a director of Bluegreen, (ii) Seth M. Wise is an Executive Vice President and director of BBX Capital and a director of Bluegreen, (iii) Raymond S. Lopez, Executive Vice President and Chief Financial Officer of BBX Capital, is the former Chief Accounting Officer and Senior Vice President of Bluegreen and continues to perform certain services for Bluegreen in a non-executive capacity, (iv) Susan J. Saturday, Executive Vice President and Chief Human Resources Officer of BBX Capital, served in the same capacity at Bluegreen until April 30, 2018, and (v) Norman H. Becker is a non-employee director of each of BBX Capital and Bluegreen. Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise do not receive compensation for their service on Bluegreen’s Board of Directors. Mr. Lopez and Ms. Saturday earned total compensation from Bluegreen of $26,000 and approximately $535,000, respectively, for the year ended December 31, 2017, and $26,000 and approximately $195,000, respectively, for the year ended December 31, 2018. In addition, Mr. Becker received compensation for his service on Bluegreen’s Board of Directors and its committees of $85,000 for each of the years ended December 31, 2017 and 2018.
During the years ended December 31, 2017 and 2018, Bluegreen paid subsidiaries of BBX Capital approximately $1.5 million and $1.6 million, respectively, for management advisory, risk management, administrative and other services.
On April 17, 2015, BBX Capital entered into a Loan Agreement and Promissory Note with a wholly owned subsidiary of Bluegreen pursuant to which Bluegreen’s subsidiary provided an $80 million loan to BBX Capital. Amounts outstanding on the loan bore interest at a rate of 10% per annum until July 2017 when the interest rate was reduced to 6% per annum. Payments of interest are required on a quarterly basis, with all outstanding amounts being due and payable at the end of the five-year term of the loan. BBX Capital is permitted to prepay the loan in whole or in part at any time, and prepayments will be required, to the extent necessary, in order for Bluegreen or its subsidiaries to remain in compliance with covenants under their outstanding indebtedness. During the years ended December 31, 2017 and 2018, BBX Capital paid approximately $6.4 million and $4.8 million, respectively, of interest expense on the loan.
On May 8, 2015, BBX Capital and its subsidiaries, including Woodbridge, Bluegreen and their respective subsidiaries, entered into an Agreement to Allocate Consolidated Income Tax Liability and Benefits (the “Consolidated Tax Agreement”) pursuant to which, among other customary terms and conditions, the parties agreed to file consolidated federal tax returns. Pursuant to the Consolidated Tax Agreement, the parties calculate their respective income tax liabilities and attributes as if each of them were a separate filer. If any tax attributes are used by another party to the Consolidated Tax Agreement to offset its tax liability, the party providing the benefit will receive an amount for the tax benefits realized. During the years ended December 31, 2017 and 2018, Bluegreen paid BBX Capital approximately $39.4 million and $23.1 million pursuant to the Consolidated Tax Agreement.
(b)
Significant Corporate Events.
See “Background of the Merger” beginning on page
8
of this Schedule 13E-3.
(c)
Negotiations or Contacts.
See “Background of the Merger” beginning on page
8
of this Schedule 13E-3.
(e)
Agreements Involving the Subject Company’s Securities.
There are no agreements, arrangements or understandings with respect to the securities of Bluegreen between the Filing Persons (or, to the knowledge of the Filing Persons, any of the individuals listed on Annex B hereto) and any other person.
Item 6. Purposes of the Transaction and Plans or Proposals.
(b)
Use of Securities Acquired.
The shares of Bluegreen’s common stock acquired by Woodbridge in the Merger will be canceled.
(c)
Plans.
It is currently expected that, following the consummation of the Merger, the business and operations of Bluegreen will, except as set forth in this Schedule 13E-3, continue to be conducted by Bluegreen, as the surviving corporation of the Merger, substantially as they currently are being conducted. Additionally, except as described in this Schedule 13E-3, the Filing Persons do not have, and, to the knowledge of the Filing Persons, Bluegreen does not have, any plans, proposals or negotiations that relate to or would result in: