Document:

EX-10.1

 

Exhibit 10.1

EXECUTION COPY

INVESTMENT AGREEMENT

By and Between

LEUCADIA NATIONAL CORPORATION

and

JEFFERIES GROUP, INC.

Dated as of April 20, 2008

 

 

TABLE
OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I     Definitions
	 	 	1	 
	Section 1.01.     Definitions
	 	 	1	 
	Section 1.02.     General Interpretive Principles
	 	 	3	 
	ARTICLE II     Sale and Purchase of the Securities
	 	 	3	 
	Section 2.01.     Sale and Purchase of the Securities
	 	 	3	 
	Section 2.02.     Closing
	 	 	3	 
	ARTICLE III     Representations and Warranties
	 	 	4	 
	Section 3.01.     Representations and Warranties of Jefferies
	 	 	4	 
	Section 3.02.     Representations and Warranties of Leucadia
	 	 	8	 
	ARTICLE IV     Additional Agreements of the Parties
	 	 	12	 
	Section 4.01.     Taking of Necessary Action
	 	 	12	 
	Section 4.02.     Securities Laws; Legends
	 	 	12	 
	Section 4.03.     Regulatory Matters
	 	 	13	 
	Section 4.04.     Share Listing
	 	 	14	 
	Section 4.05.     Registration Rights Agreement; Letter Agreement
	 	 	14	 
	ARTICLE V     Additional Agreements
	 	 	14	 
	Section 5.01.     Leucadia Closing Deliverables
	 	 	14	 
	Section 5.02.     Jefferies Closing Deliverables
	 	 	14	 
	ARTICLE VI     Miscellaneous
	 	 	14	 
	Section 6.01.     Survival of Representations and Warranties
	 	 	14	 
	Section 6.02.     Notices
	 	 	14	 
	Section 6.03.     Entire Agreement; Third Party Beneficiaries; Amendment
	 	 	15	 
	Section 6.04.     Counterparts
	 	 	16	 
	Section 6.05.     Governing Law
	 	 	16	 
	Section 6.06.     Public Announcements
	 	 	16	 
	Section 6.07.     Expenses
	 	 	16	 
	Section 6.08.     Successors and Assigns
	 	 	16	 
	Section 6.09.     Remedies; Waiver
	 	 	16	 
	Section 6.10.     Consent to Jurisdiction
	 	 	16	 
	Section 6.11.     Severability
	 	 	17	 
	Section 6.12.     Headings
	 	 	17	 

Exhibits

A — Form of Standstill Agreement

 

 

INVESTMENT AGREEMENT

     INVESTMENT AGREEMENT (the “Agreement”), dated as of April 20, 2008 , by and between
Leucadia National Corporation, a New York corporation (“Leucadia”), and Jefferies Group,
Inc., a Delaware corporation (“Jefferies”). Capitalized terms not otherwise defined where
used shall have the meanings ascribed thereto in Article I.

     WHEREAS, Jefferies has agreed to purchase, and Leucadia has agreed to sell, subject to the
terms and conditions of this Agreement, the Leucadia Shares (as defined below) in exchange for the
Jefferies Shares (as defined below) and cash;

     WHEREAS, Jefferies and Leucadia desire to set forth certain agreements herein.

     NOW THEREFORE, in consideration of the premises and the representations, warranties and
agreements herein contained and intending to be legally bound hereby, the parties hereby agree as
follows:

ARTICLE I

Definitions

     Section 1.01. Definitions. As used in this Agreement, the following terms shall have
the meanings set forth below:

     “Affiliate” or “affiliate” shall mean, with respect to any Person, any other
Person which directly or indirectly controls or is controlled by or is under common control with
such Person. As used in this definition, “control” (including its correlative meanings,
“controlled by” and “under common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or otherwise). To the extent
that any such term is used in relation to or in connection with any statute and the definition of
such term in such statute is broader or different, then, in such context, such term shall have the
meaning set forth in such statute.

     “Agreement” shall have the meaning set forth in the preamble hereto.

     “Ancillary Documents” shall mean the Standstill Agreement and the Registration Rights
Agreements.

     “Closing” and “Closing Date” shall have their meanings set forth in Section
2.02(a).

     “DGCL” shall mean the Delaware General Corporation Law.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “GAAP” shall mean generally accepted accounting principles in the United States of
America.

 

 

     “Governmental Entity” shall mean any court, administrative agency or commission or
other governmental authority or instrumentality, whether federal, state, local or foreign, and any
applicable industry self-regulatory organization.

     “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

     “Jefferies” shall have the meaning set forth in the preamble hereto.

     “Jefferies Common Stock” shall mean the common stock, par value $.0001 per share, of
Jefferies.

     “Jefferies Shares” shall have the meaning set forth in Section 2.01.

     “Leucadia” shall have the meaning set forth in the preamble hereto.

     “Leucadia Common Stock” shall mean the common shares, par value $1.00 per share, of
Leucadia.

     “Leucadia Shares” shall have the meaning set forth in Section 2.01.

     “Leucadia Voting Debt” shall have the meaning set forth in Section 3.02(e).

     “Material Adverse Effect” shall mean any material adverse effect on (a) the financial
condition, results of operations, assets, liabilities or business of Jefferies and its Subsidiaries
taken as a whole or Leucadia and its Subsidiaries taken as a whole, as the case may be,
(provided, however, that, with respect to this clause (a), a “Material Adverse
Effect” shall not be deemed to include any effects to the extent resulting from (i) changes, after
the date hereof, in generally accepted accounting principles or regulatory accounting requirements
applicable to banks or savings associations and their holding companies generally, (ii) changes,
after the date hereof, in laws, rules or regulations of general applicability or interpretations
thereof by Governmental Entities, (iii) actions or omissions of Jefferies taken with the prior
written consent of Leucadia or actions or omissions of Leucadia taken with the prior written
consent of Jefferies, as the case may be, or (iv) changes, after the date hereof, in general
economic or market conditions generally affecting the other companies in the industries in which
Jefferies and its Subsidiaries, or Leucadia and its Subsidiaries, as the case may, operate, except,
with respect to clauses (i), (ii) and (iv), to the extent that the effects of such changes are
disproportionately adverse to the financial condition, results of operations, assets, liabilities
or business of Jefferies and its Subsidiaries, taken as a whole, or Leucadia and its Subsidiaries,
taken as a whole), (b) the ability of Jefferies or Leucadia to perform its respective obligations
under this Agreement or the Ancillary Documents or (c) the validity or enforceability of this
Agreement or any of the Ancillary Documents or the rights or remedies of Jefferies or Leucadia
hereunder and thereunder.

     “NYSE” shall mean the New York Stock Exchange.

     “Person” or “person” shall mean an individual, corporation, association,
partnership, group (as such term is used in Section 13(d)(3) of the Exchange Act), trust, joint
venture,

2

 

business trust or unincorporated organization, or a government or any agency or political
subdivision thereof.

     “Registration Rights Agreements” shall mean the separate registration rights
agreements to be executed by Jefferies and Leucadia, which shall each be consistent with the terms
set forth in Annex A to Exhibit A of this Agreement.

     “Reports” shall mean all periodic reports, registration statements and proxy
statements, together with any amendments required to be made with respect thereto, that were
required to be filed with the SEC under the Securities Act or the Exchange Act.

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities Act” shall mean the Securities Act of 1933, as amended.

     “Standstill Agreement” shall mean the standstill agreement executed by Jefferies and
Leucadia at the Closing, which shall be in the form attached hereto as Exhibit A.

     “Subsidiary” shall mean those certain entities listed on Exhibit 21 to the most recent
Annual Report on Form 10-K as filed with the SEC by Jefferies or Leucadia, as the case may be.

     “Transactions” shall have the meaning set forth in Section 3.01(c).

     Section 1.02. General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires, any noun or
pronoun shall be deemed to include the plural as well as the singular and to cover all genders.
The name assigned this Agreement and the section captions used herein are for convenience of
reference only and shall not be construed to affect the meaning, construction or effect hereof.
Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.” Unless otherwise specified, the terms
“hereto,” “hereof,” “herein” and similar terms refer to this Agreement as a whole (including the
exhibits, schedules and disclosure statements hereto), and references herein to Articles or
Sections refer to Articles or Sections of this Agreement.

ARTICLE II

Sale and Purchase of the Securities

     Section 2.01. Sale and Purchase of the Securities. Subject to all of the terms and
conditions of this Agreement, and in reliance upon the representations and warranties hereinafter
set forth, at the Closing provided for in Section 2.02 hereof, Leucadia will sell to Jefferies, and
Jefferies will purchase from Leucadia, 10,000,000 shares of Leucadia Common Stock (the
“Leucadia Shares”), for an aggregate purchase price of (i) $100,021,353 and (ii) 26,585,310
shares of Jefferies Common Stock (the “Jefferies Shares”).

     Section 2.02. Closing. (i) Subject to the satisfaction or waiver of the conditions
set forth in this Agreement, the purchase and sale of the Leucadia Shares hereunder (the
“Closing”) shall take place at the offices of Morgan, Lewis & Bockius LLP at 101 Park
Avenue, New York,

3

 

New York 10178, on April 21, 2008 beginning at 9 A.M. (New York time) or such other place and
date as the parties hereto may agree upon (the date that the Closing occurs, the “Closing
Date”).

     (ii) At the Closing: (i) Leucadia will deliver to Jefferies certificates for the Leucadia
Shares registered in the name of Jefferies or its nominee; (ii) Jefferies, in full payment for the
Leucadia Shares, will deliver to Leucadia immediately available funds, by wire transfer to such
account as Leucadia shall specify, in the amount of $100,021,353 and certificates for the Jefferies
Shares registered in the name of Leucadia or its nominee; and (iii) each party shall take or cause
to happen such other actions, and shall execute and deliver such other instruments or documents, as
shall be required under Article V.

ARTICLE III

Representations and Warranties

     Section 3.01. Representations and Warranties of Jefferies. Except as disclosed in the
Reports filed with or furnished to the SEC by Jefferies prior to the date hereof, Jefferies
represents and warrants to, and agrees with, Leucadia, as of the date hereof (or as of such earlier
date in the case of any representation or warranty expressly made as of an earlier date), as
follows:

     (i) Organization and Good Standing of Jefferies; Organizational Documents. Jefferies
is duly incorporated, validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority and governmental authorizations to own, operate
and lease its properties and to carry on its business as it is being conducted on the date of this
Agreement. Jefferies is duly licensed or qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such qualification, except where the
failure to be so licensed or qualified in any such jurisdiction would not reasonably be expected to
have a Material Adverse Effect.

     (ii) Organization of Subsidiaries. Each Subsidiary of Jefferies is duly incorporated
and validly existing under the laws of its jurisdiction of organization, and has all requisite
corporate power and authority and governmental authorizations to own, operate and lease its
properties and to carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, except where the failure to be so
authorized, licensed or qualified in any such jurisdiction, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

     (iii) Authorization; No Conflicts. (i) Jefferies has full corporate power and
authority to execute and deliver this Agreement and the Ancillary Documents and to consummate the
transactions contemplated hereby and thereby (the “Transactions”). The execution, delivery
and performance by Jefferies of this Agreement and each Ancillary Document and the consummation of
the Transactions have been duly authorized by the Board of Directors of Jefferies. No other
corporate proceedings on the part of Jefferies are necessary to authorize the execution, delivery

4

 

and performance by Jefferies of this Agreement and each Ancillary Document and consummation of
the Transactions. This Agreement has been, and at or prior to the Closing or at such time as such
Ancillary Document is entered into, each Ancillary Document to which it is a party will be, duly
and validly executed and delivered by Jefferies. This Agreement is, and upon its execution at or
prior to the Closing or at such time as such Ancillary Document is entered into, each Ancillary
Document to which it is a party will be, a valid and binding obligation of Jefferies, enforceable
against it in accordance with its terms.

     (ii) The execution, delivery and performance of this Agreement and the Ancillary Documents,
the consummation by Jefferies of the Transactions and the compliance by Jefferies with any of the
provisions hereof and thereof will not conflict with, violate or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse of time or both
would constitute a default) under, or result in the termination of or accelerate the performance
required by, or result in a right of termination or acceleration under, (A) any provision of the
Amended and Restated Certificate of Incorporation or By-laws of Jefferies or the certificate of
incorporation, charter, by-laws or other governing instrument of any Subsidiary of Jefferies or (B)
any mortgage, note, indenture, deed of trust, lease, loan agreement or other agreement or
instrument or any permit, concession, grant, franchise, license, judgment, order, decree, ruling,
injunction, statute, law, ordinance, rule or regulation applicable to Jefferies or any of its
Subsidiaries or any of their respective properties or assets.

     (iv) Consents. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required on the part of Jefferies or any of
its Subsidiaries in connection with the execution, delivery and performance by Jefferies of this
Agreement and the Ancillary Documents to which it is a party and the consummation by Jefferies of
the Transactions.

     (v) Capitalization. The authorized capital stock of Jefferies consists of (i)
500,000,000 shares of Jefferies Common Stock of which, as of April 18, 2008, 133,059,610 shares
were issued and outstanding and (ii) 10,000,000 shares of preferred stock, par value $.0001, of
Jefferies, of which 125,000 shares, designated as 3.25% Series A Cumulative Convertible Preferred
Stock, were issued and outstanding as of April 18, 2008. As of April 18, 2008, Jefferies held
31,542,113 shares of Jefferies Common Stock in its treasury. As of December 31, 2007 there were
38,426,001 shares of Jefferies Common Stock reserved for issuance in connection with employee
benefit, stock option and dividend reinvestment and stock purchase plans and 23,733,127 shares of
Jefferies Common Stock remaining available for future issuance under such employee benefit, stock
option and dividend reinvestment and stock purchase plans. As of the three months ended December
31, 2007 and March 31, 2008, the weighted average number of shares of Jefferies Common Stock
outstanding (basic and diluted treasury method) was 140,726,000 and 141,784,000, respectively. All
of the issued and outstanding shares of Jefferies capital stock have been duly and validly
authorized and issued and are fully paid and nonassessable, and are not subject to preemptive
rights. No bonds, debentures, notes or other indebtedness having the right to vote on any matters
on which the stockholders of Jefferies may vote (“Jefferies Voting Debt”) are issued and
outstanding. Other than as set forth in this subsection (e) or pursuant to this Agreement or the
Certificate of Designations for the 3.25% Series A Cumulative Convertible Preferred Stock, (A) no
equity securities or Jefferies Voting Debt of Jefferies are or may be required to be issued by
reason of

5

 

any options, warrants, rights to subscribe to, calls or commitments of any character
whatsoever, (B) there are outstanding no securities or rights convertible into or exchangeable for
any equity securities or Jefferies Voting Debt of Jefferies and (C) there are no contracts,
commitments, understandings or arrangements by which Jefferies is bound to issue additional equity
securities or Jefferies Voting Debt or options, warrants or rights to purchase or acquire any
additional equity securities or Jefferies Voting Debt.

     (vi) Reports; Financial Statements; Controls.

     (i) Since January 1, 2005, Jefferies has filed all Reports, and has paid all fees and
assessments due and payable in connection therewith. As of their respective dates, the Reports
complied in all material respects with applicable requirements of the Securities Act or the
Exchange Act and the published rules and regulations of the SEC and did not as of the date of
filing thereof with the SEC contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.

     (ii) Each of the consolidated balance sheets, and the related consolidated statements of
income, changes in stockholders’ equity and cash flows, included in the Reports filed with the SEC
under the Exchange Act fairly present in all material respects the consolidated financial position
of Jefferies and its consolidated Subsidiaries as of the dates shown and the results of the
consolidated operations, changes in stockholders’ equity and cash flows of Jefferies and its
consolidated Subsidiaries for the respective fiscal periods or as of the respective dates therein
set forth, subject, in the case of any unaudited financial statements, to normal recurring year-end
audit adjustments, complied as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto and have been prepared in accordance with GAAP
consistently applied during the periods involved, except as otherwise set forth in the notes
thereto.

     (iii) Jefferies (A) has implemented and maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to
Jefferies, including its consolidated Subsidiaries, is made known to the chief executive officer
and the chief financial officer of Jefferies by others within those entities, and (B) has
disclosed, based on its most recent evaluation prior to the date hereof, to Jefferies outside
auditors and the audit committee of Jefferies Board of Directors (x) any significant deficiencies
and material weaknesses in the design or operation of internal controls over financial reporting
(as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect
Jefferies ability to record, process, summarize and report financial information and (y) any fraud,
whether or not material, that involves management or other employees who have a significant role in
Jefferies internal controls over financial reporting.

     (vii) Absence of Certain Changes. Since January 1, 2008 until the date hereof, and
except as publicly disclosed by Jefferies in the Reports filed by it with the SEC and publicly
available prior to the date hereof, and except for its results of operations for the three month
period ended March 31, 2008 previously disclosed to Leucadia, (i) Jefferies and its Subsidiaries
have conducted their respective businesses in all material respects in the ordinary course,

6

 

consistent with prior practice, (ii) except for publicly disclosed ordinary dividends on the
Jefferies Common Stock and the 3.25% Series A Cumulative Convertible Preferred Stock, Jefferies has
not made or declared any distribution in cash or in kind to its stockholders or issued any shares
of its capital stock or other equity interests and (iii) no event or events have occurred that,
individually or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.

     (viii) No Undisclosed Liabilities, etc. Neither Jefferies nor its Subsidiaries has
any liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) which are
not fully reflected or reserved against in the financial statements described in Section 3.01(f),
except for liabilities that have arisen since December 31, 2007 in the ordinary and usual course of
business and consistent with past practice and that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Material Adverse Effect.

     (ix) Compliance with Applicable Law. Each of Jefferies and its Subsidiaries holds all
licenses, franchises, permits and authorizations necessary for the lawful conduct of its business
under, and has complied in all material respects and is not in default or violation in any respect
of, any law, statute, order, rule, regulation, policy or guideline of any Federal, state or local
governmental authority applicable to Jefferies or such Subsidiary, other than such non-compliance,
defaults or violations that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect.

     (x) Legal Proceedings. Except as set forth in the Reports filed and publicly
available prior to the date hereof, neither Jefferies nor any of its Subsidiaries is a party to
any, and there are no pending, or to the knowledge of Jefferies, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental investigations of any nature against
Jefferies or any of its Subsidiaries or to which any of their assets are subject (i) that,
individually or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect or (ii) relating to or which challenges the validity or propriety of the
Transactions. Neither Jefferies nor any of its Subsidiaries is subject to any order, judgment or
decree of a Governmental Entity that, individually or in the aggregate, has had or would reasonably
be expected to have a Material Adverse Effect.

     (xi) State Takeover Laws. Jefferies’ Board of Directors has taken all action
necessary to render inapplicable to Leucadia the restrictions on “business combinations” set forth
in Section 203 of the DGCL and, to the knowledge of Jefferies, any similar “moratorium,” “control
share,” “fair price,” “takeover” or “interested stockholder” law applicable to transactions between
Leucadia and Jefferies.

     (xii) Status of Jefferies Shares. The Jefferies Shares have been duly authorized by
all necessary corporate action. When issued and sold against receipt of the consideration
therefor, the Jefferies Shares will be validly issued, fully paid and nonassessable, will not
subject the holders thereof to personal liability and will not be subject to preemptive rights of
any other stockholder of Jefferies.

     (xiii) Offering of Securities. Neither Jefferies nor any Person acting on its behalf
has offered the Jefferies Shares for sale to, solicited any offers to buy any of the Jefferies
Shares or

7

 

from or otherwise approached or negotiated with respect to any of the Jefferies Shares with
any Person other than Leucadia. Neither Jefferies nor any Person acting on its behalf has taken or
will take any action (including, without limitation, any offering of any securities of Jefferies
under circumstances which would require the integration of such offering with the offering of any
of the Jefferies Shares under the Securities Act and the rules and regulations of the SEC
thereunder) which might subject the offering, issuance or sale of any of the Jefferies Shares to
the registration requirements of the Securities Act.

     (n) Securities Act. Jefferies is acquiring the Leucadia Shares solely for the purpose
of investment and not with a view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act.

     (xv) Brokers and Finders. Neither Jefferies nor any of its Subsidiaries nor any of
their respective officers, directors, employees or agents has utilized any broker, finder,
placement agent or financial advisor or incurred any liability for any fees or commissions in
connection with any of the Transactions.

     (xvi) Ownership of Leucadia Stock. As of the date hereof, Jefferies and it
Subsidiaries beneficially own (determined in accordance with Rule 13d-3 of the Exchange Act) an
aggregate of 6,181 shares of Leucadia Common Stock and $17,794,000 principal amount of Leucadia’s
3-3/4% Convertible Senior Subordinated Debt that is currently convertible into 774,775 shares of
Leucadia Common Stock. After giving effect to the issuance of Leucadia Common Stock pursuant to
the Transactions, the shares of Leucadia Common Stock beneficially owned by Jefferies will
represent less than 5% of Leucadia Common Stock then outstanding as determined in accordance with
Rule 13d-3.

     Section 3.02. Representations and Warranties of Leucadia. Except as disclosed in the
Reports filed with or furnished to the SEC by Leucadia prior to the date hereof, Leucadia
represents and warrants to, and agrees with, Jefferies, as of the date hereof (or as of such
earlier date in the case of any representation or warranty expressly made as of an earlier date),
as follows:

     (i) Organization and Good Standing of Leucadia; Organizational Documents. (i)
Leucadia is duly incorporated, validly existing and in good standing under the laws of the State of
New York and has all requisite corporate power and authority and governmental authorizations to
own, operate and lease its properties and to carry on its business as it is being conducted on the
date of this Agreement. Leucadia is duly licensed or qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so as to require such qualification, except
where the failure to be so licensed or qualified in any such jurisdiction would not reasonably be
expected to have a Material Adverse Effect.

     (ii) Organization and Good Standing of Subsidiaries. Each Subsidiary of Leucadia is
duly incorporated and validly existing under the laws of its jurisdiction of organization, and has
all requisite corporate power and authority and governmental authorizations to own, operate and
lease its properties and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each other jurisdiction in which it owns or leases
properties, or

8

 

conducts any business, so as to require such qualification, except where the failure to be so
authorized, licensed or qualified in any such jurisdiction, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

     (iii) Authorization; No Conflicts. Leucadia has full corporate power and authority to
execute and deliver this Agreement and the Ancillary Documents and to consummate the Transactions.
The execution, delivery and performance by Leucadia of this Agreement and each Ancillary Document
and the consummation of the Transactions have been duly authorized by the Board of Directors of
Leucadia. No other corporate proceedings on the part of Leucadia are necessary to authorize the
execution, delivery and performance by Leucadia of this Agreement and each Ancillary Document and
consummation of the Transactions. This Agreement has been, and at or prior to the Closing, each
Ancillary Document to which it is a party will be, duly and validly executed and delivered by
Leucadia. This Agreement is, and upon its execution at or prior to the Closing each Ancillary
Document to which it is a party will be, a valid and binding obligation of Leucadia, enforceable
against it in accordance with its terms.

     (i) The execution, delivery and performance of this Agreement and the Ancillary Documents, the
consummation by Leucadia of the Transactions and the compliance by Leucadia with any of the
provisions hereof and thereof will not conflict with, violate or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse of time or both
would constitute a default) under, or result in the termination of or accelerate the performance
required by, or result in a right of termination or acceleration under, (A) any provision of the
Restated Certificate of Incorporation or By-laws of Leucadia or the certificate of incorporation,
charter, by-laws or other governing instrument of any Subsidiary of Leucadia or (B) any mortgage,
note, indenture, deed of trust, lease, loan agreement or other agreement or instrument or any
permit, concession, grant, franchise, license, judgment, order, decree, ruling, injunction,
statute, law, ordinance, rule or regulation applicable to Leucadia or any of its Subsidiaries or
any of their respective properties or assets.

     (iv) Consents. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required on the part of Leucadia or any of
its Subsidiaries in connection with the execution, delivery and performance by Leucadia of this
Agreement and the Ancillary Documents to which it is a party and the consummation by Leucadia of
the Transactions.

     (v) Capitalization.

     (i) The authorized capital stock of Leucadia consists of (i) 600,000,000 shares of Leucadia
Common Stock of which, as of March 31, 2008, 222,610,840 shares were issued and outstanding and
(ii) 6,000,000 shares of preferred stock, par value $1.00 per share, of Leucadia, of which no
shares were issued and outstanding as of March 31, 2008. As of March 31, 2008, Leucadia held
56,886,204 shares of Leucadia Common Stock in its treasury. As of March 31, 2008 there were
22,649,801 shares of Leucadia Common Stock reserved for issuance in connection with outstanding
warrants, the Company’s stock option plan and the Company’s outstanding 3-3/4 % Convertible Senior
Subordinated Debt. All of the issued and outstanding shares of Leucadia capital stock have been
duly and validly authorized and issued and are fully paid and nonassessable, and are not subject to
preemptive rights. No bonds, debentures, notes or

9

 

other indebtedness having the right to vote on any matters on which the stockholders of
Leucadia may vote (“Leucadia Voting Debt”) are issued and outstanding. Other than as set
forth in this subsection (e) or pursuant to this Agreement or the 3-3/4 % Convertible Senior
Subordinated Debt, (A) no equity securities or Leucadia Voting Debt of Leucadia are or may be
required to be issued by reason of any options, warrants, rights to subscribe to, calls or
commitments of any character whatsoever, (B) there are outstanding no securities or rights
convertible into or exchangeable for any equity securities or Leucadia Voting Debt of Leucadia and
(C) there are no contracts, commitments, understandings or arrangements by which Leucadia is bound
to issue additional equity securities or Leucadia Voting Debt or options, warrants or rights to
purchase or acquire any additional equity securities or Leucadia Voting Debt.

     (vi) Reports; Financial Statements; Controls.

     (i) Since January 1, 2005, Leucadia has filed all Reports, and has paid all fees and
assessments due and payable in connection therewith. As of their respective dates, the Reports
complied in all material respects with applicable requirements of the Securities Act or the
Exchange Act and the published rules and regulations of the SEC and did not as of the date of
filing thereof with the SEC contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.

     (ii) Each of the consolidated balance sheets, and the related consolidated statements of
income, changes in stockholders’ equity and cash flows, included in the Reports filed with the SEC
under the Exchange Act fairly present in all material respects the consolidated financial position
of Leucadia and its consolidated Subsidiaries as of the dates shown and the results of the
consolidated operations, changes in stockholders’ equity and cash flows of Leucadia and its
consolidated Subsidiaries for the respective fiscal periods or as of the respective dates therein
set forth, subject, in the case of any unaudited financial statements, to normal recurring year-end
audit adjustments, complied as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto and have been prepared in accordance with GAAP
consistently applied during the periods involved, except as otherwise set forth in the notes
thereto.

     (iii) Leucadia (A) has implemented and maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to
Leucadia, including its consolidated Subsidiaries, is made known to the chief executive officer and
the chief financial officer of Leucadia by others within those entities, and (B) has disclosed,
based on its most recent evaluation prior to the date hereof, to Leucadia outside auditors and the
audit committee of Leucadia Board of Directors (x) any significant deficiencies and material
weaknesses in the design or operation of internal controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect Leucadia ability
to record, process, summarize and report financial information and (y) any fraud, whether or not
material, that involves management or other employees who have a significant role in Leucadia
internal controls over financial reporting.

10

 

     (vii) Absence of Certain Changes. Since January 1, 2008 until the date hereof, and
except as publicly disclosed by Leucadia in the Reports filed by it with the SEC and publicly
available prior to the date hereof, and except as previously disclosed to Jefferies in connection
with the Transactions, (i) Leucadia and its Subsidiaries have conducted their respective businesses
in all material respects in the ordinary course, consistent with prior practice, (ii) except for
publicly disclosed ordinary dividends on the Leucadia Common Stock, Leucadia has not made or
declared any distribution in cash or in kind to its stockholders or issued any shares of its
capital stock or other equity interests and (iii) no event or events have occurred that,
individually or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.

     (viii) No Undisclosed Liabilities, etc. Neither Leucadia nor its Subsidiaries has any
liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) which are not
fully reflected or reserved against in the financial statements described in Section 3.02(f),
except for liabilities that have arisen since December 31, 2007 in the ordinary and usual course of
business and consistent with past practice and that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Material Adverse Effect.

     (ix) Compliance with Applicable Law. Each of Leucadia and its Subsidiaries holds all
licenses, franchises, permits and authorizations necessary for the lawful conduct of its business
under, and has complied in all material respects and is not in default or violation in any respect
of, any law, statute, order, rule, regulation, policy or guideline of any Federal, state or local
governmental authority applicable to Leucadia or such Subsidiary, other than such non-compliance,
defaults or violations that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect.

     (x) Legal Proceedings. Except as set forth in the Reports filed and publicly
available prior to the date hereof, neither Leucadia nor any of its Subsidiaries is a party to any,
and there are no pending, or to the knowledge of Leucadia, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental investigations of any nature against
Leucadia or any of its Subsidiaries or to which any of their assets are subject (i) that,
individually or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect or (ii) relating to or which challenges the validity or propriety of the
Transactions. Neither Leucadia nor any of its Subsidiaries is subject to any order, judgment or
decree of a Governmental Entity that, individually or in the aggregate, has had or would reasonably
be expected to have a Material Adverse Effect.

     (xi) Status of Leucadia Shares. The Leucadia Shares have been duly authorized by all
necessary corporate action. When issued and sold against receipt of the consideration therefor,
the Leucadia Shares will be validly issued, fully paid and nonassessable, will not subject the
holders thereof to personal liability and will not be subject to preemptive rights of any other
stockholder of Leucadia.

     (xii) Offering of Securities. Neither Leucadia nor any Person acting on its behalf
has offered the Leucadia Shares for sale to, solicited any offers to buy any of the Leucadia Shares
or from or otherwise approached or negotiated with respect to any of the Leucadia Shares with any
Person other than Jefferies. Neither Leucadia nor any Person acting on its behalf has taken or

11

 

will take any action (including, without limitation, any offering of any securities of
Leucadia under circumstances which would require the integration of such offering with the offering
of any of the Leucadia Shares under the Securities Act and the rules and regulations of the SEC
thereunder) which might subject the offering, issuance or sale of any of the Leucadia Shares to the
registration requirements of the Securities Act.

     (n) Securities Act. Leucadia is acquiring the Jefferies Shares solely for the purpose
of investment and not with a view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act.

     (xiii) Brokers and Finders. Neither Leucadia nor any of its Subsidiaries nor any of
their respective officers, directors, employees or agents has utilized any broker, finder,
placement agent or financial advisor or incurred any liability for any fees or commissions in
connection with any of the Transactions.

     (xiv) Ownership Interest in Jefferies. As of the date hereof, Leucadia beneficially
owns in the aggregate 4,265,800 shares of Jefferies Common Stock.

     (xv) Antitrust. The waiting period (and any extension thereof) applicable to the
Transactions under the HSR Act and any other clearances or approvals required under applicable
competition, merger control, antitrust or similar law have been granted, terminated or have
expired, without any conditions, restrictions, requirements or change of regulation or any other
action taken.

ARTICLE IV

Additional Agreements of the Parties

     Section 4.01. Taking of Necessary Action. Subject to the conditions set forth in
Article V hereof, each of the parties hereto agrees to use all reasonable best efforts promptly to
take or cause to be taken all action and promptly to do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations to consummate and make effective the
Transactions. Each party shall execute and deliver both before and after the Closing such further
certificates, agreements and other documents and take such other actions as the other party may
reasonably request to consummate or implement the Transactions or to evidence such events or
matters.

     Section 4.02. Securities Laws; Legends. (i) Leucadia acknowledges and agrees that as
of the date hereof that the Jefferies Shares have not been registered under the Securities Act or
the securities laws of any state and that they may be sold or otherwise disposed of only if
registered under the Securities Act or pursuant to an exemption therefrom. Leucadia acknowledges
that, except as provided in the Ancillary Documents, Leucadia has no right to require Jefferies to
register the Jefferies Shares. Leucadia further acknowledges and agrees that each certificate for
the Leucadia shall bear a legend substantially as set forth in paragraph (c) of this Section 4.02.

     (ii) Jefferies acknowledges and agrees that as of the date hereof that the Leucadia Shares
have not been registered under the Securities Act or the securities laws of any state and

12

 

that they may be sold or otherwise disposed of only if registered under the Securities Act or
pursuant to an exemption therefrom. Jefferies acknowledges that, except as provided in the
Ancillary Documents, Jefferies has no right to require Leucadia to register the Leucadia Shares.
Jefferies further acknowledges and agrees that each certificate for the Leucadia Shares shall bear
a legend substantially as set forth in paragraph (c) of this Section 4.02.

     (iii) Certificates for the Jefferies Shares and the Leucadia Shares shall bear legends in
substantially the following form:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COMPANY’S COUNSEL
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

     (iv) When issued pursuant hereto, the certificates evidencing the Jefferies Shares and the
Leucadia Shares shall also bear any legend required by any applicable state blue sky law.

     Section 4.03. Regulatory Matters.

     (i) Leucadia and Jefferies shall use commercially reasonable efforts to promptly prepare and
file all necessary documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and authorizations of all
third parties and Governmental Entities which are necessary or advisable to consummate the
Transactions. Jefferies and Leucadia shall have the right to consult the other, in each case
subject to applicable laws relating to the exchange of information, with respect to any filing made
with, or written materials submitted to, any third party or any Governmental Entity in connection
with the Transactions. In exercising the foregoing right, each of the parties hereto shall act
reasonably and as promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and authorizations of
all third parties and Governmental Entities necessary or advisable to consummate the Transactions
and each party will keep the other apprised of the status of matters relating to completion of the
Transactions.

     (ii) Leucadia and Jefferies shall, upon request, furnish each other with all information
concerning themselves, their Subsidiaries, directors, officers and stockholders and such other
matters as may be reasonably necessary or advisable in connection with any statement, filing,
notice or application made by or on behalf of Leucadia, Jefferies or any of their respective
Subsidiaries to any Governmental Entity in connection with the Transactions.

     (iii) Leucadia and Jefferies shall promptly furnish the other with copies of written
communications received by them or their Subsidiaries from, or delivered by any of the foregoing
to, any Governmental Entity in respect of the Transactions (other than in respect of information
filed or otherwise submitted confidentially to any such Governmental Entity).

13

 

     (iv) Leucadia and Jefferies shall, and shall cause their Subsidiaries to, use commercially
reasonable efforts (i) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements that may be imposed on them or their Subsidiaries with
respect to the Transactions and, subject to the conditions set forth in Article V hereof, to
consummate the Transactions and (ii) subject to the conditions set forth in Article V hereof, to
obtain (and to cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity and any other third party which is
required to be obtained by Jefferies or Leucadia or any of their respective Subsidiaries in
connection with the Transactions, and to comply with the terms and conditions of such consent,
authorization, order or approval.

     Section 4.04. Share Listing. Each of Jefferies and Leucadia shall promptly use its
reasonable best efforts to cause the Jefferies Shares and the Leucadia Shares, respectively, to be,
upon official notice of issuance, listed on the NYSE.

     Section 4.05. Registration Rights Agreements; Letter Agreement. As soon as reasonably
practicable after the date hereof, Leucadia and Jefferies shall execute (i) Registration Rights
Agreements consistent with the terms described in Annex A to Exhibit A of this Agreement, and (ii)
a letter agreement providing that no request of Leucadia or its subsidiaries for any additional
capital investment in Jefferies High Yield Holdings, LLC shall be made without the unanimous
consent of the Board of Directors of Jefferies, including Leucadia’s designees to the Jefferies
Board of Directors (the “Letter Agreement”).

ARTICLE V

Additional Agreements

     Section 5.01. Leucadia Closing Deliverables. At the Closing, Leucadia shall have
executed and delivered to Jefferies the Standstill Agreement, in the form attached hereto as
Exhibit A.

     Section 5.02. Jefferies Closing Deliverables. At the Closing, Jefferies shall have
executed and delivered to Leucadia the Standstill Agreement, in the form attached hereto as
Exhibit A.

ARTICLE VI

Miscellaneous

     Section 6.01. Survival of Representations and Warranties. All representations and
warranties shall survive the Closing Date for a period of twelve months following the Closing Date,
and all covenants and agreements shall survive the Closing Date until the expiration of any
applicable statutes of limitation.

     Section 6.02. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered personally, by telecopier or sent
by overnight courier as follows:

14

 

	 	 	 	 	 
	     (i)	 	If to Leucadia, to:
	 
	 	 	 	 
	 	 	Leucadia National Corporation
	 	 	315 Park Avenue South
	 	 	New York, New York 10010
	 
	 	 	 	 
	 

	 	Attention:
	 	Joseph S. Steinberg
	 

	 	 	 	315 Park Avenue South
	 

	 	 	 	New York, New York 10010
	 

	 	 	 	Fax: (212) 598-4869
	 
	 	 	 	 
	 	 	With copies to:
	 
	 	 	 	 
	 	 	Weil, Gotshal & Manages, LLP
	 	 	767 Fifth Avenue
	 	 	New York, New York 10153-0119
	 
	 	 	 	 
	 

	 	Attention:
	 	Andrea A. Bernstein, Esq.
	 

	 	 	 	Fax: (212) 310-8007
	 
	 	 	 	 
	     (ii)	 	If to Jefferies, to:
	 
	 	 	 	 
	 	 	Jefferies Group, Inc.
	 	 	520 Madison Avenue
	 	 	New York, New York 10021
	 
	 	 	 	 
	 

	 	Attention:
	 	General Counsel
	 	 	Fax: (212) 284-2280
	 
	 	 	 	 
	 	 	With a copy to:
	 
	 	 	 	 
	 	 	Morgan, Lewis & Bockius LLP
	 	 	101 Park Avenue
	 	 	New York, New York 10178
	 
	 	 	 	 
	 

	 	Attention:
	 	Stephen P. Farrell, Esq.
	 

	 	 	 	Robert W. Dickey, Esq.
	 

	 	 	 	Fax: (212) 309-6001

or to such other address or addresses as shall be designated in writing. All notices shall be
effective when received.

     Section 6.03. Entire Agreement; Third Party Beneficiaries; Amendment. This Agreement,
the Registration Rights Agreements, and the Standstill Agreement and the documents described herein
and therein or attached or delivered pursuant hereto or thereto set forth the entire agreement
between the parties hereto with respect to the Transactions, and are not intended to and shall not
confer upon any person other than the parties hereto any rights or

15

 

remedies hereunder. Any provision of this Agreement may be amended or modified in whole or in
part at any time by an agreement in writing between the parties hereto executed in the same manner
as this Agreement. No failure on the part of any party to exercise, and no delay in exercising,
any right shall operate as a waiver thereof nor shall any single or partial exercise by any party
of any right preclude any other or future exercise thereof or the exercise of any other right. No
investigation by Leucadia or Jefferies prior to or after the date hereof shall prevent or limit
Leucadia or Jefferies from exercising any right hereunder or be deemed to be a waiver of any such
right.

     Section 6.04. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute any original, but all of which together
shall constitute one and the same documents.

     Section 6.05. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of New York.

     Section 6.06. Public Announcements. Subject to each party’s disclosure obligations
imposed by law, each of the parties hereto will cooperate with each other in the development and
distribution of all news releases and other public information disclosures with respect to this
Agreement and any of the Transactions, and no party hereto will make any such news release or
public disclosure without first consulting with the other party hereto.

     Section 6.07. Expenses. Each party hereto shall bear its own costs and expenses
(including attorneys’ fees) incurred in connection with this Agreement and the Ancillary Documents
and the Transactions.

     Section 6.08. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, Jefferies’ successors and
assigns and Leucadia’s successors and assigns, and no other person; provided, that, subject
to applicable law, Leucadia may assign its rights under this Agreement to any of its Affiliates,
but no such assignment shall relieve Leucadia of its obligations hereunder.

     Section 6.09. Remedies; Waiver. To the extent permitted by law, all rights and
remedies existing under this Agreement or any Ancillary Documents are cumulative to, and are
exclusive of, any rights or remedies otherwise available under applicable law. No failure on the
part of any party to exercise, or delay in exercising, any right hereunder shall be deemed a waiver
thereof, nor shall any single or partial exercise preclude any further or other exercise of such or
any other right.

     Section 6.10. Consent to Jurisdiction. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal or state court located in the Borough of
Manhattan in the City of New York, New York in the event any dispute arises out of this Agreement,
any of the Ancillary Documents or the Transactions, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any such court and (c)
agrees that it will not bring any action relating to this Agreement, any of the Ancillary Documents
or the Transactions in any court other than a Federal or state court located in the Borough of
Manhattan in the City of New York, New York.

16

 

     Section 6.11. Severability. If any provision of this Agreement is determined to be
invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall remain in full
force and effect provided that the economic and legal substance of, any of the Transactions is not
affected in any manner materially adverse to any party. In the event of any such determination,
the parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as
possible the original intent and purpose hereof. To the extent permitted by law, the parties
hereby to the same extent waive any provision of law that renders any provision hereof prohibited
or unenforceable in any respect.

     Section 6.12. Headings. The headings of Articles and Sections contained in this
Agreement are for reference purposes only and are not part of this Agreement.

17

 

     IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their
respective duly authorized officers, all as of the date first above written.

	 	 	 	 	 
	 	LEUCADIA NATIONAL CORPORATION

 	 
	 	By:  	/s/ Barbara L. Lowenthal
 	 
	 	 	Name:  	BARBARA L. LOWENTHAL 	 
	 	 	Title:  	VICE PRESIDENT 	 
	 
	 	JEFFERIES GROUP, INC.

 	 
	 	By:  	/s/ Richard B. Handler
 	 
	 	 	Name:  	RICHARD B. HANDLER	 
	 	 	Title:  	CHIEF EXECUTIVE OFFICER	 
	 

[Investment Agreement Signature Page]

18

 

Exhibit A

Form of Standstill AgreementEX-10.2

 

Exhibit 10.2

EXECUTION COPY

LEUCADIA NATIONAL CORPORATION

315 Park Avenue South

New York, New York 10010

April 20, 2008

Jefferies Group, Inc.

520 Madison Avenue, 12th Floor

New York, New York 10021

Ladies and Gentlemen:

We have discussed with you our intention to acquire shares of common stock, $0.0001 par value per
share (the “Common Stock”), of Jefferies Group, Inc., a Delaware corporation (the “Company”), and
the possibility that the Company may enact certain shareholder protection measures. In
consideration of your forbearing the enactment of such measures at the present time, and without
prejudice to the Company’s enactment of such measures in the future, intending to be legally bound,
we agree as follows:

1. We agree that, until April 21, 2010, without the prior approval of a majority of the members of
the Board of Directors of the Company (the “Board”) who are not Associates or Affiliates of ours
and who have not been nominated to serve on the Board by us or any of our Affiliates or Associates
(the “Disinterested Directors”), we and our subsidiaries, Associates, Affiliates and any persons
with whom we have formed a “group” (within the meaning of Section 13(d)(3) of the Exchange Act)
(together, the “Restricted Persons”) will not: (a) enter into or agree, offer, seek or propose to
enter into, directly or indirectly, any merger, acquisition transaction or other business
combination, or recapitalization, restructuring, liquidation or other extraordinary transaction
involving the Company or any of its subsidiaries or any of their respective assets or properties;
(b) make, or in any way participate in, directly or indirectly, any “solicitation” of “proxies” (as
such terms are used in the proxy rules of the Securities and Exchange Commission promulgated under
the Exchange Act) or consents to vote or refrain from voting, or seek to advise or influence any
person with respect to the voting of, any voting securities of the Company or any of its
subsidiaries in connection with seeking the removal of any directors on the Board or a change in
the size or composition of the Board, or call a special shareholder’s meeting for any such purpose
(provided, however, that such restriction shall not apply in the event that the
Company or the Board schedules the Company’s annual meeting of shareholders to be held in 2010 (the
“2010 Annual Meeting”) for a date prior to May 5, 2010); or (c) directly or indirectly enter into
any discussions, negotiations, arrangements or understandings with any other person (including any
individual, firm, corporation, partnership or other entity or any “person” as such term is used in
Section 13(d) or Section 14(d)(2) of the Exchange Act) (“person”) with respect to any of the
foregoing activities or propose any of such activities. The “Exchange Act” means the Securities
Exchange Act of 1934, as amended, or any successor statute. The terms “Affiliate” and “Associate”
shall have the meanings set forth in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.

 

 

2. We acknowledge that the Restricted Persons have acquired approximately 3.2% of the outstanding
Common Stock and, until the second anniverary of the date hereof, without the prior approval of a
majority of the Disinterested Directors, we agree that the Restricted Persons will not acquire any
additional shares of Common Stock (or rights in respect thereof) or the right or rights to vote
additional voting securities of the Company, if as a result of thereof, the Restricted Persons
would have beneficial ownership (within the meaning of Section 13(d) of the Exchange Act) of in
excess of 30% of the voting power of the Common Stock; provided, however, the
Company agrees that if any other person, or group of which such other person is a part, that is
unaffiliated with the Restricted Persons shall acquire more than 30% of the voting power of the
Common Stock, then we shall be permitted to acquire such number of additional shares of Common
Stock that would permit the Restricted Persons to beneficially own an aggregate amount of the
Common Stock having voting power equal to the voting power of such other unaffiliated person,
entity or group plus one percent (1%), such that the Restricted Persons are able to remain the
largest holder of Common Stock by one percent (1%).

3. We agree that, until April 21, 2010, without the prior approval of a majority of the
Disinterested Directors, the Restricted Persons will not sell or dispose of, in a single
transaction or series of transactions, Common Stock (or rights in respect thereof) to any other
person or “group”, unless: (a) such sale is part of a tender offer or exchange offer made to all
stockholders of the Company by a person other than us or who is not a subsidiary or an Affiliate or
Associate of ours and is not a part of a “group” of which we are a part; or (b) such disposition is
pursuant to a dividend or distribution made by us on a pro rata basis to our shareholders.

4. The restrictions set forth in Paragraph 2 hereof are expressly agreed to preclude us from
engaging in any hedging or other transaction which is or would result in the acquisition of
“beneficial ownership” (as defined in Rule 13d-3 of the Exchange Act) of Common Stock in
contravention of the provisions of this letter agreement. Such prohibited hedging or other
transactions would include, without limitation, any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to Common Stock or with
respect to any security that includes, relates to, or derives any significant part of its value
from such Common Stock, including, without limitation, any such purchase, sale or grant settled in
cash.

5. We agree that, until April 21, 2010, at any meeting of the shareholders of the Company, however
called, or in any other circumstance in which the vote, consent or approval of the shareholders of
the Company, in their capacity as shareholders, is sought, with respect to the election of
directors of the Company, that we shall vote or give our consent with respect thereto, or cause to
be voted or consent to be given with respect thereto, all shares of Common Stock held by the
Restricted Persons, or over which we exercise voting control, in favor of those nominees approved
by the Disinterested Directors; provided, if we have become and remain entitled to
designate individuals for election to the Board in accordance with Paragraph 6 hereof, that our
nominees shall have been nominated to serve on the Board upon the expiration of their terms of
office, if any such terms are expiring, to the extent required under Paragraph 6; and provided
further, that the obligations set forth in this paragraph shall not apply to the 2010 Annual
Meeting in the event that the Company or the Board schedules the 2010 Annual Meeting on a date
prior to May 5, 2010. We agree that we will not grant any proxy, power-of-attorney or

-2-

 

other authorization in or with respect to any shares of Common Stock that are held by the Reporting
Persons, or over which we exercise voting control, or take any other action, in our capacity as a
shareholder of the Company, that would in any way restrict, limit or interfere with the performance
of our obligations hereunder.

6. Promptly following execution of this Agreement, the Company shall increase the size of the Board
by two (2) directorships, and the vacancies on the Board created thereby shall be filled by the
Disinterested Directors with two of our designees to be selected by us in our sole discretion, who
initially shall be Ian M. Cumming and Joseph S. Steinberg. In each subsequent election of
directors of the Company, the Company shall use its best efforts to nominate a slate such that the
Board will include two directors designated by us. If any of our director designees resigns or
becomes ineligible to serve on the Board, we shall have the right to designate a replacement for
such director designee, provided such replacement is eligible to serve on the Board and is
reasonably acceptable to the Company. Upon our request, at least one of our director designees
shall be appointed to serve on each committee of the Board, with the exception of the audit
committee, provided that such designee is qualified to serve on such committee under applicable
regulations and listing standards. The Company shall not increase the size of the Board beyond
nine (9) directorships without the approval of both a majority of the members of the Board and our
director designees. If, we (including our subsidiaries, Associates and Affiliates) subsequently
sell or otherwise dispose of shares of Common Stock and, as a result, we (including our
subsidiaries, Associates and Affiliates) shall beneficially own less than 15% of the Common Stock,
we shall cause the individuals designated by us then serving on the Board to resign from the Board
if requested by the Disinterested Directors and, subject to the proviso below, we shall no longer
be entitled to representation on the Board; provided, however, that if we purchase
additional shares of Common Stock such that we again own 15% or more of the Common Stock within
sixty (60) days of such request by the Disinterested Directors, the individuals designated by us
then serving on the Board shall not be required to resign and we shall continue to be entitled to
representation on the Board pursuant to this letter agreement.

7. The Company shall furnish us with such financial information concerning the Company that we
request to enable us to timely comply with our reporting obligations under applicable securities
laws.

8. As soon as reasonably practicable, the Company and we shall enter into a mutually acceptable
registration rights agreement having the principal terms set forth on Annex A hereto affording us
the right to require the Company, at the Company’s expense, to file with the Securities and
Exchange Commission, upon our demand, a registration statement on Form S-3 registering the resale
of the shares of Common Stock owned by us.

9. We agree that all shares of Common Stock that we beneficially own as of the date of this letter
agreement, and any shares of Common Stock that we purchase or with respect to which we otherwise
acquire beneficial ownership or voting rights, directly or indirectly, after the date of this
letter agreement, including, without limitation, shares issued upon the conversion, exercise or
exchange, as the case may be, of securities held by us that are convertible into, or exercisable or
exchangeable for, shares of Common Stock, shall be subject to the terms and conditions of this
letter agreement.

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10. Except as otherwise provided herein, the restrictions and agreements made by us contained in
Paragraphs 1, 2, 4, 5 and 6 shall terminate upon the earliest to occur of: (a) such time as the
Restricted Persons own less than 5% of the Common Stock; (b) the Company’s breach of any material
provision of this Agreement, which breach shall continue uncured for more than 30 days after
written notice of such breach shall have been delivered by us to the Disinterested Directors (but
any such breach hereof by the Company shall not relieve the Company of the restrictions and
agreements made by it herein); (c) the acquisition by any person or “group” that is not affiliated
or associated with us of a majority of the Common Stock; (d) the date on which the Company shall
have entered into any merger, acquisition transaction or other business combination involving the
merger or acquisition of the Company or all or substantially all of its assets or properties; or
(e) April 21, 2010. The restrictions and agreements made by us contained in Paragraph 3 shall
terminate upon the earliest to occur of: (a) the Company’s breach of any material provision of
this Agreement, which breach shall continue uncured for more than 30 days after written notice of
such breach shall have been delivered by us to the Disinterested Directors (but any such breach
hereof by the Company shall not relieve the Company of the restrictions and agreements made by it
herein); or (b) April 21, 2010. The restrictions and obligations of the Company contained in
Paragraphs 6 hereof shall terminate upon the earliest to occur (x) if we breach any material
provision of this letter agreement, which breach shall continue uncured for more than 30 days after
written notice of such breach shall have been delivered by the Company to us, but any such breach
hereof by us shall not relieve us of the restrictions and agreements made by us herein or (y) April
21, 2010. Notwithstanding the foregoing, the provisions of Paragraph 7 hereof shall continue for
so long as (but only to the extent that) we are required to include financial information
concerning the Company in our public reporting).

11. The parties hereto acknowledge and agree that money damages would not be a sufficient remedy
for any breach or threatened breach of any provision of this letter agreement, and that in addition
to all other remedies which we or the Company may have, each of the parties hereto will be entitled
to seek specific performance and injunctive or other equitable relief as a remedy for any such
breach, without the necessity of posting any bond.

12. It is understood and agreed that no failure or delay by a party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any right, power
or privilege hereunder.

13. The invalidity or unenforceability of any provision of this letter agreement shall not affect
the validity or enforceability of any other provisions of this letter agreement, which shall remain
in full force and effect.

14. This letter agreement may not be amended, modified or waived, in whole or in part, except by a
separate writing signed by the Company and us expressly so amending, modifying or waiving such
agreement or any part thereof.

15. This letter agreement may be executed in two or more counterparts (including by means of
facsimile), each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. Receipt of an executed signature page to this letter

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agreement by facsimile or other electronic transmission shall constitute effective delivery
thereof. Electronic records of this executed letter agreement shall be deemed to be originals
thereof.

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16. This letter agreement shall not prohibit or limit, among other things, any action taken by any
of our designees in his or her capacity as, or in the performance of his or her duties as, a member
of the Board (including, without limitation, discussing any proposal concerning the Company with
other Board members and officers and other representatives of the Company and its and the Board’s
respective advisors).

17. Each party agrees and consents to personal jurisdiction and service of process and exclusive
venue in the federal or state courts in the County of New York in the State of New York for the
purposes of any action, suit or proceeding arising out of or relating to this letter agreement.
This letter agreement shall be governed by, and construed in accordance with, the laws of the State
of New York, without regards to its conflicts of law principles.

	 	 	 	 	 
	 	Very truly yours,

LEUCADIA NATIONAL CORPORATION

 	 
	 	By:  	/s/ Barbara L. Lowenthal
 	 
	 	 	Name:  	Barbara L. Lowenthal 	 
	 	 	Title:  	Vice President 	 
	 

Confirmed and agreed to as of the date first written above:

	 	 	 	 	 	 	 
	JEFFERIES GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Richard B. Handler	 	 
	 	 	 	 	 
	 

	 	Name:	 	Richard B. Handler	 	 
	 

	 	Title:	 	Chief Executive Officer	 	 

SIGNATURE PAGE TO STANDSTILL AGREEMENT

 

 

Annex A

TERMS OF REGISTRATIONS RIGHTS AGREEMENTS

	•	 	Shelf registration statement of shares to be continuously in effect.
	 
	•	 	Three demand registrations, subject to a minimum threshold of (i) at least 20% of the
aggregate number of shares held by the party, or (ii) reasonably expected to generate
aggregate gross proceeds of at least $25 million, even if less than 20%).
	 
	•	 	No more than one demand registration in any six-month period.
	 
	•	 	We shall use our best efforts to cause a registration statement or a prospectus supplement
to an existing shelf registration statement to be filed as promptly as practicable after the
Closing. If available on Form S-3, we must file and maintain a shelf registration for the
registrable shares (which include all currently owned and after acquired shares); shelf to
remain effective so long as the Company owns any shares; shelf to permit underwritten
offerings and to the extent available will be filed as a so-called “WKSI” shelf; securities to
remain registrable unless they have been sold under a registration statement or Rule 144.
	 
	•	 	The Company shall use its best efforts to cause a registration statement or a prospectus
supplement to an existing shelf registration statement to be filed not later than April 21,
2010. If available on Form S-3, Company must file and maintain a shelf registration for the
registrable shares (which include all currently owned and after acquired shares); shelf to
remain effective so long as we own any shares; shelf to permit underwritten offerings and to
the extent available will be filed as a so-called “WKSI” shelf; securities to remain
registrable unless they have been sold under a registration statement or Rule 144.
	 
	•	 	Blackout period: not more than once in any six-month period for not more than 60 days and
not more than, in the aggregate, 90 days during any twelve-month period.
	 
	•	 	The Company will pay all expenses in connection with any request for registration pursuant
to the registration rights agreement, including road shows.
	 
	•	 	Piggyback rights.
	 
	•	 	Most Favored Nations provision.

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