<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------
(Amendment No. ___)
[x] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14-
a6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Leucadia National Corporation
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined.):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed: <PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION
315 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10010
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1995
------------------------
April 12, 1995
To Our Common Shareholders:
You are cordially invited to attend the Annual Meeting of
Shareholders (the "Meeting") of Leucadia National Corporation (the
"Company") to be held on May 3, 1995, at 9:30 a.m., at Republic Bank
of New York, 452 Fifth Avenue, 11th Floor, New York, New York:
1. To elect seven directors.
2. To ratify the selection of Coopers & Lybrand as independent
auditors to audit the Consolidated Financial Statements of the Company
and its subsidiaries for the year ended December 31, 1995.
3. To transact such other business as may properly come before
the Meeting or any adjournments of the Meeting.
Only holders of record of the Company's common shares, par value
$1.00 per share, at the close of business on April 3, 1995 will be
entitled to notice of and to vote at the Meeting. Please sign, date
and mail the enclosed proxy so that your shares may be represented at
the Meeting if you are unable to attend and vote in person.
By Order of the Board of Directors.
RUTH KLINDTWORTH
Secretary
NYFS04...:\30\76830\0001\570\PXY2025P.55G<PAGE>
<PAGE>
LEUCADIA NATIONAL CORPORATION
315 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10010
--------------------------
PROXY STATEMENT
--------------------------
ANNUAL MEETING OF SHAREHOLDERS
--------------------------
April 12, 1995
This Proxy Statement is being furnished to the Shareholders (the
"Shareholders") of Leucadia National Corporation, a New York
corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors for use at the Annual Meeting of
Shareholders (the "Meeting") of the Company to be held on May 3, 1995
and at any adjournments thereof.
At the Meeting, Shareholders will be asked:
1. To elect seven directors.
2. To ratify the selection of Coopers & Lybrand as independent
auditors to audit the Consolidated Financial Statements of the Company
and its subsidiaries for the year ended December 31, 1995.
3. To transact such other business as may properly come before
the Meeting or any adjournments of the Meeting.
The Board of Directors has fixed the close of business on April
3, 1995 as the record date for the determination of the holders of
common shares, par value $1.00 per share (the "Common Shares")
entitled to notice of and to vote at the Meeting. Each such
Shareholder will be entitled to one vote for each Common Share held on
all matters to come before the Meeting and may vote in person or by
proxy authorized in writing. At the close of business on April 3,
1995, there were 28,141,212 Common Shares entitled to vote.
All references in this Proxy Statement to the Common Shares and
to prices of the Common Shares reflect a two-for-one stock split
effective on January 8, 1993.
This Proxy Statement and the accompanying form of proxy are first
being sent to holders of the Common Shares on or about April 12, 1995.
THE MEETING
DATE, TIME AND PLACE
The Meeting will be held on May 3, 1995, at 9:30 a.m., local
time, at Republic Bank of New York, 452 Fifth Avenue, 11th Floor, New
York, New York.
MATTERS TO BE CONSIDERED
At the Meeting, Shareholders will be asked to consider and vote
to elect seven directors and to ratify the selection of independent
auditors. See "ELECTION OF DIRECTORS" and "RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS". The Board of Directors knows of no matters
that are to be brought before the Meeting other than as set forth in
the Notice of Meeting. If any other matters properly come
1<PAGE>
<PAGE>
before the Meeting, the persons named in the enclosed form of proxy or
their substitutes will vote in accordance with their best judgment on
such matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Shareholders as of the Record Date (i.e., the close of business
on April 3, 1995) are entitled to notice of and to vote at the
Meeting. As of the Record Date, there were 28,141,212 Common Shares
outstanding and entitled to vote, with each share entitled to one
vote.
REQUIRED VOTES
Election of Directors. Under New York law, the affirmative vote
of the holders of a plurality of the Common Shares voted at the
Meeting is required to elect each director. Consequently, only shares
that are voted in favor of a particular nominee will be counted toward
such nominee's achievement of a plurality. Shares present at the
Meeting that are not voted for a particular nominee or shares present
by proxy where the Shareholder properly withheld authority to vote for
such nominee (including broker non-votes) will not be counted toward
such nominee's achievement of a plurality.
Other Matters. The ratification of the selection of Coopers &
Lybrand as independent auditors is being submitted to Shareholders
because the Board of Directors believes that such action follows sound
corporate practice and is in the best interests of the Shareholders.
If the Shareholders do not ratify the selection by the affirmative
vote of the holders of a majority of the Common Shares voted at the
Meeting, the selection of independent auditors will be reconsidered by
the Board. If the Shareholders ratify the selection, the Board, in
its discretion, may still direct the appointment of new independent
auditors at any time during the year if the Board believes that such a
change would be in the best interests of the Company and its
Shareholders. Abstentions and broker non-votes are not counted in
determining the votes cast in connection with the ratification of
auditors, but do have the effect of reducing the number of affirmative
votes required to achieve a majority for such matter by reducing the
total number of shares from which the majority is calculated.
Ian M. Cumming, Chairman of the Board of Directors, beneficially
owns 5,182,961 or approximately 18.4% of the Common Shares outstanding
at the Record Date (excluding 790,000 Common Shares which Mr. Cumming
and his family have the right to acquire upon exercise of currently
exercisable warrants), Joseph S. Steinberg, a Director and President,
beneficially owns 4,661,670 or approximately 16.6% of the Common
Shares outstanding at the Record Date (excluding 796,000 Common Shares
which Mr. Steinberg and his family have the right to acquire upon
exercise of currently exercisable warrants) and two trusts for the
benefit of Mr. Steinberg's minor children (the "Steinberg Children
Trusts") beneficially own 563,700 or approximately 2.0% of the Common
Shares outstanding at the Record Date. Mr. Steinberg disclaims
beneficial ownership of the Common Shares held by the Steinberg
Children Trusts. The Cumming Foundation and the Joseph and Diane
Steinberg 1992 Charitable Trust, private charitable foundations
independently established by Messrs. Cumming and Steinberg,
respectively, beneficially own 250,717 or approximately .9% and
238,236 or approximately .8% of the Common Shares outstanding at the
Record Date, respectively. Mr. Cumming and Mr. Steinberg each
disclaims beneficial ownership of the Common Shares held by their
respective private charitable foundations. Messrs. Cumming and
Steinberg have advised the Company that they intend to cause all
Common Shares that they beneficially own (excluding Common Shares
acquirable upon the exercise of the warrants) to be voted in favor of
each nominee named herein and in favor of ratification of selection of
independent auditors. In addition to Messrs. Cumming and Steinberg,
all other directors and officers of the Company beneficially own
approximately 5.1% of the Common Shares outstanding at the Record Date
(excluding Common Shares which such directors and officers have the
right to acquire upon exercise of currently exercisable options).
ACCORDINGLY, ASSUMING ALL OF SUCH DIRECTORS AND OFFICERS AND THE
STEINBERG CHILDREN TRUSTS AND THE TWO PRIVATE CHARITABLE FOUNDATIONS
CAUSE ALL COMMON SHARES BENEFICIALLY OWNED BY THEM (EXCLUDING COMMON
SHARES ACQUIRABLE UPON THE EXERCISE OF OPTIONS) TO BE VOTED IN FAVOR
OF EACH NOMINEE NAMED HEREIN AND IN FAVOR OF RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS, ELECTION OF EACH NOMINEE AND RATIFICATION OF
THE
2<PAGE>
<PAGE>
SELECTION OF INDEPENDENT AUDITORS WILL BE ASSURED UNLESS MORE THAN
87.7% OF THE OUTSTANDING COMMON SHARES ARE VOTED ON SUCH MATTERS.
VOTING AND REVOCATION OF PROXIES
Shareholders are requested to complete, date, sign and promptly
return the accompanying form of proxy in the enclosed envelope.
Common Shares represented by properly executed proxies received by the
Company and not revoked will be voted at the Meeting in accordance
with the instructions contained therein. If instructions are not
given, proxies will be voted FOR election of each nominee for director
---
named herein and FOR ratification of selection of independent
---
auditors.
Any proxy signed and returned by a Shareholder may be revoked at
any time before it is voted by filing with the Secretary of the
Company, at the address of the Company set forth herein, written
notice of such revocation or a duly executed proxy bearing a later
date or by attending the Meeting and voting in person. Attendance at
the Meeting will not in and of itself constitute revocation of a
proxy.
PROXY SOLICITATION
The Company will bear the costs of solicitation of proxies for
the Meeting. In addition to solicitation by mail, directors, officers
and regular employees of the Company may solicit proxies from Share-
holders by telephone, telegram, personal interview or otherwise. Such
directors, officers and employees will not receive additional
compensation, but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. Brokers, nominees, fiduciaries and
other custodians have been requested to forward soliciting material to
the beneficial owners of Common Shares held of record by them, and
such custodians will be reimbursed for their reasonable expenses.
INDEPENDENT AUDITORS
The Company has been advised that representatives of Coopers &
Lybrand, the Company's independent auditors for 1994, will attend the
Meeting, will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
3<PAGE>
<PAGE>
ELECTION OF DIRECTORS
At the Meeting, seven directors are to be elected to serve until
the next Meeting or until their successors are elected and qualified.
The persons named in the enclosed form of proxy have advised that,
unless contrary instructions are received, they intend to vote FOR the
seven nominees named by the Board of Directors and listed on the
following table. The Board of Directors does not expect that any of
the nominees will be unavailable for election as a director. However,
if by reason of an unexpected occurrence one or more of the nominees
is not available for election, the persons named in the form of proxy
have advised that they will vote for such substitute nominees as the
Board of Directors of the Company may propose. The following
information is as of April 3, 1995.
Age, period served as director,
other business experience
Name and present position during the last five years and
if any, with the Company family relationships, if any
------------------------- -------------------------------
Ian M. Cumming,
Chairman of the Board Mr. Cumming, 54, 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 Allcity Insurance
Company ("Allcity") since February
1988. Allcity, a consolidated
subsidiary of the Company, is a
property and casualty insurer. Mr.
Cumming is also a director of
Skywest, Inc., a Utah-based
regional air carrier.
Paul M. Dougan Mr. Dougan, 57, has served as a
director of the Company since May
1985. He has been a director and
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.
Lawrence D. Glaubinger Mr. Glaubinger, 69, 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 sale of textiles,
since November 1977. He has also
been President of Lawrence Economic
Consulting Inc., a management
consulting firm, since January
1977. Mr. Glaubinger is a director
of Marisa Christina Inc., an
importer of women's clothing.
James E. Jordan Mr. Jordan, 51, has served as a
director of the Company since
February 1981. Since October 1986,
he has been President of The
William Penn Corporation ("William
Penn"), one of the Jordan
Associated Companies referred to
under "EXECUTIVE COMPENSATION -
Compensation Committee Interlocks
and Insider Participation" below.
William Penn, approximately 19.7%
of the common stock of which is
beneficially owned by the Company,
is a holding company for an invest-
ment advisor to The William Penn
family of mutual funds. Mr. Jordan
4<PAGE>
<PAGE>
Age, period served as director,
other business experience
Name and present position during the last five years and
if any, with the Company family relationships, if any
------------------------- -------------------------------
is a director of three mutual funds in
The William Penn family, Penn Square Mutual
Fund, William Penn Interest Income
Fund and Scottish Widows
International Fund, and a director
of Mezzanine Capital & Income Trust
2001 PLC, a British investment
trust company.
John W. Jordan II Mr. Jordan, 47, has served as a
director of the Company since May
1979. Since February 1982, he has
been Managing Partner of The Jordan
Company. He is also a director of
Carmike Cinemas, Inc., an owner and
operator of movie screens
throughout the Southeast
(approximately 6% of the Class A
shares of which are beneficially
owned by the Company), Jones
Plumbing Systems, Inc., a
manufacturer and distributor or
plumbing and hardware related
products (approximately 21% of the
common stock of which is
beneficially owned by the Company),
American Safety Razor Company, a
manufacturer of consumer products,
and Jordan Industries, Inc.
("JII"), a public company
controlled by Mr. Jordan
(approximately 11% of the common
stock of which is beneficially
owned by the Company), which owns
and manages manufacturing
companies.
Jesse Clyde Nichols, III Mr. Nichols, 55, 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.
Joseph S. Steinberg,
President Mr. Steinberg, 51, has served as a
director of the Company since
December 1978 and as President of
the Company since January 1979. He
is also a director of Allcity and
JII.
The Board of Directors recommends a vote FOR the above named nominees.
5<PAGE>
<PAGE>
INFORMATION CONCERNING
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
MEETINGS AND COMMITTEES
During 1994, the Board of Directors held two meetings.
The Board of Directors has a standing Audit Committee, Executive
Committee and Employee Benefits Committee.
The functions of the Audit Committee are to recommend to the
Board independent auditors for the Company, to analyze the reports and
recommendations of such auditors and to review internal audit
procedures and controls. The Audit Committee met once during 1994 and
consists of Messrs. Dougan (Chairman), Nichols and Glaubinger.
The functions of the Executive Committee are to exercise the
authority of the Board of Directors in the management of the business
of the Company at such times as the full Board of Directors is
unavailable. The Executive Committee, which did not meet during 1994,
consists of Messrs. Cumming, Steinberg, John W. Jordan II and
Glaubinger.
The functions of the Employee Benefits Committee are to review
compensation of the Chairman of the Board and President, and employee
benefit and incentive plans and to present recommendations thereon to
the Board. The Employee Benefits Committee also functions as the
Option Committee under the Company's 1982 Stock Option Plan, as
amended, and under the Company's 1992 Stock Option Plan. The Employee
Benefits Committee, which met twice during 1994, consists of Messrs.
Nichols (Chairman), Dougan and James E. Jordan.
All directors, with the exception of John W. Jordan II, attended
at least 75% of the meetings of the Board and committees of the Board
on which they served.
CERTAIN LITIGATION
On May 11, 1994, a shareholder of the Company filed a purported
derivative action on behalf of the Company against the Company's
current Board of Directors and one former director, Melvin Hirsch.
The action was filed in the United States District Court for the
Southern District of New York and is entitled Pinnacle Consultants,
---------------------
Ltd. v. Leucadia National Corporation, et al. (Civil Action No. 94
---- -------------------------------------
Civ. 3496). The complaint alleges claims for violations of the
Racketeer Influenced and Corrupt Organizations Act, Section 14(a) of
the Securities Exchange Act of 1934 and state law claims for waste,
breach of fiduciary duty and fraud. Defendants have retained legal
counsel and have filed a motion to dismiss the complaint on various
grounds. The motion is currently scheduled to be argued on June 23,
1995. All discovery has been stayed pending resolution of the
defendants' motion to dismiss.
6<PAGE>
<PAGE>
PRESENT BENEFICIAL OWNERSHIP OF COMMON SHARES
Set forth below is certain information as of April 3, 1995 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, the
Steinberg Children Trusts and private charitable foundations established
by Mr. Cumming and Mr. Steinberg and (iii) all officers and directors of
the Company as a group.
<TABLE>
<CAPTION>
Name and Address Number of Shares and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
------------------- ----------------------- --------
<S> <C> <C>
First Manhattan Co. (a) 1,522,137 (b) 5.4%
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) 1,648,392 5.9%
Ian M. Cumming 5,972,961 (e)(f) 20.6%
Paul M. Dougan --
Lawrence D. Glaubinger 34,000 .1%
James E. Jordan 17,000 (g) *
John W. Jordan II 1,217,743 (h)(i) 4.3%
Jesse Clyde Nichols, III 31,462 (j) .1%
Joseph S. Steinberg 5,457,670 (f)(k) 18.9%
The Steinberg Children
Trusts 563,700 (l) 2.0%
Cumming Foundation 250,717 (m) .9%
The Joseph S. and Diane
H. Steinberg 1992
Charitable Trust 238,236 (n) .8%
All directors and officers as
a group (14 persons) 12,923,643 (i)(o) 43.4%
<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. 9 to a Statement on Schedule 13G dated
February 10, 1995, filed by First Manhattan Co., as of
February 10, 1995, First Manhattan Co. has sole voting power with
respect to 123,023 of such Common Shares, shares voting power with
respect to 1,311,014 of such Common Shares and sole power to
dispose or to direct the disposition with respect to 123,023 of
such Common Shares and shares power to dispose or to direct the
disposition with respect to 1,399,114 of such Common Shares.
First Manhattan Co. disclaims beneficial ownership with respect to
12,850 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.
(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.
7<PAGE>
<PAGE>
(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 and his family currently have 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 1,000 Common Shares that may be acquired upon the
exercise of currently exercisable stock options.
(h) Includes 4,000 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 John W. Jordan II'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) Includes 11,200 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 and his family
currently have 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) Mr. Cumming is a trustee and President of this private charitable
foundation and disclaims beneficial ownership of the Common Shares
held by the foundation.
(n) Mr. Steinberg and his wife are the trustees of this private
charitable foundation. Mr. Steinberg disclaims beneficial
ownership of the Common Shares held by the foundation.
(o) Includes an aggregate of 37,000 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) 1,000 Common
Shares are deemed outstanding with respect to James E. Jordan,
4,000 Common Shares are deemed outstanding with respect to John W.
Jordan II, 11,200 Common Shares are deemed outstanding with
respect to Mr. Nichols, 790,000 Common Shares are deemed to be
outstanding with respect to Mr. Cumming and 796,000 Common Shares
are deemed to be outstanding with respect to Mr. Steinberg;
(B) 1,602,200 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) 38,064 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>
As of April 3, 1995, Cede & Co. held of record 14,813,554 Common
Shares (approximately 52.6% of the total number of Common Shares
outstanding). Cede & Co. held such shares as a nominee for broker-
dealer
8<PAGE>
<PAGE>
members of The Depository Trust Company, which conducts clearing and
settlement operations for securities transactions involving its
members.
EXECUTIVE COMPENSATION
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 1994 for services in all capacities to the Company and its
subsidiaries in 1994, 1993 and 1992.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
-------------------------------------------- ------------
Name and Options/
Principal Other Annual Warrants All Other
Position(s) Year Salary Bonus (1) Compensation (# of shares) Compensation
----------- ---- ------ --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ian M. Cumming, 1994 $491,497 $ 341,684(2) $306,906(3) -- $71,975(4)
Chairman of the 1993 477,365 2,214,505 300,345(3) -- 57,313(4)(5)
Board 1992 464,412 1,614,120 191,129(3) 800,000 58,998(4)(5)(6)
Joseph S. 1994 $491,500 $ 345,769(2) $270,722(3) -- $60,120(4)
Steinberg, 1993 477,365 2,214,505 271,603(3) -- 58,083(4)(5)
President 1992 464,412 1,614,120 315,642(3) 800,000 55,268(4)(5)(6)
Thomas E. Mara, 1994 $205,006 $506,150 -- -- $9,500(4)
Executive Vice 1993 199,923 406,000 -- 10,000 4,497(4)
President and 1992 194,922 330,850 -- -- 2,182(4)
Treasurer
Lawrence S. 1994 $205,004 $656,150 $86,442(3) -- $3,750(7)
Hershfield, 1993 175,653 556,000 -- 15,000 4,497(7)
Executive Vice 1992 139,846 304,200 -- -- 2,182(7)
President
David K. Sherman, 1994 $93,540 $252,775 -- -- $2,382(7)
Vice President 1993 89,769 182,700 -- 3,000 4,497(7)
1992 73,652 152,250 -- -- 2,182(7)
<FN>
----------------------
(1) Generally, 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). However, in response to certain proposed and enacted
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 and
1993 were determined and paid in 1992 and 1993, respectively, as
described below.
(2) To permit the Company to fully utilize the maximum deduction
available for compensation paid to Messrs. Cumming and
Steinberg in 1994, the Board of Directors accelerated into
1994 the payment of a portion of the 1994 performance bonus
for each of Messrs. Cumming and Steinberg necessary to bring
up to $1 million the total compensation paid (for tax
purposes) to each of them in 1994. The Compensation
Committee of the Board of Directors intends to consider the
payment of an additional 1994 performance bonus to each of
Messrs. Cumming and Steinberg at the Board of Directors
meeting to be held following the 1995 Annual
9<PAGE>
<PAGE>
Meeting. See "Report of the Compensation Committee of the Board
of Directors--Compensation of Messrs. Cumming and Steinberg."
(3) Consists of non-cash compensation valued in accordance with the
disclosure rules of the Securities and Exchange Commission, of
which $305,995, $299,434 and $190,825 relates to the personal use
of corporate aircraft by Mr. Cumming in 1994, 1993 and 1992,
respectively, $264,338, $265,219 and $310,604 relates to the
personal use of corporate aircraft by Mr. Steinberg in 1994, 1993
and 1992, respectively, and $79,607 relates to expenses incurred
in connection with Mr. Hershfield's relocation to New York in
1994. The value of such other compensation for federal tax
purposes may differ.
(4) Included in this amount is the annual premium on a term life
insurance policy paid by the Company for the benefit of such
person ($15,540, $1,900 and $1,900 for Mr. Cumming in 1994, 1993
and 1992, respectively, and $3,620, $1,420 and $1,420 for Mr.
Steinberg in 1994, 1993 and 1992, respectively), 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 ($52,685, $50,916 and $54,916 for Mr.
Cumming in 1994, 1993 and 1992, respectively, $52,750, $52,166
and $51,666 for Mr. Steinberg in 1994, 1993 and 1992,
respectively, and $5,750 for Mr. Mara in 1994) and contributions
of $3,750, $4,497 and $2,182 in 1994, 1993 and 1992,
respectively, made by the Company and Leucadia, Inc., a wholly
owned subsidiary of the Company ("LI"), to a defined benefit plan
on behalf of the named person.
(5) Excludes $4,000,000 placed in escrow in 1993 (the "1993 Escrow")
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 "1993 Escrow Agreements"). The funds vest at the
rate of 20% for each full calendar year after December 31, 1997
during which Messrs. Cumming and Steinberg, respectively,
continue to be employed by the Company or any of its
subsidiaries. Each of Messrs. Cumming and Steinberg is entitled
to be 50% vested upon his 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 reported
income equal to the amount of the escrowed funds, and the Company
deducted that amount 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 actual
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. At December 31, 1994, Messrs. Cumming and Steinberg
were not vested with respect to any funds under the 1993 Escrow.
10<PAGE>
<PAGE>
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.
(6) 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 (the "1992 Escrow
Agreements"). These agreements are identical to those described
in footnote 5 above, except (i) 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, (ii) in the event of
death or disability of Mr. Cumming or Mr. Steinberg, the funds
would be 100% vested and (iii) 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. As of
December 31, 1994, Messrs. Cumming and Steinberg each are vested
with respect to $1,000,000 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.
(7) Consists of contributions by the Company and LI to a defined
contribution 401(k) plan on behalf of the named person.
</TABLE>
AGGREGATE OPTION/WARRANT EXERCISES IN 1994 AND
OPTION/WARRANT VALUES AT DECEMBER 31, 1994
The following table provides information as to options and
warrants exercised by each of the named executives in 1994 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, 1994 ($44.50, as reported on the New York Stock
Exchange Composite Tape).
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/ Options/
Warrants Warrants at
at December December 31,
31, 1994 1994
----------- ------------
Number of
Shares
Underlying
Options/
Warrants Value Exercisable/ Exercisable/
Name Exercised Realized Unexercisable Unexercisable
---- --------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Ian M. Cumming -- -- 790,000/0 $19,206,875/$0
Joseph S. Steinberg -- -- 796,000/0 $19,352,750/$0
Thomas E. Mara -- -- 26,576/18,288 $852,046/$368,648
Lawrence S. Hershfield 7,500 $164,063 0/18,000 $0/$240,750
David K. Sherman 3,200 88,750 3,000/6,000 $81,075/$126,300
</TABLE>
11<PAGE>
<PAGE>
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.
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:
<TABLE>
<CAPTION>
<S> <C>
Ian M. Cumming $17,385*
Joseph S. Steinberg 22,543*
Thomas E. Mara 11,548*
Lawrence S. Hershfield 78,605*
David K. Sherman 85,340*
<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.
</TABLE>
12<PAGE>
<PAGE>
EMPLOYMENT AGREEMENTS
The Company 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 for Mr.
Steinberg's employment as President and Chief Operating Officer of the
Company 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. Messrs.
Cumming and Steinberg are entitled to participate in all incentive
plans of the Company and other subsidiary and affiliated companies,
and the Company 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 and if either the employment of Messrs. Cumming or
Steinberg is terminated by the Company 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 termination of the employment agreements the
life insurance payable to the beneficiaries of Messrs. Cumming and
Steinberg.
For information concerning certain compensation awards placed in
escrow for the benefit of Messrs. Cumming and Steinberg, see footnotes
5 and 6 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 1994, 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 $36.625 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 27, 1994.
For additional information, see "Certain Relationship and Related
Transactions" and "Compensation Committee Interlocks and Insider
Participation" below.
INDEMNIFICATION
Pursuant to a contract of insurance dated December 4, 1994 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 $763,000. During 1994, no payments were
received under the Company's indemnification insurance.
13<PAGE>
<PAGE>
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 $342,000 in
1994. These amounts are not included in the Summary Compensation
Table appearing elsewhere in this Proxy Statement.
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.
In connection with his agreement, at the Company's request, to
relocate with his family to Moscow, Lawrence S. Hershfield and the
Company have agreed to form a joint venture (the "Joint Venture") for
all of the Company's future investments in Russia and the Commonwealth
of Independent States (formerly states of the Soviet Union). The
Company has agreed that pursuant to the Joint Venture agreement, after
satisfaction of third party obligations, repayment to the Company of
certain loans and the payment of certain minimum returns on capital
invested by the Company and Mr. Hershfield, Mr. Hershfield will be
entitled to 10% of any remaining funds. Capital investments in the
Joint Venture will be made proportionately by the Company and Mr.
Hershfield, with Mr. Hershfield contributing 1% to the total capital
of the Joint Venture. As of the Record Date, no investments have been
made in, or distributions received from, the Joint Venture by either
the Company or Mr. Hershfield.
Also in connection with his relocation to Moscow, the Company
has leased Mr. Hershfield's United States residence for the duration
of Mr. Hershfield's Company-related relocation at a monthly rental of
$4,500 and intends to enter into an agreement with Mr. Hershfield
pursuant to which funds, currently estimated at $100,000, will be
placed in escrow for the benefit of Mr. Hershfield. These funds will
not vest in Mr. Hershfield until the first day of the calendar year in
which Mr. Hershfield is no longer treated as a Russian resident for
tax purposes and, subject to certain exceptions relating to the death
and disability of Mr. Hershfield, will never vest in Mr. Hershfield if
he is not an employee of the Company or its subsidiaries on September
30, 1995 or such subsequent date as may be agreed to by the Company
and Mr. Hershfield. The amounts in the escrow accounts will be
invested at the direction of the Company, which will be entitled to
receipt of the investment income. As a condition to the escrow
arrangement, Mr. Hershfield will be required to file a tax election
that will result in 1995 recognition for U.S. tax purposes of the full
amount placed in escrow. It is contemplated that Mr. Hershfield will
be permitted to direct that the Company's tax withholding obligation
be paid with funds from the escrow; however, this will have no effect
on the vesting schedule. Accordingly, if Mr. Hershfield does not
become vested in the amount placed in escrow, he will be obligated to
repay the amount withheld to the Company.
For information concerning certain compensation awards placed in
escrow for the benefit of Messrs. Cumming and Steinberg, see footnotes
5 and 6 to the Summary Compensation Table above.
14<PAGE>
<PAGE>
For additional information, see "Compensation Committee
Interlocks and Insider Participation", below.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS*
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS (OTHER THAN IAN M.
CUMMING AND JOSEPH S. STEINBERG)
The Employee Benefits Committee of the Board of Directors (the
"Committee"), consisting of Mr. Nichols (Chairman), Mr. Dougan and Mr.
James E. Jordan, each of whom is a non-employee director, awards stock
options upon the recommendation of Messrs. Cumming and Steinberg,
Chairman of the Board and President of the Company, respectively and
recommends to the Board of Directors the compensation of Messrs.
Cumming and Steinberg. Salary and bonus compensation of executive
officers of the Company are determined by Messrs. Cumming and
Steinberg under authority of the Board of Directors.
The Company's compensation package for executive officers
consists of four basic elements: (1) base salary; (2) annual bonus
compensation; (3) long-term incentives in the form of stock options
granted pursuant to the Company's 1992 Stock Option Plan; and (4)
retirement benefits pursuant to the Company's Retirement Plan. Other
elements of compensation include a defined contribution 401(k) plan
and medical and life insurance benefits available to employees,
generally.
Each element of compensation has a different purpose. Salary and
bonus payments are mainly designed to reward current and past
performance. Stock options are primarily designed to provide strong
incentive for superior long-term future performance and are directly
linked to shareholders' interests because the value of the awards will
increase or decrease based upon the future price of the Common Shares.
Retirement benefits generally are designed to reward prior service.
Base compensation of executive officers is determined by Messrs.
Cumming and Steinberg consistent with the executive's office and level
of responsibility, with annual salary increases, which generally
amount to a small percentage of the executive's prior base salary,
primarily reflecting cost of living increases. However, where
appropriate to reflect an executive's increase in office and/or
responsibility, annual salary increases may be significant.
The Company's executive compensation policy emphasizes
performance based compensation. Accordingly, a large percentage of
annual compensation consists of bonus compensation. This ensures that
compensation paid to an executive reflects the individual's specific
contributions to the success of the Company, as well as the level and
degree of complexity involved in his contributions to the Company
(which historically often have involved restructuring newly acquired
enterprises, the success of which may not be evident for several
years). Bonus compensation is determined on the basis of Messrs.
Cumming's and Steinberg's subjective assessment of an executive's
performance and contribution to the Company and is heavily dependent
upon the Company's performance and each individual's contribution
thereto. Bonus compensation is not based on any specific formula.
The Company, by means of the 1992 Stock Option Plan, seeks to
retain the services of persons now holding key positions and to secure
the services of persons capable of filling such positions. From time
to time, stock options may be awarded which, under the terms of the
1992 Stock Option Plan, permit the executive
- -------------------
* The disclosure contained in this section of the Proxy
Statement is not incorporated by reference into any prior filings
by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that incorporated future filings or portions
thereof (including this Proxy Statement or the "Executive
Compensation" section of this Proxy Statement).
15<PAGE>
<PAGE>
officer or other employee to purchase Common Shares at not less than
the fair market value of the Common Shares on the date of grant. The
extent to which the employee realizes any gain is, therefore, directly
related to increases in the price of the Common Shares and hence,
shareholder value, during the period of the option. Options granted
to executive officers generally become exercisable at the rate of 20%
per year, commencing one year after the date of grant. As with base
salary and bonuses, the amount of stock options awarded to an
executive officer is not based on any specific formula, but rather on
a subjective assessment of the executive's performance and the
Company's performance.
The Company believes the executive compensation program has
enabled it to attract, motivate and retain senior management by
providing a competitive total compensation opportunity based on
performance. Base salaries, combined with annual variable performance
based bonus awards that reflect the individual's level of
responsibility, performance and contribution to the Company are
important elements of the Company's cash compensation philosophy.
Together with the Company's executive stock ownership, the Company's
total executive compensation program not only aligns the interest of
executive officers and shareholders, but permits the Company to
attract talented senior management. Messrs. Cumming and Steinberg and
the Board believe the program strikes an appropriate balance between
short- and long-term performance objectives.
COMPENSATION OF MESSRS. CUMMING AND STEINBERG
The base compensation of Messrs. Ian M. Cumming and Joseph S.
Steinberg, Chairman of the Board and President of the Company,
respectively, is set pursuant to employment agreements between the
Company and each of Messrs. Cumming and Steinberg entered into as of
December 28, 1993 covering the period from July 1, 1994 through June
30, 2003. See "Employment Agreements." These employment agreements
continued the employment agreements between LI and each of Messrs.
Cumming and Steinberg entered into in 1984, which expired on June 30,
1994. The base salary of Messrs. Cumming and Steinberg provided for
in the current employment agreements was determined by the Committee,
which presented its recommendation to the entire Board of Directors
(with Messrs. Cumming and Steinberg abstaining) and represents an
increase over their prior base salaries, primarily reflecting cost of
living increases. The Committee reviews other compensation for each
of Messrs. Cumming and Steinberg and presents its recommendations
thereon to the entire Board of Directors.
In response to federal tax law changes that, beginning in 1994,
limited the deductibility by the Company of compensation in excess of
$1 million per employee per year for each of the Company's five most
highly compensated executives, the Company accelerated the
determination and payment of 1993 performance bonuses for each of
Messrs. Cumming and Steinberg into 1993. For 1994 and future years
(absent tax considerations), the Company intended to return to its
standard practice of determining and paying the performance bonus for
Messrs. Cumming and Steinberg in the year following the year in which
earned (at the annual organizational meeting of the Board of Directors
following the annual shareholders meeting). However, to permit the
Company to take full advantage of the maximum 1994 federal tax
deduction available to the Company in respect of compensation to
Messrs. Cumming and Steinberg, the Committee met in December 1994 to
consider the acceleration and payment of a portion of the expected
1994 performance bonus for each of Messrs. Cumming and Steinberg.
At its December 1994 meeting, the Committee was advised that
without acceleration of any bonus payments into 1994, total
compensation (including the tax value of perquisites) to be paid in
1994 to each of Messrs. Cumming and Steinberg would be approximately
$650,000, thereby falling short of the $1 million maximum amount
deductible by the Company. The Committee determined that the
performance bonus ultimately to be paid to each of Messrs. Cumming and
Steinberg for 1994 would be at least $350,000 and that total 1995
compensatory payments (including bonuses) to each of Messrs. Cumming
and Steinberg would likely be at least equal to $1 million. In view
of the foregoing, the Committee determined that it would be prudent
for the Company to accelerate into 1994 the payment and deductibility
of approximately $350,000 of the 1994
16<PAGE>
<PAGE>
bonus amounts for each of Messrs. Cumming and Steinberg. By doing so,
the Company would be able to take full advantage of the maximum $1
million per employee annual allowable deduction. If the $350,000
amount had not been accelerated, assuming amounts paid to Messrs.
Cumming and Steinberg in 1995 and any subsequent year will exceed $1
million, the Company would have forfeited an opportunity to avail
itself of the full $1 million allowable deduction for 1994. The
Committee determined not to recommend early vesting and payment of any
funds in the 1992 Escrow or the 1993 Escrow, each of which was
established to fund compensatory payments to Messrs. Cumming and
Steinberg in excess of deductible amounts, because 1994 payments to
each of Messrs. Cumming and Steinberg did not exceed deductible
amounts and use of such funds would not provide the Company with any
tax deductions (all of which were taken by the Company in the year in
which each such escrow was created). Furthermore, failure to
accelerate payment of a portion of the 1994 bonus likely would have
placed the Company in a position to withdraw funds prematurely from
the 1992 Escrow or the 1993 Escrow, thereby unnecessarily depleting
the availability of such funds for use in future years. For additional
information with respect to the escrow accounts referred to above, see
"Executive Compensation -- Summary Compensation Table" above.
The Committee unanimously approved the payment to each of Messrs.
Cumming and Steinberg of so much of the performance bonus to be paid
for services rendered to Leucadia for 1994 as is necessary to bring up
to $1 million the total compensation (for tax purposes) paid to each
of Messrs. Cumming and Steinberg in 1994 (approximately $326,700 for
Mr. Cumming and $330,800 for Mr. Steinberg) and recommended that the
Board of Directors approve such action.
Thereafter, based upon the Committee's recommendation and the
factors considered by the Committee, the Board of Directors, acting by
unanimous written consent, approved the recommended award of a portion
of the 1994 performance bonuses to each of Messrs. Cumming and
Steinberg. The consent noted that the signatures of Messrs. Cumming
and Steinberg appeared solely to permit the Board of Directors to act
by unanimous written consent, that Messrs. Cumming and Steinberg would
have abstained on the matters approved thereby had they been
considered at a meeting of the Board, that Messrs. Cumming and
Steinberg were consenting to the subject action based solely upon the
consent of the other members of the Board and that the signatures of
Messrs. Cumming and Steinberg would not be effective unless and until
the consent was signed by all other members of the Board of Directors.
The Committee and the Board of Directors intend to consider the
balance of the 1994 performance bonus for each of Messrs. Cumming and
Steinberg at the 1995 organizational meeting of the Board following
the Meeting. In so doing, the Committee intends to consider amounts
held in the 1992 Escrow and the 1993 Escrow for each of Messrs.
Cumming and Steinberg. Accelerated payments from these escrows are
intended to be included as part of bonus compensation that is paid to
Messrs. Cumming and Steinberg and is not intended as compensation in
addition to salaries and bonuses. As provided in the Escrow
Agreements, given the underlying objective of the arrangements, in
deciding upon early vesting and payment, the Board and the 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 Committee consists of Jesse Clyde Nichols, III, Chairman,
Paul M. Dougan and James E. Jordan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Committee consists of Jesse Clyde Nichols, III, Chairman,
Paul M. Dougan and James E. Jordan.
Joseph S. Steinberg, President and a director of the Company, is
a member of the Compensation Committee of the Board of Directors of
JII. Mr. John W. Jordan II, a director of the Company, is Chairman of
the Board of JII.
17<PAGE>
<PAGE>
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. Through December 31, 1994, the Company invested
approximately $1,554,000 in SEI.
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 part-
nership ("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 for 1994, 1995 and 1996 equal $750,000. 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") in 1994, 1995 and
1996 equal $750,000.
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 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, 1994, LI had equity interests in a total
of 16 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 1994, in addition to the capital contribution described
above, the Company expended approximately $277,000 and received
approximately $7,258,000 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 1994, an aggregate of $30,000 was paid to Mr. Jordan for
financial and advisory services provided to the Company.
19<PAGE>
<PAGE>
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, 1994, 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 Mark Hornstein and two
transactions were not timely reported by Paul Borden. Mr. Hornstein
subsequently filed a Form 4 and Mr. Borden subsequently filed a Form 5
to report the respective transactions.
SHAREHOLDER RETURN PERFORMANCE GRAPH**
Set forth below is a graph comparing the cumulative total
shareholder return on Common Shares against cumulative total return of
the Standard & Poor's 500 Stock Index (the "S&P 500 Index") and the
Standard & Poor's Financial (Multi-Line Insurance Companies) Index
(the "S&P Insurance Index") for the five year period commencing
December 31, 1989 (as required by the Securities and Exchange
Commission). The data was furnished by Standard & Poor's Compustat
Services, Inc.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF THE COMPANY, S&P
500 INDEX AND S&P INSURANCE INDEX
The following graph assumes that $100 was invested on December
31, 1989 in each of the Common Shares, the S&P 500 Index and the S&P
Insurance Index and that all dividends were reinvested.
<TABLE>
<CAPTION>
Value at Year End
--------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The Company $100 $106.44 $172.52 $371.48 $388.03 $423.52
S&P 500 Index 100 96.89 126.42 136.05 149.76 151.74
S&P Insurance Index 100 82.30 109.84 125.39 140.23 147.50
</TABLE>
- -------------------
** The disclosure contained in this section of the Proxy
Statement is not incorporated by reference into any prior filings
by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that incorporated future filings or portions
thereof (including this Proxy Statement or the "Executive
Compensation" section of this Proxy Statement).
19<PAGE>
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the Shareholders ratify
the selection of Coopers & Lybrand, certified public accountants, as
independent auditors to audit the accounts of Leucadia and its
subsidiaries for 1995. The selection of Coopers & Lybrand was
recommended to the Board of Directors by its Audit Committee. Coopers
& Lybrand are currently independent auditors for Leucadia.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
ANNUAL REPORT
A copy of Leucadia's 1994 Annual Report to Shareholders is being
furnished to Shareholders concurrently herewith.
PROPOSALS BY SHAREHOLDERS
Proposals that Shareholders wish to include in Leucadia's Proxy
Statement and form of proxy for presentation at Leucadia's 1996 Annual
Meeting of Shareholders must be received by Leucadia at 315 Park
Avenue South, New York, New York 10010, Attention of Ruth Klindtworth,
Secretary, no later than December 12, 1995.
By Order of the Board of Directors
Ruth Klindtworth
Secretary
20<PAGE>
<PAGE>
PROXY
LEUCADIA NATIONAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS, MAY 3, 1995 AT 9:30 A.M..
The undersigned shareholder of Leucadia National Corporation
(the "Company") hereby appoints Ian M. Cumming, Joseph S. Steinberg
and Ruth Klindtworth and each of them, as attorneys and proxies, each
with power of substitution and revocation, to represent the
undersigned at the Annual Meeting of Shareholders of Leucadia National
Corporation to be held at Republic Bank of New York, 452 Fifth Avenue,
11th Floor, New York, New York on May 3, 1995 at 9:30 a.m., and at any
adjournment or postponement thereof, with authority to vote all shares
held or owned by the undersigned in accordance with the directions
indicated herein.
Receipt of the Notice of Annual Meeting of Shareholders
dated April 12, 1995, the Proxy Statement furnished herewith, and a
copy of the Annual Report to Shareholders for the year ended December
31, 1994 is hereby acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND PURSUANT TO ITEM 3.
---
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
NYFS04...:\30\76830\0001\1980\PXY4045L.070
<PAGE>
<PAGE>
ITEM 1. Election of Directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE NOMINEES LISTED BELOW.
FOR all nominees listed on the right NOMINEES: IAN M. CUMMING, PAUL M.
(except as marked to the contrary DOUGAN, LAWRENCE D. GLAUBINGER,
hereon). JAMES E. JORDAN, JOHN W. JORDAN II,
JESSE CLYDE NICHOLS, III AND JOSEPH
[_] S. STEINBERG. (Instructions: To
withhold authority to vote for any
WITHHOLD AUTHORITY to vote individual nominee write that
for all nominees listed to nominee's name in the space provided
the right. below.)
------------------------------------
[_]
ITEM 2. Ratification of the selection of Coopers & Lybrand as independent
auditors of Leucadia for 1995.
FOR AGAINST ABSTAIN
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH RATIFICATION.
---
ITEM 3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly be presented to the meeting or any
adjournment thereof.
P DATED: _____________, 1995
R
------------------------------------------
O (SIGNATURE)
X
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Y (SIGNATURE IF HELD JOINTLY)
THE SIGNATURE SHOULD AGREE WITH THE NAME ON YOUR
STOCK CERTIFICATE. IF ACTING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC.,
YOU SHOULD SO INDICATE WHEN SIGNING. IF THE
SIGNER IS A CORPORATION, PLEASE SIGN THE FULL COR-
PORATE NAME BY DULY AUTHORIZED OFFICER. IF SHARES
ARE HELD JOINTLY, EACH SHAREHOLDER SHOULD SIGN.
