Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 4, 2005
Cadiz Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-12114 77-0313235
(Commission File Number) (IRS Employer Identification No.)
777 South Figueroa Street, Suite 4250, Los Angeles 90017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 271-1600
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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As described in the Company's Annual Reports on Form 10-
K for the fiscal years ended December 31, 2003 and December
31, 2004, in December 2003 the Company's Board of Directors
authorized the adoption of a Management Equity Incentive
Plan (the "Incentive Plan"), under which a total of
1,472,051 shares were authorized for issuance to key
personnel at the direction of the Company's allocation
committee. Under the terms of the Incentive Plan, 1,094,712
shares were authorized for issuance by direct grant and
377,339 shares were authorized for issuance by way of the
grant of stock options at an exercise price of the then
current market value of $12 per share. Both the direct
grants and option grants are subject to vesting schedules.
As further described in Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2004, in light
of the nature of the Company's resource development
activities, the Company's compensation program for
management is weighted more heavily towards long-term
incentives than is typical of other companies with similarly
sized asset portfolios. Accordingly, the base salary
component of the compensation program is lower than that
typically provided by similarly sized companies, and the
Incentive Plan is used by the Company to provide long-term
incentives and to incentivize management in a manner that
further aligns the interests of management with those of the
Company's stockholders.
The Company's allocation committee has to date allocated
1,094,712 shares and 300,000 options under the Incentive Plan.
354,191 shares and 100,000 options were allocated to each of
Keith Brackpool, the Chief Executive Officer of the Company,
and Richard Stoddard, the Chief Executive Officer of the
Company's subsidiary, Cadiz Real Estate LLC. 278,725 shares
and 100,000 options were allocated to Mark Liggett, an employee
of the Company, and 107,605 shares were allocated to Timothy
Shaheen, a director of the Company.
On May 4, 2005, the Company filed a Registration Statement
on Form S-8 pursuant to which it registered for issuance all
of the shares and options authorized under the Incentive Plan.
The issuances of the shares and options allocated under the
Incentive Plan as described above followed the effectiveness
of this Registration Statement on Form S-8.
The Company also registered for issuance in the Form S-
8 10,000 shares of common stock issuable under the Cadiz
Inc. 2004 Management Bonus Plan. These shares were
immediately thereafter issued to Keith Brackpool as a
performance bonus.
On May 5, 2005, following the effectiveness of the Form
S-8 Registration Statement, each of the recipients of shares
under the Incentive Plan resold a portion of such shares for
tax purposes. Inasmuch as the allocations of shares under
the Incentive Plan constituted an immediate taxable event to
the recipients, the recipients chose to sell shares so as to
pay taxes. By selling these shares shortly following issuance,
the recipients could most closely align the value assigned to
each share for tax purposes with the proceeds received upon
the sale, thereby maximizing the number of shares which each
recipient would be able to retain on a longer term basis
(with potential for further appreciation and more favorable
capital gains tax rates upon ultimate resale) while still
enabling the recipients to satisfy a portion of their tax
obligations.
As disclosed in the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 2004 and in the
Company's Form S-8 Registration Statement, under applicable
accounting rules the issuance of shares and options under
the Incentive Plan will result in a charge to earnings based
on the value of the common stock at the time of issue and
valuation of options at the time of their award and will be
recorded over the vesting period in proportion to the
quantities vested. Inasmuch as the Company has not yet
generated revenues from its water development projects, this
charge to earnings resulting from issuances under the
Incentive Plan during 2005 will occur in a year in which the
Company expects to incur a net loss in any event.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Cadiz Inc.
By:/s/ Keith Brackpool
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Keith Brackpool
Chairman of the Board and
Chief Executive and Financial Officer
Dated: May 6, 2005