SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) 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 Section 240.14a-11(c) or Section
240.14a-12
CADIZ LAND COMPANY, INC.
------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange
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4) Date Filed:________________________________________________________
PRELIMINARY COPY
CADIZ LAND COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 18, 1996
To the Stockholders of
Cadiz Land Company, Inc.:
The Annual Meeting of Stockholders of Cadiz Land Company, Inc., a
Delaware corporation (the "Company"), will be held at the Westwood
Marquis Hotel and Gardens located at 930 Hilgard Avenue, Los Angeles,
California, on Friday, October 18, 1996, at 9:00 a.m., local time, and any
adjournments thereof, to consider and act upon the following matters:
(1) The election of four members of the Board of Directors, each to serve
until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified;
(2) Amendment of the Company's Certificate of Incorporation increasing
the number of authorized shares of Common Stock from 24,000,000
to 45,000,000;
(3) Ratification of the Company's 1996 Stock Option Plan;
(4) Ratification of the selection of Price Waterhouse LLP as the
Company's independent certified public accountants for fiscal year
1997; 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 September 6,
1996, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting.
In order to constitute a quorum for the conduct of business at the Annual
Meeting, holders of a majority of all outstanding shares of Common Stock
must be present in person or be represented by proxy.
Whether or not you expect to attend the Annual Meeting in person, please
date, sign and mail the enclosed proxy in the postage-paid return envelope
provided as promptly as possible. The proxy is revocable and will not affect
your right to vote in person if you attend the meeting.
By Order of the Board of Directors
/s/ Susan K. Chapman
______________________________
Secretary
Rancho Cucamonga, California
September 13, 1996
CADIZ LAND COMPANY, INC.
Annual Meeting of Stockholders
TABLE OF CONTENTS
Page
-----
PROXY STATEMENT INTRODUCTION . . . . . . . . . . 1
BENEFICIAL OWNERSHIP OF SECURITIES . . . . . . . 2
PROPOSAL 1:
Election of Directors. . . . . . . . . . . . 5
PROPOSAL 2:
Approval of Amendment to Certificate of
Incorporation. . . . . . . . . . . . . . . 14
PROPOSAL 3:
Approval of 1996 Stock Option Plan . . . . .16
PROPOSAL 4:
Approval of Independent Auditors . . . . . .18
OTHER MATTERS. . . . . . . . . . . . . . . . . .18
STOCKHOLDER PROPOSALS. . . . . . . . . . . . . .18
ADDITIONAL INFORMATION . . . . . . . . . . . . .18
PRELIMINARY COPY
CADIZ LAND COMPANY, INC.
10535 Foothill Boulevard, Suite 150
Rancho Cucamonga, California 91730
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 18, 1996
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 Friday, October
18, 1996, 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 for the fiscal year ended March 31, 1996,
including audited financial statements, is being mailed to you with this
Proxy Statement on or about September 16, 1996
We cordially invite you to attend the Annual Meeting. Whether or not you
plan to attend, please date, sign and return your proxy promptly in the
postage paid return envelope provided. You may revoke your proxy at any
time prior to its exercise at the meeting by notice to the Company's
Secretary, and, if you attend the meeting, you may vote your shares in
person. You may also revoke your proxy by returning a duly executed proxy
bearing a later date. Your proxy, if not revoked, will be voted at the Annual
Meeting in accordance with the instructions specified therein.
Only holders of record of the Company's Common Stock at the close of
business on September 6, 1996, will be entitled to vote at the meeting. At
the close of business on August 20, 1996, there were 19,572,611 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 Proposals 2 and 3. An affirmative vote of a majority of the
shares present and voting at the meeting is required for approval of Proposal
4. For purposes of determining whether a matter has received a majority
vote either of shares present or of all outstanding shares, abstentions will be
included in the vote totals, with the result that an abstention has the same
effect as a negative vote. In instances where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not
returned a proxy (so-called "broker non-votes"), those shares will not be
included in the vote totals and therefore will have no effect on the vote on
Proposals 1 and 4, but will have the same effect as a negative vote on
Proposals 2 and 3.
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 1,344,812 outstanding shares of Common Stock which they hold
or control, representing 6.87% 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 August 20, 1996, the ownership of
Common Stock of the Company by each stockholder who is known by the
Company to own beneficially more than 5 percent of the outstanding
Common Stock, by each director, by each executive officer listed in the
Summary Compensation Table below, and by all directors and officers as a
group.
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
- ---------------- ------------------------ -------------
Morgan Stanley Group, Inc., et. al. 1,834,000<F1> 9.37%
1251 Avenue of the Americas
New York, NY
Fidelity International Limited, et. al. 1,642,567<F2> 8.39%
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
The Capital Group Companies, Inc. 1,240,000<F3> 6.34%
333 South Hope Street
Los Angeles, CA 90071
Jupiter Asset Management Limited 1,141,633<F4> 5.83%
Knightsbridge House
197 Knightsbridge
London SW7 1RB England
Dwight W. Makins 375,000<F5> 1.89%
Beaurepaire House
Sherborne St. John
Basingstoke
Hampshire RG26 5EH
United Kingdom
Keith Brackpool 1,193,795<F6> 5.87%
10535 Foothill Blvd., Suite 150
Rancho Cucamonga, CA 91730
J.F.R. Hammond 475,017<F7> 2.41%
10 Compton Terrace
London N1 2UN
United Kingdom
Stephen D. Weinress 165,000<F8> 0.84%
3333 Michelson Dr.
Irvine, CA 92715
Susan K. Chapman 100,000<F9> 0.51%
10535 Foothill Blvd., Suite 150
Rancho Cucamonga, CA 91730
David Peterson 150,000<F10> 0.76%
19065 Portola Drive, Suite K
Salinas, CA 93908
Theodore W. Dutton 386,000 1.97%
10535 Foothill Blvd., Suite 150
Rancho Cucamonga, CA 91730
All Directors and Officers as a Group 2,844,812<F5><F6><F7> 13.50%
(7 individuals) <F8><F9><F10>
- --------------------------------
<FN>
<F1> A Schedule 13G has been filed with the Securities and Exchange
Commission indicating that Morgan Stanley Group, Inc. ("MS Group")
may be deemed to be the indirect beneficial owner of 1,744,000 shares
of Common Stock, arising from the indirect beneficial ownership of
such shares by Morgan Stanley Asset Management Limited ("MSAM"), a
subsidiary of MS Group. The address of MSAM is 25 Cabot Square,
Canary Wharf, London E14 4QA, England. The Schedule 13G indicates
that all such shares are held by MSAM in its capacity as an Investment
Adviser, and that MS Group and MSAM share voting and investment power
with respect to the shares which they may be deemed to beneficially
own. MS Group and MSAM each disclaim beneficial ownership of such
shares pursuant to Rule 13d-4 under the Securities Exchange Act of
1934. Morgan Stanley purchased an additional 90,000 shares of Common
Stock through private placements during the year ended March 31, 1996.
<F2> Fidelity International Limited ("FIL") and FMR Corp. ("FMR") have each
filed Schedule 13Ds and amendments thereto with the Securities and
Exchange Commission indicating that, although they do not consider
themselves to be acting as a "group," they hold, directly or
indirectly, a total of 1,452,567 shares of Common Stock. The Schedule
13Ds state that FIL beneficially owns, as investment adviser or the
parent of the investment adviser to certain international funds and
international pension accounts, 1,452,567 shares of Common Stock and
that such funds and accounts and FIL, as investment adviser to the
funds and accounts, has sole voting and investment power as to all
such shares. Neither FMR nor its subsidiary Fidelity Management &
Research Company ("Fidelity") beneficially own any shares. According
to the Schedule 13Ds, Mr. Edward C. Johnson 3d, who is Chairman of
FIL and FMR, owns 24.9 percent of the outstanding votingcommon stock
of FMR, and a partnership controlled by Mr. Johnson and
members of his family own shares of FIL with the right to cast
approximately 47.22 percent of the total votes which may be cast by
shareholders of FIL. The Schedule 13Ds indicate that FIL was a
subsidiary of Fidelity prior to June 30, 1980, at which time the
shares of FIL held by Fidelity were distributed as
a dividend to the shareholders of FMR, and that FIL currently
operates as an entity independent of FMR and Fidelity. Fidelity
purchased an additional 190,000 shares of Common Stock through
private placements during the year ended March 31, 1996.
<F3> The Capital Group Companies, Inc. has filed a Schedule 13G with the
Securities and Exchange Commission indicating that it holds 990,000
shares as Discretionary Manager by virtue of its affiliates acting
as investment manager to a number of institutional investors. During
the year ended March 31, 1996, the Capital Group Companies subscribed
to an additional 250,000 shares of Common Stock through a private
placement.
<F4> Jupiter Asset Management Limited has filed a Schedule 13D with the
Securities and Exchange Commission indicating that it holds such
shares in its capacity as Discretionary Manager by virtue of its
acquisition, in July 1994, of all of the business and assets of
Queen Anne's Gate Asset Management Limited, which had previously
acted as investment manager with respect to such shares.
<F5> Includes 250,000 shares underlying presently exercisable options.
<F6> Includes 750,000 shares underlying presently exercisable options.
<F7> Includes 285,017 shares held by a corporation of which Mr. Hammond
is an affiliate. Also includes 125,000 shares underlying presently
exercisable options.
<F8> Includes 125,000 shares underlying presently exercisable options.
<F9> Includes 100,000 shares underlying presently exercisable options.
Does not include 25,000 shares underlying conditional options held
by Ms. Chapman, the conditions to the vesting of which have not yet
been met.
<F10> Includes 150,000 shares underlying presently exercisable options.
Does not include 100,000 shares underlying conditional options held
by Mr. Peterson, the conditions to the vesting of which have not yet
been met.
</FN>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the four persons listed below for election
at the Annual Meeting to serve as directors for a term expiring at the 1997
Annual Meeting of Stockholders or until their respective successors are elected
and qualified. Each nominee currently serves as a director and has agreed to
serve as such for another term if elected.
Proxies will be voted for the election of the four nominees named below unless
instructions are given to the contrary. Proxies cannot be voted for a greater
number of persons than the number of nominees named. Should any nominee
become unable to serve as a director, the persons named in the enclosed form of
proxy will, unless otherwise directed, vote for the election of such other
person as the present Board of Directors may designate to fill that position.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth certain biographical information, the present
occupation and 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 45 Chairman of the Board
Keith Brackpool 39 Chief Executive Officer & Director
J.F.R. Hammond 54 Director
Stephen D. Weinress 55 Director
Executive Officers:
Name Age Position with the Company
___________________ _____ _____________________________
Susan K. Chapman 43 Chief Financial Officer and Secretary
David J. Peterson 43 Vice President of Agricultural Development
<FN>
Dwight W. Makins was elected as Chairman of the Board in December 1991. Mr.
Makins currently serves as 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. He is a director of a number of U.K. companies.
Mr. Makins is a member of the Audit Committee and Compensation Committee of
the Board of Directors.
Keith Brackpool is a founder of the Company, and has served as a member of the
Company's Board of Directors since September 1986, and served as Chairman of
the Board from 1989 through December 1991, when he was reappointed as Chief
Executive Officer of the Company. From October 1989 until May 1991, Mr.
Brackpool was employed as the President of Albert Fisher, Inc., a wholly-owned
subsidiary of The Albert Fisher Group PLC, a U.K. corporation and was a director
of The Albert Fisher Group PLC until May 31, 1991. Since 1988, Mr. Brackpool
has served as an officer and principal of the general partner of 1334 Partners,
Ltd., a California limited partnership which holds commercial real estate in
Southern California.
J.F.R. Hammond was named to the Company's Board of Directors in December
1991. Since March 1987 Mr. Hammond has been self employed, and his business
activities primarily involve private investments in various companies. Mr.
Hammond also serves as Chairman of a Canadian oil and gas company traded on
the Alberta exchange. Prior to March 1987, Mr. Hammond was managing director
of Greenwell-Montagu Securities, a British brokerage firm. Mr. Hammond is a
member of the Audit Committee and Compensation Committee of the Board of
Directors.
Stephen D. Weinress was appointed a director of the Company in September 1993.
Since 1984 he has been the Managing Director of L.H. Friend, Weinress, Frankson
& Presson, Inc., an investment banking firm based in Irvine, California. Mr.
Weinress is a member of the Audit Committee and Compensation Committee of
the Board of Directors.
Susan K. Chapman became Chief Financial Officer and Secretary of the Company
in November 1993. From 1985 until she joined the Company, Ms. Chapman
served as Vice President of Operations and Controller of Agora Development,
Inc., a private real estate development company, where she supervised all
financial and operational aspects of the company. Prior thereto, she served
for five years as Senior Accountant with the accounting firm of Price Waterhouse
LLP, following which she served as a senior financial executive of a privately
held manufacturing company.
David J. Peterson joined the Company as Vice President of Agricultural
Development in April 1994. Mr. Peterson has twelve years experience in the
produce industry, most recently serving as Chief Operating Officer of the
Procurement Division of Albert Fisher North America since 1990. In this
capacity Mr. Peterson directed purchases for and sales to Albert Fisher PLC
North American Distributors, a produce distributor with aggregate annual
sales of approximately $800 million. Previously, Mr. Peterson established a
centralized product distribution network for Sysco (the largest U.S. food
service distributor) in his capacity as General Manager0-Procurement for Sysco
between 1988 and 1990.
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.
</FN>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
Based upon the Company's review of the reports and amendments on Forms 3, 4
and 5 furnished to the Company pursuant to Section 16 of the Securities Exchange
Act of 1934, all such reports were filed in a timely manner by reporting
persons.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- -------------------------------------------------
During the year ended March 31, 1996, the Board of Directors held five formal
meetings and held various telephone conferences. Each current director attended
at least 75 percent of the meetings of the Board and at least 75 percent of the
meetings of Board committees of which each was a member during the year.
The Board of Directors has two standing committees, the Audit Committee and the
Compensation Committee. The Board does not have a nominating committee.
Messrs. Weinress, as chairman, Makins and Hammond serve on the Audit
Committee, the purpose of which is to oversee preparation of the Company's
financial statements. The Audit Committee met four times during the year ended
March 31, 1996. Messrs. Makins, as chairman, Hammond and Weinress serve on
the Compensation Committee, the purpose of which is to establish salary and
bonus compensation levels for the Company's executive officers. The
Compensation Committee met four times during the year ended March 31, 1996.
EMPLOYMENT ARRANGEMENTS
- -----------------------
Mr. Brackpool is compensated pursuant to a Compensation Agreement effective
as of April 2, 1993. Under the terms of this Agreement, Mr. Brackpool receives
compensation of $29,167 per month. Mr. Brackpool also receives the use of an
automobile owned by the Company.
Ms. Chapman is compensated pursuant to a letter agreement effective November
5, 1993 which provides for base compensation of $130,000 per annum. Ms.
Chapman also receives the use of an automobile owned by the Company.
Mr. Peterson is compensated pursuant to an Employment Agreement effective
April 11, 1994 which provides for base compensation of $185,000 per annum.
This Employment Agreement also provides for cash bonuses, including (i) an
immediate bonus of $30,000, which was paid in fiscal 1995; (ii) conditional
annual bonuses based on specific performance criteria; and (iii) other
performance bonuses awarded at the discretion of the Board of Directors.
No bonuses have been awarded to date. Mr Peterson also receives the use of
an automobile owned by the Company.
Timothy J. Shaheen has been engaged by the Company to act as Chief Executive
Officer of Sun World following the completion of the acquisition. In this
capacity, Mr. Shaheen will receive compensation from Sun World at an annual
rate of $250,000 and the Board of Directors has approved the grant to
Mr. Shaheen 400,000 stock options of which 300,000 will be conditional upon
certain performance criteria of Sun World to be established by the Board of
Directors of the Company.
COMPENSATION OF DIRECTORS
- -------------------------
Mr. Brackpool does not receive any additional compensation for serving as a
director of the Company.
Mr. Makins receives cash compensation for his services as Chairman pursuant to
a Compensation Agreement effective April 2, 1993, which provides for base
compensation of $75,000 per year, payable quarterly in advance, plus payment for
certain additional services performed on behalf of the Company, at the rate of
(i) $1,000 per day if such services are performed within the United Kingdom,
or (ii) $1,500 per day if such services are performed outside the United
Kingdom. During the Company's 1996 fiscal year, Mr. Makins received total cash
compensation of $77,750 pursuant to this Compensation Agreement.
Mr. Hammond receives cash compensation for his services as a Director pursuant
to a Compensation Agreement effective April 2, 1993, which provides for
compensation of $25,000 per year, payable quarterly in advance. During the
Company's 1996 fiscal year, Mr. Hammond received total cash compensation of
$25,000 pursuant to this arrangement.
Mr. Weinress receives cash compensation for his services as a Director in the
amount of $25,000 per year, payable quarterly in advance. During the Company's
1996 fiscal year, Mr. Weinress received total cash compensation of $25,000
pursuant to this arrangement.
EXECUTIVE COMPENSATION
The tables and discussion below set forth information about the compensation
awarded to, earned by, or paid to the Company's executive officers during the
fiscal years ended March 31, 1994, 1995 and 1996.
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
-------------------- -------------
Name and Principal Fiscal Stock
Position Year Salary<F1> Bonus Options
- ------------------------ ---- --------------------- ---------
Keith Brackpool 1996 $350,000 $175,000 -0-
Chief Executive Officer 1995 280,000 -0- 750,000
1994 202,083 50,000 500,000
David Peterson<F2> 1996 $185,000 $ -0- 50,000<F3>
Vice President of 1995 150,000 30,000 200,000<F3>
Agricultural Development
Susan K. Chapman<F4> 1996 $130,000 $ -0- -0-
Chief Financial Officer 1995 110,000 -0- 25,000<F5>
and Secretary 1994 40,542 -0- 100,000<F6>
- ----------------------
<FN>
<F1> Does not include the dollar value of other annual compensation not
properly categorized as salary or bonus, which consisted entirely
during each fiscal year of perquisites and other personal benefits
aggregating less than 10 percent of the total of annual salary
reported for each of the above named executive officers for each
fiscal year. See "Employment Arrangements".
<F2> No disclosure for the fiscal year ended March 31, 1994 is provided
for Mr. Peterson because he joined the Company after the end of the
1994 fiscal year, in April 1994.
<F3> 100,000 of the options granted to Mr. Peterson during the fiscal year
ended March 31, 1995 were conditional options. 50,000 of such
options have since vested. The 50,000 options granted to Mr.
Peterson during fiscal year ended March 31, 1996 were conditional
options, none of which have since vested.
<F4> Ms. Chapman joined the Company in November 1993. Salary
reported for fiscal 1994 represents compensation for the period
November 1993 through March 31, 1994.
<F5> The 25,000 options granted to Ms. Chapman during the fiscal year
ended March 31, 1995 were conditional options, none of which have
since vested.
<F6> The 100,000 options granted to Ms. Chapman during the fiscal year
ended March 31, 1994 were conditional options, all of which have
since vested.
</FN>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Relizable
Percent of Value
Total Options At Assumed
Granted to Annual Rates
Employees Exercise of Stock Price
in Price Appreciation for
Options Fiscal Per Share Expiration Option Term<F5>
Name Granted<F1> Year<F2> ($/Sh)<F3> Date<F4> 5% 10%
- -------------- ----------- -------- ------- --------- -------------------
David Peterson 50,000<F6> 8.23% $4.25 4-20-00 $ 58,710 $ 129,733
<FN>
<F1> All options granted to the named officer were non-qualified options.
<F2> Also includes options granted to consultants during the fiscal year.
<F3> All options were granted at market value (average of closing bid and
asked prices for the Company's Common Stock as reported by Nasdaq)
at date of grant.
<F4> All options have a fixed term of five years.
<F5> 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.
<F6> The vesting of all 50,000 options was conditioned upon certain
criteria to be established by the Board of Directors of the Company.
None of these options have become vested.
</FN>
FISCAL YEAR-END OPTION VALUES
Value of
Number of Unexercised Unexercised In-the-Money
Options at FY-End (#) Options at FY-End
Name Exercisable/Unexercisable Exercisable/Unexercisable<F1>
- ------------------- ------------------------- -----------------------------
Keith Brackpool 750,000/-0- $1,312,500/$ -0-
David Peterson 150,000/100,000<F2> $300,000/$200,000<F2>
Susan K. Chapman 100,000/25,000<F3> $325,000/$31,250<F3>
<FN>
<F1> Based upon the Nasdaq closing sales price per share at fiscal year end.
<F2> Includes 150,000 shares underlying presently exercisable options. Does
not include 100,000 shares underlying conditional options, the conditions
to the vesting of which have not yet been met.
<F3> Includes 100,000 shares underlying presently exercisable options. Does
not include 25,000 shares underlying conditional options, the conditions
to the vesting of which have not yet been met.
</FN>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- ------------------------------------------------------------
During the Company's fiscal year ended March 31, 1996, all decisions
concerning executive officer compensation were made by the Compensation
Committee of the Board of Directors. The members of such committee were
Messrs. Makins, Weinress and Hammond, all of whom are non-employee
directors. Mr. Makins serves as Chairman of the Board. See "Directors and
Executive Officers."
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------
The Compensation Committee has furnished the following report on executive
compensation:<F1>
The Company's business plan has been designed to promote the maximization of
the long-term value of the Company's properties. As such, the Compensation
Committee believes that compensation to the Company's executive officers should
be designed to encourage and reward management's efforts to promote the
fulfillment of the Company's business plan and position the Company for long
term growth. Such a compensation program helps to achieve the Company's
business and financial objectives and also provides 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.
<F1> 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.
The Board of Directors has formed a Compensation Committee which is
responsible for reviewing and establishing the compensation payable to the
Company's executive officers, including the Chief Executive Officer. For
executive officers other than the Chief Executive Officer, the Compensation
Committee establishes compensation levels based, in part, upon the
recommendations of the Chief Executive Officer.
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. In view of the relatively small number of senior Company
officers, the performance of each executive officer can be linked to the
overall performance of the Company. For compensation purposes, the
Compensation Committee does not believe that overall Company performance can
be measured as a function of short-term profits or losses, as the Company holds
its assets for long-term maximization of values and is currently not receiving
significant revenues from operations. Rather, the Company's overall performance
during any period is 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.
PERFORMANCE BASED CASH AWARDS. The Compensation 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
Compensation Committee relies primarily upon the grant of incentive stock
options to reward executive performance (see "Long-Term Incentives", below),
under certain circumstances, the Compensation Committee will utilize
performance based cash awards from time to time to provide additional
incentives. No such discretionary awards were made during fiscal 1996.
Although, as discussed above, overall Company performance is not readily
measurable on an objective basis, objective criteria can currently be applied to
certain parts of the Company's development operations. For executive officers
with responsibility in these areas (including the Company's Vice President of
Agricultural Development), the Company has entered into compensation
agreements which provide for specific non-discretionary cash bonuses upon
achieving specified goals. See "Employment Arrangements". The Company does
not use such non-discretionary arrangements with executive officers whose
responsibilities are more general in nature, such as the Chief Executive
Officer and Chief Financial Officer.
LONG-TERM INCENTIVES. The primary form of incentive compensation
offered by the Company to executives consists of long-term incentives in the
form of stock options. This form of compensation is intended to help retain
executives and motivate them to improve the Company's long-term performance
and hence long-term stock market performance. Stock options are granted at
the prevailing market value and will only have added value if the Company's
stock price increases.
The Committee views the grant of stock options as both a reward for past
performance and an incentive for future performance. Stock options granted by
the Company may vest immediately upon grant, or upon the achievement of certain
specific performance goals. Where performance is not readily measurable, the
vesting of options granted are often dependent upon the satisfaction of
subjective performance criteria. The 50,000 options granted to the Company's
Vice President of Agricultural Development during fiscal 1996 vest upon the
satisfaction of subjective performance criteria and entirely at the discretion
of the Board. In the case of executive officers who perform services more
readily measurable by objective criteria, a portion of the options granted
vest only upon the achievement of stated performance goals.
During fiscal 1996, the Company was able to place itself in a significantly
improved position for ultimate realization of its long-range goals through
progress in negotiations for the transfer of surplus water to third parties,
through additional property acquisitions, through additional development of
its Cadiz properties and through planning and negotiating the acquisition
of Sun World International, Inc. ("Sun World")
In considering the compensation of Keith Brackpool, the Company's Chief
Executive Officer, the Compensation Committee granted Mr. Brackpool an
increase in salary, primarily as a result of his efforts in negotiating
the purchase of Sun World, which is expected to be consummated in the near
future. The Company's Chief Executive Officer was primarily responsible
for these negotiations, while continuing to fulfill his duties regarding
the Company's existing agriculture business and efforts to develop a
commercial water transfer program. In evaluating the remuneration package
of the Chief Executive Officer, the Committee took into account these
normal duties, as well as the successful results obtained by the Chief
Executive Officer in the Sun World negotiations, his expertise in financing
transactions thereby reducing professional fees paid to third parties,
and increased levels of responsibility.
After considering each of these factors, the Committee agreed that the base
salary of the Chief Executive Officer should be raised from $23,333 per month to
$29,166 per month, and that a bonus of $175,000 should be paid for the fiscal
year ended March 31, 1996.
Options granted by the Company during fiscal 1996, 1995 and 1994, whether
vesting immediately or contingently, are exercisable for a period of five years
from grant. The Compensation Committee anticipates that options may again be
granted in the future in order to provide executives with additional long-term
incentives. Such options may be granted pursuant to the Company's 1996 Stock
Option Plan, if approved by the stockholders. See "Proposal 3 - Approval of
1996 Stock Option Plan."
THE COMPENSATION COMMITTEE
Dwight W. Makins, Chairman
Stephen D. Weinress
J.F.R. Hammond
STOCK PRICE PERFORMANCE
The stock price performance graph below compares the cumulative total return of
the Company's Common Stock against the cumulative total return of the Nasdaq
US index and the Nasdaq Non-Financial index for the past five fiscal years. The
graph indicates for each index a measurement point of March 31, 1991, and
assumes a $100 investment on such date in the Company's Common Stock and in
each index. With respect to the payment of dividends, the Company has not paid
any dividends, but the Nasdaq US index and Nasdaq Non-Financial index assume
that all dividends were reinvested. The stock price performance graph shall not
be deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this graph by reference, and shall not
otherwise be deemed filed under such acts.
STOCK PRICE PERFORMANCE GRAPH
[Performance Graph Appears Here]
Company and
Indices 3/28/91 3/31/92 3/31/93 3/31/94 3/31/95 3/29/96
- ---------------- ------ -------- ---------- -------- -------- --------
CLCI Stock Price 100 59.615 13.846 55.385 54.708 76.923
Nasdaq US Index 100 127.453 146.514 158.148 175.925 238.833
Nasdaq Non
Financial Index 100 124.512 134.335 147.38 161.489 217.822
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -----------------------------------------------
Since April 1, 1995, the Company has issued in private placements a total of
190,000 shares of stock ranging in price from $4.00 per share to $5.75 per
share to Fidelity Investment Services, whose affiliates have filed a Schedule
13D with the Securities and Exchange Commission indicating that they hold in
excess of five percent of the Company's outstanding Common Stock in their
capacity as discretionary manager for a number of investment funds. See
"Security Ownership of Certain Beneficial Owners and Management".
Since April 1, 1995, the Company has issued in private placements a total of
90,000 shares of stock at a price of $5.75 per share to Morgan Stanley Asset
Management, Inc., an affiliate of Morgan Stanley Group, Inc., who filed a
Schedule 13G with the Securities and Exchange Commission indicating that it may
be deemed to be the indirect beneficial owner of in excess of five percent of
the Company's outstanding Common Stock in its capacity as an Investment Advisor.
See "Security Ownership of Certain Beneficial Owners and Management". In
addition, in June 1996, the Company received Standby Purchase Commitments
from Morgan Stanley Asset Management, Inc. for $3,000,000 of Series A
Preferred Stock. Morgan Stanley Asset Management, Inc., along with other
subscribers in this offering, provided irrevocable Standby Purchase Commitments
to purchase shares of the Company's Series A Preferred Stock, at the option of
the Company, if certain conditions are satisfied on or before September 15,
1996. See "Proposal 2- Approval of Amendment to Certificate of Incorporation."
In March 1996, the Company issued in a private placement a total of 250,000
shares of stock at $5.75 per share to The Capital Group Companies, Inc., who
filed a Schedule 13G with the Securities and Exchange Commission indicating that
it holds in excess of five percent of the Company's outstanding Common Stock in
its capacity as discretionary manager for a number of investment funds. See
"Security Ownership of Certain Beneficial Owners and Management".
In connection with a private placement in October 1995, the Company issued
82,317 shares at a price of $4.10 per share to a corporation of which Mr. J.F.R.
Hammond, a director of the Company, is an affiliate. See "Security Ownership of
Certain Beneficial Owners and Management".
In February 1995, L.H. Friend, Weinress, Frankson & Presson, Inc. ("L.H.
Friend"), an investment banking firm which is an affiliate of Mr. Weinress,
entered into an agreement with the Company pursuant to which L.H. Friend
provided investment banking services with respect to the development by the
Company of its water resources at its Piute property. As compensation for
these services, the Company agreed to pay to L. H. Friend a retainer fee of
$2,000 per month through July 31,1995. In addition, the Company has paid the
Weinress Group, a consulting firm which is an affiliate of Mr. Weinress,
consulting fees totaling $55,950 since April 1, 1995. A fee in the amount of
$217,500 will be paid to L. H. Friend for services rendered in connection with
the placement of the Series A Preferred Stock.
On April 20, 1995, the Company granted a total of 50,000 incentive stock options
at the exercise price of $4.25 per share (representing the fair market value as
of the date of such grant) to Mr. Peterson. The vesting of these options is
conditioned upon certain criteria to be established by the Board of Directors.
None of these options have become vested. See "Executive Compensation".
The grant by the Company of additional incentive stock options is intended to
provide compensation in a manner designed to preserve the cash resources of the
Company while providing significant ongoing incentives for management
performance based upon an increase of the Company's value to its stockholders.
The Company believes that the terms of the foregoing transactions were at least
as favorable to the Company as those which could have been negotiated in arm's
length transactions with unaffiliated third parties.
PROPOSAL 2
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
The Board of Directors of the Company has unanimously adopted a resolution
recommending to the stockholders the adoption of an amendment of the Certificate
of Incorporation of the Company to increase the authorized number of shares of
Common Stock, $0.01 par value, from 24,000,000 to 45,000,000.
The Company's Certificate of Incorporation currently provides that the
authorized capital of the Company is 24,100,000 shares, consisting of
24,000,000 shares of Common Stock, $0.01 par value, and 100,000 shares of
Preferred Stock, $0.01 par value. The Board has determined that it is in the
best interests of the Company to have additional shares of Common Stock
authorized and available for issuance upon conversion of the Company's Series A
Preferred Stock (described below) and, as the need arises, for possible future
financing transactions, asset purchases, stock dividends or splits, issuances
under the Company's proposed 1996 Stock Option Plan and for other general
corporate purposes. The Company currently has no specific plans, arrangements
or understandings to issue any additional shares of Common Stock other than as
described herein.
In June 1996, the Company received Standby Purchase Commitments for
$30,000,000 of preferred stock, designated as Series A Preferred Stock, $0.01
par value ("Series A Preferred Stock"), with the ability to accept up to an
additional $5,000,000 in Standby Purchase Commitments (the "Series A Offering").
In connection with the Series A Offering, the Company's Board of Directors has
approved the issuance of up to 60,000 Shares of Series A Preferred Stock.
Currently, the Series A Preferred Stock is not convertible. However, by its
terms, the Series A Preferred Stock will become convertible into shares of
Common Stock at the option of the holder following the approval by stockholders
of this proposal and the filing of an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of Common Stock
available for issuance by the Company to 45,000,000 (the "Amendment"). At such
time, the Series A Preferred Stock will also become convertible into shares of
Common Stock at the option of the Company; exercisable at any time between the
filing of the Amendment and six (6) months following the filing of the
Amendment; provided, however, that the Company may require such mandatory
conversion only of all of the outstanding shares of Series A Preferred Stock,
and not of any lesser number of such shares; and provided further, that no such
mandatory conversion may occur on or before the first anniversary of issuance of
the Series A Preferred Stock unless, prior to the date of mandatory conversion
(the "Mandatory Conversion Date"), the Company shall have paid to the holder of
the Series A Preferred Stock so converted an amount equal to the difference
between (a) the total dividends which the holder would have received during the
first full year after issuance with respect to the Series A Preferred Stock so
converted, had such shares not been converted; and (b) the amount of any
dividends accrued and/or received with respect to such shares as of the
Mandatory Conversion Date.
The Series A Preferred Stock, upon becoming convertible, will have an initial
conversion price of $4.50 per share. This initial conversion price will
automatically be reduced to $3.75 per share if the bid price of the Company's
Common Stock has not averaged at least $5.25 per share during the 90 day period
prior to the filing of the Amendment. Other anti-dilution adjustments to the
conversion price will continue to apply.
Holders of the Series A Preferred Stock are entitled to cumulative dividends
initially payable at a rate of six percent (6%) per annum. Dividends will be
payable semi-annually on March 31 and September 30 of each year (each of such
dates being a "Dividend Payment Date" and each period between such dates (or the
date of issue, if earlier) being a "Dividend Period") commencing on the first
Dividend Payment Date following the date of issuance of the Series A Preferred
Stock. Dividends are fully cumulative and will accrue (whether or not accrued
or declared) from the date of issuance. In the event the stockholders of the
Company have not approved the Amendment on or before December 31, 1996, so as
to permit conversion of the Series A Preferred Stock, then the annual dividend
rate on the Series A Preferred Stock will be increased, commencing on January 1,
1997, to twelve percent (12%), and will remain at twelve percent (12%) until
such time as the stockholders of the Company have approved the Amendment,
whereupon the annual rate will immediately be decreased to six percent (6%).
Holders of Series A Preferred Stock are entitled, subject to the rights of
creditors, in the event of any voluntary or involuntary liquidation of the
Company to an amount in cash equal to $10,000 for each share outstanding and for
each share issuable with respect to all accrued and unpaid dividends. The
Series A Preferred Stock shall, with respect to the payment of dividends and
upon liquidation, dissolution, or winding up, rank senior and prior to the
Company's Common Stock, and on a parity with any other class or series of
preferred stock of the Company. Except as provided by law, holders of Series A
Preferred Stock shall not be entitled to vote upon any matter submitted to a
vote of the Company's stockholders, including this proposal and the other
proposals described herein.
As of August 20, 1996, the Company had 19,572,611 shares of Common Stock
outstanding. As of such date, the Company had also reserved for issuance, an
additional 2,001,000 shares upon exercise of outstanding stock options, an
additional 210,000 shares upon exercise of outstanding stock warrants,
and an additional 1,307,527 shares upon conversion of outstanding shares of
6% Convertible Series B Preferred Stock, assuming a conversion price of
$5.8125 per share.
Although this proposal is not intended to be an anti-takeover measure, the
increase in authorized capital with a subsequent issuance of equity securities
could impede a potential takeover by, for example, diluting the stock ownership
of persons attempting to gain control of the Company, or placing a large amount
of the Company's securities in the hands of individuals or entities favorable
to management.
If approved by the stockholders of the Company, Subsection A of Article Four of
the Company's Certificate of Incorporation will be amended to read in full as
follows:
"Fourth:
A. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is Forty-five Million One
Hundred Thousand (45,100,000), consisting of:
(1) Forty-five Million (45,000,000) shares of Common Stock,
par value one cent ($.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 stockholder 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 1996 STOCK OPTION PLAN
The Board of Directors of the Company has unanimously adopted a resolution
recommending to the stockholders the adoption of the Cadiz Land Company, Inc.
1996 Stock Option Plan (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 awards of Options. Under the Plan, stock options
("Plan Options") 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 options under the Plan because of the favorable treatment of
such options 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 3,000,000 shares of Common Stock for issuance pursuant to Plan
Options granted under the terms of the Plan. If and to the extent Plan Options
expire or are terminated for any reason without being exercised, the shares of
Common Stock subject to such Plan Options again will be available for purposes
of the Plan.
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; and to adopt, amend and rescind rules relating to the Plan. While the
Committee will have full power to implement and carry out the Plan, grants of
Plan Options to directors must be carried out in accordance with the terms of
the Plan, as discussed below. All determinations of the Committee will be
conclusive. All expenses of administering the Plan will be borne by the
Company.
GRANTS. Grants under the Plan may consist of: (i) options intended to qualify
as incentive stock options ("ISOs") with the meaning of the Internal Revenue
Code of 1986, as amended (the "Code"), (ii) so-called "non-qualified stock
options" that are not intended to so qualify ("NQSOs"), or (iii) a combination
thereof.
ELIGIBILITY. Employees, officers, consultants, and certain 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 any
of the different types of awards under the Plan. Directors who are not
employees of the Company will be entitled to receive only NQSOs under the Plan.
OPTIONS - NON-DIRECTOR PARTICIPANTS. The Plan permits the Committee to grant
Plan Options either as ISOs or as NQSOs, and allows the Committee to establish,
as to any participant, the number of Plan Options, exercise price, exercise
term (subject to a maximum of ten years), and other terms and conditions.
Subject to the foregoing, the option exercise price for each share covered
by a Plan Option may not be less than 85% of the fair market value of a
share of Common Stock on the date of grant of such Plan Option; however, in the
case of an ISO, the price shall be no less than 100% of the fair market value
of a share of Common Stock at the time such option is granted; and in the case
of an ISO granted to a ten percent stockholder, the exercise price will be no
less than 110% of the fair market value of the Common Stock on the date of
grant. The recipient may pay the exercise price by (i) cancellation of
indebtedness of the Company to the Participant, (ii) by surrender of shares of
the Company's Common Stock that have been owned by the Participant for more
than six months and have been paid for within the meaning of Rule 144
promulgated under the Securities Act of 1933, as amended, or were obtained by
the Participant in the public market and are clear of all liens, claims,
encumbrances and security interests; (iii) by waiver of compensation due to the
Participant for services rendered; (iv) provided a public market exists for
the Company's stock, through a same day sale of the shares acquired upon
exercise of an Option, subject to applicable securities laws; and (v)
by any combination of the foregoing.
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 such
stockholder approval pursuant to the Code or pursuant to the 1934 Act or
Rule 16b-3 thereunder, and the terms and conditions of any awards to directors
shall not be amended more than once every six months, other than to comply with
changes in the Code or ERISA. 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 (and the exercise price per share)
subject to the unexercised portion of any outstanding Plan Option; provided,
however, that in the event of a merger, consolidation, liquidation or sale of
the Company in a transaction in which the Company is not to be the surviving
entity, the Board has the right to accelerate vesting of all options so that
they become exercisable within the 30-day period preceding the merger,
consolidation, liquidation or sale.
The following resolution will be offered at the meeting:
RESOLVED, that the Cadiz Land Company, Inc. 1996 Stock Option Plan in the
form attached hereto as Exhibit A be adopted by the Company.
The affirmative vote of the holders of a majority of shares of Common Stock
entitled to vote 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
Price Waterhouse LLP as the Company's independent certified public accountants
to audit the financial statements of the Company for the 1997 fiscal year.
Although ratification of the choice of auditors is not required, the Board
believes such ratification to be in the best interests of the Company. In the
event such approval of stockholders is not received, the Board will select
another firm to audit the Company's financial statements. Price Waterhouse LLP
has advised the Company that neither it nor any of its partners or associates
has any direct or indirect financial interest in or any connection with the
Company other than as accountants and auditors. A representative of Price
Waterhouse LLP is expected to be present and available to answer appropriate
questions at the Annual Meeting, and will be given the opportunity to make a
statement if desired.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 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
March 31, 1997) must file such resolutions with the Company not later than May
2, 1997.
ADDITIONAL INFORMATION
This Proxy Statement is accompanied by the Company's Annual Report and Form
10-K for the fiscal year ended March 31, 1996 (the "10-K"). Exhibits to the
10-K will be made available to stockholders for a reasonable charge upon their
written request to the Company, Attention: Ms. Susan K. Chapman, 10535 Foothill
Boulevard, Suite 150, Rancho Cucamonga, California 91730.
Rancho Cucamonga, California By Order of the Board of Directors
September 13, 1996
CADIZ LAND COMPANY, INC.
10535 Foothill Boulevard, Suite 150 Rancho Cucamonga, California 91730
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, as owner of shares of Common Stock of Cadiz Land Company,
Inc., a Delaware corporation (the "Company") hereby acknowledges receipt of the
Proxy Statement and the notice of the stockholders meeting to be held on
October 18, 1996, at 9:00 a.m. local time, at the Westwood Marquis Hotel and
Gardens located at 930 Hilgard Avenue, Los Angeles, California, and hereby
further revokes all previous proxies and appoints Keith Brackpool and/or
Susan K. Chapman as proxy of the undersigned at said meeting and any
adjournments thereof with the same effect as if the undersigned were
present and voting the shares.
(1) For the election of the following persons as directors of the Company to
serve until the 1997 annual meeting of shareholders or until their
respective successors shall have been elected and qualified.
Dwight W. Makins, Keith Brackpool, J.F.R. Hammond, Stephen D. Weinress
[ ] AUTHORITY GRANTED to vote [ ] AUTHORITY WITHHELD to
for all nominees listed vote for all nominees listed above.
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) For the amendment of the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 24,000,000
to 45,000,000, as described in Proposal 2.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) For approval and adoption of the Company's 1996 Stock Option Plan as
described in Proposal 3.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on the reverse side)
(Continued from other side)
(4) For ratification of the appointment of Price Waterhouse LLP as the
independent certified public accountants of the Company to audit the
Company's financial statements for the 1997 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) In their discretion upon such other matters as may properly come before
this meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED AS YOU HAVE INDICATED ABOVE. IF NO
INDICATION HAS BEEN MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR
THE ABOVE NOMINEES AND IN FAVOR OF SUCH
PROPOSALS AND AS SAID PROXY DEEMS ADVISABLE
ON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
Dated: ------------------------------, 1996
--------------------------------------------
--------------------------------------------
(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.
CADIZ LAND COMPANY, INC.
1996 STOCK OPTION 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 through awards of Options.
Capitalized terms not defined in the text are defined in Section 20.
2. SHARES SUBJECT TO THE PLAN
2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 14,
the total number of Shares reserved and available for grant and issuance
pursuant to the Plan shall be 3,000,000 Shares, provided, however, that the
maximum number of Shares that may be issued under the Plan to each
Participant who is subject to Section 162(m) of the Code shall be limited
to 750,000 Shares. Subject to Sections 2.2 and 14, Shares reserved for
issuance pursuant to Options granted under this Plan shall again be
available for grant and issuance, in connection with future Options under
the Plan, that: (a) are subject to issuance upon exercise of an Option,
but cease to be subject to such Option for any reason other than exercise
of such Option, or (b) are subject to an Option that otherwise terminates
without such Shares being issued and for which the participant did not
receive any benefits of ownership.
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: (a) the number of Shares
reserved for issuance under the Plan, and (b) the Exercise Prices of and
number of Shares subject to outstanding Options, 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; and provided, further, that the
Exercise Price of any Option may not be decreased to below the par value
of the Shares.
3. ELIGIBILITY
3.1 ELIGIBILITY OF EMPLOYEES, CONSULTANTS AND INDEPENDENT
CONTRACTORS. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees ) of the
Company or of a Subsidiary of the Company. NQSOs may be granted to
employees, officers, 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. A person may be granted both ISOs and NQSOs
under the Plan.
4 ADMINISTRATION.
4.1 COMMITTEE AUTHORITY. The Plan shall beadministered 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. The
Committee shall have the authority to:
(a) construe and interpret the Plan, any Option Agreement
and any other agreement or document executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations
relating to the Plan;
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other consideration
subject to Options;
(f) determine whether Options will be granted singly, in
combination or in tandem with, in replacement of, or as alternatives to,
other Options under the Plan or any other incentive or compensation plan
of the Company or any Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and payment of
Options and to accelerate the vesting and/or exercisability of Options, as
provided herein;
(i) correct, any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Option or any Option Agreement;
(j) determine whether an Option has been earned; and
(k) 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 Option shall be
made in its sole discretion at the time of grant of the Option or, unless
in contravention of any express term of the Plan or Option, at any later
time, and such determination shall be final and binding on the Company and
all persons having an interest in any Option under the Plan.
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 Non-employed Directors; or (ii) the Board acting as
the Committee. It is the intent of the Company that the Plan and Options
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 Option 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. GRANT AND EXERCISE OF OPTIONS
5.1 GRANT OF OPTIONS. Except as otherwise limited herein, the
Committee may grant Options to eligible persons pursuant to this Section
5.1 and shall determine whether such Options shall be Incentive Stock
Options within the meaning of the Code ("ISOs") or Nonqualified Stock
Options ("NQSOs"), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised,
and all other terms and conditions of the Option, subject to the following:
5.1.1 FORM OF OPTION GRANT. Each Option granted shall
be evidenced by an Option Agreement, which shall expressly identify the
Option as an ISO or NQSO ("Stock Option Agreement"), and be in such form
and contain such provisions (which need not be the same for each
Participant receiving an Option) as the Committee shall from time to time
approve, and which shall comply with and be subject to the terms and
conditions of the Plan. The Committee may in its discretion include in any
NQSO granted under the Plan a condition that the Participant shall agree
to remain in the employ of, and to render services to, the Company or any
of its Subsidiaries for a period of time (specified in the agreement)
following the date the NQSO is granted.
5.1.2 DATE OF GRANT. The date of grant of an Option
shall be the date on which the Committee makes the determination to grant
such Option. The Stock Option Agreement and a copy of the Plan will be
delivered to the Participant within a reasonable time after the granting
of such Option.
5.1.3 EXERCISE PERIOD. Options shall be exercisable
within the times or upon the events determined by the Committee as set
forth in the Stock Option Agreement; provided, however:
(a) no Option shall be exercisable after the expiration of
ten (10) years from the date the Option is granted;
(b) no ISO granted to a person who directly or by
attribution owns more than Ten Percent (10%) of the total combined voting
power of all classes of stock of the Company or any Subsidiary of the
Company ("Ten Percent Stockholder") shall be exercisable after the
expiration of five (5) years from the date the Option is granted.
5.1.4 EXERCISE PRICE. The Exercise Price shall be
determined by the Committee when an Option is granted and may be not less
than (i) 85% of the Fair Market Value of the Shares on the date of grant,
or (ii) the par value of the Shares; provided, however, that:
(i) the Exercise Price of an ISO shall be not less
than 100% of the Fair Market Value of the Shares on the
date of grant, and
(ii) the Exercise Price of any ISO granted to a Ten
Percent Stockholder shall not be less than 110% of the Fair
Market Value of the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 6
of the Plan.
5.1.5 METHOD OF EXERCISE. Options may be exercised only
by delivery to the Company of a written stock option exercise agreement
(the "Exercise Agreement") in a form approved by the Committee (which need
not be the same for each Participant receiving an Option pursuant to the
Plan), stating the number of Shares being purchased, the restrictions
imposed on the Shares, if any, and such representations and agreements
regarding Participant's investment intent, access to information and other
matters, if any, as may be required or desirable by the Company to comply
with applicable securities laws, together with payment in full of the
Exercise Price for the number of Shares being purchased.
5.1.6 TERMINATION. Notwithstanding the exercise periods
set forth in the Stock Option Agreement, exercise of an Option shall always
be subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise such
Participant's Options, only to the extent that such Options
would have been exercisable upon the Termination Date, no later
than ninety (90) days after the Termination Date, but in any
event, no later than the expiration date of the Options.
(b) If the Participant is terminated because of death or
Disability, then the Participant's Options which are ISO's may
be exercised, only to the extent that such Options would have
been exercisable by Participant on the Termination Date, and
must be exercised by Participant (or Participant's legal
representative or authorized assignee) no later than one hundred
eighty (180) days after the Termination Date, but in any event
no later than the expiration date of the Options.
5.1.7 LIMITATIONS ON EXERCISE. The Committee may
specify a reasonable minimum number of Shares that may be purchased on any
exercise of an Option, provided that such minimum number will not prevent
Participant from exercising the Option for the full number of Shares for
which it is then exercisable.
5.1.8 LIMITATIONS ON ISOS. The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect to which
ISOs are exercisable for the first time by a Participant during any
calendar year (under the Plan or under any other incentive stock option
plan of the Company or any Affiliate or Subsidiary of the Company) shall
not exceed $100,000. If the Fair Market Value of Shares on the date of
grant with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year
shall be ISOs and the Options for the amount in excess of $100,000 that
become exercisable in that calendar year shall be NQSOs. In the event that
the Code or the regulations promulgated thereunder are amended after the
Effective Date of the Plan to provide for a different limit on the Fair
Market Value of Shares permitted to be subject to ISOs, such different
limit shall be automatically incorporated herein and shall apply to any
Options granted after the effective date of such amendment.
5.1.9 MODIFICATION, EXTENSION OR RENEWAL. The Committee
may modify, extend or renew outstanding Options and authorize the grant of
new Options in substitution therefor, provided that any such action may
not, without the written consent of a Participant, impair any of such
Participant's rights under any Option previously granted. Any outstanding
ISO that is modified, extended, renewed or otherwise altered shall be
treated in accordance with Section 424(h) of the Code. The Committee may
reduce the Exercise Price of outstanding Options without the consent of
Participants affected, by a written notice to them; provided, however, that
the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 5.1.4 of the Plan for Options granted on
the date the action is taken to reduce the Exercise Price; provided,
further, that the Exercise Price shall not be reduced below the par value
of the Shares.
5.1.10 NO DISQUALIFICATION. Notwithstanding any other
provision in the Plan, no term of the Plan relating to ISOs shall be
interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any ISO under Section 422 of the Code.
5.2 ACCELERATED VESTING.
5.2.1 Notwithstanding Sections 5.1.3(b), the Committee
shall have the authority to accelerate the exercisability of Options
granted pursuant to the terms of this Plan, provided however, that the
acceleration of exercisability shall be conditioned upon inclusion in the
Option agreements with Participants of such provisions and restrictions as
are necessary to permit stock issued upon exercise of such Options to
continue to qualify for the exception from Section 16(b) of the Securities
Act as is provided under Rule 16(b)(3)(a),(b) and (c).
5.2.2 Notwithstanding anything herein to the contrary,
if a Change in Control of the Company occurs or if the Committee determines
in its sole discretion that an Acceleration Event has occurred, then all
Options shall become fully exercisable as of the date such Change in
Control occurred or the Committee determines that an Acceleration Event has
occurred, provided however, that the acceleration of exercisability shall
be subject to the imposition of such restrictions on transferability of
shares of Common Stock subject to such Options, as are necessary to permit
stock issued upon exercise of such Options to continue to qualify for the
exception from Section 16(b) of the Securities Act as is provided under
Rule 16(b)(3)(a),(b) and (c).
6. PAYMENT FOR SHARE PURCHASES
6.1 PAYMENT. Payment for Shares purchased pursuant to the Plan
may be made in cash (by check or equivalent) or, where expressly approved
by the Committee and permitted by law by:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares of the Company's Common Stock
that either: (1) have been owned by Participant for more than six (6)
months and have been paid for within the meaning of Rule 144 of the
Securities Act; or were obtained by Participant in the public market; and,
(2) are clear of all liens, claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant
for services rendered;
(d) provided that a public market for the Company's stock
exists and subject to the ability of the Participant to sell Shares in
compliance with applicable securities laws:
(i) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an "NASD Dealer") whereby the
Participant irrevocably elects to exercise the Option and to sell a portion
of the Shares so purchased in order to pay the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(ii) through a "margin" commitment from the
Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account
as security for a loan from the NASD Dealer in the amount
of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(e) by any combination of the foregoing.
Notwithstanding the foregoing, the Exercise Price of an Option
held by a director who is not an employee shall be paid either (i) in cash;
or (ii) pursuant to subsection (a) of this Section 6.1, or (iii) by any
combination of the foregoing (i) and (ii).
7. WITHHOLDING TAXES
7.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Options granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares.
8. PRIVILEGES OF STOCK OWNERSHIP
8.1 VOTING AND DIVIDENDS. No Participant shall have any of the
rights of a stockholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares.
8.2 FINANCIAL STATEMENTS. The Company shall provide financial
statements to each Participant annually during the period such Participant
has Options outstanding, provided, however, that the Company shall not be
required to provide such financial statements to Participants whose
services in connection with the Company assure them access to equivalent
information.
9. TRANSFERABILITY
Options 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 or as consistent with the
specific Plan and Option Agreement provisions relating thereto. During the
lifetime of the Participant, an Option shall be exercisable only by the
Participant, and any elections with respect to an Option, may be made only
by the Participant.
10. 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.
11. EXCHANGE AND BUY OUT OF OPTIONS
The Committee may, at any time or from time to time, authorize
the Company, with the consent of the respective Participants, to issue new
Options in exchange for the surrender and cancellation of any or all
outstanding Options. The Committee may at any time buy from a Participant
an Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Committee and the
Participant shall agree.
12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
An Option shall not be effective unless such Option 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 the Option and also
on the date of exercise or other issuance. 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.
13. NO OBLIGATION TO EMPLOY
Nothing in the Plan or any Option granted under 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.
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options 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, class, and per share price of Shares subject
to outstanding Options hereunder shall be appropriately adjusted in such
a manner as to entitle a Participant to receive upon exercise thereof (and,
if relevant, for the same aggregate cash consideration), the same total
number and class of shares as such Participant would have received had such
Participant exercised such Option in full immediately prior to such event;
and (ii) the number and class of shares with respect to which Options may
be granted 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 Option shall, at no additional cost, be entitled to receive
upon exercise of such Option (subject to any required action by
stockholders of the Company) in, lieu of the number of Shares as to which
such Option shall then be so exercisable, 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 Option shall be so exercised.
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
unexercised Options remain outstanding under the Plan, (i) subject to the
provisions of clause (ii) below, after the effective date of such merger,
consolidation or sale, as the case may be, each holder of an outstanding
Option shall be entitled to receive upon exercise of such Option in lieu
of shares of Common Stock, shares of such stock or other securities, cash
or property as the holders of shares of Common Stock received pursuant to
the terms of the merger, consolidation or sale; or (ii) all outstanding
Options may be canceled by the Board as of the effective date of any such
merger, consolidation, liquidation or sale provided that: (x) notice of
such cancellation shall be given to each holder of an Option, and (y) each
holder of an Option shall have the right to exercise such Option to the
extent that the same is then exercisable or, if the Board shall have
accelerated the time for exercise of all unexercised and unexpired Options,
in full during the 30-day period preceding the effective date of such
merger, consolidation, liquidation 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 or price of Shares then
subject to outstanding Options.
15. ADOPTION AND STOCKHOLDER APPROVAL
The Plan shall become effective on the date that it is adopted
by the Board (the "Effective Date"). The Company shall submit the Plan for
approval by the stockholders of the Company at the next annual meeting of
stockholders of the Company to obtain the advantages under NASD, IRS,
Securities and Exchange Commission and other regulations that approval of
stockholders may bestow, provided however, that Options granted under the
Plan shall be conditioned upon stockholder approval of the Plan within one
year of adoption by the Board.
16. TERM OF PLAN
The Plan will terminate ten (10) years from the Effective Date.
17. 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 form of Option
Agreement or instrument to be executed pursuant to the Plan; provided,
however, that:
(a) the Board shall not, without the approval of the
stockholders of the Company, amend the Plan in any manner that
requires such stockholder approval pursuant to the Code or the
regulations promulgated thereunder as such provisions apply to ISO
plans or pursuant to the Exchange Act or Rule 16b-3 (or its
successor), as amended, thereunder; and
(b) the terms and conditions of any awards of Options to
Directors and the category of persons eligible to be awarded such
shares under the Plan shall not be amended more than once every six
months, other than to comply with changes in the Code or ERISA, or the
rules and regulations thereunder.
18. NON-EXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board, the submission of
the Plan to the stockholders of the Company for approval, 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.
19. 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.
20. DEFINITIONS
As used in the Plan, the following terms shall have the following
meanings:
"Acceleration Event" means but is not limited to, any Change
of Control of the Company or other event determined in the discretion of
the Committee.
"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.
"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 the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
"Company" means Cadiz Land Company, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.
"Disability" means a disability, whether temporary or permanent,
partial or total, within the meaning of Section 22(e)(3) of the Code, as
determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Price" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.
"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 an director of the Company defined
in Rule 16b-3(b)(i) of the Exchange Act.
"Option" means an option to purchase Shares of Common Stock of
the Company pursuant to Section 5.
"Option Agreement" means, with respect to each Option, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Option.
"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 an Option under the
Plan.
"Plan" means this Cadiz Land Company, Inc., 1996 Stock Option
Plan, as amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock, $0.01 par
value, reserved for issuance under the Plan, as adjusted pursuant to
Sections 2 and 14, 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 granting of the Option, 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" or "Terminated" 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 (the "Termination Date").
TABLE OF CONTENTS
1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. SHARES SUBJECT TO THE PLAN. . . . . . . . . . . . . . . . . . . . .1
2.1 Number of Shares Available . . . . . . . . . . . . . . . . . .1
2.2 Adjustment of Shares.. . . . . . . . . . . . . . . . . . . . .1
3. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3.1 Eligibility of Employees, Consultants and Independent
Contractors. . . . . . . . . . . . . . . . . . . . . . . . . .1
4. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . .2
4.1 Committee Authority. . . . . . . . . . . . . . . . . . . . . .2
4.2 Committee Discretion . . . . . . . . . . . . . . . . . . . . .3
4.3 Composition of Committee . . . . . . . . . . . . . . . . . . .3
5. GRANT AND EXERCISE OF OPTIONS . . . . . . . . . . . . . . . . . . .3
5.1 Grant of Options . . . . . . . . . . . . . . . . . . . . . . .3
5.1.1 Form of Option Grant . . . . . . . . . . . . . . . .3
5.1.2 Date of Grant. . . . . . . . . . . . . . . . . . . .3
5.1.3 Exercise Period. . . . . . . . . . . . . . . . . . .4
5.1.4 Exercise Price . . . . . . . . . . . . . . . . . . .4
5.1.5 Method of Exercise . . . . . . . . . . . . . . . . .4
5.1.6 Termination. . . . . . . . . . . . . . . . . . . . .4
5.1.7 Limitations on Exercise. . . . . . . . . . . . . . .5
5.1.8 Limitations on ISOs. . . . . . . . . . . . . . . . .5
5.1.9 Modification, Extension or Renewal . . . . . . . . .5
5.1.10 No Disqualification. . . . . . . . . . . . . . . . .5
5.2 Accelerated Vesting. . . . . . . . . . . . . . . . . . . . . .6
6. PAYMENT FOR SHARE PURCHASES . . . . . . . . . . . . . . . . . . . .6
6.1 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
7. WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . . . . . .7
7.1 Withholding Generally. . . . . . . . . . . . . . . . . . . . .7
8. PRIVILEGES OF STOCK OWNERSHIP . . . . . . . . . . . . . . . . . . .7
8.1 Voting and Dividends . . . . . . . . . . . . . . . . . . . . .7
8.2 Financial Statements . . . . . . . . . . . . . . . . . . . . .7
9. TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . .7
10. CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
11. EXCHANGE AND BUYOUT OF OPTIONS. . . . . . . . . . . . . . . . . . .8
12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. . . . . . . . . . .8
13. NO OBLIGATION TO EMPLOY . . . . . . . . . . . . . . . . . . . . . .8
14. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. . . . . . . . . . . . .9
15. ADOPTION AND STOCKHOLDER APPROVAL . . . . . . . . . . . . . . . . 10
16. TERM OF PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
17. AMENDMENT OR TERMINATION OF PLAN. . . . . . . . . . . . . . . . . 10
18. NONEXCLUSIVITY OF THE PLAN. . . . . . . . . . . . . . . . . . . . 11
19. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11