[LOGO]
bluegreen(R)
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
Tel: (561) 912-8000 Fax: (561) 912-8100
April 17, 2004
To our Shareholders:
You are cordially invited to attend our Annual Meeting of Shareholders,
which will be held at the Broward County Convention Center, 1950 Eisenhower
Boulevard, 3rd floor, Fort Lauderdale, Florida, on Tuesday, May 11, 2004, at
3:30 p.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. Following the meeting,
please join us for an Annual Celebration and Exposition. The schedule will be as
follows: 3:30 - 5:00 p.m. Exposition open; 5:00 p.m. - 6:15 p.m. Video and
Presentation; 6:15 p.m. - 8:00 p.m. Exposition open.
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" 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 11, 2004
Our Annual Meeting of the Shareholders will be held at the Broward County
Convention Center, 1950 Eisenhower Boulevard, 3rd floor, Fort Lauderdale,
Florida, on Tuesday, May 11, 2004, at 3:30 p.m., local time, to consider and act
on the following matters:
(1) To elect four Directors, each of whom will serve for a three-year
term;
(2) To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
The close of business on March 25, 2004, 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/ RANDI S. TOMPKINS
Randi S. Tompkins
Clerk
April 16, 2004
BLUEGREEN CORPORATION
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
(561) 912-8000
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Annual Meeting of Shareholders
May 11, 2004
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PROXY STATEMENT
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INFORMATION ABOUT THE MEETING
This Proxy Statement is being furnished to the holders of common stock,
par value $.01 per share ("Common Stock") of Bluegreen Corporation, a
Massachusetts corporation, 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 Broward County Convention Center, 1950 Eisenhower
Boulevard, 3rd floor, Fort Lauderdale, Florida, on Tuesday, May 11, 2004, at
3:30 p.m., local time, and at any adjournment or postponement thereof.
What is the purpose of the Annual Meeting?
At the Annual Meeting, shareholders will act upon the proposal regarding
the election of Directors and to transact such 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?
The Board of Directors has fixed the close of business on March 25, 2004
(the "Record Date"), as the date for determining the shareholders entitled to
receive notice of, and to vote at, the Annual Meeting and any adjournments or
postponements thereof.
What are the voting rights of the holders of Bluegreen Corporation 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."
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Who can attend the Annual Meeting?
Subject to space availability, 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. Since seating is limited, admission to the meeting
will be on a first-come, first-served basis.
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 that date
was 25,577,413, with each share being entitled to one vote. Thus the presence in
person or by proxy of the holders of 12,814,284 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. 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, then your broker, bank or nominee may or may not vote your shares in
its discretion if you have not provided voting instructions to such broker, bank
or nominee. 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." Because shares held in "street name" through
brokers, banks and nominees will not be considered entitled to vote on matters
as to which the broker, bank or nominee withholds authority (so called "broker
non-votes"), "broker non-votes" will have no effect on the outcome of the
election of Directors.
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. 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 Randi S. Tompkins, 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.
Eastern Standard Time on May 7, 2004. 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. Eastern Standard Time on May 7, 2004. 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. With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board or, if no
recommendation is given, in their own discretion.
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CORPORATE GOVERNANCE
Pursuant to our bylaws, 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 undertook a review of each Director's independence in March
2004. During this review, the Board considered transactions and relationships
between each Director or any member of his or her immediate family and Bluegreen
Corporation 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 determined that certain categories of
relationships would not constitute material relationships that would impair a
member's independence. The Board 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, (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
relationships of each of the members of the Board, and considering these
categorical standards, the Board affirmatively determined that a majority of our
Board members, including Norman H. Becker, Lawrence A. Cirillo, Scott W.
Holloway, John Laguardia, Mark A. Nerenhausen, J. Larry Rutherford and Arnold
Sevell, are independent Directors within the meaning of the listing standards of
the NYSE and applicable law.
Attendance at Meetings of the Board of Directors
Our Board of Directors held 11 meetings during the year ended December 31,
2003. Each Director attended at least 75% of the meetings of the Board of
Directors and meetings of the committees of the Board on which he served. All of
our Directors attended our 2003 Annual Meeting of Shareholders, although we do
not have a policy requiring them to do so.
Our Board of Directors has established Audit, Compensation, Nominating and
Corporate Governance and Investment Committees. The Board has adopted a written
charter for the Audit, Compensation and Nominating and Corporate Governance
Committees and 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 will be posted in the "Investor" section of our website at
www.bluegreenonline.com prior to the Annual Meeting.
Audit Committee. During 2003, the Audit Committee consisted of John
Laguardia, Chairman, Norman H. Becker, 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 SEC regulations. Mr. 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 Committee met ten times during 2003. The Audit Committee is
directly responsible for the appointment, compensation, retention and oversight
of our independent auditor. Additionally, the Audit Committee assists Board
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, and the Audit Committee's Charter is attached as Appendix A to this proxy
statement.
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Compensation Committee. During 2003, the Compensation Committee consisted
of John E. Abdo, Chairman and J. Larry Rutherford. For 2004, the Compensation
Committee will consist of Scott W. Holloway, Chairman, J. Larry Rutherford and
Mark A. 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 2003. 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 11.
Compensation Committee Interlocks and Insider Participation. None of the
members of the Compensation Committee are employed by us or any of our
subsidiaries. Mr. Abdo is the Vice Chairman of BFC Financial Corporation and
BankAtlantic Bancorp, Inc. Mr. Abdo is also the Vice Chairman and President of
Levitt Corporation ("Levitt"). Levitt beneficially owned approximately 37.2% of
the outstanding Common Stock as of March 25, 2004.
Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee was established by Board resolution in 2004 and
consists of Arnold Sevell, Chairman, Lawrence A. Cirillo and Norman H. Becker.
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 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. 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, Lawrence A. Cirillo and Mark A. Nerenhausen, who were appointed
as Directors by the Board in 2003, are standing for election by the shareholders
for the first time. Scott W. Holloway was also appointed as a Director by the
Board in 2003 and will stand for election by the shareholders for the first time
in 2005. Messrs. Cirillo, Nerenhausen and Holloway were recommended by members
of our Board. Messrs. Cirillo, Nerenhausen and Holloway were selected based on
their administrative skills, business experience and active involvement in the
community.
Investment Committee. The Investment Committee was established by the
Board of Directors by resolution in October 2003 and consists of Alan B. Levan,
Chairman, John E. Abdo and J. Larry Rutherford. The Investment Committee met
three times in 2003. 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. In
accordance with applicable NYSE rules, beginning in 2004 our non-management
Directors intend to have periodic executive sessions of the Board in which
management Directors and other members of management do not participate. Arnold
Sevell has been selected as the presiding Director for these sessions.
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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 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 Mr.
Laguardia) 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
on an annual basis at the beginning of each fiscal year at a date to be
determined by the Board of Directors. 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.
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, one of our
officers 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.
The Code of Ethics will be available on our website at www.bluegreenonline.com
prior to the Annual Meeting. We intend to post amendments to or waivers from our
Code of Ethics to the extent applicable to our chief executive officer,
principal financial officer or principal accounting officer on our website.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and Directors and persons who own more than ten percent 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, we
believe that, during the year ended December 31, 2003, all such filing
requirements were complied with on a timely basis.
Proposals at the Annual Meeting
Proposal 1 - Election of Nominees for Director
There are currently ten 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.
Directors are elected for three-year terms. The term of office of the Directors
in one of the classes expires
6
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 Board has nominated Messrs. Levan, Cirillo, Donovan and Nerenhausen
for election to the class, the term of which expires in 2007.
Unless contrary instructions are received, the enclosed proxy will be
voted for the election of the four nominees listed herein. The Board recommends
that shareholders vote "For" the election of each of the named nominees. Messrs.
Levan, Donovan, Cirillo and Nerenhausen are currently serving as our Directors
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.
If elected, the nominees listed below will serve until the 2007 Annual Meeting
of Shareholders (or special meeting in lieu thereof) and until their successors
are duly elected and qualified.
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 2004 Annual Meeting, Each of Whom Will Serve for a
Term of Three Years Expiring in 2007
Alan B. Levan, age 59, 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 BankAtlantic Bancorp, Inc.
("BBC"), a publicly held financial services holding company principally engaged
through its subsidiaries in banking and investment banking, since 1994, and
President and Chairman of the Board of BankAtlantic since 1987. Mr. Levan also
serves as Chairman of the Board of Levitt, a publicly-held real estate
development company. Mr. Levan has also served as the Chairman of the Board,
President and Chief Executive Officer of BFC Financial Corporation ("BFC") or
its predecessors since 1978. BFC is a publicly-held savings bank holding company
whose principal assets are its interests in BBC and Levitt.
Lawrence A. Cirillo, age 65, 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 65, 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 49, 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 Atlantic University.
Directors Continuing in Office, Each of Whom Will Serve Until 2005
John E. Abdo, age 60, 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
BBC since 1994 and a director of BankAtlantic since 1984. He has been employed
as Vice Chariman 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 since 1985. Mr. Abdo has also served as a
director of BFC since 1988 and as the Vice Chairman of the Board of BFC since
1993. Mr. Abdo is also a director of Benihana, Inc. ("Benihana").
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Scott W. Holloway, age 55, 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 65, became a Director in 2000. Since 1999, he has been
the President 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. 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 66, became a Director in March 2003. Mr. Becker is
currently, and has been for more than ten 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 ten years. Mr.
Becker is also a director of Benihana. In addition, Mr. Becker is an officer and
director of Ram Venture Holdings Corporation.
J. Larry Rutherford, age 58, 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
Communities Corporation, a publicly traded real estate development company.
Arnold Sevell, age 56, 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.
Director Emeritus
Joseph C. Abeles, age 89, 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 4.00% per annum
at December 31, 2003). The outstanding balance on this loan plus all accrued
interest as of July 1, 2002 became the balance of a new $125,045 promissory note
between Mr. Donovan and us. 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, 2003, was approximately
$92,723.
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 $10,000 (other than in the ordinary course of our
business) shall be approved by a majority vote of disinterested Directors, and
any such transaction will be on terms no less favorable to us than those which
could reasonably be obtained from an independent third party.
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Summary Compensation Table
The following table sets forth compensation for the past three fiscal
years for our Chief Executive Officer and our other four most highly compensated
executive officers (the "Named Executive Officers").
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Fiscal Year Securities All Other
End Salary Bonus Underlying Compensation
Name and Principal Position (Mo/Yr) ($) ($) (1) Options(#)(2) ($)
--------------------------- ------- --- ------- ------------- ---
George F. Donovan 12/2003 $500,000 $690,068 140,896 $ 7,500(3)
President and Chief Executive Officer 12/2002(5) $375,000 $570,313 -- $ 67,324
3/2002 $450,000 $433,800 -- $ 89,432
John F. Chiste 12/2003 $300,000 $369,041 63,389 $ 1,000(3)
Senior Vice President, 12/2002(5) $225,000 $273,938 -- $ 6,217
Treasurer and Chief Financial Officer 3/2002 $255,000 $182,070 -- $ 7,956
Daniel C. Koscher 12/2003 $300,000 $432,790 89,224 $ 1,000(3)
Senior Vice President, 12/2002(5) $206,250 $223,596 -- $ 5,496
President - Bluegreen Communities 3/2002 $275,000 $363,303 -- $ 6,994
John M. Maloney, Jr.(4) 12/2003 $275,000 $406,757 100,000 $ --
Senior Vice President, 12/2002(5) $206,250 $152,474 -- $ 600
President - Bluegreen Resorts 3/2002 $229,166 $ 75,000 50,000 $ 82,743
Douglas O. Kinsey(4) 12/2003 $157,000 $ 75,833 -- $ --
Senior Vice President, 12/2002(5) -- -- -- $ --
Acquisitions and Development 3/2002 -- -- -- $ --
----------
(1) Amounts represent bonuses earned for each 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, 2003, 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 and Mr. Koscher -
$1,000) and forgiveness of debt to us (Mr. Donovan - $6,500).
(4) Mr. Maloney became the Senior Vice President of Bluegreen Resorts in May
2001 and a Senior Vice President of Bluegreen Corporation and the
President of Bluegreen Resorts in May 2002. Mr. Kinsey became our Senior
Vice President, Acquisitions and Development in May 2003.
(5) Amounts are for the nine months ended December 31, 2002, our new fiscal
year end.
Option Grants in 2003
The following table sets forth information concerning individual grants of
stock options to the Named Executive Officers in the Summary Compensation Table
pursuant to our stock option plans during the fiscal year ended December 31,
2003.
Individual Grants
---------------------------------------------------------
Potential Realizable
Number of Value at Assumed
Shares of % of Total Annual Rates of Stock
Common Stock Options Exercise Price Appreciation for
Underlying Granted to Price Option Term(2)
Options Employees in Per Expiration --------------
Name Granted(1) Fiscal Year Share Date 5%($) 10%($)
---- ---------- ----------- ----- ---- ----- ------
George F. Donovan 140,896 18% $3.48 2/19/2013 $308,410 $781,567
John F. Chiste 63,389 8% $3.48 2/19/2013 $138,753 $351,626
Daniel C. Koscher 89,224 11% $3.48 2/19/2013 $195,304 $494,936
John M. Maloney, Jr. 100,000 13% $5.84 10/9/2013 $367,336 $930,896
Douglas O. Kinsey -- -- -- -- -- --
9
(1) All options vest in 2008.
(2) Amounts for the Named Executive Officer have been calculated by
multiplying the exercise price by the annual appreciation rate shown
(compounded for the remaining term of the options), subtracting the
exercise price per share and multiplying the gain per share by the number
of shares covered by the options. The dollar amounts set forth in these
columns are the result of calculations based upon assumed rates of annual
compounded stock price appreciation specified by regulation and are not
intended to forecast actual future appreciation rates of our stock price.
Option Exercises in 2003 and Year-End Option Values
The following table sets forth information regarding the number of shares
of Common Stock acquired and value realized upon the exercise of stock options
during the year ended December 31, 2003, and the number and unrealized value of
unexercised options, adjusted to give effect to any dividends on the Common
Stock, held by each of the Named Executive Officers as of December 31, 2003.
Unrealized values are computed by multiplying the number of shares by the amount
by which the closing market price of the Common Stock on the NYSE as of December
31, 2003, exceeds the exercise price.
Number of
Securities Underlying
Unexercised Value of Unexercised
Options at In-the-Money Options
Year-End (#) at Year-End ($)
------------ ---------------
Shares
Acquired Value Exercisable (E) vs. Exercisable (E) vs.
Name On Exercise (#) Realized ($) Unexercisable (U) Unexercisable (U)
---- --------------- ------------ ------------------ ------------------
George F. Donovan 229,320 $572,170 552,218 E $693,141 E
140,896 U $388,872 U
John F. Chiste -- -- 161,140 E $144,779 E
63,389 U $174,954 U
Daniel C. Koscher -- -- 301,274 E $333,599 E
89,224 U $246,257 U
John M. Maloney, Jr -- -- 20,000 E $ 79,000 E
130,000 U $158,500 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 new employment
agreements are for an initial one-year period, subject to automatic one-year
extensions unless terminated by either the employee or us with 60 days notice.
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 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
10
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 or the Securities Exchange
Act of 1934, except to the extent we specifically incorporate this Report or the
performance graphs by reference therein.
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. 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 offer 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 CEO. 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 each 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. Bonuses of approximately $2.0 million were paid to the Named
Executive Officers based on their individual performances during 2003.
11
Stock Options
Our executive officers were granted stock options to purchase shares of
Common Stock during 2003. All of the stock options were 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 higher the trading
price of our Common Stock, the higher the value of the stock options. The
granting of options is totally discretionary and options are awarded based on an
assessment of an executive officer's contribution to our success and growth.
Grants of stock options to executive officers, including the Named Executive
Officers (other than the CEO), are generally made upon the recommendation of the
CEO 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. 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.
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 CEO 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 CEO and its expectation as to
his future contributions. In 2003, Mr. Donovan received a base salary of
$500,000, which was the same base salary that Mr. Donovan received in 2002.
During 2003, Mr. Donovan was awarded an annual bonus of approximately
$690,000 and stock options to acquire approximately 141,000 shares of Common
Stock. This compares to the award of an annual bonus of approximately $570,000
and life insurance for Mr. Donovan's benefit at a premium cost of approximately
$67,000, for the nine months ended December 31, 2002. The increase in Mr.
Donovan's annual bonus was due to certain pre-determined strategic goals and
financial performance objectives being achieved during 2003. The Committee
concluded that Mr. Donovan's total compensation for 2003, 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 2003 reflects its confidence in Mr. Donovan's
ability to lead us in the implementation of our strategic plans, including the
continued development and expansion of Bluegreen(R) Resorts. The Committee's
knowledge of Mr. Donovan's successful background, including his prior service as
the chief executive officer of another publicly held real estate company,
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 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 or restricted stock unit
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:
John E. Abdo, Chairman
J. Larry Rutherford
12
Shareholder Return Performance Graph
The following graph assumes an investment of $100 on December 31, 1998,
and thereafter compares the yearly percentage change in cumulative total return
to our shareholders with an industry peer group (consisting of MEGO Financial
Corporation, 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.
[THE FOLLOWING TABLE WAS DEPICTED AS A LINE GRAPH IN THE PRINTED MATERIAL]
Data Points in Performance Graph
1998 1999 2000 2001 2002 2003
Bluegreen Corporation $100.00 $ 66.12 $ 20.66 $26.45 $46.42 $82.52
S & P 500 $100.00 $121.05 $110.02 $96.95 $75.52 $97.19
Peer Group $100.00 $ 89.64 $ 62.32 $55.48 $38.99 $60.72
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 of 1933 or the Securities Exchange
Act of 1934, except to the extent we specifically incorporate this Report by
reference therein.
13
The Audit Committee held ten meetings during 2003. 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 2003, 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, 2003 with
management, internal auditors 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 financial position, results of operations
and cash flows in conformity with accounting principles generally accepted in
the United States of America 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, 2003 be included in our
Annual Report on Form 10-K for the year ended December 31, 2003.
Submitted by the Members of the Audit Committee:
John Laguardia, Chairman
Norman H. Becker
J. Larry Rutherford
Arnold Sevell
Fees to Independent Auditors for Fiscal 2003 and 2002
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, 2003 and December 31, 2002.
Year Ended Year Ended
December 31, December 31,
2003 2002
Audit Fees (a) $715,546 $467,137
Audit-related fees (b) 67,238 70,050
Tax fees (c) 17,500 65,471
14
(a) The 2003 fees include $155,000 of fees reimbursed to us by Levitt related
to the inclusion of our audited financial statements in certain of
Levitt's filings with the Securities and Exchange Commission. The 2003
fees also include approximately $176,000 of fees related to a comfort
letter that EY provided in connection with a proposed Rule 144a private
placement of debt securities, which we have postponed at the present time.
The remainder of the 2003 fees and all of the 2002 fees related to the
audit of our consolidated financial statements, an audit of one of our
subsidiaries, quarterly reviews of our interim financial statements and
accounting consultations on matters addressed during the audits or interim
reviews.
(b) The 2003 fees include approximately $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 and all
of the 2002 fees related to internal audit outsourcing procedures and the
audit of the Bluegreen Corporation Retirement Savings Plan.
(c) 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. The
2002 fees include tax planning consulting and state and local tax
consulting.
All audit-related services, tax services and other services during 2003
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 the filing of the preceding year's annual report on Form 10-K.
Under its current practices, the Audit Committee does not regularly evaluate
potential engagements of the independent auditor and approve or reject such
potential engagements. At each Audit Committee meeting, the Audit Committee
receives updates on the services actually provided by the independent auditor,
and management may present additional services for 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 March 25, 2004, 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)
---- ---------------------------------------------- --------------
John E. Abdo (2) ............................ 9,517,325 -- 9,517,325 37.2%
Sheila B. Beauchesne ........................ -- -- -- --
Norman H. Becker ............................ -- 5,000 5,000 *
John F. Chiste .............................. 5,253 101,778 107,031 *
Lawrence A. Cirillo ......................... -- 5,000 5,000 *
George F. Donovan ........................... 55,936 552,218 608,154 2.3%
Allan J. Herz ............................... 12,038 27,500 39,538 *
Scott W. Holloway ........................... -- 5,000 5,000 *
Douglas O. Kinsey ........................... -- -- -- --
Daniel C. Koscher ........................... 33,042 179,699 212,741 *
John Laguardia .............................. -- 20,000 20,000 *
Alan B. Levan (2) ........................... 9,517,325 -- 9,517,325 37.2%
John M. Maloney, Jr.......................... 2,998 30,000 32,998 *
Susan J. Milanese ........................... 1,600 7,500 9,100 *
Mark A. Nerenhausen ......................... -- 5,000 5,000 *
Anthony M. Puleo (3) ........................ 1,278 17,500 18,778 *
J. Larry Rutherford ......................... -- 95,000 95,000 *
Arnold Sevell ............................... -- 5,000 5,000 *
Randi S. Tompkins ........................... 133 -- 133 *
All Directors and executive officers as
a group (19 persons)(4) ................... 9,629,603 1,056,195 10,685,798 40.1%
Levitt Corporation .......................... 9,517,325 -- 9,517,325 37.2%
1750 East Sunrise
Blvd Ft. Lauderdale, FL 33304(2)
----------
* 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 25,577,413 shares
outstanding on March 25, 2004.
(2) Based on the most recently Form 13D filed with the SEC as of
December 22, 2003, Messrs. Levan and Abdo may be deemed to control
Levitt, and therefore the shares beneficially held by Levitt may
also be deemed to be beneficially owned by Messrs. Levan and Abdo.
(3) Includes 136 shares of Common Stock and stock options to purchase
2,500 shares of Common Stock held by Mr. Puleo's wife, who is also
employed by us.
(4) 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 positions and interests in Levitt and its parent, BFC.
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.
16
INDEPENDENT PUBLIC ACCOUNTANTS
EY served as our independent public accountants for the year ended
December 31, 2003. 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 Securities and Exchange Commission
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 Dianna L. Rausch.
Shareholder Proposals for the 2005 Annual Meeting. Proposals of our
shareholders intended to be presented at the 2005 Annual Meeting of Shareholders
must be received by us not later than December 22, 2004, to be considered for
inclusion in our proxy materials relating to the 2005 Annual Meeting and, on or
before March 7, 2005, 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 Randi S. Tompkins, 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.
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 17, 2004.
BY ORDER OF THE BOARD OF DIRECTORS
/S/RANDI S. TOMPKINS
Randi S. Tompkins, Clerk
April 16, 2004
17
Appendix A
BLUEGREEN CORPORATION
AUDIT COMMITTEE CHARTER
(as approved and adopted by Bluegreen Corporation's
Board of Directors on March 17, 2004)
----------
I. COMMITTEE ROLE
The primary functions of the Audit Committee (the "Committee") are:
(a) to assist the Corporation's Board of Directors (the "Board")
in fulfilling its oversight of (i) the integrity of the
financial statements and other financial information provided
by the Corporation to any governmental body, investors or the
public, (ii) the Corporation's compliance with legal and
regulatory requirements, (iii) the auditor's qualifications
and independence, and (iv) the performance of the auditor and
internal audit function, and
(b) to prepare the report of the Committee required by the
Securities Exchange Act rules to be included in the
Corporation's annual proxy statement.
Consistent with these functions, the Committee should encourage continuous
improvement of, and should foster adherence to, the Corporation's
policies, procedures and practices at all levels.
The Committee's primary duties and responsibilities are to:
(a) serve as an independent and objective party to monitor, review
and assess the Corporation's financial reporting process,
internal control system and business risk management process,
(b) review and appraise the audit efforts of the Corporation's
auditor and internal auditing department, and
(c) provide an open avenue of communication among the auditor,
financial and senior management, the internal auditing
department, and the Board.
The Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV below.
II. COMMITTEE MEMBERSHIP AND COMPOSITION
(a) The Committee shall be comprised of at least three and no more
than six directors as determined by the Board. Each Committee
member shall be independent (as that term is defined in the
applicable Securities Exchange Act and NYSE rules), and the
Board shall affirmatively determine that each member has no
material relationship with the Corporation (either directly or
as a partner, shareholder or officer of an organization that
has a relationship with the Corporation). The basis for such
determinations shall be disclosed in the Corporation's annual
proxy statement.
(b) The Committee members may not, except in their capacity as a
director, a member of the Committee or a member of another
committee, (i) accept any consulting, advisory, or other
compensatory fee from the Corporation or (ii) be an affiliate
of the Corporation.
18
(c) Each Committee member shall be financially literate (as such
qualification is interpreted by the Board in its business
judgment), or must become financially literate within a
reasonable time after his or her appointment to the Committee.
At least one Committee member must be a "financial expert"
based on criteria established by the Securities and Exchange
Commission (the "SEC") and other applicable rules and
regulations, as determined by the Board in its business
judgment. Committee members may enhance their familiarity with
finance and accounting by participating in educational
programs conducted by the Corporation or an outside
consultant.
(d) Notwithstanding anything in this Charter to the contrary, it
is the intent of the Corporation and its Board that the
composition of the Committee shall be in accordance with the
applicable SEC and NYSE rules (including any "grandfather"
provisions) and composition of the Committee in accordance
with such rules shall be also deemed in compliance with this
Charter.
(e) The Committee members shall be elected by the Board at the
annual organizational meeting of the Board and shall serve
until the next annual meeting or until their successors shall
be duly elected and qualified. Unless a Chair is elected by
the full Board, the Committee members may designate a Chair by
majority vote of the full Committee membership.
III. MEETINGS
(a) The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Committee shall meet
at least annually (and throughout the year as appropriate)
with management, the director of the internal auditing
department and the representatives of the auditor in separate
executive sessions to discuss any matters that the Committee
or each of these groups believe should be discussed privately.
In addition, the Committee or at least its Chair should meet
with the representatives of the auditor and management
quarterly to review the Corporation's financial statements
consistent with Section IV below. The Committee, with
management, shall develop and participate in a process for
review of important financial and operating topics that
present potential significant risk to the Corporation.
(b) Committee meeting agendas shall be the responsibility of the
Committee Chair, with input from Committee members. It is
expected that the Chair would also ask for management and key
Committee advisors, and perhaps others, to participate in this
process where appropriate.
(c) The Committee shall communicate committee expectations and the
nature, timing, and extent of committee information needs to
management, internal audit, and external parties, including
representatives of the auditor. Wherever possible, written
materials shall be received from management, the auditor, and
others one week in advance of Committee meetings.
(d) The Committee, through the Committee Chair, shall report
regularly to the Board. Among other things, the Committee
should review any issues that arise with respect to the
quality or integrity of the Corporation's financial
statements, the Corporation's compliance with legal or
regulatory requirements, the performance and independence of
the Corporation's independent auditors, and the performance of
the internal audit function.
(e) The Committee, at least annually, shall review, discuss, and
evaluate its own performance as well as the Committee's role
and responsibilities, seeking input from senior management,
the Board, and others. Changes in role and/or
responsibilities, if any, shall be recommended to the Board
for approval.
IV. RESPONSIBILITIES AND DUTIES
(a) Documents/Reports Review. The Committee shall:
(i) Review and reassess the adequacy of this Charter on an
annual basis.
19
(ii) Review and discuss the Corporation's annual audited
financial statements, quarterly financial statements and
any material reports or other financial information
submitted to any governmental body, investors or the
public, including "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and
any certification, report, opinion, or review rendered
by the auditor, with management and the auditor.
(iii) Review with financial management and the auditor each
quarterly report on Form 10-Q prior to its filing or
prior to the release of earnings. The Committee Chair
may represent the entire Committee for purposes of this
review.
(iv) Discuss the Corporation's earnings press releases, and
financial information and earnings guidance provided to
analysts and rating agencies (this can be a general
discussion of the types of information to be disclosed
and the type of presentation to be made).
(v) Review the regular internal reports to management
prepared by the internal auditing department and
management's response.
(vi) Review periodically the internal auditing department and
system of internal risk management processes control.
(vii) Review disclosures made by the Corporation's chief
executive officer and chief financial officer in
connection with the SEC Form 10-K and 10-Q certification
process regarding significant deficiencies in the design
or operation of internal controls or any fraud that
involves management or other employees who have a
significant role in the Corporation's internal controls
as well as management's assessment of the effectiveness
of internal controls.
(viii) With input from management and other key committee
advisors, develop an annual plan responsive to the
responsibilities and duties detailed in this Charter.
The annual plan shall be reviewed and approved by the
Board.
(b) Auditor
(i) The Committee, in its capacity as a Board committee,
shall have the sole and direct authority and
responsibility for the appointment, compensation,
retention and oversight of the work of any registered
public accounting firm engaged (including resolution of
disagreements between management and the auditor
regarding financial reporting) for the purpose of
issuing an audit report or performing other audit review
or attest service for the Corporation. The Corporation's
auditor shall report directly and be accountable to the
Committee. The Committee shall have the sole authority
and responsibility for selecting, retaining and
replacing the Corporation's auditor, evaluating the
auditor's independence and effectiveness and approving
all engagement terms, fees and other compensation.
(ii) Prior to the auditor rendering any audit or permitted
non-audit services to the Corporation, the Committee
shall be required to approve such service. The Committee
may authorize the Chair or one or more other Committee
members, acting individually, to approve such services.
Any pre-approval granted by a member acting individually
shall be reported to the Committee at its next scheduled
meeting.
(iii) The Committee shall monitor compliance with the
provisions of the Securities Exchange Act concerning (1)
the rotation of the auditor's lead audit partner and
audit review partner and (2) the prior affiliation of
the auditor and the Corporation's chief executive
officer, chief financial officer, chief accounting
officer, controller or persons in an equivalent
position. The Committee shall set clear hiring policies
for employees or former employees of the auditor.
20
(iv) The Committee shall require that the auditor submit at
least annually to the Committee a formal written
statement delineating all relationships between the
auditor and the Corporation. The Committee is
responsible for actively engaging in a dialogue with the
auditor with respect to any disclosed relationships or
services that may affect the independence of the auditor
and for taking appropriate action in response to the
auditor's report to satisfy itself of the auditor's
independence.
(v) The Committee shall require that the auditor submit at
least annually to the Committee a formal written report
describing (1) the auditor's internal quality control
procedures; (2) any material issues raised by the most
recent internal quality control review or peer review of
the auditor or by any inquiry or investigation by
governmental or professional authorities, within the
preceding five years, respecting one or more independent
audits carried out by the auditor and any steps taken to
deal with any such issues; and (3) (to assess the
auditor's independence) all relationships between the
auditor and the Corporation.
(vi) After reviewing the foregoing report and the independent
auditor's work throughout the year, the Committee will
be in a position to evaluate the auditor's
qualifications, performance and independence. This
evaluation should include the review and evaluation of
the lead partner of the independent auditor. In making
its evaluation, the Committee should take into account
the opinions of management and the Corporation's
internal auditors (or other personnel responsible for
the internal audit function). In addition to assuring
the regular rotation of the lead audit partner as
required by law, the Committee should further consider
whether, to assure continuing auditor independence,
there should be regular rotation of the audit firm
itself. The Committee should present its conclusions
with respect to the independent auditor to the full
Board.
(vii) The Committee shall periodically meet with
representatives of the auditor out of the presence of
management about internal controls, the fullness and
accuracy of the Corporation's financial statements and
such other matters as the Committee and the auditor
shall deem appropriate.
(c) Financial Reporting Processes. The Committee shall:
(i) Meet separately, periodically, with management and with
internal auditors (or other personnel responsible for
the internal audit function).
(ii) In consultation with the auditor and the internal
auditors, review the integrity of the Corporation's
financial reporting processes, both internal and
external.
(iii) Consider the auditor's judgments about the quality and
appropriateness of the Corporation's accounting
principles as applied in its financial reporting.
(iv) Consider and approve, if appropriate, major changes to
the Corporation's auditing and accounting principles and
practices as suggested by the auditor, management, or
the internal auditing department.
(d) Process Improvement. The Committee shall:
(i) Establish regular and separate systems of reporting to
the Committee by each of management, the auditor and the
internal auditors regarding any significant judgments
made in management's preparation of the financial
statements and the view of each as to appropriateness of
such judgments.
21
(ii) In connection with the annual audit, receive the report
of the auditor concerning (1) all critical accounting
policies and practices to be used, (2) all alternate
treatments of financial information discussed with
management, ramifications of the use of such alternative
treatments and the treatment preferred by the auditor
and (3) other material written communications with
management.
(iii) Regularly review with the auditor any audit problems or
difficulties the auditor encountered in the course of
the audit work, including management's responses, any
restrictions on the scope of the auditor's activities or
on access to requested information, and any significant
disagreements with management.
(iv) Following completion of the annual audit, review
separately with each of management, the auditor and the
internal auditing department any audit problems or
difficulties encountered during the course of the audit,
including any restrictions on the scope of work or
access to required information, and management's
response.
(v) Review any significant disagreement among management and
the auditor or the internal auditing department in
connection with the preparation of the financial
statements and management's response.
(vi) Review with the auditor, the internal auditing
department and management the extent to which changes or
improvements in financial or accounting practices, as
approved by the Committee, have been implemented. This
review should be conducted at an appropriate time
subsequent to implementation of changes or improvements,
as decided by the Committee.
(e) Ethical and Legal Compliance. The Committee shall:
(i) Establish, review and update periodically a Code of
Ethical Conduct and confirm that management has
established a system to monitor compliance with and
enforce this Code.
(ii) Confirm that management has an appropriate review system
in place to ensure that Corporation's financial
statements, reports and other financial information
disseminated to governmental organizations, investors
and the public satisfy legal requirements.
(iii) Review activities, organizational structure, and
qualifications of the internal audit department.
(iv) Monitor, review and assess policies with respect to risk
assessment and risk management, including guidelines and
policies to govern the process by which this is handled,
the Corporation's major financial risk exposures and the
steps management has taken to monitor and control such
exposure.
(v) Review, with the Corporation's counsel, any legal matter
that could have a material impact on the Corporation's
financial statements and inquire of the Corporation's
counsel, chief executive officer and general counsel as
to reports of material violations of securities law,
breaches of fiduciary duty or similar violations by the
Corporation or any agent of the Corporation.
(vi) Review and assess any SEC inquiries and the results of
any examinations by regulatory authorities in terms of
important findings, recommendations and management's
response.
(vii) Establish procedures for (1) the receipt, retention, and
treatment of complaints received by the Corporation
regarding accounting, internal accounting controls, or
auditing matters and (2) the confidential, anonymous
submission by employees of concerns regarding
questionable accounting or auditing matters.
22
(f) Other
(i) The Committee shall have the authority, without seeking
approval of the Board, to engage and obtain advice and
assistance from independent legal, accounting or other
advisors, as the Committee determines necessary or
appropriate to carry out its duties.
(ii) The Corporation shall provide for appropriate funding,
as determined by the Committee, in its capacity as a
committee of the Board, for payment of: (1) compensation
to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or
performing other audit, review or attest services for
the Corporation; (2) compensation to any advisers
employed by the Committee under the immediately
preceding paragraph; and (3) ordinary administrative
expenses of the Committee that are necessary or
appropriate in carrying out its duties.
(iii) The Committee shall perform any other activities
consistent with this Charter, the Corporation's Articles
of Organization and By-laws, and governing law, as the
Committee or the Board deem necessary or appropriate.
23
[ BLUEGREEN LOGO ]
ADMISSION TICKET
2004 Annual Meeting of Shareholders
Tuesday, May 11, 2004 at 3:30 p.m. at the
Broward County Convention Center,
1950 Eisenhower Blvd., 3rd Floor, Fort Lauderdale, Florida
You should present this admission ticket in order to gain admittance to the
meeting. This ticket admits only the shareholder(s) listed on the reverse side
and is not transferable. Each shareholder may be asked to present valid picture
identification, such as a driver's license. Cameras, recording devices and other
electronic devices will not be permitted at the meeting.
If you submit your proxy by telephone or Internet, do not return your
proxy card. Thank you for your proxy submission.
--------------------------------------------------------------------------------
BLUEGREEN CORPORATION
4960 CONFERENCE WAY NORTH, SUITE 100
BOCA RATON, FLORIDA 33431
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 11, 2004
The shareholder(s) hereby appoint(s) John F. Chiste and Anthony M. Puleo, or
either of them, as proxies and attorneys-in-fact, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as
designated on the reverse side of this ballot, all of the shares of Common Stock
of Bluegreen Corporation that the shareholder is entitled to vote at the Annual
Meeting of shareholders to be held at 3:30 p.m., Eastern Time on Tuesday, May
11, 2004, at the Broward County Convention Center, 1950 Eisenhower Blvd., 3rd
Floor, Fort Lauderdale, Florida, and any adjournment or postponement 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.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDERS. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED REPLY ENVELOPE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[BLUEGREEN LOGO] VOTE BY MAIL
BLUEGREEN CORPORATION Mark, sign, and date your proxy card and
4960 CONFERENCE WAY NORTH return it in the postage-paid envelope we
SUITE 100 have provided or return it to Bluegreen
BOCA RATON, FL 33431 Corporation, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |X|
BLUEG1 KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BLUEGREEN CORPORATION
For Withhold For All To withhold authority to vote for any
1. Election of four Directors, each All All Except individual nominee, mark "For All
for a term of three years. Except" and write the nominee's number
|_| |_| |_| on the line below.
Nominees:
-------------------------------------
01) Alan B. Levan, 02) Lawrence A.
Cirillo, 03) George F. Donovan,
and 04) Mark A. Nerenhausen
2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
The close of business on March 25, 2004, 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.
Please sign exactly as your name appears on this proxy. When shares are held by
joint tenants or as community property, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign the full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
Yes No
Please indicate if you plan to attend this meeting |_| |_|
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Signature (PLEASE SIGN WITHIN BOX) DATE P93964
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Signature (Joint Owners) Date