FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
For Quarter Ended Commission File Number
June 30, 1997 1-7183
TEJON RANCH CO.
(Exact name of Registrant as specified in its charter)
Delaware 77-0196136
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
P.O. Box 1000, Lebec, California 93243
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code.(805) 248-6774
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Total Shares of Common Stock issued and outstanding on June 30,
1997, were 12,682,244.
TEJON RANCH CO.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Statements of 3
Operations for the Three Months
Ended June 30, 1997 and June 30, 1996
and Six Months Ended June 30,1997 and
June 30, 1996
Unaudited Consolidated Balance Sheet 4
as of December 31, 1996 and June 30, 1997
Unaudited Consolidated Statements of 5
Cash Flows for the Six Months Ended
June 30, 1997 and 1996
Notes to Unaudited Consolidated Financial 6
Statements
Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
- 2 -
PART I FINANCIAL INFORMATION
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30 June 30
1997 1996 1997 1996
Revenues:
Livestock $ 4,900 $ 3,269 $ 6,469 $ 3,818
Farming 229 50 681 74
Oil & Minerals 356 338 658 619
Commercial and Land Use 417 336 794 672
Interest Income 349 319 672 647
6,251 4,312 9,274 5,830
Cost and Expenses:
Livestock 4,729 2,580 6,423 3,277
Farming 99 369 543 747
Oil & Minerals 70 40 115 83
Commercial and Land Use 660 588 1,177 1,068
General & Administrative
Expense 524 586 1,233 1,062
Interest Expense 192 54 263 104
6,274 4,217 9,754 6,341
Operating Income (Loss) (23) 95 (480) (511)
Income Tax Expense (Benefit) (17) 38 (188) (204)
Net Income (Loss) $ (6) $ 57 $ (292) $ (307)
Earnings (Loss) Per Share $ 0.00 $ 0.00 $ (0.02) $(0.02)
Cash Dividends Paid
Per Share $ 0.025 $ 0.025 $ 0.025 $ 0.025
See Notes to Consolidated Condensed Financial Statement
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
June 30, 1997 December 31, 1996*
ASSETS (Unaudited)
CURRENT ASSETS
Cash & Cash Equivalents $ 89 $ 693
Marketable Securities 17,654 20,127
Accounts & Notes Receivable 4,430 4,303
Inventories:
Cattle 5,935 3,082
Farming 2,966 191
Other 483 157
Prepaid Expenses & Other 1,322 1,319
Total Current Assets 32,879 29,872
PROPERTY & EQUIPMENT-NET 20,842 16,270
OTHER ASSETS 1,162 1,227
TOTAL ASSETS $ 54,883 $ 47,369
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade Accounts Payable $ 996 $ 488
Other Accrued Liabilities 68 569
Other Current Liabilities 9,596 4,129
Total Current Liabilities 10,660 5,186
LONG-TERM DEBT 4,300 1,800
DEFERRED CREDITS 2,713 2,651
Total Liabilities 17,673 9,637
STOCKHOLDERS' EQUITY
Common Stock 6,341 6,341
Additional Paid-In Capital 387 387
Retained Earnings 30,643 31,253
Defined Benefit Plan-Funding
Adjustment, net of taxes (256) (256)
Marketable Securities-
Unrealized Gain, Net 95 7
Total Stockholders' Equity 37,210 37,732
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 54,883 $ 47,369
See Notes to Consolidated Condensed Financial Statements.
* The Balance Sheet at December 31, 1996 has been derived from
the audited financial statements at that date.
TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
SIX MONTHS ENDED
June 30
1997 1996
OPERATING ACTIVITIES
Net Loss $ (292) $ (307)
Items Not Affecting Cash:
Depreciation and Amortization 676 541
Deferred Income Taxes 0 134
Gain on Sale of Investments (4) 0
Changes in Operating Assets and
Liabilities
Receivables, Inventories and Other
Assets, Net (5,686) 2,362
Current Liabilities, Net (789) (846)
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (6,095) 1,884
INVESTING ACTIVITIES
Acquisition of Champion Feeders (3,874) 0
Maturities and Sales of Marketable
Securities 4,085 5,484
Funds Invested in Marketable
Securities (1,460) (5,503)
Property and Equipment Expenditures (1,734) (947)
Net Change in Breeding Herds 59 (60)
Other (31) 3
NET CASH (USED IN) INVESTING ACTIVITIES $(2,955) $(1,023)
FINANCING ACTIVITIES
Proceeds From Revolving Line of Credit 14,740 6,698
Payments of Revolving Line of Credit (8,477) (7,184)
Borrowing of Long-Term Debt 2,500 0
Cash Dividend Paid (317) (317)
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 8,446 (803)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (604) 58
Cash and Cash Equivalents at
Beginning of Year 693 44
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 89 $ 102
See Notes to Consolidated Condensed Financial Statements.
TEJON RANCH CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
NOTE A - BASIS OF PRESENTATION
The summarized information furnished by Registrant pursuant to
the instructions to Part I of Form 10-Q is unaudited and reflects
all adjustments which are, in the opinion of Registrant's
Management, necessary for a fair statement of the results for the
interim period. All such adjustments are of a normal recurring
nature.
The results of the period reported herein are not indicative of
the results to be expected for the full year due to the seasonal
nature of Registrant's agricultural activities. Historically,
the largest percentage of revenues are recognized during the
third and fourth quarters.
For further information, refer to the Consolidated Financial
Statements and footnotes thereto included in Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996.
NOTE B - CALCULATIONS OF EARNINGS PER SHARE
Earnings per share is calculated using the weighted average
number of common shares outstanding during the period. Common
shares outstanding for the three month and six month periods
ended June 30, 1997 and 1996 were 12,682,244. Registrant has a
Stock Option Plan providing for the granting of options to
purchase a maximum of 230,000 shares of Registrant's Common Stock
to employees, advisors and consultants of Registrant. At June
30,1997, options to purchase 179,000 shares are outstanding at
prices equal to the fair market value at date of grant (159,000
shares at $16.00 per share, and 20,000 shares at $15.00 per
share). Stock options granted will be treated as common stock
equivalents in accordance with the treasury method when such
amounts would be dilutive. Fully diluted common shares
outstanding for the three month period ended June 30, 1997 and
1996 were 12,698,081 and 12,685,361 respectively. Fully diluted
common shares outstanding for the six month period ended June 30,
1997 and 1996 were 12,690,756 and 12,684,228, respectively.
There is no change in earnings per share based on the fully
diluted common shares outstanding.
NOTE C - MARKETABLE SECURITIES
Registrant has elected to classify its securities as available-
for-sale per Statement of Financial Accounting Standard No. 115,
Accounting for Certain Investments in Debt and Equity Securities,
and therefore is required to adjust securities to fair value at
each reporting date.
Marketable securities consist of the following at:
June 30 December 31
1997 1996
Estimated Estimated
Fair Fair
Cost Value Cost Value
Marketable securities:
(in thousands)
U.S. Treasury and
agency notes $ 10,403$ 10,564 $ 13,156$ 13,158
Corporate notes 7,092 7,090 6,960 6,969
$ 17,495$ 17,654 $ 20,116$ 20,127
As of June 30, 1997, the cumulative fair value adjustment is a
$159,000 unrealized gain. The cumulative fair value adjustment
to stockholders' equity, net of a deferred tax of $64,000, is an
unrealized gain of $95,000. Registrant's gross unrealized
holding gains equal $217,000, while gross unrealized holding
losses equal $58,000. On June 30, 1997, the average maturity of
U.S. Treasury and agency securities was 1.2 years and corporate
notes was 1.7 years. Currently, Registrant has no securities
with a remaining term to maturity of greater than five years.
Market value equals quoted market price, if available. If a
quoted market price is not available, market value is estimated
using quoted market prices for similar securities. Registrant's
investments in Corporate notes are with companies with a credit
rating of A or better.
NOTE D - COMMODITY DERIVATIVES USED TO HEDGE PRICE FLUCTUATIONS
Registrant uses commodity contracts to hedge its exposure to
price fluctuations on its purchased stocker cattle and cattle
feed costs. The objective is to protect or create a future price
for stocker cattle that will provide a profit or minimize a loss
once the cattle are sold and all costs are deducted and to
protect Registrant against market declines. To help achieve this
objective Registrant uses the cattle futures and cattle options
markets to hedge the price of cattle. Registrant also hedges to
protect against fluctuations in feed cost by using the corn
futures and options markets. Feed costs are hedged in order to
protect against large pricing increases in feed costs. Registrant
continually monitors any open futures and options contracts to
determine the appropriate hedge based on market movement of the
underlying asset. The option and futures contracts used
typically expire on a quarterly or semi-annual basis and are
structured to expire close to or during the month the stocker
cattle are scheduled to be sold. The risk associated with
hedging is that hedging imposes a limit on the potential profits
from the sale of cattle if cattle prices begin to increase
dramatically. The costs of buying and selling options and
futures contracts reduce profits. Any payments received and paid
related to options contracts are deferred in and reflected as an
asset on the balance sheet in prepaid expenses until contracts
are closed or expire and were approximately $56,000 at June 30,
1997. There were 180 outstanding option contracts at June 30,
1997. Cattle futures contracts are carried off-balance sheet
until the contracts are settled. Realized losses associated with
closed contracts equal to $164,000 are currently included in
cattle inventory and will be recognized in cost of sales when the
cattle are sold during the third and fourth quarters of 1997.
The following table identifies the cattle futures contract
amounts outstanding at June 30, 1997 (in thousands, except number
of Contracts):
Cattle Hedging Estimated
Activity Original Fair Value Estimated
Commodity Contract Contract At Gain
Future/Option No. Expiration (Bought) Settlement (Loss) at
Description Contracts Date Sold (Buy) Sell Settlement
Cattle futures 130 Aug. 97 $ 3,343 $(3,351) $(8)
sold 50,000
lbs. per 37 Oct. 97 1,021 (1,005) 16
contract 34 Dec. 97 963 (964) (1)
Cattle Options- 50 Aug. 97 12 (6) 6
Calls Sold,
40,000 lbs. 40 Oct. 97 10 (4) 6
per contract
Cattle Options- 50 Aug. 97 (30) 11 (19)
Puts bought,
40,000 lbs.
per contract 40 Oct. 97 (21) 14 7
Estimated fair value at settlement is based upon quoted market
prices at June 30, 1997.
NOTE E - ACQUISITION OF ASSETS
On March 10, 1997, Registrant completed the purchase of certain
assets from Champion Feeders, Inc., a cattle feedlot company in
western Texas. The assets purchased include land, a feed mill,
cattle pins, office and shop buildings, all rolling stock,
inventory and intangibles. No debt or material liabilities of
Champion Feeders, Inc. were assumed in the purchase of these
assets. The purchase price for these assets is $3.5 million plus
inventory value of $358,000, as of February 28, 1997 and will be
accounted for as a purchase. The purchase price of the assets
was based upon a dollar value per head of capacity at the
feedyard and the fair market value of assets purchased. The
purchase price was allocated based on estimated fair value at
date of acquisition. The excess of the purchase price over the
fair market value of tangible assets acquired was immaterial.
The purchase of these assets allows the Company to begin to meet
its long-term objective of becoming more vertically integrated
within the beef industry. The assets purchased will allow
Registrant to own and operate a cattle feedyard operation in
western Texas.
The following unaudited pro forma information presents a summary
of consolidated results of operations of Registrant as if the
acquisition had occurred as of January 1, 1996.
Six Months Ended
June 30
(In thousands except per
share amounts)
1997 1996
Total Revenue $ 11,977 $ 14,416
Net Operating Income (Loss) (151) (304)
Net (Loss) (40) (183)
Net (Loss) Per Share $ 0.00 $ 0.01
NOTE F - CONTINGENCIES
Registrant leases land to National Cement Company of California,
Inc. ("National") for the purpose of manufacturing portland
cement from limestone deposits on the leased acreage. National
and Lafarge Corporation (the successor to the previous operator)
have been ordered to clean up and abate certain hazardous waste
sites on the leased premises. Registrant has been named
secondarily responsible and would be ordered to perform cleanup
work if National and Lafarge fail to do so. Under existing lease
agreements, National or Lafarge is required to indemnify
Registrant for costs and liabilities incurred in connection with
the cleanup order depending on when the release of hazardous
waste occurred. Due to the financial strength of National and
its parent company, which guaranteed National's obligations, and
Lafarge, Registrant believes that it is remote there will be a
material effect on Registrant.
As an unrelated matter, Registrant has recently become aware that
soils contaminated by gasoline, diesel fuel, and heavy metals are
present on the premises leased from Registrant by Truckstops of
America for a truck stop and gas station. Registrant has become
actively engaged in the regulatory oversight activities of the
Kern County Environmental Health Services Department, which has
named Registrant as a secondarily responsible party with respect
to the underground diesel storage tanks that have leaked, and of
the Central Valley Regional Water Quality Control Board.
Registrant has demanded the cleanup of the contaminated soils.
This demand has been made on the current tenant, and the
guarantors of the lease, Standard Oil of Ohio and BP Oil &
Exploration, Inc. Registrant has entered into settlement
discussions with the foregoing parties, is currently working with
them on a jointly approved investigation plan, and is hopeful
that this dispute can be resolved without resorting to
litigation. Because of the financial strength of Standard Oil of
Ohio and BP Oil & Exploration, Inc. Registrant believes it is
remote that this matter will have a material effect on
Registrant.
For a further discussion refer to Registrant's 1996 Form 10-K,
Part I, Item 3, - "Legal Proceedings". There have been no
changes since the filing of the 1996 Form 10-K.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Results of Operations
This Management's discussion and Analysis of Financial Condition
and Results of Operations includes forward-looking statements
that are subject to many uncertainties and may turn out not to be
accurate. These forward looking statements are subject to
factors beyond the control of Registrant (such as weather and
market forces) and with respect to Registrant's future
development of its land, the availability of financing and the
ability to obtain various governmental entitlements. No
assurance can be given that any such projections will turn out to
be accurate.
Total revenues, including interest income, for the first six months
of 1997 were $9,274,000 compared to $5,830,000 for the first six
months of 1996. The growth in revenues during 1997 is primarily
attributable to increases in livestock and farming operations
revenues. The increase in livestock revenues is due primarily to
the new cattle feedlot located near Hereford, Texas that
was purchased on March 10, 1997. The revenues from the feedlot were
approximately $5,205,000 for the four months Registrant has owned
the feedlot. Revenues at the feedlot are derived from the sale of
grain and other types of feed rations to customers that are feeding
cattle at the feedlot. This increase in revenues within the
livestock division was partially offset by a
decline in cattle sales revenues due to 6,321 fewer head of cattle
being sold in 1997, which resulted in cattle sales revenues being
$2,603,000 less than 1996. The difference in the number of cattle
sold in 1997 compared to 1996 is due to the timing of sales of
cattle and to Registrant maintaining ownership of stocker cattle at
feedlots for sale in August and September to take advantage of
improving prices. Registrant continues to hedge the future sales
price of cattle using commodity contracts. See Note D - Commodity
Contracts Used to Hedge Price Fluctuations, for further information.
Farming revenues increased due to the receipt of additional crop
proceeds related to the 1996 grape, walnut, and pistachio crops.
The receipt of these proceeds results from increases in crop prices
that were reflected in the final settlement payments received during
1997.
Operating activities during the first six months of 1997 resulted in
a net loss of $292,000, or $.02 per share, compared to a net loss of
$307,000, or $.02 per share, for the same period in 1996.
The reduction in the net loss when compared to 1996 is due to the
increase in revenues as described above which was partially offset
by increased livestock and general and administrative expenses. The
increase in livestock expense is due primarily to the operations of
the new feedlot. Expenses at the feedlot for the period from
acquisition through June 30, 1997 were approximately $5,000,000.
This increase in livestock expense was partially offset by a
decrease in cost of sales on cattle ($1,933,000) due to fewer head
of cattle being sold as described above. General and administrative
costs have increased when compared to 1996 due to higher staffing
costs and professional service fees. Staffing costs increased in
1997 due to the timing of hiring a new chief executive officer.
Total revenues for the second quarter of 1997, including interest
income, were $6,251,000 compared to $4,312,000 for the second
quarter of 1996. The increase in second quarter revenues is due to
additional revenue from the new feedlot which was partially offset
by reduced cattle sales due to the timing of sales as described
above.
During the second quarter of 1997 Registrant had a net loss of
$6,000, or $.00 per share, compared to net income of $57,000, or
$.00 per share for the same period of 1996. The decrease in net
income compared to 1996 is due to reduced cattle sales revenues and
to increased livestock expenses resulting from the purchase of the
feedlot. The increase in livestock expense due to the feedlot
was partially offset by lower cost of sales on cattle due to fewer
head of cattle being sold.
Registrant believes that cattle prices should continue to improve
throughout 1997 based on estimates of lower supplies during the
latter part of 1997 and the continued increase in demand due to
export growth.
Based on industry estimates it appears that the price per pound
expected to be received by Registrant for its almonds will be less
than that received in 1996 by an estimated $.50 per pound. This
lower price will reduce almond revenues when compared to 1996 almond
crop revenues. All of Registrant's crops appear to be doing very
well with the exception of the walnut orchards, which are
expected to have yields lower than 1996 levels, but walnut prices
may be higher due to statewide production estimates being less than
the previous year. Actual production numbers will not be known
until harvest is completed. Harvest for Registrant's crops will
begin during August.
Registrant has been advised that final approvals were received
for the construction of a major crude oil pipeline through ranch
lands. During December 1995 Registrant completed negotiations
with respect to an easement agreement related to this pipeline.
Construction of this pipeline has commenced on portions of the
right of way. The pipeline company has informed Registrant that
it expects to close the easement purchase transaction in August,
which must occur before the pipeline company may commence
construction on ranch lands.
Registrant continues to be involved in various environmental
proceedings related to leased acreage. For a further discussion
refer to Note E - Contingencies.
Prices received by Registrant for many of its products are
dependent upon prevailing market conditions and commodity prices.
Therefore, Registrant is unable to accurately predict revenue,
just as it cannot pass on any cost increases caused by general
inflation, except to the extent reflected in market conditions
and commodity prices. The operations of the Registrant are
seasonal and results of operations cannot be predicted based on
quarterly results.
Liquidity and Capital Resources
Registrant's cash, cash equivalents and short-term investments
totaled approximately $17,743,000 at June 30, 1997, compared to
$20,820,000 on December 31, 1996, a decrease of 15%. Working
capital as of June 30, 1997 was $22,225,000 compared to
$24,686,000 as of December 31,1996. Cash and short-term
investments declined during 1997 due to increases in cattle and
farming inventories because of the timing of sales and to the
purchase of the cattle feedlot. Working capital uses during 1997
have been for property and equipment expenditures, the purchase
of a cattle feedlot and dividend payments. The assets of the
cattle feedlot were purchased on March 10, 1997 for $3,500,000
plus an additional $358,000 in beginning inventories. Registrant
funded this purchase with cash and short-term lines of credit.
During the second quarter Registrant refinanced the funding of
the purchase of the feedlot with a $2.5 million term loan, with
an interest rate of 8.50%, secured by feedlot assets. This debt
is expected to be paid out of cash flows generated at the
feedlot.
Registrant has a revolving line of credit of $6,000,000 that as
of June 30, 1997 had an outstanding balance of $3,108,000 at an
interest rate of 8.50%. Registrant also has a short-term line of
credit outstanding of $5,900,000 from an investment banking firm
at an interest rate of 6.05%. Registrant's short-term borrowing
needs increased during the quarter due to the timing of cattle
sales, which are expected to occur during the third quarter, and
to the feedlot's financing of customer receivables. The lines of
credit are expected to be paid down throughout the year from the
proceeds of cattle and crop sales. The revolving lines of credit
are used as a short-term cash management tool.
The accurate forecasting of cash flows by Registrant is made
difficult due to the fact that commodity markets set the prices
for the majority of Registrant's products, the fact that the cost
of water changes significantly from year-to-year as a result of
changes in its availability and the fact that adverse weather
conditions can significantly affect farming and cattle
operations. Registrant, based on its past experience, believes
it will have adequate cash flows over the next twelve months to
fund internal operations.
Registrant is currently evaluating the possibility of new farming
developments, expansion of the cattle herd, and commercial
development along the Interstate 5 corridor. These potential new
projects would be funded from current cash resources and from
additional borrowings.
Registrant has traditionally funded its growth and capital
additions from internally generated funds. Management believes
that the combination of net earnings, short-term investments and
borrowing capacity will be sufficient for its near term
operations.
Item 8. Financial Statements and Supplementary Data.
The response to this Item is submitted in a separate section of
this report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable.
Impact of Accounting Change
None
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
In April 1997 the Board of Directors of the Company approved
agreements with seven employees, including the six executive
officers of the Company, providing for payment of certain
benefits if their employment is terminated in connection with
certain transactions relating to the control of the Company.
This action was taken because of the announcement by The Times
Mirror Company that it was considering disposition of all or a
portion of its shares of Common Stock of the Company. The
agreements entered into provide benefits if the employee's
employment is terminated (subject to certain exceptions) in
anticipation of, or within two years after, (1) a change in
ownership of 28% or more of the outstanding shares of Common
Stock of the Company accompanied or followed within one year by a
change in a majority of the Board of Directors of (2) certain
acquisitions of the business of the Company substantially as a
whole. The principal benefits consist of payments equal to
salary and bonus for up to two and one-half years after
terminations of employment. In July 1997 the Company announced
that The Times Mirror Company and the Times Mirror Foundation had
sold their shares of Common Stock of the Company, representing
approximately 31% of the total shares outstanding, to {Third
Avenue Value Fund, Third Avenue Small Cap Fund, Carl Marks
Strategic Investments LP and certain related purchasers.}
Also in anticipation of the sale of the shares by The Times
Mirror Company, the Company amended options to purchase an
aggregate of 79,000 shares outstanding under its 1992 Stock
Option Plan to change the vesting of the options. Prior to the
amendment the options were to become exercisable as to 100% of
the shares nine years after the date of grant and were to expire
ten years after the date of grant. The amendments provide for
the options to become exercisable as to 10% of the shares on the
first anniversary of the date of grant, 15% of the shares on each
of the second and third anniversaries of the date of grant, and
30% of the shares on each of the fourth and fifth anniversaries
of the date of the grant. As a result of these amendments
options to purchase an aggregate of 67,000 shares became
presently exercisable. Also, at the time of the amendments were
adopted there were outstanding options to purchase an aggregate
of 159,000 shares with exercise prices higher than the current
trading prices of the Company's Common Stock, and the option
amendments reduced the exercise price of those options to $16 per
share, which was the closing price of the Common Stock on the
American Stock Exchange on the date of the amendments.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
10.4 Tejon Ranch Co. Amended Stock Option Agreement
10.5 Tejon Ranch Co. Officer Severance Agreement
27 Financial Data Schedule (Edgar)
(b) Reports - None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TEJON RANCH CO.
(Registrant)
BY /s/ ALLEN E. LYDA
Date Allen E. Lyda
Vice President, Finance
& Treasurer
EXHIBIT INDEX
Exhibit No. Exhibit Description
10.4 Tejon Ranch Co. Amended Stock Agreement
10.5 Tejon Ranch Co. Officer Severance Agreement
27 Financial Data Schedule (Edgar)