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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[x] AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required) For the fiscal year
ended December 31, 1998
Or
[_] AMENDMENT TO TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required) For the transition
period from ___________ to ___________
Commission file number: 1-10153
HOMEFED CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-0304982
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1903 WRIGHT PLACE
SUITE 220
CARLSBAD, CALIFORNIA 92008
(760) 918-8200
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Securities registered pursuant to Section 12(b) of the Act: NONE.
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [x].
Based on the average bid and asked prices of the Registrant's Common Stock as
published by the OTC Bulletin Board Service as of March 24, 1999, the aggregate
market value of the Registrant's Common Stock held by non-affiliates was
approximately $367,322 on that date.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [X] No [ ]
As of March 26, 1999, there were 10,000,000 outstanding shares of the
Registrant's Common Stock, par value $.01 per share.
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NY2:\435697\03\9C6P03!.DOC\76830.0194
<PAGE>
EXPLANATORY NOTE
This Report on Form 10-K/A amends and restates in their
entirety the following Items of the Annual Report on Form 10-K of HomeFed
Corporation for the fiscal year ended December 31, 1998.
PART III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth information with respect to the
directors and executive officers and directors of HomeFed:
<TABLE>
<CAPTION>
Name Age Position with HomeFed Office Held Since
- ---- --- --------------------- -----------------
<S> <C> <C> <C>
Paul J. Borden 50 President and Director 1998
Corinne A. Maki 42 Secretary and Treasurer 1995
Curt R. Noland 42 Vice President 1998
Timothy M. Considine 58 Chairman of the Board 1992
and Director
Patrick D. Bienvenue 44 Director 1998
Michael D. Lobatz 49 Director 1995
Joseph S. Steinberg 55 Director 1998
</TABLE>
The officers serve at the pleasure of the Board of Directors
of HomeFed.
The recent business experience of our executive officers and
directors is summarized as follows:
Paul J. Borden. Mr. Borden has served as a Director and
President of HomeFed since May 1998. Mr. Borden has been a Vice President of
Leucadia National Corporation since August 1988, responsible for overseeing many
of Leucadia's real estate investments. Mr. Borden has also served as a Vice
President of Leucadia Financial Corporation ("LFC"), a subsidiary of Leucadia.
Corinne A. Maki. Ms. Maki, a certified public accountant, has
served as Treasurer of HomeFed since February 1995 and Secretary since February
1998. Prior to that, Ms. Maki served as an Assistant Secretary of HomeFed since
August 1995. Ms. Maki has also been a Vice President of LFC, holding the offices
of Controller, Assistant Secretary and Treasurer since October 1992. Ms. Maki
has been employed by Leucadia since December 1991.
Curt R. Noland. Mr. Noland has served as Vice President of
HomeFed since October 1998. He spent the last 19 years in the land development
industry in San Diego County as a design consultant, merchant builder and a
master developer. From November 1997 until immediately prior to joining HomeFed,
Mr. Noland was Director of Development at San Elijo Hills. Prior to his
employment by San Elijo Hills, Mr. Noland was employed for eight years by
Aviara, a 1,000 acre master-planned resort community in Carlsbad, California. He
is also a licensed civil engineer and real estate broker.
<PAGE>
Timothy M. Considine. Mr. Considine has served as Chairman of
the Board and a Director of HomeFed since 1992 and has been Managing Partner of
Considine and Considine, an accounting firm in San Diego, California, since
1969.
Patrick D. Bienvenue. Mr. Bienvenue has served as a Director
of HomeFed since 1998 and has been President of LFC since June 1998. Since
January 1996, Mr. Bienvenue has been President of Rosemary Beach Land Company, a
subsidiary of Leucadia and, from 1992 until December 1995 he was President and
Chief Executive Officer of Tourwest Inc., a property development and investment
company.
Michael A. Lobatz. Dr. Lobatz has served as a Director of
HomeFed since February 1995 and has been a practicing physician in San Diego,
California since 1981.
Joseph S. Steinberg. Mr. Steinberg has served as a Director of
HomeFed since 1998 and has been President and a Director of Leucadia National
Corporation, a diversified financial services holding company, since 1979. He is
also director of Allcity Insurance Company, a publicly held insurance company
that is approximately 90% held by Leucadia, MK Gold, a publicly held precious
metals mining company, and Jordan Industries, Inc.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Based solely upon a review of the copies of such forms
furnished to the Company and written representations from the Company's
executive officers, directors and greater than 10% beneficial shareholders, the
Company believes that during the year ended December 31, 1998, all persons
subject to the reporting requirements of Section 16(a) filed the required
reports on a timely basis.
Item 11. Executive Compensation
Set forth below is certain information with respect to the cash
compensation paid by the Company to its former chief executive officer, who
resigned effective May 18, 1998, for services in all capacities to the Company
and its subsidiaries during the years ended 1998, 1997 and 1996. The Company's
current chief executive officer, Paul J. Borden, does not receive any
compensation from the Company. No other officer or employee of the Company
received a total annual salary and bonus in excess of $100,000 during these
periods.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
- ---------------------------------- ------------------- ---------------------- ---------------------------------
Name and Year Salary Bonus
Principal Position ($) ($)
(a) (b) (c) (d)
- ---------------------------------- ------------------- ---------------------- ---------------------------------
<S> <C> <C> <C>
Paul J. Borden, 1998 -- --
President (1) (2)
Patricia A. Wood, 1998 11,500 --
President (1) (3) 1997 26,000 780
1996 24,000 780
</TABLE>
(1) The Company pays an annual fee to LFC for performing certain administrative
services for the Company, including providing the services of the chief
executive officer and certain other executives. See Item 1. "Business --
Administrative Services; Employees" and Item 13 "Certain Relationships and
Related Transactions" included in this Report.
(2) Mr. Borden is a Vice President of Leucadia and receives compensation from
Leucadia.
(3) Ms. Wood was also President of LFC and received compensation from LFC.
2
<PAGE>
COMPENSATION OF DIRECTORS
In 1998, Directors who are also employees of the Company or
Leucadia received no remuneration for services as a member of the Board or any
committee of the Board. In 1998, each Director who was not an employee of the
Company or Leucadia was paid $9,000 for attendance at regular meetings of the
Board of Directors. Mr. Considine and Dr. Lobatz also served on a special
committee of directors unaffiliated with Leucadia that was formed to consider
the San Elijo Hills development management agreement. For their services on this
committee, Mr. Considine and Dr. Lobatz each received additional fees of
$20,000.
Item 12. Security Ownership of Certain Beneficial owners and Management.
Set forth below is certain information as of April 26, 1999
with respect to the beneficial ownership of Common Stock by (i) each person who,
to the knowledge of the Company, is the beneficial owner of more than 5% of the
outstanding Common Stock (the Company's only class of voting securities), (ii)
each director and nominee for director, (iii) executive officers and (iv) all
directors and executive officers as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Of Beneficial Owner Beneficial Ownership1 of Class
- ------------------- --------------------- --------
<S> <C> <C>
Trust under Agreement 4,117,986 41.2%
dated August 14, 1998,
between Leucadia National
Corporation for the benefit
of its shareholders and
Joseph A. Orlando, as
Trustee(2)
c/o Leucadia National Corporation
315 Park Avenue South
New York, New York 10010
Paul J. Borden -- --
Corinne A. Maki -- --
Curt R. Noland -- --
Timothy Considine(3) 4,859 *
Patrick D. Bienvenue -- --
Michael A. Lobatz -- --
Joseph S. Steinberg(4) 4,117,986 41.2%
All directors and 4,122,845 41.2%
Executive officers as a
group (7 persons)
</TABLE>
- --------------------------------------------
* Less than 1%.
(1) Except as otherwise noted, each of the beneficial owners listed in the
above table has, to the knowledge of the Company, sole voting and
investment power with respect to the indicated shares of Common Stock.
3
<PAGE>
(2) The Leucadia Trust was formed on August 14, 1998 for the benefit of
shareholders of record of Leucadia as of August 25, 1998. Joseph A.
Orlando, Vice President and Chief Financial Officer of Leucadia, is
trustee of the Leucadia Trust. Ian M. Cumming, Chairman of the Board of
Leucadia, and Joseph S. Steinberg, a director of HomeFed, as well as a
director and President of Leucadia, jointly hold power to control the
vote of all shares of Common Stock that may be held by the Leucadia
Trust. Messrs. Orlando, Steinberg and Cumming each may be deemed to
have beneficial ownership, as that term is used in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, of all shares of Common
Stock held by the Leucadia Trust.
Does not include an aggregate of 46,557,826 shares of Common Stock that
the Leucadia Trust has the right to acquire on or after July 5, 1999
pursuant to stock purchase agreements dated as of August 14, 1998 and
October 20, 1998.
(3) Includes 4,859 shares held by the Considine and Considine Retirement
Plan. Mr. Considine is the Managing Partner of Considine and Considine,
an accounting firm in San Diego, California.
(4) See footnote (2) above.
Item 13. Certain Relationships and Related Transactions.
From the time of HomeFed's emergence from Chapter 11
bankruptcy protection in July 1995 through August 25, 1998, Leucadia owned
approximately 41.2% of HomeFed's outstanding Common Stock. Since August 25,
1998, the Leucadia Trust has owned this 41.2% interest. Under the terms of the
Leucadia Trust trust agreement, Joseph S. Steinberg, a director of HomeFed, as
well as a director and President of Leucadia and Ian M. Cumming, Chairman of the
Board of Leucadia, jointly have the right to vote any shares of HomeFed Common
Stock held by the Leucadia Trust.
Set forth below is information concerning agreements or
relationships between HomeFed and Leucadia and its subsidiaries.
In March 1998, the Board of Directors of HomeFed formed a
special committee of directors unaffiliated with Leucadia to consider a proposal
from Leucadia that HomeFed enter into an agreement to become development manager
of San Elijo Hills. This committee, consisting of Mr. Considine and Dr. Lobatz,
engaged consultants to evaluate the development proposal, performed substantial
due diligence with respect to the proposal, negotiated the structure of the
development proposal with Leucadia (which included Leucadia's agreement to make
equity financing available to HomeFed and to restructure the terms of HomeFed's
outstanding $20 million convertible collateralized note issued to LFC (described
below)); and recommended that the Board of Directors approve the development
management agreement.
In August 1998, upon approval of the Board of Directors, with
Mr. Borden, a Leucadia Vice President, not voting, HomeFed entered into a
development management agreement with a subsidiary of Leucadia. Pursuant to the
development agreement, HomeFed is the development manager of the San Elijo Hills
project, a master-planned community of approximately 3,400 homes expected to be
completed over the next ten years. As development manager, HomeFed is
responsible for the overall management of the project, including arranging
financing, coordinating marketing and sales activity, and acting as construction
manager. The development agreement provides that HomeFed will receive certain
fees in connection with the project. These fees consist of marketing and
management service fees, which are based on a fixed percentage of gross revenues
received by the project. The marketing and management service fees are expected
to cover HomeFed's cost of providing these services. In addition, the
development agreement provides for payment of a success fee under certain
circumstances to HomeFed based on the net cash flow from the project (as
determined in the development agreement), subject to a maximum success fee. The
timing of the payment of any success fee prior to the conclusion of the project
will be at the discretion of the project owner. Through April 26, 1999, no
amounts are payable to HomeFed under the development agreement.
4
<PAGE>
The Company's Chapter 11 plan of reorganization was
principally funded by the issuance of a $20,000,000 convertible note to LFC. As
of August 14, 1998, in connection with the development agreement, HomeFed and
LFC entered into an Amended and Restated Loan Agreement pursuant to which the
original convertible note and the related loan agreement were restructured. The
restructured note, dated August 14, 1998, is in the principal amount of
approximately $26,462,000 (including additions to principal resulting from
accrued and unpaid interest on the original note to the date of the
restructuring, as allowed under the terms of the original note), extends the
maturity date from July 3, 2003 to December 31, 2004, reduces the interest rate
from 12% to 6% and eliminates the convertibility feature of the original note.
Interest only on the restructured note is paid quarterly and all unpaid
principal is due on the date of maturity. During the year ended December 31,
1998, HomeFed paid approximately $2,162,000 in interest on the original note and
the restructured note. Through April 26, 1999, interest of $391,000 was paid on
the restructured note.
In August and October 1998, HomeFed entered into two stock
purchase agreements with Leucadia, pursuant to which HomeFed agreed to sell an
aggregate of 46,557,826 additional shares of its Common Stock to Leucadia for an
aggregate purchase price of $8,380,000. In connection with these stock purchase
agreements, Leucadia advanced to HomeFed $6,710,000 of the total purchase price,
which amount is refundable in the event the closing of the stock purchase
agreements do not occur. The stock purchase agreements provide that the balance
of the purchase price will be paid at the closing and that the closing will
occur on or after July 5, 1999, subject to the satisfaction of certain
conditions that the Company expects to be satisfied. In 1998, Leucadia assigned
the stock purchase agreements to the Leucadia Trust. Upon consummation of the
stock purchase agreements, the Leucadia Trust will own 89.6% of the issued and
outstanding HomeFed Common Stock. HomeFed has been advised that, as promptly as
practicable following the closing of stock purchases under these stock purchase
agreements and the effectiveness of a registration statement filed with the
Securities and Exchange Commission, the Leucadia Trust intends to distribute to
its beneficial holders all of the HomeFed Common Stock owned by the Leucadia
Trust. After giving effect to the stock purchases by the Leucadia Trust, the
5,882,014 shares held by HomeFed's current stockholders (excluding the Leucadia
Trust) will represent, in the aggregate, approximately 10.4% of the stock to be
outstanding. After the distribution of stock by the Leucadia Trust, Joseph S.
Steinberg will own 12.7%, and Ian M. Cumming, will own approximately 13.9%, of
the outstanding HomeFed Common Stock.
As of October 14, 1998, HomeFed and Leucadia formed Otay Land
Company, LLC. HomeFed invested $10,000,000 as capital and Leucadia invested
$10,000,000 as a preferred capital interest. HomeFed is the manager of Otay Land
Company. In 1998, Otay Land Company purchased approximately 4,800 acres of land
that is part of a 22,900 acre project located south of San Diego, California,
known as Otay Ranch for approximately $19,500,000. Distributions of net income
from this investment first will be paid to Leucadia until it has received an
annual cumulative preferred return of 12% on, and repayment of, its preferred
investment. Any remaining funds are to be distributed to HomeFed.
Certain of HomeFed's administrative services and managerial
support are provided to HomeFed by LFC pursuant to an administrative services
agreement. Pursuant to this agreement, LFC provides the services of Paul J.
Borden, HomeFed's President, and Corinne A. Maki, HomeFed's Treasurer and
Secretary. Mr. Borden and Ms. Maki each are officers of LFC and Leucadia. The
current administrative services agreement extends through February 28, 2002 and
provides for compensation (payable monthly) at an annual rate of $296,101
through February 29, 2000. The agreement provides that the administrative fee
payable to LFC for subsequent annual periods commencing March 1 of a year shall
be negotiated in good faith by HomeFed and LFC. Administrative fees paid to LFC
since January 1998 aggregated $212,000.
On February 27, 1998, HomeFed purchased 19 lots at the
Silverwood project from LFC for a purchase price of $500,000. On July 31, 1998,
HomeFed sold its entire 97 lot interest in the Silverwood project to Southfork
Partnership for $3,033,000, less closing costs.
HomeFed rents office space and furnishings from a subsidiary
of Leucadia for a monthly amount equal to its share of the Leucadia subsidiary's
cost for such space and furnishings (based upon occupancy of the facility). The
5
<PAGE>
agreement pursuant to which the space and furnishings are provided extends for a
6-year period (coterminous with the Leucadia subsidiary's occupancy of the
space) and provides for a monthly rental of $15,400. Since January 1, 1998,
HomeFed has accrued $55,981 in rental to the Leucadia subsidiary, of which
$18,900 was paid through March 31, 1999.
6
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
HOMEFED CORPORATION
Registrant
By: /s/ Corinne A. Maki
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Corinne A. Maki, Treasurer
Dated: April 29, 1999
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