<PAGE>
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. For the fiscal year ended December
31, 1993
or
[_] AMENDMENT TO TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934. For the transition period from
___________ to ___________
Commission file number: 1-5721
LEUCADIA NATIONAL CORPORATION
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
New York 13-2615557
- -------------------------------------- ----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)
315 Park Avenue South
New York, New York 10010
(212) 460-1900
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(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:
Name of Each Exchange
Title of Each Class on Which Registered
- -------------------------------------- ----------------------------------
Common Shares, par value $1 per share New York Stock Exchange
Pacific Stock Exchange
10-3/8% Senior Notes due June 15, 2002 New York Stock Exchange
5-1/4% Convertible Subordinated New York Stock Exchange
Debenture due February 1, 2003
7-3/4% Senior Notes due August 15, New York Stock Exchange
2013
Securities registered pursuant to Section 12(g) of the Act:
None
- ---------------------------------------------------------------------------
(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 [_].
(Cover Page continued on next page)<PAGE>
<PAGE>
Aggregate market value of the voting stock (which consists solely of shares
of Common Stock) held by non-affiliates of the registrant as of March 16,
1994, computed by reference to the closing sale price of the registrant's
Common Stock on the New York 1994 Stock Exchange on such date:
$621,552,120.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 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 [_] No [_]
On March 16, 1994, the registrant had outstanding 27,948,823 shares of
Common Stock, par value $1 per share, which is the registrant's only class
of common stock.
DOCUMENTS INCORPORATED BY REFERENCE:
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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 Leucadia
National Corporation (the "Company") for the fiscal year ended
December 31, 1993:
PART III
Item 10. Directors and Executive Officers of the Registrant.
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As of March 31, 1994, the directors and executive officers of the
Company, their ages, the positions held by them and the periods during
which they have served in such positions were as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION OFFICE HELD SINCE
---- --- -------- -----------------
<S> <C> <C> <C>
Ian M. Cumming . . . . . . . . . . 53 Chairman of the Board June 1978
Joseph S. Steinberg . . . . . . . 50 Director and President December 1978; January 1979
Paul M. Dougan . . . . . . . . . . 56 Director May 1985
Lawrence D. Glaubinger . . . . . . 68 Director May 1979
James E. Jordan . . . . . . . . . 50 Director February 1981
John W. Jordan II . . . . . . . . 46 Director May 1979
Jesse Clyde Nichols, III . . . . . 54 Director June 1978
Thomas E. Mara . . . . . . . . . . 48 Executive Vice President May 1980;
and Treasurer January 1993
Lawrence S. Hershfield . . . . . . 37 Executive Vice President July 1993
Paul J. Borden . . . . . . . . . . 45 Vice President August 1988
Mark Hornstein . . . . . . . . . . 46 Vice President July 1983
Ruth Klindtworth . . . . . . . . . 59 Secretary and Vice President- February 1976;
Corporate Administrator January 1990
C. Bruce Miller . . . . . . . . . 62 Vice President January 1989
Joseph A. Orlando . . . . . . . . 38 Vice President and January 1994;
Comptroller March 1994
David K. Sherman . . . . . . . . . 28 Vice President August 1992
</TABLE>
Mr. Cumming has served as a director and Chairman of the Board of
the Company since June 1978. In addition, he has served as a director
of Bolivian Power since March 1987, as Chairman of the Board of
Bolivian Power since September 1988 and as a director of Allcity since
February 1988. Mr. Cumming has also been a director of Skywest, Inc.,
a Utah-based regional air carrier, since June 1986.
Mr. Steinberg has served as a director of the Company since
December 1978 and as President of the Company since January 1979. In
addition, he has served as a director of Bolivian Power since March
1987, as a director of Allcity since February 1988 and as a director
of Jordan Industries, Inc. ("JII"), a public company controlled by Mr.
John W. Jordan II (approximately 11% of the common stock of which is
beneficially owned by the Company) which owns and manages manufac-
turing companies, since June 1988.
Mr. Dougan has served as a director of the Company since May
1985. He has been President and Chief Executive Officer of Equity Oil
Company ("Equity Oil"), a company engaged in oil and gas exploration
and production, since January 1994. Prior thereto, he served as
corporate secretary and manager of corporate development of Equity Oil
since May 1968.
Mr. Glaubinger has served as a director of the Company since May
1979. He has been Chairman of the Board of Stern & Stern Industries,
Inc., a New York corporation, primarily engaged in the manufacture and
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sale of textiles, since November 1977. He has also been President of
Lawrence Economic Consulting Inc., a management consulting firm, since
January 1977.
James E. Jordan has served as a director of the Company since
February 1981. Since October 1986, he has been President of The
William Penn Company ("William Penn"), one of the Jordan Associated
Companies referred to under "Item 13. Certain Relationships and
Related Transactions" below. William Penn, approximately 19.7% of the
common stock of which is beneficially owned by the Company, is a
holding company for an investment advisor to The William Penn family
of mutual funds. Mr. Jordan has been a director of Penn Square Mutual
Fund since May 1987, a director of William Penn Interest Income Fund
since October 1987 and a director of Mezzanine Capital & Income Trust
2001 PLC, a British investment trust company, since 1986.
John W. Jordan II has served as a director of the Company since
May 1979. Since February 1982, he has been Managing Partner of The
Jordan Company. He has also been a director of Carmike Cinemas, Inc.,
an owner and operator of movie screens throughout the Southeast
(approximately 10% of the Class A shares of which are beneficially
owned by the Company) since October 1986 and a director of JII since
March 1988.
Mr. Nichols has served as a director of the Company since June
1978. He has been President, since May 1974, of Nichols Industries,
Inc., a holding company engaged, through subsidiaries, in manu-
facturing.
Mr. Mara joined the Company in April 1977 and was elected Vice
President of the Company in May 1977. He has served as Executive Vice
President of the Company since May 1980 and as Treasurer of the
Company since January 1993. Mr. Mara also served as Treasurer of the
Company from April 1981 to April 1985.
Mr. Hershfield has served as Executive Vice President of the
Company since July 1993 and prior thereto served as Vice President of
the Company since April 1990. Mr. Hershfield has also served as a
director of Bolivian Power since January 1992. From 1981 to April
1990, he served in a variety of executive positions with the Company's
subsidiary, BRAE Corporation (formerly a public company), including
President, Executive Vice President and Vice President.
Mr. Borden joined the Company as Vice President in August 1988
and has served in a variety of other capacities with the Company and
its subsidiaries.
Mr. Hornstein joined the Company as Vice President in July 1983
and has also served as Secretary of Bolivian Power since July 1988.
Ms. Klindtworth has been employed by the Company since July 1960
and was appointed Assistant Secretary in May 1973. She has served as
Secretary of the Company since February 1976, as Vice President-
Corporate Administrator of the Company since January 1990 and prior
thereto had served as Assistant Vice President-Corporate Administrator
of the Company since February 1979.
Mr. Miller has served as Vice President of the Company since
January 1989. He has also served as Executive Vice President of a
subsidiary of the Company for more than the past five years.
Mr. Orlando, a certified public accountant, has served as
Comptroller of the Company since March 1994 and as Vice President of
the Company since January 1994. Mr. Orlando served in a variety of
capacities with the Company and its subsidiaries since 1987, including
serving as Chairman of S&H.
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Mr. Sherman has served as Vice President of the Company since
August 1992. For the five years prior, he served in a variety of
capacities with the Company and its subsidiaries.
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, the New York
Stock Exchange and the Pacific Stock Exchange. Executive officers,
directors and greater than 10% beneficial shareholders are required by
Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
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, 1993, all persons subject to the reporting requirements of Section
16(a) filed the required reports on a timely basis, except that one
transaction was not timely reported by each of James E. Jordan, John
W. Jordan II and Paul J. Borden. Each person subsequently filed a
Form 4 to report the transactions.
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Item 11. Executive Compensation.
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SUMMARY COMPENSATION TABLE
The following table sets forth information in respect of the
compensation of the Chairman of the Board, the President and each of
the other three most highly compensated executive officers of the
Company in 1993 for services in all capacities to the Company and its
subsidiaries in 1993, 1992 and 1991.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Securities
Underlying
Other Annual Options/
Name and Principal Compensa- Warrants All Other
Position(s) Year Salary Bonus (1) tion (2) (# of shares) Compensation (2)
------------------- ---- ------ --------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ian M. Cumming, 1993 $477,365 $2,214,505 $300,345(3) -- $57,313(4)(5)(6)
Chairman of the 1992 464,412 1,614,120 191,129(3) 800,000 58,998(5)(6)(7)
Board 1991 449,614 1,263,750 -- -- --
Joseph S. 1993 $477,365 $2,214,505 $271,603(3) -- $58,083(4)(5)(6)
Steinberg, 1992 464,412 1,614,120 315,642(3) 800,000 55,268(5)(6)(7)
President 1991 449,614 1,263,750 -- -- --
Thomas E. Mara, 1993 $199,923 $406,000 -- 10,000 $4,497(6)
Executive Vice 1992 194,922 330,850 -- -- 2,182(6)
President and 1991 184,969 305,550 -- 10,000 --
Treasurer
Lawrence S. 1993 $175,653 $556,000 -- 15,000 $4,497(6)
Hershfield, 1992 139,846 304,200 -- -- 2,182(6)
Executive Vice 1991 119,981 253,600 -- 7,500 --
President
Norman P. Kiken, 1993 $139,923 $384,200 -- -- $4,497(6)
Vice President and 1992 134,962 279,050 -- -- 2,182(6)
Comptroller (8) 1991 129,981 253,900 -- 7,500 --
______________________
<FN>
(1) With the exception of 1993 and 1992, performance bonuses for
Messrs. Cumming and Steinberg for services rendered during a year
are considered at the organizational meeting of the Board of
Directors for the following year (which is generally held during
the second fiscal quarter). Accordingly, bonuses for services
rendered in 1991 were determined and paid in 1992. However, in
anticipation of potential changes in federal tax laws affecting
the tax consequences associated with executive compensation,
performance bonuses for Messrs. Cumming and Steinberg for
services rendered in 1992 were determined and paid in 1992. Due
to tax law changes announced in 1993 for implementation in 1994,
the Company also determined and paid 1992 bonuses in 1993.
Absent further tax law developments, the Company does not
anticipate accelerating the payment of bonuses in future years.
(2) In accordance with the transitional provisions applicable to the
rules of the Securities and Exchange Commission with respect to
executive compensation, amounts of "Other Annual Compensation"
and "All Other Compensation" are not required for the fiscal year
ended December 31, 1991.
NYFS04...:\30\76830\0001\1980\RPT32994.V5B
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(3) Non-cash compensation, of which $299,434 and $190,825 relates to
the personal use of corporate aircraft by Mr. Cumming in 1993 and
1992, respectively, and $265,219 and $310,604 relates to the
personal use of corporate aircraft by Mr. Steinberg in 1993 and
1992, respectively.
(4) Excludes $4,000,000 placed in escrow in 1993 by the Company for
the benefit of each of Ian M. Cumming and Joseph S. Steinberg
pursuant to agreements dated as of December 28, 1993 between the
Company and each of Messrs. Cumming and Steinberg. The funds
vest at the rate of 20% for each full calendar year after
December 31, 1997 during which Messrs. Cumming and Steinberg
continue to be employed by the Company or any of its
subsidiaries. Messrs. Cumming and Steinberg are entitled to be
50% vested upon death or disability, and 100% vested upon (i)
termination without cause, (ii) the merger of the Company with
another corporation which results in a change of control of the
Company, the sale of all or substantially all of the Company's
assets or the acquisition by a person or group of persons of more
than 50% of the Common Shares, or (iii) the Company becoming
subject to bankruptcy, insolvency or similar proceedings. The
vesting and payment schedule is also subject to acceleration at
the sole discretion of the Board of Directors, excluding Messrs.
Cumming and Steinberg, upon recommendation of the Employee
Benefits Committee. Amounts vested are to be paid to Messrs.
Cumming and Steinberg on January 1, 2003, unless payment is
accelerated by the Board. Any amount unvested will be returned
to the Company. The amounts in the escrow accounts are invested
at the direction of the Company, which is entitled to receipt of
the investment income.
As required under the agreements, Messrs. Cumming and Steinberg
timely filed a tax election resulting in their 1993 recognition
for tax purposes of the full $4,000,000 placed in escrow. As a
result, for tax purposes Messrs. Cumming and Steinberg will
report receipt of the escrowed funds, and the Company will deduct
the escrowed funds, for 1993. As permitted under the agreements,
Messrs. Cumming and Steinberg directed that the Company's tax
withholding obligation be paid with funds from the escrow
accounts, leaving a reduced amount available for distribution to
Messrs. Cumming and Steinberg from the escrow accounts as bonus
compensation. The application of the escrow funds toward
satisfaction of the Company's withholding obligation had no
affect on the vesting schedule; accordingly, in the event either
Mr. Cumming or Mr. Steinberg does not ultimately become fully
vested in the respective amount placed in escrow, to the extent
the funds remaining in escrow are less than the unvested portion
for such person, Mr. Cumming and/or Mr. Steinberg, as the case
may be, will be obligated to repay such deficiency to the
Company.
These agreements were entered into as a result of recent changes
in federal tax laws which, commencing in 1994, deny to
corporations such as the Company a deduction for individual
compensation above $1,000,000 per year, and increase certain
federal tax rates for individuals such as Messrs. Cumming and
Steinberg. In light of the fact that compensation paid to
Messrs. Cumming and Steinberg is likely to exceed $1,000,000 per
year, the Company believes it was in the best interests of the
Company and its shareholders that the taxation and deductibility
of bonus payments otherwise expected to be paid by the Company
(or its subsidiaries) to each of Messrs. Cumming and Steinberg
from 1993 through 2002 be accelerated.
The Employee Benefits Committee intends to consider amounts held
in escrow for each of Messrs. Cumming and Steinberg pursuant to
such agreements when determining their bonuses for such years.
Awards pursuant to these agreements are intended to be applied as
part of bonus compensation that would otherwise be paid to
Messrs. Cumming and Steinberg; these awards are not intended as
compensation in addition to salaries and bonuses customarily
awarded to Messrs. Cumming and Steinberg. As provided in the
agreements, given the underlying objective of the arrangements,
in
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deciding upon early vesting and payment, the Board and the
Employee Benefits Committee can consider tax law changes, if any,
actually enacted and the costs and benefits to the Company of
initiating and maintaining the arrangements and of accelerating
payments and vesting thereunder.
The funds placed in escrow will be reported in the table in the
appropriate columns for those years in which amounts are released
from the escrow accounts.
(5) Included in this amount is the annual premium on a term life
insurance policy paid by the Company for the benefit of such
person ($1,900 for Mr. Cumming in each of 1993 and 1992, and
$1,420 for Mr. Steinberg in each of 1993 and 1992) and directors'
fees from certain companies in which the Company has equity
interests by virtue of The Jordan Company and directors' fees
from affiliates of the Company ($50,916 and $54,916 for Mr.
Cumming in 1993 and 1992, respectively, and $52,166 and $51,666
for Mr. Steinberg in 1993 and 1992, respectively).
(6) Included in this amount are contributions of $4,497 and $2,182 in
1993 and 1992, respectively, by the Company and Leucadia, Inc., a
wholly owned subsidiary of the Company ("LI"), to a defined
contribution 401(K) plan on behalf of the named person.
(7) Excludes $2,500,000 placed in escrow in 1992 (the "1992 Escrow")
by LI for the benefit of each of Messrs. Cumming and Steinberg
pursuant to agreements dated December 28, 1992 between LI and
each of Messrs. Cumming and Steinberg. Such amount was
previously reported as a long term incentive plan award. These
agreements are identical to those described in footnote 4 above,
except such funds vest at the rate of 20% for each full calendar
year after December 31, 1992 during which Messrs. Cumming and
Steinberg continue to be employed by the Company or any of its
subsidiaries and amounts vested are to be paid to Messrs. Cumming
and Steinberg on January 1, 1998, unless payment is accelerated
by the Board. No payments have been made to Messrs. Cumming or
Steinberg from the 1992 Escrow. Messrs. Cumming and Steinberg
each are vested with respect to $500,000 of the 1992 Escrow.
The funds placed in escrow will be reported in the table in the
appropriate columns for those years in which amounts are released
from the escrow accounts.
(8) Mr. Kiken retired from all positions with the Company on March
25, 1994.
</TABLE>
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OPTION GRANTS IN 1993
The following table shows all grants of options to the named
executive officers of the Company in 1993.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term (2)
Securities % of Total
Underlying Options
Options Granted to Exercise
Name Granted Employees Price Expiration
---- (# of shares)(1) in 1993 ($/Sh) Date 0%($) 5%($) 10%($)
---------------- ----------- -------- ---------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas E. Mara 10,000 5.8% $40.875 12/7/99 $0 $112,930 $249,546
Lawrence S. 15,000 8.7% 40.875 12/7/99 0 169,395 374,319
Hershfield
________________
<FN>
(1) The options were granted pursuant to the Company's 1992 Stock
Option Plan, as amended, at an exercise price equal to the fair
market value of the Common Shares on the date of grant. The
options become exercisable at the rate of 20% per year commencing
one year after date of grant. The grant date of the options is
December 7, 1993.
(2) The potential realizable values represent future opportunity and
have not been reduced to reflect the time value of money. The
amounts shown under these columns are the result of calculations
at 0% and at the 5% and 10% rates required by the Securities and
Exchange Commission, and are not intended to forecast future
appreciation of the Common Shares and are not necessarily
indicative of the values that may be realized by the named
executive officers.
</TABLE>
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AGGREGATE OPTION/WARRANT EXERCISES IN 1993 AND
OPTION/WARRANT VALUES AT DECEMBER 31, 1993
The following table provides information as to options and
warrants exercised by each of the named executives in 1993 and the
value of options and warrants held by such executives at year end
measured in terms of the last reported sale price for the Common
Shares on December 31, 1993 ($41.00, as reported on the New York Stock
Exchange Composite Tape).
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options/
Options/Warrants Warrants at December 31,
at December 31, 1993 1993
--------------------
Number of Shares
Underlying Options/ Exercisable/ Exercisable/
Name Warrants Exercised Value Realized Unexercisable Unexercisable
---- ------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Ian M. Cumming -- -- 790,000/0 $16,441,875/$0
Joseph S. Steinberg -- -- 796,000/0 $16,566,750/$0
Thomas E. Mara -- -- 12,288/32,576 $379,390/$684,280
Lawrence S. 4,500 $126,938 0/25,500 $0/$311,250
Hershfield
Norman P. Kiken -- -- 7,500/13,500 $233,063/$409,313
</TABLE>
RETIREMENT PLAN
The Company and certain of its affiliated companies maintain a
retirement plan, as amended January 1, 1992 (the "Retirement Plan"),
for certain of its employees and employees of these affiliated
companies. The Retirement Plan is intended to qualify under the
provisions of Section 401 of the Internal Revenue Code of 1986, as
amended (the "Code"). Benefits under the Retirement Plan are provided
by an insurance company separate account which receives and invests
company contributions. Participants are not required to make any
contributions under the Retirement Plan.
An employee is eligible for participation in the Retirement Plan
after he is at least age 21 and has completed one year of service.
For a participant retiring at normal retirement (age 65 with at
least five years of service), the Retirement Plan provides a
retirement benefit payable for life, equal to 1.25% of his final
average pay up to the Covered Compensation level plus 1.75% of his
final average pay in excess of the Covered Compensation level (subject
to the limitations of Section 415 of the Code), times his years of
credited service. The Covered Compensation level is the average of
the maximum Social Security taxable wage base in the 35 years
preceding retirement or termination. Final average pay is the average
of the five highest consecutive years of compensation in the last ten
years before retirement or termination. Years of credited service
include all calendar years during which an employee has at least 1,000
hours of service while employed by the Company or an affiliate
participating in the plan, but not before January 1, 1989.
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The Retirement Plan contains provisions for optional forms of
payment and provides that the normal form of benefit in the case of a
married participant is a benefit actuarially equivalent to an annuity
for the life of the participant payable in the form of a 50% joint and
survivor annuity for the participant and his spouse.
A participant becomes 100% vested in his accrued benefit under
the Retirement Plan after he has five years of service. If he
terminates employment with less than five years of service, he will
forfeit any benefits under the Retirement Plan.
A participant with 10 or more years of service, who is age 55 or
over, but less than age 65, and who has retired from the Company or a
participating affiliate, may elect to receive an early retirement
benefit. A participant with less than 10 years of service or who is
under age 55, who has terminated employment with the Company or a
participating affiliate may elect to receive an early deferred vested
benefit. The amount of such benefits are actuarially reduced to
reflect payment before age 65.
The projected annual retirement benefits under the Retirement
Plan of the executive officers named in the Summary Compensation
Table, expressed in the form of a straight life annuity with no
reduction for early commencement, and assuming continuous employment
until age 65, are estimated as follows:
Ian M. Cumming . . . . . $16,431*
Joseph S. Steinberg . . . 21,589*
Thomas E. Mara . . . . . 10,569*
Lawrence S. Hershfield . 85,780*
Norman P. Kiken . . . . . 43,769*
____________________
[FN]
* The benefits shown take into account limitations contained in Section
415 of the Code, and other limits on plan benefits that exist because of
distributions received from a prior plan terminated as of December 31,
1988.
EMPLOYMENT AGREEMENTS
LI has employment agreements with Messrs. Cumming and Steinberg
that provide for Mr. Cumming's employment as Chairman of the Board and
Chief Executive Officer of the Company and LI and for Mr. Steinberg's
employment as President and Chief Operating Officer of the Company and
the LI through June 30, 1994 at annual salaries of $364,835 (which
amount reflects an increase effective March 26, 1987) (subject to cost
of living adjustments), plus such additional compensation as may be
voted by the Board of Directors of the Company. Messrs. Cumming and
Steinberg are entitled to participate in all incentive plans of LI, LI
and other subsidiary and affiliated companies, and LI has agreed to
carry at its expense term life insurance policies on their lives in
the amount of $1,000,000 each, payable to such beneficiaries as each
of Messrs. Cumming and Steinberg shall designate. Under the
agreements, if there is a change in control of the Company or LI and
if either the employment of Messrs. Cumming or Steinberg is terminated
by LI without cause or Messrs. Cumming or Steinberg terminates his
employment within one year of certain occurrences (such as the
appointment or election of another person to his offices, the
occurrence of the aggregate compensation and other benefits to be
received by him for any twelve full calendar months falling below 115%
of that received by him during the comparable preceding period, or a
change in the location of his principal place of employment), Messrs.
Cumming or Steinberg will be entitled to receive a severance allowance
equal to the remainder of the aggregate annual salary (as adjusted for
increases in the cost of living) that he would have received under his
employment agreement. In addition, the Company or its successors will
continue to carry through the scheduled
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termination of the employment agreements the life insurance payable to
the beneficiaries of Messrs. Cumming and Steinberg.
The Company has entered into new employment agreements with
Messrs. Cumming and Steinberg that provide for Mr. Cumming's
employment as Chairman of the Board and Chief Executive Officer of the
Company and LI and for Mr. Steinberg's employment as President and
Chief Operating Officer of the Company and LI from July 1, 1994
through June 30, 2003 at annual salaries of $500,000 (subject to cost
of living adjustments), plus such additional compensation as may be
voted by the Board of Directors of the Company. All other terms of
these employment agreements are substantially similar to the
employment agreements with LI that expire on June 30, 1994.
For information concerning certain compensation awards placed in
escrow for the benefit of Messrs. Cumming and Steinberg, see footnotes
4 and 7 to the Summary Compensation Table, above.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company receive no
remuneration for services as a member of the Board or any committee of
the Board. In 1993, each director who was not an employee of the
Company received a retainer of $18,000 plus $500 for each meeting of
the Board and $300 for each meeting of a committee of the Board
($400 if a committee chairman) that he attended. In addition, under
the terms of the 1992 Stock Option Plan, each non-employee director is
automatically granted options to purchase 1,000 Common Shares on the
date on which the annual meeting of the Company's shareholders is held
each year. The purchase price of the Common Shares covered by such
options is the fair market value of such Common Shares on the date of
grant. These options become exercisable at the rate of 25% per year
commencing one year after the date of grant. As a result of this
provision, options to purchase 1,000 Common Shares at an exercise
price of $43.00 per Common Share were awarded to each of Messrs. Paul
M. Dougan, Lawrence D. Glaubinger, James E. Jordan, John W. Jordan II
and Jesse Clyde Nichols, III on July 14, 1993.
INDEMNIFICATION
Pursuant to a contract of insurance dated December 4, 1993 with
National Union Fire Insurance Company of Pittsburgh, Pennsylvania, 70
Pine Street, New York, New York 10270, the Company maintains a
$10,000,000 indemnification insurance policy covering all directors
and officers of the Company and its named subsidiaries. The annual
premium for such insurance is $815,000. During 1993, no payments were
received under the Company's indemnification insurance.
NYFS04...:\30\76830\0001\1980\RPT32994.V5B
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Item 12. Security Ownership of Certain Beneficial Owners and Management.
-------- --------------------------------------------------------------
Set forth below is certain information as of March 31, 1994 with
respect to the beneficial ownership of Common Shares by (i) each
person who, to the knowledge of the Company, is the beneficial owner
of more than 5% of the outstanding Common Shares (the Company's only
class of voting securities), (ii) each director and nominee for
director and the Steinberg Children Trusts and (iii) all officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Number of Shares
Name and Address and Nature of Percent
of Beneficial Owner of Beneficial Ownership of Class
------------------- ----------------------- --------
<S> <C> <C>
First Manhattan Co. (a) . . . . . . 1,419,975(b) 5.1%
Group consisting of
CMCO, Inc., Robert
Davidoff, Edwin S.
Marks, Nancy A.
Marks, Estate of
Robert S. Boas, Marks
Family Foundation,
Mark Claster and Andrew
Boas (c)(d) . . . . . . . . . . . 1,677,992 6.0%
Ian M. Cumming . . . . . . . . . . 6,223,678(e)(f) 21.7%
Paul M. Dougan . . . . . . . . . . 2,000(g) *
Lawrence D. Glaubinger . . . . . . 32,500(g) .1%
James E. Jordan . . . . . . . . . . 18,900(h) *
John W. Jordan II . . . . . . . . . 1,216,243(h)(i) 4.4%
Jesse Clyde Nichols, III . . . . . 30,262(j) .1%
Joseph S. Steinberg . . . . . . . . 5,695,906(f)(k) 19.8%
The Steinberg Children
Trusts . . . . . . . . . . . . . 563,700(l) 2.0%
All directors and officers as
a group (15 persons) . . . . . . 13,981,768(m) 47.2%
______________
<FN>
* Less than .1%.
(a) The business address of this beneficial owner is 437 Madison
Avenue, New York, New York 10022.
(b) According to Amendment No. 8 to a Statement on Schedule 13G dated
February 11, 1994, filed by First Manhattan Co., as of February
11, 1994, First Manhattan Co. has sole voting power with respect
to 146,640 of such Common Shares, shared voting power with
respect to 1,089,081 of such Common Shares and sole power to
dispose or to direct the disposition with respect to 146,640 of
such Common Shares and shared power to dispose or to direct the
disposition with respect to 1,273,335 of such Common Shares.
First Manhattan Co. disclaims beneficial ownership with respect
to 13,650 Common Shares and dispositive power with respect to
31,100 Common Shares that are held by family members of general
partners of First Manhattan Co.
(c) The business address of this beneficial owner is c/o CMCO, Inc.,
135 East 57th Street, New York, New York 10022.
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(d) Based upon Amendment No. 1 to a Statement on Schedule 13D dated
December 1, 1992 filed by CMCO, Inc., Robert Davidoff, Edwin S.
Marks, Nancy A. Marks, the Estate of Robert S. Boas, Marks Family
Foundation, Mark Claster and Andrew Boas and information provided
by CMCO, Inc.
(e) Includes (i) 206,556 (.7%) Common Shares beneficially owned by
Mr. Cumming's wife (directly and through trusts for the benefit
of Mr. Cumming's children of which Mr. Cumming's wife is trustee
(the "Trusts")) as to which Mr. Cumming may be deemed to be the
beneficial owner, (ii) 100,000 (.3%) Common Shares that the
Trusts currently have the right to acquire upon exercise of
warrants to purchase Common Shares and (iii) 690,000 (2.4%)
Common Shares which Mr. Cumming presently has the right to
acquire upon exercise of warrants to purchase Common Shares.
(f) Messrs. Cumming and Steinberg have an oral agreement pursuant to
which they will consult with each other as to the election of a
mutually acceptable Board of Directors of the Company.
(g) Includes 2,000 Common Shares that may be acquired upon the
exercise of currently exercisable stock options.
(h) Includes 10,500 Common Shares that may be acquired upon the
exercise of currently exercisable stock options.
(i) Excludes 35,000 (.1%) Common Shares owned by a trust for the
benefit of Mr. Jordan's minor children of which Mr. Jordan is one
of three trustees. Mr. Jordan disclaims beneficial ownership of
the 35,000 Common Shares owned by such trust.
(j) Include 9,700 Common Shares that may be acquired upon the
exercise of currently exercisable stock options.
(k) Includes (i) 21,200 (less than .1%) Common Shares beneficially
owned by Mr. Steinberg's wife and minor daughter as to which Mr.
Steinberg may be deemed to be the beneficial owner and (ii)
796,000 (2.8%) Common Shares which Mr. Steinberg presently has
the right to acquire upon exercise of warrants to purchase Common
Shares.
(l) Mr. Steinberg disclaims beneficial ownership of the Common Shares
held by the Steinberg Children Trusts.
(m) Includes an aggregate of 37,646 Common Shares owned of record by
the spouses or children of various officers of the Company as to
which such officers disclaim beneficial ownership. In addition,
because they may be acquired within 60 days, (A) 2,000 Common
Shares are deemed outstanding with respect to each of Messrs.
Dougan and Glaubinger, 10,500 Common Shares are deemed
outstanding with respect to each of Messrs. John W. Jordan II and
James E. Jordan, 9,700 Common Shares are deemed outstanding with
respect to Mr. Nichols, 790,000 Common Shares are deemed out-
standing with respect to Mr. Cumming and 796,000 Common Shares
are deemed outstanding with respect to Mr. Steinberg;
(B) 1,620,700 Common Shares that may be acquired pursuant to the
exercise of stock options and/or warrants described in (A) above
are deemed outstanding with respect to all directors and officers
as a group; and (C) 44,988 Common Shares that may be acquired by
certain officers upon the exercise of stock options are deemed
outstanding with respect to all directors and officers as a
group.
</TABLE>
<PAGE>
<PAGE>
As of March 31, 1994, Cede & Co. held of record 14,558,427 Common
Shares (approximately 52% of the total number of Common Shares
outstanding). Cede & Co. held such shares as a nominee for broker-
dealer members of The Depository Trust Company, which conducts
clearing and settlement operations for securities transactions
involving its members.
Item 13. Certain Relationships and Related Transactions.
------- ----------------------------------------------
Pursuant to an agreement dated as of August 1, 1988 among the
Company, Ian M. Cumming and Joseph S. Steinberg, upon the death of
either Mr. Cumming or Mr. Steinberg, the Company has agreed to
purchase from the respective estate up to 55% of his direct and/or
indirect interest in the Company, subject to reduction in certain
circumstances, not to exceed $50,000,000 in value. The agreement
provides that Mr. Cumming's and Mr. Steinberg's interests in the
Company will be valued at the higher of the average closing price of
the Common Shares on the NYSE for the 40 trading days preceding the
date of death or the net book value of the Common Shares at the end of
the fiscal quarter preceding the date of death. The Company has
agreed to fund the purchase of Common Shares pursuant to this
Agreement by purchasing and maintaining insurance on the life of each
of Messrs. Cumming and Steinberg in the aggregate face amount of
$50,000,000 per individual. This agreement will expire in December
1997 (subject to earlier termination in certain circumstances). The
Company has purchased the life insurance contemplated by this
agreement, the premiums for which aggregated approximately $300,000 in
1993. These amounts are not included in the Summary Compensation
Table appearing elsewhere in this Report.
Pursuant to an agreement dated as of May 3, 1985, Lawrence
Economic Consulting Inc. (a management consulting firm, 49% of the
outstanding common stock of which is owned by Lawrence D. Glaubinger
and his wife) performs certain financial and advisory services for the
Company at the rate of $200,000 per annum payable monthly. The
agreement is scheduled to terminate on April 30, 1995.
Pursuant to an agreement effective as of September 30, 1986, a
subsidiary of the Company formed a real estate limited partnership
with J.C. Nichols Company, a Missouri corporation formerly controlled
by the family of Jesse Clyde Nichols, III, a director of the Company,
and Communico, Inc., a New Mexico corporation controlled by Mr.
Nichols' brother and sister-in-law, as general partner (the "General
Partner"). The limited partnership was formed to acquire and develop
certain real estate in New Mexico. Each of the Company's subsidiary
and J.C. Nichols Company, as limited partners (the "Limited
Partners"), contributed approximately $225,000 to the capital of the
limited partnership. Approximately $60,000 was contributed by the
General Partner. The Limited Partners are entitled to receive out of
profits, if any, a preferred allocation equal to 10-1/2% per year of
their respective outstanding capital contributions; thereafter, 45% of
the profits, if any, will be allocated to the Limited Partners pro
rata. The partnership is scheduled to terminate in September 2006.
In connection with the formation of JII, on June 1, 1988, John W.
Jordan II acquired from Leucadia Investors, Inc. ("LII"), a subsidiary
of LI, 71.4% of LII's interest in JII in exchange for a zero coupon
note with an initial principal value of approximately $7,132,000 and
an accredited value at maturity on May 31, 1993 of approximately
$11,618,000 (the "Zero Coupon Note"). Mr. Jordan's obligations to LII
under the Zero Coupon Note are collateralized under a Pledge, Security
and Assignment Agreement dated June 1, 1988 (the "Pledge Agreement"),
pursuant to which Mr. Jordan agreed to make certain prepayments on the
Zero Coupon Note, agreed not to dispose of his interests in the
Company without the prior consent of LII, unless the net cash proceeds
of any such sale are paid directly to LII to be applied to the
prepayment, in whole or in part, of the Zero Coupon Note and pledged
to LII certain of the Common Shares owned by him. LII currently owns
approximately 11% of the outstanding common stock of JII. After
giving effect to prepayments in respect of
<PAGE>
<PAGE>
the Zero Coupon Note made by Mr. Jordan, the accredited value at
maturity of the Zero Coupon Note was approximately $8,294,000.
Pursuant to an agreement dated May 25, 1993 between Mr. Jordan and
LII, on June 1, 1993 Mr. Jordan delivered to LII 224,175 Common Shares
valued at $8,294,000 as payment in full of the Zero Coupon Note. The
Common Shares were valued at $37.00 per share, the closing price of a
Common Share on the New York Stock Exchange Composite Tape on May 24,
1993, the last full trading day prior to the authorization by the
Board of Directors of the agreement.
During 1993, Thomas E. Mara held commercial paper of the Company.
At March 31, 1994, Mr. Mara held approximately $830,000 of such
commercial paper bearing interest at the rate of approximately 3.7%
per annum. Interest earned by Mr. Mara on such commercial paper since
the beginning of 1993 was approximately $34,000. The maximum
principal amount of commercial paper held by Mr. Mara since the
beginning of 1993 was approximately $1,280,000.
In January 1994, the Company acquired 50% of Symskaya
Exploration, Inc. ("SEI"), a company engaged in the exploration and
development of oil and gas in the Krasnoyarsk region of eastern
Siberia. Equity Oil (of which Paul Dougan, a director of the Company,
is President and Chief Executive Officer) owns the remaining 50% of
SEI. In connection with such acquisition, the Company entered into a
shareholders' agreement with Equity Oil, pursuant to which the Company
has agreed to match Equity Oil's contributions to SEI, up to $6
million, for SEI's projects through the initial five year term of the
agreement.
For information concerning certain compensation awards placed in
escrow for the benefit of Messrs. Cumming and Steinberg, see footnotes
4 and 7 to the Summary Compensation Table contained in Item 11 of this
Report.
THE JORDAN COMPANY
Pursuant to an agreement effective as of February 1, 1982, as
amended and restated, LI, John W. Jordan II and David W. Zalaznick
formed The Jordan Company, a New York general partnership ("TJC").
TJC's business is to seek out, for clients, businesses (other than
those in the financial services area) that are attractive candidates
for leveraged buy-outs ("Buy-outs"), to arrange the terms of Buy-outs
and the financing thereof. TJC's business is managed by its Managing
Partner (The John W. Jordan II Revocable Trust, the sole trustee of
which is Mr. Jordan). To the extent that TJC becomes aware of
opportunities to invest in clients in connection with Buy-outs, TJC is
required to make available to LI, but LI is not required to accept, a
25% participation in each of such opportunities. The term of TJC
extends through December 31, 1996 (subject to earlier termination in
certain circumstances). If TJC is dissolved because of the occurrence
of certain events, LI will be entitled to receive certain percentages
of net fees thereafter collected from clients of TJC and certain
affiliated entities. LI is entitled to receive from TJC 25% of TJC's
net fees earned. LI's quarterly capital contributions to TJC were
$750,000 in 1992, 1993 and 1994. The amount that the Managing Partner
has the right to disburse in each quarter to pay compensation to
Messrs. Jordan and Zalaznick and certain other expenses of TJC (the
"Management Fee") was $750,000 in 1992, 1993 and 1994.
Pursuant to an agreement effective as of April 15, 1985, LI, John
W. Jordan II and David W. Zalaznick formed a partnership, the
Jordan/Zalaznick Capital Company ("JZCC"), for the purpose of
arranging the acquisition of and investment in companies of a smaller
size than those previously acquired through TJC. JZCC was capitalized
with $10,000,000, $3,000,000 of which was furnished by LI and
$7,000,000 of which was furnished by Messrs. Jordan and Zalaznick.
Profits, if any, will be divided pro rata (subject to certain
exceptions) and certain management fees will be paid to Messrs. Jordan
and Zalaznick in such amounts as would be paid, under the
circumstances, to an unaffiliated party. Members of the committee
which manages
<PAGE>
<PAGE>
JZCC's business (composed of Messrs. Jordan, Zalaznick, Cumming and
Steinberg) receive annual compensation of $10,000 for their services
to JZCC. The partnership agreement is terminable by each of the
partners after $10,000,000 has been invested by the partnership and
under certain other circumstances.
Through its partnership interests in TJC and JZCC, LI acquired
equity interests in certain private companies (the "Jordan Associated
Companies"). At December 31, 1993, LI had equity interests in a total
of 15 companies by virtue of TJC, JZCC and JII. LI has designated one
or both of Ian M. Cumming and Joseph S. Steinberg to serve as a
director of certain of the Jordan Associated Companies.
TJC and JZCC are presently negotiating additional leveraged Buy-
out opportunities. However, there can be no assurance any such Buy-
outs will be completed.
During 1993, in addition to the capital contribution described
above, the Company expended approximately $232,000 and received
approximately $4,919,000 in fees (including amounts from the Jordan
Associated Companies), distributions and sales proceeds related to the
Company's investments in partnerships of which Mr. Jordan is a general
partner.
During 1993, an aggregate of $30,000 was paid to Mr. Jordan for
financial and advisory services provided to the Company.
<PAGE>
<PAGE>
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.
LEUCADIA NATIONAL CORPORATION
Registrant
By: /s/ Joseph A. Orlando
--------------------------------
Joseph A. Orlando,
Vice President and Comptroller
(Chief Financial and Accounting
Officer)
Dated: April 29, 1994
