CADIZ LAND COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 12, 1997
To the Stockholders of
Cadiz Land Company, Inc.:
The Annual Meeting of Stockholders of Cadiz Land Company,
Inc., a Delaware corporation (the "Company"), will be held at
the Westwood Marquis Hotel and Gardens located at 930 Hilgard
Avenue, Los Angeles, California, on Thursday, June 12, 1997,
at 9:00 a.m., local time, and any adjournments thereof, to
consider and act upon the following matters:
(1) The election of four members of the Board of
Directors, each to serve until the next Annual
Meeting of Stockholders or until their respective
successors are elected and qualified;
(2) Ratification of the selection of Price Waterhouse
LLP as the Company's independent certified public
accountants for fiscal year 1997; and
(3) The transaction of such other business as may
properly come before the meeting and any
adjournments thereof.
The subject matter of each of the above proposals is
described within the Proxy Statement.
The Board of Directors has fixed the close of business on
April 22, 1997 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the
Annual Meeting.
In order to constitute a quorum for the conduct of business
at the Annual Meeting, holders of a majority of all
outstanding shares of Common Stock must be present in person
or be represented by proxy.
Whether or not you expect to attend the Annual Meeting in
person, please date, sign and mail the enclosed proxy in the
postage paid return envelope provided as promptly as
possible. The proxy is revocable and will not affect your
right to vote in person if you attend the meeting.
By Order of the Board of Directors
/s/ Susan K. Chapman
-------------------------
Susan K. Chapman
Secretary
Rancho Cucamonga, California
April 23, 1997
CADIZ LAND COMPANY, INC.
Annual Meeting of Stockholders
TABLE OF CONTENTS
Page
PROXY STATEMENT INTRODUCTION . . . . . . . . . . . . . . . 1
BENEFICIAL OWNERSHIP OF SECURITIES . . . . . . . . . . . . 2
PROPOSAL 1:
Election of Directors. . . . . . . . . . . . . . . . . 4
PROPOSAL 2:
Approval of Independent Auditors . . . . . . . . . . .13
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . .13
STOCKHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . .13
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . .13
CADIZ LAND COMPANY, INC.
10535 Foothill Boulevard, Suite 150
Rancho Cucamonga, California 91730
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 12, 1997
To Our Stockholders:
Your Board of Directors furnishes this Proxy Statement in
connection with its solicitation of your proxy in the form
enclosed to be used at the Company's Annual Meeting of
Stockholders to be held on Thursday, June 12, 1997, at the
time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.
The Company's Transition Report on Form 10-K for the fiscal
year ended December 31, 1996, including audited financial
statements, is being mailed to you with this Proxy Statement
on or about April 29, 1997.
We cordially invite you to attend the Annual Meeting.
Whether or not you plan to attend, please date, sign and
return your proxy promptly in the postage paid return
envelope provided. You may revoke your proxy at any time
prior to its exercise at the meeting by notice to the
Company's Secretary, and, if you attend the meeting, you may
vote your shares in person. You may also revoke your proxy
by returning a duly executed proxy bearing a later date.
Your proxy, if not revoked, will be voted at the Annual
Meeting in accordance with the instructions specified
therein.
Only holders of record of the Company's Common Stock at the
close of business on April 22, 1997 will be entitled to vote
at the meeting. At the close of business on April 22, 1997,
there were 24,447,387 shares of Common Stock of the Company
outstanding, with each share of Common Stock being entitled
to one vote on each matter to be voted upon. There is no
right to cumulate votes as to any matter.
The candidates for director receiving a plurality of the
votes of the shares present in person or represented by proxy
will be elected (Proposal 1). An affirmative vote of a
majority of the shares present or represented by proxy and
voting at the meeting is required for approval of Proposal 2.
For purposes of determining whether a matter has received a
majority vote of shares present or represented by proxy,
abstentions will be included in the vote totals, with the
result that an abstention has the same effect as a negative
vote. In instances where brokers are prohibited from
exercising discretionary authority for beneficial owners who
have not returned a proxy (so-called "broker non-votes"),
those shares will not be included in the vote totals and
therefore will have no effect on the vote on Proposals 1
and 2.
Stockholders of the Company will not have appraisal rights
with respect to either of the proposals to be voted upon at
the Annual Meeting.
The Company has been advised by its directors and officers
that they intend to vote the 790,122 outstanding shares of
Common Stock which they hold or control, representing 3.23%
of the total shares outstanding as of the record date, in
favor of the Proposals presented in this Proxy Statement.
See "Beneficial Ownership of Securities."
The entire cost of soliciting proxies will be borne by the
Company, including expenses in connection with preparing and
mailing proxy solicitation materials. In addition to use of
the mails, proxies may be solicited by officers, directors
and regular employees of the Company, without extra
compensation, by telephone, telegraph or personal
solicitation, and no additional compensation will be paid to
such persons. If requested, the Company will reimburse
brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses incurred in mailing
proxy material to their principals.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth, as of April 22, 1997, the ownership of
Common Stock of the Company by each stockholder who is known by the Company
to own beneficially more than 5 percent of the outstanding Common Stock,
by each executive officer listed in the Summary Compensation
Table below, and by all directors and officers as a group.
Amount and Nature of Percent
Name and Address Beneficial Ownership of
- ------------------------------ ----------------------- ------------
Morgan Stanley 2,518,560(1) 9.98%
Group, Inc. et. al
1251 Avenue of the Americas
New York, NY 10020
Fidelity International
Limited, et. al. 2,434,067(2) 9.96%
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
The Capital Group Companies, Inc. 1,415,000(3) 5.79%
333 South Hope Street
Los Angeles, CA 90071
Dwight W. Makins 425,000(4) 1.72%
Beaurepaire House
Bramley, Tadley
Hampshire RG26 5EH
United Kingdom
Keith Brackpool 1,113,893(5) 4.40%
10535 Foothill Blvd. Suite 150
Rancho Cucamonga, CA 91730
J.F.R. Hammond 927,007(6) 3.71%
10 Compton Terrace
London N1 2UN
United Kingdom
Stephen D. Weinress 200,722(7) 0.82%
3333 Michelson Drive
Irvine, CA 92715
Susan K. Chapman 127,700(8) 0.52%
10535 Foothill Blvd., Suite 150
Rancho Cucamonga, CA 91730
Timothy J. Shaheen 155,000(9) 0.63%
P.O. Box 80298
Bakersfield, CA 93380
Stanley E. Speer 150,000(10) 0.61%
P.O. Box 80298
Bakersfield, CA 93380
All Directors and Officers
as a Group 3,099,322(4)(5)(6)(7) 11.58%
(7 individuals) (8)(9)(10)
(1) According to information provided to the Company, Morgan
Stanley Group, Inc. ("MS Group") may be deemed to be the
indirect beneficial owner of 1,696,753 shares of Common
Stock, arising from the indirect beneficial ownership of
such shares by Morgan Stanley Asset Management Limited
("MSAM"), a subsidiary of MS Group. The address of MSAM
is 25 Cabot Square, Canary Wharf, London E14 4QA,
England. All such shares are held by MSAM in its
capacity as an Investment Adviser, and MS Group and MSAM
share voting and investment power with respect to the
shares which they may be deemed to beneficially own. MS
Group and MSAM each disclaim beneficial ownership of
such shares pursuant to Rule 13d-4 under the Securities
Exchange Act of 1934. MSAM is also the holder of 3,000
shares of Convertible Series A Preferred Stock ("Series
A Preferred") issued in an institutional private
placement which provided financing for the Company's
acquisition of Sun World. The Series A Preferred is
convertible into 800,000 shares of Common Stock at a
conversion price of $3.75 per share. Also includes
dividends paid on Series A Preferred in common stock.
(2) Fidelity International Limited ("FIL") and FMR Corp.
("FMR") have each filed Schedule 13Ds and amendments
thereto with the Securities and Exchange Commission
indicating that, although they do not consider
themselves to be acting as a "group," they hold,
directly or indirectly, a total of 2,434,067 shares of
Common Stock. The Schedule 13Ds state that FIL
beneficially owns, as investment adviser or the parent
of the investment adviser to certain international funds
and international pension accounts, 2,426,667 shares of
Common Stock and that such funds and accounts and FIL,
as investment adviser to the funds and accounts, have
sole voting and investment power as to all such shares.
A partnership controlled by Mr. Johnson and members of
his family own shares of FIL with the right to cast
approximately 47.22 percent of the total votes which may
be cast by shareholders of FIL. According to the
Schedule 13Ds, FMR beneficially owns, through Fidelity
Management Trust Company, 7,400 shares of the Company's
Common Stock. Mr. Edward C. Johnson 3d, who is Chairman
of FIL and FMR, and certain family members, are the
predominant owners of FMR's Class B shares of common
stock representing approximately 49 percent of the
voting power of FMR. Mr. Johnson and Abigail Johnson
together own 36.5 percent of the outstanding voting
stock of FMR. The Johnson family group and all other
Class B shareholders have entered into a shareholders'
voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B
shares. The Schedule 13Ds indicate that FIL was a
subsidiary of Fidelity Management & Research Company
("Fidelity") prior to June 30, 1980, at which time the
shares of FIL held by Fidelity were distributed as a
dividend to the shareholders of FMR, and that FIL
currently operates as an entity independent of FMR and
Fidelity. The principal officers of FMR, Fidelity and
Mr. Johnson are located at 82 Devonshire Street, Boston,
Massachusetts 02109.
(3) According to information provided to the Company by the
Capital Group Companies, Inc. ("CGCI"), at December 31,
1996 CGCI beneficially owned, through its wholly-owned
subsidiary Capital Research and Management Company
("CRMC"), 1,415,000 shares of the Company's Common
Stock. CRMC serves as investment adviser to SMALLCAP
World Fund, Inc., a registered investment company.
(4) Includes 300,000 shares underlying presently exercisable
options.
(5) Includes 875,000 shares underlying presently exercisable
options. Does not include 75,000 shares issuable upon
the satisfaction of certain conditions established by
the Board of Directors, none of which have been met.
(6) Includes 285,017 shares held by a corporation of which
Mr. Hammond is an affiliate. Also includes 125,000
shares underlying presently exercisable options and
440,000 shares underlying 1,650 shares of Series A
Preferred held by Mr. Hammond and members of his family.
Also includes dividends paid on Series A Preferred in
common stock.
(7) Includes 125,000 shares underlying presently exercisable
options. Also includes 19,200 shares of Common Stock
underlying 72 shares of Series A Preferred, with a
conversion price of $3.75 per share of Common Stock.
(8) Includes 125,000 shares underlying presently exercisable
options.
(9) Includes 150,000 shares underlying presently exercisable
options. Does not include 250,000 shares underlying
conditional options held by Mr. Shaheen, the conditions
to the vesting of which have not yet been met.
(10) Includes 150,000 shares underlying presently exercisable
options. Does not include 50,000 shares underlying
conditional options held by Mr. Speer, the conditions to
the vesting of which have not yet been met.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the four persons listed
below for election at the Annual Meeting to serve as
directors for a term expiring at the 1998 Annual Meeting of
Stockholders or until their respective successors are elected
and qualified. Each nominee currently serves as a director
and has agreed to serve as such for another term if elected.
Proxies will be voted for the election of the four nominees
named below unless instructions are given to the contrary.
Proxies cannot be voted for a greater number of persons than
the number of nominees named. Should any nominee become
unable to serve as a director, the persons named in the
enclosed form of proxy will, unless otherwise directed, vote
for the election of such other person as the present Board of
Directors may designate to fill that position.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth certain biographical
information, the present occupation and the business
experience for the past five years of each director and
executive officer, including Board nominees:
Nominees for Director:
Name Age Position with the Company
-------------------- ---- ---------------------------
Dwight W. Makins 46 Chairman of the Board
Keith Brackpool 39 Chief Executive Officer and Director
J.F.R. Hammond 55 Director
Stephen D. Weinress 56 Director
Executive Officers:
Name Age Position with the Company
-------------------- ---- --------------------------
Susan K. Chapman 43 Chief Financial Officer and Secretary
Timothy J. Shaheen 37 Chief Executive Officer of Subsidiary
Stanley E. Speer 37 Senior Vice President,
Chief Financial Officer and Secretary
of Subsidiary
Dwight W. Makins was elected as Chairman of the Board in
December 1991. Mr. Makins currently serves as Chairman of
Greenway Holdings plc, a British waste oil recycling company
and as a director of several other British companies. Prior
to a change in ownership, which occurred in January 1997, Mr.
Makins was a director of King and Shaxson (Holdings) plc, a
British bank and discount house. Prior to July 1988, he was
managing director of John Govett & Co. Ltd. Mr. Makins is a
member of the Audit Committee and Compensation Committee of
the Board of Directors.
Keith Brackpool is a founder of the Company, and has
served as a member of the Company's Board of Directors since
September 1986, and served as Chairman of the Board from 1989
through December 1991, when he was reappointed as Chief
Executive Officer of the Company. From October 1989 until
May 1991, Mr. Brackpool was employed as the President of
Albert Fisher, Inc., a wholly-owned subsidiary of The Albert
Fisher Group PLC, a U.K. corporation and was a director of
The Albert Fisher Group PLC until May 31, 1991. Since 1988,
Mr. Brackpool has served as an officer and principal of the
general partner of 1334 Partners, Ltd., a California limited
partnership which holds commercial real estate in Southern
California.
J.F.R. Hammond was named to the Company's Board of
Directors in December 1991. Since March 1987 Mr. Hammond has
been self-employed, and his business activities primarily
involve private investments in various companies. Mr.
Hammond also serves as Chairman of a Canadian oil and gas
company traded on the Alberta exchange. Prior to March 1987,
Mr. Hammond was managing director of Greenwell-Montagu
Securities, a British brokerage firm. Mr. Hammond is a
member of the Audit Committee and Compensation Committee of
the Board of Directors.
Stephen D. Weinress was appointed a director of the
Company in September 1993. Since 1984 he has been the
Managing Director of L.H. Friend, Weinress, Frankson &
Presson, Inc., an investment banking firm based in Irvine,
California. Mr. Weinress is a member of the Audit Committee
and Compensation Committee of the Board of Directors.
Susan K. Chapman became Chief Financial Officer and
Secretary of the Company in November 1993. From 1985 until
she joined the Company, Ms. Chapman served as Vice President
of Operations and Controller of Agora Development, Inc., a
private real estate development company, where she supervised
all financial and operational aspects of the company. Prior
thereto, she served for five years as Senior Accountant with
the accounting firm of Price Waterhouse LLP, following which
she served as a senior financial executive of a privately
held manufacturing company. Ms. Chapman is a Certified
Public Accountant.
Timothy J. Shaheen was appointed Chief Executive Officer
and Director of the Company's Sun World subsidiary in
September 1996. Mr. Shaheen has seven years of experience in
the produce industry, most recently serving as a senior
executive with Albert Fisher North America. While with
Albert Fisher, Mr. Shaheen also served as Director of its
Canadian Produce Operations and as a Director of Fresh
Western Marketing, one of the largest growers/shippers of
fresh vegetables in the Salinas Valley of California. Mr
Shaheen has also served as a past director of the Los Angeles
Association of Produce Wholesalers and Dealers. Prior to his
employment with Albert Fisher, Mr. Shaheen was a senior
manager with the accounting firm of Ernst & Young LLP. Mr
Shaheen is a Certified Public Accountant.
Stanley E. Speer joined the Company in September 1996,
following completion of the acquisition by the Company of Sun
World, as Senior Vice President, Chief Financial Officer and
Secretary of Sun World. Mr. Speer has fifteen years of
experience in public accounting with the accounting firm of
Coopers & Lybrand LLP. From 1992 until September 1996, Mr.
Speer served as a partner in their financial advisory
services group specializing in business reorganizations and
mergers and acquisitions consulting. Mr. Speer is a
Certified Public Accountant and a Certified Insolvency and
Reorganization Accountant.
Directors of the Company hold office until the next
annual meeting of stockholders or until their successors are
elected and qualified. There are no family relationships
between any directors or current officers of the Company.
Officers serve at the discretion of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who beneficially own more than ten percent of a
registered class of the Company's equity securities
("reporting persons"), to file with the Securities and
Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Reporting
persons are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Except as described below, to the Company's knowledge,
based solely on a review of the copies of reports and
amendments thereto on Forms 3, 4 and 5 furnished to the
Company by reporting persons during, and with respect to, its
fiscal year ended December 31, 1996, and on a review of
written representations from reporting persons to the Company
that no other reports were required to be filed for such
fiscal year, all Section 16(a) filing requirements applicable
to the Company's directors, executive officers and greater
than ten percent beneficial owners during such period were
satisfied in a timely manner. Based on information
available to the Company, it appears that Fidelity
International Limited inadvertently did not file two reports
of holdings, J.F.R. Hammond was inadvertently late in filing one
report regarding one transaction, and Stephen D. Weinress was
inadvertently late in filing one report regarding two transactions.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------
During the nine months ended December 31, 1996, the
Board of Directors held two formal meetings, conferred on a
number of occasions through telephone conferences, and took
action, when appropriate, by unanimous written consent. The
Board ordinarily holds formal meetings every quarter, and, in
fact, there were four formal meetings during the last twelve
month period, but due to the timing of the meetings that had
been scheduled during the shortened fiscal year, two such
meetings occurred during this period. Each current director
attended at least 75 percent of the meetings of the Board and
at least 75 percent of the meetings of Board committees of
which each was a member during his term.
The Board of Directors has two standing committees, the
Audit Committee and the Compensation Committee. The Board
does not have a nominating committee. Messrs. Weinress, as
chairman, Makins and Hammond serve on the Audit Committee,
the purpose of which is to oversee preparation of the
Company's financial statements. The Audit Committee met 2
times during the nine months ended December 31, 1996.
Messrs. Makins, as chairman, Hammond and Weinress serve on
the Compensation Committee, the purpose of which is to
establish salary and bonus compensation levels for the
Company's executive officers. The Compensation Committee met
2 times during the nine months ended December 31, 1996.
EMPLOYMENT ARRANGEMENTS
- -----------------------
Mr. Brackpool is compensated pursuant to a Compensation
Agreement effective as of April 2, 1993. Under the terms of
this Agreement, Mr. Brackpool receives compensation of
$41,667 per month. of which $12,500 is paid by Sun World.
Mr. Brackpool also receives the use of an automobile leased
by the Company.
Ms. Chapman is compensated pursuant to a letter
agreement effective November 5, 1993 which provides for base
compensation of $130,000 per annum. Ms. Chapman also
receives the use of an automobile owned by the Company.
Timothy J. Shaheen has been engaged by the Company to
act as Chief Executive Officer of Sun World. In this
capacity, Mr. Shaheen receives compensation from Sun World at
an annual rate of $250,000 and the Board of Directors has
approved the grant to Mr. Shaheen of an aggregate of 400,000
incentive stock options for the purchase of Common Stock of
the Company at an exercise price of $4.50 per share. The
vesting of 250,000 of these options is subject to the
satisfaction of certain performance criteria which are either
tied to the performance of Sun World or are subject to the
discretion of the Company's Board of Directors. Mr. Shaheen
also receives the use of an automobile leased by the Company.
Stanley E. Speer has been engaged by the Company to act
as Senior Vice President, Chief Financial Officer and
Secretary of Sun World. In this capacity, Mr. Speer receives
compensation from Sun World at an annual rate of $225,000 and
the Board of Directors has approved the grant to Mr. Speer of
an aggregate of 200,000 incentive stock options for the
purchase of Common Stock of the Company at an exercise price
of $4.50 per share. The vesting of 50,000 of these options
is subject to the satisfaction of certain performance
criteria which are either tied to the performance of Sun
World or are subject to the discretion of the Company's Board
of Directors. Mr. Speer also receives the use of an
automobile leased by the Company.
COMPENSATION OF DIRECTORS
- -------------------------
Mr. Brackpool does not receive any additional
compensation for serving as a Director of the Company.
Mr. Makins receives cash compensation for his services
as Chairman pursuant to a Compensation Agreement effective
April 2, 1993, which provides for base compensation of
$75,000 per year, payable quarterly in advance, plus payment
for certain additional services performed on behalf of the
Company, at the rate of $1,000 per day. During the Company's
1996 fiscal year, Mr. Makins received total cash compensation
of $77,750 pursuant to this Compensation Agreement. In
addition, Mr. Makins receives cash compensation for his
services as Director of the Company's Sun World subsidiary in
the amount of $25,000 per year, payable quarterly in advance.
During the Company's 1996 fiscal year, Mr. Makins received
total cash compensation of $12,500 from Sun World pursuant to
this arrangement.
Mr. Hammond receives cash compensation for his services
as a Director pursuant to a Compensation Agreement effective
April 2, 1993, which provides for compensation of $25,000 per
year, payable quarterly in advance. During the Company's
1996 fiscal year, Mr. Hammond received total cash
compensation of $18,750 pursuant to this arrangement.
Mr. Weinress receives cash compensation for his services
as a Director in the amount of $25,000 per year, payable
quarterly in advance. During the Company's 1996 fiscal year,
Mr. Weinress received total cash compensation of $18,750
pursuant to this arrangement.
EXECUTIVE COMPENSATION
----------------------
The tables and discussion below set forth information
about the compensation awarded to, earned by, or paid to the
Company's executive officers during the nine months ended
December 31, 1996 and the fiscal years ended March 31, 1995
and 1996.
Summary Compensation Table
-------------------------
Long-Term
Compensation Awards
----------------------
Name and Annual Compensation(2) Restricted
Principal Fiscal -------------------- ----------- Stock
Position Year (1) Salary Bonus Stock Awards Options
- ---------------- --------- --------- --------- ------------ ---------
Keith Brackpool 12/31/96 $ 306,250 $ 625,000 $ 656,250(3) 250,000(4)
Chief Executive 03/31/96 350,000 175,000 -0- -0-
Officer 03/31/95 280,000 -0- -0- 750,000
Susan K. Chapman 12/31/96 95,000 25,000 -0- -0-
Chief Financial 03/31/96 130,000 -0- -0- -0-
and Secretary 03/31/95 110,000 -0- -0- 25,000(5)
Timothy J.
Shaheen(6) 12/31/96 181,891 125,000 -0- 400,000(7)
Chief Executive 03/31/96 44 551 -0- -0- -0-
Officer-Sun World
Stanley E.
Speer(8) 12/31/96 79,607 56,250 -0- 200,000(9)
Chief Financial
Officer and
Secretary - Sun World
- --------------------------
(1) In December 1996 the Company changed its fiscal year
end from March 31 to December 31. Consequently,
information is presented in this table for the nine
months ended December 31, 1996 and the fiscal years
ended March 31, 1996 and 1995. Information provided
for the nine months ended December 31, 1996 represents
compensation actually received during this period. The
executive officers for whom compensation has been
disclosed for the nine months ended December 31, 1996
constituted all of the Company's executive officers as
of December 31, 1996. The total annual salary and
bonus of each such officer, on an annualized basis,
exceeds $100,000.
(2) No column for "Other Annual Compensation" has been
included to show compensation not properly categorized
as salary or bonus, which consisted entirely during
each fiscal year of perquisites and other personal
benefits, the aggregate amount of which did not exceed
the lesser of either $50,000 or ten percent of the
total of annual salary and bonus reported for each of
the above named executive officers for each fiscal
year. See "Employment Arrangements."
(3) On March 24, 1997, the Company awarded Mr. Brackpool a
total of 125,000 shares of restricted stock in
consideration of extraordinary services performed
during 1996 in connection with the Company's
acquisition of Sun World, subject to the satisfaction
of certain conditions, namely, that (i) 50,000 of the
shares would vest upon completion of a refinancing of
Sun World's secured debt (which refinancing was
completed on April 16, 1997), and (ii) 25,000 of the
shares would vest each year on September 12, 1997,
1998 and 1999, if Mr. Brackpool is then employed by the
Company as its Chief Executive Officer. If Mr.
Brackpool's employment is terminated without cause
prior to the vesting of any of these shares, all of
such shares will immediately vest. None of the 125,000
shares were outstanding at December 31, 1996.
Dividends will be paid on such shares (when issued and
outstanding) only to the same extent, if any, that
dividends are paid on all other outstanding shares of
Common Stock.
(4) The 250,000 options granted to Mr. Brackpool during the
fiscal year ended December 31, 1996 were conditional
options, of which 125,000 of such options have since
vested.
(5) The 25,000 options granted to Ms. Chapman during the
fiscal year ended March 31, 1995 were conditional
options, all of which have since vested.
(6) Mr. Shaheen joined the Company in January 1996 and on
September 14, 1996 was appointed Chief Executive
officer of Sun World. Salary reported for fiscal year
ended March 31,1996 represents compensation for the
period January 1996 through March 31, 1996.
(7) The 400,000 options granted to Mr. Shaheen during the
fiscal year ended December 31, 1996 were conditional
options, of which 150,000 such options have since
vested.
(8) Mr. Speer joined the Company in August 1996 and on
September 14, 1996 was appointed Chief Financial
Officer and Secretary of Sun World.
(9) The 200,000 options granted to Mr. Speer during the
fiscal year ended December 31, 1996 were conditional
options, of which 150,000 such options have since
vested.
OPTION GRANTS IN LAST FISCAL YEAR
Percent
of
Total
Options
Granted Exer- Potential Realizable
to cise Value at Assumed Rates
Employees Price Annual Rates of Stock
in Per Expira- Price Appreciation
Options Fiscal Share tion for option term(5)
-------------------
Name Granted(1) Year(2) ($/Sh)(3) Date 5% 10%
- ----------------- ---------- ------- ------- ------- --------- -----------
Keith Brackpool 250,000(6) 13.89% $4.50 9-13-01 $ 310,817 $ 703,295
Timothy J. Shaheen 400,000(7) 22.22% $4.50 9-13-01 $ 497,307 $ 1,125,272
Stanley E. Speer 200,000(8) 11.11% $4.50 9-13-01 $ 248,653 $ 562,636
(1) All options granted to the named officer were incentive
options.
(2) Also includes options granted to consultants during the
fiscal year.
(3) All options were granted at market value (average of
closing bid and asked prices for the Company's Common
Stock as reported by Nasdaq) at date of grant.
(4) All options have a fixed term of five years.
(5) Potential gains are reported net of the option exercise
price, but before taxes associated with exercise. These
amounts represent certain assumed rates of appreciation
only. Actual gains on stock option exercises are
dependent on the future performance of the Common Stock
and overall stock market conditions. The amounts
reflected in this table may not necessarily be achieved.
(6) Of this total, 125,000 options have vested and 125,000
options are to vest at such time as the stock of the
Company is traded at $9.00 per share.
(7) Of this total, 150,000 options have vested, 100,000
options vest within one year following the date of the
grant, 50,000 options are conditioned upon certain
performance criteria associated with the Company, and
100,000 options are conditioned upon certain criteria to
be established by the Board of Directors.
(8) Of this total, 150,000 options have vested, 25,000 options
are conditioned upon certain performance criteria
associated with the Company, and 25,000 options are
conditioned upon certain criteria to be established by the
Board of Directors.
FISCAL YEAR-END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable(1)
- ------------------ ------------------ ----------------
Keith Brackpool 750,000/250,000(2) $281,250/$93,750
Susan K. Chapman 125,000/0(3) $196,875/0
Timothy J. Shaheen 0/400,000(4) $0/150,000
Stanley E. Speer 0/200,000(5) $0/75,000
(1) Based upon the Nasdaq National Market closing sales price
per share at fiscal year end. No options were exercised
by the named executive officers during the last fiscal
year.
(2) Includes 750,000 shares underlying presently exercisable
options. Does not include 250,000 shares underlying
conditional options, the conditions to the vesting of
which had not been met as of December 31, 1996.
(3) Includes 125,000 shares underlying presently exercisable
options.
(4) Does not include 400,000 shares underlying conditional
options, the conditions to the vesting of which had not
been met as of December 31, 1996.
(5) Does not include 200,000 shares underlying conditional
options, the conditions to the vesting of which had not
been met as of December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- -------------------------------------------------------------
During the Company's nine month period ended December
31, 1996, all decisions concerning executive officer
compensation were made by the Compensation Committee of the
Board of Directors. The members of such committee were
Messrs. Makins, Weinress and Hammond, all of whom are non-employee
directors. Mr. Makins serves as Chairman of the
Board. See "Directors and Executive Officers." In September
1996, L.H. Friend, Weinress, Frankson & Presson, Inc., an
investment banking firm which is an affiliate of Mr.
Weinress, a director of the Company, received $145,500 from
the Company in payment for services rendered in connection
with the placement of the Series A Preferred. In addition,
the Company has paid the Weinress Group, a consulting firm
which is an affiliate of Mr. Weinress, 72 shares of Series A
Preferred with a value of $1,000 per share, for services
rendered in connection with the placement of the Series A
Preferred. See "Beneficial Ownership of Securities".
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- ---------------------------------------------------------------
The Board of Directors has formed a Compensation
Committee (the "Committee") which is responsible for
reviewing and establishing the compensation payable to the
Company's executive officers, including the Chief Executive
Officer. For executive officers other than the Chief
Executive Officer, the Committee establishes compensation
levels based, in part, upon the recommendations of the Chief
Executive Officer.
The Committee has furnished the following report on
executive compensation:(1)
(1) This report shall not be deemed incorporated by
reference by any general statement incorporating by
reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange
Act of 1934, except to the extent that the Company
specifically incorporates this report by reference, and
shall not otherwise be deemed filed under such acts.
Historically, the Company's business plan was designed
to promote the maximization of the long-term value of the
Company's properties which was primarily focused on the
development of its existing properties in addition to
expansion of its property portfolio. Therefore, for
compensation purposes, the Committee did not believe that
overall Company performance was able to be measured as a
function of profits or losses, as the Company held its assets
for long-term maximization of values and was not receiving
significant revenues from operations. Rather, the Company's
overall performance during any period was more appropriately
measured through a subjective evaluation of the progress made
by the Company during such period toward the achievement of
its long range business goals, taking into account the
general economic climate. As such, the Committee established
that compensation to the Company's executive
officers was designed to encourage and reward management's
efforts which promoted the fulfillment of the Company's
business plan and positioned the Company for long-term
growth. Whilst the Company will continue to seek to pursue
opportunities synergistic with its land, water and
agricultural resources, the Company with its acquisition of
Sun World on September 13, 1996, has implemented a business
strategy which is currently more aligned with meeting
specific operating performance objectives. Therefore, the
Committee has formulated compensation programs for its
executive officers that not only seek to maximize the long-term
value of the Company's properties, but also to enhance
corporate performance and thus shareholder value, by aligning
the financial interest of its executive officers with those
of its shareholders. Such a compensation program will help
to achieve the Company's business and financial objectives
and will also provide incentives needed to attract and retain
well-qualified executives in a highly competitive
marketplace. To this end, the Company has developed a
compensation program with three primary components: base
salary, performance based cash awards and long-term
incentives.
BASE SALARY. An effort is made to establish base salary
levels for all executive officers so as to be competitive
with the salaries of executives of other companies with
similarly sized asset portfolios and to ensure the continued
services of key individuals. See "Employment Arrangements"
for terms of all agreements regarding executive compensation.
No specific or set formula has been used to tie base salary
levels to precise measurable factors. Adjustments to an
executive officer's base salary, once established, can be
made at the discretion of the Compensation Committee, based
upon such factors as position and responsibility, salary
history and cost of living increases.
Where applicable, the Committee may also consider the
past performance of the officer, both in adjusting base
salary levels and in determining additional incentive
compensation, such as the cash awards and long term
incentives discussed below.
PERFORMANCE BASED CASH AWARDS. The Committee believes
that incentives should be offered to executives which are
related to improvements in Company performance that yield
increased value for stockholders. Although the Committee
relies primarily upon the grant of incentive stock options to
reward executive performance (see "Long-Term Incentives",
below), under certain circumstances, the Committee will
utilize performance based cash awards from time to time to
provide additional incentives.
Due to the significant changes in the scope and nature
of the Company's business as a result of the Sun World
acquisition, the Committee designed a compensation program
for Mr. Brackpool and Messrs. Shaheen, Speer and other Sun
World senior management which provides for incentives based
upon meeting specific operating objectives such as earnings
before interest, taxes, depreciation and amortization
(EBITDA). In addition, executives may receive cash awards
purely at the discretion of the Committee.
Mr. Brackpool was instrumental in identifying,
structuring and financing the acquisition of Sun World. His
associated activities in connection with the acquisition are
believed to be above and beyond the usual role of a Chief
Executive Officer in structuring such an acquisition.
Accordingly, during 1996, the Committee retained the services
of Towers Perrin, a prominent independent compensation
consulting firm to review and evaluate the compensation, and
design a compensation program, for Mr. Brackpool.
As a result of the report issued by the independent
consulting firm and the fact that Mr. Brackpool is now
charged with the overall responsibility for the performance
of the Company, as well as Sun World, the Committee awarded
Mr. Brackpool an annual incentive cash bonus, and a special
recognition bonus consisting of a transaction bonus and the
grant of restricted stock. The annual incentive cash bonus,
in the amount of $225,000, was awarded in recognition of the
achievement of certain annually established goals. The
special recognition bonus for his actions leading to the
acquisition of Sun World, was partially paid in cash, in the
amount of $400,000, and the balance in restricted stock. See
"Long-Term Incentives" below.
In addition to the above, as of December 31, 1996, the
Committee determined that Sun World had met its targeted
corporate performance objectives. Based on these results,
the Committee awarded to Mr. Shaheen and Mr. Speer the
mandatory cash incentive bonuses pursuant to their employment
agreements. See "Employment Arrangements" above.
LONG-TERM INCENTIVES. The primary form of incentive
compensation offered by the Company to executives consists of
long-term incentives in the form of stock options. This form
of compensation is intended to help retain executives and
motivate them to improve the Company's long-term performance
and hence long-term stock market performance. Stock options
are granted at the prevailing market value and will only have
added value if the Company's stock price increases.
The Committee views the grant of stock options as both
a reward for past performance and an incentive for future
performance. Stock options granted by the Company may vest
immediately upon grant, or upon the achievement of certain
specific performance goals. Where performance is not readily
measurable, the vesting of options granted are often
dependent upon the satisfaction of subjective performance
criteria. The options granted to Mr. Brackpool, Mr. Shaheen
and Mr. Speer of 250,000, 400,000 and 200,000, respectively,
during the nine months ended December 31, 1996 vest upon the
satisfaction of subjective performance criteria, the passage
of time and the balance at the discretion of the Board. Mr.
Brackpool also was awarded 125,000 shares of restricted stock
as part of the special recognition bonus discussed above.
The vesting of the shares was tied to both meeting certain
performance criteria related to the post-acquisition
integration of Sun World and the passage of time coupled with
Mr. Brackpool's continued employment with the Company during
such periods. See "Summary Compensation Table, " footnote
(3).
Options granted by the Company during the last three
fiscal years, whether vesting immediately or contingently,
are exercisable for a period of five years from grant. The
Committee anticipates that options may again be granted in
the future in order to provide executives with additional
long-term incentives. Such options may be granted pursuant
to the Company's 1996 Stock Option Plan, which was approved
by the stockholders during the prior year's Annual Meeting of
Shareholders.
DEDUCTIBILITY OF CERTAIN EXECUTIVE COMPENSATION EXPENSE
UNDER FEDERAL TAX LAWS
- --------------------------------------------------------
The Committee has considered the impact of provisions of
the Internal Revenue Code of 1986, specifically Code Section
162(m). Section 162(m) limits to $1 million the Company's
deduction for compensation paid to each executive officer of
the Company which does not qualify as "performance-based."
While the Company expects that this provision will not
limit its tax deductions for executive compensation in the
near term, the Cadiz Land Company, Inc. 1996 Stock Option
Plan (the "Plan") enables the Company to comply, to the
extent deemed advisable, with the requirements of Section
162(m) for performance-based compensation to insure that the
Company will be able to avail itself of all deductions
otherwise available with respect to awards made under the
Plan.
CONCLUSION
- ----------
Through the programs described above, a very significant
portion of the Company's executive compensation is linked
directly to corporate performance. The Committee intends to
continue the policy of linking executive compensation to
corporate performance in order to continue to align the
interest of executives with those of Company stockholders.
THE COMPENSATION COMMITTEE
Dwight W. Makins, Chairman
Stephen D. Weinress
J.F.R. Hammond
STOCK PRICE PERFORMANCE
- -----------------------
The stock price performance graph below compares the
cumulative total return of the Company's Common Stock against
the cumulative total return of the Nasdaq US index and the
Nasdaq Non-Financial index for the past five fiscal years.
The graph indicates for each index a measurement point of
March 31, 1992, and assumes a $100 investment on such date in
the Company's Common Stock and in each index. With respect
to the payment of dividends, the Company has not paid any
dividends, but the Nasdaq US index and Nasdaq Non-Financial
index assume that all dividends were reinvested. The stock
price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act
of 1933 or under the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates this
graph by reference, and shall not otherwise be deemed filed
under such acts.
STOCK PRICE PERFORMANCE GRAPH
[Performance Graph Appears Here]
Company and Indices 3/31/92 3/31/93 3/31/94 3/31/95 3/31/96 12/31/96
- ------------------- ------- ------- ------- ------- ------- -------
CLCI Stock Price 100.000 23.226 92.903 91.768 129.032 107.097
NASDAQ US Index 100.000 114.955 124.083 138.030 187.421 220.255
NASDAQ Non
Financial Index 100.000 107.890 118.366 129.699 174.993 202.429
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 13, 1996, the Company issued 3,000 shares
of Series A Preferred for $1,000 per share to Morgan
Stanley Asset Management, Inc., an affiliate of Morgan
Stanley Group, Inc., who filed a Schedule 13G with the
Securities and Exchange Commission indicating that it may
be deemed to be the indirect beneficial owner of in excess
of five percent (5%) of the Company's outstanding Common
Stock in its capacity as an Investment Advisor. See
"Beneficial Ownership of Securities." These shares of
Series A Preferred were issued in an institutional private
placement which provided financing for the Company's
acquisition of Sun World. The Series A Preferred is
convertible into shares of Common Stock at a conversion
price of $3.75 per share. See "Beneficial Ownership of
Securities."
On September 13, 1996, the Company issued 1,650 shares
of Series A Preferred at a price of $1,000 per share to Mr.
Hammond and members of his family. Each share of Series A
Preferred is convertible into Common Stock at a conversion
price of $3.75 per share. See "Beneficial Ownership of
Securities."
In September 1996, L.H. Friend, Weinress, Frankson &
Presson, Inc., an investment banking firm which is an
affiliate of Mr. Weinress, a director of the Company,
received $145,500 from the Company in payment for services
rendered in connection with the placement of the Series A
Preferred. In addition, the Company has paid the Weinress
Group, a consulting firm which is an affiliate of Mr.
Weinress, 72 shares of Series A Preferred with a value of
$1,000 per share, for services rendered in connection with
the placement of the Series A Preferred. See "Beneficial
Ownership of Securities".
Each of the transactions described above was entered
into by the Company on terms which were the same as, or
equivalent to, the terms which the Company had negotiated
at arm's length with independent parties in the same
transactions.
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors is recommending the ratification of
its selection of Price Waterhouse LLP as the Company's
independent certified public accountants to audit the
financial statements of the Company for the 1997 fiscal year.
Although ratification of the choice of auditors is not
required, the Board believes such ratification to be in the
best interests of the Company. In the event such approval of
stockholders is not received, the Board will select another
firm to audit the Company's financial statements. Price
Waterhouse LLP has advised the Company that neither it nor
any of its partners or associates has any direct or indirect
financial interest in or any connection with the Company
other than as accountants and auditors. A representative of
Price Waterhouse LLP is expected to be present and available
to answer appropriate questions at the Annual Meeting, and
will be given the opportunity to make a statement if desired.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSAL 2
OTHER MATTERS
The Board of Directors does not know of any other matters
which may come before the Annual Meeting. However, if any
other matter shall properly come before the Annual Meeting,
the proxy holders named in the proxy accompanying this
statement will have discretionary authority to vote all
proxies in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Any stockholder who wishes to present resolutions to be
included in the proxy statement for the Company's next Annual
Meeting (for the fiscal year ending December 31, 1997) must
file such resolutions with the Company not later than
December 24, 1997.
ADDITIONAL INFORMATION
This Proxy Statement is accompanied by the Company's
Transition Report on Form 10-K for the nine months ended
December 31, 1996 (the "10-K"). Exhibits to the 10-K will be
made available to stockholders for a reasonable charge upon
their written request to the Company, Attention: Ms. Susan K.
Chapman, 10535 Foothill Boulevard, Suite 150, Rancho
Cucamonga, California 91730.
Rancho Cucamonga, California By Order of the Board of Directors
April 23, 1997
CADIZ LAND COMPANY, INC.
10535 Foothill Boulevard, Suite 150, Rancho Cucamonga,
California 91730
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY
The undersigned, as owner of shares of Common Stock of
Cadiz Land Company, Inc., a Delaware corporation (the
"Company") hereby acknowledges receipt of the Proxy Statement
and the notice of the stockholders meeting to be held on
June 12, 1997, at 9:00 a.m. local time, at the Westwood
Marquis Hotel and Gardens located at 930 Hilgard Avenue, Los
Angeles, California, and hereby further revokes all previous
proxies and appoints Keith Brackpool and/or Susan K. Chapman
as proxy of the undersigned at said meeting and any
adjournments thereof with the same effect as if the
undersigned were present and voting the shares.
(1) For the election of the following persons as
directors of the Company to serve until the 1998
annual meeting of shareholders or until their
respective successors shall have been elected and
qualified.
Dwight W. Makins, Keith Brackpool, J.F.R. Hammond, Stephen D. Weinress
[ ] AUTHORITY GRANTED to vote [ ] AUTHORITY WITHHELD to vote
for all nominees listed for all nominess listed above.
above, except as indicaed
to the contrary below
(Instruction: To vote against any nominee, write that
nominee's name in the space provided below.)
---------------------------------------------------------
(2) For ratification of the appointment of Price Waterhouse
LLP as the independent certified public accountants of
the Company to audit the Company's financial statements
for the 1997 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on the reverse side)
(Continued from the other side)
(3) In their discretion upon such other matters as
may properly come before this meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE
INDICATED ABOVE. IF NO INDICATION HAS BEEN MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ABOVE NOMINEES
AND IN FAVOR OF SUCH PROPOSALS AND AS SAID PROXY DEEMS ADVISABLE
ADVISABLE ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
Dated: , 1997
----------------------
- ---------------------------------------------------------------
(Sign exactly as your name appears on your share certificate.)
When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If more than
one trustee, all should sign. All joint owners should
sign. If a corporation, sign in full corporation name by
President or other authorized officer. If a partnership,
sign in partnership name by authorized person. Persons
signing in a fiduciary capacity should indicate their full
title in such capacity.
