================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-K/A
----------
Amendment No. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] 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 charter)
Delaware 33-0304982
------------------------------ ------------------------------
(State or other jurisdiction of (I. R. S. employer
incorporation or organization) identification number)
1903 Wright Place, Suite 220
Carlsbad, California 92008
(760) 918-8200
-------------------------------------------------------------
(Address of principal executive offices and telephone number)
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
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes No X
---- ----
Based on the average bid and asked prices of the Registrant's Common
Stock as published by the OTC Bulletin Board Service as of June 30, 2002, the
aggregate market value of the Registrant's Common Stock held by non-affiliates
was approximately $36,783,000 on that date.
As of March 14, 2003, there were 81,550,844 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 amends and restates in their entirety the
following Items of the Annual Report on Form 10-K of HomeFed Corporation (the
"Company") for the fiscal year ended December 31, 2002.
PART III
Item 10. Directors and Executive Officers of the Registrant.
- ------- --------------------------------------------------
As of April 11, 2003, 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:
Position with the
Name Age Company Office Held Since
- ---- --- ------- -----------------
Paul J. Borden 54 Director and May 1998
President
Corinne A. Maki 46 Secretary and Secretary since February
Treasurer 1998; Treasurer since
February 1995
Curt R. Noland 46 Vice President October 1998
R. Randy Goodson 37 Vice President April 2000
Simon G. Malk 33 Vice President April 2000
Erin N. Ruhe 37 Vice President Vice President since
and Controller April 2000; Controller
since January 1999
Patrick D. Bienvenue 48 Director August 1998
Timothy M. Considine 62 Director January 1992
Ian M. Cumming 62 Director May 1999
Michael A. Lobatz 54 Director February 1995
Joseph S. Steinberg 59 Chairman of the Chairman of the Board
Board and Director 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. Mr. Borden had been 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 23 years in the land development
industry in San Diego County as a design consultant, merchant builder and a
master developer. From November 1997 until 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 17 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 six years, Mr. Malk was a principal of a San
Diego company involved in residential real estate developing and consulting.
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. Previously, Ms. Ruhe was Vice President since December 1995 and
Controller since November 1994 of HSD Venture, a real estate subsidiary of
Leucadia.
3
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, MK
Gold Company ("MK Gold"), an international mining company, since June 1995 and
WilTel Communications Group, Inc. ("WilTel"), a telecommunications company,
since October 2002. Both Allcity and MK Gold are subsidiaries of Leucadia and
Leucadia has an approximately 47.4% interest in WilTel. 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 11.1% interest, since January 2002.
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, MK Gold since June 1995, Jordan Industries Inc., a
public company that owns and manages manufacturing companies, of which
approximately 10.1% of the common stock that is beneficially owned by Leucadia,
since June 1988, FINOVA since August 2001, White Mountains Insurance Group,
Ltd., a publicly traded insurance holding company in which Leucadia has a less
than 5% equity interest, since June 2001 and WilTel since October 2002.
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, 2002, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis.
4
Item 11. Executive Compensation.
- ------- ----------------------
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 2002, 2001 and 2000 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.
Annual Compensation Long-Term
Compensation
---------- ------------------ ------------------ -------------------- ------------------ ----------------
Name and Principal Restricted Options All Other
Position(s) Year Salary Bonus Stock Awards (# of shares) Compensation
- ------------------ ---- ------ ----- ------------ ------------- ------------
Paul J. Borden, 2002 $ 226,189(1) $ 231,426 $ -- 1,000 $ 8,000(4)
President 2001 222,000(1) 330,265 -- 1,000 6,800
2000 37,151(1) 344,027 7,500(3) 51,000 --
Curt R. Noland, 2002 $ 110,318 $ 153,309 $ -- -- $ 7,545(4)
Vice President 2001 108,159 78,245 -- -- 6,800
2000 105,024 103,150 18,750(3) 25,000 --
Erin N. Ruhe, 2002 $ 76,493 $ 77,295 $ -- -- $ 5,552(4)
Vice President and 2001 75,009 62,250 -- -- 5,490
Controller 2000 65,016 61,950 18,750(3) 25,000 --
R. Randy Goodson, 2002 $ 183,611 $ 80,508 $ -- -- $ 8,000(4)
Vice President 2001 180,000 80,400 -- -- --
2000 131,558(2) 4,050 12,188(3) 666,250 --
Simon G. Malk, 2002 $ 110,005 $ 78,300 $ -- -- $ 7,532(4)
Vice President 2001 90,000 77,700 -- -- 3,708
2000 65,783(2) 2,025 6,563(3) 358,750 --
- -----------------
(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 of
the fees paid by the Company to Leucadia for services rendered in 2000 are
attributable to Mr. Borden's services. This amount is 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 2002, 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 $.75 per share as of
the date granted under the Company's 1999 Stock Incentive Plan.
(4) Represents the contribution made by the Company to a defined contribution
401(k) plan on behalf of the named person.
5
OPTION GRANTS IN 2002
The following table shows all grants of options to the
named executive officers of the Company in 2002.
Potential Realizable Value
At Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (2)
----------------------------------------------------------------------------------------------------------
Securities
Underlying % of Total
Options Options Granted Exercise
Granted to Employees Price Expiration
Name (#of shares) in 2002 ($/share) Date 5%($) 10%($)
- ---- ---------- ---- --------- ---- ----- ------
Paul J. Borden 1,000 (1) 100.0% $.95 7/10/07 $262 $580
- --------------
(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, 2002. 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 2002 AND
OPTION VALUES AT YEAR END 2002
The following table provides information as to options exercised by
each of the named executives in 2002 and the value of options held by such
executives at year end measured in terms of the last reported sale price for the
Common Stock on December 31, 2002, $1.45.
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 2002 December 31, 2002
----------------- -----------------
Number of shares
Underlying Value Exercisable/ Exercisable/
Name Options Exercised Realized Unexercisable Unexercisable
- ---- ------------------ -------- ------------- -------------
Paul J. Borden -- -- 20,750/32,250 $14,505/$22,265
Curt R. Noland -- -- 10,000/15,000 $7,000/$10,500
Erin N. Ruhe -- -- 10,000/15,000 $7,000/$10,500
R. Randy Goodson (a) -- -- 656,500/9,750 $550,550/$6,825
Simon G. Malk (a) -- -- 353,500/5,250 $296,450/$3,675
- --------------------
(a) Includes currently exercisable options with respect to 650,000 shares
valued at $546,000 for Mr. Goodson and currently exercisable options
with respect to 350,000 shares valued at $294,000 for Mr. Malk as to
which performance criteria have been waived in accordance with the
terms of the options.
COMPENSATION OF DIRECTORS
In 2002, each Director received a retainer of $12,000 for serving on
the Board of Directors. Each of Messrs. Considine and Lobatz were also paid a
$20,000 fee for serving as the Special Committee of the Board of Directors
appointed to review and give a recommendation in connection with the Company's
acquisition of CDS Holding Corporation. For more information concerning this
acquisition, see Item 13, "Certain Relationships and Related Transactions--
Acquisition of CDS Holding Corporation." 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.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- ------- --------------------------------------------------------------
Set forth below is certain information as of April 11, 2003
with respect to the beneficial ownership determined in accordance with Rule
13d-3 under the Securities Exchange act of 1934, as amended, 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.
7
Number of Shares
Name and Address and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
Leucadia National Corporation (a).............................................. 24,742,268 30.3%
Patrick D. Bienvenue........................................................... 10,750 (b) *
Paul J. Borden................................................................. 46,533 (c) *
Timothy M. Considine........................................................... 15,609 (d) *
Ian M. Cumming................................................................. 7,732,364 (e)(f) 9.5%
R. Randy Goodson............................................................... 791,000 (g) 1.0%
Michael A. Lobatz.............................................................. 10,750 (b) *
Simon G. Malk.................................................................. 575,844 (h) .7%
Curt R. Noland................................................................. 40,000 (i) *
Erin N. Ruhe................................................................... 40,000 (i) *
Joseph S. Steinberg............................................................ 7,198,130 (f)(j) 8.8%
The Steinberg Children Trusts.................................................. 893,258 (k) 1.1%
Cumming Foundation............................................................. 73,297 (l) *
The Joseph S. and Diane H. Steinberg
1992 Charitable Trust..................................................... 23,815 (m) *
All Directors and executive officers
as a group (11 persons)..................................................... 16,481,480 (n) 19.9%
- -------------------
* Less than .1%.
(a) The business address of this beneficial owner is 315 Park Avenue South,
New York, New York 10010.
(b) Includes 750 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(c) Includes 30,750 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(d) Includes 4,859 shares held by the Seeseeanoh Inc. Retirement Plan.
Mr. Considine and his wife are the sole owners of Seeseeanoh, a real
estate company in San Diego, California. Also includes 8,250 shares
held by The Considine Family 1981 Trust, of which Mr. Considine is
the sole trustee.
(e) Includes (i) 95,324 shares of Common Stock (.1%) 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)
750 shares that may be acquired upon the exercise of currently
exercisable stock options. Does not include 24,742,268 shares held by
Leucadia which Mr. Cumming may be deemed to beneficially own as a
result of his beneficial ownership of Leucadia common shares. See
Item 13, "Certain Relationships and Related Transactions."
(f) Messrs. Cumming and Steinberg have an oral agreement pursuant to
which they will consult with each other as to the election of a
mutually acceptable Board of Directors of the Company. The business
address for Messrs. Cumming and Steinberg is c/o Leucadia National
Corporation, 315 Park Avenue South, New York, New York 10010.
(g) Includes (i) 9,750 common shares that may be acquired upon the
exercise of currently exercisable stock options and (ii) 650,000
common shares that may be acquired upon the exercise of currently
exercisable stock options as to which performance criteria have been
waived in accordance with the terms of the options.
8
(h) Includes (i) 5,250 common shares that may be acquired upon the
exercise of currently exercisable stock options and (ii) 350,000
common shares that may be acquired upon the exercise of currently
exercisable stock options as to which performance criteria have been
waived in accordance with the terms of the options.
(i) Includes 15,000 common shares that may be acquired upon the exercise of
currently exercisable stock options.
(j) 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) 750 shares that may
be acquired upon the exercise of currently exercisable stock options.
Does not include 24,742,268 shares held by Leucadia which Mr.
Steinberg may be deemed to beneficially own as a result of his
beneficial ownership of Leucadia common shares. See Item 13, "Certain
Relationships and Related Transactions."
(k) Mr. Steinberg disclaims beneficial ownership of the Common Stock held
by the Steinberg Children Trusts.
(l) Mr. Cumming is a trustee and President of the foundation and
disclaims beneficial ownership of the Common Stock held by the
foundation.
(m) Mr. Steinberg and his wife are trustees of the trust. Mr. Steinberg
disclaims beneficial ownership of the Common Stock held by the trust.
(n) Includes 84,750 shares of Common Stock 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
1,000,000 shares of Common Stock described in footnotes (g) and (h)
above.
As of April 11, 2003, Cede & Co. held of record 44,863,093 shares of
Common Stock (approximately 55.0% 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.
9
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information regarding the Company's
equity compensation plans as of December 31, 2002. All outstanding awards relate
to the Company's common stock.
Number of securities
remaining available
for future issuance
Number of Securities Weighted-average under equity
to be issued upon exercise price of compensation plans
exercise of outstanding options, outstanding options, (excluding securities
warrants and rights warrants and rights reflected in column (a))
Plan Category (a) (b) (c)
- ------------- ------------------------------------ ---------------------- ------------------------
Equity compensation
plans approved by
security holders 1,197,250 $ .63 552,000
Equity compensation
plans not approved
by security holders - - -
---------- --------- -------
Total 1,197,250 $ .63 552,000
========= ========= =======
Item 13. Certain Relationships and Related Transactions.
- ------- ----------------------------------------------
In 1999, Leucadia distributed all of the Company's Common Stock that
it owned to shareholders of Leucadia. As a result, at April 11, 2003, 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 owned approximately
8.8% and 9.5%, respectively, of the Company's outstanding Common Stock, before
consideration of the Common Stock owned by Leucadia. Mr. Steinberg is also
President and a director of Leucadia and Mr. Cumming is Chairman of the Board of
Leucadia. At April 11, 2003, 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 15.4% and 16.6%,
respectively, of Leucadia's outstanding common shares. In addition to their
ownership of the Company's Common Stock (directly and through family members),
as a result of their beneficial ownership of Leucadia common shares, Messrs.
Cumming and Steinberg each may be deemed to be the beneficial owner of the
shares of the Company's Common Stock beneficially owned by Leucadia.
Prior to joining the Company as Vice Presidents in 2000, R. Randy
Goodson and Simon G. Malk were principals of Accretive Investments, LLC, a real
estate consulting firm. In June 2002, Otay Land Company, LLC ("Otay Land
Company"), a joint venture between the Company and Leucadia which is more fully
discussed below, paid Accretive Investments a commission of $116,000 for
consulting services provided to Otay Land Company by Accretive Investments prior
to Messrs. Goodson & Malk joining the Company.
Set forth below is information concerning agreements or relationships
between the Company and Leucadia and its subsidiaries.
10
ACQUISITION OF CDS HOLDING CORPORATION
On October 21, 2002, the Company purchased from Leucadia all of the
issued and outstanding shares of capital stock of CDS Holding Corporation
("CDS"), which through its majority-owned subsidiaries is the owner of the San
Elijo Hills project. The $25,000,000 purchase price consisted of $1,000,000 in
cash and 24,742,268 shares of the Company's common stock, representing
approximately 30.3% of the Company's outstanding shares. The San Elijo Hills
project, a master-planned community located in the City of San Marcos in San
Diego County, California, will be a community of approximately 3,400 homes and
apartments as well as commercial properties that are expected to be completed
during the course of this decade. Since August 1998, the Company has been the
development manager for this project, with responsibility 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
provided that the Company would receive development management fees for the
field overhead, management and marketing services it provides, based on the
revenues of the project. Prior to the acquisition of CDS, in 2002 the Company
received approximately $1,600,000 of development management fees from the San
Elijo Hills project. In addition, the Company had the right to receive a
substantial portion of CDS's share of the project's net cash flow through the
success fee arrangement. No success fee had been paid prior to the Company's
acquisition of CDS. After the acquisition of CDS, since the Company was both an
indirect owner of the San Elijo Hills project and the holder of the rights to
the success fee, the development management agreement was amended to eliminate
the success fee provisions.
Pursuant to an agreement with CDS and its subsidiaries, Leucadia has
historically provided project improvement bonds which were required prior to the
commencement of any project development. This agreement was not affected by the
Company's acquisition of CDS, and Leucadia will continue to obtain these bonds
on behalf of the project.
LOAN AGREEMENTS
Leucadia funded the Company's bankruptcy plan by purchasing stock and
a note of the Company. As of December 31, 2002, the principal amount outstanding
on the note was $26,462,000. The note is payable on December 31, 2007 and bears
interest at 6% per year through 2004, 9% in 2005, 10% in 2006 and 11% in 2007.
In 2002, the Company paid Leucadia $250,000 in connection with amending certain
terms of the note and 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; in 2002, the Company paid $87,000 in interest and commitment fees.
Effective March 1, 2002, this agreement was amended to extend the maturity to
February 28, 2007, although Leucadia had the right to terminate the line of
credit on an annual basis. In October 2002, the line of credit was increased to
$10,000,000 and Leucadia's ability to terminate the line of credit prior to
maturity was removed, unless the Company is in default. As of April 11, 2003, no
amounts were outstanding under this facility.
11
OTAY LAND COMPANY, LLC
In October 1998, the Company and Leucadia formed Otay Land Company to
purchase approximately 4,850 non-adjoining acres of land located within the
larger 22,900 acre Otay Ranch master-planned community south of San Diego,
California. Otay Land Company acquired this land for $19,500,000. Through
December 31, 2002, the Company has contributed $12,100,000 as capital and
Leucadia has contributed $10,000,000 as a preferred capital interest; the
Company is the managing member of Otay Land Company. 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. In 2002, Otay
Land Company paid Leucadia $2,524,000 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,
which extends through December 31, 2003, Leucadia provides services to the
Company for a monthly fee of $10,000. 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 subsidiaries of Leucadia. The cost of services provided by Leucadia
during 2002 aggregated $120,000. 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.
OFFICE SPACE
The Company leases a portion of the space in its corporate
headquarters to Leucadia for a monthly rental of $8,400 in 2002 and $5,500 in
2003.
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- ------- ----------------------------------------------------------------
None.
12
SIGNATURES
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 25, 2003
13
CERTIFICATIONS
--------------
I, Paul J. Borden, certify that:
1. I have reviewed this annual report on Form 10-K/A of HomeFed
Corporation; and
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report.
Date: April 25, 2003
/s/ Paul J. Borden
---------------------------
Paul J. Borden
President
14
CERTIFICATIONS
--------------
I, Erin N. Ruhe, certify that:
1. I have reviewed this annual report on Form 10-K/A of HomeFed
Corporation; and
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report.
Date: April 25, 2003
/s/ Erin N. Ruhe
-------------------------------
Erin N. Ruhe
Vice President and Controller
15