SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Bluegreen Corporation
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Page 1
[LOGO] bluegreen(R)
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
Tel: (561) 912-8000 Fax: (561) 912-8100
April 18, 2005
To our Shareholders:
You are cordially invited to attend our Annual Meeting of Shareholders,
which will be held at the Westin Cypress Creek, 400 Corporate Drive, Ft.
Lauderdale, FL 33334, on Tuesday, May 17, 2005, at 11:30 a.m., local time.
The accompanying Notice of the Annual Meeting and Proxy Statement describe
the formal business to be transacted at the meeting and contain certain
information about us and our officers and directors.
Please sign, date and return the enclosed proxy card promptly. If you
attend the meeting, and we sincerely hope you will, you may vote in person even
if you have previously mailed a proxy card.
Thank you for your attention and continued interest in our company. We
look forward to seeing you at the meeting.
Very truly yours,
/S/ GEORGE F. DONOVAN
George F. Donovan,
President and Chief Executive Officer
"BLUEGREEN,""BLUEGREEN COMMUNITIES" and the "BLUEGREEN Logo" trademarks are
registered in the U.S. Patent and Trademark Office.
BLUEGREEN CORPORATION
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 17, 2005
Our Annual Meeting of Shareholders will be held at the Westin Cypress
Creek, 400 Corporate Drive, Ft. Lauderdale, FL 33334, on Tuesday, May 17, 2005,
at 11:30 a.m., local time, to consider and act on the following matters:
(1) To elect three directors to the Company's Board of Directors to
serve for a three-year term.
(2) To approve our 2005 Stock Incentive Plan.
(3) To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
The matters listed above are more fully described in the Proxy Statement
delivered with this Notice.
The close of business on March 28, 2005 has been fixed as the record date
for determining the shareholders entitled to notice of, and to vote at, the
annual meeting and any adjournments or postponements thereof.
THE PRESENCE OF A QUORUM IS IMPORTANT. THEREFORE, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY BY MAIL WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING IN
PERSON, BUT WILL ENSURE THAT YOUR VOTE IS COUNTED IF YOU ARE UNABLE TO ATTEND
THE MEETING.
By order of the Board of Directors,
/S/ JAMES R. MARTIN
James R. Martin,
Clerk
April 18, 2005
BLUEGREEN CORPORATION
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
(561) 912-8000
----------
Annual Meeting of Shareholders
May 17, 2005
----------
PROXY STATEMENT
----------
INFORMATION ABOUT THE MEETING
This Proxy Statement is being furnished to the holders of common stock,
par value $0.01 per share (the "Common Stock") of Bluegreen Corporation, a
Massachusetts corporation (the "Company"), in connection with the solicitation
of proxies by our Board of Directors for use at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the Westin Cypress Creek, 400
Corporate Drive, Ft. Lauderdale, FL 33334, on Tuesday, May 17, 2005, at 11:30
a.m., local time, and at any adjournment or postponement thereof.
It is anticipated that this Proxy Statement, the accompanying notice and
the enclosed proxy, together with our annual report to shareholders, will first
be mailed to shareholders on or about April 18, 2005.
What is the purpose of the Annual Meeting?
At the Annual Meeting, shareholders will act upon proposals regarding the
election of directors, the approval of the Company's 2005 Stock Incentive Plan
and any other business as may properly come before the meeting or any
postponements or adjournments thereof. After the formal meeting has been
adjourned, management will report on our performance and respond to appropriate
questions from shareholders.
Who is entitled to vote at the Annual Meeting?
Record holders of Common Stock at the close of business on March 28, 2005
(the "Record Date") may vote at the Annual Meeting and any adjournments or
postponements thereof.
What are the voting rights of the holders of Bluegreen Corporation's Common
Stock?
Each holder of record of Common Stock on the Record Date is entitled to
cast one vote per share in person or by proxy at the Annual Meeting.
What is the difference between a shareholder of record and a "street name"
holder?
If your shares are registered directly in your name with Mellon Investor
Services, our stock transfer agent, you are considered the shareholder of record
with respect to those shares. If your shares are held in a stock brokerage
account, by a bank or other nominee, or if you hold shares of our Common Stock
in the Bluegreen Corporation Retirement Savings Plan, you are considered the
beneficial owner of these shares but not the shareholder of record, and your
shares are held in "street name."
Who can attend the Annual Meeting?
All shareholders as of the Record Date, or their duly appointed proxies,
may attend the Annual Meeting, and each may be accompanied by one guest.
IF YOU ATTEND, PLEASE NOTE THAT YOU MAY BE ASKED TO PRESENT VALID PICTURE
IDENTIFICATION, SUCH AS A DRIVER'S LICENSE OR PASSPORT. CAMERAS, RECORDING
DEVICES AND OTHER ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE MEETING.
REGISTERED SHAREHOLDERS SHOULD BRING THE ADMISSION TICKET ATTACHED TO
THEIR PROXY CARD IN ORDER TO FACILITATE THEIR REGISTRATION PROCESS. PLEASE ALSO
NOTE THAT IF YOU HOLD YOUR SHARES IN "STREET NAME" AND THEREFORE YOU DID NOT
RECEIVE AN ADMISSION TICKET ATTACHED TO YOUR PROXY CARD, YOU WILL NEED TO BRING
A COPY OF THE BROKERAGE STATEMENT REFLECTING YOUR STOCK OWNERSHIP AS OF THE
RECORD DATE AND CHECK IN AT THE REGISTRATION DESK AT THE MEETING.
What constitutes a quorum?
The presence at the Annual Meeting, in person or by proxy, of a majority
of the issued and outstanding shares of Common Stock as of the Record Date will
constitute a quorum for the transaction of business at the Annual Meeting. The
number of shares of Common Stock outstanding and entitled to vote on the Record
Date was 30,317,296, with each share being entitled to one vote. Thus the
presence in person or by proxy of the holders of 15,188,965 shares of Common
Stock will be required to establish a quorum.
What vote is required to approve a proposal?
The affirmative vote of the holders of a plurality of the votes cast at
the Annual Meeting is required for the election of directors.
For the approval of the Company's 2005 Stock Incentive Plan, the
affirmative vote of the holders of a majority of the votes cast will be required
for approval. Since abstentions are treated for these purposes as votes cast on
the proposal, an abstention will effectively count as a vote against the
adoption of the proposal.
Automatic Data Processing, Inc. Investor Communication Services ("ADP")
will tabulate the votes, subject to the supervision of persons designated by the
Board of Directors as inspectors.
How are "broker non-votes" counted?
If you hold your shares in "street name" through a broker, bank or other
nominee and you have not provided voting instructions to your broker, bank or
nominee, then whether your broker, bank or nominee may vote your shares in its
discretion depends on the proposal before the meeting. Under the rules of the
New York Stock Exchange ("NYSE"), your broker, bank or nominee may vote your
shares in its discretion on "routine matters." The election of directors is a
routine matter on which brokers, banks and nominees will be permitted to vote
your shares if no voting instructions are furnished. The rules of the NYSE,
however, do not permit your broker, bank or nominee to vote your shares in its
discretion on proposals that are not considered "routine matters." The approval
of the Company's 2005 Stock Incentive Plan is a non-routine matter. Accordingly,
if your broker has not received your voting instructions with respect to this
proposal, your broker cannot vote your shares on the proposal. This is called a
"broker non-vote." However, because shares that constitute broker non-votes
(which include shares as to which brokers withhold authority) will not be
considered entitled to vote on such matters, broker non-votes will have no
effect on the outcome of either of the proposals.
How do I vote?
If you are a record shareholder, then you can give a proxy to be voted at
the Annual Meeting by completing and mailing the enclosed proxy card. If you
hold your shares in "street name," then you must vote your shares in the manner
prescribed by your broker, bank or other nominee. Your broker, bank or nominee
has enclosed or provided a voting instruction card for you to use in directing
the broker, bank or nominee how to vote your shares.
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If you are a record shareholder, then you may vote your shares at the
Annual Meeting by completing a ballot at the Annual Meeting. If you are a
"street name" holder, then you may vote your shares in person at the Annual
Meeting only if you have obtained a signed proxy from your broker, bank or
nominee giving you the right to vote the shares.
Even if you currently plan to attend the Annual Meeting, we recommend that
you also submit your vote by proxy or by giving instructions to your broker,
bank or other nominee as described above so that your vote will be counted if
you later decide not to attend the Annual Meeting.
What if I do not specify how I want my shares voted?
If you do not specify on your proxy card how you want to vote your shares,
the proxy will be voted FOR the election of the nominees for director and FOR
the approval of the Company's 2005 Stock Incentive Plan. Although the Board of
Directors is unaware of any other matters to be presented at the Annual Meeting,
if any other matters are properly brought before the Annual Meeting, the persons
named in the enclosed proxy will vote the proxies in accordance with their best
judgment on those matters.
Can I vote by telephone or electronically?
If you are a record shareholder, you can only vote by returning your proxy
card in the enclosed envelope or by attending the Annual Meeting in person. If
your shares are held in "street name," you may vote by mail, telephone, or
electronically through the Internet, by following the instructions included with
the proxy card that has been provided by your broker, bank or other nominee.
Can I change my vote after I return my proxy card?
Yes. A shareholder may revoke their proxy by providing written notice of
revocation addressed to James R. Martin, Clerk, at the above address or in
person at any time before it is voted. Submission of a later dated and signed
proxy will also revoke an earlier dated proxy. The powers of the proxy holders
will be suspended if you attend the Annual Meeting and vote in person, although
attendance at the Annual Meeting will not by itself revoke a previously granted
proxy.
How do I vote my 401(k) shares?
If you participate in the Bluegreen Corporation Retirement Savings Plan,
you may give voting instructions as to the number of shares of Common Stock
credited to your account as of the Record Date. You may provide voting
instructions to SunTrust Bank (the "Trustee"), by completing and returning the
proxy card accompanying this proxy statement. The Trustee will vote your shares
in accordance with your duly executed instructions received by 11:59 p.m. on May
12, 2005. If you do not send instructions, the Trustee will vote the number of
shares equal to the shares of Common Stock credited to your account as of the
Record Date in the same proportion that it votes shares for which it did receive
timely instructions.
You may also revoke previously given voting instructions by filing with
ADP either a written notice of revocation or a properly completed and signed
proxy card bearing a later date, as long as such notice is received by ADP by
11:59 p.m. on May 12, 2005. The Trustee will keep your voting instructions
confidential.
What is the Board's recommendation?
The Board of Directors recommends a vote FOR all of the nominees for
director and FOR the approval of the Company's 2005 Stock Incentive Plan. With
respect to any other matter that properly comes before the meeting, the proxy
holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
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CORPORATE GOVERNANCE
Pursuant to our by-laws, our business and affairs are managed under the
direction of the Board of Directors. Directors are kept informed of our business
through discussions with management, including the Chief Executive Officer and
other senior officers, by reviewing materials provided to them and by
participating in meetings of the Board of Directors and its committees.
Director Independence
The Board of Directors undertook a review of each director's independence.
During this review, the Board considered transactions and relationships between
each director or any member of his or her immediate family and the Company and
its subsidiaries and affiliates, including those reported below under "Certain
Relationships and Related Transactions." The Board also examined transactions
and relationships between directors or their affiliates and members of our
senior management or their affiliates. The purpose of this review was to
determine whether any such relationships or transactions were inconsistent with
a determination that the director is independent under applicable laws and
regulations and the NYSE listing standards. As permitted by the listing
standards of the NYSE, the Board of Directors determined that certain categories
of relationships would not constitute material relationships that would impair a
member's independence. The Board of Directors determined that the following
relationships will not be deemed to be material relationships which impair
independence: (i) serving on third party boards of directors with other members
of the Board of Directors, (ii) payments or charitable gifts by us to entities
with which a director is an executive officer or employee where such payments do
not exceed the greater of $1 million or 2% of such company's or charity's
consolidated gross revenues, (iii) investments by directors in common with each
other or us and (iv) direct or indirect ownership of our Common Stock. As a
result of its review of the transactions and relationships of each of the
members of the Board of Directors, and considering these categorical standards,
the Board of Directors affirmatively determined that a majority of our Board
members, including Norman Becker, J. Larry Rutherford, Arnold Sevell, Scott
Holloway, Mark Nerenhausen, and Lawrence Cirillo, are independent directors
within the meaning of the listing standards of the NYSE and applicable law.
Committees of the Board of Directors and Attendance at Meetings of the Board of
Directors
Our Board of Directors has established Audit, Compensation, Nominating and
Corporate Governance, and Investment Committees. In addition, the Board of
Directors may, from time to time, establish special committees to address
specific, significant matters. The Board of Directors has adopted a written
charter for the Audit, Compensation and Nominating and Corporate Governance
Committees and has adopted Corporate Governance Guidelines that address the
make-up and functioning of the Board. The Board has also adopted a Code of
Business Conduct and Ethics that applies to all of our directors, officers and
employees. The committee charters, Corporate Governance Guidelines and Code of
Business Conduct and Ethics are posted in the "Investor" section of our website
at www.bluegreenonline.com, and each is available in print, without charge, to
any shareholder.
Our Board of Directors held twelve meetings during the year ended December
31, 2004. Each director attended at least 75% of the meetings of the Board of
Directors and meetings of the committees of the Board of Directors on which he
served. All of our directors attended our 2004 Annual Meeting of Shareholders,
although we do not have a policy requiring them to do so.
Audit Committee. During 2004, the Audit Committee consisted of Norman
Becker, Chairman, J. Larry Rutherford and Arnold Sevell. The Board has
determined that all members of the Audit Committee are "financially literate"
and "independent" within the meaning of the listing standards of the NYSE and
applicable Securities and Exchange Commission ("SEC") regulations. Norman Becker
was determined to be qualified as the audit committee financial expert within
the meaning of SEC regulations and the Board has determined that he has
accounting and related financial management expertise within the meaning of the
listing standards of the NYSE. The Audit Committee met nine times during 2004.
The Audit Committee is directly responsible for the appointment, compensation,
retention and oversight of our independent auditor. Additionally, the Audit
Committee assists the Board's oversight of: (i) the integrity of our financial
statements, (ii) our compliance with legal and regulatory requirements, (iii)
the qualifications, performance and independence of our independent auditor and
(iv) the performance of our internal audit function. A report from the Audit
Committee is included at page 13.
4
Compensation Committee. During 2004, the Compensation Committee consisted
of Scott Holloway, Chairman, J. Larry Rutherford and Mark Nerenhausen. Each of
the members of the Compensation Committee is considered independent within the
meaning of the listing standards of the NYSE. The Committee met once during
2004. The Compensation Committee provides assistance to the Board in fulfilling
its responsibilities relating to compensation of our executive officers. It
reviews and determines the compensation of the Chief Executive Officer and
determines or makes recommendations with respect to the compensation of our
other executive officers. It also assists the Board of Directors in the
administration of our equity-based compensation plans. A report from the
Compensation Committee is included at page 10.
Compensation Committee Interlocks and Insider Participation. None of the
members of the Compensation Committee are employed by us or any of our
subsidiaries.
Nominating and Corporate Governance Committee. During 2004, the Nominating
and Corporate Governance Committee consisted of Arnold Sevell, Chairman, Norman
Becker and Lawrence Cirillo. Each of the members of the Nominating and Corporate
Governance Committee is considered independent within the meaning of the listing
standards of the NYSE. The Nominating and Corporate Governance Committee met
once during 2004. The Nominating and Corporate Governance Committee is
responsible for assisting the Board of Directors in identifying individuals
qualified to become directors, making recommendations of candidates for
directorships, developing and recommending to the Board a set of corporate
governance principles for us, overseeing the evaluation of the Board and
management, overseeing the selection, composition and evaluation of Board
committees and overseeing the management continuity and succession planning
process.
Generally, the Committee will identify candidates through the business and
other organization networks of the directors and management. The Committee will
also consider candidates nominated by the Company's shareholders. Candidates for
director will be selected on the basis of the contributions the Committee
believes that those candidates can make to the Board and to management and on
such other qualifications and factors as the Committee considers appropriate. In
assessing potential new directors, the Committee will seek individuals from
diverse professional backgrounds who provide a broad range of experience and
expertise. Board candidates should have a reputation for honesty and integrity,
strength of character, mature judgment and experience in positions with a high
degree of responsibility. In addition to reviewing a candidate's background and
accomplishments, candidates for director nominees are reviewed in the context of
the current composition of the Board and our evolving needs. We also require
that our Board members be able to dedicate the time and resources sufficient to
ensure the diligent performance of their duties on our behalf, including
attending Board and applicable committee meetings. If the Committee believes a
candidate would be a valuable addition to the Board, it will recommend the
candidate's election to the full Board.
This year, Scott W. Holloway, who was appointed as a director by the Board
in 2003, will stand for election by the shareholders for the first time. Mr.
Holloway, whose background is in real estate development, was recommended by
Alan B. Levan, our Chairman of the Board. Mr. Holloway was selected based on his
administrative skills, business experience and active involvement in the
community.
Investment Committee. During 2004, the Investment Committee consisted of
Alan B. Levan, Chairman, John E. Abdo and J. Larry Rutherford. The Investment
Committee met 15 times in 2004. The Investment Committee assists the Board in
supervising and overseeing the management of our investments in capital assets.
Specifically, the Investment Committee (i) reviews and approves all real
property acquisitions and (ii) authorizes new project debt subject to guidelines
established by the Board. The approval of the Investment Committee is required
prior to our acquisition of real estate or for project financing.
Executive Sessions of Non-Management and Independent Directors. Our
non-management directors had one executive session of the Board in which
management directors and other members of management did not participate. Arnold
Sevell was the presiding director for this session.
Director Compensation
The Board of Directors sets the compensation of the Board members based on
factors it considers appropriate and based on the recommendations of management.
Directors, other than Messrs. Levan and Abdo (who have waived their fees) and
Mr. Donovan (who, as an employee, does not receive directors' fees), receive an
annual retainer of $36,000 (paid in monthly increments of $3,000 for each month
that the non-employee served as a
5
director) and reimbursement of reasonable out-of-pocket travel expenses to
attend meetings of the Board of Directors and its committees. In addition, the
Chairman of the Audit Committee (currently Norman Becker) receives an additional
annual retainer of $7,000 (paid in quarterly increments of $1,750). Members of
the Audit Committee (other than the Chairman) receive additional annual
retainers of $3,000 each (paid in quarterly increments of $750). In addition,
each of our non-employee directors, other than Messrs. Levan and Abdo, receive a
grant of stock options to purchase 5,000 shares of Common Stock under the
Company's 1998 Non-Employee Directors Stock Option Plan or its 1995 Stock
Incentive Plan on an annual basis. The exercise price is equal to the closing
market price of the Common Stock on the NYSE on the date of grant. These options
vest immediately upon grant and have a ten-year term.
Additionally, Messrs. Sevell (Chairman), Becker, Cirillo, Holloway,
Nerehausen and Rutherford each received retainers and meeting fees totaling
$36,000, $25,000, $26,000, $25,500, $25,500 and $26,000, respectively, in
connection with their services on a special committee assignment of the Board of
Directors.
Shareholder Communications with the Board
Shareholders who wish to communicate with the Board of Directors, any
individual director or the non-management directors as a group can write to
Investor Relations, Bluegreen Corporation, 4960 Conference Way North, Suite 100,
Boca Raton, Florida 33431. The letter should include a statement indicating that
the sender is a shareholder. Depending on the subject matter, we will:
o forward the letter to the director or directors to whom it is
addressed;
o attempt to handle the inquiry directly if it relates to routine or
ministerial matters, including requests for information; or
o not forward the letter if it is primarily commercial in nature or if
it is determined to relate to an improper or irrelevant topic.
A member of management will, at each meeting of the Board, present a
summary of all letters received since the last meeting that were not forwarded
to the Board and will make those letters available to the Board upon request.
Code of Ethics
We have a Code of Business Conduct and Ethics that is applicable to all of
our directors, officers and employees, including the principal executive
officer, the principal financial officer and the principal accounting officer.
We intend to post amendments to or waivers from our Code of Ethics to the extent
applicable to directors or executive officers (including our chief executive
officer, principal financial officer or principal accounting officer) on our
website. There were no such waivers from, or amendments to, our Code of Ethics
subsequent to adoption of the Code of Ethics in 2004.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires our officers, directors and persons who own more than 10% of our Common
Stock to file reports with the SEC disclosing their ownership of our stock and
changes in such ownership. Copies of such reports are also required to be
furnished to us. Based solely on a review of the copies of such reports received
by us and written representations that no other reports were required, we
believe that, during the year ended December 31, 2004, all such filing
requirements were complied with on a timely basis, with the exception of the
following: (i) a Form 3 filed late by Sheila Beauchensne, Senior Vice President
and Chief Information Officer; (ii) a Form 4 filed late by Daniel Koscher,
Senior Vice President and President of Bluegreen Communities, relating to Mr.
Koscher's exercise of 30,000 stock options and (iii) a Form 4 filed late by J.
Larry Rutherford, one of our directors, relating to Mr. Rutherford's exercise of
60,000 stock options.
PROPOSALS AT THE ANNUAL MEETING
Proposal 1 - Election of Nominees for Director
There are currently 10 members of the Board of Directors. Our by-laws
provide that the directors are classified, with respect to the time for which
they hold office, into three classes, as nearly equal in number as possible.
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Directors are elected for three-year terms. The term of office of the directors
in one of the classes expires each year, and their successors are elected at
each annual meeting of shareholders for a term of three years and until their
successors are duly elected. The Nominating and Corporate Governance Committee
recommended for nomination and the Board has nominated Messrs. Abdo, Holloway
and Laguardia for election to the class, the term of which expires in 2008.
Unless contrary instructions are received, the enclosed proxy will be
voted for the election of the three nominees listed below. THE BOARD RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE NAMED NOMINEES. Messrs.
Abdo, Holloway and Laguardia, each of whom currently serves as a director, were
recommended for election and have consented to serve, if elected, for the term
described herein. Although the Board of Directors does not contemplate that any
of the nominees will be unavailable for election, in the event that vacancies
occur unexpectedly, the enclosed proxy, unless authority has been withheld as to
such nominee, will be voted for such substituted nominees, if any, as may be
designated by the Board.
The principal occupations and business experience of the nominees for
director, and each director whose term will continue following the Annual
Meeting, for the preceding five years along with any directorships of other
publicly owned or registered investment companies are as follows:
Nominees for Election at the 2005 Annual Meeting, Each of Whom Will Serve for a
Term of Three Years Expiring in 2008
John E. Abdo, age 61, became a director in 2002. In May 2002, Mr. Abdo was
elected as Vice Chairman of our Board. Mr. Abdo has been the Vice Chairman of
BankAtlantic Bancorp, Inc. ("BBC"), a publicly held financial services holding
company principally engaged through its subsidiaries in banking and investment
banking, since 1994 and a director of BankAtlantic, BBC's banking subsidiary,
since 1984. He has been employed as Vice Chairman of BankAtlantic since 1987 and
Chairman of the Executive Committee of BankAtlantic since 1985. Mr. Abdo has
also served as Vice Chairman of the Board and President of Levitt Corporation
("Levitt"), a publicly held real estate development company, since 1985. Mr.
Abdo has also served as a director of BFC Financial Corporation ("BFC") since
1988 and as the Vice Chairman of the Board of BFC since 1993. BFC is a publicly
held savings bank holding company whose principal assets are its interests in
BBC and Levitt. Mr. Abdo is also a director of Benihana, Inc. ("Benihana"), a
publicly traded company engaged in the restaurant business.
Scott W. Holloway, age 56, became a director in October 2003. Since 1986,
Mr. Holloway has served as a principal of Hampton Financial Group, Inc. ("HFG"),
a company involved in real estate development, investment, management and
mortgage brokerage. In 2000, Mr. Holloway co-founded Holloway Irrigation
Systems, Inc., a company that develops irrigation and growing systems for
outdoor container-grown plants. In 2001, HFG established iCAP Realty Advisors,
LLC, a national commercial mortgage banking and investment sales company.
John Laguardia, age 66, became a director in 2000. Since 2004, he has been
the Chairman of the Board and Chief Executive Officer of Bowden Building
Corporation, a subsidiary of Levitt. From 1999 through April 2004, he was the
President, Chief Executive Officer and Chief Operating Officer of ALH II, Inc.,
a holding company involved in the roll-up of regional homebuilders located in
the southeastern United States. From 1997 through 1999, Mr. Laguardia served as
the Executive Vice President and Chief Operating Officer of Atlantic Gulf
Communities Corporation ("Atlantic Gulf"), a publicly traded real estate
development company. Mr. Laguardia was the President and Chief Executive Officer
for American Heritage Homes from 1994 to 1997.
Directors Continuing in Office, Each of Whom will Serve Until 2006
Norman H. Becker, age 67, became a director in March 2003. Mr. Becker is
currently, and has been for more than 10 years, self-employed as a certified
public accountant. Prior thereto, Mr. Becker was a partner with Touche Ross &
Co., the predecessor of Deloitte & Touche LLP, for more than 10 years. Mr.
Becker is also a director of Benihana. In addition, Mr. Becker is an officer of
Proguard Acquisition Corp. and Correction Services International, Inc.
J. Larry Rutherford, age 59, became a director in 1997. Since September
1999, Mr. Rutherford has been the President and Chief Executive Officer of
SouthStar Development Partners, Inc., a real estate developer. From 1990 to
1999, he served as the President and Chief Executive Officer of Atlantic Gulf.
7
Arnold Sevell, age 57, became a director in 2002. For more than five
years, Mr. Sevell has been the President of Sevell Realty Partners, Inc. (and
its predecessor company), a full-service commercial real estate firm, and an
affiliated company, Sevell Realty Holdings, Inc.
Directors Continuing in Office, Each of Whom will Serve until 2007
Alan B. Levan, age 60, became a director in 2002. In May 2002, Mr. Levan
was elected as our Chairman of the Board. Mr. Levan has been the Chairman of the
Board, President and Chief Executive Officer of BBC since 1994, and President
and Chairman of the Board of BankAtlantic since 1987. Mr. Levan also serves as
Chairman of the Board and Chief Executive Officer of Levitt. Mr. Levan has also
served as the Chairman of the Board, President and Chief Executive Officer of
BFC or its predecessors since 1978.
Lawrence A. Cirillo, age 66, became a director in October 2003. Mr.
Cirillo was Principal Partner and President of Atlantic Chartering, an oil
tanker brokerage company, from 1979 until Atlantic Chartering merged with
Seabrokers, Inc., a subsidiary of Clarkson, Ltd. Mr. Cirillo served as a Vice
President of Seabrokers, Inc. until 2000. From 2000 to present, Mr. Cirillo has
served as a tanker broker with Southport Maritime, Inc.
George F. Donovan, age 66, joined us as a director in 1991 and was
appointed President and Chief Operating Officer in October 1993. He became Chief
Executive Officer in December 1993. Mr. Donovan has served as an officer of a
number of other recreational real estate corporations, including Leisure
Management International, of which he was President from 1991 to 1993, and
Fairfield Communities, Inc., of which he was President from April 1979 to
December 1985. Mr. Donovan holds a B.S. in Electrical Engineering and is a
Registered Resort Professional.
Mark A. Nerenhausen, age 50, became a director in October 2003. Since
1998, Mr. Nerenhausen has served as President and Chief Executive Officer of the
Broward Center for the Performing Arts in Fort Lauderdale, Florida. Mr.
Nerenhausen also serves as an adjunct professor for the graduate program at
Florida International University.
Director Emeritus
Joseph C. Abeles, age 90, a private investor, served as a director from
1987 through 2000. Mr. Abeles currently holds the honorary title of Director
Emeritus and has no voting power on our Board of Directors.
Certain Relationships and Other Transactions
During fiscal 2000, we advanced Mr. Donovan $180,000 as a home equity
loan, which bears interest at the prime lending rate (which was 5.25% per annum
at December 31, 2004). Mr. Donovan delivered a new $125,045 promissory note
representing the outstanding balance on this loan plus all accrued interest as
of July 1, 2002. Mr. Donovan is paying the balance of this new promissory note
plus interest at the prime lending rate (adjusted annually) through payroll
deductions over 60 months, which commenced on August 1, 2002. The outstanding
balance on this loan as of December 31, 2004 was approximately $67,187.
Any existing loans to our officers and employees other than in the
ordinary course of business have been approved by a majority of disinterested,
non-management directors. It is also our policy that any transaction with an
employee, officer, director or principal shareholder, or affiliate of any of
them, involving in excess of $10,000 (other than in the ordinary course of our
business) shall be approved by a majority vote of disinterested directors, and
any such transaction will be on terms no less favorable to us than those which
could reasonably be obtained from an independent third party. In accordance with
applicable regulations, we will not make any new loans to, or advances on behalf
of, our executive officers nor will we modify in any respect any currently
outstanding loan to any executive officer.
The Company performs risk management services for Levitt, which owns a
31.4% beneficial interest in the Company, and its affiliates BFC and BBC. The
Company billed Levitt and its affiliates approximately $177,000 for risk
management services during 2004, of which approximately $106,000 was unpaid as
of December 31, 2004.
8
Summary Compensation Table
The following table sets forth compensation for the past three fiscal
years for our Chief Executive Officer and our other four most highly compensated
executive officers (the "Named Executive Officers").
Long-Term Compensation
Annual Compensation Awards
------------------- ------
Securities
Bonus Underlying All Other
Name and Principal Position Fiscal Year Salary ($) ($)(1) Options (#)(2) Compensation ($)
--------------------------- ----------- ---------- ------ -------------- ----------------
George F. Donovan 2004 $500,000 $662,129 -- $ 5,864(3)
President and Chief Executive Officer 2003 $500,000 $690,068 140,896 $ 7,500
2002(5) $375,000 $570,313 -- $ 67,324
John F. Chiste 2004 $300,000 $397,277 -- $ 1,714(3)
Senior Vice President, 2003 $300,000 $369,041 63,389 $ 1,000
Treasurer and Chief Financial Officer 2002(5) $225,000 $273,938 -- $ 6,217
Daniel C. Koscher 2004 $300,000 $915,710 -- $ 1,675(3)
Senior Vice President, 2003 $300,000 $432,790 89,224 $ 1,000
President - Bluegreen Communities 2002(5) $206,250 $223,596 -- $ 5,496
John M. Maloney, Jr. (4) 2004 $300,000 $458,980 -- $ 1,522(3)
Senior Vice President, 2003 $275,000 $406,757 100,000 $ --
President - Bluegreen Resorts 2002(5) $206,250 $152,474 -- $ 600
Douglas O. Kinsey (4) 2004 $260,000 $150,000 -- $ --
Senior Vice President, 2003 $157,000 $ 5,833 -- $ --
Acquisitions and Development 2002(5) -- -- -- $ --
----------
(1) Amounts represent bonuses earned for the fiscal year and paid during the
subsequent fiscal year.
(2) Figures represent stock options granted under our 1995 Stock Incentive
Plan.
(3) Other compensation for the year ended December 31, 2004 consists of
amounts we paid to match a portion of the Named Executive Officers' 401(k)
contributions (Mr. Donovan - $1,000; Mr. Chiste - $1,000; Mr. Koscher -
$1,000; and Mr. Maloney - $1,000) and premiums paid for life insurance
policies for the benefit of each Named Executive Officer (Mr. Donovan -
$4,864; Mr. Chiste - $714; Mr. Koscher - $675; and Mr. Maloney - $522).
(4) Mr. Maloney became the Senior Vice President of Bluegreen Resorts in May
2001 and a Senior Vice President of Bluegreen Corporation and the
President of Bluegreen Resorts in May 2002. Mr. Kinsey became our Senior
Vice President, Acquisitions and Development in May 2003.
(5) Amounts are for the nine-month transitional period ended December 31,
2002, when we transitioned from a March to a December fiscal year end.
The Company did not grant any of the Named Executive Officers stock
options or stock appreciation rights during 2004.
Option Exercises in 2004 and Year-End Option Values
The following table sets forth information regarding the number of shares
of Common Stock acquired and value realized upon the exercise of stock options
during the year ended December 31, 2004, and the number and unrealized value of
unexercised options held by each of the Named Executive Officers as of December
31, 2004. Unrealized values are computed by multiplying the number of shares by
the amount by which the closing market price of the Common Stock on the NYSE as
of December 31, 2004, exceeds the exercise price.
9
Number of
Securities
Underlying
Unexercised Value of Unexercised
Options at In-the-Money Options
Year-End (#) at Year-End ($)
------------ ---------------
Shares
Acquired Value Exercisable (E) vs. Exercisable (E) vs.
Name On Exercise (#) Realized ($) Unexercisable (U) Unexercisable (U)
---- --------------- ------------ ----------------- -----------------
George F. Donovan 118,650 $1,352,081 433,568 E $5,446,342 E
140,896 U $2,303,641 U
John F. Chiste 161,140 $1,180,550 -- E $ -- E
63,389 U $1,036,410 U
Daniel C. Koscher 271,274 $2,490,374 -- E $ -- E
89,224 U $1,458,804 U
John M. Maloney, Jr. 30,000 $ 454,689 -- E $ -- E
120,000 U $1,749,800 U
Douglas O. Kinsey -- -- -- E $ -- E
-- U $ -- U
Employment Agreements
In March 1998, we entered into employment agreements with each of Messrs.
Donovan, Chiste and Koscher. In December 2001, we entered into new employment
agreements with Messrs. Donovan and Chiste. In May 2002, we entered into a new
employment agreement with Mr. Koscher. The terms of the employment agreements
are for an initial one-year period, subject to automatic one-year extensions
unless terminated by either the employee or us upon not less than 60 days notice
prior to the end of the then-current term. The employment agreements provide
that the employees will receive a base salary (currently $500,000 for Mr.
Donovan and $300,000 each for Messrs. Chiste and Koscher), subject to annual
increases at the discretion of the Compensation Committee of the Board of
Directors, and certain other benefits and will be eligible to receive a cash
bonus as determined by the Board of Directors. Under the employment agreements,
if we terminate any employee without cause, we will pay the employee his base
salary for the 15 months (12 months with an additional lump-sum payment equal to
one year's salary in the case of Mr. Donovan) following such termination. A
termination of the employee without cause shall be deemed to occur upon, among
other things, a determination by the Company not to renew the employment
agreement upon expiration of the then-current term, a significant decrease of
the employee's position, duties or responsibilities, our failure to obtain the
assumption of the employment agreement by any successor to our business, or the
sale of all or substantially all of our business or assets or our liquidation.
Upon any termination by us for cause (as defined in the employment agreements)
or by the employee, the employee shall be entitled only to amounts then due to
him. In the event the employee is disabled, the employee's employment shall be
terminated and the employee shall be entitled to receive his base salary for 12
months following such termination. Pursuant to his employment agreement, each
employee agreed, for 15 months (12 months in the case of Mr. Donovan) following
his termination, not to compete with us, disclose confidential information about
us, or solicit our current or former employees.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following Report of the Compensation Committee and the performance
graph included elsewhere in this Proxy Statement do not constitute soliciting
material and should not be deemed filed or incorporated by reference into any of
our other filings under the Securities Act of 1933 (the "Securities Act") or the
Exchange Act, except to the extent we specifically incorporate this Report or
the performance graphs by reference therein.
10
Executive Officer Compensation
Our compensation program for executive officers consists of three key
elements: a base salary, an incentive bonus and periodic grants of stock options
or other equity-based awards. The Compensation Committee believes that this
approach best serves the interests of shareholders by ensuring that executive
officers are compensated in a manner that advances both the short- and long-term
interests of Bluegreen Corporation and our shareholders. Thus, compensation for
our executive officers involves a portion of pay which depends on incentive
payments which are generally earned based on an assessment of performance in
relation to corporate goals, and stock options, which directly relate a
significant portion of an executive officer's long-term remuneration to stock
price appreciation realized by our shareholders.
Base Salary
We believe that the Company offers competitive salaries based on a review
of market practices and the duties and responsibilities of each officer. In
setting base compensation, the Compensation Committee periodically examines
market compensation levels and trends observed in the labor market. Market
information is used as an initial frame of reference for annual salary
adjustments and starting salary offers. Salary decisions are determined based on
an annual review by the Compensation Committee with input and recommendations
from the Chief Executive Officer. Base salary determinations are made based on,
among other things, competitive market salaries, the functional and decision
making responsibilities of each position, and the contribution, experience and
work performance of the executive officer.
Annual Incentive Bonus Plan
Our management incentive bonus plan is designed to motivate executives by
recognizing and rewarding performance. The annual incentive bonus plan
compensates executives generally based on our profitability and the achievement
of individual performance competencies and goals. Generally, a minimum corporate
profitability threshold must be achieved before any bonus will be paid.
Each participant's bonus is intended to take into account corporate and
individual components, which are weighted according to the executive's
responsibilities. Annual performance bonuses of approximately $2.6 million were
paid to the Named Executive Officers based on their individual performances
during 2004 as follows:
George F. Donovan $662,129
John F. Chiste $397,277
Douglas O. Kinsey $150,000
Daniel C. Koscher $915,710
John M. Maloney, Jr. $458,980
Stock Options and Other Equity-Based Compensations
The granting of options is totally discretionary and options are awarded
based on an assessment of an executive officer's contribution to our success and
growth. Grants of stock options to executive officers, including the Named
Executive Officers (other than the Chief Executive Officer), are generally made
upon the recommendation of the Chief Executive Officer based on the level of an
executive's position with us, an evaluation of the executive's past and expected
performance, the number of outstanding and previously granted options and
discussions with the executive. Generally, stock options are granted with an
exercise price equal to 100% of the market value of our Common Stock on the date
of grant and vest on the fifth anniversary of the date of grant. The Board of
Directors believes that providing executives with opportunities to acquire an
interest in our growth and prosperity through the grant of stock options enables
us to attract and retain qualified and experienced executive officers and offer
additional long-term incentives. The Board of Directors believes that
utilization of stock options more closely aligns the executives' interests with
those of our shareholders, since the ultimate value of such compensation is
directly dependent on the stock price increases over time. In 2004, the Company
did not grant any stock options to our Named Executive Officers.
11
Our 2005 Stock Incentive Plan, if approved by shareholders at the Annual
Meeting, will provide the Compensation Committee with the flexibility to award
restricted stock as an additional means of granting equity-based compensation
that aligns the interests of management with our shareholders by tying
compensation to increases in our stock price.
Compensation of the Chief Executive Officer
As previously indicated, the Compensation Committee believes that our
total compensation program is appropriately based upon business performance,
market compensation levels and personal performance. The Compensation Committee
reviews and fixes the base salary of the Chief Executive Officer based on those
factors described above for other executive officers as well as the Compensation
Committee's assessment of Mr. Donovan's past performance as Chief Executive
Officer and its expectation as to his future contributions. In 2004, Mr. Donovan
received a base salary of $500,000, which was the same base salary that Mr.
Donovan received in 2003.
During 2004, Mr. Donovan was awarded an annual bonus of approximately
$662,000. This compares to the award of an annual bonus of approximately
$690,000 and stock options to acquire approximately 141,000 shares of Common
Stock for the year ended December 31, 2003. The Committee concluded that Mr.
Donovan's total compensation for 2004 was consistent with total compensation for
other chief executives of publicly held companies in similar businesses and of
similar size. The Committee also believes that Mr. Donovan's total compensation
for 2005 reflects its confidence in Mr. Donovan's ability to lead the Company in
the implementation of our strategic plans, including the Company's continued
development and expansion of Bluegreen Resorts and identification of properties
for development for Bluegreen Communities. The Committee's knowledge of Mr.
Donovan's successful background, the awards won by Mr. Donovan in 2004 and
recognition of his leadership by the timeshare industry, together with its
observations of Mr. Donovan's performance during his tenure with us, served
equally to assure the Committee of his ability to lead us as our chief
executive.
Internal Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code (the "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.
The Compensation Committee believes that it is generally in our best
interest to attempt 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. However, 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 us to meet our overall
objectives, even if we may not deduct all of the compensation. Accordingly, the
Compensation Committee this year approved and may in the future approve
compensation arrangements for certain officers, including Mr. Donovan, that are
not fully deductible. Further, because of ambiguities and uncertainties as to
the application and interpretation of Section 162(m) and the regulations issued
thereunder, no assurance can be given, notwithstanding our efforts, that
compensation intended by us to satisfy the requirements for deductibility under
Section 162(m) does in fact do so.
Submitted by the Members of the Compensation Committee:
Scott Holloway
J. Larry Rutherford
Mark Nerenhausen
12
Shareholder Return Performance Graph
The following graph assumes an investment of $100 on December 31, 1999 and
thereafter compares the yearly percentage change in cumulative total return to
our shareholders with an industry peer group (consisting of Intrawest
Corporation, ILX Resorts, Sunterra Corporation, and Silverleaf Resorts) ("Peer
Group") and a broad market index (the S&P 500). The graph shows performance on a
total return (dividend reinvestment) basis. The graph lines connect fiscal
year-end dates and do not reflect fluctuations between those dates.
[LINE GRAPH OMITTED]
Data Points in Performance Graph
1999 2000 2001 2002 2003 2004
Bluegreen Corporation $100.00 $ 31.25 $ 40.00 $ 70.20 $124.80 $396.57
S & P 500 100.00 90.90 80.10 62.39 80.29 89.02
Peer Group 100.00 68.59 60.99 43.51 68.43 86.98
AUDIT COMMITTEE REPORT
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any of
our other filings under the Securities Act or the Exchange Act, except to the
extent we specifically incorporate this Report by reference therein.
The Audit Committee held nine meetings during 2004. The meetings were
designed, among other things, to facilitate and encourage communication among
the Audit Committee, management, the internal auditors and our independent
auditors for 2004, Ernst & Young LLP ("EY"). The Committee discussed with our
internal and independent auditors the overall scope and plans for their
respective audits and met with the internal and independent auditors, with and
without management present, to discuss the results of their examinations and
their evaluations of our internal controls.
The Audit Committee reviewed and discussed the audited consolidated
financial statements for the fiscal year ended December 31, 2004 with management
and EY.
Management has primary responsibility for our financial statements and the
overall reporting process, including our system of internal controls. The
independent auditors audit the annual financial statements prepared by
management, express an opinion as to whether those financial statements present
fairly, in all material respects, our
13
financial position, results of operations and cash flows in conformity with U.S.
generally accepted accounting principles and discuss with the Audit Committee
their independence and any other matters they are required to discuss with the
Audit Committee or that they believe should be raised with it. The Audit
Committee oversees these processes, although it must rely on information
provided to it and on the representations made by management and the independent
auditors.
The Audit Committee also discussed with the independent auditors matters
required to be discussed with audit committees under generally accepted auditing
standards, including, among other things, matters related to the conduct of the
audit of our consolidated financial statements and the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
Our independent auditors also provided to the Audit Committee the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees), and the Audit Committee
discussed with EY its independence from us. When considering EY's independence,
the Audit Committee considered whether their provision of services to us beyond
those rendered in connection with their audit and review of our consolidated
financial statements was compatible with maintaining their independence. The
Audit Committee also reviewed, among other things, the amount of fees paid to EY
for audit and non-audit services.
Based on these reviews and meetings, discussions and reports, the Audit
Committee recommended to the Board of Directors that our audited consolidated
financial statements for the year ended December 31, 2004 be included in our
Annual Report on Form 10-K for the year ended December 31, 2004.
Submitted by the Members of the Audit Committee:
Norman Becker
J. Larry Rutherford
Arnold Sevell
Fees to Independent Auditors for Fiscal 2004 and 2003
The following table presents fees for professional services rendered by EY
for the audit of our annual financial statements and fees billed for
audit-related services, tax services and all other services rendered by EY for
the years ended December 31, 2004 and December 31, 2003.
Year Ended Year Ended
December 31, December 31,
2004 2003
Audit Fees (a) $2,502,666 $445,128
Audit-related fees (b) 110,451 119,238
Tax fees (c) 8,500 17,500
Other (d) 1,601 1,500
(a) The 2004 fees include approximately $127,000 of fees related to a
comfort letter that EY provided in connection with a proposed Rule
144A private placement of debt securities, which was postponed, and
approximately $166,000 of fees reimbursed to us by Levitt related to
the inclusion of our audited financial statements in certain of
Levitt's filings with the SEC. The remainder of the 2004 fees
related to the audit of our consolidated financial statements,
assessments of our internal control over financial reporting for the
fiscal year, quarterly reviews of our interim financial statements,
accounting consultations on matters addressed during the audits or
interim reviews.
The 2003 fees include $65,000 of fees reimbursed to us by Levitt
related to the inclusion of our audited financial statements in
certain of Levitt's filings with the SEC. The 2003 fees also include
approximately $50,000 of fees related to the commencement of EY's
procedures in connection with the proposed Rule 144A private
placement of debt securities discussed above. The remainder of the
2003 fees related to the audit of our consolidated financial
statements, quarterly reviews of our interim financial statements
and accounting consultations on matters addressed during the audits
or interim reviews.
14
(b) The 2004 fees include approximately $58,000 for the financial
statement audit of one our subsidiaries and $30,000 of fees for the
performance of certain agreed-upon procedures in connection with our
receivable servicing operations. The remainder of the 2004 fees
related to the audit of the Bluegreen Corporation Retirement Savings
Plan.
The 2003 fees include approximately $52,000 for the financial
statement audit of one our subsidiaries, $22,000 of fees for the
performance of certain agreed-upon procedures in connection with our
receivable servicing operations and approximately $14,000 of fees
for due diligence pertaining to potential business combinations. The
remainder of the 2003 fees related to internal audit outsourcing
procedures and the audit of the Bluegreen Corporation Retirement
Savings Plan.
(c) The 2004 fees include fees for reviewing our federal and certain of
our state income tax returns. The 2003 fees include fees for
reviewing our federal and certain of our state income tax returns as
well as state and local tax consulting.
(d) The 2004 and 2003 fees are for an online accounting research service
subscription.
All audit-related services, tax services and other services during 2004
were pre-approved by the Audit Committee, which concluded that the provision of
such services by EY was compatible with the maintenance of that firm's
independence in the conduct of its auditing functions. Under its charter, the
Audit Committee must review and pre-approve both audit and permitted non-audit
services provided by the independent auditors and shall not engage the
independent auditors to perform any non-audit services prohibited by law or
regulation. Each year, the independent auditor's retention to audit our
financial statements, including the associated fee, is approved by the Audit
Committee before any audit work for that year is commenced. The Audit Committee
has not approved the retention of the Company's independent auditor for 2005
pending the submission of a fee proposal by EY. Each year, the Audit Committee
also pre-approves general categories of services that may be provided by the
independent auditor within certain pre-approved budget ranges. Under its current
practices, the Audit Committee does not regularly evaluate potential engagements
of the independent auditor and approve or reject such potential engagements
unless such potential engagements are beyond the scope of the general
pre-approved services or above the pre-approved budget limitations. At each
Audit Committee meeting, the Audit Committee receives updates on the services
actually provided by the independent auditor, and management may present
additional services for specific pre-approval. The Audit Committee has delegated
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,
other than audit services, described above are compatible with maintaining the
principal independent auditor's independence.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of our Common Stock as of April 13, 2005, by (1) each director, (2)
each of the Named Executive Officers, (3) all current directors and executive
officers as a group and (4) all persons known to be the beneficial owners of
more than five percent of our outstanding Common Stock. The amount of Common
Stock held by executive officers includes nominal amounts held in our 401(k)
plan. Unless otherwise noted, each shareholder has sole voting and investment
power with respect to the shares of Common Stock listed.
15
Options Total Shares Percent of
Exercisable Beneficially Shares
Name Common Stock Within 60 Days Owned Outstanding(1)
---- ------------ -------------- ----- --------------
Levitt Corporation ......................... 9,517,325 -- 9,517,325 31.4%
1750 East Sunrise
Blvd. Ft. Lauderdale, FL 33304(2)
John E. Abdo (2) ........................... 9,517,325 -- 9,517,325 31.4%
Sheila B. Beauchesne ....................... -- -- -- --
Norman H. Becker ........................... -- 10,000 10,000 *
John F. Chiste ............................. 255 -- 255 *
Lawrence A. Cirillo ........................ -- 10,000 10,000 *
George F. Donovan .......................... 56,034 433,568 489,602 1.6%
Allan J. Herz .............................. 3,218 7,500 10,718 *
Scott W. Holloway .......................... -- 10,000 10,000 *
Douglas O. Kinsey .......................... -- -- -- --
Daniel C. Koscher .......................... 32,996 -- 32,996 *
John Laguardia ............................. -- 25,000 25,000 *
Alan B. Levan (2) .......................... 9,517,325 -- 9,517,325 31.4%
John M. Maloney, Jr ........................ 3,252 10,000 13,252 *
James R. Martin ............................ -- -- -- --
Susan J. Milanese .......................... 1,665 -- 1,665 *
Mark A. Nerenhausen ........................ -- 10,000 10,000 *
Anthony M. Puleo (4) ....................... 191 -- 191 *
J. Larry Rutherford ........................ -- 40,000 40,000 *
Arnold Sevell .............................. -- 10,000 10,000 *
All directors and executive officers as
as a group (19 persons)(3) ................. 9,614,936 566,068 10,181,004 33.0%
----------
* Less than 1%.
(1) In accordance with the rules of the SEC, the denominator used to calculate
the percent of shares outstanding includes shares issuable upon exercise
of any options that are exercisable within 60 days and held by the
applicable stockholder or group, plus 30,317,296 shares outstanding on
April 13, 2005.
(2) Based on the most recently Schedule 13D filed with the SEC as of January
14, 2004, Messrs. Levan and Abdo may be deemed to control Levitt, and
therefore the shares beneficially owned by Levitt may also be deemed to be
beneficially owned by Messrs. Levan and Abdo.
(3) Includes the 9,517,325 shares held by Levitt, which may be deemed to be
beneficially owned by both Messrs. Levan and Abdo by virtue of their
control positions in Levitt and its controlling shareholder, BFC.
(4) Includes shares held by Mr. Puleo's wife.
Proposal 2 -- Approval of the Company's 2005 Stock Incentive Plan
On April 8, 2005, our Board of Directors adopted the Bluegreen Corporation
2005 Stock Incentive Plan, subject to the approval of the Company's
shareholders. A summary of the Bluegreen Corporation 2005 Stock Incentive Plan
follows but is qualified in its entirety by the full text of the plan document.
The plan document is included at the end of this Proxy Statement in Appendix A
and is incorporated by reference into this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE BLUEGREEN CORPORATION 2005 STOCK INCENTIVE PLAN.
Purpose of the Stock Incentive Plan
The purpose of the plan is to attract and retain the best available
personnel for positions of substantial responsibility at the Company, to provide
additional long-term incentive to the employees of the Company and its
subsidiaries as well as other individuals, including members of the Board of
Directors, who perform services for the Company and its subsidiaries, and to
promote the success and profitability of the Company's business. If this plan is
approved by shareholders, restricted stock and options will be available for
issuance under this plan and the
16
Company will not issue any additional restricted stock award or options under
the Company's existing stock options plans.
Description of the Stock Incentive Plan
Types of Awards
The Plan allows the Company to grant stock options (both incentive stock
options and non-qualified stock options) and restricted stock. In the past,
stock options have been the principal form of long-term equity incentive used by
the Company. The plan will give the Company greater flexibility to respond to
changes in equity compensation practices given the anticipated impact of changes
in accounting for stock options and other stock compensation.
Administration
The plan will be administered by a committee consisting of not less than
two members of the Board of Directors. The administrative committee has broad
discretionary powers. The Board of Directors may exercise any power or
discretion conferred on the administrative committee. Initially, the plan will
be administered by the Compensation Committee of our Board of Directors.
Stock Subject to the Stock Incentive Plan
A maximum of 2,000,000 shares of our Common Stock may be issued for
restricted stock awards and upon the exercise of options granted under the plan.
Any shares subject to stock awards or option grants under the plan which expire
or are terminated, forfeited or canceled without having been exercised or vested
in full, shall be available for further grant under the plan. As of April 12,
2005, the aggregate fair market value of the shares to be reserved under this
plan was $28.4 million, based on the closing sales price per share of Common
Stock of $14.20 on the NYSE on April 12, 2005.
Eligibility
The administrative committee will select the people who will receive stock
option grants and restricted stock awards under the plan. Any employee or
director of the Company or of any of the Company's subsidiaries or parent, and
any independent contractor or agent of the Company, may be selected to receive
restricted stock awards and stock option grants. As of April 13, 2005,
approximately 4,500 individuals were eligible to be selected to receive
restricted stock awards and stock option grants.
Restricted Stock Awards
The administrative committee may, in its discretion, grant awards of
restricted stock to eligible individuals and eligible directors, up to a maximum
of 100,000 shares of Common Stock. The administrative committee will determine
at the time of the grant whether the award is a performance-based restricted
stock award, the number of shares of Common Stock subject to an award, the
vesting schedule applicable to the award and may, in its discretion, establish
other terms and conditions applicable to the award. The administrative committee
may not grant restricted stock awards for more than 500,000 shares in any one
calendar year to any person who is a "covered employee" under Section 162(m) of
the Code or to all such persons in the aggregate.
As a general rule, shares of our Common Stock that are subject to a
restricted stock award will be held by the administrative committee for the
benefit of the award recipient until vested and, when vested, are transferred to
the award recipient. Unless the administrative committee determines otherwise
with respect to any restricted stock award, before the shares subject to a
restricted stock award are vested and transferred to the award recipient, the
administrative committee will exercise any voting or tender rights in its
discretion and hold and accumulate any dividends or distributions for
distribution at the same time and terms as the underlying shares. In the
alternative, the administrative committee may authorize the immediate
distribution of the restricted shares to the award recipient in the form of a
stock certificate bearing a legend containing the applicable vesting
restrictions or the immediate distribution of dividends paid on the underlying
shares.
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Vesting
All restricted stock awards will be subject to a vesting schedule
specified by the administrative committee when the award is made. If the
administrative committee does not specify a vesting schedule, the award will
vest on the first anniversary of the grant date. In the event of death or
termination due to disability before the vesting date, unvested awards that
would have vested within six months after death or termination for disability
will be deemed vested. All other awards that are unvested at termination of
employment will be forfeited, with the award recipient receiving a refund equal
to the lesser of the fair market value of the unvested shares at termination of
employment or the amount (if any) paid when the award was made.
Performance-Based Restricted Stock Awards
At the time of grant, the administrative committee may designate a
restricted stock award as a performance-based restricted stock award. If it does
so, it shall establish, in addition to or in lieu of service-based vesting
requirements, one or more performance goals, which must be attained as a
condition of retention of the shares. The performance goal(s) shall be based on
one or more of the following:
o earnings per share,
o net income,
o EBITDA,
o return on equity,
o return on assets,
o core earnings,
o stock price,
o strategic business objectives, consisting of one or more objectives
based on meeting specified cost targets, business expansion goals,
goals relating to acquisitions or divestitures, revenue targets or
business development goals, and
o except in the case of a "covered employee" under Section 162(m) of
the Code, any other performance criteria established by the
administrative committee.
Performance goals may be established on the basis of reported earnings or
cash earnings, and consolidated results or individual business units and may, in
the discretion of the administrative committee, include or exclude extraordinary
items and/or the results of discontinued operations. Each performance goal may
be expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the
Company (or individual business units) and/or the past or current performance of
other companies. Attainment of the performance goals will be measured over a
performance measurement period specified by the administrative committee when
the award is made. At least 75% of any performance measurement period will occur
after the performance goal(s) are established.
The administrative committee will determine in its discretion whether the
award recipient has attained the goals. If they have been attained, the
administrative committee will certify that fact in writing. If the performance
goals are not satisfied during the performance measurement period, the relevant
awards will be forfeited. If the performance goals and any service-based vesting
schedule are satisfied, the award will be distributed (or any vesting-related
legend removed from any stock certificates previously delivered to the award
recipient). No performance-based restricted stock awards will be granted after
the fifth anniversary of the plan's effective date unless the list of
permissible performance goals is re-approved by the shareholders.
Terms and Conditions of Stock Option Grants
The administrative committee will set the terms and conditions of the
stock options that it grants. In setting terms and conditions, it must observe
the following restrictions:
o It may not grant options to purchase more than 500,000 shares in the
aggregate to individuals who are "covered employees" under Section
162(m) of the Code during any calendar year. In addition, it may not
grant options to purchase more than 100,000 shares to any individual
during any calendar year.
o It may not grant a stock option with a purchase price that is less
than the fair market value of a share of Common Stock on the date it
grants the stock option.
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o It may not grant a stock option with a term that is longer than 10
years.
The administrative committee may grant incentive stock options that
qualify for special federal income tax treatment or non-qualified stock options
that do not qualify for special federal income tax treatment. Incentive stock
options are subject to certain additional restrictions under the Code and the
plan. Unless otherwise designated by the administrative committee, options
granted will be exercisable for a period of 10 years after the date of grant (or
for a shorter period ending three months after the option holder's termination
of employment due to disability, one year after termination of employment due to
death, or immediately upon termination for any other reason). The exercise
period may be further extended for limited periods in the administrative
committee's discretion.
Upon the exercise of an option, the exercise price of the option must be
paid in full. Payment may be made in cash, Common Stock already owned by the
option holder, or in such other consideration as the administrative committee
authorizes. Options may be transferred prior to exercise only to certain family
members, trusts or other entities owned by the option holder and/or such family
members, charitable organizations and on death of the option holder.
Mergers and Reorganizations
The number of shares available under the plan, the maximum limits on
option grants and restricted stock awards to persons or groups of persons
individually and in the aggregate, any outstanding awards and the number of
shares subject to outstanding options may be adjusted to reflect any merger,
consolidation or business reorganization in which we are the surviving entity,
and to reflect any stock split, stock dividend, spin-off or other event where
the administrative committee determines an adjustment is appropriate in order to
prevent the enlargement or dilution of an award recipient's rights. If a merger,
consolidation or other business reorganization occurs and we are not the
surviving entity, any outstanding options, at the discretion of the
administrative committee or the Board, may be canceled and payment made to the
option holder in an amount equal to the value of the canceled options or
modified to provide for alternative, nearly equivalent securities. Any
outstanding restricted stock award shall be adjusted by allocating to the award
recipient any money, stock, securities or other property received by the other
shareholders of record, and such money, stock, securities or other property
shall be subject to the same terms and conditions of the restricted stock award
that applied to the shares for which it has been exchanged.
Termination or Amendment
Our Board of Directors has the authority to suspend or terminate the plan
in whole or in part at any time by giving written notice to the administrative
committee; however, no amendment or termination may affect any option or
restricted stock award granted prior to the amendment or termination without the
recipient's consent, unless the administrative committee finds that such
amendment or termination is in the best interests of the award recipients or our
shareholders.
Our Board of Directors has the authority to amend or revise the plan in
whole or part at any time. As a NYSE listed company, we are required to seek
shareholder approval for amendments to the plan that are deemed material under
the NYSE listing rules.
Term of Plan
This plan will continue in effect for 10 years from the date of adoption
by our Board of Directors unless terminated sooner. No performance-based
restricted stock awards will be granted after the fifth anniversary of the
plan's effective date unless the list of permissible performance goals is
re-approved by the shareholders.
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Federal Income Tax Consequences
The following discussion is intended to be a summary and is not a
comprehensive description of the federal tax laws, regulations and policies
affecting the Company and recipients of restricted stock awards or stock option
grants that may be granted under the plan. Any descriptions of the provisions of
any law, regulation or policy are qualified in their entirety by reference to
the particular law, regulation or policy. Any change in applicable law or
regulation or in the policies of various taxing authorities may have a
significant effect on this summary. The plan is not a qualified plan under
Section 401(a) of the Code.
Restricted Stock Awards. The stock awards under the plan do not result in
federal income tax consequences to either us or the award recipient. Once the
award is vested and the shares subject to the award are distributed, the award
recipient will generally be required to include in ordinary income, for the
taxable year in which the vesting date occurs, an amount equal to the fair
market value of the shares on the vesting date. We will generally be allowed to
claim a deduction, for compensation expense, in a like amount. If dividends are
paid on unvested shares held under the plan, such dividend amounts will also be
included in the ordinary income of the recipient. We will generally be allowed
to claim a deduction for compensation expense for this amount as well.
In certain cases, a recipient of a restricted stock award that is not a
performance-based restricted stock award may elect to include the value of the
shares subject to a restricted stock award in income for federal income tax
purposes when the award is made instead of when it vests.
Stock Options. Incentive stock options will not create federal income tax
consequences when they are granted. If they are exercised during employment or
within three months after termination of employment (one year for termination
due to death or disability), the exercise will not create federal income tax
consequences either. When the shares acquired on exercise of an incentive stock
option are sold, the seller must pay federal income taxes on the amount by which
the sales price exceeds the purchase price. This amount will be taxed at capital
gains rates if the sale occurs at least two years after the option was granted
and at least one year after the option was exercised. Otherwise, it is taxed as
ordinary income.
Incentive stock options that are exercised more than one year after
termination of employment due to death or disability or three months after
termination of employment for other reasons are treated as non-qualified stock
options. Non-qualified stock options will not create federal income tax
consequences when they are granted. When they are exercised, federal income
taxes at ordinary income tax rates must be paid on the amount by which the fair
market value of the shares acquired by exercising the option exceeds the
exercise price. When an option holder sells shares acquired by exercising a
non-qualified stock option, he or she must pay federal income taxes on the
amount by which the sales price exceeds the purchase price plus the amount
included in ordinary income at option exercise. This amount will be taxed at
capital gains rates, which will vary depending upon the time that has elapsed
since the exercise of the option.
When a non-qualified stock option is exercised, we may be allowed a
federal income tax deduction for the same amount that the option holder includes
in his or her ordinary income. When an incentive stock option is exercised, we
will not be allowed to claim a deduction unless the shares acquired are resold
sooner than two years after the option was granted or one year after the option
was exercised.
Deduction Limits. The Code places an annual limit of $1 million each on
the tax deduction which we may claim in any fiscal year for the compensation of
our chief executive officer and any other executive officers named in the
summary compensation table included in our annual proxy statement. There is an
exception to this limit for "qualified performance-based compensation." We have
designed this plan with the intention that the stock options and
performance-based restricted stock awards that we grant after obtaining
shareholder approval will constitute qualified performance-based compensation.
As a result, we do not believe that the $1 million limit will impair our ability
to claim federal income tax deductions for compensation attributable to future
performance-based restricted stock awards and stock options granted under the
plan. The $1 million limit would apply to (i) future restricted stock awards, if
any, made to covered employees that are not designated as performance-based
restricted stock awards and (ii) to all stock options and all restricted stock
grants outstanding under the plan on the date of this Proxy Statement.
The preceding statements are intended to summarize the general principles
of current federal income tax law applicable to awards that may be granted under
the plan. State and local tax consequences may also be significant.
20
If we do not receive shareholder approval, we will not grant any awards
under the 2005 Stock Incentive Plan.
NEW PLAN BENEFITS
BLUEGREEN CORPORATION STOCK INCENTIVE PLAN
The benefits that the Company's executive officers, directors and
employees will receive under the 2005 Stock Incentive Plan are not determinable
because the benefits to be awarded under the plan will depend on the discretion
of the administrative committee and the fair market value of the Common Stock at
various future dates. No determinations have been made as to whom awards will be
granted to under the plan and, as a result, no information is provided
concerning the benefits to be delivered under the plan to any individual or
group of individuals.
EQUITY COMPENSATION PLAN INFORMATION
The Company's shareholders have approved all of its equity compensation
plans in existence as of December 31, 2004. Information about securities
authorized for issuance under our equity compensation plans as of December 31,
2004, is as follows (in thousands, except per option data):
Number of Securities Remaining
Number of Securities to Weighted-Average Available for Future Issuance
be Issued Upon Exercise Exercise Price of Under Equity Compensation Plans
of Outstanding Stock Outstanding Stock (Excluding Outstanding Stock
Options Options Options)
------------------------------------------------------------------------------------------
1,645 $5.29 781
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not
aware of any matters, other than those referred to in the accompanying Notice of
Meeting that may be brought before the Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
EY served as our independent public accountants for the year ended
December 31, 2004. A representative of EY is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he desires to
do so, and will be available to respond to appropriate questions from
shareholders.
ADDITIONAL INFORMATION
"Householding" of Proxy Material. The SEC has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to two or more shareholders sharing the same
address by delivering a single proxy statement addressed to those shareholders.
This process, which is commonly referred to as "householding," potentially
provides extra convenience for shareholders and cost savings for companies. We
and some brokers household proxy materials, delivering a single proxy statement
to multiple shareholders sharing an address unless contrary instructions have
been received from the affected shareholders. Once you have received notice from
your broker or our transfer agent, Mellon Investor Services ("Mellon"), that
they or we will be householding materials to your address, householding will
continue until you are notified otherwise or until you revoke your consent.
However, we will deliver promptly upon written or oral request a separate copy
of this Proxy Statement to a shareholder at a shared address to which a single
Proxy Statement was delivered. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate proxy
statement, or if you are receiving multiple proxy statements and would like to
request delivery of a single proxy statement, please notify your broker if your
shares are held in a brokerage account or Mellon if you hold registered shares.
You can notify Mellon by sending a written request to Mellon Investor Services,
200 Galleria Parkway NW, Suite 1900, Atlanta, GA, 30339, attention Judy Hsu.
Shareholder Proposals for the 2006 Annual Meeting. Proposals of our
shareholders intended to be presented at the 2006 Annual Meeting of Shareholders
must be received by us not later than December 19, 2005, to be
21
considered for inclusion in our proxy materials relating to the 2006 Annual
Meeting and, on or before March 3, 2006, for matters to be considered timely
such that, pursuant to Rule 14a-4 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), we may not exercise our discretionary authority to
vote on such matters at that meeting. Any such proposals should be sent to us at
our principal office addressed to James R. Martin, Clerk. Other requirements for
inclusion are set forth under Rule 14a-8 under the Exchange Act.
Proxy Solicitation Costs. All costs of solicitation will be borne by us.
The solicitation is to be principally conducted by mail and may be supplemented
by telephone and personal contacts by our Directors, executive officers and
regular employees, without additional remuneration. Arrangements will be made
with brokerage houses, banks and custodians, nominees and other fiduciaries to
forward solicitation materials to the beneficial owners of shares held of
record. We will reimburse such persons for their reasonable out-of-pocket
expenses incurred in connection with the distribution of proxy materials.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ JAMES R. MARTIN
James R. Martin, Clerk
April 18, 2005
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Appendix A
BLUEGREEN CORPORATION
2005 STOCK INCENTIVE PLAN
1. PURPOSES. The purposes of this Bluegreen Corporation 2005 Stock
Incentive Plan (the "Plan") are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
long-term incentives to the Employees of the Company or its Subsidiaries (as
defined in Section 2 below) as well as other individuals who perform services
for the Company and its Subsidiaries, and to promote the success and
profitability of the Company's business. Options granted hereunder may be either
"incentive stock options," as defined in Section 422 of the Internal Revenue
Code of 1986, as amended, or "nonqualified stock options," at the discretion of
the Committee (as defined in Section 2 below) and as reflected in the terms of
the Stock Option Agreement (as defined in Section 2 below).
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Award Notice" shall mean, with respect to a particular
Restricted Stock Award, a written instrument signed by the Company and the
recipient of the Restricted Stock Award evidencing the Restricted Stock Award
and establishing the terms and conditions thereof.
(b) "Award Recipient" shall mean the recipient of a Restricted Stock
Award.
(c) "Beneficiary" shall mean the Person designated by an Award
Recipient to receive any Shares subject to a Restricted Stock Award made to such
Award Recipient that become distributable following the Award Recipient's death.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
(g) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan.
(h) "Company" shall mean Bluegreen Corporation, a Massachusetts
corporation, and its successors and assigns.
(i) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board of Directors of the
Company or the Committee. Continuous Status as an Employee shall not be deemed
terminated or interrupted by a termination of employment followed immediately by
service as a non-Employee director of the Company or one or more of its
Subsidiaries until a subsequent termination of all service as either a
non-Employee director or an Employee.
23
(j) "Covered Employee" shall mean, for any taxable year of the
Company, a person who is, or who the Committee determines is reasonably likely
to be, a "covered employee" within the meaning of Section 162(m) of the Code.
(k) "Disability" shall mean permanent and total disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" shall be determined by the Committee in its
discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be (i) if the Common Stock
is listed or admitted for trading on any United States national securities
exchange, or if actual transactions are otherwise reported on a consolidated
transaction reporting system, the closing price of such stock on such exchange
or reporting system, as the case may be, on the relevant date, as reported in
any newspaper of general circulation, or (ii) if the Common Stock is quoted on
the National Association of Securities Dealers Automated Quotations ("Nasdaq")
System, or any similar system of automated dissemination of quotations of
securities prices in common use, the mean between the closing bid and asked
quotations for such stock on the relevant date, as reported by a generally
recognized reporting service.
(o) "Incentive Stock Option" shall mean a stock option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(p) "Nonqualified Stock Option" shall mean a stock option not
intended to qualify as an Incentive Stock Option or a stock option that at the
time of grant, or subsequent thereto, fails to satisfy the requirements of
Section 422 of the Code.
(q) "Option" shall mean a stock option granted pursuant to the Plan.
(r) "Optioned Stock" shall mean the Shares subject to an Option.
(s) "Optionee" shall mean the recipient of an Option.
(t) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "Performance-Based Restricted Stock Award" shall mean a
Restricted Stock Award to which Section 8(c) is applicable.
(v) "Performance Goal" shall mean, with respect to any
Performance-Based Restricted Stock Award, the performance goal(s) established
pursuant to Section 8(c)(i), the attainment of which is a condition of vesting
of the Performance-Based Restricted Stock Award.
(w) "Performance Measurement Period" shall mean, with respect to any
Performance Goal, the period of time over which attainment of the Performance
Goal is measured.
24
(x) "Person" shall mean an individual, a corporation, a partnership,
a limited liability company, an association, a joint-stock company, a trust, an
estate, an unincorporated organization and any other business organization or
institution.
(y) "Restricted Stock Award" shall mean an award of Shares pursuant
to Section 8.
(z) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act or any successor rule.
(aa) "Service" shall mean, unless the Committee provides otherwise
in an Award Notice: (a) service in any capacity as a common-law employee,
director, advisor or consultant to the Company or a Parent or Subsidiary; (b)
service in any capacity as a common-law employee, director, advisor or
consultant (including periods of contractual availability to perform services
under a retainer arrangement) to an entity that was formerly a Parent or
Subsidiary, to the extent that such service is an uninterrupted continuation of
services being provided immediately prior to the date on which such entity
ceased to be a Parent or Subsidiary; and (c) performance of the terms of any
contractual non-compete agreement for the benefit of the Company or a Parent or
Subsidiary.
(bb) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 9 of the Plan.
(cc) "Stock Option Agreement" shall mean the written option
agreements described in Section 14 of the Plan.
(dd) "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
(ee) "Transferee" shall mean a "transferee" of the Optionee as
defined in Section 7(d) of the Plan.
3. STOCK. Subject to the provisions of Section 9 of the Plan, the maximum
aggregate number of Shares which may be issued for Restricted Stock Awards and
upon the exercise of Options under the Plan is 2,000,000 Shares. The maximum
aggregate number of Shares which may be covered by Options granted to
individuals who are Covered Employees shall be 500,000 Shares during any
calendar year. The maximum aggregate number of Shares which may be issued as
Restricted Stock Awards to individuals who are Covered Employees shall be
500,000 Shares during any calendar year. If an Option or Restricted Stock Award
should expire or become unexercisable for any reason without having been
exercised or vested in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for further
grant under the Plan.
Subject to the provisions of Section 9 of the Plan, no person shall be
granted Options under the Plan in any calendar year covering an aggregate of
more than 100,000 Shares. If an Option should expire, become unexercisable for
any reason without having been exercised in full, or be cancelled for any reason
during the calendar year in which it was granted, the number of Shares covered
by such Option shall nevertheless be treated as Options granted for purposes of
the limitation in the preceding sentence.
25
4. ADMINISTRATION.
(a) Procedure. The Plan shall be administered by a Committee
appointed by the Board of Directors, which initially shall be the Compensation
Committee of the Company. The Committee shall consist of not less than two
members of the Board of Directors. Once appointed, the Committee shall continue
to serve until otherwise directed by the Board of Directors. From time to time
the Board of Directors, at its discretion, may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause), and appoint new members in substitution therefor, and fill
vacancies however caused; provided, however, that at no time shall a Committee
of less than two members of the Board of Directors administer the Plan. If the
Committee does not exist, or for any other reason determined by the Board of
Directors, the Board may take any action and exercise any power, privilege or
discretion under the Plan that would otherwise be the responsibility of the
Committee.
(b) Powers of the Committee. Subject to the provisions of the Plan,
the Committee shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, in accordance with Section 422 of the Code, to grant
Nonqualified Stock Options or to grant Restricted Stock Awards; (ii) to
determine, upon review of relevant information, the Fair Market Value of the
Common Stock; (iii) to determine the exercise price per share of Options to be
granted or consideration for Restricted Stock Awards; (iv) to determine the
persons to whom, and the time or times at which, Options and Restricted Stock
Awards shall be granted and the number of Shares to be represented by each
Option or Restricted Stock Award; (v) to determine the vesting schedule of the
Options and Restricted Stock Awards to be granted; (vi) to interpret the Plan;
(vii) to prescribe, amend and rescind rules and regulations relating to the
Plan; (viii) to determine the terms and provisions of each Option or Restricted
Stock Award granted (which need not be identical) and, with the consent of the
holder thereof if required, modify or amend each Option or Restricted Stock
Award; (ix) to accelerate or defer (with the consent of the holder thereof) the
exercise or vesting date of any Option or the vesting date of any Restricted
Stock Award; (x) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option or Restricted Stock
Award previously granted by the Committee; (xi) to grant an Option in
replacement of Options previously granted under this Plan; and (xii) to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
(c) Effect of the Committee's Decision. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all Optionees, Award Recipients or Transferees, if applicable.
5. ELIGIBILITY. Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options and Restricted Stock Awards may be granted to
Employees as well as directors, independent contractors and agents who are
natural persons (but only if such Options or Restricted Stock Awards are granted
as compensation for personal services rendered by the independent contractor or
agent to the Company or a Subsidiary that are not services in connection with
the offer or sale of securities in a capital-raising transaction or services
that, directly or indirectly, promote or maintain a market for the Company's
securities), as determined by the Committee. Any person who has been granted an
Option or Restricted Stock Award may, if he is otherwise eligible, be granted an
additional Option or Options or Restricted Stock Award.
Except as otherwise provided under the Code, to the extent that the
aggregate Fair Market Value of Shares for which Incentive Stock Options (under
all stock option plans of the Company and of any Parent or Subsidiary) are
exercisable for the first time by an Employee during any calendar year exceeds
$100,000, such excess Options shall be treated as Nonqualified Stock Options.
For purposes of this limitation, (a) the Fair Market Value of Shares is
determined as of the time the Option is granted and (b) the limitation is
applied by taking into account Options in the order in which they were granted.
26
The Plan shall not constitute a contract of employment nor shall the Plan
confer upon any Optionee or Award Recipient any right with respect to
continuation of employment or continuation of providing services to the Company,
nor shall it interfere in any way with his right or the Company's or any
Parent's or Subsidiary's right to terminate his employment or his provision of
services at any time.
6. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board of Directors; provided, however, if the Plan is not approved by the
shareholders of the Company in accordance with Section 15 of the Plan within 12
months after the date of adoption by the Board of Directors, the Plan and any
Options or Restricted Stock Awards granted thereunder shall terminate and become
null and void. The Plan shall continue in effect for 10 years from the effective
date of the Plan, unless sooner terminated under Section 11 of the Plan.
7. STOCK OPTIONS.
(a) Term of Option. The term of each Option shall be 10 years from
the date of grant thereof or such shorter term as may be provided in the Stock
Option Agreement. However, in the case of an Incentive Stock Option granted to
an Employee who, immediately before the Incentive Stock Option is granted, owns
stock representing more than 10% of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Incentive Stock Option
shall be five years from the date of grant thereof or such shorter time as may
be provided in such Optionee's Stock Option Agreement
(b) Exercise Price And Consideration.
(i) Price. The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as determined by the
Committee, but shall be subject to the following:
(A) In the case of an Incentive Stock Option which is
(1) granted to an Employee who, immediately before the
grant of such Incentive Stock Option, owns stock representing more than 10% of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(2) granted to an Employee not within (1), the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(3) In the case of a Nonqualified Stock Option, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) Certain Corporate Transactions. In the event the Company
substitutes an Option for a stock option issued by another corporation in
connection with a corporate transaction, such as a merger, consolidation,
acquisition of property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code) or partial or complete liquidation involving the Company and such other
corporation, the exercise price of such substituted option shall be as
determined by the Committee in its discretion (subject to the provisions of
Section 424(a) of the Code in the case of a stock option that was intended to
qualify as an "incentive stock option") to preserve, on a per Share basis
immediately after such corporate transaction, the same ratio of Fair Market
Value per Option Share to exercise price per Share which existed immediately
prior to such corporate transaction under the option issued by such other
corporation.
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(iii) Payment. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Committee and may consist entirely of cash, check, promissory
note, or other shares of the Company's capital stock having a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment for the issuance of
Shares to the extent permitted under the law of the Company's jurisdiction of
incorporation. The Committee may also establish coordinated procedures with one
or more brokerage firms for the "cashless exercise" of Options, whereby Shares
issued upon exercise of an Option are delivered against payment by the brokerage
firm on the Optionee's behalf. When payment of the exercise price for the Shares
to be issued upon exercise of an Option consists of shares of the Company's
capital stock, such shares will not be accepted as payment unless the Optionee
or Transferee, if applicable, has held such shares for the requisite period
necessary to avoid a charge to the Company's earnings for financial reporting
purposes.
(c) Exercise of Option.
(i) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Committee, including performance criteria with respect to
the Company or its Subsidiaries and/or the Optionee, and as shall be permissible
under the terms of the Plan. An Option may not be exercised for a fraction of a
Share. An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Committee, consist of any
consideration and method of payment allowable under Section 7(b)(iii) of the
Plan. Until the issuance of the stock certificate evidencing such Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), which in no event will be delayed
more than 30 days from the date of the exercise of the Option, no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in the
Plan. Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(ii) Termination of Status as an Employee. Subject to this Section
7(c)(ii), if any Employee ceases to be in Continuous Status as an Employee, he
or any Transferee may, but only within 30 days or such other period of time not
exceeding three months as is determined by the Committee (or, provided that the
applicable Option is not to be treated as an Incentive Stock Option, such longer
period of time as may be determined by the Committee) after the date he ceases
to be an Employee, exercise his Option to the extent that he or any Transferee
was entitled to exercise it as of the date of such termination. To the extent
that he or any Transferee was not entitled to exercise the Option at the date of
such termination, or if he or any Transferee does not exercise such Option
(which he or any Transferee was entitled to exercise) within the time specified
herein, the Option shall terminate. If any Employee ceases to serve as an
Employee as a result of a termination for cause (as determined by the
Committee), any Option held by such Employee or any Transferee shall terminate
immediately and automatically on the date of his termination as an Employee
unless otherwise determined by the Committee. Notwithstanding the foregoing, if
an Employee ceases to be in Continuous Status as an Employee solely due to a
reorganization, merger, consolidation, spin-off, combination, re-assignment to
another member of the affiliated group of which the Company is a member or other
similar corporate transaction or event, the Committee may, in its discretion,
suspend the operation of this Section 7(c)(ii); provided that the Employee shall
execute an agreement, in form and substance satisfactory to the Committee,
waiving such
28
Employee's right to have such Employee's Options treated as Incentive Stock
Options from and after a date determined by the Committee which shall be no
later than three months from the date on which such Employee ceases to be in
Continuous Status as an Employee, and such Employee's Options shall thereafter
be treated as Nonqualified Stock Options for all purposes.
(iii) Disability of Optionee. Notwithstanding the provisions of
Section 7(c)(ii) above, in the event an Employee is unable to continue his
employment as a result of his Disability, he or any Transferee may, but only
within three months or such other period of time not exceeding 12 months as is
determined by the Committee (or, provided that the applicable Option is not to
be treated as an Incentive Stock Option, such longer period of time as may be
determined by the Committee) from the date of termination of employment,
exercise his Option to the extent he or any Transferee was entitled to exercise
it at the date of such Disability. To the extent that he or any Transferee was
not entitled to exercise the Option at the date of Disability, or if he or any
Transferee does not exercise such Option (which he or any Transferee was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(iv) Death of Optionee. In the event of the death of an Optionee:
(A) during the term of the Option and who is at the time of
his death an Employee and who shall have been in Continuous Status as an
Employee since the date of grant of the Option, the Option may be exercised at
any time within 12 months (or, provided that the applicable Option is not to be
treated as an Incentive Stock Option, such longer period of time as may be
determined by the Committee) following the date of death, by the Optionee's
estate, by a person who acquired the right to exercise the Option by bequest or
inheritance, or by any Transferee, as the case may be, but only to the extent of
the right to exercise that would have accrued had the Optionee continued living
one month after the date of death; or
(B) within 30 days or such other period of time not exceeding
three months as is determined by the Committee (or, provided that the applicable
Option is not to be treated as an Incentive Stock Option, such longer period of
time as may be determined by the Committee) after the termination of Continuous
Status as an Employee, the Option may be exercised, at any time within three
months following the date of death, by the Optionee's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance, or by any
Transferee, as the case may be, but only to the extent of the right to exercise
that had accrued at the date of termination.
(d) Transferability Of Options. During an Optionee's lifetime, an
Option may be exercisable only by the Optionee and an Option granted under the
Plan and the rights and privileges conferred thereby shall not be subject to
execution, attachment or similar process and may not be sold, pledged, assigned,
hypothecated, transferred or otherwise disposed of in any manner (whether by
operation of law or otherwise) other than by will or by the laws of descent and
distribution. Notwithstanding the foregoing, to the extent permitted by
applicable law and Rule 16b-3, the Committee may determine that an Option may be
transferred by an Optionee to any of the following: (1) a family member of the
Optionee; (2) a trust established primarily for the benefit of the Optionee
and/or a family member of said Optionee in which the Optionee and/or one or more
of his family members collectively have a more than 50% beneficial interest; (3)
a foundation in which such persons collectively control the management of
assets; (4) any other legal entity in which such persons collectively own more
than 50% of the voting interests; or (5) any charitable organization exempt from
income tax under Section 501(c)(3) of the Code (collectively, a "Transferee");
provided, however, in no event shall an Incentive Stock Option be transferable
if such transferability would violate the applicable requirements under Section
422 of the Code. Any other attempt to sell, pledge, assign, hypothecate,
transfer or otherwise dispose of any Option under the Plan or of any right or
privilege conferred thereby, contrary to the provisions of the Plan, or the sale
or levy or any attachment or similar process upon the rights and privileges
conferred hereby, shall be null and void.
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8. RESTRICTED STOCK AWARDS.
(a) In General.
(i) Each Restricted Stock Award shall be evidenced by an Award
Notice issued by the Committee to the Award Recipient containing such terms and
conditions not inconsistent with the Plan as the Committee may, in its
discretion, prescribe, including, without limitation, any of the following terms
or conditions:
(A) the number of Shares covered by the Restricted Stock
Award;
(B) the amount (if any) which the Award Recipient shall be
required to pay to the Company in consideration for the issuance of such Shares
(which shall in no event be less than the minimum amount required for such
Shares to be validly issued, fully paid and nonassessable under applicable law);
(C) whether the Restricted Stock Award is a Performance-Based
Award and, if it is, the applicable Performance Goal or Performance Goals;
(D) the date of grant of the Restricted Stock Award; and
(E) the vesting date for the Restricted Stock Award;
(ii) All Restricted Stock Awards shall be in the form of issued and
outstanding Shares that shall be either:
(A) registered in the name of the Committee for the benefit of
the Award Recipient and held by the Committee pending the vesting or forfeiture
of the Restricted Stock Award;
(B) registered in the name of Award Recipient and held by the
Committee, together with a stock power executed by the Award Recipient in favor
of the Committee, pending the vesting or forfeiture of the Restricted Stock
Award; or
(C) registered in the name of and delivered to the Award
Recipient.
In any event, the certificates evidencing the Shares shall at all times
prior to the applicable vesting date bear the following legend:
The Common Stock evidenced hereby is subject to the
terms of a Restricted Stock Award agreement between
Bluegreen Corporation and [Name of Award Recipient]
dated [Date] made pursuant to the terms of the Bluegreen
Corporation 2005 Stock Incentive Plan, copies of which
are on file at the executive offices of Bluegreen
Corporation, and may not be sold, encumbered,
hypothecated or otherwise transferred except in
accordance with the terms of such Plan and Agreement.
and/or such other restrictive legend as the Committee, in its discretion, may
specify.
(iii) Except as otherwise provided by the Committee, a Restricted
Stock Award shall not be transferable by the Award Recipient other than by will
or by the laws of descent and distribution, and
30
the Shares granted pursuant to such Restricted Stock Award shall be
distributable, during the lifetime of the Award Recipient, only to the Award
Recipient.
(b) Vesting Date.
(i) The vesting date for each Restricted Stock Award shall be
determined by the Committee and specified in the Award Notice and, if no date is
specified in the Award Notice, shall be the first anniversary of the date on
which the Restricted Stock Award is granted. Unless otherwise determined by the
Committee and specified in the Award Notice:
(A) if the Service of an Award Recipient is terminated prior
to the vesting date of a Restricted Stock Award for any reason other than death
or Disability, any unvested Shares shall be forfeited without consideration
(other than a refund to the Award Recipient of an amount equal to the lesser of
(1) the cash amount, if any, actually paid by the Award Recipient to the Company
for the Shares being forfeited and (2) the Fair Market Value of such Shares on
the date of forfeiture);
(B) if the Service of an Award Recipient is terminated prior
to the vesting date of a Restricted Stock Award on account of death or
Disability, any unvested Shares with a vesting date that is during the period of
six months beginning on the date of termination of Service shall become vested
on the date of termination of Service and any remaining unvested Shares
forfeited without consideration (other than a refund to the Award Recipient of
an amount equal to the lesser of (1) the cash amount, if any, actually paid by
the Award Recipient to the Company for the Shares being forfeited and (2) the
Fair Market Value of such Shares on the date of forfeiture); and
(c) Performance-Based Restricted Stock Awards.
(i) At the time it grants a Performance-Based Restricted Stock
Award, the Committee shall establish one or more Performance Goals the
attainment of which shall be a condition of the Award Recipient's right to
retain the related Shares. The Performance Goals shall be selected from among
the following:
(A) earnings per share;
(B) net income;
(C) EBITDA;
(D) return on equity;
(E) return on assets;
(F) core earnings;
(G) stock price;
(H) strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business expansion goals,
goals relating to acquisitions or divestitures, revenue targets or business
development goals;
(I) except in the case of a Covered Employee, any other
performance criteria established by the Committee;
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(J) any combination of (A) through (I) above.
Performance Goals may be established on the basis of reported earnings or cash
earnings, and consolidated results or individual business units and may, in the
discretion of the Committee, include or exclude extraordinary items, taxes
and/or the results of discontinued operations. Each Performance Goal may be
expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the
Company or any Subsidiary (or individual business units) and/or the past or
current performance of other companies.
(ii) At the time it grants a Performance-Based Restricted Stock
Award, the Committee shall establish a Performance Measurement Period for each
Performance Goal. The Performance Measurement Period shall be the period over
which the Performance Goal is measured and its attainment is determined. If the
Committee establishes a Performance Goal but fails to specify a Performance
Measurement Period, the Performance Measurement Period shall be:
(A) if the Performance-Based Restricted Stock Award is granted
during the first three months of the Company's fiscal year, the fiscal year of
the Company in which the Performance-Based Restricted Stock Award is granted;
and
(B) in all other cases, the period of four consecutive fiscal
quarters of the Company that begins with the fiscal quarter in which the
Performance-Based Restricted Stock Award is granted.
(iii) Within a reasonable period of time as shall be determined by
the Committee following the end of each Performance Measurement Period, the
Committee shall determine, on the basis of such evidence as it deems
appropriate, whether the Performance Goals for such Performance Measurement
Period have been attained and, if they have been obtained, shall certify such
fact in writing.
(iv) If the Performance Goals for a Performance-Based Restricted
Stock Award have been determined by the Committee to have been attained and
certified, the Committee shall either:
(A) if the relevant vesting date has occurred, cause the
ownership of the Shares subject to such Restricted Stock Award, together with
all dividends and other distributions with respect thereto that have been
accumulated, to be transferred on the stock transfer records of the Company,
free of any restrictive legend other than as may be required by applicable law,
to the Award Recipient;
(B) in all other cases, continue the Shares in their current
status pending the occurrence of the relevant vesting date or forfeiture of the
Shares.
If any one or more of the relevant Performance Goals have been determined by the
Committee to not have been attained, all of the Shares subject to such
Restricted Stock Award shall be forfeited without consideration (other than a
refund to the Award Recipient of an amount equal to the lesser of (1) the cash
amount, if any, actually paid by the Award Recipient to the Company for the
Shares being forfeited and (2) the Fair Market Value of such Shares on the date
of forfeiture).
(v) If the Performance Goals for any Performance Measurement Period
shall have been affected by special factors (including material changes in
accounting policies or practices, material acquisitions or dispositions of
property, or other unusual items) that in the Committee's judgment should or
should not be taken into account, in whole or in part, in the equitable
administration of the Plan, the
32
Committee may, for any purpose of the Plan, adjust such Performance Goals and
make payments accordingly under the Plan; provided, however, that any
adjustments made in accordance with or for the purposes of this Section 8(c)(v)
shall be disregarded for purposes of calculating the Performance Goals for a
Performance-Based Restricted Stock Award to a Covered Employee if and to the
extent that such adjustments would have the effect of increasing the amount of a
Restricted Stock Award to such Covered Employee.
(d) Dividend Rights. Unless the Committee determines otherwise with
respect to any Restricted Stock Award and specifies such determination in the
relevant Award Notice, any dividends or distributions declared and paid with
respect to Shares subject to the Restricted Stock Award, whether or not in cash,
shall be held and accumulated for distribution at the same time and subject to
the same terms and conditions as the underlying Shares.
(e) Voting Rights. Unless the Committee determines otherwise with
respect to any Restricted Stock Award and specifies such determination in the
relevant Award Notice, voting rights appurtenant to the Shares subject to the
Restricted Stock Award, shall be exercised by the Committee in its discretion.
(f) Tender Offers. Each Award Recipient shall have the right to
respond, or to direct the response, with respect to the issued Shares related to
its Restricted Stock Award, to any tender offer, exchange offer or other offer
made to the holders of Shares. Such a direction for any such Shares shall be
given by completing and filing, with the inspector of elections, the trustee or
such other person who shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and manner
prescribed by the Committee. If no such direction is given, then the Shares
shall not be tendered.
(g) Designation of Beneficiary. An Award Recipient may designate a
Beneficiary to receive any unvested Shares that become available for
distribution on the date of his death. Such designation (and any change or
revocation of such designation) shall be made in writing in the form and manner
prescribed by the Committee. In the event that the Beneficiary designated by an
Award Recipient dies prior to the Award Recipient, or in the event that no
Beneficiary has been designated, any vested Shares that become available for
distribution on the Award Recipient's death shall be paid to the executor or
administrator of the Award Recipient's estate, or if no such executor or
administrator is appointed within such time as the Committee, in its sole
discretion, shall deem reasonable, to such one or more of the spouse and
descendants and blood relatives of such deceased person as the Committee may
select.
(h) Taxes. The Company or the Committee shall have the right to
require any person entitled to receive Shares pursuant to a Restricted Stock
Award to pay the amount of any tax which is required to be withheld with respect
to such Shares, or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of Shares to cover the amount required to be withheld.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
Subject to any required action by the shareholders of the Company, in the
event any recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or exchange of Common Stock or
other securities, stock dividend or other special and nonrecurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Common Stock such that an adjustment is appropriate in the
Committee's discretion in order to prevent dilution or enlargement of the rights
of Optionees and Award Recipients under the Plan, then the Committee shall, in
such manner
33
as it may deem equitable, adjust any or all of (i) the number and kind of shares
of Common Stock or other securities deemed to be available thereafter for grants
of Options and Restricted Stock Awards under the Plan in the aggregate to all
eligible individuals and individually to any one eligible individual, (ii) the
number and kind of shares of Common Stock or other securities that may be
delivered or deliverable in respect of outstanding Options or Restricted Stock
Awards, and (iii) the exercise price of Options. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Options and Restricted Stock Awards (including, without limitation,
cancellation of Options or Restricted Stock Awards in exchange for the
in-the-money value, if any, of the vested portion thereof, or substitution of
Options or Restricted Stock Awards using stock of a successor or other entity)
in recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the Company or any
Subsidiary or the financial statements of the Company or any Subsidiary, or in
response to changes in applicable laws, regulations, or account principles;
provided, however, that any such adjustment to an Option or Performance-Based
Restricted Stock Award granted to a Covered Employee with respect to the Company
or its Parent or Subsidiaries shall conform to the requirements of Section
162(m) of the Code and the regulations thereunder then in effect. In addition,
each such adjustment with respect to an Incentive Stock Option shall comply with
the rules of Section 424(a) of the Code (or any successor provision), and in no
event shall any adjustment be made which would render any Incentive Stock Option
granted hereunder other than an "incentive stock option" as defined in Section
422 of the Code. The Committee's determination shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Restricted Stock Award.
In the event of the proposed dissolution or liquidation of the Company, or
in the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Committee or the Board of Directors may determine, in its discretion, that (i)
if any such transaction is effected in a manner that holders of Common Stock
will be entitled to receive stock or other securities in exchange for such
shares, then, as a condition of such transaction, lawful and adequate provision
shall be made whereby the provisions of the Plan and the Options granted
hereunder shall thereafter be applicable, as nearly equivalent as may be
practicable, in relation to any shares of stock or securities thereafter
deliverable upon the exercise of any Option or (ii) the Option will terminate
immediately prior to the consummation of such proposed transaction. The
Committee or the Board of Directors may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Committee or the Board of Directors and give each Optionee or Transferee, if
applicable, the right to exercise his Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable; provided, however, that the Committee may, at any time prior to the
consummation of such merger, consolidation or other business reorganization,
direct that all, but not less than all, outstanding Options be cancelled as of
the effective date of such merger, consolidation or other business
reorganization in exchange for a cash payment per share of Optioned Stock equal
to the excess (if any) of the value exchanged for an outstanding Share in such
merger, consolidation or other business reorganization over the exercise price
of the Option being cancelled.
In the event of any merger, consolidation, or other business
reorganization in which the Company is not the surviving entity, any Restricted
Stock Award with respect to which Shares had been awarded to an Award Recipient
shall be adjusted by allocating to the Award Recipient the amount of money,
stock, securities or other property to be received by the other shareholders of
record, and such money, stock, securities or other property shall be subject to
the same terms and conditions of the Restricted Stock Award that applied to the
Shares for which it has been exchanged.
34
Without limiting the generality of the foregoing, the existence of
outstanding Options or Restricted Stock Awards granted under the Plan shall not
affect in any manner the right or power of the Company to make, authorize or
consummate (i) any or all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company; (iii) any issuance by the Company of
debt securities or preferred or preference stock that would rank above the
Shares subject to outstanding Options or Restricted Stock Awards; (iv) the
dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or otherwise.
10. TIME FOR GRANTING OPTIONS AND RESTRICTED STOCK AWARDS. The date of
grant of an Option or Restricted Stock Award shall, for all purposes, be the
date on which the Committee makes the determination granting such Option or
Restricted Stock Award or such later date as the Committee may specify. Notice
of the determination shall be given to each Optionee or Award Recipient within a
reasonable time after the date of such grant.
11. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Committee Action; Shareholders' Approval. Subject to applicable
laws and regulations, the Committee or the Board of Directors may amend or
terminate the Plan from time to time in such respects as the Committee or the
Board of Directors may deem advisable, without the approval of the Company's
shareholders.
(b) Effect of Amendment or Termination. No amendment or termination
or modification of the Plan shall in any manner affect any Option or Restricted
Stock Award theretofore granted without the consent of the Optionee or Award
Recipient, except that the Committee or the Board of Directors may amend or
modify the Plan in a manner that does affect Options or Restricted Stock Awards
theretofore granted upon a finding by the Committee or the Board of Directors
that such amendment or modification is in the best interest of shareholders,
Optionees or Award Recipients.
12. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or delivered with respect to a Restricted
Stock Award unless the exercise of such Option and the issuance and delivery of
such Shares pursuant thereto or the grant of a Restricted Stock Award and the
delivery of Shares with respect thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, grant of a Restricted Stock
Award or delivery of Shares with respect to a Restricted Stock Award, the
Company may require the Person exercising such Option or acquiring such Shares
or Restricted Stock Award to represent and warrant at the time of any such
exercise, grant or acquisition that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law. The Company shall not
be required to deliver any Shares under the Plan prior to (i) the admission of
such Shares to listing on any stock exchange on which Shares may then be listed,
or (ii) the completion of such registration or other qualification under any
state or federal law, rule or regulation as the Committee shall determine to be
necessary or advisable.
35
13. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained.
14. STOCK OPTION AGREEMENT; AWARD NOTICE. Options shall be evidenced by
written option agreements and Restricted Stock Awards shall be evidenced by
Award Notices, each in such form as the Board of Directors or the Committee
shall approve.
15. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company entitled to vote thereon within 12
months after the date the Plan is adopted. If such shareholder approval is
obtained at a duly held shareholders' meeting, it may be obtained by the
affirmative vote of the holders of outstanding shares of the Company's common
stock representing a majority of the votes entitled to be cast thereon. No
Performance-Based Restricted Stock Awards shall be granted after the fifth
anniversary of the date the Plan is adopted unless, prior to such date, the
listing of permissible Performance Goals set forth in Section 8(c) shall have
been re-approved by the shareholders of the Company in the manner required by
Section 162(m) of the Code and the regulations thereunder.
16. OTHER PROVISIONS. The Stock Option Agreements or Award Notices
authorized under the Plan may contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option or vesting of the
Restricted Stock Award, as the Board of Directors or the Committee shall deem
advisable. Any Incentive Stock Option Agreement shall contain such limitations
and restrictions upon the exercise of the Incentive Stock Option as shall be
necessary in order that such Option will be an incentive stock option as defined
in Section 422 of the Code.
17. INDEMNIFICATION OF COMMITTEE MEMBERS. In addition to such other rights
of indemnification they may have as directors, the members of the Committee
shall be indemnified by the Company against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal thereon, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option or Restricted
Stock Award granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such
Committee member is liable for gross negligence or misconduct in the performance
of his duties; provided that within 60 days after institution of any such
action, suit or proceeding a Committee member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the same.
18. NO OBLIGATION TO EXERCISE OPTION. The granting of an Option shall
impose no obligation upon the Optionee to exercise such Option.
19. WITHHOLDINGS; TAX MATTERS.
(a) The Company shall have the right to deduct from all amounts paid
by the Company in cash with respect to an Option under the Plan any taxes
required by law to be withheld with respect to such Option. Where any Person is
entitled to receive Shares pursuant to the exercise of an Option, the Company
shall have the right to require such Person to pay to the Company the amount of
any tax which the Company is required to withhold with respect to such Shares,
or, in lieu thereof, to retain, or to sell
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without notice, a sufficient number of Shares to cover the minimum amount
required to be withheld. To the extent determined by the Committee and specified
in the Option Agreement, an Option holder shall have the right to direct the
Company to satisfy the minimum required federal, state and local tax withholding
by reducing the number of Shares subject to the Option (without issuance of such
Shares to the Option holder) by a number equal to the quotient of (i) the total
minimum amount of required tax withholding divided by (ii) the excess of the
Fair Market Value of a Share on the Option exercise date over the Option
exercise price per Share.
(b) If and to the extent permitted by the Committee and specified in
an Award Notice for a Restricted Stock Award other than a Performance-Based
Restricted Stock Award, an Award Recipient may be permitted or required to make
an election under section 83(b) of the Code to include the compensation related
thereto in income for federal income tax purposes at the time of issuance of the
Shares to such Award Recipient instead of at a subsequent vesting date. In such
event, the Shares issued prior to their vesting date shall be issued in
certificated form only, and the certificates therefor shall bear the following
legend:
The Common Stock evidenced hereby is subject to the
terms of a Restricted Stock Award agreement between
Bluegreen Corporation and [Name of Recipient] dated
[Date] made pursuant to the terms of the Bluegreen
Corporation 2005 Stock Incentive Plan, copies of which
are on file at the executive offices of Bluegreen
Corporation, and may not be sold, encumbered,
hypothecated or otherwise transferred except in
accordance with the terms of such Plan and Agreement.
or such other restrictive legend as the Committee, in its discretion, may
specify. In the event of the Award Recipient's termination of Service prior to
the relevant vesting date or forfeiture of the Shares for any other reason, the
Award Recipient shall be required to return all forfeited Shares to the Company
without consideration therefor (other than a refund to the Award Recipient of an
amount equal to the lesser of (i) the cash amount, if any, actually paid by the
Award Recipient to the Company for the Shares being forfeited and (ii) the Fair
Market Value of such Shares on the date of forfeiture).
20. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.
21. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the singular
shall include the plural, and the masculine pronoun shall include the feminine
gender.
22. HEADINGS, ETC. NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.
23. SEVERABILITY. If any provision of the Plan is held to be invalid or
unenforceable by a court of competent jurisdiction, then such invalidity or
unenforceability shall not affect the validity and enforceability of the other
provisions of the Plan and the provision held to be invalid or unenforceable
shall be enforced as nearly as possible according to its original terms and
intent to eliminate such invalidity or unenforceability.
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