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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
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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,
1996
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
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(Exact Name of Registrant as Specified in its Charter)
NEW YORK 13-2615557
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
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
7-3/4% SENIOR NOTES DUE AUGUST 15, 2013 NEW YORK STOCK EXCHANGE
8-1/4% SENIOR SUBORDINATED NOTES DUE NEW YORK STOCK EXCHANGE
JUNE 15, 2005
7-7/8% SENIOR SUBORDINATED NOTES DUE NEW YORK STOCK EXCHANGE
OCTOBER 15, 2006
Securities registered pursuant to Section 12(g) of the Act:
NONE
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(Title of Class)
(Cover Page continued on next page)
<PAGE>
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [x].
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 19, 1997,
computed by reference to the closing sale price of the registrant's Common Stock
on the New York 1994 Stock Exchange on such date: $1,079,513,739.
On March 19, 1997, the registrant had outstanding 60,458,618 shares of Common
Stock.
DOCUMENTS INCORPORATED BY REFERENCE:
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<PAGE>
EXPLANATORY NOTE
This Report on Form 10-K/A amends and restates in their entirety the
following Items of the Annual Report on Form 10-K of Leucadia National
Corporation (the "Company") for the fiscal year ended December 31, 1996:
PART III
Item 10. Directors and Executive Officers of the Registrant.
As of April 11, 1997, 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.................. 56 Chairman of the Board June 1978
Joseph S. Steinberg............. 53 Director and President December 1978; January 1979
Paul M. Dougan.................. 59 Director May 1985
Lawrence D. Glaubinger.......... 71 Director May 1979
James E. Jordan................. 53 Director February 1981
Jesse Clyde Nichols, III........ 57 Director June 1978
Thomas E. Mara................. 51 Executive Vice President May 1980;
and Treasurer January 1993
Joseph A. Orlando.............. 41 Vice President and April 1996;
Chief Financial Officer March 1994
Barbara L. Lowenthal............ 42 Vice President and April 1996
Comptroller
Paul J. Borden.................. 48 Vice President August 1988
Mark Hornstein.................. 49 Vice President July 1983
Ruth Klindtworth................ 62 Secretary and Vice President- February 1976;
Corporate Administrator January 1990
</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 Allcity
since February 1988 and MK Gold since June 1995. 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 Allcity since February 1988, as a director of MK Gold
since June 1995 and as a director of JII since June 1988.
Mr. Dougan 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.
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 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.
1
<PAGE>
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"). 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, a director of Scottish Widows
International Fund since 1995 and a director of Mezzanine Capital & Income Trust
2001 PLC, a British investment trust company, since 1986.
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 manufacturing.
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. In
addition, he has served as a director of Allcity since October 1994.
Mr. Orlando, a certified public accountant, has served as Chief
Financial Officer of the Company since April 1996 and as Vice President of the
Company since January 1994. Mr. Orlando previously served in a variety of
capacities with the Company and its subsidiaries since 1987, including
Comptroller of the Company from March 1994 to April 1996.
Ms. Lowenthal, a certified public accountant, has served as Vice
President and Comptroller of the Company since April 1996. For the prior four
years, Ms. Lowenthal served as Director of Policies, Systems & Procedures and
Assistant Controller of W.R. Grace & Co., a specialty chemicals company.
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
served in a variety of other capacities with the Company and its subsidiaries.
Ms. Klindtworth has been employed by the Company since July 1960 and has
served as Secretary of the Company since February 1976 and as Vice
President-Corporate Administrator of the Company since January 1990.
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.
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, 1996, all persons subject to the reporting requirements
of Section 16(a) filed the required reports on a timely basis.
2
<PAGE>
Item 11. 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 current executive officers of the Company in 1996,
for services in all capacities to the Company and its subsidiaries in 1996, 1995
and 1994.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------------------------- ------------- ------------
Options/
Name and 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, 1996 $ 517,356 $ 15,759(2) $257,830(5) -- $ 91,885(6)
Chairman of the Board 1995 504,808 1,115,300(3) 174,759(5) -- 115,092
1994 491,497 965,000(4) 306,906(5) -- 93,875
Joseph S. Steinberg, 1996 $ 517,356 $ 15,759(2) $298,220(5) -- $ 98,452(6)
President 1995 505,960 1,115,300(3) 254,443(5) -- 118,728
1994 491,500 965,000(4) 270,722(5) -- 82,020
Thomas E. Mara, 1996 $ 250,000 $ 757,500 -- 25,000 $ 30,920(6)
Executive Vice 1995 210,000 856,300 -- -- 19,250
President and Treasurer 1994 205,006 506,150 -- -- 9,500
Paul J. Borden, 1996 $ 125,000 $ 303,750 -- 7,500 $ 3,750(7)
Vice President 1995 106,000 203,180 -- -- 3,750
1994 103,012 203,090 -- -- 2,652
Joseph A. Orlando, 1996 $ 160,000 $ 154,800 -- 20,000 $ 6,750(6)
Vice President and 1995 135,000 154,050 -- -- 6,750
Chief Financial 1994 130,768 128,900 -- -- 6,348
Officer
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</TABLE>
(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
federal tax laws affecting the tax consequences associated with certain
executive compensation in excess of $1,000,000 per year, portions of the
performance bonuses for Messrs. Cumming and Steinberg for services
rendered in 1994 and 1995 were determined and paid in 1994 and 1995,
respectively, as described below.
(2) Represents annual year-end bonus paid to all employees.
(3) Includes $494,853 and $427,320 (net of withholding taxes already paid by
Messrs. Cumming and Steinberg) for each of Messrs. Cumming and Steinberg,
respectively, out of the $2,500,000 placed in escrow in 1992 for the
benefit of each of Messrs. Cumming and Steinberg (the "1992 Escrows") by
Leucadia, Inc., a wholly owned subsidiary of the Company ("LI"), pursuant
to agreements dated as of December 28, 1992 between LI and each of
Messrs. Cumming and Steinberg (the "1992 Escrow Agreements"). These
amounts were paid in May 1996 to fund a portion of the 1995 performance
bonuses, net of withholding taxes already paid by Messrs. Cumming and
Steinberg. The funds in the 1992 Escrows vest at the rate of 20% for each
full calendar year after December 31, 1992 during which Messrs. Cumming
and Steinberg, respectively, continue to be employed by the Company or
any of its
3
<PAGE>
subsidiaries. Each of Messrs. Cumming and Steinberg is entitled to be
100% vested upon (i) termination without cause, death or disability, (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, 1998, 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 of December 31, 1996, Messrs. Cumming and Steinberg each have
vested with respect to an aggregate of $2,000,000 of the 1992 Escrow. The
funds paid out of the 1992 Escrow reflected in this table were paid out
of vested amounts.
As required under the agreements, Messrs. Cumming and Steinberg timely
filed a tax election resulting in their 1992 recognition for tax
purposes of the full $2,500,000 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
1992. 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.
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.
(4) Includes $373,990 and $348,008 (net of withholding taxes already paid by
Messrs. Cumming and Steinberg) for each of Messrs. Cumming and Steinberg,
respectively, out of the 1992 Escrows. These amounts were paid in May
1995 to fund a portion of the 1994 performance bonuses, net of
withholding taxes already paid by Messrs. Cumming and Steinberg.
(5) Consists of non-cash compensation valued in accordance with the
disclosure rules of the Securities and Exchange Commission, as follows:
personal use of corporate aircraft (Mr. Cumming: $251,754, $165,645 and
$305,995 in 1996, 1995 and 1994, respectively, and Mr. Steinberg:
$293,682, $248,971 and $264,338 in 1996, 1995 and 1994, respectively).
The value of such other compensation for federal tax purposes may
differ.
(6) Included in this amount is the annual premium on a term life insurance
policy paid by the Company for the benefit of such person ($2,631 for Mr.
Cumming and $2,530 for Mr. Steinberg), directors' fees from affiliates of
the Company ($85,504 for Mr. Cumming, $92,172 for Mr. Steinberg, $27,170
for Mr. Mara and $3,000 for Mr. Orlando) and a contribution of $3,750
made by the Company to a defined contribution 401(k) plan on behalf of
the named person.
(7) Consists of a contribution by the Company to a defined contribution
401(k) plan.
4
<PAGE>
OPTION GRANTS IN 1996
The following table shows all grants of options to the named executive in 1996.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants For Option Term (2)
-------------------------------------------------------------- --------------------------
Securities
Underlying % of Total Exercise
Options Granted Options Granted to Price Expiration
Name (# of shares)(1) Employees in 1996 ($/Sh) Date 0%($) 5%($) 10%($)
- ---- ---------------- ----------------- ------ ---- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas E. Mara 25,000 4.0% $ 26.625 03/05/02 $0 $183,900 $406,371
Paul J. Borden 7,500 1.2% 26.625 03/05/02 0 55,170 121,911
Joseph A. Orlando 20,000 3.2% 26.625 03/05/02 0 147,120 325,097
- ----------------
</TABLE>
(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 March 5, 1996.
(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.
5
<PAGE>
AGGREGATE OPTION EXERCISES IN 1996 AND
OPTION VALUES AT DECEMBER 31, 1996
The following table provides information as to options exercised by each
of the named executives in 1996 and the value of options held by such executives
at year end measured in terms of the last reported sale price for the Common
Shares on December 31, 1996 ($26.75, as reported on the New York Stock Exchange
Composite Tape).
<TABLE>
<CAPTION>
Value of
Number of Unexercised Unexercised In-the-
Options at Money Options at
December 31, 1996 December 31, 1996
----------------- -----------------
Number of Shares
Underlying Exercisable/ Exercisable/
Name Options Exercised Value Realized Unexercisable Unexercisable
- ---- ----------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Ian M. Cumming -- -- 0/0 $0/0
Joseph S. Steinberg -- -- 0/0 $0/0
Thomas E. Mara 33,728 720,652 22,000/33,000 $282,000/$53,625
Paul J. Borden 2,400 43,500 3,600/9,900 $22,725/$16,088
Joseph A. Orlando -- -- 6,000/24,000 $37,875/$27,750
</TABLE>
RETIREMENT PLAN
The Company and certain of its affiliated companies maintain a
retirement plan, as amended December 31, 1995 (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 employed by the Company 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.
6
<PAGE>
A participant employed by the Company 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 employed by the Company 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.................. $16,765*
Joseph S. Steinberg............. 21,746*
Thomas E. Mara.................. 10,691*
Paul J. Borden.................. 63,490*
Joseph A. Orlando............... 79,869*
- --------------------
* 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
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.
In addition, $4,000,000 was 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").
7
<PAGE>
The 1993 Escrow Agreements are identical to those described in footnote (2) to
the Summary Compensation Table above, except (i) such 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, (ii) in the event of the death or disability of Mr. Cumming or Mr.
Steinberg, the funds would be 50% vested and (iii) amounts vested are to be paid
to Messrs. Cumming and Steinberg on January 1, 2003, unless payment is
accelerated by the Board.
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.
The funds placed in escrow will be reported in the Summary Compensation
Table above in the appropriate columns for those years in which amounts are
released from the escrow accounts.
For information concerning certain other compensation awards placed in
escrow for the benefit of Messrs. Cumming and Steinberg, see footnote (3) 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 1996,
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 $24.75 per Common Share were awarded to each of
Messrs. Paul M. Dougan, Lawrence D. Glaubinger, James E. Jordan and Jesse Clyde
Nichols, III on May 14, 1996.
For additional information, see "Certain Relationships and Related
Transactions" below.
INDEMNIFICATION
Pursuant to a contract of insurance dated December 4, 1996 with National
Union Fire Insurance Company of Pittsburgh, Pennsylvania, 70 Pine Street, New
York, New York 10270, the Company maintains a $20,000,000 indemnification
insurance policy covering all directors and officers of the Company and its
named
8
<PAGE>
subsidiaries. The annual premium for such insurance is $888,000. During 1996,
no payments were received under the Company's indemnification insurance.
9
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Set forth below is certain information as of April 11, 1997 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, (iii) each of the executive officers named in the Summary
Compensation Table under "EXECUTIVE COMPENSATION," (iv) the Steinberg Children
Trusts and private charitable foundations established by Mr. Cumming and Mr.
Steinberg and (v) all executive officers and directors of the Company as a
group.
Number of Shares
Name and Address and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
Group consisting of
Travelers Group Inc.
and Smith Barney
Holdings Inc. (a)..................... 3,105,508(b) 5.1%
Group consisting of
CMCO, Inc., Robert
Davidoff, Edwin S.
Marks, Nancy A.
Marks, Boas GRAT
No. 1 Trust, Marks
Family Foundation,
Marjorie M. Boas,
Mark Claster and Andrew
Boas (c)(d)........................... 3,297,784 5.4%
Paul J. Borden.......................... 8,700 (e) *
Ian M. Cumming.......................... 10,110,402 (f)(g) 16.6%
Paul M. Dougan.......................... 3,750 (h) *
Lawrence D. Glaubinger.................. 75,250 (i) .1%
James E. Jordan......................... 21,750 (h) *
Thomas E. Mara.......................... 139,583 (j) .2%
Jesse Clyde Nichols, III................ 61,087 (h) .1%
Joseph A. Orlando....................... 10,356 (k) *
Joseph S. Steinberg..................... 9,262,340 (g)(l) 15.2%
The Steinberg Children
Trusts................................ 1,127,400 (m) 1.9%
Cumming Foundation ..................... 708,059 (n) 1.2%
The Joseph S. and Diane
H. Steinberg 1992
Charitable Trust...................... 399,190 (o) .7%
All directors and executive
officers as a group
(12 persons).......................... 19,845,046 (p) 32.7%
- -------------------
* Less than .1%.
(a) The business address of this beneficial owner is 388 Greenwich
Street, New York, New York 10013.
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<PAGE>
(b) According to a Statement on Schedule 13G dated January 28, 1997,
filed by Travelers Group Inc. and its wholly owned subsidiary,
Smith Barney Holdings Inc., beneficial ownership of such Common
Shares assumes the conversion of certain securities not specified
in the Schedule 13G. Such entities disclaim beneficial ownership of
such Common Shares.
(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, Boas GRAT No. 1 Trust, Marks Family
Foundation, Marjorie M. Boas, Mark Claster and Andrew Boas and
information provided by CMCO, Inc.
(e) Includes 5,100 Common Shares that may be acquired upon the exercise
of currently exercisable stock options.
(f) Includes 413,112 (.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.
(g) 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.
(h) Consists of 3,750 Common Shares that may be acquired upon the
exercise of currently exercisable stock options.
(i) Includes 1,250 Common Shares that may be acquired upon the exercise
of currently exercisable stock options.
(j) Includes (i) 27,000 Common Shares that may be acquired upon the
exercise of currently exercisable stock options and (ii) 49,200
(less than .1%) Common Shares owned by Mr. Mara's wife and minor
daughter as to which Mr. Mara disclaims beneficial ownership.
(k) Includes 8,000 Common Shares that may be acquired upon the exercise
of currently exercisable stock options.
(l) Includes 46,400 (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.
(m) Mr. Steinberg disclaims beneficial ownership of the Common Shares
held by the Steinberg Children Trusts.
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(n) Includes 259,965 Common Shares that may be acquired by this private
charitable foundation upon conversion of the Company's Debentures.
Mr. Cumming is a trustee and President of the foundation and
disclaims beneficial ownership of the Common Shares held by the
foundation.
(o) Includes 189,008 Common Shares that may be acquired by this private
charitable foundation upon conversion of the Company's Debentures.
Mr. Steinberg and his wife are the trustees of the foundation. Mr.
Steinberg disclaims beneficial ownership of the Common Shares held
by the foundation.
(p) Includes 49,200 Common Shares owned of record by the wife and minor
daughter of Mr. Mara as to which he disclaims beneficial ownership.
In addition, because they may be acquired within 60 days, includes
(i) 12,500 Common Shares that may be acquired by directors pursuant
to the exercise of currently exercisable stock options; and (ii)
46,700 Common Shares that may be acquired by certain officers
pursuant to the exercise of currently exercisable stock options.
As of April 11, 1997, Cede & Co. held of record 35,475,222 Common Shares
(approximately 58.4% 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 New York Stock Exchange 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 $337,000 in 1996. These amounts are
not included in the Summary Compensation Table appearing elsewhere in this
Report.
For information concerning certain compensation awards placed in escrow
for the benefit of Messrs. Cumming and Steinberg, see footnote (3) to the
Summary Compensation Table and "Employment Agreements" above.
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 make certain contributions to SEI for SEI's projects. In 1996, the
Company wrote-off $7,041,000 representing its investment in an unsuccessful well
drilled by SEI.
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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/ Barbara L. Lowenthal
------------------------------------
Barbara L. Lowenthal
Vice President and Comptroller
Dated: April 29, 1997
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