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 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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4) Proposed maximum aggregate value of transaction:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
CADIZ INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 15, 2000
---------------------------
To the Stockholders of
Cadiz Inc.:
The Annual Meeting of Stockholders of Cadiz Inc., a Delaware
corporation (the "Company"), will be held at the Fairmont Miramar Hotel
located at 101 Wilshire Boulevard, Conference Bungalow Room, Santa
Monica, California, on Monday, May 15, 2000, at 9:00 a.m., local time,
and any adjournments thereof, to consider and act upon the following
matters:
(1) The election of six 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 increase the number of
authorized shares of common stock from 45,000,000 to 70,000,000
shares.
(3) To consider and vote upon a proposal to approve the 2000 Stock Award
Plan.
(4) Ratification of the selection of PricewaterhouseCoopers LLP as the
Company's independent certified public accountants for fiscal year
2000; and
(5) 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 20,
2000 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 the
Company's 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
Stanley E. Speer
Secretary
Santa Monica, California
April 5, 2000
CADIZ 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:
Increase in the Number of Authorized Shares of Common Stock .14
PROPOSAL 3:
Approval of the 2000 Stock Award Plan . . . . . . . . . . . .15
PROPOSAL 4:
Approval of Independent Auditors . . . . . . . . . . . . . . 17
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 17
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . 17
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . .17
CADIZ INC.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 15, 2000
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 Monday, May
15, 2000, 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, 1999, including audited financial statements, is being mailed to you
with this Proxy Statement on or about April 5, 2000.
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 20, 2000 will be entitled to vote at the meeting. At
the close of business on March 20, 2000, there were 35,309,911 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 Proposals 3 and 4. 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, 3 and 4, 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 1,222,643 outstanding shares of Common Stock which
they hold or control, representing 3.46% 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 20, 2000, the ownership
of Common Stock of the Company by each stockholder who is known by the
Company to own beneficially more than five 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. 3,584,667 (1) 10.15%
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
Morgan Stanley Dean
Witter & Co. 2,265,091 (2) 6.41%
1585 Broadway
New York, NY 10036
Capital Research &
Management Company 2,232,000 (3) 6.32%
333 South Hope Street
Los Angeles, CA 90071
Lone Star Securities
Fund, L.L.C. 2,053,220 (4) 5.81%
540 Madison Avenue, 32nd Floor
New York, NY 10022
Gilder Gagnon Howe
& Co., LLC. 1,926,125 (5) 5.45%
1775 Broadway, 26th Floor
New York, NY 10019
Dwight W. Makins 435,500 (6) 1.22%
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Keith Brackpool 1,805,143 (7) 5.00%
100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Anthony L. Coelho 35,500 (8) *
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Murray H. Hutchison 35,500 (9) *
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Mitt Parker 60,500 (10) *
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Timothy J. Shaheen 486,250 (11) 1.36%
100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Stanley E. Speer 281,250 (12) *
100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
All Directors and Officers
as a Group 3,139,643 (6)(7)(8)
(7 individuals) (9)(10)(11)(12) 8.43%
- ----------------------------
* Less than 1%
(1) Based upon information obtained from Fidelity International
Limited ("FIL"), FIL beneficially owns, as an investment advisor
which provides investment advisory and management services to a
number of non-U.S. investment companies or investment trusts and
certain institutional investors, 3,584,667 shares of Common Stock
and such funds and accounts and FIL, as investment advisor to the
funds and accounts, have sole voting and dispositive power as to
all such shares. A partnership controlled by Mr. Edward C.
Johnson 3d and members of his family owns shares of FIL voting
stock with the right to cast approximately 47.22 percent of the
total votes which may be cast by all holders of FIL voting stock.
Mr. Johnson 3d is Chairman of FIL. 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 with certain common shareholders. The
principal office of FIL is located at Pembroke Hall, 42 Crow
Lane, Hamilton, Bermuda. The principal offices of FMR,
Fidelity and Mr. Johnson 3d are located at 82 Devonshire Street,
Boston, Massachusetts 02109.
(2) Morgan Stanley Dean Witter & Co. ("Morgan Stanley") filed a
Schedule 13G with the Securities and Exchange Commission
indicating that they are the indirect beneficial owner of
2,265,091 shares of Common Stock, arising from the indirect
beneficial ownership of such shares by Morgan Stanley Dean Witter
Investment Management Limited ("MSDWIM"), a subsidiary of Morgan
Stanley. The address of Morgan Stanley is 1585 Broadway, New
York, New York 10036. The address of MSDWIM is 25 Cabot Square,
Canary Wharf, London E14 4QA, England. According to the Schedule
13G, accounts managed on a discretionary basis by MSDWIM hold
2,212,994 shares and are known to have the right to receive or
the power to direct the receipt of dividends or proceeds from the
sale of such securities. The Schedule 13G indicates that no such
account holds more than 5% of the class.
(3) Capital Research and Management Company ("Capital Research")
filed a Schedule 13G with the Securities and Exchange Commission
indicating that it is the beneficial owner of 2,232,000 shares of
Common Stock, arising from the 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, an investment advisor
registered under Section 203 of the Investment Advisors Act of
1940. Capital Group filed a Schedule 13G with the Securities and
Exchange Commission indicating they will no longer be required to
report beneficial ownership under SEC Rule 13d-1. The principal
offices of 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 Research does not have
investment power or voting power over any of the shares and
beneficial ownership is disclaimed pursuant to Rule 13d-4.
4) Based upon information obtained from Lone Star Securities Fund,
L.L.C., a Delaware limited liability company ("LS Securities"),
LS Securities and Hudson Advisors, L.L.C., a Texas limited
liability company ("Hudson") beneficially own an aggregate of
2,053,220 shares of Common Stock. LS Securities is principally
engaged in the business of investment in public and private
debt, equity and derivative securities. Hudson is the
investment manager of LS Securities. The principal office of
LS Securities and Hudson is 600 North Pearl Street, Suite 1550,
Dallas, Texas 75201.
(5) Gilder Gagnon Howe & Co. LLC ("Gilder Gagnon") filed a
Schedule 13G with the Securities and Exchange Commission
indicating that it is the beneficial owner of 1,926,125 shares of
Common Stock, which shares include 1,759,125 shares held in
customer accounts over which members and/or employees of Gilder
Gagnon have discretionary authority to dispose of or direct the
disposition, 115,900 shares held in accounts owned by the members
of Gilder Gagnon and their families, and 51,100 shares held in
the account of the profit-sharing plan of Gilder Gagnon (the
"Profit-Sharing Plan"). The Schedule 13G indicates that the
owners of the accounts (including the Profit-Sharing Plan) in
which the shares reported on the Schedule 13G are held 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
principal office of Gilder Gagnon is located at 1775 Broadway,
26th Floor, New York, NY 10019.
(6) Includes 260,500 shares underlying presently exercisable options.
(7) Includes 750,000 shares underlying presently exercisable options
and 25,000 shares owned by a foundation of which Mr. Brackpool is
a trustee, but in which Mr. Brackpool has no economic interest.
Mr. Brackpool disclaims any beneficial ownership of these 25,000
shares. Does not include conditional deferred stock units to be
granted under the 2000 Stock Award Plan proposed for shareholder
approval.
(8) Includes 35,500 shares underlying presently exercisable options.
(9) Includes 35,500 shares underlying presently exercisable options.
(10) Includes 60,500 shares underlying presently exercisable options.
(11) Includes 475,000 shares underlying presently exercisable
options. Does not include conditional deferred stock units to be
granted under the 2000 Stock Award Plan proposed for shareholder
approval.
(12) Includes 275,000 shares underlying presently exercisable
options. Does not include 50,000 shares underlying options that
are not vested or conditional deferred stock units to be granted
under the 2000 Stock Award Plan proposed for shareholder
approval.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the six persons listed below
for election at the Annual Meeting to serve as directors for a term
expiring at the 2001 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 six 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 49 Chairman of the Board
Keith Brackpool 42 President, Chief Executive Officer
and Director
Anthony L. Coelho 57 Director
Murray H. Hutchison 61 Director
Mitt Parker 50 Director
Timothy J. Shaheen 40 Director of the Company and President,
Chief Executive Officer of Sun
World International, Inc.
Executive Officer:
Name Age Position with the Company
----- --- -------------------------
Stanley E. Speer 39 Chief Financial Officer and Corporate
Secretary of the Company and
Sun World International, Inc.
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 Chairman of
the Audit Committee and a member of the 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.
Anthony L. Coelho was appointed a director of the Company in March
1999. Mr. Coelho currently serves as General Chairman of the Gore
Campaign 2000. Mr. Coelho was first elected to the U.S. House of
Representatives in 1978 and served as the first-ever elected Majority
Whip from 1987 to 1989. Representing California's Central Valley, Mr.
Coelho served in senior positions on the Agriculture, Interior and
Administration Committees with his legislative focus on agriculture and
water issues. After leaving Congress, Mr. Coelho served as Managing
Director of Wertheim Schroder Inc, an investment banking firm from 1989
to 1995 and from 1990 to 1995 he served as President and Chief Executive
Officer of Wertheim Schroder Investment Services, Inc. In 1994,
President Clinton appointed him Chairman of the President's Committee on
Employment of People with Disabilities. Mr. Coelho currently serves as a
director of Cyberonics, Inc., ICF Kaiser International, Inc., ITT
Educational Services, Inc., Service Corporation International, Pinnacle
Global Group, Inc. (formerly TEI, Inc.), Kistler Aerospace Corporation,
and as a director of several other non-publicly traded and not-for-profit
companies.
Murray H. Hutchison was appointed a director of the Company in June
1997. Since his retirement in 1996 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 1996, 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 currently
serves as Chairman of Sunrise Medical, Inc. and as a director of Jack in
the Box, Inc., which are both traded on the New York Stock Exchange.
Additionally, Mr. Hutchison serves as Chairman of Huntington Hotel
Corporation 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 involved in the produce industry for over
28 years, is currently President and Chief Executive Officer of
FreshPoint, Inc. FreshPoint owns 28 individual produce companies
operating in major markets throughout the U.S. and in the Canadian
Provinces of British Columbia and Alberta. Mr. Parker also serves as a
director of The United Fresh Fruit and Vegetable Association, a national
trade organization, which represents interests of fruit and vegetable
producers and distributors. 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. Mr. Parker is a member of the Compensation Committee
of the Board of Directors.
Timothy J. Shaheen was appointed a director of the Company in March
1999. Mr. Shaheen has served as the Chief Executive Officer and director
of the Company's Sun World International, Inc. ("Sun World") subsidiary
since September 1996. Mr. Shaheen also serves as a director of The
United Fresh Fruit and Vegetable Association, a national trade
organization, which represents interests of fruit and vegetable producers
and distributors. He is also active on several industry advisory
committees. Mr. Shaheen has ten 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
relinquished his position as Secretary of Sun World. In April 1998, Mr.
Speer became Secretary of both the Company and Sun World. Prior to
joining Sun World, Mr. Speer had 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, 1999, 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, 1999, the Board of Directors held
four formal meetings, conferred on a number of occasions through
telephone conferences, and took action, when appropriate, by unanimous
written consent. Each current director attended all the meetings of the
Board and all the meetings of the 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. Makins, as Chairman, Coelho 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, 1999. Messrs.
Hutchison, as Chairman, Makins and Parker 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,
1999.
EMPLOYMENT ARRANGEMENTS
Mr. Brackpool is compensated pursuant to an 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
disability insurance 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 $300,000. Mr. Shaheen
is entitled to receive additional compensation in the form of bonuses at
the sole discretion of the Board of Directors, based primarily on the
performance of Sun World. Mr. Shaheen also receives the use of an
automobile leased by the Company.
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 $260,000. 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.
Mr. Speer is entitled to receive additional compensation in the form of
bonuses at the sole discretion of the Board of Directors, based primarily
on the performance of the Company. Mr. Speer also receives the use of an
automobile leased by the Company.
COMPENSATION OF DIRECTORS
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. During the year ended
December 31, 1999, Mr. Makins received total cash compensation of $75,000
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.
Mr. Brackpool and Mr. Shaheen do not receive any additional
compensation for serving as directors of the Company or of Sun World.
Mr. Coelho receives cash compensation for his services as director
of the Company in the amount of $25,000 per year, payable quarterly in
advance. He was appointed as a director of the Company in March 1999.
Upon appointment, Mr. Coelho also received options to purchase 25,000
shares of the Company's Common Stock, which vested in September 1999.
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.
Mr. Parker receives 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 February 2000, Messrs. Makins, Coelho, Hutchison and Parker
each received options to purchase 10,500 shares of the Company's Common
Stock as additional compensation.
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 years ended December 31, 1999, 1998, and 1997.
SUMMARY COMPENSATION TABLE
Other Long-Term
Name and Annual Compensation Awards All
Principal Fiscal Compensation(2) Stock Stock Other
Position Year(1) Salary Bonus(3) Awards(4) Options Compensation
--------------- -------- -------- -------- --------- ------- ------------
Keith Brackpool 12/31/99 $500,000 $275,000 $250,000 500,000(5) -0-
President and 12/31/98 500,000 300,000 -0- 0- 50,000(6)
Chief Executive
Officer 12/31/97 500,000 217,500 -0- 0- 82,500(7)
Timothy J.
Shaheen 12/31/99 270,000 135,000 135,000 0- -0-
Chief Executive
Officer of Sun 12/31/98 270,000 35,000 -0- 75,000(8) 50,000(6)
World 12/31/97 250,000 62,500 -0- -0- -0-
Stanley E.
Speer 12/31/99 240,000 120,000 120,000 -0- -0-
Chief Financial
Officer 12/31/98 240,000 35,000 -0- 125,000(9) 50,000(6)
12/31/97 225,000 56,250 -0- -0- -0-
(1) The information presented in this table is for the years ended
December 31, 1999, December 31, 1998, and December 31, 1997. The
executive officers for whom compensation has been disclosed for the
year ended December 31, 1999, constituted all of the Company's
executive officers as of December 31, 1999.
(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) Bonuses are paid in February for the preceding calendar year.
(4) Deferred stock units, subject to vesting, were conditionally granted
to Messrs. Brackpool, Shaheen and Speer in February 2000, as part of
their respective bonuses for the preceding calendar year. Issuance
of these deferred stock units, which shall vest ratably over three
years, are conditional upon adoption of the 2000 Stock Award Plan
proposed for shareholder approval.
(5) In January 1999, Mr. Brackpool was granted 500,000 options, vesting
in July 1999, based upon meeting certain milestones in the
fulfillment of the Company's water resources business plan.
(6) In February 1999, the Company awarded 6,250 shares of stock each to
Messrs. Brackpool, Shaheen and Speer, totaling 18,750 shares, as part
of a performance-based bonus with respect to the year ended December
31, 1998. The value of the shares is calculated based on the fair
market value of $8.00 on the date the shares were awarded.
(7) The Company awarded Mr. Brackpool a total of 10,000 shares of stock,
which value is calculated based on the fair market value of $8.25 on
the date stock was awarded, as part of a performance-based bonus with
respect to the year ended December 31, 1997. However, such shares
were not issued until March 1998.
(8) In February 1999, Mr. Shaheen was granted 75,000 options, vesting in
August 1999, as part of a performance-based bonus with respect to the
year ended December 31, 1998.
(9) 50,000 options were granted to Mr. Speer during the fiscal year ended
December 31, 1998 and shall vest in February 2001. These options vest
immediately upon a change of control in the Company. In addition,
in February 1999, Mr. Speer was granted 75,000 options, vesting in
August 1999, as part of a performance-based bonus with respect to the
year ended December 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
Percent
of
Total Potential Realizable
Options Value
Granted at
to Assumed Annual Rates
Employees Exercise of Stock Price
In Price Appreciation
Options Fiscal Per Share Expiration for Option Term(3)
Name Granted Year ($/Sh)(1) Date(2) 5% 10%
- --------------- --------- ----- ------- -------- ---------- ----------
Keith Brackpool 500,000(4) 62.5% $7.3125 01-15-04 $1,010,154 $2,232,177
Timothy J. Shaheen 75,000(5) 9.4% $8.0000 02-12-04 $ 165,769 $ 366,306
Stanley E. Speer 75,000(6) 9.4% $8.0000 02-12-04 $ 165,769 $ 366,306
(1) All options were granted at market value (average of closing
bid and asked prices for the Company's Common Stock as reported on
the Nasdaq Stock Marketr) at date of grant.
(2) All options have a fixed term of five years.
(3) Potential gains are reported net of the option exercise price,
but before taxes associated with exercise. These amounts represent
certain assumed rates of appreciation only. Actual gains on stock
option exercises are dependent on the future performance of the
Common Stock and overall stock market conditions. The amounts
reflected in this table may not necessarily be achieved.
(4) The options vested on July 15, 1999.
(5) The options vested on August 12, 1999
(6) The options vested on August 12, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value of
Unexercised Unexercised
Shares Options at Options at
Acquired FY-End (#) FY-End (#)
on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable(1)
- -------------- ------------ ------------ ------------ ---------------
Keith Brackpool 750,000 $3,750,000 750,000/-0- $2,343,750/-0-
Timothy J. Shaheen -0- -0- 475,000/-0- $2,112,500/-0-
Stanley E. Speer -0- -0- 275,000/50,000 $1,112,500/$62,500
(1) Based upon the Nasdaq Stock Market(R) closing
sales price per share at December 31, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the Company's year ended December 31, 1999, all decisions
concerning executive officer compensation were made by the Compensation
Committee of the Board of Directors. The members of the Compensation
Committee were Messrs. Hutchison (Chairman), Makins and Parker all 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 COMPENSATION
The Board of Directors has formed a Compensation Committee (the
"Committee") which is responsible for reviewing and establishing the
compensation payable to the Company's executive officers, including the
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>
Prior to the Sun World acquisition, 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. While the Company will continue to seek
to pursue opportunities synergistic with its water
and agricultural resources, the Company's business
strategy is currently 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]
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
Arrangements," 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
resource 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, 1999, the
application of these criteria resulted in a grant to
Mr. Brackpool, in February 2000, of a performance-
based bonus equal to 105% of Mr. Brackpool's base
salary of $525,000. $275,000 of this bonus is
payable in cash and the remainder in the form of
deferred stock units exchangeable for the Company's
Common Stock, which vest ratably over three years, to
be issued under the 2000 Stock Award Plan proposed
for shareholder approval.
The Committee has designed a compensation
program for Messrs. Shaheen and Speer and other
Company 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 Arrangements" above.)
With respect to the year ended December 31, 1999,
Messrs. Shaheen and Speer each received a performance-
based bonus equal to 100% of base salary. Fifty
percent (50%) of this bonus is payable in cash and
50% is payable in the form of deferred stock units
exchangeable for the Company's Common Stock, which
vest ratably over three years, to be issued under the
2000 Stock Award Plan proposed for shareholder
approval.
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 or other stock awards. 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 and other stock
awards 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 or other stock awards may be dependent upon
the satisfaction of subjective performance criteria.
Mr. Brackpool received a stock option grant in
January 1999 to purchase 500,000 shares of the
Company's Common Stock at $7.3125 per share, which
vested six months after the grant date, based upon
meeting certain milestones in the fulfillment of the
Company's water resources business plan.
Options granted by the Company during the last
three fiscal years, whether vesting immediately or
contingently, are exercisable for a period of five to
seven years from grant. The Committee anticipates
that options or stock awards may again be granted in
the future in order to provide executives with
additional long-term incentives. Such options and
stock awards may be granted pursuant to the Company's
1996 Stock Option Plan or, if approved by the
shareholders, the 2000 Stock Award Plan.
DEDUCTIBILITY OF CERTAIN EXECUTIVE COMPENSATION
EXPENSE UNDER FEDERAL TAX LAWS
The Committee has considered the impact of
provisions of the Internal Revenue Code of 1986,
specifically Code Section 162(m). Section 162(m)
limits to $1 million the Company's deduction for
compensation paid to each executive officer of the
Company which does not qualify as "performance
based."
While the Company expects that this provision
will not limit its tax deductions for executive
compensation in the near term, the Company's 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. However,
any shares of stock issued to executives under the
Company's proposed 2000 Stock Award Plan will not
qualify as performance-based compensation and,
therefore, will be counted in determining whether the
$1 million limit has been reached.
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
Mitt Parker
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 U.S. index and the Russell 2000(R) index for the past
five fiscal years. The graph indicates a measurement point of March 31,
1995, and assumes a $100 investment on such date in the Company's Common
Stock, the Nasdaq U. S. and the Russell 2000(R) indices. With respect to
the payment of dividends, the Company has not paid any dividends on its
Common Stock, but the Nasdaq U. S. and the Russell 2000(R) indices 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 PERFORMANCE GRAPH
[Performance Graph appears here)
Company and
Indices 3/31/95 3/29/96 12/31/96 12/31/97 12/31/98 12/31/99
- ------------------ ------- ------- -------- -------- -------- --------
CLCI Stock Price 100.000 140.607 116.715 192.643 171.541 213.723
Nasdaq US Index 100.000 135.797 159.606 195.569 275.582 497.868
Russell 2000 (R) 100.000 126.844 139.054 167.588 161.813 193.561
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions required to be reported pursuant to this
section.
PROPOSAL 2
AMENDMENT OF THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
The Company's Certificate of Incorporation provides that the
authorized capital of the Company is 45,000,000 shares of Common Stock,
$.01 par value. As of March 20, 2000, the Company had 35,309,911 shares
of common stock outstanding. As of such date, the Company has also
reserved an additional 3,695,500 shares for the exercise of currently
outstanding stock options and the issuance of new stock options under the
Company's 1996 and 1998 Stock Option Plans, and an additional 900,000
shares for exercise of outstanding vested and unvested stock warrants.
Based on the above, only 5,094,589 shares remain available for issuance
by the Company for other corporate purposes.
The Board of Directors believes that the authorization of an
additional 25,000,000 shares of Common Stock will provide increased
flexibility for future growth, including the opportunity to utilize the
Company's Common Stock as full or partial consideration for potential
acquisitions. The Company will also be able to use the additional
authorized Common Stock, as the need arises, for possible future
financing transactions, stock dividends or splits, and for other general
corporate purposes. Although, in the normal course of business, the
Company evaluates alternative proposals concerning the use of additional
authorized shares of common Stock for the foregoing purposes, the
Company currently has no specific plans, arrangements or understandings
to issue any additional shares of Common Stock as described herein.
The Board of Directors of the Company has adopted a resolution
recommending to the shareholders the adoption of an amendment of the
Certificate of Incorporation of the Company to increase the authorized
number of shares of Common Stock, $.01 par value, from 45,000,000 to
70,000,000.
Although it is not intended to be an anti-takeover measure, the
increase in authorized capital with a subsequent issuance of equity
securities could impede a potential takeover, for example, by diluting
the stock ownership of persons attempting to gain control of the Company,
or issuing securities to individuals or entities favorable to management.
If approved by the stockholders of the Company, Subsection A of
Article Four of the Company's Certificate of Incorporation will be
amended to read in full as follows:
"Fourth:
A. The total number of shares of all classes of stock which
the Company shall have the authority to issue is Seventy
Million One Hundred Thousand (70,100,000), consisting of:
(1) Seventy Million (70,000,000) shares of Common Stock,
par value one cent ($.01) per share (the "Common
Stock"); and
(2) One Hundred Thousand (100,000) shares of
Preferred Stock, par value one cent ($.01) per share (the
"Preferred Stock")."
Upon approval, the Board of Directors, without further shareholder
action, shall be able to provide for the issuance from time to time of
authorized but unissued shares of the common stock of the Company and to
determine and approve the consideration and other terms for which shares
are to be issued.
The affirmative vote of the holders of a majority of shares of
common stock outstanding is required to amend the Certificate of
Incorporation to increase the number of authorized shares of common
stock.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 2.
PROPOSAL 3
APPROVAL OF 2000 STOCK AWARD PLAN
The Board of Directors of the Company has unanimously adopted a
resolution recommending to the stockholders the approval of the Cadiz
2000 Stock Award Plan (the "Plan").
The Board believes that adoption of the Plan provides added
flexibility in the form of stock awards that can be made to attract,
retain and motivate employees and other eligible persons of the Company
and its subsidiaries. The Board believes that adding the additional
forms of stock awards available under the Plan (i.e., restricted stock,
deferred stock units, stock bonus and stock awards in lieu of cash) to
the currently available stock option grants could reduce the dilutive
impact on shareholders. This proposal does not increase the number of
shares available for grant to employees and other eligible persons as the
total shares available for grant under the Plan when combined with the
1996 Stock Option Plan and 1998 Non-Qualified Stock Option Plan will not
exceed the 4,000,000 shares previously approved by the Company's
stockholders. As of March 20, 2000, there were 584,000 remaining shares
available for future option grants under the 1996 Stock Option Plan and
the 1998 Non-Qualified Stock Option Plan. The closing price of the
Company's Common Stock on the Nasdaq Stock Market(R) as of that date was
$ per share.
The following table sets forth information with respect to Stock
Awards granted pursuant to the Plan through March 20, 2000:
2000 STOCK AWARD PLAN
STOCK AWARD GRANT SUMMARY
AWARDS DOLLAR
NAME TITLE GRANTED VALUE
- ------------------ -------------------------- --------- -----------
Keith Brackpool President, Chief Executive
Officer & Director (1) $250,000
Timothy J. Shaheen Director of the Company &
Chief Executive Officer of
Sun World International, Inc. (1) $135,000
Stanley E. Speer Chief Financial Officer
& Secretary (1) $120,000
All current Executive
Officers as a Group (1) $505,000
All current Directors
who are not Executive
Officers as a Group $ -0-
All Employees as a Group
(not including Executive
Officers and Directors) (1) $650,000
(1) Amount of awards granted to be based upon the fair
market value of the Company's Common Stock as of the date of
approval of the Plan by the Company's stockholders.
As the Company's executive officers and directors are eligible to
participate in the Plan, they may have an interest in the proposal to
approve the Plan.
DESCRIPTION OF THE PLAN
Below is a summary of the principal provisions of the Plan. The
summary is not necessarily complete, and reference is made to the full
text of the Plan attached as an Appendix to this Proxy Statement.
Capitalized terms used, but not defined herein, shall have the same
meaning as set forth in the Plan.
GENERAL. The purpose of the Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and its
subsidiaries and affiliates, by offering them an opportunity to
participate in the Company's future performance through stock-based
awards. Under the Plan, stock-based awards ("Plan Awards") may be
granted to certain directors, officers, employees, consultants,
independent contractors and advisors of the Company or its subsidiaries
or affiliates. By encouraging stock ownership, the Company seeks to
attract, retain and motivate such persons and to encourage such employees
and persons to devote their best efforts to the business and financial
success of the Company. The Company also believes that stock incentive
programs, such as the Plan, are commonly employed by companies as an
important element of a total compensation program. It is intended that
the Plan will comply with the requirements of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and Rule 16b-
3 promulgated thereunder. The Company believes that compliance with
these rules is beneficial to recipients of stock awards under the Plan
because of the favorable treatment of such awards under the "short-swing"
profit rules of Section 16 of the 1934 Act.
Subject to adjustment in certain circumstances as discussed below,
the Plan authorizes up to 1,000,000 shares of Common Stock for issuance
pursuant to Plan Awards granted under the terms of the Plan, provided,
however, that the total number of shares of Common Stock issuable under
the Plan, when combined with the total number of options granted (and not
subsequently canceled) by the Company under its 1996 Stock Option Plan
and its 1998 Non-Qualified Stock Option Plan shall at no time exceed
4,000,000.
ADMINISTRATION OF THE PLAN. The Plan will be administered by a
committee of the Board (the "Committee") or the Board acting as the
Committee. The Committee will have the sole discretion, subject to
certain limitations, to interpret the Plan; to select Plan participants;
to determine the type, size, terms and conditions of awards under the
Plan; to authorize the grant of such awards; to enter into agreements
with Plan participants evidencing the terms and conditions of such
awards, and to adopt, amend and rescind rules relating to the Plan. All
determinations of the Committee will be conclusive. All expenses of
administering the Plan will be borne by the Company.
PLAN AWARDS. The Committee shall have the discretion to select from
several alternative forms of Plan Awards. The types of Plan Awards which
the Committee may grant include Restricted Stock, Deferred Stock Units,
Stock Bonuses and Stock Awards in Lieu of Cash. Recipients of Plan
Awards may receive any one form of Plan Award or a combination thereof.
The Committee may at any time offer to buy out certain Plan Awards for a
payment in cash, stock or other Plan Awards, or other property based on
such terms and conditions as the Committee shall determine.
ELIGIBILITY. Employees, officers, consultants, and directors and
advisors of the Company and its subsidiaries and affiliates whom the
Board deems to have contributed significantly to the Company or who have
the potential to contribute to the future success of the Company will be
eligible to receive Plan Awards.
AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend or
terminate the Plan at any time; provided, however, that the Board may
not, without the approval of stockholders, amend the Plan in any manner
that requires stockholder approval under any applicable statute, rule or
regulation, and provided, further, that no amendment or termination may
adversely affect the rights of the holder of an outstanding Plan Award
without the consent of such holder. According to its terms, the Plan
will terminate 10 years from the effective date.
ADJUSTMENT PROVISIONS. In the event of a stock split, stock
dividend, combination or exchange of shares, merger, consolidation,
reorganization, recapitalization or similar transaction, an appropriate
adjustment shall be made to the number of shares of Common Stock
authorized under the Plan and to which outstanding Plan Awards are
subject. A change in control of the Company shall accelerate the vesting
of outstanding, but unvested, Plan Awards.
The affirmative vote of the holders of a majority of shares of
Common Stock present or represented by proxy and voting at the meeting is
required to approve the Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 3.
PROPOSAL 4
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors is recommending the ratification of its
selection of PricewaterhouseCoopers LLP as the Company's independent
certified public accountants to audit the financial statements of the
Company for the 2000 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. PricewaterhouseCoopers 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
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 4.
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, 2000) must file such resolutions with the
Company not later than November 30, 2000.
ADDITIONAL INFORMATION
This Proxy Statement is accompanied by the Company's Annual Report
on Form 10-K for the year ended December 31, 1999 (the "Form 10-K").
Exhibits to the Form 10-K will be made available to stockholders for a
reasonable charge upon their written request to the Company, Attention:
Mr. Stanley E. Speer, 100 Wilshire Boulevard, Suite 1600, Santa Monica,
California 90401.
By Order of the Board of Directors
Santa Monica, California
April 5, 2000
APPENDIX A
----------
CADIZ INC.
2000 STOCK AWARD PLAN
1. PURPOSE
---------
The purpose of the Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions
are important to the success of the Company and its Subsidiaries and
Affiliates, by offering them an opportunity to participate in the
Company's future performance.
Capitalized terms not defined in the text are defined in Section 18.
2. SHARES SUBJECT TO THE PLAN
---------------------------
2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 13, the
total number of Shares which may be granted pursuant to the Plan shall be
1,000,000; provided, however, that the total number of Shares granted
under the Plan, when combined with the total number of options granted
(and not subsequently canceled) by the Company under its 1996 Stock
Option Plan and the 1998 Non-Qualified Stock Option Plan, shall at no
time exceed 4,000,000.
2.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares of the Company's common stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure
of the Company without consideration, then the number of Shares reserved
for issuance under the Plan shall be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that
fractions of a Share shall not be issued, but shall either be paid in
cash at Fair Market Value or shall be rounded up to the nearest Share, as
determined by the Committee.
3. ELIGIBILITY
------------
Awards may be granted to officers, directors, employees,
consultants, independent contractors and advisers of the Company or any
Subsidiary or Affiliate of the Company; provided, however, that such
consultants, contractors and advisers render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction.
4. ADMINISTRATION
--------------
4.1 COMMITTEE AUTHORITY. The Plan shall be administered by the
Committee or the Board acting as the Committee. Subject to the purposes,
terms and conditions of the Plan, and to the direction of the Board, the
Committee shall have full power to implement and carry out the Plan.
Without limiting the generality of the foregoing, the Committee shall
have the authority to:
4.1.1. construe and interpret the Plan and any Award Agreement or
other document executed pursuant to the Plan;
4.1.2. prescribe, amend and rescind rules and regulations relating to
the Plan;
4.1.3. select persons to receive Awards;
4.1.4. determine the form and terms of Awards and any Award
Agreements;
4.1.5. determine whether Awards will be granted singly, in combination
or in tandem with options under any other incentive or compensation plan
of the Company or any Subsidiary or Affiliate of the Company;
4.1.6. grant waivers of Plan or Award conditions;
4.1.7. determine the vesting and payment of Awards and to accelerate
the vesting of Awards;
4.1.8. correct, any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award Agreement;
4.1.9. determine whether an Award grant has been earned; and
4.1.10. make all other determinations necessary or advisable for the
administration of the Plan.
4.2 COMMITTEE DISCRETION. Any determination permitted to be made by the
Committee under the Plan with respect to any Award shall be made in its
sole discretion at the time of grant of the Award or, unless in
contravention of any express terms of the Plan, at any later time, and
such determination shall be final and binding on the Company and all
persons.
4.3. COMPOSITION OF COMMITTEE. The Committee shall be comprised of
either (i) at least two members of the Board, all of whom are both
Outside Directors and Nonemployee Directors; or (ii) the Board acting as
the Committee. It is the intent of the Company that the Plan, and Awards
granted hereunder satisfy and be interpreted in a manner that, in the
case of Participants who are or may be Insiders, satisfies the applicable
requirements of Rule 16b-3 (or its successor) of the Exchange Act. If
any provision of the Plan or of any grant of an Award would otherwise
conflict with the intent expressed in this Section 4.3, that provision,
to the extent possible, shall be interpreted and deemed amended so as to
avoid such conflict.
5. SPECIFIC TERMS OF AWARDS
-------------------------
5.1. GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 5 and as otherwise provided in the Plan. In
addition, the Committee may impose on any Award, at the date of grant or
thereafter (subject to Section 10 and 15), such additional terms and
conditions not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms regarding forfeiture of Awards
in the event of Termination of the Participant. Upon an Award to a
Participant, the Committee may, if it determines that it would further
the orderly administration of the Plan, deliver to the Participant an
Award Agreement containing such terms and conditions as may be
established by the Committee, the execution of which by the Participant
may be made a condition of the Award.
5.2. RESTRICTED STOCK. The Committee is authorized to award Shares to
Participants on the following terms and conditions:
5.2.1. ISSUANCE AND RESTRICTIONS. Shares awarded pursuant to this
Section 5.2 ("Restricted Stock") shall be subject to such restrictions on
transferability and other restrictions, if any, as the Committee may
impose at the date of grant or thereafter, which restrictions may lapse
separately or in combination at such times, under such circumstances, in
such installments, or otherwise, as the Committee may determine. Except
to the extent restricted under the Award Agreement relating to the
Restricted Stock, a Participant granted Restricted Stock shall have all
of the rights of a stockholder including the right to vote Restricted
Stock and the right to receive dividends thereon.
5.2.2. FORFEITURE. Upon Termination of a Participant during any
applicable restriction period, Restricted Stock and any accrued but
unpaid dividends, that is or are then subject to a risk of forfeiture
shall be forfeited; provided, however, that the Committee may provide, by
rule or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to
Restricted Stock and any accrued but unpaid dividends will be waived in
whole or in part in the event of Terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Stock and any accrued but unpaid dividends.
5.2.3 CERTIFICATES FOR STOCK. Restricted Stock awarded under the Plan
may be evidence in such manner as the Committee shall determine. If
Certificates representing Restricted Stock are registered in the name of
the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, the Company shall retain physical possession of the
certificate, and the Company may require the Participant to deliver a
stock power, endorsed in blank, relating to the Restricted Stock.
5.2.4 DIVIDENDS. Dividends paid on Restricted Stock shall be either
paid at the dividend payment date in cash or in shares of unrestricted
Shares having a Fair Market Value equal to the amount of such dividends,
or the payment of such dividends shall be deferred or the amount or value
thereof automatically reinvested in additional Restricted Stock, Deferred
Stock Units, or other investment vehicles as the Committee shall
determine or permit the Participant to elect. Stock distributed in
connection with a stock split or stock dividend, and other property
distributed as a dividend shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect to
which such stock or other property has been distributed.
5.3 DEFERRED STOCK UNITS. The Committee is authorized to award Deferred
Stock Units to Participants, subject to the following terms and
conditions:
5.3.1 AWARD AND RESTRICTIONS. Deferred Stock Units awarded to a
Participant pursuant to this Section 5.3 shall entitle such Participant
to receive Shares in such amount and at such future date as specified by
the Committee at the time of the award. Delivery of Shares will occur
upon expiration of the deferral period specified by the Committee. In
addition, Deferred Stock Units shall be subject to such restrictions as
the Committee may impose, if any, at the date of award or thereafter (but
subject to Section 15), which restrictions may lapse at the expiration of
the deferral period or at earlier or later specified times, separately or
in combination, in installments or otherwise, as the Committee may
determine.
5.3.2 FORFEITURE. Upon Termination of a Participant during the
applicable deferral period or portion thereof to which forfeiture
conditions apply, or upon failure to satisfy any other conditions
precedent to the delivery of Shares to which such Deferred Stock Units
relate, all Deferred Stock Units that are at that time subject to a risk
of forfeiture shall be forfeited; provided, however, that the Committee
may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Deferred Stock Units will be waived in whole or in
part in the event of Termination resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Deferred Stock Units.
5.3.3 NO SHAREHOLDER RIGHTS. Except as may be otherwise provided by the
Committee, a Participant awarded Deferred Stock Units shall have no right
to receive dividends, vote, or any other rights of a shareholder with
respect to such Deferred Stock Units.
5.4 STOCK BONUSES AND STOCK AWARDS IN LIEU OF CASH AWARDS. The
Committee is authorized to grant Shares as a bonus, or to grant other
Awards, in lieu of Company commitments to pay cash under other plans or
compensatory arrangements. Stock of Awards granted hereunder shall have
such other terms as shall be determined by the Committee.
5.5 OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants Other Stock-
Based Awards that are deemed by the Committee to be consistent with the
purpose of the Plan. The Committee shall determine the terms and
conditions of such Awards at the date of grant or thereafter. Shares or
other securities or property delivered pursuant to an Award in the nature
of a purchase right granted under this Section 5.5 shall be purchased for
such consideration, paid for at such times, by such methods, and in such
forms, including, without limitation, cash, Shares, other Awards, notes
or other property, as the Committee shall determine, subject to any
required corporate action.
5.6 AWARDS TO PARTICIPANTS OUTSIDE THE UNITED STATES. The Committee may
modify the terms of any Award under the Plan granted to a Participant who
is, at the time of grant or during the term of the Award, resident or
primarily provides services outside of the United States in any manner
deemed by the Committee to be necessary or appropriate in order that such
Award shall conform to laws, regulations, and customs of the country in
which the Participant is then resident or primarily provides services, or
so that the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a
result of the Participant's residence or provision of services abroad,
shall be comparable to the value of such an Award to a Participant who is
resident or primarily provides services in the United States. An Award
may be modified under this Section 5.6 in a manner that is inconsistent
with the express terms of the Plan, so long as such modifications will
not contravene any applicable law or regulation.
5.7 IMMEDIATE VESTING, LAPSE OF RESTRICTIONS IF CHANGE IN CONTROL. In
the event of a Change in Control of the Company all Awards outstanding on
the date of such Change in Control shall immediately vest, and all
restrictions and conditions to such vesting shall lapse effective as of
the date of such Change in Control.
6. WITHHOLDING TAXES
------------------
The Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax
requirements at such time or times that such withholding requirements are
imposed.
7. TRANSFERABILITY
---------------
Awards granted under the Plan, and any interest therein, shall not
be transferable or assignable by Participant, and may not be made subject
to execution, attachment or similar process, otherwise than by will or by
the laws of descent and distribution.
8. CERTIFICATES
-------------
All certificates for Shares or other securities delivered under the
Plan shall be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be
listed.
9. BUYOUTS
-------
Notwithstanding anything contained in the Plan or any Award
Agreement to the contrary, the Committee may, at any time or from time to
time, require a Participant to surrender all or a portion of that
Participant's Restricted Stock, Deferred Stock Units, or Other Stock-
Based Award in exchange for cash in an amount equal to the Fair Market
Value of the number of Shares represented by such Restricted Stock,
Deferred Stock Units, or Other Stock-Based Award, as the case may be,
with such Fair Market Value determined as if such Shares were not subject
to any forfeiture provisions or other restrictions.
10. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
-----------------------------------------------
An Award shall not be effective unless such Award is in compliance
with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be
listed, as they are in effect on the date of grant of Award and also on
the date of distribution or other issuance of Shares. Notwithstanding
any other provision in the Plan, the Company shall have no obligation to
issue or deliver certificates for Shares under the Plan prior to: (a)
obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any
registration or other qualification of such Shares under any state or
federal law or ruling of any governmental body that the Company
determines to be necessary or advisable. The Company shall be under no
obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the
Company shall have no liability for any inability or failure to do so.
11. NO OBLIGATION TO EMPLOY
-----------------------
Nothing in the Plan or any Award Agreement pursuant to the Plan
shall confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with,
the Company, or any Subsidiary or Affiliate of the Company or limit in
any way the right of the Company or any Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at
any time, with or without cause.
12. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
------------------------------------------
The existence of outstanding Restricted Stock, Deferred Stock Units,
or any other Award shall not affect in any way the right or power of the
Company or its stockholders to make or authorize all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the common stock or the rights thereof, or
the dissolution or liquidation of the Company, or any other corporate act
or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares
or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of its common stock
outstanding, without receiving compensation therefor in money, services
or property, then (i) the number and class of Shares subject to
outstanding Deferred Stock Units hereunder shall be appropriately
adjusted in such a manner as to entitle a Participant to receive upon
exchange thereof the same total number and class of shares as such
Participant would have received had such Participant exchanged such
Deferred Stock Units in full immediately prior to such event; and (ii)
the number and class of shares with respect to which Deferred Stock Units
may be exchanged under the Plan shall be adjusted by substituting for the
total number of shares of common stock then reserved that number and
class of shares of stock that would have been received by the owner of an
equal number of outstanding shares of common stock as the result of the
event requiring the adjustment.
After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one or more corporations in
which the Company shall be the surviving corporation, each holder of an
outstanding Deferred Stock Unit shall, at no additional cost, be entitled
to receive upon exchange of such Deferred Stock Units (subject to any
required action by stockholders of the Company) in lieu of the number of
Shares as to which such Deferred Stock Unit shall then be so
exchangeable, the number and class of shares of stock or other securities
to which such holder would have been entitled pursuant to the terms of
the agreement of merger or consolidation if, immediately prior to such
merger or consolidation, such holder had been the holder of record of a
number of shares of common stock equal to the number of shares as to
which such Deferred Stock Units shall be so exchanged.
If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company is liquidated, or sells or otherwise
disposes of substantially all its assets to another corporation while
unexchanged Deferred Stock Units remain outstanding under the Plan, after
the effective date of such merger, consolidation or sale, as the case may
be, each holder of an outstanding Deferred Stock Unit shall be entitled
to receive upon exchange of such Deferred Stock Units in lieu of Shares,
shares of such stock or other securities, cash or property as the holders
of Shares received pursuant to the terms of the merger, consolidation or
sale.
Except as expressly provided above, the issue by the Company of
shares of stock of any class, securities convertible into shares of stock
of any class, for cash, property or services, either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares then subject
to outstanding Deferred Stock Units.
13. ADOPTION
---------
The Plan shall become effective on the date that it is adopted by
the Board (the "Effective Date") and upon shareholder approval.
14. TERM OF PLAN
--------------
The Plan will terminate ten (10) years from the Effective Date;
provided, however, that any outstanding Deferred Stock Units and any
other Awards granted on or before such termination date shall continue to
be subject to the terms of the Plan.
15. AMENDMENT OR TERMINATION OF PLAN
--------------------------------
The Board may at any time terminate or amend the Plan in any
respect, including without limitation amendment of any Award Agreement or
other instrument to executed pursuant to the Plan; provided, however,
that the Board shall not, without the approval of the stockholders of the
Company, amend the Plan in any manner that requires stockholder approval
under any applicable statute, rule or regulation; and provided, further,
that no termination or amendment to the Plan or any Award Agreement may,
without the consent of the holder of an outstanding Award, terminate such
Award or materially adversely affect the rights of the holder under such
Award.
16. NONEXCLUSIVITY OF THE PLAN
--------------------------
Neither the adoption of the Plan by the Board nor any provision of
the Plan shall be construed as creating any limitations on the power of
the Board to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of stock
options and bonuses otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.
17. GOVERNING LAW
--------------
The Plan and all agreements, documents and instruments entered into
pursuant to the Plan shall be governed by and construed in accordance
with the internal laws of the State of California, excluding that body of
law pertaining to conflict of laws.
18. DEFINITIONS
-----------
As used in the Plan, the following terms shall have the following
meanings:
"Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with"
means the possession, direct or indirect, of the power to cause the
direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise.
"Award" means any Restricted Stock, Deferred Stock Units, or Other
Stock-Based Award granted to a Participant under the Plan.
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Company.
"Change in Control" means the occurrence of any of the following
events:
(A) when the Company acquires actual knowledge that any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is
or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange
Act) directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then-
outstanding securities;
(B) upon the first purchase of common stock pursuant to a
tender or exchange offer (other than a tender or exchange offer made by
the Company);
(C) upon the approval by the Company's shareholders of: (i) a
merger or consolidation of the Company with or into another corporation,
which does not result in any capital reorganization or reclassification
or other change in the Company's then-outstanding shares of common
stock), (ii) a sale or disposition of all or substantially all of the
Company's assets, or (iii) a plan of liquidation or dissolution of the
Company;
(D) if during any period of two consecutive years, the
individuals who at the beginning of such period constitute the Board of
Directors of the Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
the Company's shareholders, of each new director is approved by a vote of
at least two-thirds of the directors then still in office who were
directors at the beginning of the period; or
(E) if the Board of Directors or any designated committee
determines, in its sole discretion, that any person (such as that term is
used in Sections 13(d) and 14(d) of the Exchange Act) directly or
indirectly exercises a controlling influence over the management or
policies of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means, subject to Section 4.3, the committee appointed
by the Board to administer the Plan, or if no committee is appointed, the
Board.
"Company" means Cadiz Inc., a corporation organized under the laws
of the State of Delaware, or any successor corporation.
"Deferred Stock Units" means an award granted to a Participant under
Section 5.3.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, as of any date, the value of a share of
the Company's common stock determined as follows:
(A) if such common stock is then quoted on the NASDAQ National
Market System, its last reported sale price on the NASDAQ National Market
or, if no such reported sale takes place on such date, the average of the
closing bid and asked prices;
(B) if such common stock is publicly traded and is then listed
on a national securities exchange, the last reported sale price or, if no
such reported sale takes place on such date, the average of the closing
bid and asked prices on the principal national securities exchange on
which the common stock is listed or admitted to trading;
(C) if such common stock is publicly traded but is not quoted
on the NASDAQ National Market nor listed or admitted to trading on a
national securities exchange, the average of the closing bid and asked
prices on such date, as reported by the Wall Street Journal, for the over-
the-counter market; or
(D) if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.
"Insider" means an officer or director of the Company or other
person whose transactions in the Company's common stock are subject to
Section 16 of the Exchange Act.
"Nonemployee Director" means a director of the Company defined in
Rule 16b-3(b)(i) of the Exchange Act.
"Other Stock-Based Award" means a right, granted to a Participant
under Section 5.5 that is denominated or payable in, valued in whole or
in part by reference to, or otherwise based on, or related to, Shares or
other securities of the Company or any Subsidiary or Affiliate,
including, without limitation, rights convertible or exchangeable into
Shares or such other securities, and purchase rights for Shares or such
other securities.
"Outside Director" means any outside director as defined in Section
162(m) of the Code and the regulations issued thereunder.
"Participant" means a person who receives and Award under the Plan.
"Plan" means this Cadiz Inc. 2000 Stock Award Plan, as amended from
time to time.
"Restricted Stock" means an award of Shares to a Participant under
Section 5.2 that may be subject to restrictions and to a risk of
forfeiture.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock, $0.01 par
value, and any security issued in respect thereto or in replacement
therefor.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time
of an Award, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
"Termination" means, for purposes of the Plan with respect to a
Participant, that the Participant has ceased to provide services as an
employee, director, consultant, independent contractor or adviser, to the
Company or a Subsidiary or Affiliate of the Company, except in the case
of sick leave, military leave, or any other leave of absence approved by
the Committee, provided, that such leave is for a period of not more than
ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee shall have sole
discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to
provide services.
--------------------------------
CADIZ 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 Inc., a
Delaware corporation (the "Company"), hereby acknowledges receipt of the
Proxy Statement and the Notice of the Annual Meeting of Stockholders to
be held on May 15, 2000 at 9:00 a.m. local time, at the Fairmont 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 persons as directors of the
Company to serve until the next Annual Meeting of Stockholders or
until their respective successors shall have been elected and
qualified.
Dwight W. Makins, Keith Brackpool, Anthony L. Coelho, Murray H.
Hutchison, Mitt Parker, Timothy J. Shaheen
[] AUTHORITY GRANTED to vote for [] AUTHORITY WITHHELD to vote
all nominees listed above, for all nominees listed above.
except as indicated 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 increase the number of
authorized shares of common stock from 45,000,000 to 70,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on the reverse side)
(Continued from other side)
(3) To consider and vote upon a proposal to approve the 2000 Stock
Award Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent certified public accountants for fiscal year
2000; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) 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:_______________________________, 2000
___________________________________________
___________________________________________
(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.