SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
HOMEFED CORPORATION
-----------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate
value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
HOMEFED CORPORATION
1903 WRIGHT PLACE
SUITE 220
CARLSBAD, CALIFORNIA 92008
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 18, 2006
------------------------
June 22, 2006
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
HomeFed Corporation to be held on July 18, 2006, at 1:30 p.m., at Grand Pacific
Palisades Resort and Hotel, 5805 Armada Drive, Carlsbad, California 92008, in
the Terrace Room:
1. To consider and vote on a proposal to elect six directors;
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors to audit the consolidated financial statements of the Company and our
subsidiaries for the year ended December 31, 2006; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements of the meeting.
We will be conducting a tour of our Otay Ranch project, for interested
stockholders. The tour will begin at 8:30 a.m. on the morning of the meeting and
will last approximately four hours. The tour will depart from the Grand Pacific
Palisades Resort and Hotel. If you would like to reserve a place on the tour for
you and one invited guest, or need directions to the hotel, please call Annette
Alaga at (760) 918-8200, extension 241, before July 5, 2006.
Only holders of record of our common stock at the close of business on June
5, 2006 will be entitled to notice of and to vote at the meeting. Please vote
your shares, either (i) by signing, dating and mailing the enclosed proxy card
in the accompanying postage prepaid envelope, (ii) by telephone using the
toll-free telephone number printed on the proxy card, or (iii) by the Internet,
using the instructions printed on the proxy card. This will assure that your
shares are represented at the meeting.
By Order of the Board of Directors.
CORINNE A. MAKI
Secretary
HOMEFED CORPORATION
1903 WRIGHT PLACE
SUITE 220
CARLSBAD, CALIFORNIA 92008
-----------------------
PROXY STATEMENT
-----------------------
ANNUAL MEETING OF STOCKHOLDERS
-----------------------
June 22, 2006
This proxy statement is being furnished to the stockholders of HomeFed
Corporation, a Delaware corporation, in connection with the solicitation of
proxies by the Board of Directors for use at the Annual Meeting of Stockholders
of the Company to be held on July 18, 2006 and at any adjournments or
postponements thereof.
At the meeting, stockholders will be asked:
1. To consider and vote on a proposal to elect six directors;
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors to audit the consolidated financial statements of the Company and our
subsidiaries for the year ended December 31, 2006; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements of the meeting.
The Board of Directors has fixed the close of business on June 5, 2006 as
the record date for the determination of the holders of our common stock
entitled to notice of and to vote at the meeting. Each such stockholder will be
entitled to one vote for each share of common stock held on all matters to come
before the meeting and may vote in person or by proxy by completing the enclosed
proxy card and returning it in the enclosed postage prepaid envelope or, as
indicated on the proxy card, by Internet or telephone voting. At the close of
business on June 5, 2006, there were 8,273,434 shares of common stock entitled
to vote.
This proxy statement and the accompanying form of proxy are first being
sent to holders of our common stock on or about June 22, 2006.
THE MEETING
DATE, TIME, PLACE
The annual meeting will be held on July 18, 2006, at 1:30 p.m., local time,
at Grand Pacific Palisades Resort and Hotel, 5805 Armada Drive, Carlsbad,
California 92008, in the Terrace Room.
MATTERS TO BE CONSIDERED
At the meeting, stockholders will be asked to consider and vote to elect
six directors and to ratify the selection of independent auditors. See "ELECTION
OF DIRECTORS" and "RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS." The Board
of Directors knows of no matters that are to be brought before the meeting other
than as set forth in the notice of meeting. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy or their
substitutes will vote in accordance with their best judgment on such matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Stockholders as of the record date, i.e., the close of business on June 5,
2006, are entitled to notice of and to vote at the meeting. As of the record
date, there were 8,273,434 shares of our common stock outstanding and entitled
to vote, with each share entitled to one vote.
REQUIRED VOTES
Election of Directors. Under Delaware law, the affirmative vote of the
holders of a plurality of shares of common stock voting on this matter is
required to elect each director. Consequently, only shares that are voted in
favor of a particular nominee will be counted toward such nominee's achievement
of a plurality. For purposes of the election of directors, abstentions and
broker non-votes will each be included in the determination of the number of
shares present for purposes of constituting a quorum, but will not be counted as
shares voting on the matter (and will have no effect on the result of the vote).
Ratification of the selection of PricewaterhouseCoopers LLP as independent
auditors. The ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors is being submitted to stockholders because the Board of
Directors believes that such action follows sound corporate practice and is in
the best interests of the stockholders. If the stockholders do not ratify the
selection by the affirmative vote of a majority of the votes cast by the holders
of our common stock present at the meeting and entitled to vote on this matter,
the selection of independent auditors will be reconsidered by the Audit
Committee of the Board of Directors. If the stockholders ratify the selection,
the Audit Committee, in its discretion, may still direct the appointment of new
independent auditors at any time during the year if the Audit Committee believes
that such a change would be in our and our stockholders' best interests. For
purposes of ratifying the selection of PricewaterhouseCoopers LLP as independent
auditors, abstentions and broker non-votes will each be included in the
determination of the number of shares present for purposes of constituting a
quorum, but will not be counted as votes cast (and will have no effect on the
result of the vote).
Other Matters. If any other matters are properly presented at the meeting
for action, including a question of adjourning or postponing the meeting from
time to time, the persons named in the proxies and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment.
Joseph S. Steinberg, Chairman of our Board of Directors, beneficially owns
781,720 shares of our common stock or approximately 9.4% of our common stock
outstanding at the record date, excluding 775 shares of our common stock which
Mr. Steinberg has the right to acquire upon exercise of stock options; and a
trust for the benefit of Mr. Steinberg's children beneficially owns 27,532
shares of our common stock or approximately 0.3% of our common stock outstanding
at the record date. Mr. Steinberg disclaims beneficial ownership of our common
stock held by this trust. Ian M. Cumming, a director of the Company,
beneficially owns 633,259 shares of our common stock or approximately 7.7% of
our common stock
2
outstanding at the record date, excluding 775 shares of our common stock which
Mr. Cumming has the right to acquire upon exercise of stock options. Leucadia
National Corporation (together with its subsidiaries, "Leucadia") is the
beneficial owner of 2,474,226 shares of our common stock or approximately 29.9%
of our common stock outstanding at the record date. Mr. Steinberg is also a
director, President and significant stockholder of Leucadia. Mr. Cumming is
Chairman of the Board and a significant stockholder of Leucadia. In addition,
the Cumming Foundation and the Joseph S. and Diane H. Steinberg 1992 Charitable
Trust, private charitable foundations independently established by Messrs.
Cumming and Steinberg, respectively, beneficially own 147,330 (1.8%) shares of
our common stock and 2,381 (less than 0.1%) shares of our common stock
outstanding at the record date, respectively. Mr. Cumming and Mr. Steinberg each
disclaim beneficial ownership of our common stock held by their respective
private charitable foundations. Leucadia has advised us that it intends, and
Messrs. Cumming and Steinberg have advised us that they intend, to cause all of
our common stock beneficially owned, and all of our common stock beneficially
owned by charitable foundations established, by Mr. Cumming and Mr. Steinberg,
to be voted in favor of each nominee named herein and for the ratification of
the selection of independent auditors. In addition to Messrs. Cumming and
Steinberg, all of our other directors and officers beneficially own 0.3% of our
common stock outstanding at the record date.
VOTING AND REVOCATION OF PROXIES
Stockholders are requested to vote by proxy in one of three ways:
o Use the toll-free telephone number shown on your proxy card;
o Visit the Internet website at www.voteproxy.com and follow
the on-screen instructions; or
o Mail, date, sign and promptly return your proxy card in the
enclosed postage prepaid envelope.
Shares of our common stock represented by properly executed proxies
received by us or proxies submitted by telephone or via the Internet, which are
not revoked will be voted at the meeting in accordance with the instructions
contained therein. If instructions are not given, proxies will be voted FOR
election of each nominee for director named herein and FOR ratification of the
selection of independent auditors.
Voting instructions (including instructions for both telephonic and
Internet proxies) are provided on the proxy card. The Internet and telephone
proxy procedures are designed to authenticate stockholder identities, to allow
stockholders to give voting instructions and to confirm that stockholders'
instructions have been recorded properly. A control number, located on the proxy
card, will identify stockholders and allow them to submit their proxies and
confirm that their voting instructions have been properly recorded. Costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, must be borne by the stockholder. If you
submit your proxy by Internet or telephone, it will not be necessary to return
your proxy card.
If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive from your record holder. The availability
of Internet and telephone proxies will depend on their voting procedures.
If a stockholder does not return a signed proxy card or submit a proxy by
the Internet or by telephone, and does not attend the meeting and vote in
person, his or her shares will not be voted.
Any proxy signed and returned by a stockholder or submitted by telephone or
via the Internet may be revoked at any time before it is exercised by giving
written notice of revocation to the Secretary of the Company, at our address set
forth herein, by executing and delivering a later-dated proxy (either in
3
writing, by telephone or via the Internet) or by voting in person at the
meeting. Attendance at the meeting will not in and of itself constitute
revocation of a proxy.
"HOUSEHOLDING" OF ANNUAL REPORT AND PROXY MATERIALS
We have adopted a procedure approved by the Securities and Exchange
Commission called "householding." Under this procedure, stockholders of record
who have the same address and last name will receive only one copy of our Annual
Report and proxy statement unless one or more of these stockholders notifies us
that they wish to continue receiving individual copies. This procedure will
reduce our printing costs and postage fees.
Stockholders who participate in householding will continue to receive
separate proxy cards. Also, householding will not in any way affect dividend
check mailings.
If you are eligible for householding, but you and other stockholders of
record with whom you share an address currently receive multiple copies of the
Annual Report and/or the proxy statement, or if you hold in more than one
account, and in either case you wish to receive only a single copy of each of
these documents for your household, please contact our transfer agent, American
Stock Transfer and Trust Company, (in writing: 59 Maiden Lane, New York, New
York 10038; by telephone: in the U.S., Puerto Rico and Canada, 1-800-937-5449;
outside the U.S., Puerto Rico and Canada, 1-718-921-8200).
If we are householding materials to your address and you wish to receive a
separate copy of the 2005 Annual Report or this proxy statement, or if you do
not wish to participate in householding and prefer to receive separate copies of
these documents in the future, please contact American Stock Transfer as
indicated above.
Beneficial stockholders can request information about householding from
their banks, brokers or other holders of record.
PROXY SOLICITATION
We will bear the costs of solicitation of proxies for the meeting. In
addition to solicitation by mail, directors, officers and our regular employees
may solicit proxies from stockholders by telephone, telegram, in person or
otherwise. These directors, officers and employees will not receive additional
compensation, but may be reimbursed for out-of-pocket expenses in connection
with such solicitation. Brokers, nominees, fiduciaries and other custodians have
been requested to forward soliciting material to the beneficial owners of our
common stock held of record by them, and such custodians will be reimbursed for
their reasonable expenses.
INDEPENDENT AUDITORS
We have been advised that representatives of PricewaterhouseCoopers LLP,
our independent auditors for 2005, will attend the meeting, will have an
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
4
ELECTION OF DIRECTORS
At the meeting, six directors are to be elected to serve until the next
meeting or until their successors are elected and qualified. All of the
following nominees are currently serving as directors. The persons named in the
enclosed form of proxy have advised that, unless contrary instructions are
received, they intend to vote FOR the six nominees named by the Board of
Directors and listed on the following table. The Board of Directors expects that
each of the nominees will be available for election as a director. However, if
by reason of an unexpected occurrence one or more of the nominees is not
available for election, the persons named in the form of proxy have advised that
they will vote for such substitute nominees as the Board of Directors may
propose. The following information is as of June 5, 2006.
Age, period served as a director, other
Name and present position, business experience during the last five
if any, with the Company years and family relationships, if any
- ------------------------- ----------------------------------------
Patrick D. Bienvenue................. Mr. Bienvenue, 51, has served as a
director since August 1998. Since
January 1996, Mr. Bienvenue has served
in a variety of executive capacities
with real estate related subsidiaries of
Leucadia.
Paul J. Borden, President............ Mr. Borden, 57, has served as a director
and our President since May 1998. Mr.
Borden was a Vice President of Leucadia
from August 1988 through October 2000,
responsible for overseeing many of
Leucadia's real estate investments.
Timothy M. Considine................. Mr. Considine, 65, has served as a
director since January 1992, serving as
Chairman of the Board from 1992 to
December 1999, and is employed on a
part-time basis by Considine and
Considine, an accounting firm in San
Diego, California, where he was a
partner from 1969 to 2002.
Ian M. Cumming....................... Mr. Cumming, 65, has served as a
director since May 1999. He has been a
director and Chairman of the Board of
Leucadia since June 1978 and a director
and Chairman of the Board of The FINOVA
Group Inc., 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.
Michael A. Lobatz.................... Dr. Lobatz, 57, has served as a director
since February 1995 and has been a
practicing physician in San Diego,
California since 1981.
Joseph S. Steinberg,
Chairman of the Board................ Mr. Steinberg, 62, has served as a
director 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 Jordan Industries Inc., a
public company that owns and manages
manufacturing companies, of which
approximately 10.1% of the common stock
is beneficially owned by Leucadia, since
June 1988 and FINOVA since August 2001.
The Board of Directors recommends a vote FOR the above-named nominees.
5
INFORMATION CONCERNING
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
MEETINGS AND COMMITTEES
During 2005, the Board of Directors held four meetings and took action by
unanimous written consent on one other occasion.
The Board of Directors' has a standing Audit Committee and Compensation
Committee.
The functions of the Audit Committee are to assist the Board of Directors
in fulfilling its responsibility to oversee the quality and integrity of our
financial statements, our compliance with legal and regulatory requirements, the
qualifications and independence of our independent accountants, the performance
of our independent accountants and significant financial matters. In discharging
its duties, the Audit Committee has the sole authority to select (subject to
stockholder ratification, which ratification is not binding on the Audit
Committee), compensate, evaluate and replace the independent accountants,
reviews and approves the scope of the annual audit, reviews and pre-approves the
engagement of our independent accountants to perform audit and non-audit
services and the related fees, meets independently with our independent
accountants and senior management, reviews the integrity of our financial
reporting process and reviews our financial statements and disclosures and
certain Securities and Exchange Commission filings.
During 2005, the Audit Committee met eight times, including meetings with
the independent auditors without management present. The Board of Directors has
adopted a charter for the Audit Committee which was attached as Annex A to the
Proxy Statement for our 2005 Annual Meeting of Shareholders. The Audit Committee
consists of Mr. Considine (Chairman) and Dr. Lobatz. Our Board has determined
that each of Mr. Considine and Dr. Lobatz is independent, applying the National
Association of Securities Dealers' listing standards for independence, and that
Mr. Considine is qualified as an audit committee financial expert within the
meaning of regulations of the Securities and Exchange Commission.
The Compensation Committee was formed in March 2005. The functions of the
Compensation Committee are to determine and approve the compensation of our
executive officers. The Compensation Committee consists of Mr. Steinberg.
The Board of Directors does not have a nominating committee or a policy
concerning stockholder nominations. As our common stock is traded on the OTC
Bulletin Board Service, we are not subject to listing standards that would
require director nominees to be selected or recommended by a majority of
independent directors or a nominating committee comprised solely of independent
directors. Because Mr. Steinberg, Mr. Cumming and Leucadia together beneficially
own nearly 50% of the outstanding common stock of the Company, the Board
believes it is appropriate to have all directors involved in the process of
nominating directors rather than delegate this responsibility to a smaller group
of directors. As indicated above, under the listing standards of the National
Association of Securities Dealers, Mr. Considine and Dr. Lobatz are independent
directors serving on the Board. All current members of the Board of Directors
have been re-nominated to serve as our directors.
The Board does not believe that it is in the Company's best interests to
establish rigid criteria for the selection of prospective nominees inasmuch as
the needs of the Company change over time. Accordingly, the selection of
prospective nominees would be based on skills relevant to the issues the Company
faces at the time of nomination. Nominees would be selected on the basis of
their experience and qualifications, availability to devote sufficient time to
the Board and the needs of the Company at that time. Candidates who may also
become members of our Audit Committee would be required to have the financial
experience necessary to perform the duties of a member of the Audit Committee
and to satisfy the requirements of the Securities and Exchange Commission for
membership on the Audit Committee. In 2005, the Board did not pay a fee to any
third party to identify candidates.
6
A stockholder entitled to vote in the election of directors may nominate
one or more persons for election as director at a meeting if written notice of
that stockholder's intent to make the nomination has been given to us, with
respect to an election to be held at an annual meeting of stockholders, not less
than 120 days before the first anniversary of our proxy statement in connection
with the last annual meeting, and, with respect to an election to be held at a
special meeting of stockholders, not later than the tenth day following the date
on which notice of the meeting is first given to stockholders. The notice shall
include the name and address of the stockholder and his or her nominees, a
representation that the stockholder is entitled to vote at the meeting and
intends to nominate the person, a description of all arrangements or
understandings between the stockholder and each nominee, other information as
would be required to be included in a proxy statement soliciting proxies for the
election of the stockholder's nominees, and the consent of each nominee to serve
as a director of the Company if so elected. We may require any proposed nominee
to furnish other information as we may reasonably require to determine the
eligibility of the proposed nominee to serve as a director of the Company. We
did not receive any nominations from stockholders for election as directors at
the meeting. See "Proposals by Stockholders" for the deadline for nominating
persons for election as directors for the 2007 annual meeting.
ATTENDANCE
All directors, other than Ian M. Cumming, attended at least 75% of the
meetings of the Board of Directors and committees of the Board of Directors on
which they served. It is the Company's policy that directors are expected to
dedicate sufficient time to the performance of his duties as a director,
including by attending meetings of the stockholders, the Board of Directors and
committees of which he is a member. All directors, other than Ian M. Cumming,
attended the annual meeting of stockholders in July 2005.
COMMUNICATING WITH THE BOARD
Stockholders and other parties interested in communicating directly with
the Board of Directors as a group may do so by writing to the Board of
Directors, c/o Corporate Secretary, HomeFed Corporation, 1903 Wright Place,
Suite 220, Carlsbad, California 92008. The Corporate Secretary will review all
correspondence and regularly forward to the Board of Directors a summary of all
such correspondence that, in the opinion of the Corporate Secretary, deals with
the functions of the Board or committees thereof or that the Corporate Secretary
otherwise determines requires attention. Directors may at any time review a log
of all correspondence received by the Company that is addressed to members of
the Board and request copies of all such correspondence. Concerns relating to
accounting, internal controls or auditing matters will immediately be brought to
the attention of the Chairman of the Audit Committee.
CODE OF PRACTICE
We have a Code of Business Practice, which is applicable to all of our
directors, officers and employees, and includes a Code of Practice applicable to
our principal executive officers and senior financial officers. Both the Code of
Business Practice and the Code of Practice are available without charge upon
request. Requests should be addressed to Corporate Secretary, HomeFed
Corporation, 1903 Wright Place, Suite 220, Carlsbad, California 92008. We intend
to file with the Securities and Exchange Commission amendments to or waivers
from our Code of Practice applicable to our principal executive officers and
senior financial officers.
The information contained in this proxy statement with respect to the Audit
Committee charter and the independence of the non-management members of the
Board of Directors shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission, nor shall such information
be incorporated by reference into any future filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates it by reference in a filing.
7
PRESENT BENEFICIAL OWNERSHIP OF OUR COMMON STOCK
Set forth below is certain information as of June 5, 2006, with respect to
the beneficial ownership determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, of our common stock by (1) each
person who, to our knowledge, is the beneficial owner of more than 5% of our
outstanding common stock, which is our only class of voting securities, (2) each
director and nominee for director, (3) each of the executive officers named in
the Summary Compensation Table under "Executive Compensation," (4) the trust for
the benefit of Mr. Steinberg's children and private charitable foundations
established by Mr. Cumming and Mr. Steinberg and (5) all of our executive
officers and directors as a group. Unless otherwise stated, the business address
of each person listed is c/o HomeFed Corporation, 1903 Wright Place, Suite 220,
Carlsbad, California 92008.
Number of Shares
Name and Address and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
Leucadia National Corporation (a)............ 2,474,226 29.9%
Patrick D. Bienvenue......................... 1,875 (b) *
Paul J. Borden............................... 7,453 (c) *
Timothy M. Considine......................... 2,375 (d) *
Ian M. Cumming............................... 634,034 (e)(f) 7.7%
Michael A. Lobatz............................ 1,875 (b) *
Curt R. Noland............................... 5,000 *
H. Pike Oliver............................... -- (g) --
Erin N. Ruhe................................. 5,000 *
Joseph S. Steinberg.......................... 782,495 (f)(h) 9.5%
The Steinberg Children Trust................. 27,532 (i) .3%
Cumming Foundation........................... 147,330 (j) 1.8%
The Joseph S. and Diane H. Steinberg
1992 Charitable Trust................... 2,381 (k) *
All Directors and executive officers
as a group (9 persons).................... 1,440,882 (l) 17.4%
- -------------------
* Less than .1%.
(a) The business address of this beneficial owner is 315 Park Avenue South, New
York, New York 10010.
(b) Includes 775 shares that may be acquired upon the exercise of currently
exercisable stock options.
(c) Includes 675 shares that may be acquired upon the exercise of currently
exercisable stock options.
(d) Includes 500 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 (i) 1,250 shares held by
The Considine Family 1981 Trust, of which Mr. Considine and his wife are
trustees and (ii) 550 shares that may be acquired upon exercise of
currently exercisable stock options.
(e) Includes (i) 9,530 shares (.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, (ii) 60,000 shares (.7%) held by a corporation
which is 50% owned by Mr. Cumming and 50% owned by Mr. Cumming's wife and
(iii) 775 shares that may be acquired upon the exercise of currently
exercisable stock options. Does not include 2,474,226 shares held by
Leucadia which Mr. Cumming may be deemed to beneficially own as a result of
8
his beneficial ownership of Leucadia common shares. See "Certain
Relationships and Related Transactions" in this proxy statement.
(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) Mr. Oliver resigned from the Company effective February 10, 2006.
(h) Includes (i) 3,676 shares (less than .1%) beneficially owned by Mr.
Steinberg's wife and daughter as to which Mr. Steinberg may be deemed to be
the beneficial owner, (ii) 61,793 shares (.7%) owned by a trust for the
benefit of Mr. Steinberg's children and (iii) 775 shares that may be
acquired upon the exercise of currently exercisable stock options. Does not
include 2,474,226 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 "Certain Relationships and Related Transactions" in this
proxy statement.
(i) Mr. Steinberg disclaims beneficial ownership of all of our common stock
held by this trust.
(j) Mr. Cumming is a trustee and President of the foundation and disclaims
beneficial ownership of our common stock held by the foundation.
(k) Mr. Steinberg and his wife are trustees of the trust. Mr. Steinberg
disclaims beneficial ownership of our common stock held by the trust.
(l) Includes 4,325 shares that may be acquired upon the exercise of currently
exercisable stock options.
As of June 5, 2006, Cede & Co. held of record 4,882,789 shares of our
common stock (approximately 59.0% of our 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
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information in respect of the
compensation of our President and Chief Executive Officer and each of our other
executive officers whose total salary and bonus exceeded $100,000 in 2005 for
services in all capacities to us and our subsidiaries during the years ended
2005, 2004 and 2003.
9
Long-term
Annual Compensation Compensation
------------------------------- --------------------------------------------
Name and Principal Other Annual Options All Other
Position(s) Year Salary (1) Bonus Compensation (# of shares) Compensation(5)
- ------------------ ---- ------ ----- ------------ ------------- ---------------
Paul J. Borden, 2005 $ 255,790(2) $ 606,954 $320,975(3) 1,000 $ 8,400
President 2004 246,200(2) 356,751 84,662(3) 1,000 8,200
2003 232,635(2) 1,006,619 89,780(3) 100 8,000
Curt R. Noland, 2005 $ 149,995 $ 504,500 $ - - $ 8,400
Vice President 2004 115,995 303,477 - - 8,200
2003 113,620 603,409 - - 8,000
Erin N. Ruhe, 2005 $ 113,307 $ 303,399 $ - - $ 8,400
Vice President, 2004 95,472 253,300 - - 8,200
Treasurer 2003 78,805 302,364 - - 6,247
& Controller
H. Pike Oliver, (6) 2005 $ 113,077 $ 103,375 $ 87,621(4) - $ 4,658
Vice President
(1) Effective January 2006, salaries were increased to the following amounts:
Mr. Borden, $238,744; Mr. Noland $154,500; and Ms. Ruhe $125,000
(2) Includes directors fees to Mr. Borden from the Company of $24,000 (2005),
$21,000 (2004), and $12,000 (2003).
(3) Mr. Borden maintains his primary residence in New Jersey. The information
reflected above includes the incremental cost to us, valued in accordance
with the disclosure rules of the Securities and Exchange Commission, of
providing the executive with a temporary residence in California ($29,045,
$35,839 and $36,830 in 2005, 2004 and 2003), airfare for travel to and from
his primary residence ($24,340, $38,715 and $42,515 in 2005, 2004 and 2003)
and transportation costs including the personal use of a Company car while
in California. Such reimbursements are considered to be taxable compensation
reportable by Mr. Borden under federal income tax rules, which results in a
net cash cost to him, even though he does not gain any incremental financial
benefit from these reimbursements. As a result, beginning in 2005, the
Company has agreed to pay Mr. Borden additional compensation which, after
taxes, will provide him with sufficient funds to pay the taxes due on the
expense amounts reimbursed by the Company. In addition, in 2005 the Company
paid Mr. Borden for the 2004 additional taxable compensation reported by Mr.
Borden for reimbursements made with respect to prior periods. These payments
aggregated $260,415 during 2005 and is reflected in the 2005 amount.
(4) The Company reimbursed Mr. Oliver for relocation expenses when he joined the
Company and personal use of a Company car.
(5) Represents the contribution made by us to a defined contribution 401(k) plan
on behalf of the named person.
10
(6) Mr. Oliver joined the Company as a Vice President on April 5, 2005 at a
salary of $150,000; the salary amount reflected in the table is for the
period he was with the Company. Mr. Oliver resigned from the Company
effective February 10, 2006.
OPTION GRANTS IN 2005
The following table shows all grants of options to the named executive
officers in 2005.
Potential Realizable Value
At Assumed Annual Rates
of Stock Price Appreciation
Individual Grant for Option Term (2)
-------------------------------------------------------------------------------
Securities % of Total
Underlying Options
Options Granted to Exercise
Granted Employees Price Expiration
Name (# of shares) in 2005 ($/share) Date 5%($) 10%($)
- ---- ------------- ------- --------- ---- ----- ------
Paul J. Borden 1,000 (1) 100.0% $65.19 7/12/10 $18,011 $39,799
(1) The options were granted pursuant to our 1999 Stock Incentive Plan to all of
our directors at an exercise price equal to the fair market value of the
shares of our common stock on the date of grant. The grant date of the
options is July 12, 2005. 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 our common stock and are not
necessarily indicative of the values that may be realized by the named
executive officer.
AGGREGATE OPTION EXERCISES IN 2005 AND
OPTION VALUES AT YEAR END 2005
The following table provides information as to options exercised by each of
the named executives in 2005 and the value of options held by these executives
at year end measured in terms of the last reported sale price for our common
stock as of December 31, 2005, $ 67.00.
Number of Shares
Underlying Value of
Unexercised Unexercised In-the-
Options at Money Options at
December 31, 2005 December 31, 2005
Number of Shares
Acquired Upon Value Exercisable/ Exercisable/
Name Exercise of Options Realized Unexercisable Unexercisable
- ---- ------------------- -------- ------------- -------------
Paul J. Borden 2,600 $ 144,350 2,975/1,825 $166,438/$22,103
Curt R. Noland 500 28,250 - / - $ - /$ -
Erin N. Ruhe - - 2,500/ - $148,750/$ -
COMPENSATION OF DIRECTORS
In 2005, each director received a retainer of $24,000 for serving on the
Board of Directors. In addition, Mr. Considine was paid $26,000 for serving as
Chairman of the Audit Committee, and Mr. Lobatz was paid $17,000 for serving on
11
the Audit Committee. In addition, under the terms of our 1999 Stock Incentive
Plan, each director is automatically granted options to purchase 1,000 shares on
the date on which the annual meeting of our stockholders 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. These options become exercisable at the rate
of 25% per year commencing one year after the date of grant. As a result of this
provision, options to purchase 1,000 shares of Common Stock at an exercise price
of $65.19 per share were awarded to each of Messrs. Bienvenue, Borden,
Considine, Cumming, Lobatz and Steinberg on July 12, 2005. The Company
reimburses directors for reasonable travel expenses incurred in attending board
and committee meetings.
2005 Board of Directors Compensation (1)
----------------------------------------
Director Total Fees Earned Stock Options (2)
Patrick D. Bienvenue $24,000 1,000
Paul J. Borden $24,000 1,000
Timothy M. Considine $50,000 1,000
Ian M. Cumming $24,000 1,000
Michael A. Lobatz $41,000 1,000
Joseph S. Steinberg $24,000 1,000
(1) Table does not include reimbursement for reasonable travel expenses
incurred in attending board and committee meetings.
(2) Reflects options granted under the Company's 1999 Stock Incentive
Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a result of the distribution of HomeFed common stock to Leucadia's
shareholders in 1999, Joseph S. Steinberg, Chairman of the Board of HomeFed, and
Ian M. Cumming, a director of HomeFed, together with their respective family
members (excluding a trust for the benefit of Mr. Steinberg's children)
beneficially own, at June 5, 2006, approximately 8.7% and 7.7%, respectively, of
the Company's outstanding common stock, before consideration of the common
shares owned by Leucadia. In addition, the Joseph S. and Diane H. Steinberg 1992
Charitable Trust owns 2,381 (less than 0.1%), and the Cumming Foundation, a
private charitable foundation independently established by Mr. Cumming,
beneficially owns 147,330 (1.8%) shares of the Company's outstanding common
stock, respectively. Mr. Steinberg and Mr. Cumming disclaim beneficial ownership
of the Company's common stock held by the Joseph S. and Diane H. Steinberg 1992
Charitable Trust and the Cumming Foundation. Mr. Steinberg is also President and
a director of Leucadia and Mr. Cumming is Chairman of the Board of Leucadia. At
June 5, 2006, Mr. Steinberg and Mr. Cumming beneficially owned (together with
their respective family members but excluding a trust for the benefit of Mr.
Steinberg's children) approximately 12.6% and 11.4%, respectively, of Leucadia's
outstanding common shares. The Joseph S. and Diane H. Steinberg 1992 Charitable
Trust owns 15,000 (less than 0.1%) and the Cumming Foundation also beneficially
owns 281,823 (0.3%) of Leucadia's outstanding common shares, respectively. Mr.
Steinberg and Mr. Cumming disclaim beneficial ownership of Leucadia's common
shares held by the Joseph S. and Diane H. Steinberg Charitable Trust and the
Cumming foundation. In addition to their ownership of HomeFed 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 HomeFed common stock owned by Leucadia.
Set forth below is information concerning agreements or relationships
between us and Leucadia and its subsidiaries.
12
INFRASTRUCTURE IMPROVEMENT BONDS
In October 2002, we 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 acquisition of CDS was reviewed by a special committee of the Board
of Directors consisting of Mr. Considine and Dr. Lobatz, who recommended that
the Board of Directors approve the acquisition, after which the Board of
Directors unanimously approved the acquisition.
We are required to obtain infrastructure improvement bonds primarily for
the benefit of the City of San Marcos prior to the beginning of lot construction
work and warranty bonds upon completion of such improvements in the San Elijo
Hills project. These bonds provide funds primarily to the City in the event we
are unable or unwilling to complete certain infrastructure improvements in the
San Elijo Hills project. Leucadia has obtained these bonds on behalf of CDS and
its subsidiaries both before and after our acquisition of CDS. CDS is
responsible for paying all third party fees related to obtaining the bonds.
Should the City or others draw on the bonds for any reason, one of CDS's
subsidiaries would be obligated to reimburse Leucadia for the amount drawn. As
of March 31, 2006, the amount of outstanding bonds was approximately
$18,700,000.
LOAN AGREEMENTS
We have an unsecured $10,000,000 line of credit agreement with Leucadia.
Loans outstanding under this line of credit bear interest at 10% per year. This
agreement matures on February 28, 2007, although Leucadia had the right to
terminate the line of credit on an annual basis if we are in default. We have
made no borrowings under this facility during 2005 or 2006 (through May 31,
2006). We incurred commitment fees of $38,000 in 2005 and $16,000 in 2006
(through May 31, 2006).
ADMINISTRATIVE SERVICES AGREEMENT
Since 1995, Leucadia has been providing administrative services and
accounting services to us. Under the current administrative services agreement,
Leucadia provides services to us for a monthly fee of $15,000. Pursuant to this
agreement, Leucadia provides the services of Ms. Corinne A. Maki, our Secretary,
in addition to various administrative functions. Ms. Maki is an officer of
subsidiaries of Leucadia. The cost of services provided by Leucadia aggregated
$255,000 from January 2005 through May 31, 2006.
The term of the administrative services agreement continues for successive
annual periods ending December 31 unless terminated by Leucadia on not less than
one year's prior notice (in which event the then monthly fee will remain in
effect until the end of the notice period) or by the Company upon 30 days prior
written notice to Leucadia.
OFFICE SPACE
We rent office space at our corporate headquarters to Leucadia. Effective
March 1, 2005, the monthly rent is $1,000; in 2005, the rent paid by Leucadia
aggregated $21,000. From January 2006 through May 31, 2006, the rent incurred by
Leucadia totaled $ 5,000.
13
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS*
In March 2005, the Board of Directors appointed a compensation committee
consisting of Joseph S. Steinberg. Prior to that time, the Board of Directors
did not have a compensation committee and delegated to our President, in
consultation with certain directors, the authority to determine the compensation
to be paid to our executive officers who are Company employees, while the Board
of Directors awards stock options.
Our compensation package for executive officers consists of three basic
elements: (1) base salary; (2) annual bonus compensation; and (3) long-term
incentives in the form of stock options granted pursuant to our 1999 stock
incentive plan. Other elements of compensation include medical and life
insurance benefits available to employees generally.
These elements of compensation serve different purposes. Salary and bonus
payments are designed mainly to reward current and past performance, while stock
options are designed to provide strong incentive for superior long-term future
performance and are directly linked to stockholders' interests because the value
of the awards will increase or decrease based upon the future price of our
common stock.
A number of factors are considered in establishing compensation for
executive officers. An executive officer's responsibilities, as well as the
services rendered by the executive officer to us are considered in determining
compensation levels. Bonuses are likely to vary widely from year to year, as
they are based on objective measures, such as the number of lots sold and
related cash flow, and on subjective criteria, such as the rate of progress made
on obtaining entitlements for development on land owned by the Company and on
the degree of success in finding and purchasing new development opportunities.
Neither base compensation nor bonus compensation is based on any specific
formula. The Board of Directors believes that awarding stock options provides a
strong incentive for long-term future performance. By means of our 1999 stock
incentive plan, we seek to retain the services of persons now holding key
positions and to secure the services of persons capable of filling such
positions. From time to time, stock options may be awarded which, under the
terms of our 1999 stock incentive plan, permit the executive officer or other
employee to purchase shares of our common stock at not less than the fair market
value of the shares of common sock at the date of grant. The extent to which the
employee realizes any gain is, therefore, directly related to increases in the
price of our common stock and, therefore, stockholder value, during the period
of the option. In certain circumstances, options having an exercise price below
the fair market value of our common stock on the date of grant may be issued
(although none have been granted to date). Options granted to executive officers
generally become exercisable at the rate of 20% per year, commencing one year
after the date of grant. The number of stock options awarded to an executive
officer is generally not based on any specific formula, but rather on a
subjective assessment of the executive's performance and the Company's
performance. In addition, under the terms of our 1999 stock incentive plan, each
director is automatically granted options to purchase 1,000 shares on the date
on which the annual meeting of our stockholders is held each year. In July 2005,
pursuant to this automatic grant, Paul J. Borden was granted options to purchase
1,000 shares of our common stock with an exercise price of $65.19 per share,
which become exercisable at the rate of 25% per year, commencing one year after
the date of grant.
The 1999 stock incentive plan was amended in 2004 following approval of the
Board and stockholders to increase to 300,000 the number of shares of common
stock that would be available under the plan for issuance pursuant to stock
options, restricted stock or stock appreciation rights.
- -------------
* The disclosure contained in this section of this Proxy Statement is not
incorporated by reference into any of our filings under the Securities Act of
1933 or the Securities Exchange Act of 1934 that incorporate filings or portions
thereof (including this Proxy Statement or the "Executive Compensation" section
of this proxy statement) without specific reference to the incorporation of this
section of this proxy statement.
14
Under the provisions of Section 162(m) of the Internal Revenue Code of
1986, we would not be able to deduct compensation to our executive officers
whose compensation is required to be disclosed in our proxy statement for such
year in excess of $1 million per year unless such compensation was within the
definition of "performance-based compensation" or meets certain other criteria.
To qualify as "performance-based compensation," in addition to certain other
requirements, compensation generally must be based on achieving certain
pre-established objective performance criteria. The Board of Directors believes
that compensation at such levels is not likely to be a recurring event and that
it is in our interest to retain maximum flexibility in our compensation programs
to enable us to appropriately reward, retain and attract the executive talent
necessary to the Company's success. The Board recognizes that in appropriate
circumstances compensation that is not deductible under Section 162(m) may be
warranted and could be paid in the Board of Directors' discretion, especially in
light of the availability to the Company of tax loss carryforwards.
Compensation of the Chief Executive Officer. Mr. Borden's annual salary was
$220,635 in 2003 and was increased to $225,200 in 2004 and to $231,790 in 2005.
Mr. Borden's 2005 performance bonus was $606,954. Of this amount, $600,000 was
determined by the Compensation Committee based on its subjective evaluation of
Mr. Borden's contribution over the past years to the Company; the balance of the
bonus was a year-end bonus based on a percentage of salary, paid to all
employees.
Mr. Borden maintains his primary residence in New Jersey. We reimburse him
for costs of maintaining a temporary residence in California, airfare to and
from his primary residence and transportation costs including the personal use
of a Company car while in California. Such reimbursements are considered to be
taxable compensation reportable by Mr. Borden under federal income tax rules,
which results in a net cash cost to him, even though he does not gain any
incremental financial benefit from these reimbursements. As a result, beginning
in 2005, the Board of Directors (without Mr. Borden's participation) agreed to
pay Mr. Borden additional compensation which, after taxes, will provide him with
sufficient funds to pay the taxes due on the expense amounts reimbursed by us.
In 2005 we paid Mr. Borden for the 2004 additional taxable compensation reported
by Mr. Borden for reimbursements made with respect to prior periods. These
payments aggregated $260,415 during 2005.
The foregoing report is submitted by Joseph S. Steinberg, the sole member
of the Compensation Committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors, and persons who beneficially own more than 10 percent of
a registered class of our 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 us and written
representations from our executive officers, directors and greater than 10%
beneficial stockholders, we believe that during the year ended December 31,
2005, all persons subject to the reporting requirements of Section 16(a) filed
the required reports on a timely basis.
15
STOCKHOLDER RETURN PERFORMANCE GRAPH**
Set forth below is a graph comparing the cumulative total stockholder
return on common stock against cumulative total return of the Standard & Poor's
500 Stock Index and the Standard & Poor's Homebuilding-500 Index for the period
commencing December 31, 2000 to December 31, 2005. Index data was furnished by
Standard & Poor's Compustat Services, Inc.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF THE COMPANY, S&P 500 INDEX
AND S&P HOMEBUILDING INDEX
The following graph assumes that $100 was invested on December 31, 2000 in
each of our common stock, the S&P 500 Index and the S&P Homebuilding Index and
that all dividends were reinvested.
[GRAPHIC OMITTED AND REPLACED WITH THE CHART BELOW]
INDEXED RETURNS
YEARS ENDING
BASE
PERIOD
COMPANY / INDEX DEC00 DEC01 DEC02 DEC03 DEC04 DEC05
- --------------------------------------------------------------------------------
HOMEFED CORP $ 100 $ 111.76 $ 170.59 $ 341.18 $ 588.35 $ 794.78
S&P 500 100 88.11 68.64 88.33 97.94 102.75
S&P 500 HOMEBUILDING 100 127.70 126.98 251.17 335.67 424.91
- ---------------
** The disclosure contained in this section of the Proxy Statement is not
incorporated by reference into any of our prior filings under the Securities Act
of 1933 or the Securities Exchange Act of 1934 that incorporated future filings
or portions thereof (including this proxy statement or the "Executive
Compensation" section of this proxy statement).
16
AUDIT COMMITTEE REPORT
The following is the report of our Audit Committee with respect to our
audited financial statements for the fiscal year ended December 31, 2005.
REVIEW WITH MANAGEMENT
The Audit Committee reviewed and discussed our audited financial statements
with management.
REVIEW AND DISCUSSIONS WITH INDEPENDENT AUDITORS
The Audit Committee discussed the Company's audited financial statements
with management, which has primary responsibility for the financial statements.
PricewaterhouseCoopers LLP, our independent auditors, is responsible for
expressing an opinion on the conformity of the Company's audited financial
statements with accounting principles generally accepted in the United States of
America. The Audit Committee discussed with PricewaterhouseCoopers LLP the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees) regarding the auditor's judgments about
the quality of the Company's accounting principles as applied in its financial
reporting.
The Audit Committee also received the written disclosures and the letter
from PricewaterhouseCoopers LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and has
discussed with PricewaterhouseCoopers LLP their independence. The Audit
Committee also concluded that PricewaterhouseCoopers LLP's provision of audit
and non-audit services to the Company and its subsidiaries, as described in this
Proxy Statement, is compatible with PricewaterhouseCoopers LLP's independence.
CONCLUSION
Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that its audited consolidated
financial statements be included in our Annual Report on Form 10-K for the year
ended December 31, 2005 for filing with the Securities and Exchange Commission
and selected Pricewaterhouse Coopers LLP as the independent auditor for 2006.
SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Timothy M. Considine
Michael A. Lobatz
The information contained in the foregoing report shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates it by
reference in a filing.
INDEPENDENT ACCOUNTING FIRM FEES
The Audit Committee has adopted policies and procedures for pre-approving
all audit and non-audit work performed by the Company's independent auditor,
PricewaterhouseCoopers LLP. Specifically, the Audit Committee has pre-approved
certain specific categories of work and an annual amount for each category. For
additional services or services in an amount above the annual amount that has
been pre-approved, additional authorization from the Audit Committee is
required. The Audit Committee has delegated to the Committee chair the ability
to pre-approve both general pre-approvals (where no specific, case-by-case
approval is necessary) and specific pre-approvals. Any pre-approval decisions
made by the Committee chair under this delegated authority will be reported to
the full Audit Committee. All requests for services to be provided by
17
PricewaterhouseCoopers LLP that do not require specific approval by the Audit
Committee must be submitted to the Controller of the Company, who determines
that such services are in fact within the scope of those services that have been
pre-approved by the Audit Committee. The Controller reports to the Audit
Committee periodically.
Audit fees of our independent registered public accounting firm,
PricewaterhouseCoopers LLP, incurred by us were $222,000 and $275,800 for the
fiscal years ended December 31, 2005 and 2004, respectively. These fees include
fees paid to PricewaterhouseCoopers LLP for professional services for the audit
of the Company's consolidated financial statements included in the Company's
Form 10-K, the review of financial statements included in the Company's Form
10-Qs, services that are normally provided in connection with statutory and
regulatory filings or engagements, assurance and related services that are
reasonably related to the performance of the audit or review of our financial
statements including compliance with regulatory matters, the Sarbanes-Oxley Act,
and consulting with respect to technical accounting and disclosure rules. All
such services were approved by the Audit Committee.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders ratify the
selection of PricewaterhouseCoopers LLP, certified public auditors, as
independent auditors to audit our accounts and those of our subsidiaries for
2006. The Audit Committee approved the selection of PricewaterhouseCoopers LLP
as our independent auditors for 2006. PricewaterhouseCoopers LLP are currently
our independent auditors.
The Board of Directors recommends a vote FOR this proposal.
ANNUAL REPORT AND COMPANY INFORMATION
A copy of our 2005 Annual Report to stockholders on Form 10-K, as amended,
is being furnished to stockholders concurrently herewith. Exhibits to the Annual
Report will be furnished to stockholders upon payment of photocopying charges.
PROPOSALS BY STOCKHOLDERS
Proposals that stockholders wish to include in our proxy statement and form
of proxy for presentation at our 2007 annual meeting of stockholders must be
received by us at 1903 Wright Place, Suite 220, Carlsbad, California 92008,
Attention of Corinne A. Maki, Secretary, no later than February 23, 2007.
Any stockholder proposal must be in accordance with the rules and
regulations of the Securities and Exchange Commission. With respect to proposals
submitted by a stockholder other than for inclusion in our 2007 proxy statement
and related form of proxy, timely notice of any stockholder proposal must be
received by us in accordance with our by-laws and our rules and regulations no
later than February 23, 2007. Any proxies solicited by the Board of Directors
for the 2007 annual meeting may confer discretionary authority to vote on any
proposals notice of which is not timely received.
IT IS IMPORTANT THAT YOUR PROXY BE RETURNED PROMPTLY, WHETHER BY MAIL, BY
THE INTERNET OR BY TELEPHONE. THE PROXY MAY BE REVOKED AT ANY TIME BY YOU BEFORE
IT IS EXERCISED. IF YOU ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW ANY PROXY
(INCLUDING AN INTERNET OR TELEPHONIC PROXY) AND VOTE YOUR OWN SHARES.
By Order of the Board of Directors.
CORINNE A. MAKI
Secretary
18
ANNUAL MEETING OF STOCKHOLDERS OF
HOMEFED CORPORATION
JULY 18, 2006
PROXY VOTING INSTRUCTIONS
MAIL
- ----
-----------------------------------
DATE, SIGN AND MAIL YOUR PROXY | COMPANY NUMBER | |
CARD IN THE ENVELOPE PROVIDED -----------------------------------
AS SOON AS POSSIBLE. -OR- | ACCOUNT NUMBER | |
-----------------------------------
TELEPHONE | CONTROL NUMBER | |
- --------- -----------------------------------
CALL TOLL-FREE 1-800-PROXIES
(1-800-776-9437) FROM ANY
TOUCH-TONE TELEPHONE AND FOLLOW
THE INSTRUCTIONS. HAVE YOUR
PROXY CARD AVAILABLE WHEN YOU
CALL. -OR-
INTERNET
- --------
ACCESS www.voteproxy.com AND
FOLLOW THE ON-SCREEN INSTRUCTIONS.
HAVE YOUR PROXY CARD AVAILABLE
WHEN YOU ACCESS THE WEB PAGE.
-------------------------------------------------------------------------
| YOU MAY ENTER YOUR VOTING INSTRUCTIONS AT 1-800-PROXIES OR |
| WWW.VOTEPROXY.COM UP UNTIL 11:59 PM EASTERN TIME THE DAY BEFORE THE |
| MEETING DATE. |
-------------------------------------------------------------------------
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED
IF YOU ARE NOT VOTING VIA TELEPHONE OR THE INTERNET
- --------------------------------------------------------------------------------
PROXY
HOMEFED CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
STOCKHOLDERS, JULY 18, 2006 AT 1:30 P.M.
The undersigned stockholder of HomeFed Corporation (the "Company") hereby
appoints Paul J. Borden, Erin Ruhe and Corinne A. Maki and each of them, as
attorneys and proxies, each with power of substitution and revocation, to
represent the undersigned at the Annual Meeting of Stockholders of HomeFed
Corporation to be held at Grand Pacific Palisades Resort and Hotel, 5805 Armada
Drive, Carlsbad, California 92008, the Terrace Room on July 18, 2006 at 1:30
p.m., and at any adjournment or postponement thereof, with authority to vote all
shares held or owned by the undersigned in accordance with the directions
indicated herein.
Receipt of the Notice of Annual Meeting of Stockholders dated June 22,
2006, the Proxy Statement furnished herewith, and a copy of the Annual Report to
Stockholders for the year ended December 31, 2005 is hereby acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEMS 1 AND 2 AND PURSUANT TO ITEM 3.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE.
ANNUAL MEETING OF STOCKHOLDERS OF
HOMEFED CORPORATION
JULY 18, 2006
[Graphic] PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED [Graphic]
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED
BELOW AND FOR ITEM 2 AND PURSUANT TO ITEM 3.
PLEASE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------
ITEM 1. Election of Directors. NOMINEES
[_] FOR ALL NOMINEES [Graphic] PATRICK D. BIENVENUE
[_] WITHHOLD AUTHORITY FOR ALL [Graphic] PAUL J. BORDEN
NOMINEES
[Graphic] TIMOTHY M. CONSIDINE
[_] FOR ALL EXCEPT
(SEE INSTRUCTIONS BELOW) [Graphic] IAN M. CUMMING
[Graphic] MICHAEL A. LOBATZ
[Graphic] JOSEPH S. STEINBERG
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as show here: [Graphic]
ITEM 2. Ratification of the selection of PricewaterhouseCoopers LLP as
independent auditors of the Company for 2006.
FOR AGAINST ABSTAIN
[_] [_] [_]
ITEM 3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly be presented to the Meeting or any adjournment of the
Meeting.
- ------------------------------------------------------------------
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be substituted via
this method. [_]
(Signature
(Signature)______________ if held jointly)______________ Dated:_________ , 2006
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS PROXY. WHEN
SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN. WHEN SIGNING AS EXECUTOR,
ADMINISTRATOR, ATTORNEY, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
THE SIGNER IS A CORPORATION, PLEASE SIGN THE FULL CORPORATE NAME BY DULY
AUTHORIZED OFFICER, GIVING FULL TITLE AS SUCH. IF SIGNER IS A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.