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:
[ ] Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(c) (2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CADIZ INC.
(Name of Registrant as Specified in Its Charter)
---------------------------------------------------------------
Payment of Filing Fee (check the appropriate box):
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
CADIZ INC.
______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held May 6, 2002
To the Stockholders of Cadiz Inc.:
The annual meeting of stockholders of Cadiz Inc., a Delaware
corporation, will be held at the Fairmont Miramar Hotel located
at 101 Wilshire Boulevard, Catalina Bungalow, Santa Monica,
California, on Monday, May 6, 2002, at 2:00 p.m., local time, and
any adjournments thereof, to consider and act upon the following
matters:
(1) The election of five members of the Board of Directors, each
to serve until the next annual meeting of stockholders or
until their respective successors shall have been elected and
qualified;
(2) Ratification of the selection of PricewaterhouseCoopers LLP
as Cadiz' independent certified public accountants for fiscal
year 2002; and
(3) The transaction of such other business as may properly come
before the meeting and any adjournments thereof.
The subject matter of each of the above proposals is described
within the proxy statement.
The Board of Directors has fixed the close of business on
March 22, 2002 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 Cadiz' 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 either vote your shares via the Internet, by phone
(detailed instructions are included on the proxy card) or 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/ Jennifer Hankes Painter
----------------------------
Jennifer Hankes Painter
Secretary
Santa Monica, California
April 5, 2002
CADIZ INC.
Annual Meeting of Stockholders
TABLE OF CONTENTS
Page
----
PROXY STATEMENT INTRODUCTION. . . . . . . . . . . . . . . . . . . .1
BENEFICIAL OWNERSHIP OF SECURITIES. . . . . . . . . . . . . . . . .2
PROPOSAL 1: Election of Directors. . . . . . . . . . . . . . . . .4
PROPOSAL 2: Approval of Independent Auditors. . . . . . . . . . .15
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . .15
STOCKHOLDER PROPOSALS. . . . . . . . . . . . . . . . . . . . . . .15
ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 15
Page i
CADIZ INC.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 6, 2002
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 Cadiz' annual meeting of stockholders to
be held on Monday, May 6, 2002, at the time and place and for the
purposes set forth in the accompanying notice of annual meeting
of stockholders.
Cadiz' Annual Report on Form 10-K for the year ended December
31, 2001, including audited financial statements, is being mailed
to you with this proxy statement on or about April 5, 2002.
We cordially invite you to attend the annual meeting. Whether
or not you expect to attend the annual meeting in person, please
either vote your shares via the Internet, by phone (detailed
instructions are included on the proxy card) or 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 Cadiz' Secretary, and, if
you attend the meeting, you may vote your shares in person. You
may also revoke your proxy by returning a duly executed proxy
reflecting a later date. Your proxy, if not revoked, will be
voted at the annual meeting in accordance with the instructions
specified therein.
Only holders of record of Cadiz' common stock at the close of
business on March 22, 2002 will be entitled to vote at the
meeting. At the close of business on March 22, 2002, there were
36,230,241 shares of common stock of Cadiz 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 the
shares present or represented by proxy and voting at the meeting
is required for approval of Cadiz' independent auditors (Proposal
2). For purposes of determining whether a matter has received a
majority vote, 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 2.
Stockholders of Cadiz will not have appraisal rights with
respect to any of the proposals to be voted upon at the annual
meeting.
Cadiz has been advised by its directors and officers that they
intend to vote all of the 1,359,182 outstanding shares of common
stock which they hold or control, representing 3.66% 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 Cadiz,
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
Cadiz, without extra compensation, by telephone, telegraph or
personal solicitation, and no additional compensation will be
paid to such persons. If requested, Cadiz will reimburse
brokerage houses and other custodians, nominees and fiduciaries
for their reasonable expenses incurred in mailing proxy material
to their principals.
Page 1
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth, as of March 22, 2002, the
ownership of common stock of Cadiz by each stockholder who is
known by Cadiz to own beneficially more than five percent of the
outstanding common stock, by each director, by each executive
officer listed in the summary compensation table below, and by
all directors and executive officers as a group excluding, in
each case, rights under options or warrants not exercisable
within 60 days. All persons named have sole voting power and
investment power over their shares except as otherwise noted.
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
----------------------- -------------------- --------
Fidelity International 3,599,667(1) 9.94%
Limited, et. al.
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
Kern Capital Management, LLC 2,376,600(2) 6.56%
114 West 47th Street, Suite 1926
New York, NY 10036
Capital Research and 2,300,000(3) 6.35%
Management Company
333 South Hope Street
Los Angeles, CA 90071
OZ Management, L.L.C. 2,229,984(4) 6.15%
OZF Management, L.P.
9 West 57th Street, 39th Floor
New York, NY 10019
Keith Brackpool 1,604,060(5) 4.36%
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Dwight Makins 447,750(6) 1.24%
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Timothy J. Shaheen 302,854(7) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Anthony L. Coelho 47,750(8) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Murray Hutchison 47,750(9) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Stanley E. Speer 239,552(10) *
c/o 100 Wilshire Blvd,
Suite 1600
Santa Monica, CA 90401
All Directors and Officers as 2,689,716(5)(6)(7)
a group (8)(9)(10) 7.25%
(6 Individuals)
Page 2
------------------------
* Represents less than 1% of the outstanding shares of
common stock of Cadiz as of March 22, 2002.
(1) Based upon a Schedule 13G filed with the Securities and
Exchange Commission and information obtained from
Fidelity International Limited, Fidelity beneficially
owns, as an investment advisor which provides investment
advisory and management services to a number of non-U.S.
investment companies or investment trusts and certain
institutional investors, 3,599,667 shares of common stock
of Cadiz and such funds and accounts and Fidelity, as
investment advisor to the funds and accounts, has sole
voting and dispositive power as to all such shares. The
principal office of Fidelity is located at Pembroke Hall,
42 Crow Lane, Hamilton, Bermuda.
(2) Based upon a Schedule 13G filed with the Securities and
Exchange Commission and information obtained from Kern
Capital Management, LLC, Kern beneficially owns 2,367,600
shares of common stock of Cadiz with sole voting and
dispositive power as to all such shares. The principal
office of Kern is located at 114 West 47th Street, Suite
1926, New York, NY 10036.
(3) Capital Research and Management Company filed a Schedule
13G with the Securities and Exchange Commission
indicating that as of December 31, 2001, it was the
beneficial owner of 2,300,000 shares of common stock of
Cadiz, arising from the beneficial ownership of such
shares by SMALLCAP World Fund, Inc., an investment
company registered under the Investment Company Act of
1940, which is advised by Capital Research, an investment
advisor registered under Section 203 of the Investment
Advisors Act of 1940. The principal offices of Capital
Research and SMALLCAP are located at 333 South Hope
Street, Los Angeles, California 90071. According to the
Schedule 13G, all such shares are held by SMALLCAP in its
capacity as an investment company, and are beneficially
held by Capital Research in its capacity as an investment
advisor. SMALLCAP has sole voting power over the shares
and Capital Research has sole dispositive power over the
shares. The Schedule 13G indicates that Capital Research
disclaims beneficial ownership of the shares pursuant to
Rule 13d-4 of the Securities Exchange Act of 1934.
(4) Based upon a joint group filing of a Schedule 13G filed
with the Securities and Exchange Commission and information
obtained from OZ Management, L.L.C., OZ Management, L.L.C.
beneficially owns 1,714,152 shares of common stock with
sole voting and dispositive power as to all such shares.
OZF Management, L.P. beneficially owns 515,832 shares of
common stock with sole voting and dispositive power as to
all such shares. The principal office of both entities is
located at 9 West 57th Street, 39th Floor, New York, NY 10019.
(5) Includes 500,000 shares underlying presently exercisable options,
52,000 shares owned by a foundation of which Mr. Brackpool is a
trustee, but in which Mr. Brackpool has no economic
interest, and 135,378 deferred stock units that are fully
vested but cannot be exchanged for shares of common stock
without restrictions until March 31, 2003. Mr. Brackpool
disclaims any beneficial ownership of these 52,000
shares. Does not include 55,789 deferred stock units
that are not yet vested.
(6) Includes 22,750 shares underlying presently exercisable
options.
(7) Includes 75,000 shares underlying presently exercisable
options and 216,604 deferred stock units that are fully
vested but cannot be exchanged for shares of common stock
without restrictions until March 31, 2003. Does not
include 29,511 deferred stock units that are not yet
vested.
(8) Includes 47,750 shares underlying presently exercisable
options.
(9) Includes 47,750 shares underlying presently exercisable
options.
(10) Includes 125,000 shares underlying presently
exercisable options and 108,302 deferred stock units that
are fully vested but cannot be exchanged for shares of
common stock without restrictions until March 31, 2003.
Does not include 26,062 deferred stock units that are not
yet vested.
Page 3
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the five persons listed
below for election at the annual meeting to serve as directors
for a term expiring at the 2003 annual meeting of stockholders or
until their respective successors are elected and qualified.
Each nominee currently serves as a director and has agreed to
serve as such for another term if elected.
Proxies will be voted for the election of the five nominees
named below unless instructions are given to the contrary.
Proxies cannot be voted for a greater number of persons than the
number of nominees named. Should any nominee become unable to
serve as a director, the persons named in the enclosed form of
proxy will, unless otherwise directed, vote for the election of
such other person as the present Board of Directors may designate
to fill that position.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth certain biographical information,
the present occupation and the business experience for the past
five years or more of each director and executive officer:
Nominees for Director:
Name Age Position with Cadiz
---------------- --- -------------------
Keith Brackpool 44 Chairman of the Board,
President and
Chief Executive Officer
Dwight W. Makins 51 Director
Anthony L. Coelho 59 Director
Murray H. Hutchison 63 Director
Timothy J. Shaheen 42 Director of Cadiz and
President, Chief Executive
Officer of Sun World
International, Inc.
Executive Officer:
Name Age Position with Cadiz
Stanley E. Speer 41 Chief Financial Officer of
Cadiz and Sun World
International, Inc.
Keith Brackpool is a founder of Cadiz, has served as a
member of Cadiz' Board of Directors since September 1986, and has
served as President and Chief Executive Officer of Cadiz since
December 1991. Mr. Brackpool assumed the role of Chairman of the
Board of Cadiz on May 14, 2001. Mr. Brackpool has also been a
principal of 1334 Partners L.P., a partnership that owns
commercial real estate from 1989 to present.
Dwight W. Makins was elected as Chairman of the Board in
December 1991. Mr. Makins stepped down from his position as
Chairman on May 14, 2001, but remains a director of Cadiz. Mr.
Makins is a self-employed entrepreneur and investment banker and
advisor and serves as a director of Just Ice Ltd. (UK), an ice
manufacturing service to the catering industry, and several other
international companies. Mr. Makins served as Chairman of
Greenway Holdings plc, a British waste oil recycling company,
until April 2000.
Anthony L. Coelho was appointed a director of Cadiz in March
1999. Mr. Coelho served as General Chairman of the Gore Campaign
2000 until June 15, 2000. Mr. Coelho was first elected to the
U.S. House of Representatives in 1978 and served as the first-
ever elected Majority Whip from 1987 to 1989. Representing
California's Central Valley, Mr. Coelho served in senior
positions on the Agriculture, Interior and Administration
Committees with his legislative focus on agriculture and water
issues. After
Page 4
leaving Congress, Mr. Coelho served as Managing
Director of Wertheim Schroder Inc., an investment banking firm
from 1989 to 1995 and from 1990 to 1995 he served as President
and Chief Executive Officer of Wertheim Schroder Investment
Services, Inc., a privately held investment banking firm. In
1994, President Clinton appointed him Chairman of the President's
Committee on Employment of People with Disabilities. Mr. Coelho
currently is self-employed and serves as a director of
Cyberonics, Inc., a publicly traded manufacturer of medical
devices; Service Corporation International, a publicly traded
funeral service company; Kistler Aerospace Corporation, a
privately held aerospace company; Mangosoft, Inc., a publicly
traded software service company; and as a director of other non-
publicly traded and not-for-profit companies.
Murray H. Hutchison was appointed a director of Cadiz in
June 1997. Since his retirement in 1996 from International
Technology Corporation, a publicly traded diversified
environmental management company, Mr. Hutchison has been self-
employed with his business activities involving primarily the
management of an investment portfolio. From 1976 to 1994, Mr.
Hutchison served as Chief Executive Officer and Chairman of
International Technology. Mr. Hutchison currently serves as a
director of Jack in the Box, Inc., a publicly traded fast food
restaurant chain. Additionally, Mr. Hutchison serves as Chairman
of the Huntington Hotel Corporation, a privately owned hotel and
office building, and as a director of several other non-publicly
traded U.S. companies.
Timothy J. Shaheen was appointed a director of Cadiz in
March 1999. Mr. Shaheen has served as the Chief Executive
Officer and a director of Cadiz' wholly-owned subsidiary, Sun
World International, Inc., since September 1996. Mr. Shaheen
also serves as a director of The United Fresh Fruit and Vegetable
Association, a national trade organization which represents
interests of fruit and vegetable producers and distributors. He
is also active on several industry advisory committees. Mr.
Shaheen has sixteen years of experience in the produce industry,
most recently serving as a senior executive with Albert Fisher
North America, a publicly traded domestic and international
produce company from 1989 to 1996. While with Albert Fisher, Mr.
Shaheen also served as director of its Canadian produce
operations and as a director of Fresh Western Marketing, one of
the largest growers/shippers of fresh vegetables in the Salinas
Valley of California. Mr. Shaheen has also served as a past
director of the Los Angeles Association of Produce Wholesalers
and Dealers. Prior to his employment with Albert Fisher, Mr.
Shaheen had seven years of experience with the accounting firm of
Ernst & Young LLP. Mr. Shaheen is a Certified Public Accountant.
Stanley E. Speer joined Cadiz in September 1996, following
completion of the acquisition by Cadiz of Sun World, as Senior
Vice President, Chief Financial Officer and Secretary of Sun
World. In July 1997, Mr. Speer was appointed Chief Financial
Officer of Cadiz and relinquished his position as Secretary of
Sun World. In April 1998, Mr. Speer became Secretary of both
Cadiz and Sun World. In October 2001, the newly-hired General
Counsel replaced Mr. Speer as Secretary of Cadiz and Sun World.
Prior to joining Sun World, Mr. Speer had 15 years of experience
in public accounting with the accounting firm of Coopers &
Lybrand LLP. From 1992 until September 1996, Mr. Speer served as
a partner in their financial advisory services group specializing
in business reorganizations and mergers and acquisitions
consulting. Mr. Speer is a Certified Public Accountant and a
Certified Insolvency and Reorganization Accountant.
Directors of Cadiz 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 Cadiz. Officers serve at the
discretion of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires Cadiz' directors and executive officers, and persons who
beneficially own more than 10% of a registered class of Cadiz'
equity securities ("reporting persons"), to file with the
Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of common stock and other
equity securities of Cadiz. Reporting persons are required by
Commission regulations to furnish Cadiz with copies of all
Section 16(a) forms they file.
Page 5
To Cadiz' knowledge, based solely on a review of the copies
of reports and amendments thereto on Forms 3, 4 and 5 furnished
to Cadiz by reporting persons during, and with respect to, its
fiscal year ended December 31, 2001, and on a review of written
representations from reporting persons to Cadiz that no other
reports were required to be filed for such fiscal year, all
Section 16(a) filing requirements applicable to Cadiz' directors,
executive officers and greater than 10% beneficial owners during
such period were satisfied in a timely manner.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 2001, the Board of
Directors held four formal meetings, conferred on a number of
occasions through telephone conferences, and took action, when
appropriate, by unanimous written consent. Each current director
attended all the meetings of the Board and all the meetings of
the Board committees of which each was a member during his term.
The Board of Directors has three standing committees, the
Audit Committee, the Compensation Committee and the Nominating
Committee. Messrs. Makins, as Chairman, Coelho and Hutchison
served on the Audit Committee, the purpose of which is to oversee
preparation of Cadiz' financial statements. The Audit Committee
met two times during the year ended December 31, 2001. Messrs.
Hutchison, as Chairman, Makins and Mitt Parker served on the
Compensation Committee, the purpose of which is to establish
salary and bonus compensation levels for Cadiz' executive
officers. The Compensation Committee met two times during the
year ended December 31, 2001. Messrs. Makins, Coelho, Parker and
Hutchison served on the Nominating Committee, the purpose of
which is to nominate qualified individuals to serve on the Board.
Mr. Parker retired from the Board of Directors of Cadiz and Sun
World in March 2002. Upon his retirement, Mr. Coelho replaced
him on the Compensation Committee.
EMPLOYMENT ARRANGEMENTS
Mr. Brackpool is compensated pursuant to an Employment
Agreement effective as of February 1, 1998 between himself and
Cadiz. Under the terms of the agreement, which automatically
renews annually unless terminated by either party, Mr. Brackpool
receives base compensation of $500,000 per year. Mr. Brackpool
may also receive an annual incentive based bonus, not to exceed
120% of his base compensation, subject to the satisfaction of
certain performance criteria which are either tied to the
performance of Cadiz or are subject to the discretion of the
Board of Directors. Under the agreement, Mr. Brackpool also
serves as the Chairman of Sun World. A portion of Mr.
Brackpool's compensation may be paid by Sun World or other
subsidiaries of Cadiz as determined periodically by Cadiz. Mr.
Brackpool also receives the use of a leased automobile and life
and disability insurance benefits funded by Cadiz. The agreement
provides that, in the event of a change in control of Cadiz, any
yet unsatisfied conditions to the vesting of any stock options
held by Mr. Brackpool or to the issuance of shares of Cadiz'
stock pursuant to stock bonus plans to which Mr. Brackpool is a
party, shall be deemed immediately satisfied. In the event of a
material change or reduction in Mr. Brackpool's responsibilities,
he will be entitled to terminate the agreement and continue to
receive base compensation for the remainder of the term of the
agreement. Mr. Brackpool will also be entitled to continue to
receive base salary and a deemed bonus equal to 60% of base
salary in the event of any other termination of the agreement by
Cadiz other than for cause.
Mr. Shaheen has been engaged by Cadiz to act as the
President and Chief Executive Officer of Sun World. In this
capacity, Mr. Shaheen receives an annual base salary from Sun
World of $300,000. Mr. Shaheen is entitled to receive additional
compensation in the form of bonuses at the sole discretion of the
Board of Directors, based primarily on the performance of Sun
World. Mr. Shaheen also receives the use of a leased automobile
funded by Sun World.
Mr. Speer has been engaged by Cadiz to act as the Chief
Financial Officer of both Cadiz and Sun World. In this capacity,
Mr. Speer receives an annual base salary of $260,000. A portion
of Mr. Speer's compensation may be paid by Sun World or other
subsidiaries of Cadiz as determined periodically by Cadiz. Mr.
Speer is entitled to receive additional compensation in the form
of bonuses at the sole discretion of the Board of Directors,
based primarily on the performance of Cadiz. Mr. Speer also
receives the use of a leased automobile funded by Cadiz.
Page 6
COMPENSATION OF DIRECTORS
Mr. Makins received cash compensation for his services as
Chairman pursuant to a Compensation Agreement effective April 2,
1993, which provides for base compensation of $75,000 per year,
payable quarterly in advance, plus payment for certain additional
services which may be performed on behalf of Cadiz, consisting
primarily of financial advisory and general business consulting
services. During the year ended December 31, 2001, Mr. Makins
received total cash compensation of $75,000 pursuant to this
agreement. In addition, Mr. Makins received cash compensation
for his services as a director of Sun World in the amount of
$25,000 per year, payable quarterly in advance. Beginning in
2002, Mr. Makins will receive the same compensation as Messrs.
Coelho and Hutchison, which is $25,000 per year, payable
quarterly in advance.
Messrs. Brackpool and Shaheen did not receive any additional
compensation for serving as directors of Cadiz or Sun World.
Messrs. Coelho, Hutchison and Parker each received cash
compensation for their services as directors of Cadiz in the
amount of $25,000 per year, payable quarterly in advance. Mr.
Parker did not receive any additional compensation for serving as
a director of Sun World.
During February 2002, Messrs. Makins, Coelho, Hutchison and
Parker each received options to purchase 14,500 shares of Cadiz'
common stock as additional compensation for their efforts in
2001.
Page 7
EXECUTIVE COMPENSATION
The tables and discussion below set forth information about
the compensation awarded to, earned by, or paid to Cadiz' chief
executive officer and other executive officers during the years
ended December 31, 2001, 2000 and 1999.
Summary Compensation Table
Other Long-Term
Compensation Awards
--------------------
Annual Restricted
Fiscal Compensation(2) Stock Stock All Other
Position Year(1) Salary Bonus(3) Awards(4)(5) Options Compensation
---------------- -------- -------- -------- ------------ ------- ------------
Keith
Brackpool
President and
Chief 12/31/01 $500,000 $ -0- $ -0- -0- -0-
Executive 12/31/00 500,000 150,000 150,000 -0- -0-
Officer 12/31/99 500,000 275,000 250,000 500,000(6) -0-
Timothy J.
Shaheen
President and
Chief Executive 12/31/01 300,000 -0- -0- -0- -0-
Officer 12/31/00 300,000 75,000 75,000 -0- -0-
of Sun World 12/31/99 270,000 135,000 135,000 -0- -0-
Stanley E.
Speer 12/31/01 260,000 -0- -0- -0- -0-
Chief Financial 12/31/00 260,000 65,000 65,000 -0- -0-
Officer 12/31/99 240,000 120,000 120,000 -0- -0-
______________________
(1) The information presented in this table is for the years
ended December 31, 2001, 2000 and 1999. The executive
officers for which compensation has been disclosed for the
year ended December 31, 2001, constituted all of Cadiz'
executive officers as of December 31, 2001.
(2) No column for "Other Annual Compensation" has been included
to show compensation not properly categorized as salary or
bonus, which consisted entirely during each fiscal year of
perquisites and other personal benefits, because the
aggregate amounts did not exceed the lesser of either
$50,000 or 10% of the total of annual salary and bonus
reported for each of the above named executive officers for
each fiscal year. See "Employment Arrangements".
(3) Bonuses were paid in February for the preceding calendar
year.
(4) Deferred stock units were granted to Messrs. Brackpool,
Shaheen and Speer in February 2001 and May 2000, as part of
their respective bonuses for the preceding calendar year.
These deferred stock units vest three years from the date of
issuance. The total number and value of deferred stock
units outstanding at December 31, 2001 (based upon the
Nasdaq National Stock Market closing sales price per share
of $8.02 on that date) for Messrs. Brackpool, Shaheen and
Speer was as follows:
Units
Name Fiscal Year Outstanding Value
---- ----------- ----------- -----
Brackpool 12/31/99 40,404 $ 324,040
12/31/00 15,385 123,388
Shaheen 12/31/99 21,819 174,988
12/31/00 7,692 61,690
Speer 12/31/99 19,395 155,548
12/31/00 6,667 53,469
(5) Deferred stock units, which are fully vested but cannot
be exchanged for shares of common stock without restrictions
until March 31, 2003, were issued to Messrs. Brackpool,
Shaheen and Speer in March 2001 in exchange for fully vested
and expiring options in amounts equaling the value of the
expiring options in excess of their exercise price. The
total number and value of these deferred stock units
outstanding at December 31, 2001 (based upon the Nasdaq
National Stock Market closing sales price per share of $8.02
on that date) for Messrs. Brackpool, Shaheen and Speer was
as follows:
# of
Options Units
Name Exchanged Awarded Value
--------- --------- ------- -----------
Brackpool 300,000 135,378 $ 1,085,732
Shaheen 400,000 216,604 1,737,164
Speer 200,000 108,302 868,582
(6) In January 1999, Mr. Brackpool was granted 500,000 options,
vesting in July 1999, based upon meeting certain milestones
related to the fulfillment of Cadiz' water resources business
plan.
Page 8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value of
Unexercised Unexercised
Shares Options at Options at
Acquired FY-End (#) FY-End (#)
on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable(1)
---------------- ---------- ---------- ------------- ----------------
Keith Brackpool -0- -0- 500,000/-0- $ 353,750/-0-
Timothy J. Shaheen -0- -0- 75,000/-0- $ 1,500/-0-
Stanley E. Speer -0- -0- 125,000/-0- $ 1,500/-0-
(1) Based upon the Nasdaq National Stock Market closing sales price per
share of Cadiz common stock at December 31, 2001 which was $8.02.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 2001, all decisions
concerning executive officer compensation were made by the
Compensation Committee of the Board of Directors. The members
of the Compensation Committee were Messrs. Hutchison
(Chairman), Makins and Parker, all of whom were non-employee
directors. Mr. Makins served as Chairman of the Board until
May 14, 2001. See "Directors and Executive Officers".
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has formed a Compensation Committee
which is responsible for reviewing and establishing the
compensation payable to Cadiz' executive officers, including
the President and Chief Executive Officer. For executive
officers other than the President and Chief Executive Officer,
the Committee establishes compensation levels based, in part,
upon the recommendations of the President and Chief Executive
Officer.
The Compensation Committee has furnished the following
report on executive compensation:
Cadiz' executive compensation programs
are designed to enhance operating performance
and to maximize the long-term value of Cadiz'
assets and stockholder value, by aligning the
financial interest of the executive officers
with those of the stockholders. Such a
compensation program helps to achieve Cadiz'
business and financial objectives and provide
incentives needed to attract and retain well-
qualified executives in a highly competitive
marketplace. To this end, Cadiz has
developed a compensation program with three
primary components: base salary, performance-
based cash awards and long-term incentives
through stock awards.
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. 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,
(1) This report shall not be deemed incorporated by
reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the
extent that Cadiz specifically incorporates this report by
reference, and shall not otherwise be deemed filed under such
acts.
Page 9
salary history and cost of living increases.
Where applicable, the Compensation
Committee may also consider the past
performance of the officer, both in adjusting
base salary levels and in determining
additional incentive compensation, such as
the cash awards and long term incentives
discussed below.
PERFORMANCE-BASED CASH AWARDS. The
Compensation Committee believes that
incentives should be offered to executives
which are related to improvements in
performance that yield increased value for
stockholders. Although the Compensation
Committee relies primarily upon the grant of
incentive stock options or other stock awards
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.
As Chairman and Chief Executive Officer
of Cadiz, Mr. Brackpool is charged with the
overall responsibility for the performance of
Cadiz, as well as Sun World. Mr. Brackpool
is compensated pursuant to a written
employment agreement effective as of February
1, 1998 which includes, in addition to base
salary, an incentive bonus compensation
component. Historically, the Compensation
Committee has established bonus compensation
for Mr. Brackpool pursuant to criteria
established in his employment agreement and,
for Messrs. Shaheen and Speer, pursuant to a
compensation program for senior management
which provides for incentives based upon
meeting specific operating objectives. While
the Compensation Committee believes that
excellent progress continues to be made in
maximizing the long-term value of Cadiz'
assets and stockholder value, due to the difficult
industry down cycle affecting Sun World's farming
operations, the Compensation Committee and the
senior executives mutually agreed to forego
application of these specific criteria for
the year ended December 31, 2001 and no
performance-based bonuses would be granted
with respect to the year ended December 31, 2001.
LONG-TERM INCENTIVES. The primary form
of incentive compensation offered by Cadiz to
executives consists of long-term incentives
in the form of stock options or other stock
awards. This form of compensation is
intended to help retain executives and
motivate them to improve Cadiz' long-term
performance and hence long-term stock market
performance. Stock options and other stock
awards are granted at the prevailing market
value and will only have added value if
Cadiz' stock price increases.
The Compensation Committee views the
grant of stock awards as both a reward for
past performance and an incentive for future
performance. Stock options or other stock
awards granted by Cadiz may vest immediately
upon grant, with the passage of time, at the
discretion of the Board, and/or upon the
achievement of certain specific performance
goals. Where performance is not readily
measurable, the vesting of performance based
options or other stock awards may be
dependent upon the satisfaction of subjective
performance criteria.
Page 10
Options previously granted by Cadiz,
whether vesting immediately or contingently,
are exercisable for a period of five to seven
years from grant. The Compensation Committee
anticipates that options or stock awards will
continue to be granted in the future in order
to provide executives with additional long-
term incentives. Such options and stock
awards may be granted to executives pursuant
to the Cadiz 1996 Stock Option Plan or 2000
Stock Award Plan.
DEDUCTIBILITY OF CERTAIN EXECUTIVE
COMPENSATION EXPENSES UNDER FEDERAL TAX LAWS
The Compensation Committee has
considered the impact of provisions of the
Internal Revenue Code of 1986, specifically
Code Section 162(m). Section 162(m) limits
to $1 million Cadiz' deduction for
compensation paid to each executive officer
of Cadiz, which does not qualify as
"performance based".
While Cadiz expects that this provision
will not limit its tax deductions for
executive compensation in the near term, the
Cadiz 1996 Stock Option Plan ?enables Cadiz
to comply, to the extent deemed advisable,
with the requirements of Section 162(m) for
performance based compensation to insure that
Cadiz will be able to avail itself of all
deductions otherwise available with respect
to awards made under the 1996 Stock Option
Plan. However, any shares of stock issued to
executives under the Cadiz 2000 Stock Award
Plan will not qualify as performance-based
compensation and, therefore, will be counted
in determining whether the $1 million limit
has been reached.
CONCLUSION
Through the programs described above, a
very significant portion of Cadiz' executive
compensation is linked directly to corporate
performance. The Compensation Committee
intends to continue this policy of linking
executive compensation to corporate
performance in order to continue to align the
interest of executives with those of Cadiz'
stockholders.
THE COMPENSATION COMMITTEE
Murray H. Hutchison, Chairman
Dwight W. Makins
Mitt Parker
Page 11
REPORT OF THE AUDIT COMMITTEE
The following is the report of the Audit Committee with
respect to the audited financial statements of Cadiz Inc. and Sun
World International, Inc. for the fiscal year ended December 31,
2001.
The role of the Audit Committee is to
assist the Board of Directors in its
oversight of Cadiz' financial reporting
process. The Board of Directors, in its
business judgment, has determined that all
members of the Audit Committee are
"independent" as required by applicable
listing standards on the Nasdaq National
Stock Market. In fulfilling its
responsibilities under its charter during
2001, the Audit Committee reviewed and
discussed the audited financial statements
with management, which has primary
responsibility for the preparation,
presentation and integrity of the financial
statements, Cadiz' accounting and financial
reporting principles and internal controls
and procedures designed to assure compliance
with accounting standards and applicable laws
and regulations, and Cadiz' independent
accountants, PricewaterhouseCoopers LLP, who
are responsible for expressing an opinion on
the conformity of the audited financial
statements with generally accepted accounting
principles. The review included a discussion
of the quality and the acceptability of
Cadiz' financial reporting and controls,
including the clarity of disclosures in the
financial statements, as well as such other
matters required to be discussed under
generally accepted auditing standards
including Statement of Auditing Standards No.
61. The Audit Committee has also received
written disclosures and a letter from
PricewaterhouseCoopers LLP with respect to
services provided by the auditors, required
by Independence Standards Board, Standard No.
1, which relates to the accountant's
independence from Cadiz and its related
entities, has considered whether the
provision of non-audit services by the
independent auditors to Cadiz is compatible
with maintaining the auditor's independence,
and has discussed with PricewaterhouseCoopers
LLP their independence from Cadiz.
The Audit Committee reviewed with Cadiz'
independent accountants the overall scope and
plan for their audit for 2001. The Committee
also reviewed all fees paid to the
independent accountants. These fees are
described at the end of this report.
The members of the Audit Committee are
not professionally engaged in the practice of
auditing or accounting and are not experts in
the fields of accounting or auditing,
including in respect of auditor independence.
Members of the Audit Committee rely without
independent verification on the information
provided to them and on the representations
made by management and the independent
accountants. Accordingly, the Audit
Committee's oversight does not provide an
independent basis to determine that
management has maintained appropriate
accounting and financial reporting principles
or appropriate internal control and
procedures designed to assure compliance with
accounting standards and applicable laws and
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 Cadiz
specifically incorporates this report by reference, and shall not
otherwise be deemed filed under such acts.
Page 12
regulations. Furthermore, the Audit
Committee's consideration and discussions
referred to above do not assure that the
audit of Cadiz' financial statements has been
carried out in accordance with generally
accepted auditing standards, that the
financial statements are presented in
accordance with generally accepted accounting
principles or that Cadiz' auditors are in
fact "independent".
Based on the review and discussions referred
to above, the Audit Committee recommended to
Cadiz' Board of Directors that the audited
financial statements of Cadiz and Sun World
be included in Cadiz' Annual Report on Form
10-K for the fiscal year ended December 31,
2001 for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
Dwight Makins, Chairman
Anthony Coelho
Murray Hutchison
AUDIT AND NON-AUDIT FEES
The following table presents fees for professional audit
services rendered by PricewaterhouseCoopers LLP for the audit of
Cadiz' annual financial statements for 2001, and fees billed for
services rendered by PricewaterhouseCoopers LLP for 2001:
Audit Fees $ 162,750
Financial Information Systems
Design and Implementation -
All Other Fees 105,180
---------
Total $ 267,930
=========
Page 13
STOCK PRICE PERFORMANCE
The stock price performance graph below compares the
cumulative total return of Cadiz common stock against the
cumulative total return of the Nasdaq U.S. index and the Russell
2000(R) index for the past five fiscal years. The graph indicates
a measurement point of December 31, 1996 and assumes a $100
investment on such date in Cadiz common stock, the Nasdaq U.S.
and the Russell 2000(R) indices. With respect to the payment of
dividends, Cadiz has not paid any dividends on its common stock,
but the Nasdaq U.S. and the Russell 2000(R) indices assume that
all dividends were reinvested. The stock price performance graph
shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that Cadiz
specifically incorporates this graph by reference, and shall not
otherwise be deemed filed under such acts.
STOCK PERFORMANCE GRAPH
(Performance Graph appears here)
Company
and
Indices 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/00
------- -------- -------- -------- -------- -------- --------
CLCI Stock
Price 100.000 165.054 146.974 183.115 172.273 154.588
Nasdaq US
Index 100.000 122.477 172.680 320.832 192.977 153.121
Russell
2000(R) 100.000 120.521 116.367 139.199 133.347 134.718
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions required to be reported pursuant
to this section.
Page 14
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors is recommending the ratification of
its selection of PricewaterhouseCoopers LLP as Cadiz' independent
certified public accountants to audit the financial statements of
Cadiz for the 2002 fiscal year. Although ratification of the
choice of auditors is not required, the Board of Directors
believes such ratification to be in the best interests of Cadiz.
In the event such approval of stockholders is not received, the
Board will select another firm to audit Cadiz' financial
statements. PricewaterhouseCoopers LLP has advised Cadiz that
neither it nor any of its partners or associates has any direct
or indirect financial interest in or any connection with Cadiz
other than as accountants and auditors. A representative of
PricewaterhouseCoopers LLP is expected to be present and
available to answer appropriate questions at the annual meeting,
and will be given the opportunity to make a statement if desired.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSAL 2.
OTHER MATTERS
The Board of Directors does not know of any other matters
that may come before the annual meeting. However, if any other
matter shall properly come before the annual meeting, the proxy
holders named in the proxy accompanying this statement will have
discretionary authority to vote all proxies in accordance with
their best judgment.
STOCKHOLDER PROPOSALS
Any stockholder who wishes to present resolutions to be
included in the proxy statement for Cadiz' next annual meeting
(for the fiscal year ending December 31, 2002) must file such
resolutions with Cadiz no later than December 6, 2002.
ADDITIONAL INFORMATION
This proxy statement is accompanied by Cadiz' Annual Report
on Form 10-K for the year ended December 31, 2001. Exhibits to
the Form 10-K will be made available to stockholders for a
reasonable charge upon their written request to Cadiz, Attention:
Corporate Communications, 100 Wilshire Boulevard, Suite 1600,
Santa Monica, California 90401.
By Order of the Board of Directors
Santa Monica, California
April 5, 2002
Page 15