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,
2001
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: 1-10153
HOMEFED CORPORATION
------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0304982
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1903 Wright Place
Suite 220
Carlsbad, California 92008
(760) 918-8200
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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:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
Based on the last reported closing sale price of the Registrant's Common Stock
as published by the OTC Bulletin Board Service as of April 2, 2002, the
aggregate market value of the Registrant's Common Stock held by non-affiliates
was approximately $35,613,758 on that date.
As of April 2, 2002, there were 56,808,076 outstanding shares of the
Registrant's Common Stock, par value $.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE:
None
EXPLANATORY NOTE
This Report on Form 10-K/A adds Part III to the Annual Report on Form
10-K of HomeFed Corporation (the "Company") for the fiscal year ended December
31, 2001.
PART III
Item 10. Directors and Executive Officers of the Registrant.
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As of April 2, 2002, 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 are as follows:
Name Age Position with HomeFed Office Held Since
- ----- --- --------------------- -----------------
Paul J. Borden 53 Director and President Director and
President since May
1998
Corinne A. Maki 45 Secretary and Treasurer Secretary since
February 1998;
Treasurer since
February 1995
Curt R. Noland 45 Vice President October 1998
R. Randy Goodson 36 Vice President April 2000
Simon G. Malk 32 Vice President April 2000
Erin N. Ruhe 36 Vice President and Controller Vice President since
April 2000;
Controller since
January 1999
Patrick D. Bienvenue 47 Director August 1998
Timothy M. Considine 61 Director January 1992
Ian M. Cumming 61 Director May 1999
Michael A. Lobatz 53 Director February 1995
Joseph S. Steinberg 58 Chairman of the Board and Director Chairman of the
Board since December
1999; Director since
August 1998
2
The officers serve at the pleasure of the board of directors of the
Company.
The recent business experience of our executive officers and directors
is summarized as follows:
Paul J. Borden. Mr. Borden has served as a director and President of
the Company since May 1998. Through October 2000, Mr. Borden was a Vice
President of Leucadia National Corporation (together with its subsidiaries,
"Leucadia"), responsible for overseeing many of Leucadia's real estate
investments. For information concerning the administrative services agreement
pursuant to which the services of Mr. Borden were, and the services of Ms. Maki
are, provided to the Company, see "Administrative Services Agreement" referred
to in Item 13, "Certain Relationships and Related Transactions."
Corinne A. Maki. Ms. Maki, a certified public accountant, has served as
Treasurer of the Company since February 1995 and Secretary since February 1998.
Prior to that time, Ms. Maki served as an Assistant Secretary of the Company
since August 1995. Ms. Maki has also been a Vice President of Leucadia Financial
Corporation, a subsidiary of Leucadia, holding the offices of Controller,
Assistant Secretary and Treasurer since October 1992. Ms. Maki has been employed
by Leucadia since December 1991.
Curt R. Noland. Mr. Noland has served as Vice President of the Company
since October 1998. He spent the last 22 years in the land development industry
in San Diego County as a design consultant, merchant builder and a master
developer. From November 1997 until immediately prior to joining the Company,
Mr. Noland was employed by the prior development manager of San Elijo Hills and
served as Director of Development for San Elijo Hills. Prior to November 1997,
Mr. Noland was employed for eight years by Aviara Land Associates, LP, a
1,000-acre master planned resort community in Carlsbad, California. He is also a
licensed civil engineer and real estate broker.
R. Randy Goodson. Mr. Goodson has served as Vice President of the
Company since April 2000. Mr. Goodson has spent 16 years as a real estate
consultant, developer and investor. Prior to joining the Company, he was a
principal in a San Diego company involved in real estate development and
consulting, which provided consulting services to San Elijo Hills and the
Company. Mr. Goodson is a licensed California real estate broker and a member of
the Urban Land Institute.
Simon G. Malk. Mr. Malk has served as Vice President of the Company
since April 2000. For the prior seven years, Mr. Malk was a principal of the San
Diego company referred to above, which provided consulting services to San Elijo
Hills and the Company.
Erin N. Ruhe. Ms. Ruhe has served as Vice President of the Company
since April 2000 and has been employed by the Company as Controller since
January 1999. Since November 1994 Ms. Ruhe has been Controller and, since
December 1995 has been Vice President of HSD Venture, a real estate subsidiary
of Leucadia.
Patrick D. Bienvenue. Mr. Bienvenue has served as a director of the
Company since August 1998. Since January 1996, Mr. Bienvenue has served in a
variety of executive capacities with real estate related subsidiaries of
Leucadia and, from 1992 until December 1995, was President and Chief Executive
Officer of Torwest Inc., a privately held property development and investment
company.
Timothy M. Considine. Mr. Considine has served as a director of the
Company since January 1992, serving as Chairman of the Board from 1992 to
December 1999, and has been a partner of Considine and Considine, an accounting
firm in San Diego, California, since 1969.
Ian M. Cumming. Mr. Cumming has served as a director of the Company
since May 1999 and has been a director and Chairman of the Board of Leucadia
since June 1978. In addition, he has served as a director of Allcity Insurance
Company ("Allcity"), a property and casualty insurer, since February 1988 and MK
Gold Company ("MK Gold"), an international mining company, since June 1995. Both
Allcity and MK Gold are subsidiaries of Leucadia. Mr. Cumming has served as
Chairman of the Board of The FINOVA Group Inc., ("FINOVA") a middle market
lender in which Leucadia has an indirect 25% equity interest, since August 2001.
Mr. Cumming has also been a director of Skywest, Inc., a Utah-based regional air
carrier, since June 1986 and a director of Carmike Cinemas, Inc., a publicly
held motion picture exhibitor in the United States, in which Leucadia has an
approximate 11% interest, since January 2002.
3
Michael A. Lobatz. Dr. Lobatz has served as a director of the Company
since February 1995 and has been a practicing physician in San Diego, California
since 1981.
Joseph S. Steinberg. Mr. Steinberg has served as a director of the
Company since August 1998 and as Chairman of the Board since December 1999. Mr.
Steinberg has been President of Leucadia since January 1979 and a director of
Leucadia since December 1978. In addition, he has served as a director of
Allcity since February 1988, as a director of MK Gold since June 1995, as a
director since June 1988 of Jordan Industries Inc., a public company that owns
and manages manufacturing companies, of which approximately 10% of the common
stock that is beneficially owned by Leucadia, as a director of FINOVA since
August 2001 and as a director of White Mountains Insurance Group, Ltd., a
publicly traded insurance holding company in which Leucadia has a less than 5%
equity interest, since June 2001.
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 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Based solely upon a review of the copies of such forms furnished to
the Company and written representations from the Company's executive officers,
directors and greater than 10% beneficial shareholders, the Company believes
that during the year ended December 31, 2001, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis.
Item 11. Executive Compensation.
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Summary Compensation Table
Set forth below is certain information with respect to the cash
compensation paid by the Company for services in all capacities to the Company
and its subsidiaries during the years ended 2001, 2000 and 1999 to (i) the
Company's President and Chief Executive Officer, Paul J. Borden, and (ii) the
other executive officers of the Company whose total annual salary and bonus
exceeded $100,000 during these periods.
4
Annual Compensation Long-Term Compensation
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Restricted
Name and Principal Stock Options All Other
Positions(s) Year Salary Bonus Awards (# of Shares) Compensation
- ------------------ ---- ------ ----- ----------- ------------- ------------
Paul J. Borden, 2001 $222,000 (1) $330,265 $ -- 1,000 $6,800 (4)
President 2000 37,151 (1) 344,027 7,500 (3) 51,000 --
1999 -- (1) -- -- -- --
Curt R. Noland, 2001 $108,159 $ 78,245 $ -- -- $6,800 (4)
Vice President 2000 105,024 103,150 18,750 (3) 25,000 --
1999 100,000 103,000 -- -- --
Erin N. Ruhe, 2001 $ 75,009 $ 62,250 $ -- -- $5,490 (4)
Vice President and 2000 65,016 61,950 18,750 (3) 25,000 --
Controller 1999 60,000 51,800 -- -- --
R. Randy Goodson, 2001 $180,000 $ 80,400 $ -- -- $ --
Vice President 2000 131,558 (2) 4,050 12,188 (3) 666,250 --
1999 -- -- -- -- --
Simon G. Malk, 2001 $ 90,000 $ 77,700 $ -- -- $3,708 (4)
Vice President 2000 65,783 (2) 2,025 6,563 (3) 358,750 --
1999 -- -- -- -- --
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(1) Through October 22, 2000, Mr. Borden was a Vice President of Leucadia
and received compensation only from Leucadia. Pursuant to the
Administrative Services Agreement between Leucadia Financial and the
Company, $200,000 and $240,000 of the fees paid by the Company to
Leucadia for services rendered in 2000 and 1999, respectively are
attributable to Mr. Borden's services. These amounts are not reflected
in the foregoing table. See "Certain Relationships and Related
Transactions" in this Report for a description of the administrative
services agreement. Included for each of 2001 and 2000 are $12,000 in
directors fees Mr. Borden received from the Company.
(2) Represents salary paid by the Company from April 1, 2000, the date Mr.
Goodson and Mr. Malk became employees of the Company. This amount does
not include amounts paid by the Company to a consulting firm, of which
Mr. Goodson and Mr. Malk were principals, that provided consulting
services to the Company prior to Mr. Goodson's and Mr. Malk's
employment by the Company.
(3) Represents restricted stock, at fair market value of $.75 per share as
of the date granted under the Company's 1999 Stock Incentive Plan.
(4) Represents the contribution made by the Company to a defined
contribution 401(k) plan on behalf of the named person.
5
Option Grants in 2001
The following table shows all grants of options to the named executive
officers of the Company in 2001.
Potential Realizable Value
At Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (2)
----------------------------------------------------- -----------------------------
Securities % of Total
Underlying Options
Options Granted to Exercise
Granted Employees in Price Expiration
Name (# of shares) 2001 ($/share) Date 5%($) 10%($)
- ---- ------------- ---- --------- ---- ----- ------
Paul J. Borden 1,000 (1) 100.0% $.93 7/10/06 $300 $600
- ----------
(1) The options were granted pursuant to the Company's 1999 Stock Incentive
Plan to all directors of the Company at an exercise price equal to the
fair market value of the shares of Common Stock on the date of grant.
The grant date of the options is July 10, 2001. These options become
exercisable at the rate of 25% per year commencing one year after the
date of grant.
(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 the 5% and 10%
rates required by the Securities and Exchange Commission, and are not
intended to forecast future appreciation of the shares of Common Stock
and are not necessarily indicative of the values that may be realized
by the named executive officer.
6
Aggregate Option Exercises in 2001 and
Option Values at Year End 2001
The following table provides information as to options exercised by
each of the named executives in 2001 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, 2001, $.95.
Value of
Number of Unexercised Unxercised
Options at In-the-Money Options
December 31, 2001 at December 31, 2001
----------------- --------------------
Number of shares
Underlying Exercisable/ Exercisable/
Name Options Exercised Value Realized Unexercisable Unexercisable
- ---- ----------------- ------------- ------------- -------------
Paul J. Borden -- -- 10,250/41,750 $2,063/$8,208
Curt R. Noland -- -- 5,000/20,000 $1,000/$4,000
Erin N. Ruhe -- -- 5,000/20,000 $1,000/$4,000
R. Randy Goodson -- -- 3,250/663,000 $650/$223,600
Simon G. Malk -- -- 1,750/357,000 $350/$120,400
Compensation of Directors
In 2001, each Director of the Company received a retainer of $12,000
for serving on the Board of Directors. In addition, under the terms of the
Company's 1999 Stock Incentive Plan, each director is automatically granted
options to purchase 1,000 shares on the date on which the annual meeting of
stockholders of the Company is held each year. The purchase price of the shares
covered by such options is the fair market value of such shares on the date of
grant.
7
Item 12. Security Ownership of Certain Beneficial Owners and Management.
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Set forth below is certain information as of April 2, 2002 with respect
to the beneficial ownership of Common Stock by (i) each person who, to the
knowledge of the Company, is the beneficial owner of more than 5% of the
outstanding Common Stock (the Company's only class of voting securities), (ii)
each Director, (iii) the current 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
- ------------------- -------------------- ---------
Patrick D. Bienvenue............................................... 10,250 (a) *
Paul J. Borden..................................................... 36,033 (b) *
Timothy M. Considine............................................... 15,109 (c) *
Ian M. Cumming..................................................... 7,731,864 (d)(e) 13.6%
R. Randy Goodson................................................... 137,750 (f) .2%
Michael A. Lobatz.................................................. 10,250 (a) *
Simon G. Malk...................................................... 224,094 (g) .4%
Curt R. Noland..................................................... 35,000 (h) *
Erin N. Ruhe....................................................... 35,000 (h) *
Joseph S. Steinberg................................................ 7,197,630 (e)(i) 12.7%
The Steinberg Children Trusts...................................... 893,258 (j) 1.6%
Cumming Foundation................................................. 73,297 (k) .1%
The Joseph S. and Diane H. Steinberg
1992 Charitable Trust......................................... 23,815 (l) *
All Directors and executive officers
as a group (11 persons)......................................... 15,451,980 (m) 27.2%
- -------------------
* Less than .1%.
(a) Includes 250 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(b) Includes 20,250 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(c) Includes 4,859 shares held by the Considine and Considine Retirement
Plan. Mr. Considine is the Managing Partner of Considine and Considine,
an accounting firm in San Diego, California.
(d) Includes (i) 95,324 shares of Common Stock (.2%) 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) as to which
Mr. Cumming may be deemed to be the beneficial owner and (ii) 250
shares that may be acquired upon the exercise of currently exercisable
stock options.
(e) 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. The business address for
Messrs. Cumming and Steinberg is c/o Leucadia National Corporation, 315
Park Avenue South, New York, New York 10010.
8
(f) Includes 6,500 common shares that may be acquired upon the exercise of
currently exercisable stock options. Does not include currently
exercisable stock options with respect to 491,802 common shares as to
which performance criteria have not been met, and which will be
repurchased by the Company at a price not more than the option exercise
price as to any shares for which the performance criteria are not met
in accordance with the terms of the option.
(g) Includes 3,500 common shares that may be acquired upon the exercise of
currently exercisable stock options. Does not include currently
exercisable stock options with respect to 350,000 common shares as to
which performance criteria have not been met, and which will be
repurchased by the Company at a price not more than the option exercise
price as to any shares for which the performance criteria are not met
in accordance with the terms of the option.
(h) Includes 10,000 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(i) Includes (i) 34,861 shares of Common Stock (less than .1%) beneficially
owned by Mr. Steinberg's wife as to which Mr. Steinberg may be deemed
to be the beneficial owner and (ii) 250 shares that may be acquired
upon the exercise of currently exercisable stock options.
(j) Mr. Steinberg disclaims beneficial ownership of the Common Stock held
by the Steinberg Children Trusts.
(k) Mr. Cumming is a trustee and President of the foundation and disclaims
beneficial ownership of the Common Stock held by the foundation.
(l) Mr. Steinberg and his wife are trustees of the trust. Mr. Steinberg
disclaims beneficial ownership of the Common Stock held by the trust.
(m) Includes 55,250 common shares that may be acquired upon the exercise of
currently exercisable stock options. Does not include currently
exercisable stock options with respect to an aggregate of 841,802
common shares described in footnotes (f) and (g) above.
As of April 2, 2002, Cede & Co. held of record 44,391,844 shares of
Common Stock (approximately 78.1% of the total Common Stock 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.
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In 1999, Leucadia completed the distribution of the Company Common
Stock to shareholders of Leucadia. As a result, Joseph S. Steinberg, Chairman of
the Board of the Company, and Ian M. Cumming, a director of the Company,
together with their respective family members (excluding trusts for the benefit
of Mr. Steinberg's children) beneficially own approximately 12.7% and 13.6%
respectively, of the outstanding Common Stock. Mr. Steinberg is also President
and a director of Leucadia and Mr. Cumming is Chairman of the Board of Leucadia.
At April 2, 2002, Mr. Steinberg and Mr. Cumming beneficially owned (together
with their respective family members but excluding trusts for the benefit of Mr.
Steinberg's children) approximately 16.8% and 18.0%, respectively, of Leucadia's
outstanding common shares. See Item 12, "Security Ownership of Certain
Beneficial Owners and Management" included in this Report for information
concerning the securities ownership of Messrs. Steinberg and Cumming and their
respective families.
Set forth below is information concerning agreements or relationships
between the Company and Leucadia and its subsidiaries.
9
San Elijo Hills Development Agreement
In August 1998, the Company entered into a development management
agreement with an indirect subsidiary of Leucadia to become development manager
of San Elijo Hills, which will be a master-planned community in San Diego
County, California, of approximately 3,400 homes and apartments as well as
commercial properties, which are expected to be completed during the course of
this decade. As development manager, the Company is responsible for the overall
management of the project, including, among other things, preserving existing
entitlements and obtaining any additional entitlements required for the project,
arranging financing for the project, coordinating marketing and sales activity,
and acting as the construction manager. The development management agreement
provides that the Company will receive certain fees in connection with the
project. These fees consist of field overhead and management service fees, which
are based on a fixed percentage of gross revenues of the project, less certain
expenses allocated to the project, and are expected to cover the Company's cost
of providing these services. The Company also receives co-op marketing and
advertising fees that are paid at the time builders sell homes, are generally
based upon a fixed percentage of the homes' selling price and are recorded as
revenue when the home is sold. The development agreement also provides for a
success fee to the Company out of the net cash flow, if any, from the project,
as determined in accordance with the development agreement, subject to a maximum
success fee. Whether a success fee, if it is earned, will be paid to the Company
prior to the conclusion of the project will be at the discretion of the project
owner. During the year ended December 31, 2001, the Company received
approximately $5,800,000 in fees under the development management agreement,
including approximately $1,000,000 in co-op marketing and advertising fees.
Loan Agreements
Leucadia funded the Company's bankruptcy plan by purchasing stock and
debt of the Company. As of December 31, 2001, the Company owed $26,462,000
principal amount to Leucadia, which is payable on December 31, 2004 and bears
interest at 6% per year. During the year ended December 31, 2001, the Company
paid to Leucadia approximately $1,588,000 in interest.
In March 2001, the Company entered into a $3,000,000 line of credit
agreement with Leucadia. Under the line of credit, the Company has agreed to pay
a commitment fee of .375% per year, payable quarterly, on the unused balance of
the line of credit. Loans outstanding under this line of credit bear interest at
10% per year. Interest on the line of credit of approximately $24,000 was
expensed and paid to Leucadia during the year ended December 31, 2001. Effective
March 1, 2002, this agreement was amended to extend the maturity to February 28,
2007, unless earlier terminated by Leucadia not later than November 15 of any
year, effective February 28 of the following year. As of April 2, 2002, $450,000
was outstanding under this facility.
Otay Land Company, LLC
In October 1998, the Company and Leucadia formed Otay Land Company, LLC
("Otay Land Company"). Through December 31, 2001, the Company invested
$11,825,000 as capital and Leucadia invested $10,000,000 as a preferred capital
interest. The Company is the development manager of this project. In 1998, Otay
Land Company purchased approximately 4,800 acres of land that is part of a
22,900 acre project located south of San Diego, California, known as Otay Ranch,
for approximately $19,500,000. Net income, if any, from this investment first
will be paid to Leucadia until it has received an annual cumulative preferred
return of 12% on, and repayment of, its preferred investment. Any remaining
funds are to be paid to the Company. No amounts have been paid to Leucadia under
this agreement.
Administrative Services Agreement
Since emerging from bankruptcy in 1995, administrative services and,
prior to November 2000, certain managerial support services, have been provided
to the Company by Leucadia. Under the current administrative services agreement,
Leucadia provides services to the Company on a month-to-month basis. Pursuant to
this agreement, Leucadia provides the services of Ms. Corinne A. Maki, the
Company's Treasurer and Secretary, in addition to various administrative
functions. Ms. Maki is an officer of Leucadia Financial. Prior to November 2000,
Leucadia also provided the services of Paul J. Borden, President of the Company,
under the administrative services agreement. Prior to November 2000, Mr. Borden
also was a Vice President of Leucadia. The cost of services provided by Leucadia
during 2001 aggregated $107,000.
10
Office Space
The Company rents office space and furnishings from Leucadia for a
monthly amount equal to its share of the Leucadia's cost for the space and
furnishings. The agreement pursuant to which the space and furnishings are
provided extends through February 28, 2005 (coterminous with Leucadia's
occupancy of the space) and provides for a monthly rental of $20,000 effective
March 1, 2002. In connection with these rentals, the Company paid $246,000 to
Leucadia in 2001.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- ------- ----------------------------------------------------------------
None.
11
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
HOMEFED CORPORATION
Registrant
By: /s/ Erin N. Ruhe
-----------------------------------
Erin N. Ruhe
Vice President and Controller
Dated: April 30, 2002
12
EXHIBIT INDEX
Exhibit Exemption
Number Description Indication
- ------ ----------- ----------
13