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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142.12
TEJON RANCH COMPANY
----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
TEJON RANCH COMPANY
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / 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 Reigstration Statement No.:
---------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
TEJON RANCH CO.
Post Office Box 1000
Lebec, California 93243
April 10, 1995
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Tejon Ranch Co. on Monday, May 8, 1995, at 9:30 A.M.,
Los Angeles time, in the Oakhurst Room of the Beverly Hilton Hotel,
9876 Wilshire Boulevard, Beverly Hills, California. Your Board of
Directors and management look forward to greeting those stockholders
who are able to attend.
The Notice of Annual Meeting and Proxy Statement containing
information concerning the business to be transacted at the meeting
appear in the following pages.
It is important that your shares be represented and voted at the
meeting, whether or not you plan to attend. Please sign, date, and
mail the enclosed proxy card at your earliest convenience.
Your interest and participation in the affairs of the Company are
greatly appreciated.
Sincerely,
Jack Hunt, President
TEJON RANCH CO.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
on
May 8, 1995
The Annual Meeting of Stockholders of Tejon Ranch Co. (the
"Company") will be held in the Oakhurst Room of the Beverly Hilton
Hotel, 9876 Wilshire Boulevard, Beverly Hills, California on Monday,
May 8, 1995, at 9:30 A.M., Los Angeles time, for the following
purposes:
1. To elect two directors.
2. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
The names of the nominees for the Board of Directors of the
Company for election at the Meeting are: Rayburn S. Dezember and
Phillip L. Williams.
The Board of Directors has fixed the close of business on March
27, 1995 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting.
Your attention is invited to the accompanying Proxy Statement.
To assure that your shares are represented at the meeting, please
date, sign, and mail the enclosed proxy card, for which a return
envelope is provided.
For the Board of Directors,
DONALD HASKELL, Chairman of the Board
DENNIS MULLINS, Secretary
Lebec, California
April 10, 1995
PLEASE MARK YOUR INSTRUCTIONS ON THE ENCLOSED PROXY CARD, SIGN AND
DATE THE PROXY CARD, AND RETURN IT IN THE ENCLOSED POSTAGE PAID
ENVELOPE EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU ATTEND
THE MEETING AND WISH TO DO SO, YOU MAY VOTE YOUR SHARES IN PERSON EVEN
IF YOU HAVE SIGNED AND RETURNED YOUR PROXY CARD.
TEJON RANCH CO.
Post Office Box 1000
Lebec, California 93243
PROXY STATEMENT
Annual Meeting of Stockholders
May 8, 1995
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Company for use at the Annual Meeting
of Stockholders to be held on May 8, 1995.
It is anticipated that the mailing of this Proxy Statement and
accompanying form of Proxy to stockholders will begin on or about
April 10, 1995.
SOLICITATION OF PROXIES
At the Meeting, the stockholders of the Company will be asked (1)
to elect two directors, and (2) to transact such other business as may
properly come before the Meeting. Your Board of Directors is asking
for your proxy for use at the Meeting. Although management does not
know of any other matter to be acted upon at the Meeting, shares
represented by valid proxies will be voted by the persons named on the
proxy card in accordance with their best judgment with respect to any
other matters which may properly come before the meeting.
The cost of preparing, assembling, and mailing the Notice of
Meeting, this Proxy Statement and the enclosed proxy card will be paid
by the Company. Following the mailing of this Proxy Statement,
directors, officers, and regular employees of the Company may solicit
proxies by mail, telephone, telegraph, or in person; such persons will
receive no additional compensation for such services. Brokerage
houses and other nominees, fiduciaries and custodians nominally
holding shares of record will be requested to forward proxy soliciting
material to the beneficial owners of such shares and will be
reimbursed by the Company for their charges and expenses in connection
therewith at the rates approved by the American Stock Exchange. It is
anticipated that the mailing of proxy materials will begin on or about
April 10, 1995.
RECORD DATE AND VOTING
Holders of shares of Common Stock of record at the close of
business on March 27, 1995, are entitled to notice of, and to vote at,
the Meeting. There were 12,682,244 shares of Common Stock outstanding
at the record date. A stockholder giving a proxy may revoke it at any
time before it is voted by filing with the Company's Secretary a
written notice of revocation or a duly executed proxy bearing a later
date. Unless a proxy is revoked, shares represented by a proxy will
be voted in accordance with the voting instructions on the proxy and,
on matters for which no voting instructions are given, shares will be
voted for the nominees of the Board of Directors as shown on the
proxy. On a matter for which the "WITHHOLD AUTHORITY" instruction is
given, shares will be voted neither "FOR" nor "AGAINST." Stockholders
cannot abstain in the election of directors, but they can withhold
authority. Shareholders who withhold authority will be considered
present for purposes of determining a quorum. The rules of the New
York and American Stock Exchanges permit member organizations
("brokers") to vote shares on behalf of beneficial owners, in the
absence of instructions from beneficial owners, on certain "routine"
matters including the election of directors and the ratification of
independent public accountants, but do not permit such votes on "non-
routine" matters. Situations where brokers are unable to vote on non-
routine proposals are referred to as "broker non-votes." Since the
election of directors is regarded as a routine matter and is the only
item of business expected to be considered at the Annual Meeting, no
broker non-votes are anticipated. However, under circumstances where
there are broker non-votes, such non-votes will not be counted as
present for purposes of determining a quorum, have no effect on the
outcome of matters requiring the affirmative vote of a majority or
super-majority of shares represented at the meeting and have the
effect of a negative vote on matters requiring the affirmative vote of
the holders of a majority or super-majority of the shares outstanding.
Stockholders vote cumulatively in the election of directors.
Cumulative voting means that each share is entitled to a number of
votes equal to the number of directors to be elected, which votes may
be cast for one nominee or distributed among two or more nominees.
The two candidates receiving the highest number of affirmative votes
will be elected as directors. On all other matters, each share has
one vote.
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table lists the stockholders known to the Company
to be the beneficial owners of more than 5% of the shares of Company
Common Stock outstanding as of March 7, 1995. The table also provides
the stock ownership of all directors and of the most highly
compensated executive officers as of the same date.
Name and Address of Stockholder Amount and
------------------------------- Nature of
Beneficial Percent
Ownership(1) of Class
------------ --------
Ardell Investment Company
P.O. Box 1715
Newport Beach, CA 92659 1,055,828(2) 8.33%
M.H. Sherman Company
P.O. Box 1715
Newport Beach, CA 92659 1,140,630(2) 8.99%
The Times Mirror Company
Times Mirror Square
Los Angeles, CA 90053 3,812,333(3) 30.06%
State of Wisconsin Investment
Board
P.O. Box 7842
Madison, WI 53707 1,076,000(4) 8.48%
Directors
---------
Otis Booth, Jr. 1,000 below 1%
Craig Cadwalader 2,231,530(5) 17.60%
Dan T. Daniels 2,231,530(6) 17.60%
Rayburn S. Dezember 1,000(7) below 1%
Robert F. Erburu 4,112,330(8) 32.43%
Clayton W. Frye, Jr. 3,822,330(9) 30.14%
Donald Haskell 2,282,630(10) 18.00%
Jack Hunt 8,825(11) below 1%
Raymond L. Watson -0- -0-
Phillip L. Williams 300,000(12) 2.37%
Officers
--------
Matt J. Echeverria 300(11) below 1%
John A. Wood 6,900(11) below 1%
All officers and directors
as a group (16 persons) 6,423,185 50.65%
(1)In each case, the named stockholder has the sole voting and
investment power as to the indicated shares, except as set forth in
the footnotes below.
(2)Does not include 35,072 shares (0.28% of the number of shares
outstanding) owned of record and beneficially by the Sherman
Foundation, a non-profit public charity, three of the trustees of
which are directors of Ardell Investment Company and M.H. Sherman
Company, those being Messrs. Donald Haskell, Chairman of the Board of
Directors of the Company, and Craig Cadwalader and Dan T. Daniels,
directors of the Company.
(3)Does not include 300,000 shares (2.37% of the number of shares
outstanding) owned of record and beneficially by The Times Mirror
Foundation, a private, non-profit, philanthropic foundation, all of
the directors of which are employees, officers or advisors of The
Times Mirror Company, including Messrs. Robert F. Erburu and Phillip
L. Williams, directors of the Company.
(4)Based upon information provided to the Company by the shareholder
on a Schedule 13G dated February 13, 1995, and filed with the
Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934.
(5)Includes 1,055,828 shares owned by Ardell Investment Company,
1,140,630 shares owned by M.H. Sherman Company, and 35,072 shares
owned by Sherman Foundation. Mr. Cadwalader is a director of Ardell
Investment Company and M.H. Sherman Company and a trustee of Sherman
Foundation. Mr. Cadwalader disclaims beneficial ownership as to all
of the shares owned by said entities.
(6)Includes 1,055,828 shares owned by Ardell Investment Company,
1,140,630 shares owned by M.H. Sherman Company, and 35,072 shares
owned by Sherman Foundation. Mr. Daniels is Vice President, Treasurer
and a director of Ardell Investment Company, President and a director
of M.H. Sherman Company, and Vice President, Secretary and a trustee
of Sherman Foundation. Mr. Daniels disclaims beneficial ownership as
to all of the shares owned by said entities.
(7)Mr. Dezember's shares are held by a family trust. Mr. Dezember and
his spouse share voting and investment power with respect to those
shares.
(8)Includes 3,812,330 shares owned by The Times Mirror Company and
300,000 shares owned by The Times Mirror Foundation, of which Mr.
Erburu is an officer and director. Mr. Erburu disclaims beneficial
ownership of all such shares.
(9)Includes 10,000 shares owned by Mr. Frye personally, and 3,812,330
shares owned by The Times Mirror Company, of which Mr. Frye is a
director. Mr. Frye disclaims beneficial ownership of the shares owned
by The Times Mirror Company.
(10)Includes 51,100 shares owned by Mr. Haskell personally, 1,055,828
shares owned by Ardell Investment Company, 1,140,630 shares owned by
M.H. Sherman Company, and 35,072 shares owned by Sherman Foundation.
Mr. Haskell is President and a director of Ardell Investment Company,
Chairman of the Board and a director of M.H. Sherman Company and has
the power to vote a majority of the shares of each company. He is
also President and a trustee of Sherman Foundation. Mr. Haskell
disclaims beneficial ownership of the shares owned by the Sherman
Foundation.
(11)The shares owned by Messrs. Hunt, Echeverria and Wood are held as
community property. Each officer and his spouse share voting and
investment power with respect to their shares.
(12)The 300,000 shares are owned by The Times Mirror Foundation, of
which Mr. Williams is a director. Mr. Williams disclaims beneficial
ownership of all such shares.
In December 1978 a Schedule 13D was filed with the Securities and
Exchange Commission on behalf of a group comprised of Ardell
Investment Company, M.H. Sherman Company, The Time Mirror Company,
Chandis Securities Company and The Times Mirror Foundation
(collectively, the "Affiliated Group") reporting the formation of the
group and the contemplated purchase by The Times Mirror Company of
additional shares of Common Stock of Tejon Ranch Co., the California
corporation now wholly-owned by the Company, "to the end that...[such
shareholders] will ultimately increase their degree of control of..."
that corporation. Each outstanding share of Common Stock of that
corporation was converted into one share of Common Stock of the
Company in connection with a 1987 reincorporation transaction. As a
result, the Schedule 13D has been amended to reflect the conversion of
the shares of Common Stock, and all references describing the Schedule
13D below refer to the Company and its Common Stock instead of the
California corporation of which the members of the Affiliated Group
were stockholders at the time the Schedule 13D was filed.
The Schedule 13D also stated that the group had no present plans
or proposals with respect to the merger, reorganization, or
liquidation of the Company, the sale or transfer of any material
amount of assets of the Company, any change in the Company's Board of
Directors or management, any change in the present capitalization or
dividend policy or any other material change in the Company's business
or corporate structure, its Articles of Incorporation, Bylaws, or
securities. In February 1979, an amended Schedule 13D was filed
stating that The Times Mirror Company had purchased an additional
1,393,600 shares (as adjusted to give effect to a subsequent 10-for-1
stock split) and that, absent a change of circumstances, it did not
plan to purchase additional shares. Since that date, additional
amendments to the Schedule 13D have been filed showing certain changes
(among other things) in Company Common Stock ownership of the
stockholders constituting the Affiliated Group, reflecting Chandis
Securities Company's disposition of shares and withdrawal as a member
of the Affiliated Group and adding to the Affiliated Group Donald
Haskell, Chairman of the Board of Directors of the Company, and
Sherman Foundation, a non-profit public charity of which Mr. Haskell
is President and a Trustee. As of March 7, 1995, the stockholders
constituting the Affiliated Group owned 6,394,960 shares of Company
Common Stock constituting 50.42% of the number of shares outstanding.
ELECTION OF DIRECTORS
The Board of Directors now consists of ten directors, the
authorized number of directors having been increased in 1994 from 9
to 10. During the 1995 Annual Meeting, the size of the Board of
Directors will revert to nine members. The directors are divided into
three classes based upon when their terms expire. The terms of three
directors (Class I) expire at the 1997 Annual Meeting, the terms of
three directors (Class II) expire at the 1995 Annual Meeting, and the
terms of four directors (Class III) expire at the 1996 Annual Meeting.
After the 1995 Annual Meeting, there will be two Class II directors.
The terms of directors expire at the third Annual Meeting following
the Annual Meeting at which the directors were elected, although
directors continue to serve until their successors are elected and
qualified, unless the authorized number of directors has been
decreased.
The names of the nominees of the Board of Directors for election
as directors at the 1995 Annual Meeting (both of whom are presently
directors) are set forth in the table below, along with certain other
information. The table also includes information as to the other
present directors of the Company.
Other than nominations made at the direction of the Board of
Directors, nominations of persons for election to the Board of
Directors by stockholders must be made pursuant to timely notice in
writing to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Company not later than the
close of business on the 10th day following the day on which the
Notice of Annual Meeting of Stockholders was mailed. Such
stockholder's notice must set forth: (i) as to each person whom the
stockholder proposes to nominate for election or reelection as a
director, all information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors or
is otherwise required, in each case pursuant to the Securities
Exchange Act of 1934, as amended; and (ii) as to the stockholder
giving the notice, the name and address, as they appear on the
Company's books, of such stockholder, and the class and number of
shares of the Company which are beneficially owned by such
stockholder.
Except as noted below, each proxy solicited by and on behalf of
the Board of Directors will be voted "FOR" the election of the
nominees named below (unless such authority is withheld as provided in
the proxy) and one half of the votes to which the stockholder is
entitled will be cast for each of the two nominees. In the event any
one or more of the nominees shall become unable to serve or refuse to
serve as director (an event which is not anticipated), the proxy
holders will vote for substitute nominees in their discretion. If one
or more persons other than those named below as nominees for the 1995
Annual Meeting are nominated as candidates for director by persons
other than the Board of Directors, the enclosed proxy may be voted in
favor of any one or more of said nominees of the Board of Directors or
substitute nominees to the exclusion of the other such nominees and in
such order of preference as the proxy holders may determine in their
discretion.
All references to the Company in the table below and the
remainder of this Proxy Statement relating to periods prior to the
effectiveness of the June 1987 reincorporation transaction referred to
under "Stock Ownership of Principal Stockholders and Management"
include references to Tejon Ranch Co., the California corporation
which became a wholly-owned subsidiary of the Company as a result of
the reincorporation transaction.
Nominees (Class II Directors First
Nominated for Reelection) Became
and Principal Occupation or Employment(1) Director Age
----------------------------------------- -------- ---
Rayburn S. Dezember(2)
Director of Wells Fargo & Co.
and CalMat Co. 1990 64
Phillip L. Williams(2)(4)
Director of Graphic Controls
Corporation and Smurfit
Newsprint Corp. 1987 72
Continuing and Retiring Directors
and Principal Occupation or Employment(1)
-----------------------------------------
Otis Booth, Jr.(2)(3)
Private investments and ranching;
Director of Clipper Fund, Inc. and
Schooner Fund, Inc. 1970 71
Craig Cadwalader
President, Chief Operating Officer,
and Director, Ardell Marina, Inc.,
yacht brokerage;
Director, M.H. Sherman Co. 1994 54
Dan T. Daniels(2)(4)
President and Director, M.H.
Sherman Company,investments 1982 53
Robert F. Erburu(3)
Chairman of the Board, President
and Chief Executive Officer, The
Times Mirror Company, publishing 1975 64
Clayton W. Frye, Jr.(3)
Senior Associate of Laurance S.
Rockefeller, business and
investment management; Director of
The Times Mirror Company 1975 64
Donald Haskell(3)(4)
Chairman of the Board, M.H.
Sherman Company, investments;
President, Ardell Investment Company,
investments; Chairman of the Board,
Tejon Ranch Co. 1967 67
Jack Hunt (3)
President, Tejon Ranch Co.; Director
of Community First Bank 1987 50
Raymond L. Watson
Vice Chairman of The Irvine Company;
Director of The Walt Disney Company,
Pacific Mutual Life Insurance Company
and Mitchell Energy and Development
Company 1994 68
(1) Except as set forth below, each of the directors has been
engaged in his principal occupation described above during the
past five years. There are no family relationships among any
directors of the Company. Mr. Dezember served as Chairman of
the Board and Chief Executive Officer of Central Pacific
Corporation from 1981 through April 2, 1990, and as Chief
Executive Officer of The Bakersfield Californian from December
1991 to June 1992. Mr. Williams served as Vice Chairman of the
Board of The Times Mirror Company from January 2, 1987, to May
4, 1993. All directors are members of the Real Estate
Committee, which sits as a committee of the whole.
(2) Member of Audit Committee.
(3) Member of Executive Committee.
(4) Member of Compensation Committee.
Mr. Hunt's term expires at the 1995 Annual Meeting. He has not
been nominated for reelection because he has resigned as President of
the Company effective May 1995 in order to take a comparable position
at the King Ranch, a large, privately owned agribusiness company based
in Houston, Texas. The terms of Messrs. Cadwalader, Frye, Haskell,
and Watson expire at the 1996 Annual Meeting, and the terms of Messrs.
Booth, Daniels, and Erburu expire at the 1997 Annual Meeting. No
director's term expires at an Annual Meeting unless his successor has
been elected and qualified, or the authorized number of directors has
been decreased.
Board of Directors and Committees
Standing committees of the Board of Directors include the
Executive, Audit, Compensation, and Real Estate Committees. The major
functions of each of these committees are described briefly below.
Except for certain powers which, under Delaware law, may only be
exercised by the full Board of Directors, the Executive Committee may
exercise all powers and authority of the Board of Directors in the
management of the business and affairs of the Company.
The Audit Committee recommends engagement of the independent
accountants, reviews the arrangement and scope of audit, considers
comments made by the independent accountants with respect to internal
controls, reviews internal accounting procedures and controls with the
Company's financial accounting staff, and reviews non-audit services
provided by the Company's independent accountants.
The Compensation Committee periodically reviews and recommends
appropriate adjustments to the compensation arrangements for executive
officers.
The Real Estate Committee reviews all activities and issues
related to the Company's real estate assets. It receives and
considers the analysis of the Company's outside land use and
development consultants. The Committee directs management and the
planning team on the direction that the Company's land use planning
activities should take.
The Company does not have a nominating committee. The nominees
for director proposed by the Board of Directors are selected by the
entire Board.
During 1994 there were five meetings of the Board of Directors,
two of the Audit Committee, one of the Compensation Committee, one of
the Real Estate Committee, and none of the Executive Committee.
During 1994 all incumbent Directors attended 75% or more of the
aggregate total of such meetings of the Board of Directors and
committees of the Board on which they served, except Messrs. Frye and
Haskell.
Directors who are not employees of the Company each received a
quarterly retainer of $1,000, a fee of $500 for attendance at any
meeting of the Board and a fee of $200 for attendance at any meeting
of a Committee through the end of 1994. Commencing in 1995, the
amounts above increase to $2,000, $1,000 and $500, respectively.
The Form 3's for Messrs. Watson and Cadwalader respecting their
election to the Board, and the Form 5 for Mr. Mullins respecting the
grant of options, were filed later than specified in applicable law.
EXECUTIVE COMPENSATION
The following table shows the aggregate compensation paid on an
accrual basis by the Company and its subsidiaries during 1994 and each
of the two previous years to the executive officers of the Company
whose combined salary and bonus exceeded $100,000 in 1994.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
------------------- COMPENSATION
AWARDS
------------
NAME SECURITIES ALL OTHER
AND PRINCIPAL YEAR SALARY(1) BONUS(1) UNDERLYING COMPENSATION(3)
POSITION ($) ($) (#) OPTIONS(2) ($)
------------- ---- --------- -------- ---------- ---------------
Jack Hunt
President and 1994 240,000 35,000 0 8,500
Chief Executive 1993 225,000 35,000 0 8,307
Officer 1992 215,000 35,000 37,000 7,650
John A. Wood
Vice President 1994 125,000 15,000 0 1,250
1993 125,000 15,000 0 1,250
1992 120,500 12,500 0 1,200
David Dmohowski
Vice President 1994 129,000 9,500 0 1,290
1993 125,000 9,500 0 1,200
1992 120,000 9,500 16,000 0
Matt J. Echeverria
Vice President 1994 115,000 10,000 0 1,150
1993 110,000 15,000 0 1,100
1992 100,000 15.000 19,000 1,000
Dennis Mullins
Vice President,
General Counsel
and Secretary 1994 117,000 12,500 0 0
1993 50,865(4) 3,500 15,000 0
N/A
(1) Amounts shown include compensation earned and received by executive
officers as well as amounts earned but deferred at the election of
those officers.
(2) No stock options were issued to the above executive officers during
1994.
(3) The amounts in this column are the matching contributions made by the
Company under its 401(K) defined contribution plan. In addition, the
amounts in this column for Mr. Hunt include Company contributions of
$6,100 in 1994, 6,082 in 1993, and $5,500 in 1992 to his Supplemental
Executive Retirement Plan. A description of the latter plan is set
forth below.
(4) Amounts shown reflect compensation for the partial year from July 19,
1993, when Mr. Mullins joined the Company, through December 31, 1993.
Stock Options
In March 1992 the Board of Directors adopted a 1992 Stock Option Plan
providing for the granting of options to purchase a maximum of 230,000
shares of the Company's Common Stock to employees, advisors, and
consultants of the Company. The 1992 Stock Option Plan was approved by the
stockholders at the 1992 Annual Meeting.
The following table shows the number of shares subject to exercisable
and nonexercisable stock options outstanding at December 31, 1994 and held
by executive officers named in the preceding Summary Compensation Table.
No options were granted to or exercised by any of the executive officers
named in the Summary Compensation Table above in 1994. All outstanding
options held by such executive officers are exercisable at prices which are
higher than the current trading price of the Company's Common Stock.
OPTION EXERCISES AND YEAR-END VALUE TABLE
Number of Value of
Unexercised Unexercised
Options At In-The-Money
Shares FY-End(#) Options at
Acquired Value Exercisable/ FY-End($)(1)
Name on Exercise Realized Unexercisable Exercisable/
(#) ($)(1) Unexercisable
-------- ----------- -------- ------------- -------------
Jack Hunt 0 0 0/37,000 0/0
John A. Wood 0 0 0/10,000 0/0
David Dmohowski 0 0 0/16,000 0/0
Matt J. Echeverria 0 0 0/19,000 0/0
Dennis Mullins 0 0 0/15,000 0/0
(1) Market value of underlying securities at year end, minus the exercise
price of options.
The outstanding options reflected in the table above (other than those
of Mr. Mullins) were granted in 1992, do not become exercisable until 2001
(subject to certain exceptions) and expire in 2002. Mr. Mullins' options
were granted in 1993, do not become exercisable until 2002 (subject to
certain exceptions) and expire in 2003. Under the terms of the option
agreements, if the optionee leaves the employ of the Company for any reason
other than death or disability, the option will terminate within three
months after any such termination of employment and will be exercisable
during those three months only to the extent that it was exercisable on the
date of termination of employment. If the optionee's employment terminates
as the result of death or disability, the option terminates one year after
such death or disability and is exercisable during that one year period only
if the employee has completed at least one full year of employment with the
Company after the date of grant. Under such circumstances the option is
exercisable to purchase that portion of the total number of shares subject
to the option equal to the number of full years of employment completed
after the date of grant divided by ten. The exercise date of the
outstanding options will also be accelerated in the event of a change in
control of the Company. "Change in control" is defined to include a merger,
consolidation, transfer of assets, issuance or transfer of stock or other
transaction or series of related transactions as a result of which persons
or entities other than the stockholders immediately before the transaction
or transactions would own at least 80% of the voting stock of the Company or
its successor after the transaction.
Pension Plan
The Company contributes each year to a Pension Plan for its salaried
employees the amount necessary to fund the Plan on an actuarial sound basis.
The amounts of these annual contributions are not included in the
compensation table above. Pension benefits to be received from the Plan
upon retirement are determined by an employee's highest 60 consecutive
months' earnings out of the last 120 months of service, length of service
with the Company and age at retirement, subject to certain limitations
imposed on a qualified retirement plan by the Internal Revenue Code.
In 1991 the Company adopted a Supplemental Executive Retirement Plan
(the "SERP") in order to restore to executives designated by the
Compensation Committee of the Board of Directors the full benefits under the
Pension Plan which would otherwise be restricted by certain limitations now
imposed under the Internal Revenue Code. The SERP is unfunded, but the
associated liability will be reflected on the Company's financial
statements. No benefits under the Pension Plan or the SERP become vested
until the earlier of (a) the participant's attainment of age 65, or (b) the
completion of five or more years of vesting service (as defined under the
Pension Plan referred to above). With respect to the SERP, an executive can
become vested upon the incurrence of a total and permanent disability while
employed by the Company as determined by the Board of Directors or the
Compensation Committee. The Compensation Committee also has the power to
grant a participant vested status with respect to the SERP even if he or she
does not meet the foregoing requirements.
The table below illustrates the amount of annual pension benefits
payable under the Plan (as increased by amounts payable to eligible
executives under the SERP) to persons in particular classifications who work
to the normal retirement age of 65.
Highest 60 Months' Years of Service
Average Annual Compensation 10 20 25 or More
--------------------------- --- --- ----------
75,000 9,255 18,510 23,138
100,000 13,380 26,760 33,450
125,000 17,505 35,010 43,763
150,000 21,630 43,260 54,075
175,000 25,755 51,510 64,387
200,000 29,880 59,760 74,699
250,000 34,005 68,010 85,011
275,000 38,130 76,260 95,323
300,000 42,255 84,510 105,635
For purposes of pension benefits, earnings consist of compensation
determined in the manner reflected in the preceding Summary Compensation
Table, except that for pension benefit purposes, bonuses are included in the
year paid instead of in the year accrued and amounts under "Long Term
Compensation Awards" and "All Other Compensation" are not counted. The
benefits presented are straight life annuity amounts and are determined
based on the benefit formula required by the Plan, which conforms to the
regulations of the Internal Revenue Service and ERISA. The credited years
of service under the Plan as of December 31, 1994, for those named in the
table above are Mr. Hunt - 13 years, Mr. Wood - 16 years, Mr. Echeverria -
15 years, Mr. Dmohowski - 3 years, and Mr. Mullins - 1 year. All employees
having one year in service to the Company participate in the Plan. This
includes all officers of the Company, except Charles Berling, who was
appointed as Vice President-Real Estate on March 3, 1995.
Compensation Committee Interlocks and Insider Participation
During 1994 Mr. Haskell rented a Company owned house, and Wood River
Ranch, a corporation in which Mr. Haskell is the sole shareholder, boarded
horses at the Company's quarterhorse facility. Aggregate payments made to
the Company for rent and horse boarding and training, including
reimbursements for incidental expenses, during 1994 totalled $45,736. It is
expected that this arrangement will continue throughout 1995. The boarding
and training fees charged Wood River Ranch are comparable to customary rates
in the horse training and breeding business and are the same as fees charged
to other horse owners not affiliated with the Company. The rent which Mr.
Haskell pays for the house is not less than the rent which the Company
charges persons not affiliated with the Company for comparable residences.
Commencing December 1, 1993, Mr. Haskell leased Mr. San Olen, a quarter
horse, to the Company, which uses Mr. San Olen for breeding purposes. The
lease term runs until December 31, 1995, and the Company has the right to
extend the lease term for two periods of three years each. The rent paid by
the Company is $1.00 per year triple net, plus one-half of all net profits
made from breeding Mr. San Olen with mares not owned by the Company. The
leasing of horses for breeding purposes typically involves the payment of a
substantial rent by the lessee. The Company believes that this agreement is
favorable to the Company compared to other such horse lease arrangements.
Compensation Committee Report On Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
In determining appropriate compensation for the executive officers of
the Company, the Compensation Committee's decisions, while not tied to any
specific financial performance criteria, are based upon an analysis of each
executive's performance in balancing the short-term operating objectives of
the Company with the overriding goal of protecting and enhancing the value
of the Company's major asset - its land.
The Company is different from most companies in that its asset value is
very large, but its earning capacity from current operations is limited. As
a result, the Compensation Committee policies focus on the goals of
achieving an optimum level of income from the Company's current operations
while at the same time preserving and enhancing the development potential of
the Company's land. The larger future value of the Company to the
stockholders rests in the development of portions of the land for a variety
of future uses. It will be decades before that development process is
complete. The Compensation Committee believes that the management of this
tradeoff between current returns and future asset value is a particularly
important criterion for evaluation of the President and the other executive
officers of the Company. The existence of these two competing goals makes
it very difficult to measure precisely the ultimate financial benefit for
the Company's stockholders of management decisions made at the present time.
Because the development of the Company's land will take many years,
retention of key executives is an extremely important goal. The importance
of this long-term retention is reflected in the design of the incentive
stock option plan approved by the stockholders in 1992, under which options
do not become exercisable until nine years after the options are granted,
and are exercisable only if the officer has remained with the Company for
that period (subject to certain exceptions).
Consistent with the foregoing criteria, a number of factors are
evaluated in specific compensation decisions. These include the performance
of the executive in his or her areas of responsibility, the overall
financial results of the Company, and the level of compensation necessary to
retain, over the long-term, highly qualified executives.
The Committee does not rely principally on specific, pre-determined
criteria to measure the performance of Company executives or the performance
of the Company itself. The Committee members evaluate the various factors
to be considered and reach a consensus based primarily upon their individual
and collective judgment, rather than mathematical calculations. The
performance of an executive in his or her area of responsibility can on
occasion include specific pre-determined goals but usually depends in more
substantial part on the Committee's overall evaluation. In measuring the
financial results of the Company, the Committee looks primarily to net
income, although often that is significantly affected by such uncontrollable
factors as bad weather, drought, the overall economy and commodity market
conditions, and the Committee focuses on those aspects of financial
performance that executives can control.
The extent to which the development potential of the Company's land has
been enhanced over a particular period of time is determined in part by the
achievement of particular planned goals, such as the development of very
long term land use and resource management guidelines for the Company's land
and the identification of development opportunities over the next 20 to 25
years, both of which were accomplished during 1993.
In determining overall levels of compensation the Committee obtains
information as to compensation levels at other companies through their
public reports, private surveys and direct communication. The Committee
believes that, because of the Company's very large undeveloped land holdings
and limited earnings, there is no group of comparable companies that it can
rely upon in determining appropriate levels of compensation. Nonetheless
the Committee makes judgments as to overall compensation in part by taking
into account what other companies of comparable size are doing, whether or
not they have extensive land holdings. The Committee does not attempt to
set the compensation for Company executives at any particular level as
compared to other companies, but merely evaluates what other companies are
paying as one factor along with others to be considered. Historically, the
Committee's practice has generally been to avoid large fluctuations from one
year to the next in compensation adjustments unless the change in an
executive's job responsibilities or specific performance warrants a large
change.
Salary and bonus levels reflect a long-term evaluation of a particular
executive as well as the nature of his or her duties and level of
experience. The relative amounts of salary and bonus for a particular
executive reflect the Committee's judgment as to the proper weighing of
these components of compensation, taking into account the position held by
the executive, historical patterns of the Company and, to a lesser extent,
the practices of other companies of comparable size. No specific formulas
are used to determine these amounts. Stock options are considered by the
Committee to constitute primarily an incentive to remain with the Company
for the long term. The Committee does not intend to grant options to
executives on a regular and continuing basis as a part of their
compensation, but it does intend to review from time to time the adequacy of
all stock options outstanding.
The increase in the President's compensation for 1994, as well as the
bonus awarded for 1994, reflected the Committee's favorable view of the
President's performance in achieving the land planning objectives described
above and in his contribution to the Company's 1993 financial performance,
which included earnings nearly double those of the prior year
notwithstanding incurrence of significant land planning expenses.
Donald Haskell, Dan T. Daniels, Phillip L. Williams
Members of the Compensation Committee
Performance Graph
The following graph is a comparison of cumulative total shareowner
returns for the Company, the Dow Jones Equity Market Index, and the Dow
Jones Real Estate Index for the period shown.
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Tejon Ranch Co. 100.00 58.60 39.09 38.31 33.43 27.55
DJ Equity Market 100.00 96.07 127.24 138.19 151.93 153.10
DJ Real Estate 100.00 66.25 74.12 66.88 78.29 74.47
--Assumes $100 Invested on December 31, 1989
--Total Return Assumes Reinvestment of Dividends
--Fiscal Year Ending December 31
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
Tejon Ranch Co. -41.40% -33.29% -1.99% -12.75% -17.59%
DJ Equity Market -3.93% 32.44% 8.61% 9.95% 0.77%
DJ Real Estate -33.75% 11.89% -9.77% 17.07% -4.89%
The stock price performance depicted in the above graph is not
necessarily indicative of future price performance. The Performance Graph
will not be deemed to be incorporated by reference in any filing by the
Company under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates the
Performance Graph by reference.
The Dow Jones Real Estate Index, for the most part, includes companies
which, unlike the Company, are principally engaged in the active phases of
commercial land development and which have revenues substantially greater
than those of the Company. The Company is unaware of any industry or line-
of-business index that is more nearly comparable.
OTHER
Financial Information. The Company's Annual Report to Stockholders
accompanies this Proxy Statement. Copies of the Company's Annual Report on
Form 10-K (without exhibits) filed with the Securities and Exchange
Commission may be obtained by calling or writing Corporate Secretary, Tejon
Ranch Co., Post Office Box 1000, Lebec, California 93243, (805) 248-6774.
Independent Accountants. Representatives of Ernst & Young, the
independent public accountants for the fiscal year most recently completed,
will be at the Meeting, will have an opportunity to make a statement if they
wish, and will be available to respond to appropriate questions from
stockholders.
Stockholder Proposals. A stockholder's proposal will be considered at
the 1995 Annual Meeting of Stockholders only if the stockholder provides
timely notice of such proposal in writing to the Secretary of the Company.
To be timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the Company not less than 30
days nor more than 60 days prior to the meeting as originally scheduled, but
if less than 40 days notice or prior public disclosure of the date of the
meeting is given or made to stockholders, then the notice must be received
not later than the close of business on the 10th day following the day on
which the Notice of Annual Meeting of Stockholders was mailed. A
stockholder's notice to the Secretary must set forth as to each matter the
stockholder proposes to bring before the Annual Meeting (i) a brief
description of the business desired to be brought before the Annual Meeting,
(ii) the name and record address of the stockholder proposing such business,
(iii) the class and number of shares of the Company which are beneficially
owned by the stockholder, and (iv) any material interest of the stockholder
in such business. To be considered for inclusion in the proxy statement for
the 1996 Annual Meeting, stockholder proposals are required to be delivered
to the Company on or before December 12, 1995.
Other Business. Management does not know of any matter to be acted
upon at the Meeting other than those described above, but if any other
matter properly comes before the meeting, the persons named on the enclosed
proxy card will vote thereon in accordance with their best judgment.
Stockholders are urged to sign and return their proxies without delay.
For the Board of Directors,
DONALD HASKELL, Chairman of the Board
DENNIS MULLINS, Secretary
April 10, 1995
PROXY CARD
TEJON RANCH CO.
Proxy for Annual Meeting of Stockholders - May 8, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 10, 1995 and hereby
appoits DONALD HASKELL and JACK HUNT as Proxies (each with full power to act
in the absence of the other, and each with full power of substitution), to
represent and to vote, as designated below, all the shares of common stock
of Tejon Ranch Co. held of record by the undersigned on march 27, 1995, at
the annual meeting of tockholders to be held on May 8, 1995, or any
adjournment or postponement thereof.
1. ELECTION OF TWO DIRECTORS (Class II)
FOR both nominees listed below
(except as written to the contrary below)
WITHHOLD AUTHORITY to vote for BOTH nominees listed below
Rayburn S. Dezember and Phillip L. Williams
(INSTRUCTIONS: to withhold authority to vote for any individual nominee
write in the nominee's name in the space below.)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued on the other side)
PROXY CARD
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS.
Dated: , 1995
-------------------------
Signature
-------------------------
Signature if held jointly
Please sign exactly as
name appears below. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full
title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
TEJON RANCH CO.
Narrative Description of Graphic and Image
Information in Registrant's Proxy Materials
Description of Graphic or Image Information
Proxy Statement
Page Contains line graph comparing five year total
cumulative return on $100 invested in Tejon
Ranch Co., Dow Jones Equity Market and Dow
Jones Real Estate showing the data points set
forth below:
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Tejon Ranch Co. 100.00 58.60 39.09 38.31 33.43 27.55
DJ Equity Market 100.00 96.07 127.24 138.19 151.93 153.10
DJ Real Estate 100.00 66.25 74.12 66.88 78.29 74.47
Form of Proxy
Front Printed material includes two boxes for purpose
of marking votes.
Reverse Includes signature lines.