Name and Address | | Amount and Nature of Beneficial Ownership | | Percent of Class |
| | | | |
LC Capital Master Fund, Ltd. LC Capital Partners LP LC Capital Advisors LLC LC Offshore Fund, Ltd. Lampe, Conway & Co., LLC Steven G. Lampe Richard F. Conway c/o Lampe, Conway & Co., LLC 680 Fifth Avenue, 12th Floor New York, NY 10019-5429 | | 5,845,033 6,790,933 (1)
| | 25.55%22.38%
|
| | | | |
Water Asset Management LLC TRF Master Fund (Cayman) LP Disque D. Deane, Jr. Matthew J. Diserio Marc Robert 509 Madison Avenue Suite 804 New York, NY 10022 | | 2,675,607 2,966,162(2)
| | 14.72%12.13% |
| | | | |
Nokomis Capital, L.L.C. Brett Hendrickson 2305 Cedar Springs Road, Suite 420 Dallas, TX 75201 | 2,715,000 (3) | 9.99% |
BlackRock Inc. BlackRock Advisors, LLC BlackRock Asset Management Canada Ltd. BlackRock Fund Advisors BlackRock Institutional Trust Company, National Association BlackRock Financial Management, Inc. BlackRock Investment Management, LLC 55 East 52nd Street New York, NY 10055 | 2,611,800(3)1,462,786 (4)
| | 12.71%5.98% |
| | | | |
Odey Asset Management Group Ltd.
Odey Asset Management LLP
Odey Holdings AG
Robin Crispin William Odey
c/o Odey Asset Management Group Ltd.
12 Upper Grosvenor St.
London, UK W1K2ND
| | 1,136,679 (4)
| | 6.34% |
| | | | |
American Assets Capital Advisors, LLC
Altegris Advisors, LLC
American Assets Investment Management, LLC
Burland B. East III
Soledad Realty Capital, Inc.
Ernest S. Rady
c/o American Assets Capital Advisors, LLC
11455 El Camino Real
Suite 140
San Diego, CA 92130
| | 1,001,723 (5)
| | 5.59% |
Keith Brackpool c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 370,000(5) | 1.5% |
| 635,000(6)
| | 3.46% | Timothy J. Shaheen c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 194,500(6) | * |
| 352,500(7)
| | 1.94% | Geoffrey Grant c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | | 161,356(8)(11) 164,730(7)
| | * |
| | | | |
Scott S. Slater c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | | 109,000(9)(8) | | * |
| | | | |
Winston H. Hickox c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | | 76,365(10)(11)105,765(9)
| | * |
| | | | |
Murray Hutchison c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | | 36,56811)
| 49,942 | * |
| | | | |
Raymond J. Pacini c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | | 20,181(11)
| 26,676 | * |
| | | | |
Stephen Courter c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 23,948 | * |
| | |
17,453(11)Richard Nevins
c/o o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 9,901 | * |
| | |
Jeffrey Brown c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 2,207 | * |
| | |
John A. Bohn c/o 550 S. Hope St., Suite 2850 Los Angeles, CA 90071 | 893 | * |
| | |
All Directors and officers as a group (nine individuals) | | 1,408,4231,057,562 (5)(6)(7)(8)(9)(10)(11)
| | 7.56%4.25% |
____________________
| * | Represents less than one percent of the 17,934,223 24,456,062 outstanding shares of common stock of the Company as of April 14, 2016.October 10, 2018. |
Footnotes
(1.) | Based upon a Form 4 and Form 13D/A filed on December 14, 2015 with the SEC by LC Capital Master Fund Ltd. (“("Master Fund”Fund"), information provided by Master Fund and the Company’sCompany's corporate records, Master Fund and affiliates beneficially own a total of 5,845,0336,790,933 shares of the Company’sCompany's common stock.stock as of October 10, 2018. Includes 759,492 shares of common stock presently outstanding. Includes 145,508 shares of common stock presently outstanding and 4,883,366held by Steven G. Lampe over which he has sole voting and dispositive power, but for which Master Fund disclaims beneficial ownership. |
| Includes 5,818,431 shares of common stock issuable upon conversion of $32,962,754$39,274,448 in Convertible Notes owned by Master Fund at a conversion rate of $6.75 per share as of April 14, 2016, plus 56,667October 10, 2018 and 67,502 shares beneficially owned as a result of common stock issuable upon conversion of interest that will have accrued within 60 days of April 14, 2016. Also includes 145,508 shares held by Steven G. Lampe over which he has sole voting and dispositive power. Master Fund disclaims beneficial ownership over these securities.October 10, 2018.
These securities, except for the common stock owned solely by Steven G. Lampe, are owned by Master Fund and may also be deemed to be beneficially owned by the named persons below by virtue of the following relationships: (i) LC Capital Partners, LP ("Partners") and LC Offshore Fund, Ltd. (“("Offshore Fund”Fund") beneficially own 100% of the outstanding shares of Master Fund; (ii) LC Capital Advisors LLC ("Advisors") is the sole general partner of Partners; (iii) Lampe, Conway & Co., LLC (“("LC&C”&C") is investment manager to Master Fund, Partners, and Offshore Fund pursuant to certain investment management agreements and shares voting and dispositive power over the securities; and (iv) Steven G. Lampe and Richard F. Conway are the sole managing members of each of Advisors and LC&C and therefore, have indirect voting and dispositive power over securities held by Master Fund. Each of the persons named above, other than Master Fund, specifically disclaims beneficial ownership of these securities except to the extent of his or its pecuniary interest therein, if any. Master Fund and/or its affiliates have designated Mr. Stephen E. Courter a directorand Mr. Richard Nevins, directors of the Company, as their designeedesignees on our Board of Directors. |
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(2.) | Based upon aSchedule 13D filed on March 26, 2018 with the SEC, Form 13F-HR filed on February 16, 2016 with the SEC,August 14, 2018, information provided by Water Asset Management LLC (“WAM”("WAM") and the Company’sCompany's corporate records, WAM and TRF Master Fund (Cayman) LP (together WAM-TRF) beneficially owns 2,675,607own 2,966,162 shares of the Company’sCompany's common stock including 2,437,560 shares presently outstanding and 235,316outstanding. Does not include 280,375 shares of common stock issuable upon conversion of $1,588,386$ 1,892,530 in Convertible Notes owned by WAMWAM-TRF at a conversion rate of $6.75 per share as of April 14, 2016,October 10, 2018, plus 2,731 shares beneficially owned as a result of common stock issuable upon conversion of interest that will have accrued within 60 days of April 14, 2016. WAM serves as investment manager to a number of investment funds and manages investments for certain entities in managed accounts. WAM disclaims beneficial ownership of the securities reported except to the extent of its pecuniary interest therein. WAM maintains sole investment power as to 2,437,560 shares of common stock and sole voting power as to 1,905,642 shares of common stock.
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(3.) | Based upon a Schedule 13G/A filed on February 11, 2016 with the SEC, information provided by Nokomis Capital, L.L.C. (“Nokomis Capital”) and the Company’s corporate records, Nokomis Capital owns or controls 2,581,840 shares of common stock issuable upon conversion of $17,427,438 in Convertible Notes at a conversion rate of $6.75 per share as of April 14, 2016 plus 29,9603,253 shares of common stock issuable upon conversion of interest that will have accrued within 60 days of April 14, 2016. October 10, 2018, but which may not currently be issued because WAM-TRF is prohibited from converting Convertible Notes to obtain ownership in excess of 9.99% of the Company's outstanding Common Stock. Disque D. Deane, Jr., Matthew J. Diserio and Marc Robert are the managing members of WAM and Limited Partners in TRF. WAM and/or its affiliates have designated Mr. Jeffrey Brown and Mr. John Bohn, directors of the Company, as their designees on our Board of Directors. |
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(3.) | Based upon a Schedule 13G/A filed on February 13, 2018 with the SEC, information provided by Nokomis Capital, L.L.C. ("Nokomis Capital") and the Company's corporate records, Nokomis Capital owns or controls 3,076,210 shares of common stock , of which only 2,715,000 are issuable as of October 10, 2018 upon conversion of $18,326,268 in Convertible Notes at a conversion rate of $6.75 per share and included in the calculation of beneficial ownership. Does not include 361,210 shares of common stock otherwise issuable to Nokomis Capital upon conversion of $2,438,170 in Convertible Notes held as of October 10, 2018 plus 35,689 shares of common stock issuable upon conversion of interest that will have accrued within 60 days of October 10, 2018, but which may not currently be issued because Nokomis Capital is prohibited from converting Convertible Notes to obtain ownership in excess of 9.99% of the Company's outstanding Common Stock. Nokomis Capital purchased the Convertible Notes through the accounts of certain private funds and managed accounts (collectively, the “Nokomis Accounts”"Nokomis Accounts"). Nokomis Capital serves as the investment manager to the Nokomis Accounts and may direct the vote and dispose of the shares held by the Nokomis Accounts. AsMr. Brett Hendrickson is the principal of Nokomis Capital Mr. Hendricksonand may direct the vote and disposition of the shares held by the Nokomis Accounts. |
(4.) | Based upon a Form 13F-HR filed on August 9, 2018, BlackRock, Inc. and affiliates own 1,462,786 shares of the Company's stock. Blackrock filings with the SEC indicate that various persons control its ownership of the Company's common stock and no one person at Blackrock has control of more than five percent of the total common stock shares outstanding. |
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(4.) | Based upon a Schedule 13F-HR filed on February 16, 2016, information provided by Odey Asset Management Group Ltd. (“OAM Ltd”) and the Company’s corporate records, OAM Ltd and affiliates own 1,136,679 shares of the Company’s stock and have sole voting and dispositive power as to the shares. OAM Ltd is the managing member of Odey Asset Management LLP (“OAM LLP”), Odey Holdings AG (“Odey Holdings”) is the sole stockholder of OAM Ltd, and Mr. Odey is the sole stockholder of Odey Holdings. Shares have been acquired for a number of funds for which Mr. Odey provides discretionary investment management activities. Each of the listed reporting persons disclaims beneficial ownership of the shares reported except to the extent of its or his pecuniary interest therein. |
(5.) | Based upon a Schedule 13G filed on February 10, 2016 with the SEC, information provided by American Assets Capital Advisors LLC (“AACA”) and the Company’s corporate records, AACA beneficially owns 1,001,723Includes 200,000 shares of the Company’s common stock. AACA shares investment and voting power as to the shares with Altegris Advisors, LLC (“Altergris”), American Assets Investment Management, LLC (“AAIM”), Burland B. East III, Soledad Realty Capital, Inc., and Ernest S. Rady, except for 10,000 shares owned individually by Mr. East. Mr. Burland East owns 100% of Soledad. Mr. Ernest Rady owns 100% of AAIM. AAIM and Soledad together own 100% of AACA.
With the exception of the shares owned individually by Mr. Burland East, the shares being reported are held by the Altegris/ AACA Real Estate Long Short Fund (the "Fund") to which Altegris is the investment Advisor and AACA is the sub-advisor. Altegris serves as the investment adviser for, and has shared investment power over Cadiz shares held by, the Fund. Altegris has no voting power over the shares in the Fund.
AAIM, Soledad, Burland East and Ernest Rady are control persons of AACA and therefore have indirect shared investment power and indirect shared voting power of 1,001,723 Cadiz common shares. Mr. Burland East also has direct sole investment power and sole voting power of 10,000 Cadiz common shares. AACA does not have any investment power or voting power over these shares. AACA has investment power and voting power over accounts that hold in the aggregate 991,723 Cadiz common shares. underlying presently exercisable options. |
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(6.) | Includes (i) 300,000100,000 shares underlying presently exercisable options, (ii) 100,000 restricted stock units (RSUs) awarded July 1, 2014 which vest ratably in ten equal quarterly installments on the final day of every quarter over the 30 month period commencing July 1, 2014 subject to continued employment as of each such vesting date (of which 70,000 RSUs have vested as of the record date), and (iii) 100,000 milestone based RSUs awarded July 1, 2014 but which do not vest until construction financing necessary for the implementation of the Cadiz Valley Water Conservation, Recovery & Storage Project, as defined in the approved Final Environmental Impact Report, is secured. These RSUs expire on June 10, 2017 if the milestone has not been achieved by such date. Mr. Brackpool disclaims beneficial ownership of 130,000 of the as yet unvested securities described herein until such time, and to the extent, that ownership of the securities has vested.options. |
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(7.) | Includes (i) 100,000 shares underlying presently exercisable options, (ii) 62,500 restricted stock units (RSUs) awarded July 1, 2014 which vest ratably in ten equal quarterly installments on the final day of every quarter over the 30 month period commencing July 1, 2014 subject to continued employment as of each such vesting date (of which 43,750 RSUs have vested as of the record date), and (iii) 100,000 milestone based RSUs awarded July 1, 2014 but which do not vest until construction financing necessary for the implementation of the Cadiz Valley Water Conservation, Recovery & Storage Project, as defined in the approved Final Environmental Impact Report, is secured. These RSUs expire on June 10, 2017 if the milestone has not been achieved by such date. Mr. Shaheen disclaims beneficial ownership of 118,750of the as yet unvested securities described herein until such time, and to the extent, that ownership of the securities has vested. |
(8.) | Includes 30,500 shares held in five separate trusts, each holding 6,100 shares for the benefit of Mr. Grant’sGrant's children. The trustee of these trusts is not a member of the Reporting Person's immediate family. Mr. Grant disclaims beneficial ownership of the shares held by these trusts. |
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(9.(8.) | Includes 100,000 shares underlying presently exercisable options. |
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(10.(9.) | Includes 15,00035,000 shares held by Mr. Hickox’sHickox's spouse. |
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(11.) | Includes 2,370 shares awarded on June 30, 2015 to each independent director pursuant to the Company’s 2014 Equity Incentive Plan and which vested and were issued on January 31, 2016. |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities ("reporting persons"), to file with the Securities and Exchange 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 our knowledge, based solely on a review of the copies of reports and amendments thereto on Forms 3, 4 and 5 furnished to us by reporting persons and forms that we filed on behalf of certain directors and officers, during, and with respect to, our fiscal year ended December 31, 2015,2017, and on a review of written representations from reporting persons to us that no other reports were required to be filed for such fiscal year, all Section 16(a) filing requirements applicable to our reporting persons were satisfied in a timely manner, except that a Form 4 filed by LC Capital Master Fund Ltd.filing for each of Geoffrey Grant, Murray Hutchison and affiliates on March 23, 2015 with respect to transactions that occurred on March 11, March 12, and March 16, 2015 wasRichard Nevins, directors of the Company in 2017, were inadvertently filed one day late.
As of December 31, 2015,2017, the Audit Committee iswas composed of Mr. Pacini, Mr. Courter and Mr. Hickox. Mr. Brown was appointed to the Audit Committee in May 2018. Mr. Pacini serves as Chairman of the Committee
Each member of the Committee is an independent director as defined under the listing standards of the NASDAQ Global Market. The Committee operates under a written charter that is reviewed on an annual basis. During fiscal 2015,2017, the Audit Committee performed all of its duties and responsibilities under its charter. The purpose of the Audit Committee is to assist the Board of Directors in its oversight of management's control of the Company’sCompany's financial reporting processes. In February 2017, the Board designated the Audit Committee to act concomitantly as the Company's Risk Committee.
Management is responsible for the preparation, presentation, and integrity of the Company’sCompany's financial statements, accounting and financial reporting principles, internal controls, and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. The Audit Committee reviews the Company’sCompany's accounting and financial reporting process on behalf of the Board of Directors. In that regard, of the four times the Committee met four times in 2015, three of these meetings and one meeting2017 in 2016 wereorder to expressly exercise the Committee's responsibilities related to the Company's quarterly and annual financial statements for fiscal 20152017 and management's assessment of the effectiveness of our internal controls over financial reporting as of December 31, 2015.2017. During these meetings, the Committee reviewed and discussed with management and PricewaterhouseCoopers LLP, our independent registered public accounting firm, our consolidated financial statements, including our audited consolidated financial statements for the year ended December 31, 2015,2017, and financial reporting process, including the system of internal controls over financial reporting and significant accounting policies applied by the Company.
The Audit Committee also reviewed the report of management contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2017, filed with the Securities and Exchange Commission, as well as PricewaterhouseCoopers LLP's Report of Independent Registered Public Accounting Firm included in our 20152017 Annual Report on Form 10-K related to its audit of: (i) the consolidated financial statements and (ii) the effectiveness of internal control over financial reporting. The Audit Committee continues to oversee the Company’sCompany's efforts related to its internal control over financial reporting and management's preparations for the evaluation of its internal controls for fiscal 2016.2018.
The Committee is directly responsible for the appointment, compensation, retention and oversight of the work of PricewaterhouseCoopers LLP. The Committee regularly meets in executive session with PricewaterhouseCoopers LLP, without management present, to discuss the results of their examinations, evaluations of the Company’sCompany's internal controls and the overall quality of the Company’sCompany's financial reporting.
Our independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements of the Company and expressing an opinion on the conformity of our financial statements with U.S. generally accepted accounting principles. The Committee discussed with the Company’sCompany's independent registered public accounting firm the scope and plan for its audits including the review of internal controls prescribed in Section 404 of the Sarbanes-Oxley Act of 2002. The Committee has discussed with PricewaterhouseCoopers LLP the matters that are required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication with Audit Committees) as adopted by the Public Company Accounting Oversight Board in Rule 3200T. PricewaterhouseCoopers LLP has provided the Committee with the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’sLLP's communications with the Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence from the Company. The Committee also considered the nature and scope of the non-audit services provided by PricewaterhouseCoopers LLP to the Company and the compatibility of these services with PricewaterhouseCoopers LLP's independence. The Committee pre-approves all audit and permitted non-audit services to be performed by the Company’sCompany's independent registered public accounting firm pursuant to the terms of the Committee's written charter.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2015.2017. The Committee also appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016,2018, and has recommended that such appointment be submitted to the Company’sCompany's stockholders for ratification at the 20162018 Annual Meeting of Stockholders.
| THE AUDIT COMMITTEE |
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| Raymond J. Pacini, Chairman |
| Jeffrey J. Brown |
| Stephen E. Courter |
| Winston H. Hickox |
For the fiscal years ended December 31, 20152017 and 2014,2016, professional services were performed by PricewaterhouseCoopers LLP. The Company’sCompany's Audit Committee annually approves the engagement of outside auditors for audit services in advance. The Audit Committee has also established complementary procedures to require pre-approval of all audit-related, tax and permitted non-audit services provided by PricewaterhouseCoopers LLP, and to consider whether the outside auditors' provision of non-audit services to the Company is compatible with maintaining the independence of the outside auditors. The Audit Committee may delegate pre-approval authority to one or more of its members. Any such fees pre-approved in this manner shall be reported to the Audit Committee at its next scheduled meeting. All services described below were pre-approved by the audit committee.Audit Committee.
All fees for services rendered by PricewaterhouseCoopers LLP aggregated $270,000 and $252,000$287,000 during the fiscal years ended December 31, 20152017 and 2014,2016, respectively, and were composed of the following:
Audit Fees. The aggregate fees accrued by the Company for the audit of the annual financial statements during the fiscal years ended December 31, 20152017 and 2014,2016, for reviews of the financial statements included in the Company's Quarterly Reports on Form 10-Q, and for assistance with and review of documents filed with the SEC were $270,000 for 20152017 and $252,000$287,000 for 2014.2016.
Audit Related Fees. No audit-related fees were billed by PricewaterhouseCoopers LLP to the Company during the fiscal years ended December 31, 20152017 and 2014.2016.
Tax Fees. No tax fees were billed by PricewaterhouseCoopers LLP to the Company during the fiscal years ended December 31, 20152017 and 2014.2016.
All Other Fees. No other fees were billed during the fiscal years ended December 31, 20152017 and 2014.2016.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS There have been no transactions since the beginning of our last fiscal year with our directors and officers and beneficial owners of more than five percent of our voting securities and their affiliates requiring disclosure, except for the following:
As previously reported on Form 8-K, on November 23, 2015, we entered into agreements with a majority of our convertible note holders, including Water Asset Management LLC (“WAM”), LC Capital Master Fund and Nokomis, to exchange their outstanding convertible notes due in March 2018 for substantially similar convertible notes due in March 2020 (“Convertible Notes”), at a ratio of $1.00 in accreted principal amount of new Convertible Notes for each $1.00 of accreted principal amount of existing convertible notes exchanged. Holders of $ 48,929,000 million in aggregate original principal amount of the Company’s existing convertible notes agreed to exchange them for new Convertible Notes pursuant to such agreements. In exchange for this maturity extension, the conversion rate on the new Convertible Notes was reduced from $8.05 to $6.75 per share. Interest continues to accrue at 7% with no payment due until maturity. In connection with issuing the new Convertible Notes, the Company entered into an Indenture, dated as of December 10, 2015, by and between the Company and U.S. Bank National Association.
Also on November 23, 2015, as reported on Form 8-K, we entered into a First Amendment to the Amended and Restated Credit Agreement with our senior lenders, including WAM, (“Senior Lenders”), which granted the Company the right to extend the maturity date of a $40 million first tranche of our mortgage debt (“First Mortgage”) from March 2016 to June 2017, subject to certain conditions, including payment of an extension fee of $2.25 millionin additional debt.
As previously reported on Form 8-K, on December 30, 2015, we entered into a lease agreement (the “Lease Agreement”) with WAM pursuant to which WAM will lease, for a 99 year term, 2,100 acres owned by us in San Bernardino County, California, to be used in the planting, growing and harvesting of agricultural crops. As consideration for the lease, WAM agreed to pay to the Company a one-time payment of $12,000,000. The lease payment was deposited into escrow until satisfaction of certain conditions including consent from our Senior Lenders to certain terms and delivery of a customary recognition and non-disturbance agreement to WAM.
As previously reported on Form 8-K and via press release, on February 8, 2016, we completed arrangements with Fenner Valley Farms, LLC (“FVF LLC”), a subsidiary of WAM, to develop 2,100 acres of irrigated acreage on our contiguous properties in eastern San Bernardino County, California and entered into an Amended and Restated Lease Agreement, in connection with the payment to us of a one-time payment of $12.0 million and satisfaction of certain conditions established in our agreements with our Senior Lenders. The Amended and Restated Lease Agreement provides a repurchase option that allows the Company, at any time, in the initial 20 years, to redirect the beneficial use of the water and integrate the agricultural well-field infrastructure into the Water Project, subject to satisfaction of certain terms in the Agreement. Further, under the Amended and Restated Lease Agreement, FVF LLC will have the option to lease up to an additional 7,500 acres of our Cadiz Valley property at the following prices if notice is provided by the following deadlines: an additional 2,093 acres for $12,000,000 if notice is provided by June 1, 2016; an additional 2,093 acres for $12,000,000 if notice is provided by September 1, 2016; and an additional 3,314 acres for $19,000,000 if notice is provided by December 22, 2016.
As previously reported on Form 8-K, on February 8, 2016, we also entered into a Second Amendment to our Amended and Restated Credit Agreement (the “Second Amendment”) with our Senior Lenders, including WAM, to provide for the application of $10.5 million of the $12.0 million payment made pursuant to the Amended and Restated Lease Agreement with FVF LLC, entered into on the same date, to satisfy the payment requirement under our Amended and Restated Credit Agreement to extend the maturity date of the First Mortgage from March 2016 to June 2017; to require Cadiz to pay 50% of all future quarterly interest payments, which will continue to accrue at 8%, in cash, rather than in accretion to principal, beginning with the quarterly interest payment due June 5, 2016; and to provide for certain related matters. On February 25, 2016, the Company delivered the extension payment notice to the Senior Lenders pursuant to which the extension fee of $2.25 million became fully earned, due and payable.
As previously reported on Form 8-K, on March 4, 2016, we entered into a Third Amendment to our Amended and Restated Credit Agreement (the “ Third Amendment”) with our Senior Lenders, including WAM, to extend the maturity date of the First Mortgage from June 30, 2017 to September 28, 2017 and to extend the deadline from March 4, 2016 to May 31, 2016 for each Senior Lender to submit a payment election to the Company indicating the Senior Lender’s election to receive the extension fee of $2.25 million in either additional term loans or shares of Cadiz Inc. common stock. The Third Amendment also extended the required extension fee payment date to June 2, 2016 and provided for certain related matters.disclosure.
POLICIES AND PROCEDURES WITH RESPECT TO RELATED PARTY TRANSACTIONS
Our Audit Committee Charter requires that the Audit Committee review and approve all related-party transactions between the Company, on the one hand, and directors, officers, employees, consultants, and any of their family members, on the other hand. In addition, the Company’sCompany's written Conflicts of Interest policy provides that no employee, officer or director may use or attempt to use his or her position at the Company to obtain any improper personal benefit for himself or herself, for his or her family, or for any other person.
In order to implement these requirements, the Company requires that, prior to entering into any transaction with the Company, a related party must advise Company management of the potential transaction. Management will, in turn, provide to the Audit Committee a description of the material terms of the transaction, including the dollar amount, the nature of the related party’sparty's direct or indirect interest in the transaction, and the benefits to be received by the Company from the transaction. The Audit Committee may make such other investigations as it considers appropriate under the circumstances. The Audit Committee will also consider whether the benefits of the proposed transaction could be obtained by the Company upon better terms from non-related parties, and whether the transaction is one that would be reportable by the Company in our public filings. The Audit Committee will then make a determination as to whether the proposed transaction is in the best interests of the Company and should therefore be approved.
APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected PricewaterhouseCoopers LLP as the Company’sCompany's independent certified public accountants to audit our financial statements for the 20162018 fiscal year. Stockholder ratification of this appointment is not required by our bylaws or other applicable legal requirements. However, consistent with our past practice, the appointment of PricewaterhouseCoopers LLP is being submitted to our stockholders for ratification. In the event stockholders do not ratify PricewaterhouseCoopers LLP as the Company’sCompany's independent certified public accountants for the 20162018 fiscal year, the Audit Committee will reconsider its selection of PricewaterhouseCoopers LLP, but will not be required to select another firm to audit the Company’sCompany's financial statements. Even if the stockholders do ratify the appointment, the Audit Committee, in its discretion, may appoint a different firm at any time during the year if it believes that such a change would be in the best interests of the Company and our stockholders. PricewaterhouseCoopers LLP has advised us 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 PricewaterhouseCoopers 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.
APPROVAL OF AMENDMENT TO THE CADIZ INC.
CERTIFICATE OF INCORPORATION, AS AMENDED
The Board has approved an amendment to our Certificate of Incorporation, as amended, to provide that the Company’s stockholders may remove any director from office, with or without cause.
Subsection C of the Sixth Article of our Certificate of Incorporation, as amended, currently provides that the Company’s stockholders may remove directors from office only for cause. Section 141(k) of the Delaware General Corporation Law, as applicable to corporations without a classified Board of Directors (such as the Company at this time), requires that stockholders be afforded the right to remove directors from office with or without cause. On December 21, 2015, the Delaware Chancery Court issued an opinion in In re VAALCO Energy, Inc. Stockholder Litigation, Consol. C.A. No. 11775-VCL, invalidating as a matter of law provisions of the certificate of incorporation and bylaws of VAALCO Energy, Inc., a Delaware corporation, which permitted the removal of VAALCO’s directors by its stockholders only for cause. The Chancery Court held that, in the absence of a classified board or cumulative voting, VAALCO’s “only for cause” director removal provisions conflict with Section 141(k) and are therefore invalid.
The proposed amendment to the Company’s Certificate of Incorporation, as amended, is intended to conform the Certificate of Incorporation to the requirements of Delaware law in light of the VAALCO decision.
The Board has approved, and recommends for approval by the stockholders, amending and restating Subsection C of the Sixth Article of our Certificate of Incorporation, as amended, to give effect to the changes set forth in Annex A. The Board also has approved a similar amendment to the Company’s Bylaws, to be effective concurrently with the effectiveness of the proposed amendment to the Company’s Certificate of Incorporation.
Until such time as the proposed amendments to the Company’s Certificate of Incorporation and Bylaws become effective, the Company will not attempt to enforce the existing director removal provisions provided therein to the extent that such provisions purport to limit removal of directors by stockholders only for cause in a manner inconsistent with Section 141(k) of the Delaware General Corporation Law.
To be approved, this Proposal must receive the affirmative vote of a majority of our outstanding shares of common stock. The amendment to the Certificate of Incorporation, if approved, would become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware incorporating the amendment, which we would expect to do as soon as practicable after the amendment is approved.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 3.
ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
This proposal, commonly referred to as a “say-on-pay”"say-on-pay" proposal, gives our stockholders the opportunity to consider the compensation of our named executive officers as described in this proxy statement. This proposal is not intended to address any specific item of compensation, but rather to provide an opportunity for our stockholders to express their opinion of the overall compensation program for our named executive officers and the philosophy, policies and practices described in this proxy statement.
As described more fully in the Compensation Discussion and Analysis section of this proxy statement, the Company is focused on the long-term development of our significant land and water assets and, as a result, our compensation programs have been designed to attract and retain well-qualified executives with experience in the water and asset development sector, a highly competitive and specialized marketplace, and to encourage achievement of our business and financial objectives for our assets, which are typically long-term in nature. The Compensation Committee has established competitive compensation programs whichthat emphasize incentives that will encourage our executive officers to achieve our long-term goals and also align the financial interests of the executive officers and management with those of our stockholders. These long-term incentives are also guided by stockholder approved plans, an important feature of our compensation philosophy and program.
We request that our stockholders consider and approve the following resolution:
“RESOLVED, "RESOLVED, that the compensation paid to the Company’sCompany's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and the narrative disclosures is hereby APPROVED.”"
This vote is nonbinding and advisory. However, our Board of Directors and the Compensation Committee will consider the outcome of the vote when making decisions related to the executive compensation for our named executive officers in the future.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE NON-BINDING ADVISORY RESOLUTION APPROVING THE COMPENSATION OF THE COMPANY’SCOMPANY'S NAMED EXECUTIVE OFFICERS.
The Board of Directors does not know of any other matters that 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 to be included in our proxy statement for the 20172019 annual meeting must be received by the Secretary of the corporationCorporation at 550 S. Hope Street, Suite 2850, Los Angeles, California 90071 no later than December 31, 2016.2018. For a proposal to be included, you must comply with the rules of the SEC governing the submission of stockholder proposals.
Under our bylaws, no business may be brought before the 20172019 annual meeting unless it is specified in the notice of the meeting, is otherwise properly brought before the meeting by or at the direction of the Board of Directors, or is properly brought before the meeting by a stockholder who has delivered notice to the Secretary of the corporation (containing certain information specified in the bylaws) not less than 90 days prior to the annual meeting. If such a stockholder notice is not timely but is nevertheless presented at the 20172019 annual meeting, the proxies solicited for that meeting may confer discretionary voting authority with respect to the business proposed. These requirements are separate from and in addition to the SEC’sSEC's requirements that a stockholder must meet in order to have a stockholder proposal included in the Company’sCompany's proxy statement.
This proxy statement is accompanied by our Annual Report on Form 10-K for the year ended December 31, 2015, as amended.2017. Exhibits to the Form 10-K will be made available to stockholders for a reasonable charge upon their written request to the Company, Attention: Corporate Communications, 550 S. Hope Street, Suite 2850, Los Angeles, California 90071.
| By Order of the Board of Directors |
Los Angeles, California
April __, 2016October 12, 2018
PROPOSED AMENDMENT TO CADIZ INC.
CERTIFICATE OF INCORPORATION, AS AMENDED
Set forth below are proposed changes to Subsection C of the Sixth Article of our Certificate of Incorporation, as amended. Addition of new text is indicated by underlining and deletion of existing text is indicated by a strike-through.
ARTICLE SIXTH
C. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any directors, or the entire Board of Directors, may be removed from office at any time, but only for causewith or without cause, and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held June 9, 2016. The Proxy Statement and our 2015 Annual Report to Stockholders are available at: http://www.cstproxy.com/cadiz/2016
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
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PROXY
CADIZ INC.
SOLICITED ON BEHALF OF THE COMPANY AND APPROVED
BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Scott S. Slater and Timothy J. Shaheen, and each of them, as attorneys and proxies of the undersigned, with full power of substitution, for and in the name, place, and stead of the undersigned, to appear at the fiscal 2016 Annual Meeting of Stockholders of Cadiz Inc. to be held on the 9th day of June 2016 at 11 a.m., local time, at the law offices of Theodora Oringher PC located at 1840 Century Park East, Suite 500, Los Angeles, CA 90067 (pursuant to the Notice of Annual Meeting dated April __, 2016, and accompanying proxy statement), and at any postponement or adjournment thereof, and to vote all of the shares of Cadiz Inc. that the undersigned is entitled to vote with all the powers and authority the undersigned would possess if personally present in accordance with the following instructions.
(Continued on reverse side)
CADIZ INC.
Voting by telephone or Internet is quick, easy and immediate. As a Cadiz Inc. stockholder, you have the option of voting your shares electronically through the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern Standard Time, on June 8, 2016.
Vote Your Proxy on the Internet:
www.cstproxyvote.com.
Have your proxy card available when you access the website. Follow the prompts to vote your shares.
Vote Your Proxy by Phone:
Call 1 (866) 894-0537.
Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE
VOTING ELECTRONICALLY OR BY PHONE
Vote Your Proxy by Mail:
Mark, sign and date your proxy card and return it in the postage-paid envelope provided.
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED "FOR" PROPOSALS 1, 2, 3 AND 4.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2, 3 AND 4.
| | | | | | WITHHOLD |
1. | | ELECTION OF DIRECTORS | FOR | | AUTHORITY |
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| | o |
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(To withhold authority to vote for any individual nominee, strike a line through that nominee's name in the list below) | | | | |
| | | | | | |
01. | | Keith Brackpool | | | | |
02. | | Stephen E. Courter | | | | |
03. | | Geoffrey Grant | | | | |
04. | | Winston Hickox | | | | |
05. | | Murray H. Hutchison | | | | |
06. | | Raymond J. Pacini | | | | |
07. | | Timothy J. Shaheen | | | | |
08. | | Scott S. Slater | | | | |
2. | | Ratification of PricewaterhouseCoopers LLP as independent auditor.
| | FOR
o
| | AGAINST
o
| | ABSTAIN
o
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3. | | Approval of Amendment to the Cadiz Inc. Certificate of Incorporation, as amended
| | FOR
o
| | AGAINST
o
| | ABSTAIN
o
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4. | | Advisory vote on executive compensation as disclosed in the proxy materials.
| | FOR
o
| | AGAINST
o
| | ABSTAIN
o
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5. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. |
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
Signature(s)________________________________________________________________________ | Signature(s)________________________________________________________________________ | Date:______________________________________________________________________________ |
Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.