DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT, (the "Agreement") is made
and entered into on December 16, 2002 by and between LEUCADIA NATIONAL
CORPORATION, a New York corporation (the "Company"), and Mark Hornstein, (the
"Executive"), collectively the parties ("Parties").
WHEREAS, Executive is employed by the Company as Vice President;
WHEREAS, in connection with the provision of services to the
Company in his capacity as Vice President the Executive desires to defer the
receipt of certain compensation from the Company to which in the future he may
become entitled, and the Company agrees to do so, in accordance with the terms
and provisions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual
convenants and agreements herein contained, the Parties hereby agree as follows:
1. Deferral of Payments.
The Company shall defer the payment of 50% of bonus compensation,
other than Holiday Bonus, that may be awarded to the Executive by the Company
from and after the date of this Agreement through the end of calendar year 2003.
The Executive acknowledges that the Company is under no obligation to award any
bonus to the Executive and that the award of any bonus, as well as the amount of
any bonus that may be awarded, remains fully discretionary with the Company.
Each deferred payment shall accrue interest (on the basis of a
360-day year), compounded annually, from the first day of the month immediately
following the date on which payment otherwise would have been made if no
deferral had existed (the "First New Month Date") until the date of actual
payment, at a rate of interest equal to the yield on Treasury bills maturing in
one year in effect at each First New Month Date, and the rate of interest shall
be reset on the first day of each subsequent quarter. For purposes hereof, the
quarters shall begin January 1, April 1, July 1, and October 1.
All amounts deferred pursuant to this Agreement, including
interest, shall be paid to the Executive in January 2008. Notwithstanding the
preceding sentence, to the extent that the aggregate deferred payments hereunder
(including interest) exceed the maximum annual amount deductible as compensation
by the Company under applicable U.S. federal tax laws, the Company may make such
payments in two or more installments in different taxable years to permit the
Company to obtain the maximum annual deduction available. In addition, to the
extent that the Company determines the aggregate deferred payments hereunder
(including interest) will not be fully deductible when paid as compensation by
the Company under applicable U.S. federal tax laws, the Company may prepay such
amounts to obtain the maximum tax deduction possible.
The rights of the Executive to the payment of the amounts
pursuant to this Agreement shall be no greater than the rights of an unsecured
general creditor of the Company and may not be assigned, pledged or otherwise
transferred by him during his lifetime to any person, whether by operation of
law or otherwise, and shall not be subject to execution, attachment or similar
proceeding. By written notice delivered to the Company, the Executive may
designate (or change a prior designation of) one or more beneficiaries (or his
estate) to receive payment hereunder in the event of his death.
The Executive acknowledges and agrees that the Company shall be
entitled to withhold from his compensation all federal, state, local or other
taxes which the Company determines are required to be withheld on amounts
payable to the Executive pursuant to this Agreement or otherwise. The Executive
further agrees to indemnify the Company and hold it harmless from and against
any and all taxes (and penalties thereon) and interest with respect thereto
arising out of the Executive's failure to pay fully his tax liability on such
deferred payment pursuant to any present or future law, regulation or ordinance
of the United States of America or any state, city or municipality therein.
3. Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
4. Entire Agreement.
This Agreement constitutes the entire agreement between the
Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings and arrangements, both oral and written,
between the Parties hereto with respect to such subject matter. This Agreement
may not be modified in any manner, except by a written instrument signed by both
the Company and the Executive.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
by hand or facsimile transmission or when deposited in the United States mail by
registered or certified mail, return receipt requested, postage prepaid, as
If to the Company: Leucadia National Corporation
315 Park Avenue South
New York, NY 10010
Attn: Chief Financial Officer
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Andrea Bernstein
If to Executive: Mark Hornstein
25 Sutton Place South
New York, New York 10022
or to such other addresses as either the Company or the Executive
may from time to time specify to the other.
6. Notice of Termination; Applicability of Agreement.
Amounts deferred pursuant to this Agreement shall be paid to the
Executive only as provided herein. At any time, by notice in writing from the
Executive to the Company, the Executive may terminate this Agreement whereupon
any compensation earned by the Executive subsequent to such notification shall
not be subject to the provisions hereof. Amounts earned prior to any such
notification shall remain subject to the terms hereof even after such
7. Benefit; Binding Effect.
This Agreement shall be for the benefit of and binding upon the
Parties hereto and their respective heirs, personal representatives, legal
representatives, successors and, where applicable, assigns.
IN WITNESS WHEREOF, the Parties hereto have executed and
delivered this Agreement as of the day and year first above written.
LEUCADIA NATIONAL CORPORATION
JOSEPH A. ORLANDO