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 INC.
(Name of Registrant as Specified in Its Charter)
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Payment of Filing Fee (check the appropriate box):
Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)
(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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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.
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on March 12, 2003
To our Stockholders:
A Special Meeting of Stockholders of Cadiz Inc., a Delaware
corporation, will be held at the law offices of Miller & Holguin,
located at 1801 Century Park East, Seventh Floor, Los Angeles,
California, on Wednesday, March 12, 2003, at 9:00 a.m., local
time, and any adjournments thereof, to consider and act upon the
following matters:
(1) Approval of an amendment to our Certificate of Incorporation
to effect a reverse stock split of not less than 1 for 4 and
not more than 1 for 25 and to authorize the Board of
Directors to determine which, if any, of these reverse stock
splits to effect.
(2) The transaction of such other business as may properly come
before the meeting and any adjournments thereof.
The accompanying proxy statement contains a more complete
description of these proposals.
Only stockholders of record at the close of business on February
10, 2003 are entitled to notice of and to vote at the meeting.
In order to constitute a quorum for the conduct of business at
the meeting, holders of a majority of all outstanding voting
shares of our common stock and preferred stock must be present in
person or be represented by proxy.
Whether or not you expect to attend the 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
February ___, 2003
CADIZ INC.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
PROXY STATEMENT
for
SPECIAL MEETING OF STOCKHOLDERS
To Be Held on March 12, 2003
INFORMATION ABOUT SOLICITATION AND VOTING
The Board of Directors of Cadiz Inc. is soliciting proxies to
be voted at the special meeting of our stockholders to be held on
Wednesday, March 12, 2003, at the time and place and for the
purposes set forth in the accompanying Notice of Special Meeting
of Stockholders. This proxy statement contains information that
may help you decide how to vote. These proxy materials were
mailed on or about __________, 2003 to all stockholders of
record.
Please read this proxy statement carefully. You can obtain
more information about Cadiz from the annual and quarterly
reports and other public documents we file with the Securities
and Exchange Commission.
RECORD DATE, VOTING SECURITIES AND QUORUM
The board of directors has fixed the close of business on
Feburary 10, 2003 as the record date for determination of
stockholders entitled to notice of, and to vote at, the meeting.
On the record date, [36,442,180] shares of our common stock
were outstanding and 12,500 shares of our convertible preferred
stock were outstanding. Holders of common stock are entitled to
one vote per share. Holders of preferred stock are entitled to
that number of votes equal to the number of shares of common
stock issuable upon conversion of the preferred stock at the time
the shares are voted, which is approximately 190.4762 votes for
each share of preferred stock. Only stockholders of record at
the close of business on the record date will be entitled to
vote.
The proposal to approve a reverse stock split requires the
affirmative vote of holders of a majority of all voting shares
outstanding on the record date for the meeting. If you do not
vote, or if you vote to abstain, you will in effect be voting
against the proposal. If you complete, sign, and date the
enclosed proxy and return it before the meeting, the persons
named will vote your shares as you specify in the proxy. If you
sign, date, and return your proxy but do not indicate how you
wish your shares voted, they will be voted for the proposal. If
you do not return a signed proxy, then your shares will not be
voted unless you attend the meeting and vote in person.
To have a quorum, holders of a majority of all shares of voting
stock outstanding on the record date must be present at the
meeting, either in person or by proxy. Abstentions and "broker
non-votes" - shares held by brokerage firms for their clients as
to which the firms have not received voting instructions from
their clients and therefore do not have the authority to vote -
will be counted for purposes of determining a quorum, but will
have the same effect as a vote against the proposal to approve a
reverse stock split.
REVOCABILITY OF PROXIES
You may revoke a proxy any time before the voting begins in any
of the following ways:
* By giving written notice to our corporate secretary;
* By signing and delivering a later dated proxy; or
* By attending and voting in person at the meeting.
COST OF SOLICITATION
We are paying the expenses of this solicitation. If requested,
we will also reimburse brokerage houses and other custodians,
nominees, and fiduciaries for their reasonable expenses in
sending proxy material to principals and obtaining their
instructions. In addition to solicitation by mail, our directors,
officers, and employees may solicit proxies, without extra
compensation, in person or by telephone, fax, e-mail, or similar
means.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth, as of the record date for the
special meeting, the beneficial ownership of Cadiz voting
securities, including our class of common stock and our class of
preferred stock, by each stockholder who we know to own
beneficially more than five percent of each class, and by each
director, each named executive officer and all directors and
executive officers as a group. All persons named have sole
voting power and investment power over their shares except as
otherwise noted.
CLASS OF COMMON STOCK
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
-------------------------- -------------------- ----------
Middenbank Curacao, N.V. 3,811,864(1) 10.46%
1325 Avenue of the Americas
New York, NY 10019
Jupiter Asset Managment Ltd. 3,810,937(2) 10.46%
1 Grosvernor Place
London, SW1X 7JJ
England
Fidelity International 3,715,367(3) 10.20%
Limited, et al.
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
Morgan Stanley 2,712,653(4) 7.44%
1585 Broadway
New York, NY 10036
OZ Management, L.L.C. 2,520,951(5) 6.47%
OZF Management, L.P.
9 West 57th Street,
39th Floor
New York, NY 10019
Capital Research and 2,300,000(6) 6.31%
Management Company
333 South Hope Street
Los Angeles, CA 90071
Keith Brackpool 998,682(7) 2.74%
c/o 100 Wilshire Boulevard,
Suite 1600
Santa Monica, CA 90401
Timothy J. Shaheen 302,854(8) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Dwight Makins 272,882(9) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Anthony L. Coelho 62,250(10) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Murray Hutchison 62,250(11) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Phillip R. Burnaman 10,600(12) *
c/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
Stanley E. Speer 239,552(13) *
C/o 100 Wilshire Blvd.,
Suite 1600
Santa Monica, CA 90401
All directors and officers as 1,949,070(7)(8)(9)
a group (10)(11)(12)(13) 5.35%
(seven individuals)
-----------------------
* Represents less than one percent of the outstanding shares of
common stock of Cadiz as of February 10, 2003.
CLASS OF PREFERRED STOCK
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
------------------------- -------------------- ---------
OZ Management, L.L.C. 12,500(14) 100%
OZF Management, L.P.
9 West 57th Street,
39th Floor
New York, NY 10019
All directors and officers as -0- 0%
a group
(seven individuals)
___________________________
(1) Based upon a Schedule 13G filed by Middenbank Curacao, N.V.
and certain of its affiliates with the SEC on May 1, 2002,
Middenbank beneficially owns 3,811,864 securites of Cadiz.
These securities include 1,386,864 shares of common stock
and 2,425,000 vested warrants to purchase share of common
stock and the common stock underlying the warrants. The
principal offices of Middenbank are located at 1325 Avenue
of the Americas, New York, New York.
(2) Based on a Schedule 13G filed with the SEC, Jupiter Asset
Managment Limited ("Jupiter") provides investment advisory
and management services and holds these securities in such
accounts for the economic benefit of the beneficiaries of
those accounts. Of the total shares held, Jupiter has sole
voting and dispositive power over 3,566,937 shares of common
stock and shared voting and dispositive power over 244,000
shares of common stock. The Schedule 13G states that it
should not be construed as an admission that Jupiter is
a beneficial owner of any securities covered by the statement.
(3) Based upon a Schedule 13F-HR filed with the SEC on November
14, 2002 and information obtained from Fidelity
International Limited, FMR Corp., on behalf of its direct
and indirect subsidiary FMR Co. and Fidelity International
Limited, on behalf of its direct and indirect subsidiaries
(together "Fidelity"), as investment adviser to a number of
non-.U.S. investment companies or investment trusts and
certain institutional investors, beneficially owns 3,715,367
shares of common stock of Cadiz and has sole voting and
dispositive power as to 3,570,167 shares. The principal
office of Fidelity is located at 82 Devonshire Street,
Boston, Massachusetts.
(4) Based upon a Schedule 13F-HR filed by Morgan Stanley with
the SEC on November 14, 2002, Morgan Stanley beneficially
owns 2,712,653 shares of common stock of Cadiz with sole
voting and dispositive power as to all such shares. The
reported principal office of Morgan Stanley is 1585
Broadway, New York, New York, 10036.
(5) Based upon Cadiz corporate records, OZ Management, L.L.C.
beneficially owns 1,902,857 shares of common stock, including
1,809,523 shares underlying convertible preferred stock and
93,334 shares underlying presently excercisable warrants, with
sole voting and dispositive power as to all such shares. OZF
Management, L.P. beneficially owns 618,094 shares of common
stock, including 571,428 shares underlying convertible preferred
stock and 46,666 shares underlying presently convertible warrants,
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.
(6) Based upon a Schedule 13F-HR filed with the SEC on November
14, 2002 and information obtained from Capital Research and
Management Company, Capital Research indicated that 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, a registered investment
adviser. The principal offices of Capital Research and
SMALLCAP are located at 333 South Hope Street, Los Angeles,
California 90071. 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
adviser. SMALLCAP has sole voting power over the shares and
Capital Research has sole dispositive power over the shares.
(7) Includes 500,000 shares underlying presently exercisable
options, 50,000 shares owned by a foundation of which Mr.
Brackpool is a trustee, but in which Mr. Brackpool has no
economic interest, 50,000 shares owned by his spouse 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 the 50,000 shares owned by the
foundation. Does not include 55,789 deferred stock units
that are not yet vested.
(8) 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.
(9) Includes 37,250 shares underlying presently exercisable
options.
(10) Includes 62,250 shares underlying presently exercisable
options.
(11) Includes 37,250 shares underlying presently exercisable
options.
(12) Includes 1,200 shares owned by Mr. Burnaman's children in
a Uniform Trust for Minors Account for which his wife is
trustee. Mr. Burnaman disclaims any beneficial ownership of
the 1,200 shares.
(13) 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.
(14) OZ Management, L.L.C. beneficially owns 4,500 shares of
Series D preferred stock, 2,500 shares of Series E-1
preferred stock, and 2,500 shares of Series E-2 preferred
stock, with sole voting and dispositive power as to all such
shares. OZF Management, L.P. beneficially owns 500 shares
of Series D preferred stock, 1,250 shares of Series E-1
preferred stock, and 1,250 shares of Series E-2 preferred
stock, with sole voting and dispositive power as to all
such shares.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO EFFECT REVERSE SPLIT OF COMMON STOCK
INTRODUCTION
The Board of Directors has determined that it is in the best
interests of Cadiz and its stockholders to approve an amendment
to Article FOURTH of our Certificate of Incorporation to effect a
reverse stock split of the outstanding common stock of not less
than 1 for 4 and not more than 1 for 25, with the Board of
Directors having the authority to determine which, if any, of
these reverse stock splits to effect. The Board of Directors
approved the reverse stock split as a means of increasing the
share price of our common stock above a minimum bid price of
$3.00 per share as required for continued listing on The Nasdaq
National Market. The minimum bid price is measured by the closing
bid for the common stock.
The proposed reverse stock split will reduce the number of
issued and outstanding shares of our common stock as described
below in "Implementation and Effects of Reverse Stock Split".
However, the proposed reverse stock split will not change the
number of authorized shares of common stock or preferred stock,
the number of treasury shares held by Cadiz, or the par value of
our common stock or preferred stock.
The text of the proposed amendment is attached to this proxy
statement as Annex A.
MAINTENANCE OF NASDAQ LISTING
In a letter dated December 16, 2002, the staff of Nasdaq
notified us that Cadiz is no longer in compliance with the
maintenance standards for continued listing on Nasdaq. Under one
of Nasdaq's maintenance standards, Cadiz does not satisfy the
requirement to maintain stockholders equity of at least $10
million or the requirement to maintain a common stock bid price
of at least $1.00 per share. Under an alternative maintenance
standard, Cadiz does not satisfy the requirement to maintain a
common stock bid price of at least $3.00 per share. The closing
price per share of our common stock has been under $3.00 since
October 1, 2002 and under $1.00 since November 18, 2002. The
closing price per share was $[0.35] on the record date for the
special meeting.
Nasdaq requested Cadiz to submit a plan for bringing the
company into compliance with the maintenance standards so as to
avoid delisting. After consideration, the Board of Directors
determined that the best plan for bringing Cadiz into compliance
with Nasdaq's maintenance standards is to seek to increase the
bid price of our common stock above $3.00 by amending our
Certificate of Incorporation to effect a reverse stock split of
our common stock. Such an amendment would require the approval
of a majority of the shares of our outstanding voting stock,
which is why the Board of Directors has called the special
meeting.
The Board of Directors believes that the reverse stock split is
the most effective means to avoid a delisting of our common stock
from Nasdaq. If we were removed from Nasdaq, the ability or
willingness of broker-dealers to sell or make a market in our
common stock might decline. As a result, your ability to sell
your shares of our common stock could be adversely affected. If
the stockholders do not approve this reverse stock split proposal
and the stock price does not otherwise increase to greater than
Nasdaq's minimum bid price requirement, we expect our common
stock to be delisted from Nasdaq.
RANGE OF REVERSE STOCK SPLITS
Because it is difficult to predict market conditions at the
time the reverse stock split may be effected, we do not know the
appropriate reverse stock split ratio that may be necessary to
accomplish our goals related to the reverse stock split.
Therefore, we believe it would be in the best interests of the
stockholders if the Board of Directors had the flexibility to
determine the appropriate reverse stock split ratio immediately
prior to effecting the reverse stock split. In making this
determination, the Board of Directors may consider various
factors, including prevailing market conditions and trading
prices of our common stock on Nasdaq, and the steps we would need
to take to achieve compliance with the minimum bid price
requirement and other listing regulations of Nasdaq (see "Nasdaq
Listing" and "Risks Associated with the Reverse Stock Split"). A
significant factor for consideration will be the trading price of
our common stock on the days leading up to the date of the
reverse stock split. Based on the price of our common stock at
that time, the Board of Directors would select the authorized
stock split that it believes is sufficient to increase our
trading price to within a range of approximately $4.00 to $6.00
per share, assuming Cadiz must maintain its closing bid stock
price above $3.00 to stay listed on Nasdaq.
Accordingly, the Board is asking that the stockholders approve
a range of reverse stock splits of not less than 1 for 4 and not
more than 1 for 25 and authorize the Board of Directors to
determine which of the reverse stock splits, if any, in the
specified range to implement. A vote in favor of this proposal
will be a vote for approval of each of the reverse stock split
ratios in the specified range, and for the granting of authority
to the Board of Directors to effectuate one of the reverse stock
splits as the Board of Directors deems advisable at the time the
reverse stock split is to be effected. Stockholder approval of
this proposal also gives the Board of Directors the discretion to
abandon the reverse stock split if it deems it to be in the best
interests of Cadiz.
RISKS ASSOCIATED WITH THE REVERSE STOCK SPLIT
We cannot predict whether the reverse stock split will increase
the market price for our common stock. The history of similar
stock split combinations for companies in like circumstances is
varied. There is no assurance that:
* the market price per new share of our common stock after the
reverse stock split, or "New Shares", will rise in
proportion to the reduction in the number of old shares of
our common stock outstanding before the reverse stock split,
or "Old Shares"; or
* the market price per New Share will either exceed or remain
in excess of the minimum bid price as required by Nasdaq or
that we will otherwise meet the requirements of Nasdaq for
continued inclusion for trading on Nasdaq.
The market price of our common stock will also be based on our
performance and other factors, some of which are unrelated to the
number of shares outstanding. If the reverse stock split is
effected and the market price of our common stock declines, the
percentage decline as an absolute number and as a percentage of
our overall market capitalization may be greater than would occur
in the absence of a reverse stock split. Furthermore, the reduced
number of shares that would be outstanding after the reverse
stock split will likely significantly reduce the trading volume
of our common stock and could otherwise adversely affect the
liquidity of our common stock.
It is also important to note that even if we are able to meet
the minimum bid price requirement after the reverse stock split,
Cadiz will still have to meet the other standards applicable to
Cadiz required for continued listing on Nasdaq including:
* either (a) a market capitalization of $50 million or (b)
total assets and total revenue of $50 million each for the
most recently completed fiscal year or two of the last three
most recently completed fiscal years;
* at least 1,100,000 shares publicly held;
* a $15 million market value of shares not held directly or
indirectly by any officer or director of Cadiz, or by any
person who is the beneficial owner of more than 10 percent
of the total shares outstanding;
* at least 400 stockholders each holding 100 or more shares;
and
* at least four registered and active market makers.
If Cadiz fails to meet any of these requirements for continued
listing on Nasdaq, even if we meet the minimum bid price
requirement subsequent to the approval of this reverse stock
split proposal, Cadiz may still be subject to delisting.
IMPLEMENTATION AND EFFECTS OF THE REVERSE STOCK SPLIT
GENERAL. The Board of Directors will be authorized to effect a
reverse stock split and to select the reverse stock split ratio,
from within the approved range, as deemed appropriate by the
Board of Directors considering market and other relevant
conditions and the trading price of our common stock at that
time. Depending on the reverse stock split ratio selected by the
Board of Directors, at the time the reverse stock split is
effected, every four to 25 shares of the common stock outstanding
will automatically be combined and converted into one share of
common stock. For example, if the Board of Directors selected a
1 for 4 reverse stock split, every four shares of the common stock
outstanding will be combined and converted into one share of
common stock.
The reverse stock split will become effective upon the filing
of an amendment to our Certificate of Incorporation with the
Secretary of State of Delaware, referred to as the "effective
time". Beginning at the effective time, each certificate
representing Old Shares will be deemed for all corporate purposes
to evidence ownership of New Shares.
The reverse stock split will not affect the number of shares of
common stock that the Board of Directors is authorized to issue
pursuant to our Certificate of Incorporation. However, it will
have the effect of increasing the number of shares of common
stock available for future issuance because of the reduction in
the number of shares that will be outstanding after giving effect
to the reverse stock split.
The following table reflects for various reverse stock split
ratios the approximate number of shares of common stock that will
be outstanding and available for issuance following the reverse
stock split. The approximate number of shares outstanding after
giving effect to the reverse stock split is based on [36,442,180]
shares of common stock outstanding as of February 10, 2003. The
approximate number of shares that would be available for issuance
following the reverse stock split is based on 70,000,000 shares
of common stock authorized for issuance under our Certificate of
Incorporation as of February 10, 2003.
Proposed Reverse Shares Outstanding Authorized Shares
Stock Split Ratio After Giving Available for
Effect to the Issuance
Reverse Stock Split
------------------- ------------------- ----------------
1 for 4 9,110,545 60,889,455
1 for 5 7,288,436 62,711,564
1 for 6 6,073,696 63,926,304
1 for 7 5,206,025 64,793,975
1 for 8 4,555,272 65,444,728
1 for 9 4,049,131 65,950,869
1 for 10 3,644,218 66,355,782
1 for 11 3,312,925 66,687,075
1 for 12 3,036,848 66,963,152
1 for 13 2,803,244 67,196,756
1 for 14 2,603,012 67,396,988
1 for 15 2,429,478 67,570,522
1 for 16 2,277,636 67,722,364
1 for 17 2,143,657 67,856,343
1 for 18 2,024,565 67,975,435
1 for 19 1,918,009 68,081,991
1 for 20 1,822,109 68,177,891
1 for 21 1,735,341 68,264,659
1 for 22 1,656,462 68,343,538
1 for 23 1,584,442 68,415,558
1 for 24 1,518,424 68,481,576
1 for 25 1,457,687 68,542,313
The reverse stock split would also have the following effects:
* all outstanding options and warrants entitling the holders
thereof to purchase shares of our common stock will enable
such holders to purchase, upon exercise of their options or
warrants, a fraction (for instance, in the case of a 1 for 4
reverse stock split, 1/4) of the number of shares of our
common stock that such holders would have been able to
purchase upon exercise of their options or warrants
immediately preceding the reverse stock split at an exercise
price equal to some multiple (for instance, in the case of a
1 for 4 reverse stock split, 4) times the exercise price
specified before the reverse stock split, resulting in
approximately the same aggregate price being required to be
paid upon exercise thereof immediately preceding the reverse
stock split;
* the number of shares reserved for issuance under our
existing stock option plans and employee stock purchase
plans will be reduced by a fraction (for instance, in the
case of a 1 for 4 reverse stock split, 1/4) of the number of
shares currently included in such plans;
* the conversion ratio of our preferred stock will be adjusted
so that holders will be entitled to receive that number of
shares of common stock which the holders would have owned
immediately after the reverse stock split if the shares of
preferred stock had been converted immediately before the
reverse stock split; and
* the number of rights associated with each share of our
common stock under our Stockholder Rights Plan will be
increased in proportion to the decrease in the number of
shares of common stock outstanding as a result of the
reverse stock split.
The reverse stock split will be effected simultaneously, and
the exchange number will be the same, for all of our outstanding
common stock. The reverse stock split will affect all of our
stockholders uniformly and will not affect any stockholder's
percentage ownership interests in Cadiz, except to the extent
that the reverse stock split results in any of our stockholders
owning a fractional share. As described below, stockholders
holding fractional shares will be entitled to cash payments in
lieu of such fractional shares. Such cash payments will reduce
the number of post-split stockholders to the extent there are
stockholders presently holding fewer than the number of shares to
be converted into one share as a result of the reverse stock
split. This, however, is not the purpose for which we are
effecting the reverse stock split. Common stock issued pursuant
to the reverse stock split will remain fully paid and non-
assessable. We will continue to be subject to the periodic
reporting requirements of the Securities Exchange Act of 1934, as
amended.
Upon stockholder approval, the Board of Directors will be
authorized, but not required, to proceed with the reverse stock
split. If our common stock closes at a bid price equal to or
greater than Nasdaq's minimum bid price requirement for ten
consecutive business days prior to the special meeting, the Board
of Directors may delay its decision to execute the reverse stock
split indefinitely.
FRACTIONAL SHARES. No certificates for fractional shares will
be issued in connection with the reverse stock split.
Stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of Old Shares not
evenly divisible by the number of shares to be converted into one
share as a result of the reverse stock split will be entitled,
upon surrender of certificate(s) representing such shares, to a
cash payment in lieu thereof. The cash payment will equal the
fraction to which the stockholder would otherwise be entitled
multiplied by the average of the closing bid and closing asked
prices (as adjusted to reflect the reverse stock split) of our
common stock, as last reported on the Nasdaq National Market,
immediately prior to the effective time. The ownership of a
fractional interest will not give the holder thereof any voting,
dividend or other rights except to receive payments as
described herein.
The funds required to purchase the fractional share interests
are available and will be paid from our current cash reserves.
Our stockholder list shows that some of the outstanding common
stock is registered in the names of clearing agencies and broker
nominees. Since we do not know the numbers of shares held by each
beneficial owner for whom the clearing agencies and broker
nominees are record holders, we cannot predict with certainty the
number of fractional shares that will result from the reverse
split or the total amount we will be required to pay for
fractional share interests. However, we do not expect that amount
will be material.
You will not have to pay any service charges in connection with
the exchange of your certificates or the payment of cash in lieu
of fractional shares.
You should be aware that, under the escheat laws of the various
jurisdictions where stockholders reside, where Cadiz is
domiciled, and where the funds will be deposited, sums due for
fractional interests that are not timely claimed after the
effective time may be required to be paid to the designated agent
for each such jurisdiction. Thereafter, stockholders otherwise
entitled to receive such funds may have to obtain them directly
from the state to which they were paid.
ACCOUNTING MATTERS. The reverse stock split will not affect
the par value of our common stock. As a result, as of the
effective time, the stated capital on our balance sheet
attributable to our common stock will be reduced by a fraction
(for instance, in the case of a 1 for 4 reverse stock split, 1/4)
of its present amount, and the additional paid-in capital account
shall be credited with the amount by which the stated capital is
reduced. The per share net income or loss and net book value of
our common stock will be increased because there will be fewer
shares of our common stock outstanding.
POTENTIAL ANTI-TAKEOVER EFFECT. Although the increased
proportion of unissued authorized shares to issued shares could,
under certain circumstances, have an anti-takeover effect (for
example, by permitting issuances that would dilute the stock
ownership of a person seeking to effect a change in the
composition of our Board of Directors or contemplating a tender
offer or other transaction for the combination of Cadiz with
another company), the reverse stock split proposal is not being
proposed in response to any effort of which we are aware to
accumulate our shares of common stock or obtain control of us,
nor is it part of a plan by management to recommend a series of
similar amendments to our Board of Directors and stockholders.
Other than the proposals in this proxy statement, our Board of
Directors does not currently contemplate recommending the
adoption of any other amendments to our Certificate of
Incorporation that could be construed to affect the ability of
third parties to take over or change control of Cadiz.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the Effective Time, stockholders
will be notified that the reverse stock split has been effected.
We expect that our transfer agent, Continental Stock Transfer &
Trust Company will act as exchange agent for purposes of
implementing the exchange of stock certificates. Holders of Old
Shares will be asked to surrender to the exchange agent
certificates representing Old Shares in exchange for certificates
representing New Shares in accordance with the procedures to be
set forth in the letter of transmittal that will be sent to you.
No new certificates will be issued to any stockholder until that
stockholder has surrendered its outstanding certificate(s),
together with the properly completed and executed letter of
transmittal, to the exchange agent. Any Old Shares submitted for
transfer, whether pursuant to a sale, other dispositions or
otherwise, will automatically be exchanged for New Shares.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD
NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO DO SO.
BOARD OF DIRECTORS' DISCRETION
Even if the stockholders approve the reverse stock split, Cadiz
reserves the right not to effect the reverse stock split if in
the Board of Directors' opinion it would not be in the best
interests of Cadiz and its stockholders to effect such a
reverse stock split.
NO DISSENTERS' RIGHTS
Under Delaware law, our stockholders are not entitled to
dissenters' rights with respect to the reverse stock split, and
we will not independently provide stockholders with any such
rights.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The following summary of material federal income tax
consequences of the reverse stock split does not purport to be a
complete discussion of all of the possible federal income tax
consequences of the reverse stock split and is included for
general information only. Further, this summary does not address
any state, local or foreign income or other tax consequences. For
example, the state and local tax consequences of the reverse
stock split may vary significantly as to each stockholder,
depending upon the state in which such stockholder resides. Also,
this summary does not address the tax consequences to holders
that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding
companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. The summary is based on
the provisions of the United States federal income tax law as of
the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the Old Shares
were, and the New Shares will be, held as "capital assets," as
defined in the Internal Revenue Code of 1986, as amended
(generally, property held for investment). The tax treatment of a
stockholder may vary depending upon the particular facts and
circumstances of such stockholder. Each stockholder is urged to
consult with his or her own tax adviser with respect to the tax
consequences of the reverse stock split.
Other than with respect to any cash received instead of a
fractional share of Cadiz common stock, no gain or loss should be
recognized by a stockholder upon such stockholder's exchange of
Old Shares for New Shares pursuant to the reverse stock split.
The aggregate tax basis of the New Shares received in the reverse
stock split will be the same as the stockholder's aggregate tax
basis in the Old Shares exchanged therefore, reduced by the basis
attributable to any fractional share for which cash is received.
In general, a stockholder who receives cash instead of a
fractional share of Cadiz common stock as a result of the reverse
stock split will be treated as if such fractional share was
received and then redeemed by Cadiz. The stockholder will
recognize capital gain or loss based on the difference between
the adjusted basis in the fractional share redeemed and the
amount of cash received. The federal income tax liability, if
any, generated by the receipt of cash in lieu of a fractional
share should not be material in amount in view of the low value
of the fractional share. The stockholder's holding period for the
New Shares will include the period during which the stockholder
held the Old Shares surrendered in the reverse stock split.
Our view regarding the tax consequences of the reverse stock
split is not binding on the Internal Revenue Service or the
courts. Accordingly, each stockholder should consult with his or
her own tax adviser with respect to all of the potential tax
consequences of the reverse stock split.
REQUIRED VOTE AND BOARD OF DIRECTORS' RECOMMENDATION
The affirmative vote of a majority of all outstanding voting
shares of Cadiz entitled to vote at the special meeting is
required for approval of the reverse stock split and the
amendment to our Certificate of Incorporation. Abstentions and
broker non-votes will have the same effect as a vote against the
proposal.
The Board of Directors unanimously recommends a vote "FOR"
approval of the reverse stock split proposal and the amendment to
our Certificate of Incorporation.
OTHER MATTERS
We do not intend to bring any matters before the special
meeting other than approval of the reverse split amendment to our
certificate of incorporation, and we know of no other matters to
be brought before the meeting by others. If any other matters
properly come before the special meeting, the persons named in
the accompanying proxy will have authority to vote on them in
their discretion.
STOCKHOLDER PROPOSALS
Any stockholder wishing to present resolutions to be included
in the proxy statement for our next annual meeting of
stockholders for the fiscal year ended December 31, 2002 was
required to file such resolutions with Cadiz on or before
December 6, 2002.
By Order of the Board of Directors
Santa Monica, California
February ___, 2003
ANNEX A
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
CADIZ INC.
Adopted in accordance with the provisions
of Section 242 of the General Corporation Law
of the State of Delaware
Cadiz Inc. (the "Corporation"), a corporation organized and
existing by virtue of the General Corporation Law of the State of
Delaware, as amended (the "Delaware GCL"), by its duly authorized
officers, hereby certifies as follows:
FIRST: That the Board of Directors of the Corporation has
duly adopted a resolution authorizing the Corporation to
reclassify and change each_____ (_) outstanding shares of the
Corporation's Common Stock, par value one cent ($0.01) per share,
into one (1) share of Common Stock, par value one cent ($0.01)
per share.
SECOND: That, pursuant to authorization by the affirmative
vote, in accordance with the provisions of the Delaware GCL, of
the holders of a majority of the outstanding voting shares of
Common Stock and Preferred Stock of the Corporation entitled to
vote thereon at a special meeting of stockholders of the
Corporation held on March 12, 2003, the Certificate of
Incorporation of the Corporation be amended by adding a new
paragraph to Article FOURTH to read as follows:
"C. Each _____shares of the Common Stock, par value
one cent ($0.01) per share, of the Corporation issued and
outstanding or held in treasury as of 12:01 a.m. Los Angeles
time on ________, 2003 (the "Effective Time") shall be
reclassified as and changed into one (1) share of Common
Stock, par value one cent ($0.01) per share, of the
Corporation, without any action by the holders thereof.
Each stockholder who, immediately prior to the Effective
Time, owns a number of shares of Common Stock which is not
evenly divisible by ______ shall, with respect to such
fractional interest, be entitled to receive from the
Corporation cash in an amount equal to such fractional
interest multiplied by the average of the closing bid and
closing asked prices (as adjusted to reflect the reverse
stock split) of the Common Stock as last reported on
The Nasdaq National Market immediately prior to the
Effective Time."
THIRD: That the amendment to the Corporation's Certificate
of Incorporation set forth herein has been duly adopted in
accordance with the provisions of Section 242 of the Delaware
GCL.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be executed on its behalf by Keith Brackpool, its
Chairman and Chief Executive Officer, on this ___ day of _______,
2003.
By:______________________________
Keith Brackpool
Chief Executive Officer
ATTEST:
By: _______________________________
Jennifer Hankes Painter
Secretary
*******************************
PROXY CARD
CADIZ INC.
100 Wilshire Boulevard, Suite 1600, Santa Monica, California
90401
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF CADIZ INC.
The undersigned, as owner of shares of common stock or
preferred stock of Cadiz Inc., a Delaware corporation, hereby
acknowledges receipt of the proxy statement and the notice of the
special meeting of stockholders to be held on March 12, 2003 at
9:00 a.m. local time, at the law offices of Miller & Holguin
located at 1801 Century Park East, 7th Floor, Los Angeles,
California, and hereby further revokes all previous proxies and
appoints Keith Brackpool and/or Stanley E. Speer as proxy of the
undersigned at said meeting and any adjournments thereof with the
same effect as if the undersigned were present and voting the
shares.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE
INDICATED ON THE REVERSE SIDE. IF NO INDICATION HAS BEEN MADE,
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
PROPOSAL TO EFFECT A REVERSE STOCK SPLIT AND IN FAVOR OF SUCH
PROPOSALS AND AS SAID PROXY DEEMS ADVISABLE ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
- REVERSE -
PROXY BY MAIL
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
PLEASE MAKE YOUR VOTES LIKE THIS [X]
(1) Approval of an amendment to the Certificate of Incorporation
to effect a reverse stock split of not less than 1 for 4 and not
more than 1 for 25 and to authorize the Board of Directors to
determine which, if any, of these reverse stock splits to effect.
/ / FOR / / AGAINST / / ABSTAIN
(2) The transaction of such other business as may properly come
before the meeting and any adjournments thereof.
Signature_________________Signature_________________Date_________
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.