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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 7)
LEUCADIA NATIONAL CORPORATION
(Name of Issuer)
COMMON SHARES, $1 PAR VALUE 527288 5 10 4
(Title of class of securities) (CUSIP number)
STEPHEN E. JACOBS, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NY 10153
(212) 310-8000
(Name, address and telephone number of person authorized to
receive notices and communications)
MAY 16, 2000
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits.
(Continued on following pages)
(Page 1 of 29 pages)
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NY2:\908949\03\JHCL03!.DOC\76830.0146
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------- --------------------------------
CUSP No. 527288 5 10 4 13D
- ---------------------------------------------------------------------------------- --------------------------------
<S> <C>
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
1 NAME OF REPORTING PERSON: Ian M. Cumming
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
- ---------------------- -----------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -----------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- ------------------------------------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS: N/A
- ---------------------- -----------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: United States
- ----------------------------------- -------- ---------------------------------------------------- --------------------------------
NUMBER OF 7 SOLE VOTING POWER: 10,025,290*
SHARES
-------- ---------------------------------------------------- --------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 266,712*
OWNED BY
-------- ---------------------------------------------------- --------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 10,025,290*
REPORTING
-------- ---------------------------------------------------- --------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 266,712
- ---------------------- -------------------------------------------------------------------------- --------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 10,292,002*
- ---------------------- -----------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [X]
See Item 5.
- ---------------------- -----------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 18.5%*
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
- ---------------
* Includes 400,000 shares issuable on exercise of currently exercisable Common
Stock Purchase Warrants.
2
<PAGE>
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CUSIP No. 527288 5 10 4 13D
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- ---------------------- ----------------------------------------------------------- -----------------------------------------------
1 NAME OF REPORTING PERSON: Joseph S. Steinberg
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
- ---------------------- -----------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ---------------------- -----------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------- ------------------------------------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS: N/A
- ---------------------- -----------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: United States
- ----------------------------------- -------- ---------------------------------------------------- --------------------------------
NUMBER OF 7 SOLE VOTING POWER: 9,447,089*
SHARES
-------- ---------------------------------------------------- --------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 46,400
OWNED BY
-------- ---------------------------------------------------- --------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 9,447,089*
REPORTING
-------- ---------------------------------------------------- --------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 46,400
- ---------------------- -------------------------------------------------------------------------- --------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 9,493,489*
- ---------------------- -----------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [X]
See Item 5.
- ---------------------- -----------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 17.0%*
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ---------------------- ----------------------------------------------------------- -----------------------------------------------
</TABLE>
- ---------------
* Includes 400,000 shares issuable on exercise of currently exercisable Common
Stock Purchase Warrants.
3
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Item 1. Security and Issuer.
This Statement constitutes Amendment No. 7 to the Statement
on Schedule 13D, as previously amended (the "Schedule 13D"), filed with the
Securities and Exchange Commission, by Ian M. Cumming and Joseph S. Steinberg
with respect to the Common Shares, par value $1 per share (the "Common Shares"),
of Leucadia National Corporation (the "Company"). Unless otherwise indicated,
all capitalized terms used herein shall have the meaning ascribed to them in the
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a)-(b) As of May 16, 2000, Ian M. Cumming and Joseph S.
Steinberg beneficially owned the following Common Shares:
Ian M. Cumming is the beneficial owner of 10,025,290 Common
Shares (including 400,000 Common Shares issuable upon the exercise of warrants
described in Item 6 of this Amendment No. 7 (the "Warrants")). The 10,025,290
Common Shares represent approximately 18.0% of the 55,296,728 Common Shares
outstanding as of May 16, 2000, together with 400,000 additional Common Shares
issuable upon exercise of the Warrants which are deemed to be outstanding with
respect to Mr. Cumming. Mr. Cumming has sole dispositive power over such Common
Shares. Mr. Cumming may also be deemed to be the beneficial owner of an
additional 266,712 Common Shares (.5%) beneficially owned by his wife (directly
and through trusts for the benefit of Mr. Cumming's children of which Mr.
Cumming's wife is trustee) (the "Trusts"). The foregoing does not include an
aggregate of 92,509 Common Shares (.2%) that are beneficially owned by a private
charitable foundation, of which Mr. Cumming is a trustee and President and as to
which Mr. Cumming disclaims beneficial ownership.
Joseph S. Steinberg is the beneficial owner of 9,447,089
Common Shares (including 400,000 Common Shares issuable upon the exercise of the
Warrants). The 9,447,089 Common Shares represent approximately 17.0% of the
55,296,728 Common Shares outstanding as of May 16, 2000, together with 400,000
additional Common Shares issuable upon exercise of the Warrants which are deemed
to be outstanding with respect to Mr. Steinberg. Mr. Steinberg has sole
dispositive power over such Common Shares. Mr. Steinberg may also be deemed to
be the beneficial owner of an additional 46,400 Common Shares (less than .1%)
beneficially owned by his wife and minor daughter. The foregoing does not
include an aggregate of 30,058 Common Shares (less than .1%) beneficially owned
by a private charitable foundation, as to which Mr. Steinberg and his wife are
trustees and as to which Mr. Steinberg disclaims beneficial ownership. Mr.
Steinberg also disclaims beneficial ownership as to an aggregate of an
additional 1,107,646 Common Shares (approximately 2.0%) beneficially owned by
two trusts for the benefit of Mr. Steinberg's minor children, of which Mr.
Steinberg's brother is trustee.
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.
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Except as discussed above, neither Mr. Cumming nor Mr.
Steinberg has any present plans or intentions that would result in or relate to
any of the transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
(c) The information contained in Item 6 of this Amendment
No. 7 is incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
On May 16, 2000, the Company issued Warrants to purchase
400,000 Common Shares to each of Ian M. Cumming and Joseph S. Steinberg, (each,
an "Executive") at a purchase price of $23.95 per share, 105% of the closing
market price of a Common Share on the New York Stock Exchange, Inc. on May 16,
2000, the date of grant. The Warrants were issued pursuant to the Company's
shareholder approved 1999 Senior Executive Warrant Plan. The Warrants are
transferable and are exercisable in whole or in part through May 15, 2005. In
the event that, prior to May 16, 2002, the Executive voluntarily terminates
employment or the Executive is terminated "for cause" as defined in the Warrant
(a "Termination"), the Executive will pay a penalty fee based upon the
difference between the per share Warrant exercise price and the closing market
price of a Common Share on the date immediately prior to the date of
Termination, as more fully described in the form of Warrant which is filed as an
Exhibit to this Amendment No. 7.
No penalty fee will be payable by the Executive if there is
a Termination on or following May 16, 2002 or if, prior to such Termination, the
Board of Directors or the Option Committee of the Board of Directors accelerates
vesting of all outstanding stock options under any stock option plan of the
Company pursuant to the terms of any such plan.
The number of Common Shares that may be purchased pursuant
to the Warrants is subject to adjustment to reflect stock splits, combinations
of shares, recapitalizations, stock dividends, and subscriptions and/or purchase
rights in respect of Common Shares. Each of the holders of the Warrants is
entitled to demand registration and incidental registration rights, the cost of
which will be borne by the Company. The foregoing description of the Warrants is
qualified in its entirety be reference to the form of Warrants filed herewith as
Exhibit 1 to this Amendment No. 7.
Item 7. Material to be Filed as Exhibits.
1. Form of the Warrant
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SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: May 16, 2000
By: /s/ Ian M. Cumming
---------------------------
Ian M. Cumming
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SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: May 16, 2000
By: /s/ Joseph S. Steinberg
-----------------------------
Joseph S. Steinberg
7
Exhibit A
8
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THE TRANSFER OF THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE HEREOF IS SUBJECT TO CERTAIN RESTRICTIONS CONTAINED IN
PARAGRAPH 10 HEREOF, AND THE HOLDER OF THIS WARRANT BY ACCEPTANCE
HEREOF AGREES TO BE BOUND BY SUCH RESTRICTIONS.
COMMON SHARE PURCHASE WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON SHARES OF
LEUCADIA NATIONAL CORPORATION
WARRANT TO PURCHASE 400,000
COMMON SHARES
THIS CERTIFIES that, for value received,
[IAN M. CUMMING OR JOSEPH S. STEINBERG]
(the "Executive") is entitled to subscribe for and purchase from LEUCADIA
NATIONAL CORPORATION, incorporated under the laws of the State of New York
(hereinafter called the "Company"), at the price of $23.95 per share (the
"initial warrant purchase price"), four hundred thousand (400,000) fully paid
and nonassessable Common Shares, $1 par value, of the Company ("Common Shares"),
subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The initial warrant purchase price and the number and
character of the shares with respect to which this Warrant is exercisable are
subject to adjustment as hereinafter provided.
1. Exercise; Termination; Penalty; Issuance of Certificates; Payment for
Shares.
1A. (1) Unless a Termination (defined below) shall have occurred,
the rights represented by this Warrant may be exercised by the holder
hereof, in whole or in part (but not as to a fractional Common Share),
at any time or from time to time on or after the date of this Warrant,
until 5:00 p.m. New York City time on May 15, 2005. In the event a
Termination shall occur after the date of this Warrant and prior to May
16, 2001 (the "first anniversary date"), upon exercise of this Warrant
by the holder hereof at any time, the Executive shall pay to the Company
in connection therewith, in addition to the initial warrant purchase
price to be paid by the holder of this Warrant (as such initial warrant
purchase price may be adjusted under the terms of this Warrant), the
product of (x) the difference between the closing price of a Common
Share on the date immediately prior to either (a) the date of exercise
or (B) the date of Termination (whichever results in a higher closing
price) minus the initial warrant purchase price (as such initial warrant
purchase price may be adjusted under the terms of this Warrant)
multiplied by (y) the number of Common Shares to be issued upon such
exercise.
(2) In addition, in the event a Termination shall occur after the
first anniversary date and prior to May 16, 2002 (the "second
anniversary date"), upon exercise of this Warrant by the holder hereof
at any time, the Executive shall pay to the Company in connection
therewith, in addition to the initial warrant purchase price (as such
initial warrant purchase price may be adjusted prior to the term of this
Warrant), the product of (x) the difference between the closing price of
a Common Share on the date immediately prior to either (A) the date of
exercise or (B) the date of Termination (whichever results in a higher
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closing price) minus the initial warrant purchase price to be paid by
the holder of this Warrant (as such initial warrant purchase price may
be adjusted under the terms of this Warrant) multiplied by (ii) fifty
percent (50%) of the number of Common Shares to be issued upon such
exercise.
(3) In the event a Termination shall occur at any time after the
second anniversary date, upon exercise of this Warrant by the holder
hereof at any time, the holder of the Warrant shall be obligated to pay
to the Company in connection therewith only the initial warrant purchase
price (as such initial warrant purchase price may be adjusted prior to
the term of this Warrant) and the Executive shall not be obligated to
pay any additional amounts to the Company in respect of such exercise.
(4) In the event that the Board of Directors or the Option
Committee of the Board of Directors accelerates vesting of all
outstanding stock options issued under any stock option plan of the
Company pursuant to the terms thereof, the penalty described in
subparagraph (1) and (2) above shall not apply if a Termination occurs
after such acceleration of vesting of stock options.
1B. "Termination" for purposes hereof shall mean either (1) the
voluntary termination by the Executive of his employment with the
Company, or (2) the discharge of the Executive from such employment for
"cause." "Cause" is defined as the commission by the Executive of any
act of gross negligence in the performance of his duties or obligations
to the Company or any of its subsidiary or affiliated companies, or the
commission by the Executive of any material act of disloyalty,
dishonesty or breach of trust against the Company or any of its
subsidiary or affiliated companies.
1C. The rights may be so exercised by such holder hereof by the
surrender of this Warrant (with the Subscription Agreement annexed
hereto appropriately completed) to the Company at its offices at 315
Park Avenue South, New York, New York (or such other office or agency of
the Company in New York, New York, as it may designate by notice in
writing to the holder hereof at the address of such holder appearing on
the books of the Company at any time within the period above named) and
upon payment to it, for the account of the Company, of the purchase
price for such shares.
1D. The Company agrees that the shares so purchased shall be
deemed to have been issued to the holder hereof as the record owner of
such shares immediately after the close of business on the date on which
this Warrant shall have been surrendered and delivery of payment for
such shares shall have been made as aforesaid. Subject to the provisions
of the next succeeding paragraph, certificates for the shares so
purchased shall be delivered to the holder hereof promptly after such
surrender and delivery, and, unless this Warrant shall have expired, a
new Warrant representing the number of shares, if any, with respect to
which this Warrant shall not then have been exercised shall also be
delivered to the holder hereof.
2. Agreement of Holder. The holder of this Warrant, by his acceptance
hereof, represents that he is acquiring this Warrant, and will acquire the
Common Shares issuable upon any exercise of this Warrant by such holder, for his
own account for investment and not with a view to the distribution thereof or
with any present intention of selling any thereof, except for a sale of such
Common Shares in compliance with the provisions of the Securities Act of 1933,
as amended, and the rules and the regulations thereunder.
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3. Shares to be Fully Paid. Reservation of Shares. All shares issued
upon the exercise of the rights represented by this Warrant shall be validly
issued, fully paid and nonassessable (except as otherwise provided in Section
630 of the New York Business Corporation Law) and free from all taxes, liens and
charges with respect to the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue). The Company shall from
time to time take all such action as may be requisite to assure that the par
value per Common Share is at all times equal to or less than the warrant
purchase price per share then in effect. During the period within which the
rights represented by this Warrant may be exercised, the Company shall at all
time have authorized, and reserved for the purpose of issuance or transfer upon
exercise of the rights evidenced by this Warrant, a sufficient number of Common
Shares to provide for the exercise of the rights represented by this Warrant.
The Company shall take all such action as may be necessary to assure that such
Common Shares may be so issued without violation of any applicable law or
regulation, or of any requirements of any domestic securities exchange upon
which the Common Shares of the Company may be listed. The Company shall not take
any action which would result in any adjustment of the warrant purchase price if
the total number of Common Shares issuable after such action upon exercise of
all Warrants then outstanding would exceed the total number of then authorized
but unissued Common Shares.
4. Adjustments. The above provisions are, however, subject to the
following:
4A. Warrant Purchase Price Defined. The initial warrant purchase
price set forth in the initial paragraph of this Warrant shall be
subject to adjustment from time to time as hereinafter provided. The
term "warrant purchase price" shall mean, unless and until any such
adjustment shall occur, the initial warrant purchase price and, after
any such adjustment, the warrant purchase price resulting from such
adjustment.
4B. Adjustment of Number of Shares. Upon each adjustment of the
warrant purchase price, the holder of this Warrant shall thereafter be
entitled to purchase, at the warrant purchase price resulting from such
adjustment, the number of Common Shares obtained by multiplying the
warrant purchase price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to
such adjustment and dividing the product thereof by the warrant purchase
price resulting from such adjustment.
4C. Adjustment of Warrant Purchase Price Upon Issuance of Common
Shares. If and whenever after the date hereof the Company shall issue or
sell any Common Shares without consideration or for a consideration per
share less than the warrant purchase price in effect immediately prior
to the time of such issue or sale, then, and in each such case,
forthwith upon such issue or sale, the warrant purchase price shall be
reduced to a price (calculated to the nearest cent) determined by
dividing (i) an amount equal to the sum of (X) the number of Common
Shares outstanding immediately prior to such issue or sale multiplied by
the then existing warrant purchase price, plus (Y) the consideration, if
any, received by the Company upon such issue or sale, by (ii) the total
number of Common Shares outstanding immediately after such issue or
sale. No adjustment shall be made in an amount less than $.05 per share,
but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to $.05
per share or more. For the purposes of this paragraph 4(C), the
following provisions (1) to (6), inclusive, shall also be applicable:
(1) Issuance of Rights or Options. In case at any time the
Company shall in any manner grant (whether directly or by
assumption in a merger or otherwise) any rights to subscribe for
or to purchase, or any options for the purchase of, Common
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Shares, whether or not such rights or options are immediately
exercisable, and the price per share for which Common Shares are
issuable upon the exercise of such rights or options (determined
by dividing (i) the total amount, if any, received or receivable
by the Company as consideration for the granting of such rights
or options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of such
rights or options by (ii) the total maximum number of Common
Shares issuable upon the exercise of such rights or options)
shall be less than the warrant purchase price in effect
immediately prior to the time of the granting of such rights or
options, then the total maximum number of Common Shares issuable
upon the exercise of such rights or options shall (as of the date
of granting of such rights or options) be deemed to be
outstanding and to have been issued for such price per share. No
further adjustments of the warrant purchase price shall be made
upon the actual issue of such Common Shares, except as otherwise
provided in paragraph 4C(2).
(2) Changes in Rights or Options. If the purchase price
provided for in any rights or options referred to in paragraph
4C(1) shall change at any time (other than under or by reason of
provisions designed to protect against dilution), the warrant
purchase price in effect at the time of such event shall
forthwith be readjusted to the warrant purchase price which would
have been in effect at such time had such rights or options still
outstanding provided for such changed purchase price at the time
initially granted, issued or sold. Upon the expiration of any
such option or right, the warrant purchase price then in effect
hereunder shall forthwith be increased to the warrant purchase
price which would have been in effect at the time of such
expiration had such right or option to the extent outstanding
immediately prior to such expiration never been issued and the
Common Shares issuable thereunder shall no longer be deemed to be
outstanding; provided, however, that no such increase in the
warrant purchase price shall be made in an amount in excess of
the amount of the adjustment thereof initially made in respect of
the granting of such rights or options. If the purchase price
provided for in any such right or option referred to in paragraph
4C(1) shall be reduced at any time under or by reason of
provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Shares upon the
exercise of any such right or option the warrant purchase price
then in effect hereunder shall forthwith be adjusted to such
respective amount as would have been obtained had such right or
option never been issued as to such Common Shares and had
adjustments been made upon the issuance of the Common Shares
delivered as aforesaid, but only if as a result of such
adjustment the warrant purchase price then in effect hereunder is
thereby reduced.
(3) Stock Dividends. In case the Company shall declare a
dividend or make any other distribution upon any shares of the
Company payable in Common Shares, any Common Shares issuable in
payment of such dividend or distribution shall be deemed to have
been issued or sold without consideration.
(4) Consideration for Shares. In case any Common Shares or
any rights or options to purchase Common Shares shall be issued
or sold for cash, the consideration received therefor shall be
deemed to be the amount received by the Company therefor, after
deduction therefrom of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in
connection therewith. In case any Common Shares or any rights or
options to purchase Common Shares shall be issued or sold for a
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consideration other than cash, or partly for cash and for a
consideration other than cash, the amount of the consideration
other than cash received by the Company shall be deemed to be the
lesser of (i) the fair market value on the issue date of the
securities so issued by the Company, after deduction of any
expenses incurred or any underwriting commissions or concessions
paid or allowed by the Company in connection therewith, or (ii)
the fair value of such consideration as determined in good faith
by the Board of Directors of the Company after deduction of any
such expenses. In case any Common Shares or any rights or options
to purchase Common Shares shall be issued in connection with any
merger in which the Company issues any securities, the amount of
consideration therefor shall be deemed to be the fair value as
determined in good faith by the Board of Directors of the Company
of such portion of the assets and business of the non-surviving
corporation as such Board in good faith shall determine to be
attributable to such Common Shares, or rights or options, as the
case may be. In the event of any consolidation or merger of the
Company in which the Company is not the surviving corporation or
in the event of any sale of all or substantially all of the
assets of the Company for shares or other securities of any
corporation, the Company shall be deemed to have issued a number
of Common Shares for shares or securities of the other
corporation computed on the basis of the actual exchange ratio on
which the transaction was predicated and the consideration
received from such issuance shall be equal to the fair market
value on the date of such transaction of such shares or
securities of the other corporation, and if any such calculation
results in adjustment of the warrant purchase price, the
determination of the number of Common Shares receivable upon
exercise of this Warrant immediately prior to such merger,
conversion or sale, for purposes of paragraph 4F shall be made
after giving effect to such adjustment of the warrant purchase
price.
(5) Record Date. In case the Company shall take a record of
the holders of its Common Shares for the purpose of entitling
them (i) to receive a dividend or other distribution payable in
Common Shares, or (ii) to subscribe for or purchase Common
Shares, then such record date shall be deemed to be the date of
the issue or sale of the Common Shares deemed to have been issued
or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
(6) Treasury Shares. The number of Common Shares outstanding
at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Shares for
the purposes of this paragraph 4(C).
4D. Dividends and Distributions. If the Company shall at any time
declare a dividend or make a distribution in respect of its Common
Shares, the warrant purchase price in effect immediately prior to the
declaration of such dividend or the making of such distribution shall be
reduced by an amount equal, in the case of a dividend or distribution in
cash, to the amount thereof payable per Common Share or, in the case of
any other dividend distribution, to the fair value thereof per Common
Share as determined in good faith by the Board of Directors of the
Company; provided that no adjustment under this paragraph 4(D) shall be
required in the case of a cash dividend payable out of earnings or
surplus and otherwise than in securities of the Company unless such cash
dividend is a special dividend as determined in good faith by the Board
of Directors of the Company. If the Company shall at any time declare a
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dividend or make a distribution in respect of its Common Shares in
securities of the Company other than Common Shares, the holder of this
Warrant shall be entitled to receive upon exercise of this Warrant such
securities as such holder would have been entitled to receive had this
Warrant been exercised immediately prior to such dividend or
distribution. For the purposes of the foregoing, a dividend in cash
shall be considered payable out of earnings or surplus only to the
extent that such earnings or surplus are charged an amount equal to such
dividend as determined by the Board of Directors of the Company. Such
reductions shall take effect as of the date on which a record is taken
for the purpose of such dividend or distribution, or, if a record is not
taken, the date as of which the holders of Common Shares of record
entitled to such dividend or distribution are to be determined.
4E. Subdivision or Combination of Shares. In case the Company
shall at any time subdivide its outstanding Common Shares into a greater
number of shares or pay a dividend or other distribution upon any shares
of the Company payable in Common Shares, the warrant purchase price in
effect immediately prior to such subdivision or payment date shall be
proportionately reduced. In case the outstanding Common Shares of the
Company shall be combined into a smaller number of shares, the warrant
purchase price in effect immediately prior to such combination shall be
proportionately increased.
4F. Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the capital
shares of the Company, any consolidation or merger of the Company with
another corporation, or any sale of all or substantially all of the
assets of the Company to another corporation shall be effected in such a
way that holders of Common Shares shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Shares,
then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision shall be
made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the Common Shares of the
Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, such shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding Common Shares equal to the number
of shares immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interest of the holder of this Warrant to the end that the
provisions hereof (including without limitation provisions for
adjustments of the warrant purchase price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise
hereof. The Company will not effect any such consolidation, merger or
sale unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger
or the corporation purchasing such assets shall assume by written
instrument, executed and mailed or delivered to, and in form and
substance satisfactory to, the registered holder hereof (who shall not
unreasonably withhold his approval) at the last address of such holder
appearing on the books of the Company, (i) the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to purchase,
and (ii) all other obligations of the Company under this Warrant.
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<PAGE>
4G. Notice of Adjustments. Upon each adjustment or readjustment
of the warrant purchase price or in the nature of the Common Shares,
securities or other property receivable upon the exercise of this
Warrant, the Company at its expense will promptly compute such
adjustment or readjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall forthwith mail a copy of each
such certificate addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company.
4H. Other Notices. In case at any time:
(1) the Company shall declare any dividend upon its Common
Shares payable in shares or authorize any other distribution
(other than regular cash dividends) to the holders of its Common
Shares;
(2) the Company shall offer for subscription pro rata to the
holders of its Common Shares any additional shares of any class
or other rights;
(3) there shall be any capital reorganization, or
reclassification of the capital shares of the Company (other than
a transaction covered by paragraph 4F), or consolidation or
merger of the Company with, or sale of all or substantially all
of its assets to, another corporation; or
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give, by
first class mail, postage prepaid, addressed to the holder of this
Warrant at the address of such holder as shown on the books of the
Company, (a) at least 20 days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken
for such dividend, distribution of subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, and (b) in the case of such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, at least 20 days' prior written notice of the date when
the same shall take place. Such notice in accordance with the forgoing
clause (a) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of
Common Shares shall be entitled thereto, and such notice in accordance
with the foregoing clause (b) shall also specify the date on which the
holders of Common Shares shall be entitled to exchange their Common
Shares for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
4I. Certain Events. If any event occurs, as to which, in the
opinion of the Board of Directors of the Company, the other provisions
of this paragraph 4 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of this Warrant
in accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make an adjustment in the
application of such provisions, in accordance with such essential intent
and principles, so as to protect such purchase rights as aforesaid, but
in no event shall any such adjustment have the effect of increasing the
warrant purchase price as otherwise determined pursuant to this
Paragraph 4 except in the event of a combination of shares of the type
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<PAGE>
contemplated in paragraph 4E and then in no event to an amount larger
than the warrant purchase price as adjusted pursuant to paragraph 4E.
5. Issue Tax. The issuance of certificates for Common Shares upon
the exercise of this Warrant shall be made without charge to the holders
hereof for any issuance tax in respect thereof, and all such issuance
taxes shall be paid or provided for by the Company prior to the issuance
of such certificates.
6. No Voting Rights. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the
Company.
7. Listing of Shares. The Company agrees to use its best efforts
to secure, as soon as practicable after the date hereof, the listing of
the Common Shares issuable upon the exercise of this Warrant, subject to
official notice of issuance, on the New York Stock Exchange, Inc.
8. Warrant Transferable; Registration Books. Subject to the
provisions of paragraph 10, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office of the Company referred
to in paragraph 1 by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker
and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed
negotiable, and that the holder hereof, when this Warrant shall have
been so endorsed, may be treated by the Company and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such
books, the Company may treat the registered holder hereof as the owner
for all purposes.
The Company shall keep or cause to be kept, at its offices (or
the office of its agents) in New York, New York, proper books in which
the names and addresses of the initial holder of this Warrant and all
subsequent transferees shall be registered.
9. Warrant Exchangeable; Loss, Theft, Destruction, Etc. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof
at the office of the Company referred to in paragraph 1, for a new
Warrant or new Warrants of like tenor representing in the aggregate the
right to subscribe for and purchase the number of Common Shares which
may be subscribed for and purchased hereunder, each such new Warrant to
represent the right to subscribe for and purchase such number of Common
Shares as shall be designated by such holder hereof at the time of such
surrender. Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon delivery of a bond or
indemnity satisfactory to the Company, or, in the case of any such
mutilation, upon surrender or cancellation of this Warrant, the Company
will issue to the holder hereof a new Warrant of like tenor, in lieu of
this Warrant, representing the right to subscribe for and purchase the
number of Common Shares which may be subscribed for and purchased
hereunder.
10. Limitations on Transferability; Securities Act Compliance,
Registration.
10A. Definitions. As used in this paragraph 10, the following
definitions shall be applicable:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time
administering the federal securities laws.
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"Company Securities" means (i) shares of common stock of
the Company, (ii) shares of preferred stock of the Company,
(iii) warrants, rights, or options (within the meaning of
Treasury Regulation ss.1.382-2T(h)(4)(v)) to purchase stock
of the Company, and (iv) any other interests that would be
treated as "stock" of the Company pursuant to Treasury
Regulation ss.1.382-2T(f)(18).
"Maximum Includable Shares" shall mean the maximum number
of Common Shares (including, for this purpose, the number
of Common Shares issuable upon exercise of Restricted
Securities for which registration is requested pursuant to
paragraph 10E(1) to be offered by selling security holders
in a firm commitment underwriting that the managing
underwriter or underwriters (the "Managing Underwriters")
of the proposed offering, in their good faith judgment,
deem it practicable and consistent with the best interests
of the Company to offer and sell, upon the effectiveness of
the Registration Statement. In making such judgment, the
Managing Underwriters shall take into account, among other
things, (i) any adverse effect on the price or terms upon
which the securities included in such Registration
Statement for the account of the Company may be sold, and
(ii) any adverse effect on the price or terms upon which
all securities included in such Registration Statement for
the account of the Company and the selling security holders
may be sold.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Prospectus" shall mean any preliminary prospectus and
final prospectus (as such may be amended or supplemented)
which constitutes Part I of a Registration Statement filed
with the Commission.
"Registration Statement" shall mean the form and documents
required to be filed by an issuer in connection with the
registration of securities of such issuer under the
Securities Act.
"Restricted Securities" shall mean (i) this Warrant (and
any warrant or warrants issued in exchange therefor or in
replacement thereof) and (ii) the Common Shares issued or
issuable upon exercise of this Warrant or such other
warrants; the certificates for all of which bear the legend
referred to in paragraph 10B.
"Restricted Shares" shall mean the Common Shares issued or
issuable upon exercise of Restricted Securities bearing the
legend referred to in paragraph 10B.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Seller" shall mean each holder of Restricted Securities or
Restricted Shares for whom securities are included or
proposed to be included in a Registration Statement filed
or proposed to be filed by the Company.
"transfer" shall mean any sale, pledge, assignment,
encumbrance or disposition of any Restricted Securities or
of any part thereof or interest therein, including an offer
to transfer, whether or not such transfer would constitute
a "sale" as that term is defined in section 2(3) of the
Securities Act. For purposes of obtaining approval by the
Board of Directors pursuant to Part III of Article Fourth
of the Company's Certificate of Incorporation, "Transfer"
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<PAGE>
shall mean any direct or indirect sale, transfer,
assignment, conveyance, pledge, or other disposition. A
Transfer also shall include the creation or grant of an
option (within the meaning of Treasury Regulation
ss.1.382-2T(h)(4)(v)). A Transfer shall not include an
issuance or grant of Company Securities by the Company.
"Treasury Regulation ss.1.382-2T" means the temporary
income tax regulations promulgated under Section 382, and
any successor regulations. References to any subsection of
such regulations include references to any successor
subsection thereof.
10B. Legends.
(1) Unless and until removed as provided in the next
paragraph, this Warrant (and any Warrants issued in exchange
herefor or replacement hereof) and each certificate evidencing
Common Shares issued upon exercise of this Warrant shall bear a
legend in substantially the following form:
In the case of this Warrant: "The
transfer of this Warrant and the Common Shares
issuable upon exercise hereof is subject to
certain restrictions contained in paragraph 10
hereof, and the holder of this Warrant by
acceptance hereof agrees to be bound by such
restrictions."
In the case of Common Shares: "The
transfer of this certificate and the shares
evidenced hereby is subject to certain
restrictions contained in paragraph 10 of a
Common Share Purchase Warrant dated May 16, 2000,
and the holder of this certificate by acceptance
hereof agrees to be bound by such restrictions. A
copy of such Warrant is on file with the
Secretary of the Company."
The Company may issue such "stop
transfer" instructions to its transfer agent with
respect to all or any of the Restricted
Securities as it deems appropriate to prevent any
violation of the provisions of this paragraph 10
or of the Securities Act.
(2) The Company shall issue a new Warrant or certificate
which does not contain the legend set forth in paragraph 10B(1)
if (i) the shares represented thereby are sold pursuant to a
Registration Statement (including a current Prospectus) which has
become and is effective under the Securities Act or (ii) the
staff of the Commission shall have issued a "no action" letter to
the effect that, or counsel acceptable to the Company shall have
rendered its opinion (which opinion shall be acceptable to the
Company) that, such securities may be sold without registration
under the Securities Act.
(3) At the time of any exercise of this Warrant, the Company
may require, as a condition of allowing such exercise, that the
holder of this Warrant furnish to the Company such information
as, in the opinion of the Company, is reasonably necessary in
order to establish that such exercise is made in compliance with
the registration requirements of the Securities Act or may be
made without registration under the Securities Act, including
without limitation a written statement that such holder is
acquiring the security receivable upon such exercise for its own
account for investment and not with a view to the distribution
thereof or with any present intention of selling any thereof;
provided, however, that nothing contained in this paragraph
10B(3) shall impair the
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registration obligations of the Company specified in the
succeeding provisions of this paragraph 10.
(4) Unless and until removed as provided in Part III of
Article Fourth of the Company's Certificate of Incorporation,
this Warrant (and any Warrants issued in exchange herefor or
replacement hereof) and each certificate evidencing Common Shares
issued upon exercise of this Warrant shall bear a legend in
substantially the following form:
In the case of this Warrant: "The
transfer of this Warrant and the Common Shares
issuable upon exercise hereof is subject to
restrictions pursuant to Part III of Article
Fourth of the Certificate of Incorporation of
Leucadia National Corporation reprinted in its
entirety on Appendix 1 of this Warrant."
In the case of Common Shares: "The
transfer of the Securities represented hereby is
subject to restrictions pursuant to Part III of
Article Fourth of the Certificate of
Incorporation of Leucadia National Corporation
reprinted in its entirety on the back of this
Certificate."
10C. Notice of Transfer; Opinion of Counsel. If a holder of
Restricted Securities proposes to transfer all or a portion of such
securities, such holder shall give the Company written notice specifying
the securities involved and describing the manner in which the proposed
transfer is to be made, together with either (i) an opinion satisfactory
to the Company or counsel satisfactory to the Company stating in
substance that registration under the Securities Act is not required
with respect to such transfer or (ii) a "no action" letter from the
staff of the Commission with respect to such transfer. Following
delivery of a notice accompanied by an opinion of counsel to the effect
set forth above or by such a "no action" letter, such holder shall have
the right to transfer, in a manner consistent with its notice to the
Company, the Restricted Securities proposed to be transferred, provided
that the holder has complied with the provisions of Part III of Article
Fourth of the Company's Certificate of Incorporation, if applicable,
unless the Company determines within 20 days following such delivery
that registration under the Securities Act is required with respect to
such proposed transfer or that such transfer would violate the
provisions of such Part III of Article Fourth. Such holder shall
cooperate with the Company for the purpose of permitting such
determination to be made, including, to the extent deemed necessary by
the Company, procuring and delivering to the Company an investment
letter signed by the proposed transferee.
10D. Demand Registration.
(1) Upon a written demand by a holder or holders of at least
200,000 Restricted Shares (or such other equivalent number of
shares as may result from a reclassification, subdivision or
combination of Common Shares into a greater or smaller number of
shares) that not less than 200,000 of such Restricted Shares be
registered (which demand shall specify its intended method of
disposition), the Company shall promptly give written notice of
such demand to all other holders of Restricted Securities and
shall use its best efforts to effect the registration under the
Securities Act of:
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(a) the Restricted Shares which the Company has been
demanded to register pursuant to this paragraph 10D for a
disposition in accordance with the proposed method of
disposition described in said demand; and
(b) all other Restricted Shares the holders of which
shall have made written request (stating the proposed method
of disposition of such securities by the prospective Seller)
to the Company for the registration thereof within 20 days
after giving of such written notice by the Company, all to
the extent requisite to permit the disposition (in
accordance with the proposed methods thereof, as aforesaid,
as long as such proposed methods are consistent with the
original demand) by the prospective Seller or Sellers of
such securities.
(2) The Company's obligation to effect a registration under
this paragraph is subject to the conditions that:
(a) The Executive and his transferees shall not be
entitled to more than a total of (i) one registration
statement on Form S-1 (or some other comparable form of
registration statement) and (ii) two separate registration
statements on Form S-2, S-3 or other comparable short form
of registration statement; provided, however, that no such
Form S-1 or Form S-2, S-3 or comparable short form need be
filed until the earlier of the 90th day after the end of any
fiscal year of the Company or the date on which the
Company's audited financial statements for such fiscal year
are available, nor shall more than one such form be required
to be filed in any 12-month period.
(b) The Company shall not be required to have a special
audit of its financial statements for inclusion in such
Registration Statement: but if the rules and regulations of
the Commission otherwise require such a special audit, the
Company may delay the filing or effectiveness of the
Registration Statement until such time as the Company
receives its audited financial statements for its then
current fiscal year.
(c) The Company shall not be required to effect any
registration in accordance with paragraph 10D(1) hereof if
(i) in the written opinion of counsel to the Company such
registration may not be appropriately effected in light of
any material pending transaction of the Company or its
subsidiaries, or (ii) any registration of any underwritten
public offering of securities made on behalf of the Company
has become effective within ninety (90) days prior to the
anticipated effective date of any registration requested
pursuant to paragraph 10D(1) hereof.
10E. Incidental Registration.
(1) Whenever the Company proposes to file on its behalf
and/or on behalf of any of its security holders a Registration
Statement under the Securities Act on Forms S-1, S-2 or S-3
(other than in connection with a registration of securities on
Form S-8) (or on any other form for the general registration of
securities to be sold for cash) with respect to its Common Shares
(as defined in Section 3(a)(11) of the Securities Exchange Act of
1934), the Company shall give written notice to each holder of
Restricted Securities at least 30 days before the filing with the
Commission of such Registration Statement, which notice shall set
forth the intended method of disposition of the securities
proposed to be registered. The notice shall offer to include in
such filing such number of Restricted Shares as such holders may
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<PAGE>
request subject to the limitation in paragraph 10E(2). Each
holder desiring to have Restricted Shares registered under this
paragraph 10E shall (i) advise the Company in writing within 20
days after the date of receipt of such offer from the Company,
setting forth the number of Restricted Shares for which
registration is requested and the intended method of disposition
thereof, and (ii) deliver to the Company a letter from counsel to
such holder to the effect that registration under the Securities
Act is or may be required. The Company shall thereupon include in
such filing, subject to the limitation in paragraph 10E(2), the
Restricted Shares proposed to be offered for sale by each Seller
making such request in accordance with its intended method of
disposition as stated in such request, and shall use its best
efforts to effect registration under the Securities Act of such
securities.
(2) The Company shall, as soon as practicable after the
expiration of the 20-day period provided for in paragraph 10E(1),
furnish each Seller with a written statement from its managing or
principal underwriter, if any, as to the Maximum Includable
Shares. If (x) the total number of Common Shares which the
Company proposes to include in such Registration Statement plus
(y) the total number of Restricted Shares for which registration
has been requested pursuant to paragraph 10E(1) is in excess of
the Maximum Includable Shares, the number of shares (including
Restricted Shares) to be included in such underwritten offering
shall be determined as follows:
(a) No reduction shall be made in the number of shares to be
registered for the account of the Company.
(b) Each Seller of Restricted Shares may include in the
number of Common Shares comprising the balance of the Maximum
Includable Shares that number of Common Shares determined by
multiplying (i) the balance of such Maximum Includable Shares by
(ii) a fraction the numerator of which shall be the number of
Common Shares then owned by such Seller (adjusted to give effect
to exercise of all warrants and conversion of all convertible
securities then owned by such Seller) and the denominator of
which is the number of Common Shares (as similarly adjusted as to
all Sellers) owned by all Sellers.
10F. General. If and whenever the Company is required by the
provisions of this paragraph 10 to use its best efforts to effect the
registration of any of its securities under the Securities Act, the
Company shall, as expeditiously as possible:
(1) prepare and file with the Commission a Registration Statement
with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective;
(2) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective for the shorter of 30 days or the completion of the
distribution and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement in accordance with the intended method of
disposition by the Seller or Sellers thereof set forth in such
Registration Statement for such period;
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<PAGE>
(3) furnish to each Seller such number of copies of the
Prospectus contained in such Registration Statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such Seller may reasonably
request in order to facilitate the disposition of the securities owned
by such Seller;
(4) use its best efforts to register or qualify the Restricted
Shares covered by such Registration Statement under the securities or
blue sky laws of such jurisdictions as the Sellers shall reasonably
request, and do any and all other acts and things which may be necessary
or advisable to enable the Sellers to consummate the disposition in such
jurisdictions of such Restricted Shares during the period provided in
paragraph 10F(2); and
(5) (a) notify each Seller of any Restricted Shares covered by
such Registration Statement, at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the Prospectus contained in
such Registration Statement, as then in effect, includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing,
and (b) at the request of any such Seller prepare and furnish to such
Seller a reasonable number of copies of any supplement to or amendment
of such Prospectus that may be necessary so that, as thereafter
delivered to the purchasers of such shares, such Prospectus shall not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
10G. Expenses. If and whenever the Company is required by the
provisions of this paragraph 10 to effect the registration of any
Restricted Shares under the Securities Act, the Company shall pay all
expenses arising out of or related to the preparation, filing, amendment
and supplementing of a Registration Statement, including, without
limitation, all legal and accounting fees, Commission filing fees, NASD
filing fees, printing costs, registration or qualification fees and
expenses to comply with "blue sky" or other state securities laws, the
fees of other experts and any reasonable expenses or other compensation
paid to the underwriters (other than those required by the next
succeeding sentence to be paid by the Sellers). Each Seller shall be
required to bear underwriting commissions and discounts and transfer
taxes, if any, payable in connection with the sale of Restricted Shares.
10H. Indemnification. In the event of the registration of any
Restricted Shares under the Securities Act pursuant to the provisions of
this paragraph 10, the Company agrees to indemnify and hold harmless the
Seller of such Restricted Shares, each underwriter, if any, of such
Restricted Shares, and each person who controls such Seller or any such
underwriter within the meaning of section 15 of the Securities Act, from
and against any and all losses, claims, damages or liabilities, joint or
several, to which such Seller, underwriter or controlling person may
become subject under the Securities Act or the common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement under which such Restricted Shares were
registered under the Securities Act, or any Prospectus or preliminary
prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse such
Seller, each such underwriter, and each such controlling person for any
legal or any other expenses reasonably incurred by such Seller,
underwriter or controlling person in connection with investigating or
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<PAGE>
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement, such
Prospectus or preliminary prospectus or such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by such Seller, underwriter or controlling person
specifically for use in preparation thereof; and provided further,
however, that this indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any such underwriter (or
any person who so controls such underwriter) for any such loss, claim,
damage, liability or action asserted by a person who purchased any
Restricted Shares from such underwriter if a copy of the final
Prospectus was not delivered or given to such person by such underwriter
at or prior to the written confirmation of the sale to such person.
In the event of the registration of any Restricted Shares
under the Securities Act pursuant to the provisions hereof,
each Seller of Restricted Shares agrees to indemnify and hold
harmless and to use its best efforts to cause each
underwriter, if any, of such Restricted Shares and each person
who controls such Seller or any such underwriter within the
meaning of section 15 of the Securities Act, to indemnify and
hold harmless the Company, each person who controls the
Company within the meaning of section 15 of the Securities
Act, each of its officers who signs the Registration
Statement, and each director of the Company from and against
any and all losses, claims, damages or liabilities, joint or
several, to which the Company, such controlling person or any
such officer or director may become subject under the
Securities Act or the common law or otherwise, insofar as such
losses, claims, damages or liabilities (or action in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
any Registration Statement under which such Restricted Shares
were registered under the Securities Act, any Prospectus or
preliminary prospectus contained therein, or amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or
alleged untrue statement or omission or alleged omission was
made therein in reliance upon and in conformity with, written
information furnished to the Company by such Seller,
controlling person or underwriter, specifically for use in
connection with the preparation thereof; and will reimburse
the Company, such controlling person and each such officer and
director for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such
loss, claim, damage, liability or action.
Promptly after receipt by an indemnified party of notice of
the commencement of any action such indemnified party will, if
a claim in respect thereof is to be made against an
indemnifying party, give written notice to such indemnifying
party of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise
than pursuant to the provisions of this paragraph 10H. In case
any such action is brought against any indemnified party, and
it notifies any indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate in, and to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying
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party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable
to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof, other than the reasonable cost of
investigation.
10I. Transferees. In the event that this Warrant or any of the
Restricted Shares purchased upon exercise of this Warrant shall at any
time be transferred by the holder hereof or thereof other than pursuant
to an effective Registration Statement, the rights herein conferred
shall extend to the transferee of such securities.
11. Descriptive Headings and Governing Law. The descriptive headings of
the several paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant. This Warrant is being delivered and is
intended to be performed in the State of New York and shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of such State.
IN WITNESS WHEREOF, LEUCADIA NATIONAL CORPORATION has
caused this Warrant to be signed by its duly authorized officers under its
corporate seal, and this Warrant to be dated May 16, 2000.
LEUCADIA NATIONAL CORPORATION
By:
-----------------------------
ATTEST:
---------------------------------------
Secretary
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SUBSCRIPTION AGREEMENT
Date ,
TO: Leucadia National Corporation
The undersigned, pursuant to the provisions set forth in
the within Warrant, hereby agrees to subscribe for and purchase _________ Common
Shares covered by such Warrant, and makes payment herewith in full therefor at
the price per share provided by such Warrant.
Signature
----------------------
Address
------------------------
------------------------
ASSIGNMENT
FOR VALUE RECEIVED ____________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the within
Warrant, with respect to the number of Common Shares covered thereby set forth
hereinbelow unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
Dated: ,
Signature
--------------------
Witness
----------------------
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APPENDIX 1
PART III OF ARTICLE FOURTH OF THE CERTIFICATE OF INCORPORATION OF LEUCADIA
NATIONAL CORPORATION
III. TRANSFER RESTRICTIONS
1. Certain Definitions. As used in this Part III of Article
FOURTH, the following terms have the following respective meanings:
"Corporation Securities" means (i) shares of common stock
of the Corporation, (ii) shares of preferred stock of the Corporation, (iii)
warrants, rights, or options (within the meaning of Treasury Regulation
ss.1.382-2T(h)(4)(v)) to purchase stock of the Corporation, and (iv) any other
interests that would be treated as "stock" of the Corporation pursuant to
Treasury Regulation ss.1.382-2T(f)(18).
"Percentage Stock Ownership" means percentage stock
ownership as determined in accordance with Treasury Regulation ss.1.382-2T(g),
(h), (j), and (k).
"Five-Percent Shareholder" means a Person or group of
Persons that is identified as a "5-percent shareholder" of the Corporation
pursuant to Treasury Regulationss.1.382-2T(g)(1).
"Person" means an individual, corporation, estate, trust,
association, company, partnership, joint venture or similar organization.
"Prohibited Transfer" means any purported Transfer of
Corporation Securities to the extent that such Transfer is prohibited and void
under this Part III of Article FOURTH.
"Restriction Release Date" means the earlier of December
31, 2005, the repeal of Section 382 of the Internal Revenue Code of 1986, as
amended (the "Code") (and any comparable successor provision) ("Section 382"),
or the beginning of a taxable year of the Corporation (or any successor thereof)
to which no Tax Benefits may be carried forward.
"Tax Benefits" means the net operating loss carryovers,
capital loss carryovers, general business credit carryovers, alternative minimum
tax credit carryovers and foreign tax credit carryovers, as well as any "net
unrealized built-in loss" within the meaning of Section 382, of the Corporation
or any direct or indirect subsidiary thereof.
"Transfer" means any direct or indirect sale, transfer,
assignment, conveyance, pledge, or other disposition. A Transfer also shall
include the creation or grant of an option (within the meaning of Treasury
Regulation ss.1.382-2T(h)(4)(v)). A Transfer shall not include an issuance or
grant of Corporation Securities by the Corporation.
"Treasury Regulationss.1.382-2T" means the temporary income
tax regulations promulgated under Section 382, and any successor regulations.
References to any subsection of such regulations include references to any
successor subsection thereof.
2. Restrictions. Any attempted Transfer of Corporation
Securities prior to the Restriction Release Date, or any attempted Transfer of
Corporation Securities pursuant to an agreement entered into prior to the
Restriction Release Date, shall be prohibited and void ab initio to the extent
that, as a result of such Transfer (or any series of Transfers of which such
Transfer is a part), either (1) any Person or group of Persons shall become a
Five-Percent Shareholder, or (2) the Percentage Stock Ownership interest in the
Corporation of any Five-Percent Shareholder shall be increased; provided,
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however, that nothing herein contained shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock Exchange,
Inc. in the Corporation Securities.
3. Certain Exceptions. The restrictions set forth in
paragraph (b) of this Part III of Article FOURTH shall not apply to an attempted
Transfer if the transferor or the transferee obtains the approval of the Board
of Directors of the Corporation. As a condition to granting its approval, the
Board of Directors may, in its discretion, require an opinion of counsel
selected by the Board of Directors that the Transfer shall not result in the
application of any Section 382 limitation on the use of the Tax Benefits.
4. Treatment of Excess Securities.
(a) No employee or agent of the Corporation shall record
any Prohibited Transfer, and the purported transferee of such a
Prohibited Transfer (the "Purported Transferee") shall not be
recognized as a shareholder of the Corporation for any purpose
whatsoever in respect of the Corporation Securities which are the
subject of the Prohibited Transfer (the "Excess Securities"). Until
the Excess Securities are acquired by another Person in a Transfer
that is not a Prohibited Transfer, the Purported Transferee shall not
be entitled with respect to such Excess Securities to any rights of
shareholders of the Corporation, including without limitation, the
right to vote such Excess Securities and to receive dividends or
distributions, whether liquidating or otherwise, in respect thereof,
if any. Once the Excess Securities have been acquired in a Transfer
that is not a Prohibited Transfer, the Securities shall cease to be
Excess Securities.
(b) If the Board of Directors determines that a Transfer of
Corporation Securities constitutes a Prohibited Transfer then, upon
written demand by the Corporation, the Purported Transferee shall
transfer or cause to be transferred any certificate or other evidence
of ownership of the Excess Securities within the Purported
Transferee's possession or control, together with any dividends or
other distributions that were received by the Purported Transferee
from the Corporation with respect to the Excess Securities
("Prohibited Distributions"), to an agent designated by the Board of
Directors (the "Agent"). The Agent shall thereupon sell to a buyer or
buyers, which may include the Corporation, the Excess Securities
transferred to it in one or more arm's-length transactions (over the
New York Stock Exchange, if possible); provided, however, that the
Agent shall effect such sale or sales in an orderly fashion and shall
not be required to effect any such sale within any specific time frame
if, in the Agent's discretion, such sale or sales would disrupt the
market for the Corporation Securities or otherwise would adversely
affect the value of the Corporation Securities. If the Purported
Transferee has resold the Excess Securities before receiving the
Corporation's demand to surrender the Excess Securities to the Agent,
the Purported Transferee shall be deemed to have sold the Excess
Securities for the Agent, and shall be required to transfer to the
Agent any Prohibited Distributions and the proceeds of such sale,
except to the extent that the Agent grants written permission to the
Purported Transferee to retain a portion of such sales proceeds not
exceeding the amount that the Purported Transferee would have received
from the Agent pursuant to paragraph (d)(iii) of this Article FOURTH
if the Agent rather than the Purported Transferee had resold the
Excess Securities.
(c) The Agent shall apply any proceeds of a sale by it of
Excess Securities and, if the Purported Transferee had previously
resold the Excess Securities, any amounts received by it from a
Purported Transferee, as follows: (1) first, such amounts shall be
paid to the Agent to the extent necessary to cover its costs and
expenses incurred in connection with its duties hereunder; (2) second,
any remaining amounts shall be paid to the Purported Transferee, up to
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the amount paid by the Purported Transferee for the Excess Securities
(or the fair market value, calculated on the basis of the closing
market price for Corporation Securities on the day before the
Transfer, of the Excess Securities at the time of the attempted
Transfer to the Purported Transferee by gift, inheritance, or similar
Transfer), which amount (or fair market value) shall be determined in
the discretion of the Board of Directors; and (3) third, any remaining
amounts, subject to the limitations imposed by the following proviso,
shall be paid to the Leucadia Foundation; provided, however, that (i)
if the Leucadia Foundation shall have terminated prior to its receipt
of such amounts, such remaining amounts shall be paid to one or more
organizations qualifying under Section 501(c)(3) of the Code (and any
comparable successor provision) ("Section 501(c)(3)") selected by the
Board of Directors, and (ii) if the Excess Securities (including any
Excess Securities arising from a previous Prohibited Transfer not sold
by the Agent in a prior sale or sales), represent a 5% or greater
Percentage Stock Ownership interest in any class of Corporation
Securities, then any such remaining amounts to the extent attributable
to the disposition of the portion of such Excess Securities exceeding
a 4.99 Percentage Stock Ownership interest in such class shall be paid
to one or more organizations qualifying under Section 501(c)(3)
selected by the Board of Directors. The recourse of any Purported
Transferee in respect of any Prohibited Transfer shall be limited to
the amount payable to the Purported Transferee pursuant to clause (2)
of the preceding sentence. In no event shall the proceeds of any sale
of Excess Securities pursuant to this Part III of Article FOURTH inure
to the benefit of the Corporation.
(d) If the Purported Transferee fails to surrender the
Excess Securities or the proceeds of a sale thereof to the Agent
within thirty business days from the date on which the Corporation
makes a demand pursuant to paragraph (d)(ii) of this Article, then the
Corporation shall institute legal proceedings to compel the surrender.
(e) The Corporation shall make the demand described in
paragraph (d)(ii) of this Part III of Article FOURTH within thirty
days of the date on which the Board of Directors determines that the
attempted Transfer would result in Excess Securities; provided,
however, that if the Corporation makes such demand at a later date,
the provisions of this Part III of Article FOURTH shall apply
nonetheless.
5. Bylaws, Legends, Etc.
(a) The Bylaws of the Corporation shall make appropriate
provisions to effectuate the requirements of this Part III of Article
FOURTH.
(b) All certificates representing Corporation Securities
issued after the effectiveness of this Part III of Article FOURTH
shall bear a conspicuous legend as follows:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS
SUBJECT TO RESTRICTIONS PURSUANT TO PART III OF ARTICLE
FOURTH OF THE CERTIFICATE OF INCORPORATION OF LEUCADIA
NATIONAL CORPORATION REPRINTED IN ITS ENTIRETY ON THE BACK
OF THIS CERTIFICATE.
(c) The Board of Directors of the Corporation shall have
the power to determine all matters necessary to determine compliance
with this Part III of Article FOURTH, including without limitation (1)
whether a new Five-Percent Shareholder would be required to be
identified in certain circumstances, (2) whether a Transfer is a
Prohibited Transfer, (3) the Percentage Stock Ownership in the
Corporation of any Five-Percent Shareholder, (4) whether an instrument
constitutes a Corporation Security, (5) the amount (or fair market
value) due to a Purported Transferee pursuant to clause (2) of
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paragraph (d)(iii) of this Part III of Article FOURTH, and (6) any
other matters which the Board of Directors determines to be relevant;
and the good faith determination of the Board of Directors on such
matters shall be conclusive and binding for all the purposes of this
Part III of Article FOURTH.
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