SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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)
N/A
------------------------------------------------------
Name of Person(s) Filing Proxy Statement, if other than the Registrant
Payment of Filing Fee (check the appropriate box):
[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:
--------------------------------------------------------
(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):
--------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
---------------------------------------------------------
[ ] 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.
(1) Amount Previously Paid:
------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------
****************************
CADIZ INC.
-------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 21 , 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 Thursday, August 21 , 2003, at 10:30 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 10
and not more than 1 for 50 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 July
14 , 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 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
Los Angeles, California
July 22 , 2003
CADIZ INC.
777 S. Figueroa Street, Suite 4250
Los Angeles, California 90017
PROXY STATEMENT
For
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 21 , 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 Thursday, August 21 , 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 July 22 , 2003 to all stockholders of record.
Please read this proxy statement carefully. You can obtain
more information about Cadiz from press releases available on our
website at www.cadizinc.com and the annual, quarterly and
periodic reports and other public documents we have filed with
the SEC. Cadiz has not filed its annual or quarterly reports
since the filing of a Form 10Q for the third quarter of 2002.
RECORD DATE, VOTING SECURITIES AND QUORUM
The Board of Directors has fixed the close of business on
July 14 , 2003 as the record date for determination of
stockholders entitled to notice of, and to vote at, the meeting.
On the record date, 57,016,939 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 318.47 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, or submit your vote by phone,
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.
Page 1
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth the beneficial ownership of
Cadiz voting securities , as of the record date for the special
meeting unless otherwise stated , 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
---------------- -------------------- --------
Fidelity International 5,070,167(1) 8.89%
Limited, et al.
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
OZ Management, L.L.C. 4,445,892(2) 7.80%
OZF Management, L.P.
9 West 57th Street,
39th Floor
New York, NY 10019
Jupiter Asset Management Ltd. 3,810,937(3) 6.68%
1 Grosvernor Place
London, SW1X 7JJ
England
ING Groep N.V. 3,736,864(4) 6.55%
ING Capital LLC
1325 Avenue of the Americas
New York, NY 10019
Keith Brackpool 1,674,464(5) 2.94%
c/o 777 S. Figueroa St.,
Suite 4250
Los Angeles, CA 90017
Timothy J. Shaheen 324,673(6) *
c/o 777 S. Figueroa St.,
Suite 4250
Los Angeles, CA 90017
Dwight Makins 272,882(7) *
c/o 777 S. Figueroa St.,
Suite 4250
Los Angeles, CA 90017
Anthony L. Coelho 62,250(8) *
c/o 777 S. Figueroa St.,
Suite 4250
Los Angeles, CA 90017
Murray Hutchison 62,250(9) *
c/o 777 S. Figueroa St.,
Suite 4250
Los Angeles, CA 90017
All directors and officers as 2,396,519(5)(6)(7) 4.20%
a group (8)(9)
(five individuals)
-----------------------------------------------------------------
* Represents less than one percent of the outstanding shares of
common stock of Cadiz as of July 14 , 2003.
Page 2
CLASS OF PREFERRED STOCK
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
OZ Management, L.L.C. 12,500(10) 100%
OZF Management, L.P.
9 West 57th Street,
39th Floor
New York, NY 10019
All directors and officers as -0- 0%
a group
( five individuals)
------------------------------
(1) Based upon a Schedule 13F-G/A filed with the SEC on
February 13, 2003, information obtained from Fidelity
International Limited and Cadiz corporate records, 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 5,070,167 shares of common
stock of Cadiz and has sole voting and dispositive power as
to the shares. The principal office of Fidelity is located
at 82 Devonshire Street, Boston, Massachusetts.
(2) Based upon Cadiz corporate records, OZ Management, L.L.C.
beneficially owns 3,411,312 shares of common stock,
including 3,025,478 shares underlying convertible preferred
stock and 385,834 shares underlying presently exercisable
warrants with sole voting and dispositive power as to all
such shares. OZF Management, L.P. beneficially owns
1,034,580 shares of common stock, including 955,414
shares underlying convertible preferred stock and 79,166
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.
(3) Based on a Schedule 13G/A filed with the SEC on January 29,
2003, Jupiter Asset Management Limited 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 Asset Management Limited 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 Asset Management
Limited is a beneficial owner of any securities covered by
the statement.
(4) Based upon a Schedule 13D filed with the SEC on February 14,
2003 and Cadiz corporate records, ING Groep N.V. and its
indirectly owned subsidiary, ING Capital LLC, beneficially
own 3,736,864 shares, of which 2,350,000 shares underlie
immediately exercisable warrants and 1,250,000 shares are
issuable upon conversion of indebtedness of Cadiz (all held
by ING Capital LLC). The Schedule 13D stated that ING Groep
does not directly hold any Cadiz shares. The principal
offices of the ING entities are located at 1325 Avenue of
the Americas, New York, New York.
(5) 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 and 50,000 shares owned by his
spouse. Mr. Brackpool disclaims any beneficial
ownership of the 50,000 shares owned by the foundation
and the 50,000 shares owned by his spouse. Does not
include 15,385 deferred stock units that are not yet vested.
(6) Includes 75,000 shares underlying presently exercisable
options. Does not include 7,692 deferred stock
units that are not yet vested.
(7) Includes 37,250 shares underlying presently exercisable
options.
(8) Includes 62,250 shares underlying presently exercisable
options.
(9) Includes 37,250 shares underlying presently exercisable
options.
(10) 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.
Page 3
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 10 and not more than 1 for 50 , 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 primarily as a means of
facilitating an increase in the share price of our common stock
in order to meet applicable Nasdaq listing requirements. Our
common stock is not currently listed on Nasdaq, and a minimum bid
price of $4.00 per share is required for an initial listing on
The Nasdaq SmallCap Market. The minimum bid price is measured by
the closing bid for the common stock.
In addition, the reverse stock split will provide Cadiz with
increased flexibility to use common stock, as the need arises,
for possible future financing transactions or for other general
corporate purposes. Cadiz' Certificate of Incorporation provides
that the authorized capital of Cadiz is 70,000,000 shares of
common stock, par value $0.01 per share. As of July 14, 2003, we
had 57,016,939 shares of common stock outstanding. As of such
date, we have also reserved an additional 1,507,097 shares for
the exercise of currently outstanding stock options and the
issuance of deferred stock units under Cadiz' 1996 Stock Option
Plan, 1998 Stock Option Plan and 2000 Stock Award Plan, an
additional 3,315,000 shares for exercise of outstanding stock
warrants, an additional 3,250,000 for conversion of outstanding
convertible debt, and an additional 3,980,892 shares for
conversion of outstanding convertible preferred stock. Based on
the above, only 930,072 shares remain available for issuance by
us for other corporate purposes. We currently have no specific
arrangements, understandings or agreements to issue any
additional shares of common stock beyond this amount. However,
in the normal course of business, we continually evaluate
alternative proposals concerning common stock issuances, and the
proposed reverse stock split will effectively increase the number
of shares of common stock available for issuance by Cadiz.
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 will be substantially in
the form attached to this proxy statement as Annex A.
NASDAQ LISTING
Effective March 27, 2003, our common stock was delisted from
trading on The Nasdaq National Market for failure to comply with
the maintenance standards for continued listing on Nasdaq.
Following delisting, our common stock traded on the OTC Bulletin
Board until May 23, 2003, at which time the common stock was
removed from Bulletin Board trading due to our failure to remain
current with the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended, sometimes referred
to as the Exchange Act. As a result, our common stock is
currently traded on a limited basis on the OTC U.S. Market, often
referred to as the "Pink Sheets".
The Board of Directors of Cadiz has determined that it is in
the best interests of Cadiz and its stockholders that we seek to
regain a Nasdaq listing as soon as we are eligible to do so.
Because the initial and continued listing standards for The
Nasdaq SmallCap Market are less rigorous than the listing
standards for The Nasdaq National Market, the Board of Directors
believes that Cadiz will first become eligible for listing on The
Nasdaq SmallCap Market. In order to obtain a listing on The
Nasdaq SmallCap Market, we must demonstrate, among other
requirements, a common stock bid price of at least $4.00 per
share. We do not currently satisfy this requirement. The
closing price per share of our common stock has been under $4.00
since September 25, 2002 and under $1.00 since November 18, 2002.
The closing price per share was $0.11 on the record date for the
special meeting.
Page 4
After consideration, the Board of Directors has determined
that the likelihood of Cadiz meeting the Nasdaq SmallCap Market's
initial listing requirement of $4.00 per share will be
substantially enhanced 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.
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 , the trading
prices of our common stock on the Pink Sheets, 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 satisfy the initial listing
requirements of The Nasdaq SmallCap Market of $4.00 per share.
However, the Board of Directors may also, in its discretion,
select an authorized stock split which will result initially in a
closing bid stock price below $4.00, if the Board believes there
to be a reasonable possibility of a subsequent increase in the
trading price sufficient to reach the $4.00 listing minimum.
Accordingly, the Board is asking that the stockholders
approve a range of reverse stock splits of not less than 1 for 10
and not more than 1 for 50 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 an
initial listing 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, we will still need to meet the other standards applicable
to Cadiz required for an initial listing on Nasdaq including:
Page 5
* either (a) stockholders' equity of $5 million, (b) a market
capitalization of $50 million or (c) net income of $750,000
each for the most recently completed fiscal year or two of the
last three most recently completed fiscal years;
* at least 1,000,000 shares publicly held;
* a $5 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% of the
total shares outstanding;
* at least 300 stockholders each holding 100 or more shares;
* at least three registered and active market makers; and
* compliance with mandated corporate governance requirements.
If we fail to meet any of these requirements for initial
listing on The Nasdaq SmallCap Market, even if we meet the
minimum bid price requirement subsequent to the approval of this
reverse stock split proposal, Cadiz may still not qualify for
initial listing. In addition, even if we qualify for initial
listing under all of these requirements, we will still not be
eligible for Nasdaq listing until we become current with our SEC
filings and regain compliance with the periodic reporting
requirements of the Exchange Act. Further, even if we obtain an
initial listing on The Nasdaq SmallCap Market, we will be
required to continue to meet standards in order to maintain our
listing, including:
* either (a) stockholders' equity of $2.5 million or (b) a
market capitalization of $35 million or (c) net income of
$500,000 each for the most recently completed fiscal year or
two of the last three most recently completed fiscal years;
* at least 500,000 shares publicly held;
* a $1 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% of the
total shares outstanding;
* at least 300 stockholders each holding 100 or more shares;
* at least two registered and active market makers; and
* compliance with mandated corporate governance requirements.
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 10 to 50 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 10 reverse stock split, every 10 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
Page 6
approximate number of shares outstanding after giving effect to
the reverse stock split is based on 57,016,939 shares of
common stock outstanding as of July 14 , 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 July 14 , 2003.
PROPOSED REVERSE SHARES OUTSTANDING AUTHORIZED SHARES
STOCK SPLIT RATIO AFTER GIVING AVAILABLE FOR
EFFECT TO THE ISSUANCE
REVERSE
STOCK SPLIT
----------------- ------------------ -----------------
1 for 10 5,701,693 64,298,307
1 for 20 2,850,846 67,149,154
1 for 30 1,900,564 68,099,436
1 for 40 1,425,423 68,574,577
1 for 50 1,140,338 68,859,662
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 10 reverse stock
split, 1/10th ) 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 10 reverse stock split, 10 ) 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 10 reverse stock split, 1/10th ) 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 Exchange Act of 1934, as amended,
sometimes referred to as the Exchange Act.
Upon stockholder approval, the Board of Directors will be
authorized, but not required, to proceed with the reverse stock
split. 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 high and low sales prices (as
adjusted to reflect the reverse stock split) of our common stock,
as last reported on the Pink Sheets
Page 7
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
expect the amount will not 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 10 reverse stock split,
1/10 ) 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
Page 8
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
In accordance with SEC rules governing stockholder
proposals, any stockholder wishing to present a resolution to be
included in the proxy materials for our 2003 annual meeting of
stockholders must deliver the resolution to our principal
executive offices a reasonable time before we begin to print and
mail our proxy materials.
Page 9
By Order of the Board of Directors
Los Angeles, California
July 22, 2003
Page 10
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 "DGCL"), 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 DGCL, 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 August 21 , 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 high and low sales
prices (as adjusted to reflect the reverse stock split) of
the Common Stock as last reported in the OTC U.S. 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 DGCL.
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
Page 11
*************************
CADIZ INC.
777 S. Figueroa Street, Suite 4250, Los Angeles, California
90017
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
August 21, 2003 at 10:30 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
Jennifer Hankes Painter 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.
(1) Approval of an amendment to the Certificate of
Incorporation to effect a reverse stock split of not less
than 1 for 10 and not more than 1 for 50 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.
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
* You can now vote your shares electronically by the
telephone.
* This eliminates the need to return the proxy card.
* Your electronic vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed,
dated and returned the proxy card.
TO VOTE YOUR PROXY BY MAIL
Mark, sign and date your proxy card above, detach it and
return it in the postage-paid envelope provided.
TO VOTE YOUR PROXY BY PHONE
1-800-293-8533
Use any touch-tone telephone to vote your proxy. Have your
proxy card in hand when you call. You will be prompted to
enter the company number, proxy number and account number.
Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE ABOVE CARD
IF YOU VOTED ELECTRONICALLY.