SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(1) of the Securities Exchange Act of
1934.
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(c) (2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Setion 240.14a-11(c) or Section
240.14a-12
CADIZ LAND COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
---------------------------------------------------------------
Payment of Filing Fee (check the appropriate box):
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
CADIZ LAND COMPANY, INC.
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 13, 1998
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 Sheraton
Miramar Hotel located at 101 Wilshire Blvd., Santa Monica, California,
on Wednesday, May 13, 1998, at 9:00 a.m., local time, and any
adjournments thereof, to consider and act upon the following matters:
(1) The election of five 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) To consider and vote upon a proposal to further amend the
Company's Certificate of Incorporation to modify the name of the
Company to Cadiz Inc.;
(3) Ratification of the selection of Price Waterhouse LLP as the
Company's independent certified public accountants for fiscal year
1998; and
(4) 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 March 23, 1998
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
Santa Monica, California
March 30, 1998
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 Amendment of Certificate of
Incorporation to Modify the Name
of the Company..........................................14
PROPOSAL 3:
Approval of Independent Auditors........................14
OTHER MATTERS..............................................15
STOCKHOLDER PROPOSALS......................................15
ADDITIONAL INFORMATION.....................................15
CADIZ LAND COMPANY, INC.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 13, 1998
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 Wednesday,
May 13, 1998, at the time and place and for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders.
The Company's Annual Report on Form 10-K for the year ended December 31,
1997, including audited financial statements, is being mailed to you
with this Proxy Statement on or about March 30, 1998.
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 reflecting 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 March 23, 1998 will be entitled to vote at the meeting. At
the close of business on March 23, 1998, there were 33,069,161 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 all outstanding
shares is required for approval of Proposal 2. 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 3. For purposes of
determining whether a matter has received a majority vote either of all
outstanding shares or 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 3, but will
have the same effect as a negative vote on Proposal 2.
Stockholders of the Company will not have appraisal rights with respect
to any 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 1,184,493 outstanding shares of Common Stock which
they hold or control, representing 3.58% 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 March 23, 1998, 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 director, 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 Class
- ------------------------ -------------------------- ---------
Fidelity International
Limited, et. al. 2,944,667(1) 8.90%
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
Morgan Stanley, Dean
Witter, Discover & Co. 2,661,592(2) 8.05%
1585 Broadway
New York, NY 10036
The Capital Group
Companies, Inc. 1,915,000(3) 5.79%
333 South Hope Street
Los Angeles, CA 90071
Dwight W. Makins 475,000(4) 1.42%
Beaurepaire House
Bramley, Tadley
Hampshire RG26 5EH
United Kingdom
Keith Brackpool 1,273,893(5) 3.74%
100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Russ Hammond 905,600(6) 2.73%
10 Compton Terrace
London N1 2UN
United Kingdom
Murray H. Hutchison 25,000(7) *
17134 El Vuelo
Rancho Santa Fe, CA 92067
Mitt Parker 50,000(8) *
16 Forest Park Way, Bldg. H
Forest Park, GA 30050
Timothy J. Shaheen 355,000(9) 1.06%
P.O. Box 80298
Bakersfield, CA 93380
Stanley E. Speer 175,000(10) *
100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
All Directors and
Officers as a Group 3,259,493(4)(5)(6) 9.27%
(7 individuals) (7)(8)(9)(10)
- ---------------------------------
* Less than 1%
(1) Based upon a Schedule 13D filed with the Securities and Exchange
Commission and, in addition, information obtained from Fidelity
International Limited ("FIL"), FIL beneficially owns, as an
investment adviser which provides investment advisory and
management services to a number of non-U.S. investment companies or
investment trusts and certain institutional investors, 2,944,667
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. Edward C. Johnson 3d 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. Mr. Johnson 3d is Chairman of FIL. The Schedule 13D
indicates 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 Corp. ("FMR"), and that FIL
currently operates as an entity independent of FMR and Fidelity.
The principle office of FIL is located at Pembroke Hall, 42 Crow
Lane, Hamilton, Bermuda. The principle offices of FMR, Fidelity
and Mr. Johnson are located at 82 Devonshire Street, Boston,
Massachusetts 02109.
(2) Morgan Stanley, Dean Witter, Discover & Co. ("Morgan Stanley")
filed a Schedule 13G with the Securities and Exchange Commission
indicating that they are the indirect beneficial owner of
2,661,592 shares of Common Stock, arising from the indirect
beneficial ownership of such shares by Morgan Stanley Asset
Management Limited ("MSAM"), a subsidiary of Morgan Stanley.
The address of MSAM is 25 Cabot Square, Canary Wharf, London E14
4QA, England. According to the Schedule 13G, MSAM holds
2,551,592 shares and is known to have the right to receive or
the power to direct the receipt of dividends from, or the
proceeds from, the sale of such securities. The Schedule 13G
indicates that no such account holds more than 5% of the class.
(3) The Capital Group Companies, Inc. ("Capital Group") filed a
Schedule 13G with the Securities and Exchange Commission
indicating that they are the indirect beneficial owner of
1,915,000 shares of Common Stock, arising from the indirect
beneficial ownership of such shares by SMALLCAP World Fund, Inc.
("SmallCap"), an investment company registered under the
Investment Company Act of 1940, which is advised by Capital
Research and Management Company ("Capital Research"), an
investment advisor registered under Section 203 of the
Investment Advisors Act of 1940 and a wholly-owned subsidiary of
Capital Group. The principal offices of Capital Group, Capital
Research and SmallCap are located at 333 South Hope Street, Los
Angeles, California 90071. According to the Schedule 13G, all
such shares are held by SmallCap in its capacity as an
investment company, and beneficially held by Capital Research in
its capacity as an investment advisor. The Schedule 13G
indicates that Capital Group does not have investment power or
voting power over any of the shares; however, they may be deemed
to beneficially own such shares by virtue of Rule 13d-3 under
the Act.
(4) Includes 350,000 shares underlying presently exercisable
options.
(5) Includes 1,000,000 shares underlying presently exercisable
options. Does not include 50,000 shares issuable upon the
satisfaction of certain conditions established by the Board
of Directors, none of which have yet been met.
(6) Includes 470,000 shares held by a corporation of which Mr.
Hammond is an affiliate. Also includes 125,000 shares
underlying presently exercisable options and 310,600 shares held
by Mr. Hammond and members of his family.
(7) Includes 25,000 shares underlying presently exercisable options.
(8) Includes 50,000 shares underlying presently exercisable options.
(9) Includes 350,000 shares underlying presently exercisable
options. Does not include 50,000 shares underlying conditional
options held by Mr. Shaheen, the conditions to the vesting of
which have not yet been met.
(10) Includes 175,000 shares underlying presently exercisable options.
Does not include 75,000 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 five persons listed below for
election at the Annual Meeting to serve as directors for a term expiring
at the 1999 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 five 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 47 Chairman of the Board
Keith Brackpool 40 President and Chief Executive Officer
and Director
Russ Hammond 56 Director
Murray H. Hutchison 59 Director
Mitt Parker 48 Director
Executive Officers:
Name Age Position with the Company
------------------ ---- -------------------------
Timothy J. Shaheen 38 Chief Executive Officer
of Subsidiary
Stanley E. Speer 37 Chief Financial Officer
of the Company
and 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, has served as a member
of the Company's Board of Directors since September 1986, and has served
as President and Chief Executive Officer of the Company since
December 1991.
Russ 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 Chairman of the Audit
Committee of the Board of Directors.
Murray H. Hutchison was appointed a Director of the Company in June
1997. Since his retirement in 1994 from International Technology
Corporation ("ITC"), Mr. Hutchison has been self-employed with his
business activities involving primarily the management of an investment
portfolio. From 1976 to 1994, Mr. Hutchison served as Chief Executive
Officer and Chairman of ITC, a diversified environmental management
company traded on the New York Stock Exchange. Mr. Hutchison also
serves as a director of Sunrise Medical, Inc. which is traded on the New
York Stock Exchange and as a director of several other non-publicly
traded U.S. companies. Mr. Hutchison serves as Chairman of the
Compensation Committee and is a member of the Audit Committee of the
Board of Directors.
Mitt Parker was appointed a Director of the Company in February
1998. Mr. Parker, who has been working in the produce industry for over
26 years, is currently President and Chief Executive Officer of
FreshPoint, Inc. FreshPoint currently owns 28 individual produce companies
operating in major markets throughout the U.S. and in the Canadian
Provinces of British Columbia and Alberta. From 1994 until its acquisition
by FreshPoint, Mr. Parker served as South Atlantic Regional Vice President
of Albert Fisher Group,PLC. Prior to 1994, Mr. Parker served as President
and Chief Executive Officer of Mitt Parker Company, Inc., a wholesale
produce distribution company which was acquired by Albert Fisher Group, PLC.
Timothy J. Shaheen was appointed Chief Executive Officer and
Director of the Company's Sun World subsidiary in September 1996. Mr.
Shaheen also serves as a director of United Fresh Fruit and Vegetable
Association, a national trade organization which represents interests
of fruit and vegetable producers and distributors. 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. In
July 1997, Mr. Speer was appointed Chief Financial Officer of the
Company and has relinquished his position as 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.
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, 1997, 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1997, the Board of Directors
held five 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, however, due to the changes in the Company's fiscal year end,
there were five formal meetings during the last twelve month 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. Hammond, as chairman, Makins and
Hutchison serve on the Audit Committee, the purpose of which is to
oversee preparation of the Company's financial statements. The Audit
Committee met two times during the year ended December 31, 1997.
Messrs. Hutchison, as chairman, and Makins 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 two times during the year ended December 31,
1997.
EMPLOYMENT ARRANGEMENTS
Mr. Brackpool is compensated pursuant to a Employment Agreement
effective as of February 1, 1998. Under the terms of this Agreement,
which has an initial term of three years, Mr. Brackpool receives base
compensation of $500,000 per annum. Mr. Brackpool may also receive an
annual incentive based bonus, not to exceed 120% of his base
compensation, subject to the satisfaction of certain performance
criteria which are either tied to the performance of the Company or are
subject to the discretion of the Board of Directors. Under the
Employment Agreement, Mr. Brackpool also serves as the Chairman of Sun
World. A portion of Mr. Brackpool's compensation may be paid by Sun
World or other subsidiaries of the Company as determined periodically by
the Company. Mr. Brackpool also receives the use of an automobile
leased by the Company and life and insurance disability benefits funded
by the Company. The Agreement provides that, in the event of a change
in control of the Company, any theretofore unsatisfied conditions to the
vesting of any stock options held by Mr. Brackpool or to the issuance of
shares of the Company's stock pursuant to stock bonus plans to which Mr.
Brackpool is a party shall be deemed immediately satisfied. In the
event of a material change or reduction in Mr. Brackpool's
responsibilities, he will be entitled to terminate the Agreement and
continue to receive base compensation for the remainder of the term of
the Agreement. Mr. Brackpool will also be entitled to continue to
receive base salary and a deemed bonus equal to 60% of base salary in
the event of any other termination of the Agreement by the Company other
than for cause.
Mr. Shaheen has been engaged by the Company to act as the Chief
Executive Officer of Sun World. In this capacity, Mr. Shaheen receives
compensation from Sun World at an annual rate of $270,000. In
consideration of Mr. Shaheen's agreement to provide services under his
employment agreement, the Board of Directors 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. 350,000 of such options have vested; the remainder are to
vest upon the earlier to occur of the satisfaction of certain Sun World
based performance criteria or three years from the date of issue.
Further, pursuant to the Company's 1996 Stock Option Plan (under which
such options were issued), all options under the Plan become fully
vested upon a change in control of the Company. Mr. Shaheen is entitled
to receive an annual incentive based bonus, not to exceed 100% of his
base compensation, subject to the satisfaction of certain performance
criteria which are tied to the performance of Sun World. Mr. Shaheen
may receive additional compensation in the form of bonuses at the sole
discretion of the Board of Directors. Mr. Shaheen also receives the use
of an automobile leased by Sun World.
Mr. Speer has been engaged by the Company to act as the Chief
Financial Officer of both the Company and Sun World. In this capacity,
Mr. Speer receives compensation at an annual rate of $240,000. A portion
of Mr. Speer's compensation may be paid by Sun World or other
subsidiaries of the Company as determined periodically by the Company.
In consideration of Mr. Speer's agreement to provide services to Sun
World under his employment agreement, the Board of Directors 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. 175,000 of such options have vested; the
remainder are to vest upon the earlier to occur of the satisfaction of
certain Sun World based performance criteria or three years from the
date of issue. Further, pursuant to the Company's 1996 Stock Option
Plan (under which such options were issued), all options under the Plan
become fully vested upon a change in control of the Company. In
addition, in consideration of the additional duties being performed by
Mr. Speer as Chief Financial Officer of the Company as well as for Sun
World, the Board of Directors approved the grant to Mr. Speer in
February 1998 of an aggregate of 50,000 incentive stock options, vesting
three years from issue, for the purchase of Common Stock of the Company
at an exercise price of $8.25 per share. Mr. Speer is entitled to
receive an annual incentive based bonus, not to exceed 50% of his base
compensation, subject to the satisfaction of certain performance
criteria which are tied to the performance of Sun World. Mr. Speer may
receive additional compensation in the form of bonuses at the sole
discretion of the Board of Directors. Mr. Speer also receives the use
of an automobile leased by Sun World.
COMPENSATION OF DIRECTORS
Mr. Brackpool does not receive any additional compensation for
serving as a Director of the Company or of Sun World.
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 which may be
performed on behalf of the Company, consisting primarily of financial
advisory and general business consulting services, at the rate of $1,000
per day. During the Company's 1997 fiscal year, Mr. Makins received
total cash compensation of $80,000 pursuant to this Compensation
Agreement. In addition, Mr. Makins receives cash compensation for
his services as a Director of the Company's Sun World subsidiary in
the amount of $25,000 per year, payable quarterly in advance. During
the Company's 1997 fiscal year, Mr. Makins received total cash compensation
of $25,000 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 1997 fiscal year, Mr. Hammond received
total cash compensation of $25,000 pursuant to this arrangement.
Mr. Hutchison receives cash compensation for his services as a
Director of the Company in the amount of $25,000 per year, payable
quarterly in advance. During the year ended December 31, 1997, Mr.
Hutchison, who was appointed as a Director in June 1997, received
$12,500. Upon appointment, Mr. Hutchison also received conditional
options to purchase 25,000 shares of the Company's Common Stock, all of
which have vested.
Mitt Parker will receive cash compensation for his services as a
Director of the Company and the Company's Sun World subsidiary in the
amount of $25,000 per year, payable quarterly in advance. During the
year ended December 31, 1997, Mr. Parker, who was appointed as a Director
of the Company in February 1998, received cash compensation for his
services as a Director of the Company's Sun World subsidiary in the
amount of $25,000 per year, payable quarterly in advance, plus $1,000 per
each meeting attended. During the Company's 1997 fiscal year, Mr. Parker
received total cash compensation of $29,000 from Sun World 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 year ended December 31, 1997, the nine months ended
December 31, 1996 and the fiscal year ended March 31, 1996.
SUMMARY COMPENSATION TABLE
Other Long-Term
Compensation Awards
Name and Annual Restricted
Principal Compensation(2) Stock Stock
Position Fiscal Year(1) Salary Bonus Awards Options
- ---------------- ------------------ ------ ------ ------- --------
Keith Brackpool December 31, 1997 $500,000 $217,500 $ 82,500(3) -0-
President and December 31, 1996 306,250 625,000 656,250(4) 250,000(5)
Chief Executive March 31, 1996 350,000 175,000 -0- -0-
Officer
Timothy J.
Shaheen(6) December 31, 1997 250,000 62,500 -0- -0-
Chief Executive December 31, 1996 181,891 125,000 -0- 400,000(7)
Officer of March 31, 1996 44,551 -0- -0- -0-
Sun World
Stanley E.
Speer(8) December 31, 1997 225,000 56,250 -0- -0-
Chief Financial December 31, 1996 79,607 56,250 -0- 200,000(9)
Officer
- --------------------
(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 year ended December 31, 1997, the nine months ended
December 31, 1996 and the fiscal year ended March 31, 1996. The
executive officers for whom compensation has been disclosed for the
year ended December 31, 1997 constituted all of the Company's
executive officers as of December 31, 1997.
(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) The Company awarded Mr. Brackpool a total of 10,000 shares of stock
as part of a performance based bonus with respect to the year ended
December 31, 1997. However, such shares were not issued until
March 1998.
(4) 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 President and 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.
75,000 shares of the 125,000 shares were outstanding at
December 31, 1997. 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.
(5) The 250,000 options granted to Mr. Brackpool during the fiscal year
ended December 31, 1996 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 350,000
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. In July 1997, Mr. Speer was appointed Chief Financial
Officer of the Company and relinquished his position as 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 175,000
such options have since vested.
OPTION GRANTS IN LAST FISCAL YEAR
During the year ended December 31, 1997, there were no option grants to
named executive officers.
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 875,000/125,000 $3,554,668/507,813
Timothy J. Shaheen 350,000/50,000 $1,421,875/203,125
Stanley E. Speer 175,000/25,000 $710,938/101,563
- --------------------
(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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's year ended December 31, 1997, all decisions
concerning executive officer compensation were made by the
Compensation Committee of the Board of Directors. The members of such
committee were Messrs. Hutchison and Makins both of whom are non-
employee directors. Mr. Makins serves as Chairman of the Board. See
"Directors and Executive Officers."
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATI0N
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 President and Chief Executive Officer. For executive officers
other than the President and Chief Executive Officer, the Committee
establishes compensation levels based, in part, upon the
recommendations of the President and Chief Executive Officer.
The Committee has furnished the following report on executive
compensation: <F1>
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.
[FN]
(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.
</FN>
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.
As President and Chief Executive Officer of
the Company, Mr. Brackpool is charged with the overall
responsibility for the performance of the Company, as
well as Sun World. In 1997, the Committee retained the
services of Towers Perrin, a prominent independent
compensation consulting firm, to assist in designing
an overall compensation program for Mr. Brackpool.
This compensation program, which is reflected in a
written employment agreement effective as of February
1, 1998 (see "Employment Agreements," above),
includes in addition to base salary an incentive
bonus compensation component. The incentive
compensation component, which may not exceed 120% of
Mr. Brackpool's base salary in any year, is
determined on the basis of three sets of criteria,
including, first, the meeting of yearly operating
objectives (such as earnings before interest, taxes,
depreciation and amortization (EBITDA)); second, the
meeting of yearly goals regarding the fulfillment of
the Company's water distribution business plan; and
third, the subjective evaluation by the Committee of
Mr. Brackpool's performance during the year. Up to
50% of any year's incentive compensation is payable,
at the discretion of the Board, in the form of
Common Stock. With respect to the year ended
December 31, 1997, the application of these criteria
resulted in a grant to Mr. Brackpool of a
performance based bonus of $300,000 of which
$217,500 was paid in cash and the remainder in the
form of 10,000 shares of Common Stock.
The Committee has designed a compensation
program for Messrs. Shaheen, Speer and other Sun
World senior management which provides for
incentives based upon meeting specific operating
objectives such as EBITDA. In addition, executives
may receive cash awards purely at the discretion of
the Committee. See "Employment Agreements," above.
With respect to the year ended December 31, 1997,
the Committee awarded to Messrs. Shaheen and Speer
discretionary cash bonuses of $62,500 and 56,250,
respectively (i.e. 25% of their 1997 base salaries).
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, with the passage of time, at the discretion
of the Board, and/or upon the achievement of certain
specific performance goals. Where performance is
not readily measurable, the vesting of performance
based options may be dependent upon the satisfaction
of subjective performance criteria. No options
were granted during the fiscal year ended December
31, 1997. However, the Board elected, based on the
performance of Messrs. Shaheen and Speer during
this period, to provide for the vesting of 100,000
and 25,000 previously issued options, the vesting of
which were subject to the Board's discretion.
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.
DEDUCTIBILITY OF CERTAIN EXECUITVE 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
Murray H. Hutchison, Chairman
Dwight W. Makins
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, 1993, 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 on its
Common Stock, 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
[Performance Graph Appears Here]
Company and
Indices 3/31/93 3/31/94 3/31/95 3/29/96 12/31/96 12/31/97
- ---------------- ------- ------- ------- ------- -------- --------
CLCI Stock price 100.000 400.000 395.111 555.556 461.156 761.156
Nasdaq US Index 100.000 107.946 120.082 163.043 191.598 235.117
Nasdaq Non
Financial Index 100.000 109.717 120.225 162.221 187.679 220.240
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions required to be reported pursuant to this
section.
PROPOSAL 2
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO MODIFY THE CORPORATE NAME
At the time of the adoption of the Company's current name in 1992,
the Company's chief asset consisted of land in the Cadiz Valley. In
subsequent years, the Company has significantly diversified its portfolio
of assets, particularly with the acquisition of Sun World International,
Inc. in 1996. Management of the Company believes it now advisable that
the name of the Company be changed to better reflect the increasing
diversification of the Company's asset portfolio pursuant to its core
business strategy of acquiring and developing water-related land and
agricultural assets. Management also believes that the "Cadiz" name
provides valuable recognition in the marketplace. Following extensive
discussions with selected leaders in the water and agricultural industries
and representatives of the investment community, the Board of Directors of
the Company has concluded that a modification of the Company's name to
"Cadiz Inc." will better reflect the broadening of the Company's asset
portfolio while retaining the identification value of the Cadiz name.
If approved by the stockholders of the Company, Article One of the
Company's Certificate of Incorporation will be amended to read in full
as follows:
"First. The name of the Corporation is Cadiz Inc., hereinafter
sometimes referred to as the "Corporation."
The affirmative vote of the holders of a majority of shares of
Common Stock outstanding is required to amend the Certificate of
Incorporation to effectuate the name modification.
If the proposed amendment is approved, the Board intends to
implement the Company's name modification at such time as the Board
deems appropriate, taking into account the need to effectuate as smooth
as possible a transition between the old and new names. In addition, if
the Board determines at any time prior to the filing of the proposed
amendment with the Delaware Secretary of State that the name
modification should not be implemented, then notwithstanding
authorization of the proposed amendment by the stockholders, the Board
of Directors may abandon such proposed amendment without further action
by the stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2.
PROPOSAL 3
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 1998 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 3.
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, 1998) must file such resolutions with the
Company not later than November 30, 1998.
ADDITIONAL INFORMATION
This Proxy Statement is accompanied by the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 (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, 100 Wilshire Boulevard, Suite 1600, Santa Monica, California
90401.
By Order of the Board of Directors
Santa Monica, California
March 30, 1998
CADIZ LAND COMPANY, INC.
100 Wilshire Boulevard, Suite 1600 Santa Monica,
California 90401
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
May 13, 1998, at 9:00 a.m. local time, at the Sheraton
Miramar Hotel located at 101 Wilshire Blvd., Santa Monica,
California, and hereby further revokes all previous
proxies and appoints Keith Brackpool and/or Stanley E. Speer
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 five persons as
directors of the Company to serve until the next
Annual Meeting of Shareholders or until their
respective successors shall have been elected and
qualified.
Dwight W. Makins, Keith Brackpool, Russ Hammond, Murray Hutchison,
Mitt Parker
[ ] 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) To consider and vote upon a proposal to further amend the Company's
Certificate of Incorporation to modify the name of the Company to Cadiz
Inc. as described in Proposal 2.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Price Waterhouse LLP
as the Company's independent certified public accountants for the
fiscal year 1998; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on the reverse side)
(Continued from the other side)
(4) The transaction of such other business as may properly
come before the meeting and any adjournments thereof.
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
ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated: , 1998
----------------------
---------------------------------------------------------------
(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.
