-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FA9Z8rjYk+lnGlVEc7LaM13DIDZlbcBPgAo2Avg5KyBtXVFwrWnAukO1Gart4DMi m+pHe5bKtcq9u3C3Vey5bQ== 0000909518-04-000385.txt : 20040427 0000909518-04-000385.hdr.sgml : 20040427 20040427172356 ACCESSION NUMBER: 0000909518-04-000385 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMEFED CORP CENTRAL INDEX KEY: 0000833795 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330304982 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10153 FILM NUMBER: 04757817 BUSINESS ADDRESS: STREET 1: 1903 WRIGHT PLACE STREET 2: STE 220 CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 7609188200 MAIL ADDRESS: STREET 1: 1903 WRIGHT PLACE STREET 2: STE 220 CITY: CARLSBAD STATE: CA ZIP: 92008 10-K/A 1 jd4-27_10ka1.txt ================================================================================ 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, 2003 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 X No --- --- 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, 2003, the aggregate market value of the Registrant's Common Stock held by non-affiliates was approximately $111,152,000 on that date. As of March 1, 2004, there were 8,256,679 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, 2003. PART III Item 10. Directors and Executive Officers of the Registrant. - ------- -------------------------------------------------- As of March 22, 2004, the directors and executive officers of the Company, their ages, the positions held by them and the periods during which they have served in such positions are as follows: Name Age Position with the Company Office Held Since - ---- --- ------------------------- ----------------- Paul J. Borden 55 Director and President May 1998 Curt R. Noland 47 Vice President October 1998 Erin N. Ruhe 38 Vice President, Treasurer and Vice President since April 2000; Controller Treasurer since March 2004; Controller since January 1999 Patrick D. Bienvenue 49 Director August 1998 Timothy M. Considine 63 Director January 1992 Ian M. Cumming 63 Director May 1999 Michael A. Lobatz 55 Director February 1995 Joseph S. Steinberg 60 Chairman of the Board and Director Chairman of the Board since December 1999; Director since August 1998
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") from August 1988 through October 2000, responsible for overseeing many of Leucadia's real estate investments. Curt R. Noland. Mr. Noland has served as Vice President of the Company since October 1998. He spent the last 24 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. 2 Erin N. Ruhe. Ms. Ruhe has served as Vice President of the Company since April 2000, Treasurer since March 2004 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. 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 is employed 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 has served as a director of the Company 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. ("FINOVA"), a middle market lender in which Leucadia has an indirect 25% equity interest, since August 2001. In addition, he has served as a director since June 1995 of MK Gold Company ("MK Gold"), an international mining company that is a subsidiary of Leucadia. Mr. Cumming has also been a director of Skywest, Inc., a Utah-based regional air carrier, since June 1986. 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 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 is beneficially owned by Leucadia, since June 1988, FINOVA since August 2001 and White Mountains Insurance Group, Ltd., a publicly traded insurance holding company in which Leucadia has a less than 5% equity interest, since June 2001. AUDIT COMMITTEE The Board of Directors has a standing Audit Committee. The Board of Directors has adopted a charter for the Audit Committee, which is filed as an exhibit to this Report. The Audit Committee consists of Messrs. Considine (Chairman) and Lobatz. Applying the Nasdaq criteria, the Board has determined that each of Messrs. Considine and Lobatz is independent. In addition, the Board has determined that Mr. Considine is qualified as an audit committee financial expert within the meaning of regulations of the Securities and Exchange Commission. 3 CODE OF PRACTICE The Company has a Code of Business Practice, which is applicable to all directors, officers and employees of the Company, and includes a Code of Practice applicable to the Company's 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. The Company intends 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. 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, 2003, all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis. 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 2003, 2002 and 2001 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.
Long-term Annual Compensation Compensation ---------------------------------------------------- ---------------- Name and Principal Options All Other Position(s) Year Salary Bonus (# of shares) Compensation (2) ----------------- ---- ------ ----- ------------- ---------------- Paul J. Borden, 2003 $ 232,635(1) $ 1,006,619 100 $ 8,000 President 2002 226,189(1) 231,426 100 8,000 2001 222,000(1) 330,265 100 6,800 Curt R. Noland, 2003 $ 113,620 $ 603,409 -- $ 8,000 Vice President 2002 110,318 153,309 -- 7,545 2001 108,159 78,245 -- 6,800 Erin N. Ruhe, 2003 $ 78,805 $ 302,364 -- $ 6,247 Vice President and 2002 76,493 77,295 -- 5,552 Controller 2001 75,009 62,250 -- 5,490 R. Randy Goodson, 2003 $ 187,278 $ 305,618 -- $ 8,000 Vice President (3) 2002 183,611 80,508 -- 8,000 2001 180,000 80,400 -- -- Simon G. Malk, 2003 $ 113,308 $ 303,399 -- $ 7,668 Vice President (3) 2002 110,005 78,300 -- 7,532 2001 90,000 77,700 -- 3,708
(1) Included for each of 2003, 2002 and 2001 are $12,000 in directors fees Mr. Borden received from the Company. (2) Represents the contribution made by the Company to a defined contribution 401(k) plan on behalf of the named person. (3) In March 2004, Messrs. Goodson and Malk resigned from the Company. OPTION GRANTS IN 2003 The following table shows all grants of options to the named executive officers of the Company in 2003. 4
Potential Realizable Value At Assumed Annual Rates of Stock Price Appreciation for Individual Grants Option Term (2) ----------------------------------------------------------------- ---------------------------------- Securities % of Total Underlying Options Options Granted to Exercise Granted Employees Price Name (# of shares) in 2003 ($/share) Expiration Date 5%($) 10%($) - ---- ------------- ------------- --------- ---------------- ----- ------ Paul J. Borden 100 (1) 100.0% $27.40 7/9/08 $757 $1,673
- -------------- (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 9, 2003. 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. 5 AGGREGATE OPTION EXERCISES IN 2003 AND OPTION VALUES AT YEAR END 2003 The following table provides information as to options exercised by each of the named executives in 2003 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, 2003, $29.00.
Number of Value of Unexercised Unexercised In-the- Options at Money Options at December 31, 2003 December 31, 2003 ----------------- ----------------- Number of shares Underlying Value Exercisable/ Exercisable/ Name Options Exercised Realized Unexercisable Unexercisable - ---- ----------------- -------- ------------- ------------- Paul J. Borden -- -- 3,150/2,250 $ 67,623/$46,158 Curt R. Noland -- -- 1,500/1,000 $ 32,250/$21,500 Erin N. Ruhe -- -- 1,500/1,000 $ 32,250/$21,500 R. Randy Goodson (a) -- -- 65,975/650 $ 1,509,463/$13,975 Simon G. Malk (a) -- -- 35,525/350 $ 812,788/$7,525
- -------------------- (a) In March 2004, Messrs. Goodson and Malk resigned. Prior to their resignations, Mr. Goodson exercised 66,300 options and 325 options were forfeited and Mr. Malk exercised 35,700 options and 175 options were forfeited. COMPENSATION OF DIRECTORS In 2003, each Director received a retainer of $12,000 for serving on the Board of Directors. In addition, Mr. Considine was paid $16,000 for serving as Chairman of the Audit Committee, and Mr. Lobatz was paid $12,000 for serving on the Audit Committee. 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. 6 Item 12. Security Ownership of Certain Beneficial Owners and Management. - ------- -------------------------------------------------------------- Set forth below is certain information as of March 22, 2004 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.
Number of Shares Name and Address and Nature of Percent of Beneficial Owner Beneficial Ownership of Class - ------------------- -------------------- -------- Leucadia National Corporation ................................... 2,474,226 (a) 30.0% Patrick D. Bienvenue............................................. 1,150 (b) * Paul J. Borden................................................... 5,728 (c) * Timothy M. Considine............................................. 1,650 (d) * Ian M. Cumming................................................... 773,309 (e)(f) 9.4% Michael A. Lobatz................................................ 1,150 (b) * Curt R. Noland................................................... 4,500 (g) * Erin N. Ruhe..................................................... 4,500 (g) * Joseph S. Steinberg.............................................. 719,977 (f)(h) 8.7% The Steinberg Children Trusts.................................... 89,325 (i) 1.1% Cumming Foundation............................................... 7,329 (j) * The Joseph S. and Diane H. Steinberg 1992 Charitable Trust....................................... 2,381 (k) * All Directors and executive officers as a group (8 persons)........................................ 1,511,964 (l) 18.3%
- ------------------- * Less than .1%. (a) The business address of this beneficial owner is 315 Park Avenue South, New York, New York 10010. (b) Includes 150 common shares that may be acquired upon the exercise of currently exercisable stock options. (c) Includes 4,150 common 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 1,150 shares held by The Considine Family 1981 Trust, of which Mr. Considine and his wife are trustees. (e) Includes (i) 9,530 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)150 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 his beneficial ownership of Leucadia common shares. See Item 13, "Certain Relationships and Related Transactions." 7 (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 2,000 common shares that may be acquired upon the exercise of currently exercisable stock options. (h) Includes (i) 3,676 shares of Common Stock (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 and (ii) 150 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 Item 13, "Certain Relationships and Related Transactions." (i) Mr. Steinberg disclaims beneficial ownership of the Common Stock held by the Steinberg Children Trusts. (j) Mr. Cumming is a trustee and President of the foundation and disclaims beneficial ownership of the Common Stock held by the foundation. (k) Mr. Steinberg and his wife are trustees of the trust. Mr. Steinberg disclaims beneficial ownership of the Common Stock held by the trust. (l) Includes 8,750 shares of Common Stock that may be acquired upon the exercise of currently exercisable stock options. As of March 22, 2004, Cede & Co. held of record 4,634,583 shares of Common Stock (approximately 56.1% of the total Common Stock outstanding). Cede & Co. held such shares as a nominee for broker-dealer members of The Depository Trust Company, which conducts clearing and settlement operations for securities transactions involving its members. 8 EQUITY COMPENSATION PLAN INFORMATION The following table summarizes information regarding the Company's equity compensation plans as of December 31, 2003. 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 120,250 $ 6.45 199,400 plans approved by security holders Equity compensation plans not approved by security holders - - - --------------- ----------- ----------- Total 120,250 $ 6.45 199,400 =============== =========== ===========
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 March 22, 2004, 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 8.7% and 9.4%, 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 March 22, 2004, 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 12.9% and 13.2%, 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. Set forth below is information concerning agreements or relationships between the Company and Leucadia and its subsidiaries. ACQUISITION OF CDS HOLDING CORPORATION In October 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 2,474,226 shares of the Company's common stock, representing approximately 30% of the Company's outstanding shares. Since August 1998, the Company has been the development manager for this project. The development management agreement provided that the Company would receive development management fees for the field overhead, management and marketing services it 9 provides, based on the revenues of the 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. Should these bonds be drawn upon, the Company would be obligated to reimburse Leucadia for the amount drawn. As of December 31, 2003, the amount of outstanding bonds was approximately $31,700,000. LOAN AGREEMENTS Leucadia funded the Company's bankruptcy plan by purchasing Common Stock and a secured promissory note of the Company. As of December 31, 2003, 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 2003, the Company paid Leucadia $1,588,000 in interest. On March 26, 2004, the Company prepaid the Leucadia note in full. In March 2001, the Company entered into an unsecured $3,000,000 line of credit agreement with Leucadia. Loans outstanding under this line of credit bear interest at 10% per year; in 2003, the Company paid $38,000 in commitment fees and incurred no interest expense. 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 March 22, 2004, no amounts were outstanding under this facility. 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. When Otay Land Company was formed, Leucadia contributed $10,000,000 as a preferred capital interest. In 2003, the Company paid approximately $12,900,000 in redemption of Leucadia's preferred capital interest in Otay Land Company and in full satisfaction of the preferred return related thereto. ADMINISTRATIVE SERVICES AGREEMENT Since emerging from bankruptcy in 1995, administrative services and accounting services have been provided to the Company by Leucadia. Under the current administrative services agreement, which extends through December 31, 2004, 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 Secretary, in addition to various administrative functions. Ms. Maki is an officer of subsidiaries of Leucadia. The cost of services provided by Leucadia during 2003 aggregated $120,000. OFFICE SPACE The Company rents office space at its corporate headquarters and furnishings to Leucadia for a monthly rental equal to Leucadia's pro rata share of the Company's cost for such space and furnishings. In 2003, the rent paid by Leucadia to the Company totaled $72,000. 10 Item 14. Principal Accounting Fees and Services. - ------- -------------------------------------- The Audit Committee has adopted policies and procedures effective May 2003 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 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. The following table sets forth the aggregate fees incurred by us for the following periods relating to our independent accounting firm, PricewaterhouseCoopers LLP: Fiscal Year Ended December 31, --------------------- 2003 2002 ---- ---- Audit Fees............................ $87,500 $76,100 Audit Related Fees.................... 4,000 - ------- ------- $91,500 $76,100 ======= ======= In the table above, in accordance with the SEC's definitions and rules, "audit fees" are 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 and review of financial statements included in the Company's Form 10-Qs, and for services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements; and "audit-related fees" are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and in 2003 consist of compliance with regulatory matters, including the Sarbanes-Oxley Act, and consulting with respect to technical accounting and disclosure rules. All such services were approved by the Audit Committee. Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. - ------- ---------------------------------------------------------------- (a)(1) Financial Statements. Report of Independent Auditors F-1 Consolidated Balance Sheets at December 31, 2003 and 2002 F-2 Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001 F-3 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended December 31, 2003, 2002 and 2001 F-4 Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001 F-5 Notes to Consolidated Financial Statements F-7
11 (a)(2) Financial Statement Schedules. Schedules are omitted because they are not required or are not applicable or the required information is shown in the financial statements or notes thereto. (a)(3) Executive Compensation Plans and Arrangements. 1999 Stock Incentive Plan (filed as Annex A to the Company's Proxy Statement dated November 22, 1999). 2000 Stock Incentive Plan (filed as Annex B to the Company's Proxy Statement dated June 20, 2000). (b) Reports on Form 8-K. None. (c) Exhibits. 3.1 Restated Certificate of Incorporation, as restated July 3, 1995 of the Company (incorporated by reference to Exhibit 3.1 to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 1995). 3.2 By-laws of the Company as amended through December 14, 1999 (incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (the "1999 10-K")). 3.3 Amendment to Amended and Restated Bylaws of the Company, dated July 10, 2002 (incorporated by reference to Exhibit 3.3 to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2002). 3.4 Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2002 (incorporated by reference to Exhibit 3.4 to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2002). 3.5 Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2003 (previously filed). 3.6 Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2003 (previously filed). 10.1 Security Agreement and Stock Pledge by and between HomeFed Corporation and Leucadia Financial Corporation dated as of July 3, 1995 (previously filed). 10.2 Development Management Agreement between the Company and Provence Hills Development Company, LLC, dated as of August 14, 1998 (incorporated by reference to Exhibit 10.3 to the Company's current report on Form 8-K dated August 14, 1998). 10.3 Amended and Restated Limited Liability Company Agreement of Otay Land Company, LLC, dated as of September 20, 1999, between the Company and Leucadia National Corporation (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-2 (No. 333-79901)). 12 10.4 Administrative Services Agreement, dated as of March 1, 2000, between Leucadia Financial Corporation ("LFC"), the Company, HomeFed Resources Corporation and HomeFed Communities, Inc. (incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2000). 10.5 Amendment No. 1 dated as of November 1, 2000 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the "2000 10-K")). 10.6 Amendment No. 2 dated as of February 28, 2001 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.22 to the Company's 2000 10-K). 10.7 Amendment No. 3 dated as of December 31, 2001 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2001). 10.8 Third Amendment to Option and Purchase Agreement and Escrow Instructions, dated as of June 21, 2002, by and between Otay Land Company, LLC and Lakes Kean Argovitz Resorts - California, LLC (incorporated by reference to Exhibit 10.27 to the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2002). 10.9 Stock Purchase Agreement dated as of October 21, 2002, by and between HomeFed Corporation and Leucadia National Corporation (incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K dated October 22, 2002). 10.10 Registration Rights Agreement dated as of October 21, 2002, by and between HomeFed Corporation and Leucadia National Corporation (incorporated by reference to Exhibit 10.2 to the Company's current report on Form 8-K dated October 22, 2002). 10.11 Second Amendment and Restated Loan Agreement dated as of October 9, 2002, by and between HomeFed Corporation and Leucadia Financial Corporation (incorporated by reference to Exhibit 10.3 to the Company's current report on Form 8-K dated October 22, 2002). 10.12 Second Amendment and Restated Variable Rate Secured Note dated as of October 9, 2002 (incorporated by reference to Exhibit 10.4 to the Company's current report on Form 8-K dated October 22, 2002). 10.13 Amended and Restated Line Letter dated as of October 9, 2002, by and between HomeFed Corporation and Leucadia Financial Corporation (incorporated by reference to Exhibit 10.5 to the Company's current report on Form 8-K dated October 22, 2002). 10.14 Amended and Restated Term Note dated as of October 9, 2002 (incorporated by reference to Exhibit 10.6 to the Company's current report on Form 8-K dated October 22, 2002). 10.15 Amendment No. 4 dated as of May 28, 2002 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 (the "2002 10-K/A")). 10.16 Amendment No. 5 dated as of November 15, 2002 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.35 of the 2002 10-K/A). 10.17 Amendment dated as of October 21, 2002 to the Development Management Agreement dated as of August 14, 1998 (incorporated by reference to Exhibit 10.36 of the 2002 10-K/A). 13 10.18 Contribution Agreement between the Company and San Elijo Hills Development Company, LLC, dated as of October 21, 2002 (incorporated by reference to Exhibit 10.37 of the 2002 10-K/A). 10.19 Agreement and Guaranty, dated as of October 1, 2002, between Leucadia National Corporation and CDS Holding Corporation (incorporated by reference to Exhibit 10.38 of the 2002 10-K/A). 10.20 Obligation Agreement, dated as of October 1, 2002, between Leucadia National Corporation and San Elijo Ranch, Inc. (incorporated by reference to Exhibit 10.39 of the 2002 10-K/A). 10.21 Tax Allocation Agreement between the Company and its subsidiaries dated as of November 1, 2002 (previously filed). 10.22 Amendment No. 1 to the First Amended and Restated Development Agreement and Owner Participation Agreement between the City of San Marcos, the San Marcos Redevelopment Agency and the San Elijo Hills Development Company, LLC dated as of February 11, 2004 (previously filed). 10.23 Amendment No. 6 dated as of December 31, 2003 to the Administrative Services Agreement dated as of March 1, 2000 (previously filed). 21 Subsidiaries of the Company (previously filed). 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (previously furnished). 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (previously furnished). 99.1 The Company's Audit Committee Charter. 14 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, Treasurer and Controller Dated: April 23, 2004 15 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 23, 2004 /s/ Paul J. Borden ---------------------------- Paul J. Borden President 16 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 23, 2004 /s/ Erin N. Ruhe ------------------------------------ Erin N. Ruhe Vice President, Treasurer and Controller 17 EX-99 2 jd4-23ex_99.txt 99.1 EXHIBIT 99.1 HOMEFED CORPORATION AUDIT COMMITTEE CHARTER This Charter is intended as a component of the flexible framework within which the Board of Directors of the Company (the "Board"), assisted by its committees, directs the affairs of the Company. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company's Certificate of Incorporation and Bylaws, it is not intended to establish by its own force any legally binding obligations. PURPOSE The primary purpose of the Audit Committee (the "Committee") is to assist the Board in overseeing (i) the conduct and integrity of financial reports and other financial information provided by the Company to governmental or regulatory bodies, the public or other users, (ii) the Company's systems of internal accounting and financial and disclosure controls, (iii) compensation of the Company's independent auditor, its independence, its conduct of the annual audit and its engagement for any other services, and (v) the preparation of the audit committee report required by SEC rules to be included in the Company's annual proxy statement. In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention or deemed appropriate by it. The Committee shall have full access to all books, records, facilities and personnel of the Company and shall have the power to retain outside counsel, independent auditors and other experts and advisers. The Board and the Committee are in place to represent the Company's stockholders; accordingly, the independent auditor is ultimately accountable to the Board and the Committee. The Committee's job is one of oversight. The Company's management is responsible for preparing the Company's financial statements and the independent auditors are responsible for auditing those financial statements. The Committee recognizes that financial management and the independent auditors have more time, knowledge and detailed information regarding the Company than do Committee members. Accordingly, in carrying out its oversight responsibilities, the Committee will not provide any expert or special assurance as to the Company's financial statements or any professional certification as to the independent auditor's work. The Committee shall review the adequacy of this Charter on an annual basis. MEMBERSHIP The Committee shall be comprised of not less than two members of the Board. KEY RESPONSIBILITIES The following functions shall be the common recurring activities of the Committee in carrying out its oversight function. These functions are set forth as a guide with the understanding that the Committee may perform any other duties deemed necessary or appropriate by the Committee or the Board or as are imposed by law, accounting standards or similar requirements. o The Committee shall review and discuss with management and the independent auditor the Company's financial statements, including, prior to public release, annual audited financial statements to be included in the Company's Annual Report on Form 10-K (or the Annual Report to Stockholders if distributed prior to the filing of Form 10-K), and interim financial statements to be included in the Company's quarterly reports, to be filed with the Securities and Exchange Commission (the "SEC") (including (a) any certification regarding the financial statements or the Company's internal accounting and financial controls and procedures and disclosure controls or procedures filed with SEC by the Company's senior executive and financial officers; and (b) the matters required to be discussed with the independent auditor by Statement of Auditing Standards ("SAS") No. 61, as such statement may be amended from time to time, including, without limitation, the amendments contained in SAS No. 90, and by SAS 100). o The Committee shall review and discuss with management and the independent auditor (i) all critical accounting policies and practices used by the Company; (ii) any material alternative accounting treatments of financial information within GAAP that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the accounting firm; and (iii) material written communications between the independent auditor and the management, such as any management letter or schedule of unadjusted differences. o The Committee shall prepare a report to be included in the Company's annual proxy statement stating whether or not the Committee: (i) has reviewed and discussed the audited financial statements with management; (ii) has discussed with the independent auditor the matters required to be discussed by SAS No. 61 and 90; (iii) has received the written disclosures and the letter from the independent auditor required by Independence Standards Board Standard No. 1, as may be modified and supplemented, and has discussed with it its independence; and (iv) based on the review and discussions referred to above, the members of the Committee recommended to the Board that the audited financial statements be included in the Company's Annual Report on Form 10-K for filing with the SEC. o The Committee shall discuss with management and the independent auditor significant issues regarding accounting principles and policies, as well as the quality and adequacy of the Company's internal controls. o The Committee, subject to any action that may be taken by the full Board, shall have the ultimate authority and responsibility to select (or nominate for shareholder approval), evaluate and, where appropriate, replace the independent auditor. o The Committee shall: o approve the fees to be paid to the independent auditor; o review and pre-approve any audit and permitted non-audit services (including the fees and terms thereof) provided by the Company's independent auditor (with pre-approvals disclosed as required in the Company's periodic public filings); o request from the independent auditor annually, and review, a formal written statement delineating all relationships between the independent auditor and the Company consistent with Independence Standards Board Standard Number 1 (as modified or supplemented); o discuss with the independent auditor any such disclosed relationships and their impact on the independent auditor's independence, and recommend that the Board take appropriate action in response to the independent auditor's report to satisfy itself of the auditor's independence; and o evaluate, and assure the regular rotation of, the lead audit partner of the independent auditor as required by law. 3 -----END PRIVACY-ENHANCED MESSAGE-----