AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 2007
REGISTRATION NO. 333 -
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEUCADIA NATIONAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
NEW YORK 6331 13-2615557
(Primary State or Other (I.R.S. Employer (I.R.S. Employer
Jurisdiction of Standard Industrial Identification No.)
Incorporation or Classification Code
Organization) Number)
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315 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10010
(212) 460-1900
(Name, address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
JOSEPH A. ORLANDO
LEUCADIA NATIONAL CORPORATION
315 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10010
(212) 460-1900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
ANDREA BERNSTEIN, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE
SECURITIES TO THE PUBLIC:
As soon as practicable after the effective date of this registration statement.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE CHART
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH AMOUNT TO OFFERING AGGREGATE
CLASS OF SECURITIES BE PRICE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
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7-1/8% Senior Notes $500,000,000 100% $500,000,000 $15,350
due 2017
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(1)Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(f)(2) under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL OR OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 15, 2007
PROSPECTUS
LEUCADIA NATIONAL CORPORATION
[GRAPHIC OMITTED]
$500,000,000
OFFER TO EXCHANGE ALL OUTSTANDING 7-1/8% SENIOR NOTES DUE 2017
FOR AN EQUAL AMOUNT OF 7-1/8% SENIOR NOTES DUE 2017
REGISTERED UNDER THE SECURITIES ACT OF 1933
MATERIAL TERMS OF THE EXCHANGE OFFER
o Expires at 5:00 p.m., New York City time, on , 2007 unless
extended.
o The only conditions to completing the exchange offer are that the
exchange offer not violate applicable law or applicable interpretations
of the staff of the Securities and Exchange Commission and that no
injunction, order or decree of any court or governmental agency which
would prohibit, prevent or otherwise materially impair our ability to
proceed with the exchange offer shall be in effect.
o We will exchange all outstanding notes issued on March 6, 2007 that are
validly tendered and not validly withdrawn.
o Tenders of old notes in the exchange offer may be withdrawn at any time
prior to the expiration of the exchange offer.
o The terms of the registered notes to be issued in the exchange offer are
substantially identical to the old notes, except for certain transfer
restrictions, registration rights and liquidated damages provisions
relating to the old notes that will not apply to the registered notes.
o We will not receive any cash proceeds from the exchange offer.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 2007
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this prospectus. Because this is a summary, it
may not contain all of the information that may be important to you. Before
making an investment decision, you should carefully read this entire prospectus.
Unless otherwise expressly stated herein or the context otherwise requires, all
references in this prospectus to "Leucadia," "we," "us," "our," "our company" or
"the company" refer to Leucadia National Corporation, a New York corporation and
its direct and indirect subsidiaries and all references to "notes" refer to the
old notes and the registered notes offered hereby.
THE EXCHANGE OFFER
On March 6, 2007, we issued in a private placement, $500 million aggregate
principal amount of our 7-1/8% Senior Notes due 2017, which we refer to herein
as the "old notes." We refer to this private placement as the "original note
offering." We entered into a registration rights agreement with the initial
purchaser of the old notes in which we agreed to deliver to you this prospectus.
You are entitled to exchange your old notes in the exchange offer for the
registered notes offered hereby with substantially identical terms, which we
refer to herein as the "registered notes". Unless you are a broker-dealer or
unable to participate in the exchange offer, we believe that the notes to be
issued in the exchange offer, which we refer to as the "notes" may be resold by
you without compliance with the registration and prospectus delivery
requirements of the Securities Act of 1933. You should read the discussions
under the headings "The Exchange Offer" and "Description of the Registered
Notes" for further information regarding the registered notes.
OUR COMPANY
We are a diversified holding company engaged in a variety of businesses,
including manufacturing, telecommunications, real estate activities, medical
product development, winery operations, residual banking and lending activities
that are in run-off. We also own equity interests in operating businesses and
investment partnerships which are accounted for under the equity method of
accounting, including gaming entertainment, a broker-dealer engaged in the
trading of high yield and special situation securities, land based contract oil
and gas drilling, real estate activities and development of a copper mine in
Spain. We concentrate on return on investment and cash flow to maximize
long-term shareholder value. Additionally, we continuously evaluate the
retention and disposition of our existing operations and investigate possible
acquisitions of new businesses. In identifying possible acquisitions, we tend to
seek assets and companies that are out of favor or troubled and, as a result,
are selling substantially below the values we believe to be present.
Our manufacturing operations are conducted through Idaho Timber, LLC and
Conwed Plastics, LLC. Idaho Timber primarily remanufactures dimension lumber and
remanufactures, packages and/or produces other specialized wood products. Conwed
Plastics manufactures and markets lightweight plastic netting used for a variety
of purposes including, among other things, building and construction, erosion
control, agriculture, packaging, carpet padding, filtration and consumer
products.
Our telecommunications operation is conducted through STi Prepaid, LLC, a
seller of international prepaid phone cards and other telecommunication services
in the U.S.
Our domestic real estate operations include a mixture of commercial
properties, residential land development projects and other unimproved land, all
in various stages of development and all available for sale.
Our medical product development operation is conducted through our
majority-owned, development stage subsidiary, Sangart, Inc., or Sangart. Sangart
is developing a product called Hemospan(R) which is a form of cell-free
hemoglobin that is designed for intravenous administration to treat a variety of
medical conditions, including use as an alternative to red blood cell
transfusions.
Our winery operations consist of Pine Ridge Winery in Napa Valley,
California and Archery Summit in the Willamette Valley of Oregon. These wineries
primarily produce and sell wines in the luxury segment of the premium table wine
market.
Our gaming entertainment operations are conducted through our controlling
interest in Premier Entertainment Biloxi, LLC, or Premier, which is the owner of
the Hard Rock Hotel & Casino Biloxi, or Hard Rock Biloxi, located in Biloxi,
Mississippi. The Hard Rock Biloxi was severely damaged by Hurricane Katrina and
is currently being rebuilt. In September 2006, Premier and its subsidiary filed
voluntary petitions for reorganization under chapter 11 of title 11 of the
United States Bankruptcy Code.
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Our land based contract oil and gas drilling investment is conducted
through our equity interest in Goober Drilling, LLC, or Goober. Based in
Stillwater, Oklahoma, Goober provides drilling services to exploration and
production companies.
Our investment in the development of a copper mine consists of our 30%
interest in Cobre Las Cruces, S.A., a former subsidiary that holds the
exploration and mineral rights to the Las Cruces copper deposit in the Pyrite
Belt of Spain. We also hold an 11.6% interest in Inmet Mining Corporation, a
Canadian-based global mining company, that produces copper, zinc and gold, that
owns the remaining 70% of Cobre Las Cruces.
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Our principal executive offices are located at 315 Park Avenue South, New
York, New York 10010. Our telephone number is (212) 460-1900.
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SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The exchange offer relates to the exchange of up to $500 million aggregate
principal amount of old notes for an equal aggregate principal amount of
registered notes. On March 6, 2007, we issued and sold $500 million aggregate
principal amount of old notes in a private placement.
The form and terms of the registered notes are substantially the same as
the form and terms of the old notes, except that the registered notes have been
registered under the Securities Act of 1933 and will not bear legends
restricting their transfer. We issued the old notes under an indenture which
grants you a number of rights. The registered notes will be issued under that
indenture and you will have the same rights under the indenture as the holders
of the old notes. See "Description of the Registered Notes."
Registration Rights Agreement...... You are entitled under the registration
rights agreement to exchange your old notes
for registered notes with substantially
identical terms. The exchange offer is
intended to satisfy these rights. After the
exchange offer is complete, except as set
forth in the next paragraph, you will no
longer be entitled to any exchange or
registration rights with respect to your old
notes. The registration rights agreement
requires us to file a shelf registration
statement for a continuous offering in
accordance with Rule 415 under the
Securities Act for your benefit if you would
not receive freely tradeable registered
notes in the exchange offer or you are
ineligible to participate in the exchange
offer and indicate that you wish to have
your old notes registered under the
Securities Act. See "The Exchange Offer -
Procedures for Tendering."
The Exchange Offer................. We are offering to exchange $2,000 principal
amount of 7-1/8% Senior Notes due 2017,
which have been registered under the
Securities Act, for each $2,000 principal
amount of our unregistered 7-1/8% Senior
Notes due 2017. In order to be exchanged, an
old note must be properly tendered and
accepted. All old notes that are validly
tendered and not validly withdrawn will be
exchanged.
As of this date, there are $500 million
aggregate principal amount of old notes
outstanding. We will issue the registered
notes promptly after the expiration of the
exchange offer.
Resales of the Registered Notes.... We believe that registered notes to be
issued in the exchange offer may be offered
for resale, resold and otherwise transferred
by you without compliance with the
registration and prospectus delivery
provisions of the Securities Act if you meet
the following conditions:
o the registered notes are acquired by you
in the ordinary course of your business;
o you are not engaging in and do not
intend to engage in a distribution of
the registered notes;
o you do not have an arrangement or
understanding with any person to
participate in the distribution of the
registered notes;
o if you are a broker-dealer, you acquired
the old notes which you seek to exchange
for registered notes as a result of
market making or other trading
activities and not directly from the
issuer and you comply with the
prospectus delivery requirements of the
Securities Act; and
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o you are not an affiliate of ours, as
that term is defined in Rule 405 under
the Securities Act.
Our belief is based on interpretations by
the staff of the Commission, as set forth on
no-action letters issued to third parties
unrelated to us. The staff has not
considered this exchange offer in the
context of a no-action letter, and we cannot
assure you that the staff would make a
similar determination with respect to this
exchange offer.
If you do not meet the above conditions, you
may incur liability under the Securities Act
if you transfer any registered note without
delivering a prospectus meeting the
requirements of the Securities Act. We do
not assume or indemnify you against that
liability.
Each broker-dealer that is issued registered
notes in the exchange offer for its own
account in exchange for old notes which were
acquired by that broker-dealer as a result
of market-making activities or other trading
activities must agree to deliver a
prospectus meeting the requirements of the
Securities Act in connection with any
resales of the registered notes. A
broker-dealer may use this prospectus for an
offer to resell or to otherwise transfer
these registered notes.
Expiration Date.................... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2007,
unless we decide to extend the exchange
offer. We do not currently intend to extend
the exchange offer, although we reserve the
right to do so. If we determine to extend
the exchange offer, we do not intend to
extend it beyond , 2007.
Conditions to the Exchange Offer... The only conditions to completing the
exchange offer are that the exchange offer
not violate applicable law or any applicable
interpretation of the staff of the
Commission and that no injunction, order or
decree has been issued which would prohibit,
prevent or materially impair our ability to
proceed with the exchange offer. See "The
Exchange Offer - Conditions."
Procedures for Tendering Old The old notes were issued as global
Notes Held in the Form of securities in fully registered form without
Book-Entry Interests............ coupons. Beneficial interests in the old
notes which are held by direct or indirect
participants in The Depository Trust
Company, or DTC, are shown on, and transfers
of the notes can be made only through,
records maintained in book-entry form by DTC
with respect to its participants.
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If you are a holder of an old note held in
the form of a book-entry interest and you
wish to tender your old note for exchange
pursuant to the exchange offer, you must
transmit to The Bank of New York, as
exchange agent, on or prior to the
expiration of the exchange offer either: a
written or facsimile copy of a properly
completed and executed letter of transmittal
and all other required documents to the
address set forth on the cover page of the
letter of transmittal; or a
computer-generated message transmitted by
means of DTC's Automated Tender Offer
Program ("ATOP") system and forming a part
of a confirmation of book-entry transfer in
which you acknowledge and agree to be bound
by the terms of the letter of transmittal.
The exchange agent must also receive on or
prior to the expiration of the exchange
offer either: a timely confirmation of
book-entry transfer of your old notes into
the exchange agent's account at DTC, in
accordance with the procedure for book-entry
transfers described in this prospectus under
the heading "The Exchange Offer - Book-Entry
Transfer;" or the documents necessary for
compliance with the guaranteed delivery
procedures described below.
A letter of transmittal accompanies this
prospectus. By executing the letter of
transmittal or delivering a
computer-generated message through DTC's
Automated Tender Offer Program system, you
will represent to us that, among other
things:
o the registered notes to be acquired by
you in the exchange offer are being
acquired in the ordinary course of your
business;
o you are not engaging in and do not
intend to engage in a distribution of
the registered notes;
o you do not have an arrangement or
understanding with any person to
participate in the distribution of the
registered notes; and
o you are not our affiliate.
Procedures for Tendering If you are a holder of book-entry interests
Certificated Old Notes........... in the old notes, you are entitled to
receive, in limited circumstances, in
exchange for your book-entry interests,
certificated notes which are in equal
principal amounts to your book-entry
interests. See "Description of the
Registered Notes - Form of Registered
Notes." No certificated notes are issued and
outstanding as of the date of this
prospectus. If you acquire certificated old
notes prior to the expiration of the
exchange offer, you must tender your
certificated old notes in accordance with
the procedures described in this prospectus
under the heading "The Exchange Offer -
Procedures for Tendering - Certificated Old
Notes."
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Special Procedures for Beneficial If you are the beneficial owner of old notes
Owners........................... and they are registered in the name of a
broker, dealer, commercial bank, trust
company or other nominee, and you wish to
tender your old notes, you should promptly
contact the person in whose name your old
notes are registered and instruct that
person to tender on your behalf. If you wish
to tender on your own behalf, you must,
prior to completing and executing the letter
of transmittal and delivering your old
notes, either make appropriate arrangements
to register ownership of the old notes in
your name or obtain a properly completed
bond power from the person in whose name
your old notes are registered. The transfer
of registered ownership may take
considerable time. See "The Exchange Offer -
Procedures for Tendering - Procedures
Applicable to All Holders."
Guaranteed Delivery Procedures..... If you wish to tender your old notes and:
o they are not immediately available;
o time will not permit your old notes or
other required documents to reach the
exchange agent on or prior to the
expiration of the exchange offer; or
o you cannot complete the procedure for
book-entry transfer on a timely basis,
you may tender your old notes in accordance
with the guaranteed delivery procedures set
forth in "The Exchange Offer - Procedures
for Tendering - Guaranteed Delivery
Procedures."
Acceptance of Old Notes and Except under the circumstances described
Delivery of Registered Notes..... above under "Conditions to the Exchange
Offer," we will accept for exchange any and
all old notes which are properly tendered in
the exchange offer at or prior to 5:00 p.m.,
New York City time, on the expiration date.
The registered notes to be issued to you in
the exchange offer will be delivered
promptly following the expiration date. See
"The Exchange Offer - Terms of the Exchange
Offer."
Withdrawal......................... You may withdraw the tender of your old
notes at any time prior to 5:00 p.m., New
York City time, on the expiration date. We
will return to you any old notes not
accepted for exchange for any reason without
expense to you as promptly as we can after
the expiration or termination of the
exchange offer.
Exchange Agent..................... The Bank of New York is serving as the
exchange agent in connection with the
exchange offer.
Consequences of Failure to If you do not participate in the exchange
Exchange......................... offer, upon completion of the exchange
offer, the liquidity of the market for your
old notes could be adversely affected. See
"The Exchange Offer - Consequences of
Failure to Exchange."
Federal Income Tax Consequences.... The exchange of old notes for registered
notes will not be a taxable event for
federal income tax purposes. See "Federal
Income Tax Considerations."
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SUMMARY OF THE TERMS OF THE REGISTERED NOTES
Issuer............................. Leucadia National Corporation.
Notes Offered...................... $500,000,000 aggregate principal amount
7-1/8% Senior Notes due 2017.
Maturity Date...................... March 15, 2017.
Interest Rate...................... We will pay interest on the notes at an
annual rate of 7-1/8%.
Interest Payment Dates............. We will make interest payments on the notes
semiannually, on each March 15 and September
15, beginning on September 15, 2007.
Ranking............................ The notes will be our senior unsecured
obligations and will rank equally in right
of payment with all of our existing and
future senior unsecured indebtedness and
senior in right to all of our existing and
future subordinated indebtedness. The notes
will be effectively subordinated to all
existing and future indebtedness of our
subsidiaries. Had the notes been issued as
of March 31, 2007, they would have been
effectively subordinated to approximately
$714.3 million of indebtedness and other
liabilities of our subsidiaries, including
trade payables but excluding intercompany
obligations.
Optional Redemption................ We may redeem some or all of the notes at
any time on or after March 15, 2012 at the
redemption price set forth under
"Description of the Notes--Optional
Redemption."
Mandatory Redemption............... The notes are not subject to sinking fund
payments.
Change of Control Offer............ If we experience a change of control, each
holder of notes will have the right to sell
to us all or a portion of such holder's
notes at 101% of their principal amount,
plus accrued but unpaid interest, if any, to
the date of repurchase. A change of control
will occur at the time Ian M. Cumming, our
chairman of the board, and Joseph S.
Steinberg, a director and our president,
cease to beneficially own, in the aggregate,
a specified percentage of our outstanding
common shares, coupled in various
circumstances with the notes being rated
below investment grade. See "Description of
Notes--Repurchase at Option of Holders Upon
a Change of Control."
Restrictive Covenants.............. The indenture governing the notes will
contain covenants that, among other things,
limit:
o ability to incur additional
indebtedness;
o our ability to incur liens;
o our ability to enter into sale-leaseback
transactions;
o our ability to enter into transactions
with affiliates;
o the ability of certain of our
subsidiaries to incur debt; and
o our ability to consummate certain
mergers.
These covenants are subject to a number of
important exceptions described below in
"Description of Notes."
Exchange Offer; Registration In connection with the offering of the old
Rights........................... notes, we agreed to give you the opportunity
to exchange the old notes for exchange notes
with substantially identical terms but that
may be publicly traded.
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In addition, we agreed, in some
circumstances, to file a "shelf registration
statement" that would allow some or all of
the old notes to be offered to the public.
If we do not comply with the foregoing
obligations under the registration rights
agreement, we will be required to pay
liquidated damages to holders of old notes.
We are making this exchange offer to satisfy
our obligations under the registration
rights agreement.
Use of Proceeds.................... We will not receive any cash proceeds from
this Exchange Offer.
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FORWARD-LOOKING STATEMENTS
Some of the statements contained in or incorporated by reference in this
prospectus contain forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. These statements may relate, but are not limited,
to projections of revenues, income or loss, capital expenditures, plans for
growth and future operations, competition and regulation, as well as assumptions
relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, many of which cannot be predicted or quantified. When used in
this prospectus, the words "estimates," "expects," "anticipates," "believes,",
"plans,", "intends" and variations of these words and similar expressions are
intended to identify forward-looking statements that involve risks and
uncertainties. Future events and actual results could differ materially from
those set forth in, contemplated by or underlying the forward-looking
statements.
The factors that could cause actual results to differ materially from those
suggested by any of these statements include, but are not limited to, those
discussed or identified from time to time in our public filings, including
without limitation our Annual Report on Form 10-K for our fiscal year ended
December 31, 2006, as amended, and our Quarterly Report on Form 10-Q for our
quarter ended March 31, 2007, such as:
o risks associated with future acquisitions and investments;
o dependence on key management personnel;
o a worsening of general economic and market conditions or increases in
prevailing interest rate levels or a continued weakening of the U.S.
Dollar against the Euro;
o declines in U.S. commercial and residential real estate markets;
o increased competition in the international and domestic plastics
market and volatility of raw material prices;
o availability of key raw materials;
o changes in foreign and domestic laws, regulations and taxes;
o adverse legal and regulatory developments that may affect our
particular businesses;
o changes in mortgage interest rate levels or changes in consumer
lending practices;
o risks associated with the operation of a new business without a proven
track record;
o ability to obtain, maintain and defend patent protection for our
products and technologies, preserve trade secrets and operate without
infringing the intellectual property rights of others;
o increased competition in the luxury segment of the premium table wine
market;
o ability to obtain sufficient or cost effective telecommunications
termination capacity from high quality carriers to particular
destinations;
o reliance on independent distributors to generate telecommunications
revenue;
o increased competition and changes in pricing environments;
o increased default rates and decreased value of assets pledged to us;
o adverse economic, political or environmental developments where we
have mining interests (Spain and Australia) that could delay or
preclude the issuance of permits, result in increased development
costs or increased financing costs, or any other developments that
result in a decrease in mineral prices;
o changes in the composition of our assets and liabilities through
acquisitions and dispositions;
o weather related conditions and significant natural disasters,
including hurricanes, tornadoes, windstorms, earthquakes and
hailstorms that may affect our operations or investments;
o ability to insure certain risks economically;
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o ability to generate sufficient taxable income to fully realize our
deferred tax asset; and
o success in obtaining approval for Premier Entertainment Biloxi, LLC's
plan of reorganization, obtaining the necessary funds to rebuild the
Hard Rock Hotel & Casino Biloxi or, if obtained, complete the
reconstruction on time and on budget.
You should not place undue reliance on these forward-looking statements,
which are applicable only as of the date of this prospectus. We undertake no
obligation to revise or update these forward-looking statements to reflect
events or circumstances that arise after the date of this prospectus or to
reflect the occurrence of unanticipated events.
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INCORPORATION BY REFERENCE
The Commission allows us to "incorporate by reference" information that we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. This prospectus and the information that
we file later with the Commission may update and supersede the information we
incorporate by reference. We incorporate by reference the documents listed below
and any future filings made with the Commission under Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 by us until the exchange offer
is complete:
o our Annual Report on Form 10-K for the fiscal year ended December 31,
2006 filed on February 28, 2007, as amended by Amendment No. 1 on Form
10-K/A filed on March 23, 2007;
o our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007
filed on May 9, 2007;
o our Current Reports on Form 8-K filed on May 18, 2007 and June 6, 2007
(as amended by our Current Report on Form 8-K/A filed on June 15,
2007); and
o all documents that we file with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until all
registered notes have been sold.
You may also request a copy of these filings, at no cost, by writing or
telephoning us at the following:
Leucadia National Corporation
315 Park Avenue South
New York, New York 10010
Attention: Corporate Secretary
Telephone: (212) 460-1900
In order to obtain timely delivery, holders must request the information no
later than five business days before the expiration date of the exchange offer.
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RISK FACTORS
You should carefully consider the risks described below, as well as those
risk factors incorporated by reference in this prospectus under the captions
"Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2006, as amended, and our Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 2007, before making a decision to invest in
the notes. The risks and uncertainties described below are not the only ones
facing us. Additional risks and uncertainties not presently known to us, or that
we currently deem immaterial, could negatively impact our results of operations
or financial condition in the future. If any of such risks actually occur, our
business and results of operations and our ability to service our outstanding
indebtedness, including the notes, could be materially affected. In that case,
you could lose all or part of your investment in, and the expected return on,
the notes.
RISKS RELATED TO THE REGISTERED NOTES AND EXCHANGE OFFER
THE LEVEL OF OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND
THEREFORE MAKE IT MORE DIFFICULT FOR US TO FULFILL OUR OBLIGATIONS UNDER THE
REGISTERED NOTES.
At March 31, 2007, we had total indebtedness of $1,666.2 million, including
$975.5 million of senior debt, $350 million senior subordinated debt, $98.2
million of subordinated debt and $242.5 million of subsidiary debt.
Our substantial indebtedness level and interest expense could have
important consequences to our company and you, including:
o limiting our ability to borrow additional amounts for working capital,
capital expenditures, debt service requirements, funding of future
acquisitions, or other general corporate purposes;
o limiting our ability to use operating cash flow in other areas of our
business because we must dedicate a substantial portion of these funds
to service the debt;
o increasing our vulnerability to general adverse economic and industry
conditions;
o placing us at a competitive disadvantage as compared to our
competitors that have less leverage;
o limiting our ability to capitalize on business opportunities and to
react to competitive pressures and adverse changes in government
regulation; and
o limiting our ability or increasing the costs to refinance
indebtedness.
Although we have substantial indebtedness outstanding, the indenture
governing the registered notes will permit us to incur additional indebtedness
in the future. If we or our subsidiaries incur additional debt, the risks we now
face as a result of our leverage could intensify.
REPAYMENT OF OUR DEBT, INCLUDING THE NOTES, IS DEPENDENT ON CASH DISTRIBUTED TO
US BY OUR SUBSIDIARIES.
Leucadia National Corporation is a holding company with no material assets
other than the equity interests of its subsidiaries. Our subsidiaries conduct
substantially all of our operations and own substantially all of our assets.
Therefore, repayment of our indebtedness, including the notes, is dependent on
our subsidiaries' current liquidity position and their generation of cash flow
in the future, and their ability to make such cash available to us, by dividend,
debt repayment or otherwise. As of March 31, 2007, our subsidiaries had
aggregate cash and cash equivalents and investments in marketable securities of
approximately $2,500 million, all of which could be distributed to us. However,
should conditions change in the future, our subsidiaries may not be able to, or
be permitted to, make distributions to enable us to make payments in respect of
our indebtedness, including the notes. Each of our subsidiaries is a distinct
legal entity and, under certain circumstances, legal and contractual
restrictions may limit our ability to obtain cash from our subsidiaries. While
the indenture governing the notes limits the ability of our subsidiaries to
incur consensual restrictions on their ability to pay dividends or make other
intercompany payments to us, these limitations are subject to certain
qualifications and exceptions. In the event that we do not receive distributions
from our subsidiaries, we may be unable to make required principal and interest
payments on our indebtedness, including the notes.
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YOUR RIGHT TO RECEIVE PAYMENTS ON THE REGISTERED NOTES IS EFFECTIVELY JUNIOR TO
ALL EXISTING AND FUTURE INDEBTEDNESS AND OTHER LIABILITIES OF OUR SUBSIDIARIES.
The registered notes will be effectively junior to all existing and future
indebtedness of our subsidiaries. For example, the notes will effectively rank
junior to $714.3 million of indebtedness and other liabilities of our
subsidiaries as of March 31, 2007. Although the indenture contains restrictions
on the ability of certain of our subsidiaries to incur indebtedness, these
restrictions are subject to important limitations and exceptions that permit our
subsidiaries to incur a substantial amount of additional indebtedness.
Accordingly, in the event of a bankruptcy, liquidation or reorganization
affecting us or any of our subsidiaries, your rights to receive payment will be
effectively subordinated to the creditors of those subsidiaries.
WE MAY BE UNABLE TO REPAY OR REPURCHASE THE NOTES UPON A CHANGE OF CONTROL.
If we experience a change of control, as that term is defined in
"Description of The Registered Notes," we may be required to make an offer to
repurchase all of your notes prior to maturity. We cannot assure you that we
will have sufficient funds or be able to arrange for additional financing to
repurchase notes tendered to us following a change of control.
THERE IS NO PUBLIC MARKET FOR THE REGISTERED NOTES AND WE DO NOT KNOW IF A
MARKET WILL EVER DEVELOP OR, IF A MARKET DOES DEVELOP, WHETHER IT WILL BE
SUSTAINED.
The registered notes are a new issue of securities and there is no existing
trading market for the notes. As a result, we cannot assure you that a liquid
market will develop for the registered notes, that you will be able to sell your
registered notes at a particular time or that the prices that you receive when
you sell the registered notes will be favorable. If a liquid market is
established, various factors could have a material adverse effect on the trading
of the registered notes, including fluctuations in prevailing interest rates. We
do not intend to apply for listing or quotation of the registered notes on any
securities exchange or stock market.
Historically, the market for non-investment grade debt has been subject to
substantial volatility. We cannot assure you that the market for the registered
notes will be free from similar volatility.
CHANGES IN OUR CREDIT RATINGS OR THE FINANCIAL AND CREDIT MARKETS COULD
ADVERSELY AFFECT THE MARKET PRICES OF THE REGISTERED NOTES.
The future market prices of the registered notes will be affected by a
number of factors, including:
o our ratings with major credit rating agencies;
o the prevailing interest rates being paid by companies similar to us;
and
o the overall condition of the financial and credit markets.
The condition of the financial and credit markets and prevailing interest
rates have fluctuated in the past and are likely to fluctuate in the future.
These fluctuations could have an adverse effect on the prices of the registered
notes. In addition, credit rating agencies continually revise their ratings for
companies that they follow, including us. We cannot assure you that credit
rating agencies will continue to rate the registered notes or that they will
maintain their ratings on the registered notes. A negative change in our rating
could have an adverse effect on the market prices of the registered notes.
YOU MAY SUFFER ADVERSE CONSEQUENCES IF YOU FAIL TO EXCHANGE YOUR ORIGINAL NOTES.
If you do not exchange your original notes for registered notes in the
exchange offer, you will continue to be subject to the restrictions on transfer
of your original notes described in the legend on your original notes. The
restrictions on transfer of your original notes arise because we issued the
original notes under exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, you may only offer or sell the original notes if they are
registered under the Securities Act and applicable state securities laws, or
offered and sold under an exemption from these requirements. Except as required
by the registration rights agreement, we do not intend to register the original
notes under the Securities Act. The tender of original notes under the exchange
offer will reduce the principal amount of the currently outstanding original
notes. Due to the corresponding reduction in liquidity, this may have an adverse
effect upon, and increase the volatility of, the market price of any currently
original notes that you continue to hold following completion of the exchange
offer. See "The Exchange Offer--Consequences of Failure to Exchange."
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BROKER-DEALERS MAY BECOME SUBJECT TO THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT AND ANY PROFIT ON THE RESALE OF THE
REGISTERED NOTES MAY BE DEEMED TO BE UNDERWRITING COMPENSATION UNDER THE
SECURITIES ACT.
Any broker-dealer that acquires registered notes in the exchange offer for
its own account in exchange for original notes which it acquired through
market-making or other trading activities must acknowledge that it will comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction by that broker-dealer. Any profit on
the resale of the registered notes and any commission or concessions received by
a broker-dealer may be deemed to be underwriting compensation under the
Securities Act.
14
THE EXCHANGE OFFER
PURPOSE AND EFFECT
We issued the old notes on March 6, 2007 in a private placement to a
limited number of qualified institutional buyers, to persons outside the United
States in compliance with Regulation S of the Securities Act and accredited
investors, each as defined under the Securities Act. In connection with this
issuance, we entered into the indenture and the registration rights agreement.
These agreements require that we file a registration statement under the
Securities Act with respect to the registered notes to be issued in the exchange
offer and, upon the effectiveness of the registration statement, offer to you
the opportunity to exchange your old notes for a like principal amount of
registered notes. These registered notes will be issued without a restrictive
legend and, except as set forth below, may be reoffered and resold by you
without registration under the Securities Act. After we complete the exchange
offer, our obligations with respect to the registration of the old notes and the
exchange of registered notes therefor will terminate, except as provided in the
last paragraph of this section. A copy of the indenture relating to the notes
and the registration rights agreement have been filed as exhibits to the
registration statement of which this prospectus is a part. As a result of the
filing and the effectiveness of this registration statement, assuming we
complete the exchange offer within 45 days of the date that the registration
statement is declared effective, we will not be required to pay any liquidated
damages on the old notes.
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties unrelated to us, if you are not our
"affiliate" within the meaning of Rule 405 under the Securities Act or a
broker-dealer referred to in the next paragraph, we believe that registered
notes to be issued to you in the exchange offer may be offered for resale,
resold and otherwise transferred by you, without compliance with the
registration and prospectus delivery provisions of the Securities Act. This
interpretation, however, is based on your representation to us that:
o the registered notes to be issued to you in the exchange offer are
acquired in the ordinary course of your business;
o you are not engaging in and do not intend to engage in a distribution
of the registered notes to be issued to you in the exchange offer; and
o you have no arrangement or understanding with any person to
participate in the distribution of the registered notes to be issued
to you in the exchange offer.
If you tender your old notes in the exchange offer for the purpose of
participating in a distribution of the registered notes to be issued to you in
the exchange offer, you cannot rely on this interpretation by the staff of the
Commission. Under those circumstances, you must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction. Each broker-dealer that receives registered notes
in the exchange offer for its own account in exchange for old notes that were
acquired by the broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of those
registered notes. See "Plan of Distribution."
If you will not receive freely tradeable registered notes in the exchange
offer or are not eligible to participate in the exchange offer, you can elect,
by indicating on the letter of transmittal and providing additional necessary
information, to have your old notes registered in a "shelf" registration
statement on an appropriate form pursuant to Rule 415 under the Securities Act.
If we are obligated to file a shelf registration statement, we will be required
to keep the shelf registration statement effective for a period of 180 days from
the date the shelf registration statement is declared effective by the
Commission or a shorter period that will terminate when all of the old notes
covered by the shelf registration statement have been sold pursuant to the shelf
registration statement. Other than as set forth in this paragraph, you will not
have the right to require us to register your old notes under the Securities
Act. See " - Procedures for Tendering" below.
CONSEQUENCES OF FAILURE TO EXCHANGE
After we complete the exchange offer, if you have not tendered your old
notes, you will not have any further registration rights, except as set forth
above. Your old notes will continue to be subject to restrictions on transfer.
Therefore, the liquidity of the market for your old notes could be adversely
affected upon completion of the exchange offer if you do not participate in the
exchange offer.
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TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all old notes validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the
expiration date. We will issue $2,000 principal amount of registered notes in
exchange for each $2,000 principal amount of old notes accepted in the exchange
offer. You may tender some or all of your old notes pursuant to the exchange
offer. However, old notes may be tendered only in integral multiples of $2,000
principal amount.
The form and terms of the registered notes are substantially the same as
the form and terms of the old notes, except that the registered notes to be
issued in the exchange offer have been registered under the Securities Act and
will not bear legends restricting their transfer. The registered notes will be
issued pursuant to, and entitled to the benefits of, the indenture.
As of the date of this prospectus, $500 million aggregate principal amount
of old notes were outstanding. This prospectus, together with the letter of
transmittal, is being sent to all registered holders and to others believed to
have beneficial interests in the old notes. You do not have any appraisal or
dissenters' rights in connection with the exchange offer under the Business
Corporation Law of the State of New York or the indenture. We intend to conduct
the exchange offer in accordance with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission promulgated under
the Exchange Act.
We will be deemed to have accepted validly tendered outstanding notes when,
as, and if we have given oral (promptly confirmed in writing) or written notice
of our acceptance to the exchange agent. The exchange agent will act as our
agent for the tendering holders for the purpose of receiving the registered
notes from us. If we do not accept any tendered notes because of an invalid
tender, the occurrence of other events set forth in this prospectus or
otherwise, we will return certificates for any unaccepted old notes, without
expense, to the tendering holder as promptly as practicable after the expiration
date.
You will not be required to pay brokerage commissions or fees or, except as
set forth below under " - Transfer Taxes," transfer taxes with respect to the
exchange of your old notes in the exchange offer. We will pay all charges and
expenses, other than applicable taxes, in connection with the exchange offer.
See " - Fees and Expenses" below.
EXPIRATION DATE; AMENDMENTS
The exchange offer will expire at 5:00 p.m., New York City time, on
, 2007, unless we determine, in our sole discretion, to extend
the exchange offer, in which case, it will expire at the later date and time to
which it is extended. We do not currently intend to extend the exchange offer,
although we reserve the right to do so. If we determine to extend the exchange
offer, we do not intend to extend it beyond , 2007. If we extend the
exchange offer, we will give oral (promptly confirmed in writing) or written
notice of the extension to the exchange agent and give each registered holder
notice by means of a press release or other public announcement of any extension
prior to 9:00 a.m., New York City time, on the next business day after the
scheduled expiration date of the exchange offer.
We also reserve the right, in our sole discretion,
o to delay accepting any old notes or, if any of the conditions set
forth below under " - Conditions" have not been satisfied or waived,
to terminate the exchange offer by giving oral (promptly confirmed in
writing) or written notice of the delay or termination to the exchange
agent, or
o to amend the terms of the exchange offer in any manner, by complying
with Rule 14e-l(d) under the Exchange Act to the extent that rule
applies.
We acknowledge and undertake to comply with the provisions of Rule 14e-l(c)
under the Exchange Act, which requires us to pay the consideration offered, or
return the old notes surrendered for exchange, promptly after the termination or
withdrawal of the exchange offer. We will notify you as promptly as we can of
any extension, termination or amendment.
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PROCEDURES FOR TENDERING
BOOK-ENTRY INTERESTS
The old notes were issued as global securities in fully registered form
without interest coupons. Beneficial interests in the global securities, held by
direct or indirect participants in DTC, are shown on, and transfers of these
interests are effected only through, records maintained in book-entry form by
DTC with respect to its participants.
If you hold your old notes in the form of book-entry interests and you wish
to tender your old notes for exchange pursuant to the exchange offer, you must
transmit to the exchange agent on or prior to the expiration date either:
o a written or facsimile copy of a properly completed and duly executed
letter of transmittal, including all other documents required by the
letter of transmittal, to the exchange agent at the address set forth
on the cover page of the letter of transmittal; or
o a computer-generated message transmitted by means of DTC's Automated
Tender Offer Program system and received by the exchange agent and
forming a part of a confirmation of book-entry transfer, in which you
acknowledge and agree to be bound by the terms of the letter of
transmittal (an "agent's message").
In addition, in order to deliver old notes held in the form of book-entry
interests:
o a timely confirmation of book-entry transfer of the notes into the
exchange agent's account at DTC pursuant to the procedure for
book-entry transfers described below under " - Book-Entry Transfer"
must be received by the exchange agent on or prior to the expiration
date; or
o you must comply with the guaranteed delivery procedures described
below.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
INSTEAD OF DELIVERY BY MAIL, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE. YOU SHOULD NOT
SEND THE LETTER OF TRANSMITTAL OR OLD NOTES TO US. YOU MAY REQUEST YOUR BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY, OR NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
CERTIFICATED OLD NOTES
Only registered holders of certificated old notes may tender those notes in
the exchange offer. If your old notes are certificated notes and you wish to
tender those notes for exchange pursuant to the exchange offer, you must
transmit to the exchange agent on or prior to the expiration date, a written or
facsimile copy of a properly completed and duly executed letter of transmittal,
including all other required documents, to the address set forth below under " -
Exchange Agent." In addition, in order to validly tender your certificated old
notes:
o the certificates representing your old notes must be received by the
exchange agent on or prior to the expiration date; or
o you must comply with the guaranteed delivery procedures described
below.
PROCEDURES APPLICABLE TO ALL HOLDERS
If you tender an old note and you do not withdraw the tender prior to the
expiration date, you will have made an agreement with us in accordance with the
terms and subject to the conditions set forth in this prospectus and in the
letter of transmittal.
If your old notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and you wish to tender your
notes, you should contact the registered holder promptly and instruct the
registered holder to tender on your behalf. If you wish to tender on your own
behalf, you must, prior to completing and executing the letter of transmittal
and delivering your old notes, either make appropriate arrangements to register
ownership of the old notes in your name or obtain a properly completed bond
power from the registered holder. The transfer of registered ownership may take
considerable time.
17
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible institution, including most banks, savings and loan
associations and brokerage houses, that is a medallion signature guarantor, each
an "eligible institution," unless old notes tendered in the exchange offer are
tendered either:
o by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the
letter of transmittal; or
o for the account of an eligible institution; and
o the box entitled "Special Registration Instructions" on the letter of
transmittal has not been completed.
If the letter of transmittal is signed by a person other than you, your old
notes must be endorsed or accompanied by a properly completed bond power and
signed by you as your name appears on those old notes.
If the letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, those
persons should so indicate when signing. Unless we waive this requirement, in
this instance you must submit with the letter of transmittal proper evidence
satisfactory to us of their authority to act on your behalf.
We will determine, in our sole discretion, all questions regarding the
validity, form, eligibility, including time of receipt, acceptance and
withdrawal of tendered old notes. This determination will be final and binding.
We reserve the absolute right to reject any and all old notes not properly
tendered or any old notes our acceptance of which would, in the opinion of our
counsel, be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tender as to particular old notes. Our
interpretation of the terms and conditions of the exchange offer, including the
instructions in the letter of transmittal, will be final and binding on all
parties.
You must cure any defects or irregularities in connection with tenders of
your old notes within the time period we will determine unless we waive that
defect or irregularity. Although we intend to notify you of defects or
irregularities with respect to your tender of old notes, neither we, the
exchange agent nor any other person will incur any liability for failure to give
this notification. Your tender will not be deemed to have been made and your
notes will be returned to you if:
o you improperly tender your old notes; or
o you have not cured any defects or irregularities in your tender; and
o we have not waived those defects, irregularities or improper tender.
The exchange agent will return your notes, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration of the
exchange offer.
In addition, we reserve the right in our sole discretion to:
o purchase or make offers for, or offer registered notes for, any old
notes that remain outstanding subsequent to the expiration of the
exchange offer;
o terminate the exchange offer; and
o to the extent permitted by applicable law, purchase notes in the open
market, in privately negotiated transactions or otherwise.
The terms of any of these purchases or offers could differ from the terms
of the exchange offer.
By tendering, you will represent to us that, among other things:
o the registered notes to be acquired by you in the exchange offer are
being acquired in the ordinary course of your business;
o you are not engaging in and do not intend to engage in a distribution
of the registered notes to be acquired by you in the exchange offer;
o you do not have an arrangement or understanding with any person to
participate in the distribution of the registered notes to be acquired
by you in the exchange offer;
18
o if you are a broker-dealer, you acquired the old notes which you seek
to exchange for registered notes as a result of market making or other
trading activities and not directly from the issuer and you comply
with the prospectus delivery requirements of the Securities Act; and
o you are not our "affiliate," as defined under Rule 405 of the
Securities Act.
In all cases, issuance of registered notes for old notes that are accepted
for exchange in the exchange offer will be made only after timely receipt by the
exchange agent of certificates for your old notes or a timely book-entry
confirmation of your old notes into the exchange agent's account at DTC, a
properly completed and duly executed letter of transmittal, or a
computer-generated message instead of the letter of transmittal, and all other
required documents. If any tendered old notes are not accepted for any reason
set forth in the terms and conditions of the exchange offer or if old notes are
submitted for a greater principal amount than you desire to exchange, the
unaccepted or non-exchanged old notes, or old notes in substitution therefor,
will be returned without expense to you. In addition, in the case of old notes,
tendered by book-entry transfer into the exchange agent's account at DTC
pursuant to the book-entry transfer procedures described below, the
non-exchanged old notes will be credited to your account maintained with DTC, as
promptly as practicable after the expiration or termination of the exchange
offer.
GUARANTEED DELIVERY PROCEDURES
If you desire to tender your old notes and your old notes are not
immediately available or one of the situations described in the second paragraph
under "--Book-Entry Transfer" occurs, you may tender if:
o you tender through an eligible financial institution;
o on or prior to 5:00 p.m., New York City time, on the expiration date,
the exchange agent receives from an eligible institution, a written or
facsimile copy of a properly completed and duly executed notice of
guaranteed delivery, substantially in the form provided by us; and
o the certificates for all certificated old notes, in proper form for
transfer, and a properly completed and duly executed letter of
transmittal or a book-entry confirmation and an agent's message, and
all other documents required by the letter of transmittal, are
received by the exchange agent within three New York Stock Exchange
trading days after the date of execution of the notice of guaranteed
delivery.
The notice of guaranteed delivery may be sent by facsimile transmission,
mail or hand delivery. The notice of guaranteed delivery must set forth:
o your name and address;
o the amount of old notes you are tendering; and
o a statement that your tender is being made by the notice of guaranteed
delivery and that you guarantee that within three New York Stock
Exchange trading days after the execution of the notice of guaranteed
delivery, the eligible institution will deliver the following
documents to the exchange agent:
o the certificates for all certificated old notes being tendered, in
proper form for transfer or a book-entry confirmation of tender;
o a written or facsimile copy of the letter of transmittal, or an
agent's message instead of the letter of transmittal; and
o any other documents required by the letter of transmittal.
BOOK-ENTRY TRANSFER
The exchange agent will establish an account with respect to the book-entry
interests at DTC for purposes of the exchange offer promptly after the date of
this prospectus. You must deliver your book-entry interest by book-entry
transfer to the account maintained by the exchange agent at DTC. Any financial
institution that is a participant in DTC's systems may make book-entry delivery
of book-entry interests by causing DTC to transfer the book-entry interests into
the exchange agent's account at DTC in accordance with DTC's procedures for
transfer.
If one of the following situations occur:
19
o you cannot deliver a book-entry confirmation of book-entry delivery of
your book-entry interests into the exchange agent's account at DTC and
an agent's message; or
o you cannot deliver all other documents required by the letter of
transmittal to the exchange agent prior to the expiration date,
then you must tender your book-entry interests according to the guaranteed
delivery procedures discussed above.
WITHDRAWAL RIGHTS
You may withdraw tenders of your old notes at any time prior to 5:00 p.m.,
New York City time, on the expiration date.
For your withdrawal to be effective, the exchange agent must receive a
written or facsimile transmission notice of withdrawal at its address set forth
below under " - Exchange Agent" prior to 5:00 p.m., New York City time, on the
expiration date.
The notice of withdrawal must:
o state your name;
o identify the specific old notes to be withdrawn, including the
certificate number or numbers and the principal amount of old notes to
be withdrawn;
o be signed by you in the same manner as you signed the letter of
transmittal when you tendered your old notes, including any required
signature guarantees or be accompanied by documents of transfer
sufficient for the exchange agent to register the transfer of the old
notes into your name; and
o specify the name in which the old notes are to be registered, if
different from yours.
We will determine all questions regarding the validity, form and
eligibility, including time of receipt, of withdrawal notices. Our determination
will be final and binding on all parties. Any old notes withdrawn will be deemed
not to have been validly tendered for exchange for purposes of the exchange
offer. Any old notes which have been tendered for exchange but which are not
exchanged for any reason will be returned to you without cost as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer. Properly withdrawn old notes may be retendered by following one of the
procedures described under " - Procedures for Tendering" above at any time on or
prior to 5:00 p.m., New York City time, on the expiration date.
CONDITIONS
Notwithstanding any other provision of the exchange offer and subject to
our obligations under the registration rights agreement, we will not be required
to accept for exchange, or to issue registered notes in exchange for, any old
notes and may terminate or amend the exchange offer, if at any time before the
acceptance of any old notes for exchange any of the following events occur:
o any injunction, order or decree has been issued by any court or any
governmental agency that would prohibit, prevent or otherwise
materially impair our ability to proceed with the exchange offer; or
o the exchange offer violates any applicable law or any applicable
interpretation of the staff of the Commission.
These conditions are for our sole benefit and we may assert them regardless
of the circumstances giving rise to them, subject to applicable law. We also may
waive in whole or in part at any time and from time to time any particular
condition in our sole discretion. If we waive a condition, we may be required in
order to comply with applicable securities laws, to extend the expiration date
of the exchange offer. Our failure at any time to exercise any of the foregoing
rights will not be deemed a waiver of these rights and these rights will be
deemed ongoing rights which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any old notes tendered, and no
registered notes will be issued in exchange for any of those old notes, if at
the time the notes are tendered any stop order is threatened by the Commission
or in effect with respect to the registration statement of which this prospectus
is a part or the qualification of the indenture under the Trust Indenture Act of
1939, as amended.
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The exchange offer is not conditioned on any minimum principal amount of
old notes being tendered for exchange.
EXCHANGE AGENT
We have appointed The Bank of New York as exchange agent for the exchange
offer. Questions, requests for assistance and requests for additional copies of
the prospectus, the letter of transmittal and other related documents should be
directed to the exchange agent addressed as follows:
21
By Hand, Regular, Registered or Certified Mail or Overnight
Courier:
The Bank of New York
Corporate Trust Operations
Reorganization Unit
101 Barclay Street - 7 East
New York, New York 10286
Attn: Mrs. Carolle Montreui
By Facsimile:
212-298-1915, Attn: Mrs. Carolle Montreui
For more information with respect to procedures for tendering your old
notes or confirmation by telephone, please call 212-815-5920. Originals of all
documents sent by facsimile should be sent promptly by hand, by registered or
certified mail, or by overnight delivery service.
FEES AND EXPENSES
We will not pay brokers, dealers, or others soliciting acceptances of the
exchange offer. The principal solicitation is being made by mail. Additional
solicitations, however, may be made in person or by telephone by our officers
and employees.
We will pay the estimated cash expenses to be incurred in connection with
the exchange offer. These are estimated in the aggregate to be approximately
$175,000 which includes fees and expenses of the exchange agent, accounting,
legal, printing and related fees and expenses.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes in connection with a
tender of your old notes for exchange unless you instruct us to register
registered notes in the name of, or request that old notes not tendered or not
accepted in the exchange offer be returned to, a person other than the
registered tendering holder, in which event the registered tendering holder will
be responsible for the payment of any applicable transfer tax.
ACCOUNTING TREATMENT
We will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize the expense of the exchange
offer over the term of the registered notes under accounting principles
generally accepted in the United States of America.
22
USE OF PROCEEDS
The exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any proceeds from the
issuance of the registered notes in the exchange offer. In exchange for each of
the registered notes, we will receive old notes in like principal amount. We
will retire or cancel all of the old notes tendered in the exchange offer.
Accordingly, issuance of the registered notes will not result in any change to
our capitalization.
RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ -------------------------------------
2007 2006 2006 2005 2004 2003 2002(b)
-------- -------- -------- ------ ------- ----- -------
Ratio of earnings to 1.86x 8.89x 3.42x 2.77x 2.02x 1.28x n/a
fixed charges (a)
------------
Notes:
(a) For purposes of computing these ratios, earnings represented consolidated
pre-tax income from continuing operations before cumulative effect of a
change in accounting principles and equity in undistributed earnings or
loss of associated companies, plus "fixed charges." Fixed charges include
all interest expense, the portion of net rental expense representative of
the interest factor and amortization of debt expense. Fixed charges include
amounts related to continuing and discontinued operations.
(b) For the year ended December 31, 2002 "fixed charges" exceeded earnings by
$5.9 million.
23
CAPITALIZATION
The following table sets forth our unaudited consolidated capitalization as
of March 31, 2007.
You should read the table below in conjunction with the information set
forth under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our consolidated financial statements and the related
notes included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2006 and our Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2007, each of which is incorporated by reference into this
prospectus.
AS OF
MARCH 31, 2007
--------------
(DOLLARS
IN
Long-term debt (a): THOUSANDS)
Bank credit facility .......................................... $ --
7-1/8% Senior Notes due 2017 .................................. 500,000
7 3/4% Senior Notes due 2013, less debt discount of $345 ...... 99,655
7% Senior Notes due 2013, net of premium of $877 .............. 375,877
3 3/4% Convertible Senior Subordinated Notes due 2014 ......... 350,000
8.65% Junior Subordinated Deferrable Interest
Debentures due 2027 .......................................... 98,200
Repurchase Agreements, with a weighted average rate
of 5.3% ...................................................... 186,475
Aircraft financing ............................................ 40,806
Capital leases due 2007 through 2015 with a weighted
average interest rate of 11.4% ............................... 11,283
Other due 2007 through 2011 ................................... 3,932
----------
Total long-term debt including current
maturities ............................................... 1,666,228
----------
Shareholders' equity (b):
Common shares, par value $1 per share, authorized
300,000,000 shares; 216,580,237 shares issued and
outstanding, after deducting 56,884,989 shares
held in treasury ............................................. 216,580
Additional paid-in capital .................................... 528,339
Accumulated other comprehensive income ........................ 105,380
Retained earnings ............................................. 3,169,132
----------
Total shareholders' equity ................................. 4,019,431
----------
Total .................................................... $5,685,659
==========
------------
Notes:
(a) For information with respect to the interest rates, priorities and
restrictions relating to outstanding long-term debt, see Note 12 of Notes
to Consolidated Financial Statements contained in our Annual Report on Form
10-K for the fiscal year ended December 31, 2006, as amended.
(b) For information with respect to stock options and contingent obligations,
see Notes 13 and 18 of Notes to Consolidated Financial Statements contained
in our Annual Report on Form 10-K for the fiscal year ended December 31,
2006, as amended.
24
DESCRIPTION OF CERTAIN INDEBTEDNESS AND OTHER OBLIGATIONS
7 3/4% SENIOR NOTES
We currently have outstanding $100 million aggregate principal amount of 7
3/4% Senior Notes due 2013, or the 7 3/4% senior notes. The 7 3/4% senior notes
were issued pursuant to an indenture dated as of August 15, 1993, with U.S. Bank
(formerly, Continental Bank, National Association), as trustee. The 7 3/4%
senior notes are our senior unsecured obligations and rank senior in right of
payment to all of our existing and future subordinated indebtedness and pari
passu in right of payment with all of our existing and future senior
indebtedness, including the notes offered hereby and the 7% Senior Notes due
2013, or the 7% senior notes. The terms of the indenture governing the 7 3/4%
senior notes are substantially identical to the terms of the indenture governing
the notes other than the optional redemption provisions of these notes.
7% SENIOR NOTES DUE 2013
We currently have outstanding $375 million aggregate principal amount of 7%
senior notes, issued pursuant to an indenture dated as of November 5, 2003, with
The Bank of New York (formerly, JPMorgan Chase Bank) as trustee. The 7% senior
notes are our senior unsecured obligations and rank senior in right of payment
to all of our existing and future subordinated indebtedness, and pari passu in
right of payment with all of our existing and future senior indebtedness,
including our outstanding 7 3/4% senior notes and the notes offered hereby. The
terms of the indenture governing the 7% senior notes are substantially identical
to the terms of the indenture governing the notes other than the optional
redemption provisions of these notes.
3 3/4% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2014
We currently have outstanding $350 million aggregate principal amount of 3
3/4% Convertible Senior Subordinated Notes due 2014, or the 3 3/4% convertible
senior subordinated notes. The 3 3/4% convertible senior subordinated notes were
issued pursuant to an indenture dated as of April 29, 2004, with HSBC Bank USA,
as trustee. The 3 3/4% convertible senior subordinated notes are convertible
into our common shares at $22.97 per share at any time before their maturity,
subject to certain restrictions, at a conversion rate of 43.5414 shares per each
$1,000 principal amount of the notes subject to adjustment (an aggregate of
15,239,490 shares). The 3 3/4% convertible senior subordinated notes are our
unsecured senior subordinated obligations and rank pari passu in right of
payment to all of our existing and future subordinated indebtedness and junior
in right of payment with all of our existing and future senior indebtedness,
including the notes offered hereby. The indenture governing the 3 3/4%
convertible senior subordinated notes does not restrict the incurrence of senior
indebtedness or other debt by us or our subsidiaries. In addition, we are not
restricted from paying dividends or issuing or repurchasing 3 3/4% convertible
senior subordinated notes under the indenture. In addition, if we experience a
change of control, we will be required to offer to purchase all of the
outstanding 3 3/4% convertible senior subordinated notes at purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase,
including accrued and unpaid interest, if any, to the date of purchase. Under
the terms of the indenture governing the 3 3/4% convertible senior subordinated
notes, a change of control will occur at the time Ian M. Cumming, our chairman
of the board, and Joseph S. Steinberg, a director and our president, cease to
beneficially own, in the aggregate, a specified percentage of our outstanding
common shares, coupled in various circumstances with the 3 3/4% convertible
senior subordinated notes being rated below investment grade.
8.65% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE 2027
We currently have outstanding $98.2 million principal amount of 8.65%
Junior Subordinated Deferrable Interest Debentures due 2027. These debentures
were issued pursuant to an indenture dated as of January 21, 1997, with The Bank
of New York (formerly, JPMorgan Chase Bank), as trustee. The debentures are
subordinated to all of our existing and future senior indebtedness, including
the notes offered hereby, our outstanding 7% senior notes, the 7 3/4% senior
notes and the 3 3/4% convertible senior subordinated notes.
BANK CREDIT FACILITY
In June 2006, we entered into a new credit agreement with various bank
lenders for a $100 million unsecured credit facility that matures in five years
and bears interest based on the Eurocurrency rate or the prime rate. As of the
date of this prospectus, no amounts were outstanding under this bank credit
facility.
25
AIRCRAFT FINANCING
During 2001, we borrowed $53.1 million secured by our corporate aircraft.
This debt bears interest based on a floating rate, requires monthly payments of
principal and interest and matures in ten years. As of March 31, 2007, $40.8
million was outstanding and the interest rate was 9.3%. We have entered into an
interest rate swap agreement on this financing, which fixed the interest rate at
approximately 5.7%.
CAPITAL LEASES
Capital leases primarily consist of a sale-leaseback transaction related to
certain corporate aircraft originally entered into in May 2003, which was
amended in 2005 to among other matters extend the lease term through 2015.
26
DESCRIPTION OF THE REGISTERED NOTES
The registered notes are to be issued under an indenture dated as of March
6, 2007 (the "Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee"), that the Company entered into in connection with the
issuance of the old notes. The terms of the registered notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
This description of registered notes summarizes certain provisions of the
Indenture and makes use of defined terms in the Indenture. The following summary
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all of the provisions of the Indenture and terms made
a part of the Indenture by reference to the Trust Indenture Act. We urge you to
read the Indenture because it, and not this description, define your rights as a
holder of notes. Copies of the Indenture are available from the Company as
described below under the heading "Where You Can Find More Information."
You can find the definitions of certain terms used in this description of
notes throughout this description of notes. As used in this description of
notes, references to "we," "us" or "the Company" mean Leucadia National
Corporation (and its successors in accordance with the terms of the Indenture)
and not any of its subsidiaries.
GENERAL
The notes bear interest from March 6, 2007 at the rate of 7-1/8% annually,
payable on March 15 and September 15 in each year to the noteholders of record
at the close of business on March 1 and September 1 immediately preceding such
interest payment date, commencing September 15, 2007. The notes will be due on
March 15, 2017, will be issued only in denominations of $2,000 and integral
multiples of $2,000, and will be general unsecured obligations of the Company.
The Indenture authorizes an initial aggregate principal amount of $500,000,000
of the notes plus an unlimited amount of additional notes which may be issued in
the future in accordance with the terms of the Indenture.
RANKING
The notes are senior unsecured obligations of the Company and rank pari
passu with all other unsecured and unsubordinated indebtedness of the Company
and prior in right of payment to all subordinated indebtedness of the Company.
The notes are effectively subordinated to all existing and future indebtedness
of our subsidiaries. Had the notes been issued as of March 31, 2007, they would
have been effectively subordinated to approximately $714.3 million of
indebtedness and other liabilities of our subsidiaries, including trade payables
but excluding intercompany obligations.
The notes rank pari passu with the Company's 7 3/4% Senior Notes due 2013
and 7% Senior Notes due 2013. The notes rank senior to the Company's 3 3/4%
Convertible Senior Subordinated Notes due 2014 and the Company's 8.65% Junior
Subordinated Deferrable Interest Debentures due 2027.
OPTIONAL REDEMPTION
We are not entitled to redeem the notes at our option prior to March 15,
2012.
On and after March 15, 2012, we will be entitled at our option to redeem
all or a portion of the notes upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed in percentages of principal amount
on the redemption date), plus accrued interest to the redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if redeemed during the
12-month period commencing on March 15 of the years set forth below:
PERIOD REDEMPTION PRICE
------------------------------------------------- ----------------
2012............................................. 103.563%
2013............................................. 102.375%
2014............................................. 101.878%
2015 and thereafter.............................. 100.000%
27
SELECTION AND NOTICE OF REDEMPTION
If we are redeeming less than all the notes at any time, the Trustee will
select notes on a pro rata basis, by lot or by such other method as the Trustee
in its sole discretion shall deem to be fair and appropriate.
We will redeem notes of $2,000 or less in whole and not in part. We will
cause notices of redemption to be mailed by first-class mail at least 30 but not
more than 60 days before the redemption date to each Holder to be redeemed at
its registered address.
If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount thereof to
be redeemed. We will issue a new note in a principal amount equal to the
unredeemed portion of the original note in the name of the Holder upon
cancellation of the original note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on notes or portions of them called for redemption.
SINKING FUND
The notes are not subject to sinking fund payments.
CERTAIN COVENANTS
The Indenture contains the following covenants:
Restriction on Incurrence of Indebtedness by the Company and on the
Incurrence of Indebtedness and Issuance of Preferred Stock by Its Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to, create, incur,
assume, or guarantee the payment of any Indebtedness, and shall not permit any
of its Subsidiaries to issue any Preferred Stock, if, at the time of such event
and after giving effect thereto on a pro forma basis, the Company's ratio of
Consolidated Debt to Consolidated Tangible Net Worth, as of the most recent date
for which consolidated financial statements are available and adjusted for the
incurrence of all Indebtedness and the issuance of all Preferred Stock by
Subsidiaries (other than Permitted Indebtedness) since that date, would be
greater than 1.75 to 1. This restriction shall not preclude the incurrence of
Permitted Indebtedness.
"Consolidated Debt" means, on any date, the sum of (i) total Indebtedness
of the Company and its Subsidiaries, at such date, determined in accordance with
GAAP on a consolidated basis, and (ii) the aggregate liquidation preference of
all Preferred Stock of Subsidiaries of the Company, at such date, other than
Preferred Stock to the extent held by the Company and its Subsidiaries;
provided, that Consolidated Debt shall not include Permitted Indebtedness.
"GAAP" means United States generally accepted accounting principles as in
effect on December 31, 1992.
"Indebtedness" of any Person means (i) any liability of such Person (a) for
borrowed money, (b) evidenced by a note, debenture or similar instrument
(including a Purchase Money Obligation or deferred payment obligation) given in
connection with the acquisition of any property or assets (other than inventory
or similar property acquired in the ordinary course of business), including
securities, (c) for the payment of a Capitalized Lease Obligation of such Person
or (d) with respect to the reimbursement of any letter of credit, banker's
acceptance or similar credit transaction (other than trade letters of credit
issued in the ordinary course of business; provided, that the failure to make
prompt reimbursement of any trade letter of credit shall be deemed to be the
incurrence of Indebtedness); and (ii) any guarantee by such Person of any
liability of others described in clause (i) above or any obligation of such
Person with respect to any liability of others described in clause (i) above.
Indebtedness shall not include deposits at the Company's banking and lending
Subsidiaries.
"Permitted Indebtedness" means (i) any Indebtedness of the Company and its
Subsidiaries outstanding on the date of the Indenture, or any refinancing or
replacement thereof; provided, that the aggregate amount of such Indebtedness is
not increased, (ii) Acquired Indebtedness, (iii) Preferred Stock of Subsidiaries
held by the Company or its Subsidiaries (it being understood that the sale of
such Preferred Stock by the Company or such
Subsidiary to any Person other than the Company or a Subsidiary of the
Company or such Subsidiary no longer being a Subsidiary shall be deemed the
issuance of Preferred Stock for purposes of the above test) and (iv)
intercompany Indebtedness.
28
"Acquired Indebtedness" means Indebtedness of a Person either (i) existing
at the time such Person becomes a Subsidiary, (ii) assumed in connection with
the acquisition of assets of such Person or (iii) any refinancing or replacement
by such Person of such Indebtedness; provided, that the aggregate amount of such
Indebtedness then outstanding is not increased. Acquired Indebtedness shall not
include (x) any such Indebtedness created in anticipation of such Person
becoming a Subsidiary (other than a refinancing or replacement of Indebtedness
of such Person, which original Indebtedness was not incurred in anticipation of
such Person becoming a Subsidiary), or (y) any Indebtedness that is recourse to
the Company or any Subsidiary or any of their respective assets, other than to
such Person and its Subsidiaries and their respective assets.
Limitation on Funded Debt of Material Subsidiaries. Without limiting the
preceding covenant, the Company will not permit any Material Subsidiary to (a)
create, incur or assume any Funded Debt other than (i) Funded Debt secured by a
Lien on Principal Property which is permitted under the provision described
below under "Limitations on Liens," (ii) Funded Debt owed to the Company or any
Subsidiary, (iii) Funded Debt of a corporation which is merged with or into the
Company or a Material Subsidiary, (iv) Funded Debt in existence on the date of
the Indenture, (v) Funded Debt created in connection with, or with a view to,
compliance by a Material Subsidiary with the requirements of any program adopted
by any federal, state or local governmental authority and applicable to such
Material Subsidiary and providing financial or tax benefits to such Material
Subsidiary which are not available directly to the Company and (vi) Funded Debt
that is Acquired Indebtedness; or (b) to guarantee, directly or indirectly
through any arrangement that is substantially the equivalent of a guarantee, the
payment of any Funded Debt except for (i) guarantees existing on the date of the
Indenture, (ii) guarantees which, on the date of the Indenture, a Material
Subsidiary is obligated to give and (iii) guarantees of Funded Debt permitted
under clause (a) of this paragraph. Notwithstanding the foregoing, any Material
Subsidiary may create, incur, assume or guarantee the payment of Funded Debt in
addition to that permitted in this paragraph and extend, renew, substitute or
replace, in whole or in part, such Funded Debt, provided, that at the time of
such creation, incurrence, assumption, guarantee, extension, renewal,
substitution or replacement, and after giving effect thereto, the aggregate
principal amount of all Funded Debt of Material Subsidiaries does not exceed 15%
of Consolidated Tangible Net Worth.
The term "Consolidated Tangible Net Worth" means, as of any date, the total
shareholders' equity of the Company determined in accordance with GAAP less any
and all goodwill and other intangible assets reflected on the consolidated
balance sheet of the Company as of such date. Deferred policy acquisition costs
("DPAC"), that portion of the value of insurance in force resulting from an
acquisition and equivalent to the amount of DPAC of the acquired entity
outstanding immediately prior to such acquisition and deferred taxes shall not
be deemed goodwill or other intangible assets for purposes of determining
Consolidated Tangible Net Worth.
The term "Funded Debt" means Indebtedness which by its terms matures at, or
can be extended or renewed at the option of the obligor to, a date more than
twelve months after the date of the creation of such Indebtedness, including,
without limitation, revolving credit loans.
Limitations on Liens. The Company will not, and will not permit any
Material Subsidiary to, (a) issue, assume or guarantee any Indebtedness if such
Indebtedness is secured by a Lien upon, or (b) directly or indirectly secure any
outstanding Indebtedness of the Company or any Material Subsidiary by a Lien
upon, any Principal Property, now owned or hereafter acquired, without
effectively providing that the notes shall be secured equally and ratably with
such Indebtedness, except that the foregoing restrictions shall not apply to (i)
Liens on any Principal Property acquired after the date of the Indenture to
secure or provide for the payment of the purchase price or acquisition cost
thereof, (ii) Liens on Principal Property acquired after the date of the
Indenture existing at the time such Principal Property is acquired, (iii) Liens
on any Principal Property acquired from a corporation merged with or into the
Company or a Material Subsidiary, (iv) Liens in favor of the Company or any
Subsidiary, (v) Liens in existence on any Principal Property on the date of the
Indenture, (vi) Liens on any Principal Property constituting unimproved real
property constructed or improved after the date of the Indenture to secure or
provide for the payment or cost of such construction or improvement, (vii) Liens
in favor of, or required by, governmental authorities, (viii) pledges or
deposits in connection with workers' compensation, unemployment insurance and
other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements or other pledges or
deposits in the ordinary course of the insurance business of a Material
Subsidiary of the Company that is a licensed insurance company, including,
without limitation, those relating to the insurance or reinsurance operations of
such Material Subsidiaries and those relating to the requirements to create
"separate accounts," (ix) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, (x) Liens securing any
extension, renewal, substitution or replacement (or successive extensions,
renewals, substitutions or replacements) of Indebtedness of the Company or any
Material Subsidiary outstanding as of March 31, 1993, and (xi) any extension,
renewal, substitution or replacement (or successive extensions, renewals,
29
substitutions or replacements), in whole or in part, of any Lien referred to in
the foregoing clauses (i) through (x), inclusive.
Notwithstanding the foregoing, the Company and any Material Subsidiary may,
without equally and ratably securing the notes, issue, assume or guarantee
secured Indebtedness (which would otherwise be subject to the foregoing Lien
restrictions) in an aggregate amount which, together with all other such secured
Indebtedness of the Company and its Material Subsidiaries (that is, not
including secured Indebtedness of the Company and its Material Subsidiaries
permitted pursuant to the preceding paragraph) and the Attributable Debt in
respect of Sale and Lease-Back Transactions existing at such time (other than
Sale and Lease-Back Transactions permitted in accordance with the first
paragraph under the caption "Limitation on Sale and Lease-Back Transactions"
below), does not at the time exceed 15% of the shareholders' equity in the
Company and its consolidated Subsidiaries as shown on the audited consolidated
balance sheet contained in the latest annual report to shareholders of the
Company.
"Lien" means any mortgage, lien, pledge, security interest, conditional
sale or other title retention agreement or other security interest or
encumbrance of any kind (including any agreement to give any security interest).
The term "Material Subsidiary" means (i) any Subsidiary of the Company
which at December 31, 1992 was a "significant subsidiary" under Regulation S-X
promulgated by the SEC or any successor to such Subsidiary and (ii) any other
Subsidiary of the Company; provided, that the Company's investments in and
advances to such Subsidiary at the date of determination thereof, without giving
effect to any write-downs in such investments or advances taken within the prior
12 months, represent 20% or more of the Company's Consolidated Tangible Net
Worth as of such time; provided, however, that this clause (ii) shall not
include any Subsidiary if, at the time that it became a Subsidiary, the Company
contemplated commencing a voluntary case or proceeding under the Bankruptcy Law
with respect to such Subsidiary.
The term "Principal Property" means all property, assets or revenue of the
Company and each Material Subsidiary now owned or hereafter acquired and all
shares of stock and Indebtedness of any Material Subsidiary now owned or
hereafter acquired.
Limitation on Sale and Lease-Back Transactions. Sale and Lease-Back
Transactions by the Company or any Material Subsidiary are prohibited unless the
proceeds of such sale or transfer are at least equal to the fair value (as
determined by the Board of Directors) of the Principal Property to be leased
pursuant to such Sale and Lease-Back Transaction and either (i) the Company or
such Material Subsidiary could incur a Lien on such Principal Property under the
covenant described in "Limitation on Liens" above, (ii) such Sale and Lease-Back
Transactions are between or among the Company and any of its Subsidiaries or
between or among Subsidiaries, (iii) the lease is for a period not exceeding
three years and the Company or such Material Subsidiary that is a party to such
lease intends that its use of such Principal Property will be discontinued on or
before the expiration of such period, or (iv) the Company applies, or causes
such Material Subsidiary to apply, an amount equal to the fair value (as
determined by the Board of Directors) of the Principal Property sold pursuant to
such Sale and Lease-Back Transaction to (A) the retirement, within 60 days after
the effective date of any such Sale and Lease-Back Transaction, of Funded Debt
of the Company or of such Material Subsidiary, or (B) the purchase of other
property that will constitute a Principal Property.
Notwithstanding the provisions of the preceding paragraph, the Company or
any Material Subsidiary may enter into any Sale and Lease-Back Transaction which
would otherwise be subject to the following restrictions, if the amount of
Attributable Debt in respect of such Sale and Lease-Back Transaction, together
with all secured
Indebtedness of the Company and its Material Subsidiaries (other than
secured Indebtedness of the Company and Material Subsidiaries permitted under
the first paragraph under the caption "Limitation on Liens" above) and all other
Attributable Debt in respect of Sale and Lease-Back Transactions existing at
such time (other than Sale and Lease-Back Transactions permitted pursuant to the
preceding paragraph), does not at the time exceed 15% of the shareholders'
equity in the Company and its consolidated Subsidiaries as shown on the audited
consolidated balance sheet contained in the latest annual report to shareholders
of the Company.
The term "Attributable Debt" means, as of any particular time, the present
value, discounted at a rate per annum equal to the interest rate of the notes,
of the rental payments (not including amounts payable by the lessee for
maintenance, property taxes and insurance) due during the remaining term of any
lease (including any period for which such lease has been extended or may, at
the option of the lessor, be extended).
30
The term "Sale and Lease-Back Transaction" means the sale or transfer of
any property owned by the Company or any Subsidiary with the intention of taking
back a lease on such property other than any such arrangements with the
government of the United States of America, any of its territories or
possessions, or any State thereof, or any department, agency, instrumentality or
political subdivision of them.
Although the Indenture contains the foregoing restrictions on the ability
of the Company and its Subsidiaries to incur Indebtedness, the Company and its
Subsidiaries may engage in transactions that, although in compliance with such
restrictions, would result in additional leverage, which may adversely affect
the noteholders.
REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE OF CONTROL
In the event of any Change of Control, each noteholder shall have the
right, at such noteholder's option, to require the Company to purchase all or
any portion (in integral multiples of $2,000) of such noteholder's notes on the
date (the "Change of Control Payment Date") which is 20 business days after the
date the Change of Control Notice (as defined below) is mailed (or such later
date as is required by applicable law) at 101% of the principal amount
(excluding premium) thereof, plus accrued interest to the Change of Control
Payment Date: provided, that the Company will not be obligated to purchase any
of such notes unless noteholders of at least 10% of the notes outstanding at the
Change of Control Payment Date (other than notes held by the Company and its
Affiliates) shall have tendered their notes for repurchase.
The Company is obligated to send to all noteholders, within five business
days after the occurrence of each Change of Control, a notice of the occurrence
of such Change of Control (the "Change of Control Notice"), specifying a date by
which a noteholder must notify the Company of such noteholder's intention to
exercise the repurchase right and describing the procedure that such noteholder
must follow to exercise such right. The Company is required to deliver a copy of
such notice to the Trustee and to cause a copy of such notice to be published in
a daily newspaper of national circulation. To exercise the repurchase right, the
noteholder must deliver, on or before the fifth calendar day prior to the Change
of Control Payment Date, written notice (which shall be irrevocable, except as
provided below) to the Company (or an agent designated by the Company for such
purpose) of the noteholder's exercise of such right, together with (i) the note
or notes with respect to which the right is being exercised, duly endorsed for
transfer with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the note completed, and (ii) if the Change of Control Payment Date
falls between any record date for the payment of interest on the notes and the
next succeeding interest payment date, an amount equal to the interest which the
noteholder is entitled to receive on such interest payment date. The Company
will comply with all applicable Federal and state securities laws; including
Rule 14e-1 of the Exchange Act and other applicable tender offer rules, in
connection with each Change of Control Notice.
A "Change of Control" shall be deemed to occur if (i) the Company has any
other Indebtedness outstanding (other than Indebtedness under a bank credit
agreement or similar bank financing) which provides for a Change of Control (as
defined in the instrument governing such Indebtedness) if Ian M. Cumming or
Joseph S. Steinberg ceases to beneficially own, in the aggregate, a certain
percentage of the outstanding Common Shares, which percentage ownership
requirement is in excess of 10%, and a Change of Control (as defined in the
instrument governing such Indebtedness) occurs under such Indebtedness or (ii)
at any time when the Company does not have any other Indebtedness outstanding of
the type referred to in clause (i), Ian M. Cumming and/or Joseph S. Steinberg,
individually or in the aggregate, sell, transfer or otherwise dispose of (a
"Disposition"), after the date hereof, Common Shares so that, after giving
effect thereto, the sole beneficial ownership of outstanding Common Shares by
Mr. Cumming and/or Mr. Steinberg would, in the aggregate, fall below 10% of the
then outstanding Common Shares; provided, that no Change of Control shall be
deemed to have occurred under clause (ii) if the notes are rated by either
Moody's or S&P as Investment Grade both at the time of such Disposition and for
a period of 90 days from the date of such Disposition (it being understood that,
with respect to the foregoing proviso, a Change of Control shall be deemed to
occur on the first date during such 90-day period when the notes are no longer
rated as Investment Grade by Moody's and S&P). The term "Common Shares" shall
include any securities issued as dividends or distributions on the Common
Shares. For purposes hereof, "sole beneficial ownership" of Common Shares shall
be deemed to include (i) all Common Shares received after June 15, 1992 from Mr.
Cumming or Mr. Steinberg by any member of their respective immediate families or
by any trust for the benefit of either of them or any member of their respective
immediate families (a "Recipient"), which Common Shares remain held by a
Recipient during the lifetime of Mr. Cumming or Mr. Steinberg (unless sold,
transferred or disposed of by such Recipient during the lifetime of Mr. Cumming
or Mr. Steinberg, as the case may be, in which case such Disposition by such
Recipient shall constitute a Disposition by Mr. Cumming or Mr. Steinberg, as the
case may be) and (ii) after the death of Mr. Cumming and/or Mr. Steinberg, all
Common Shares owned as of the date of death by the decedent, and any Recipient
of the decedent, regardless of whether such Recipient continues to own such
Common Shares after the date of death. In determining the number of outstanding
Common Shares then held by Messrs. Cumming and Steinberg and the total number of
31
outstanding Common Shares, there shall be excluded Common Shares issued by the
Company after December 31, 1991, or the conversion into or exchange for, after
December 31, 1991, Common Shares or securities convertible into or exchangeable
for Common Shares. As calculated pursuant to this provision, Messrs. Cumming and
Steinberg beneficially own, in the aggregate, approximately 38% of the Common
Shares as of March 31, 2007.
As of the date hereof, the Company does not have any Indebtedness
outstanding of the type referred to in clause (i) of the preceding paragraph.
There can be no assurance that the Company will have sufficient funds or the
financing to satisfy its obligations to repurchase the notes and other
Indebtedness that may come due upon a Change of Control. In such case, the
Company's failure to purchase tendered notes would constitute an Event of
Default under the Indenture.
The holders of a majority in principal amount of notes then outstanding may
waive compliance by the Company of the repurchase of notes obligation upon a
Change of Control. The Company may not waive such provisions. See "Modification
of the Indenture."
The term "Investment Grade" is defined as BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by Moody's or S&P.
TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any Subsidiary to, directly or
indirectly, enter into any transaction or series of related transactions with
any Affiliate (other than with the Company or a Wholly-Owned Subsidiary),
including, without limitation, any loan, advance or investment or any purchase,
sale, lease or exchange of property or the rendering of any service, unless such
transaction or series of transactions is in good faith and at arm's-length and
on terms which are at least as favorable as those available in a comparable
transaction from an unrelated Person. Any such transaction that involves in
excess of $10,000,000 shall be approved by a majority of the Independent
Directors on the Board of Directors of the Company; or, in the event that at the
time of any such transaction or series of related transactions there are no
Independent Directors serving on the Board of Directors of the Company, such
transaction or series of related transactions shall be approved by a nationally
recognized expert with experience in appraising the terms and conditions of the
type of transaction for which approval is required.
SUCCESSOR CORPORATION
The Company may not consolidate with, merge into or transfer all or
substantially all of its assets (i.e., 90% or more) to another person unless (a)
the successor person shall be existing under the laws of the United States, any
state thereof or the District of Columbia, (b) there shall not be any Default or
Event of Default under the Indenture, (c) such successor person assumes all of
the obligations of the Company under the notes and the
Indenture and (d) after giving effect to such transaction, such successor
person shall have a Consolidated Net Worth equal to or greater than the Company.
Thereafter all such obligations of the Company will terminate.
The term "Consolidated Net Worth" means, as of any date, total
stockholders' equity of the Company as of such date determined on a consolidated
basis in accordance with GAAP.
REPORTS TO NOTEHOLDERS
The Company will mail copies of its annual reports and quarterly reports
mailed to its shareholders to noteholders. If the Company is not required to
furnish annual or quarterly reports to its shareholders, the Company will, upon
request, mail to each noteholder, at such noteholder's address as appearing on
the note register, audited annual financial statements prepared in accordance
with United States generally accepted accounting principles and unaudited
condensed quarterly financial statements. Such financial statements shall be
accompanied by management's discussion and analysis of the results of operations
and financial condition of the Company for the period reported upon in
substantially the form required under the rules and regulations of the
Securities Exchange Commission currently in effect.
THE TRUSTEE
The Bank of New York is the Trustee under the Indenture.
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The noteholders of a majority in principal amount of all outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee. The Indenture
provides that, in case an Event of Default shall occur and be continuing, the
Trustee will be required to use the degree of care of a prudent person in the
conduct of his own affairs in the exercise of its powers. Subject to such
provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the noteholders,
unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
EVENTS OF DEFAULT AND NOTICE THEREOF
The term "Event of Default" when used in the Indenture shall mean any one
of the following: (i) failure to pay interest for 30 days or principal
(including premium, if any); (ii) failure to perform any covenants not described
in clause (i) for 30 days after receipt of notice; (iii) the occurrence of a
default in the payment when due of principal of, or interest on, or other
amounts payable in respect of, any instrument evidencing or securing other
Indebtedness of the Company or any Material Subsidiary of the Company in the
aggregate principal amount of $30,000,000 or more; (iv) the occurrence of any
other event of default under an instrument evidencing or securing other
Indebtedness of the Company or any Material Subsidiary of the Company in the
aggregate principal amount of $30,000,000 or more resulting in the acceleration
of such indebtedness, which acceleration is not rescinded or annulled pursuant
to the terms of such instrument; and (v) certain events of bankruptcy,
insolvency or reorganization relating to the Company or any Material Subsidiary
of the Company.
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default, provide to the noteholders notice of all uncured
defaults known to it (the term default to include the events specified above
without grace or notice); provided, that, except in the case of default in the
payment of principal of, premium, if any, or interest on any of the notes, the
Trustee shall be protected in withholding such notice if and so long as a
committee of its Trust Officers in good faith determines that the withholding of
such notice is in the interests of the noteholders.
In case an Event of Default (other than an Event of Default with respect to
the Company specified in clause (v) above) shall have occurred and be
continuing, the Trustee or the holders of at least 25% in aggregate principal
amount of the notes then outstanding, by notice in writing to the Company and to
the Trustee, may declare to be due and payable immediately the outstanding
principal amount and accrued interest, premiums, penalties and other amounts in
respect of the notes and the Indenture. Such declaration may be annulled and
past defaults (except, unless theretofore cured, a default in payment of
principal, premium, if any, or interest on the notes) may be waived by the
holders of a majority in principal amount of the notes, upon the conditions
provided in the Indenture.
If an Event of Default with respect to the Company specified in clause (v)
above occurs, all unpaid principal of, premium, if any, and accrued interest on
the notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
holder of notes.
The Indenture includes a covenant that the Company will file annually with
the Trustee a statement regarding compliance by the Company with the terms
thereof and specifying any defaults of which the signers may have knowledge.
MODIFICATION OF THE INDENTURE
Under the Indenture, the rights and obligations of the Company and the
rights of noteholders may be modified by the Company and the Trustee only with
the consent of the noteholders holding a majority in principal amount of the
notes then outstanding; but no extension of the maturity of any notes, or
reduction in the interest rate or premium, if any, or extension of the time of
payment of principal of (including premium, if any) or interest on, or any other
modification in the terms of payment of the principal of, or premium, if any, or
interest on the notes or reduction of the percentage required for modification
will be effective against any noteholder without its consent. The holders of a
majority in principal amount of notes then outstanding may waive compliance by
the Company with certain covenants, including those described under "Repurchase
at Option of Holders Upon a Change of Control."
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture will be discharged and cancelled upon payment of all the
notes or upon deposit with the Trustee, within not more than one year prior to
the maturity of the notes or the date on which all of the notes are to be called
for redemption, of funds sufficient for such payment.
33
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
consequences relating to the exchange of original notes for registered notes in
the exchange offer. This discussion does not address all tax aspects relating to
the exchange. This discussion deals only with the material U.S. federal income
tax consequences to persons who hold such notes as capital assets and does not
deal with the consequences to special classes of holders of the notes, such as
dealers in securities or currencies, brokers, traders that mark-to-market their
securities, insurance companies, tax-exempt entities, financial institutions or
"financial services entities," persons with a functional currency other than the
U.S. dollar, regulated investment companies, real estate investment trusts,
retirement plans, expatriates or former long-term residents of the United
States, persons who hold their notes as part of a straddle, hedge, "conversion
transaction," "constructive sale" or other integrated investment, persons
subject to the alternative minimum tax, partnerships or other pass-through
entities or investors in partnerships or other pass-through entities that hold
the notes. The discussion is based upon the Internal Revenue Code of 1986, as
amended (the "Code)", the Treasury Regulations promulgated thereunder, rulings
and judicial interpretations thereof, all as in effect on the date of this
prospectus, any of which may be repealed or subject to change, possibly with
retroactive effect.
CONSEQUENCES OF TENDERING OLD NOTES
The exchange of original notes for registered notes (with substantially
identical terms) in the exchange offer will not be a taxable event for U.S.
federal income tax purposes, and a holder will have the same adjusted tax basis
and holding period in such registered notes that the holder had in the original
notes immediately before the exchange. The U.S. federal income tax consequences
of holding and disposing of such registered notes will be the same as those
applicable to the original notes.
THE PRECEDING DISCUSSION OF THE MATERIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE EXCHANGE OF ORIGINAL NOTES FOR REGISTERED NOTES IS NOT TAX
ADVICE. ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO
PARTICULAR TAX CONSEQUENCES TO IT RELATING TO THE EXCHANGE, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY
PROPOSED CHANGES IN APPLICABLE LAW.
34
PLAN OF DISTRIBUTION
Each broker-dealer that receives registered notes in the exchange offer for
its own account must acknowledge that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the notes.
We reserve the right in our sole discretion to purchase or make offers for, or
to offer registered notes for, any old notes that remain outstanding subsequent
to the expiration of the exchange offer pursuant to this prospectus or otherwise
and, to the extent permitted by applicable law, purchase old notes in the open
market, in privately negotiated transactions or otherwise. This prospectus, as
it may be amended or supplemented from time to time, may be used by all persons
subject to the prospectus delivery requirements of the Securities Act, including
broker-dealers in connection with resales of registered notes received in the
exchange offer, where the notes were acquired as a result of market-making
activities or other trading activities and may be used by us to purchase any
notes outstanding after expiration of the exchange offer. We have agreed that,
for a period of 180 days after the expiration of the exchange offer, we will
make this prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with such a resale.
We will not receive any proceeds from any sale of registered notes by
broker-dealers. Notes received by broker-dealers in the exchange offer for their
own account may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the registered notes or a combination of those methods of resale, at
market prices prevailing at the time of resale, at prices related to the
prevailing market prices or negotiated prices. Such a resale may be made
directly to purchases or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from such a broker-dealer
and/or the purchasers of any of the registered notes. Any broker-dealer that
resells registered notes that were received by it in the exchange offer for its
own account an any broker or dealer that participates in a distribution of the
notes may be deemed to be an "underwriter" within the meaning of the Securities
Act and any profit on such a resale of the notes and any commissions or
concessions received by those persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus meeting the
requirements of the Securities Act, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer, including the reasonable fees and expenses of counsel to the
initial purchaser of the old notes, other than commissions or concessions of any
brokers or dealers, and will indemnify holders of the notes, including any
broker-dealers, against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Weil, Gotshal & Manges LLP has passed upon the validity of the notes on
behalf of the issuer.
EXPERTS
The consolidated financial statements and management's assessment of the
effectiveness of internal control over financial reporting (which is included in
Management's Report on Internal Control over Financial Reporting), incorporated
in this prospectus by reference to Leucadia National Corporation's Annual Report
on Form 10-K for the year ended December 31, 2006 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, an independent registered
public accounting firm, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Olympus Re Holdings, Ltd. incorporated by
reference in this prospectus by reference to Leucadia National Corporation's
Annual Report on Form 10-K for the year ended December 31, 2006, as amended,
have been so incorporated in reliance on the report of PricewaterhouseCoopers,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The statement of financial condition, including the condensed schedule of
investments, of Jefferies Partners Opportunity Fund II, LLC as of December 31,
2005, and the related statements of earnings, changes in members' equity, and
cash flows for the year then ended, appearing in Leucadia's Annual Report on
Form 10-K, as amended, for the year ended December 31, 2006, have been audited
by KPMG LLP, independent registered public accounting firm, as set forth in
their report thereon included therein and incorporated herein by reference. Such
35
financial statements are incorporated herein by reference in reliance upon such
report and upon the authority of such firm as experts in accounting and
auditing.
The financial statements of EagleRock Capital Partners (QP), LP and
EagleRock Master Fund, LP as of December 31, 2006 and 2005 and for the years
ended December 31, 2006, 2005 and 2004, respectively, appearing in the Annual
Report on Form 10-K for the year ended December 31, 2006, as amended, have been
audited by BDO Seidman, LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
The combined financial statements of ResortQuest Mainland at December 31,
2006 and 2005, and for each of the three years in the period ended December 31,
2006, appearing in Leucadia National Corporation's Current Report on Form 8-K/A
dated June 15, 2007, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein, and
incorporated herein by reference. Such combined financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
36
LEUCADIA NATIONAL CORPORATION
[GRAPHIC OMITTED]
$500,000,000
OFFER TO EXCHANGE ALL OUTSTANDING 7-1/8% SENIOR NOTES DUE 2017
FOR AN EQUAL AMOUNT OF 7-1/8% SENIOR NOTES DUE 2017
REGISTERED UNDER THE SECURITIES ACT OF 1933
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The registrant is a New York corporation. Sections 722 through 725 of the
New York Business Corporation Law (the "Business Corporation Law") provide that
a corporation may indemnify, with certain limitations and exceptions, a director
or officer as follows: (1) in a derivative action, against his reasonable
expenses, including attorneys' fees but excluding certain settlement costs,
actually and necessarily incurred by him in connection with the defense thereof,
or an appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in (or in the case of service for
another corporation, not opposed to) the best interests of the corporation; and
(2) in a civil or criminal non-derivative action or proceeding including a
derivative action by another corporation, partnership or other enterprise in
which any director or officer of the indemnifying corporation served in any
capacity at the indemnifying corporation's request, against judgments, fines,
settlement payments and reasonable expenses, including attorneys' fees, incurred
as a result thereof, or any appeal therein, if such director or officer acted in
good faith, for a purpose which he reasonably believed to be in (or, in the case
of service for any other corporation, not opposed to) the best interests of the
corporation and, in criminal actions and proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. Such indemnification
is a matter of right where the director or officer has been successful on the
merits or otherwise, and otherwise may be granted upon corporate authorization
or court award as provided in the statute.
Section 721 of the Business Corporation Law provides that indemnification
arrangements can be established for directors and officers, by contrast, by-law,
charter provision, action of shareholders or board of directors, on terms other
than those specifically provided by Article 7 of the Business Corporation Law,
provided that no indemnification may be made to or on behalf of any director or
officer if a judgment or other final adjudication adverse to the director or
officer establishes that his acts were committed in bad faith or were the result
of active and deliberate dishonesty and were material to the cause of action so
adjudicated, or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled. Article V of the Company's
By-Laws provides for the indemnification, to the full extent authorized by law,
of any person made or threatened to be made a party in any civil or criminal
action or proceeding by reason of the fact that he, his testator or intestate is
or was a director or officer of the Company.
Section 726 of the Business Corporation Law provides that a corporation may
obtain insurance to indemnify itself and its directors and officers. The Company
maintains an insurance policy providing both directors and officers liability
coverage and corporate reimbursement coverage.
Article Sixth of the Company's Certificate of Incorporation contains a
charter provision eliminating or limiting director liability for monetary
damages arising from breaches of fiduciary duty, subject only to certain
limitations imposed by statute.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
4.1 Indenture, dated as of March 6, 2007, between Leucadia National
Corporation and The Bank of New York with respect to Leucadia
National Corporation's 7-1/8% Senior Notes due 2017.+
4.2 Registration Rights Agreement, dated as of March 6, 2007, between
Leucadia National Corporation and Jefferies & Company, Inc., with
respect to Leucadia National Corporation's 7-1/8% Senior Notes due
2017.+
4.3 Form of 7-1/8% Senior Note (included in Exhibit 4.1).
5.1 Opinion of Weil, Gotshal & Manges LLP.+
12.1 Computation of Ratio of Earnings to Fixed Charges.+
23.1 Consent of PricewaterhouseCoopers LLP.+
23.2 Consent of PricewaterhouseCoopers.+
23.3 Consent of KPMG LLP.+
23.4 Consent of BDO Seidman LLP.+
23.5 Consent of Ernst & Young LLP. +
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23.6 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on signature page).
25.1 Form T-1 statement of eligibility under the Trust Indenture Act of
1939 of The Bank of New York, as trustee.+
99.1 Form of Letter of Transmittal.+
99.2 Form of Notice of Guaranteed Delivery.+
+ Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by a registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt
of such request, and to send the incorporated documents by first class mail
or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
II-2
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(f) The undersigned registrant hereby undertakes that, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser,
each prospectus filed pursuant to Rule 424(b) as part of this registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in this registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus
that is part of this registration statement or made in a document
incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of this registration statement will,
as to a purchase with a time of contract of sale prior to such first use,
supersede or modify any statement that was mad in the registration
statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
(g) The undersigned registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other then
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 15th day of June, 2007.
LEUCADIA NATIONAL
CORPORATION
By: /s/ Joseph A. Orlando
--------------------------------
Name: Joseph A. Orlando
Title: Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph A. Orlando and Barbara L.
Lowenthal, and each of them, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) and supplements to this Registration
Statement, and to file the same with the Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been duly signed below by the following persons on
behalf of Leucadia National Corporation and in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ian M. Cumming Chairman of the Board June 15, 2007
----------------------------- (Principal Executive Officer)
Ian M. Cumming
/s/ Joseph S. Steinberg President and Director June 15, 2007
----------------------------- (Principal Executive Officer)
Joseph S. Steinberg
/s/ Joseph A. Orlando Vice President and Chief June 15, 2007
----------------------------- Financial Officer (Principal
Joseph A. Orland Financial Officer)
/s/ Barbara L. Lowenthal Vice President and Comptroller June 15, 2007
----------------------------- (Principal Accounting Officer)
Barbara L. Lowenthal
/s/ Paul M. Dougan Director June 15, 2007
-----------------------------
Paul M. Dougan
/s/ Lawrence D. Glaubinger Director June 15, 2007
-----------------------------
Lawrence D. Glaubinger
/s/ Alan J. Hirschfield Director June 15, 2007
-----------------------------
Alan J. Hirschfield
/s/ James E. Jordan Director June 15, 2007
-----------------------------
James E. Jordan
/s/ Jeffrey C. Keil Director June 15, 2007
-----------------------------
Jeffrey C. Keil
/s/ Jesse Clyde Nichols, III Director June 15, 2007
-----------------------------
Jesse Clyde Nichols, III
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
---------- --------------------------------------------------------------
4.1 Indenture, dated as of March 6, 2007, between Leucadia
National Corporation and The Bank of New York with respect to
Leucadia National Corporation's 7-1/8% Senior Notes due 2017.+
4.2 Registration Rights Agreement, dated as of March 6, 2007,
between Leucadia National Corporation and Jefferies & Company,
Inc., with respect to Leucadia National Corporation's 7-1/8%
Senior Notes due 2017.+
4.3 Form of 7-1/8% Senior Note (included in Exhibit 4.1).
5.1 Opinion of Weil, Gotshal & Manges LLP.+
12.1 Computation of Ratio of Earnings to Fixed Charges.+
23.1 Consent of PricewaterhouseCoopers LLP.+
23.2 Consent of PricewaterhouseCoopers.+
23.3 Consent of KPMG LLP.+
23.4 Consent of BDO Seidman LLP.+
23.5 Consent of Ernst & Young LLP. +
23.6 Consent of Weil, Gotshal & Manges LLP (included in Exhibit
5.1).
24.1 Power of Attorney (contained on signature page).
25.1 Form T-1 statement of eligibility under the Trust Indenture
Act of 1939 of The Bank of New York, as trustee.+
99.1 Form of Letter of Transmittal.+
99.2 Form of Notice of Guaranteed Delivery.+
------------------------------------------------------------------------
+ Filed herewith.