UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TEJON RANCH CO.
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(Name of Registrant as Specified In Its Charter)
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(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)(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:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
TEJON RANCH CO.
Post Office Box 1000
Lebec, California 93243
April 10, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Tejon Ranch Co. on Tuesday, May 7, 2002, at 9:30 A.M., at the Beale Memorial
Library, 701 Truxtun Avenue, Bakersfield, 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 at your earliest convenience.
Your interest and participation in the affairs of the Company are
greatly appreciated.
Sincerely,
Robert A. Stine,
President and Chief Executive Officer
TEJON RANCH CO.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
on
May 7, 2002
The Annual Meeting of Stockholders of Tejon Ranch Co. (the "Company")
will be held at the Beale Memorial Library, 701 Truxtun Avenue, Bakersfield,
California on Tuesday, May 7, 2002, at 9:30 A.M., California time, for the
following purposes:
1. To elect four directors.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The names of the nominees of the Board of Directors of the Company for
election at the meeting are: John L. Goolsby, Norman Metcalfe, Kent G. Snyder
and Michael H. Winer.
The Board of Directors has fixed the close of business on March 20,
2002, 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
ensure that your shares are represented at the meeting, please date, sign, and
mail the enclosed proxy, for which a return envelope is provided.
For the Board of Directors,
RAYBURN S. DEZEMBER, Chairman of the Board
DENNIS MULLINS, Secretary
Lebec, California
April 10, 2002
PLEASE MARK YOUR INSTRUCTIONS ON THE ENCLOSED PROXY, SIGN AND DATE THE PROXY,
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.
TEJON RANCH CO.
Post Office Box 1000
Lebec, California 93243
PROXY STATEMENT
Annual Meeting of Stockholders
May 7, 2002
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 7, 2002.
It is anticipated that the mailing of this Proxy Statement and
accompanying form of Proxy to stockholders will begin on or about April 10,
2002.
SOLICITATION OF PROXIES
At the meeting, the stockholders of the Company will be asked (1) to
elect four 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 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 ballot 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, other
electronic means, 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 New York Stock Exchange.
RECORD DATE AND VOTING
Holders of shares of Common Stock of record at the close of business
on March 20, 2002, are entitled to notice of, and to vote at, the meeting. There
were 14,359,415 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 and except as
indicated below under "Election of Directors," 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. Stockholders cannot
abstain in the election of directors, but they can withhold authority.
Stockholders who withhold authority will be considered present for purposes of
determining a quorum. The rules of the New York Stock Exchange 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, but do not permit such votes on
"non-routine" matters. Situations where brokers do not vote on non-routine
proposals are referred to as "broker non-votes." Broker non-votes will not be
counted as present for purposes of determining a quorum and will have no effect
on the outcome of the voting for any "non-routine" matters that may arise at the
meeting.
Stockholders vote cumulatively in the election of directors.
Cumulative voting means that each stockholder is entitled to a number of votes
equal to the number of directors to be elected multiplied by the number of
shares he or she holds. These votes may be cast for one nominee or distributed
among two or more nominees. The four (4) candidates receiving the highest number
of affirmative votes will be elected as directors. On all other matters,
stockholders are entitled to one vote per share held. The proxies being
solicited include authority of the proxy holders to cumulate votes.
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 20, 2002. The table also provides the stock ownership as
of the same date of all directors, the most highly compensated executive
officers during 2001, and all directors and officers as a group.
Amount and
Nature of
Beneficial Percent
Name and Address of Stockholder Ownership(1) of Class
------------------------------- ------------- --------
Ardell Investment Company 1,034,528 (2) 7.20%
P.O. Box 1715
Newport Beach, CA 92659
M.H. Sherman Company 1,140,630 (2) 7.94%
P.O. Box 1715
Newport Beach, CA 92659
EQSF Advisers, Inc. 4,229,114 (3) 29.45%
767 Third Avenue
New York, NY 10017
Carl Marks Management Company, L.P. 585,083 (4) 4.07%
135 East 57th Street
New York, NY 10022
State of Wisconsin Investment Board 1,239,731 (5) 8.63%
P.O. Box 7842
Madison, WI 53707
Directors
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Otis Booth, Jr. 11,577 (6) below 1%
Craig Cadwalader 2,201,230 (7) 15.33%
Dan T. Daniels 2,207,694 (8) 15.37%
Rayburn S. Dezember 11,577 (9) below 1%
John L. Goolsby 9,207 (9) below 1%
Norman Metcalfe 7,025 (6) below 1%
George G.C. Parker 3,168 (9) below 1%
Robert C. Ruocco 590,326 (10) 4.11%
Kent G. Snyder 7,574 (6) below 1%
Geoffrey L. Stack 5,761 (11) below 1%
Robert A. Stine 205,889 (12) 1.43%
Michael H. Winer 4,229,114 (13) 29.45%
Executive Officers
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Joseph E. Drew 0 0
Allen E. Lyda 32,285 (14) below 1%
2
Dennis Mullins 33,673 (14) below 1%
Jeffrey H. Warren 1,000 (14) below 1%
All officers and directors as a group 7,368,440 51.31%
(18 persons)
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(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, and except that all options are held by directors and officers
individually.
(2) Does not include 26,072 shares (0.18% 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, Craig Cadwalader and Dan
T. Daniels, the latter two of whom are directors of the Company. Mr.
Haskell is President of the Sherman Foundation, is Chairman and a
director of Ardell Investment Company, is Chairman of the Board and a
director of M.H. Sherman Company, and has the power to vote a majority
of the shares of Ardell Investment Company and M.H. Sherman Company.
Mr. Haskell also owns personally 51,100 shares of the Company. Mr.
Haskell disclaims beneficial ownership of the shares owned by the
Sherman Foundation for all other purposes.
(3) Includes 3,420,106 shares owned beneficially and of record by Third
Avenue Value Fund, 274,600 shares owned beneficially and of record by
Third Avenue Small-Cap Value Fund, 287,180 shares owned beneficially
and of record by Third Avenue Real Estate Value Fund, 18,000 shares
owned beneficially and of record by Third Avenue Variable Series
Trust, and 137,305 shares owned beneficially and of record by
Aegon/Transamerica Series: Third Avenue Value Fund. EQSF Advisers,
Inc. has sole voting and investment power with respect to these
shares. Also includes 91,923 shares owned of record by various
individual investment accounts managed by M.J. Whitman Advisers, Inc.,
an entity under common ownership, management and control with EQSF
Advisers. M.J. Whitman Advisers has sole investment power with respect
to those shares and sole voting power with respect to 88,145 of those
shares.
(4) Includes 585,083 shares owned beneficially and of record by Carl Marks
Strategic Investments, L.P. Carl Marks Management Company, L.P. has
sole voting and investment power with respect to these shares.
(5) Based upon information provided to the Company by the stockholder on a
Schedule 13G dated February 15, 2002, and filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of
1934.
(6) Includes shares underlying options that are currently exercisable as
follows: Mr. Booth 10,454 shares, Mr. Metcalfe 5,228 shares, and Mr.
Snyder 7,574 shares.
(7) Includes 1,034,528 shares owned by Ardell Investment Company,
1,140,630 shares owned by M.H. Sherman Company, and 26,072 shares
owned by the Sherman Foundation. Mr. Cadwalader is President and a
director of Ardell Investment Company and M.H. Sherman Company and a
trustee of the Sherman Foundation. Mr. Cadwalader disclaims beneficial
ownership as to all of the shares owned by said entities for all other
purposes.
(8) Includes 1,034,528 shares owned by Ardell Investment Company,
1,140,630 shares owned by M.H. Sherman Company, and 26,072 shares
owned by the Sherman Foundation. Mr. Daniels is Executive 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 the Sherman Foundation. Mr. Daniels
disclaims beneficial ownership as to all of the shares owned by said
entities for all other purposes. Also includes 6,464 shares underlying
options held by Mr. Daniels that are currently exercisable.
(9) The shares owned by each of Messrs. Dezember, Goolsby and Parker are
held by a family trust concerning which the director and his spouse
share voting and investment power. Includes shares underlying options
that are currently exercisable as follows: Mr. Dezember 10,454 shares,
Mr. Goolsby 7,859 shares, and Mr. Parker 2,606 shares.
3
(10) Includes 585,083 shares owned beneficially and of record by Carl Marks
Strategic Investments, L.P. Mr. Ruocco is a General Partner of Carl
Marks Management Company, L.P. and shares voting and investment power.
Includes 5,243 shares underlying options held by Mr. Ruocco that are
currently exercisable.
(11) The shares owned by Mr. Stack are held as community property; he and
his spouse share voting and investment power with respect to their
shares. Includes 5,717 shares underlying options that are currently
exercisable.
(12) The shares owned by Mr. Stine are held by a family trust concerning
which he and his spouse share voting and investment power. Includes
198,954 shares underlying options that are currently exercisable.
(13) Includes 3,420,106 shares owned beneficially and of record by Third
Avenue Value Fund, 274,600 shares owned beneficially and of record by
Third Avenue Small-Cap Value Fund, 287,180 shares owned beneficially
and of record by Third Avenue Real Estate Value Fund, 18,000 shares
owned beneficially and of record by Third Avenue Variable Series
Trust, and 137,305 shares owned beneficially and of record by
Aegon/Transamerica Series: Third Avenue Value Fund. Also includes
91,923 shares owned of record by various individual investment
accounts managed by M.J. Whitman Advisers, Inc., an affiliated entity
to EQSF Advisers. M.J. Whitman Advisers has sole investment power with
respect to those shares and sole voting power with respect to 88,145
of those shares. Mr. Winer is a Portfolio Manager of both EQSF
Advisers and M.J. Whitman Advisers and shares voting and investment
power. Mr. Winer disclaims beneficial ownership of the shares owned by
said entities for all other purposes.
(14) The shares owned by Messrs. Lyda, Mullins and Warren are held as
community property concerning which the officer and his spouse share
voting and investment power. The totals for Messrs. Lyda, Mullins and
Warren include shares underlying options that are currently
exercisable as follows: Mr. Lyda 27,378 shares, Mr. Mullins 31,288
shares, and Mr. Warren 1,000 shares.
ELECTION OF DIRECTORS
The Board of Directors now consists of twelve directors divided into
three classes based upon when their terms expire. The terms of four directors
(Class I) expire at the 2003 Annual Meeting, the terms of four directors (Class
II) expire at the 2004 Annual Meeting, and the terms of four directors (Class
III) expire at the 2002 Annual Meeting. The regular 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 2002 Annual Meeting (all of whom are presently directors) are
set forth in the table below, along with certain other information. The table
also includes information as to other 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 fourth of
the votes to which the stockholder is entitled will be cast for each of the four
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
4
will vote for substitute nominees in their discretion. If one or more persons
other than those named below as nominees for the 2002 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 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 June 1987 include references
to Tejon Ranch Co., a California corporation and the Company's predecessor,
which became a wholly owned subsidiary of the Company as a result of a
reincorporation transaction consummated in June 1987.
First
Nominees for Class III Directors Whose Terms Expire in 2004 Became
and Principal Occupation or Employment(1) Director Age
----------------------------------------- -------- ---
John L. Goolsby(5) 1999 60
Private investments and real estate; Director of America
West Holdings Corporation
Norman Metcalfe(4)(5) 1998 59
Real estate and investments; Director of The Ryland Group
Kent G. Snyder(3) 1998 65
Attorney at Law; Director of First Fidelity Investment & Loan
and Life Financial Corp.
Michael H. Winer 2001 46
Portfolio Manager, EQSF Advisers, Inc. and M.J. Whitman
Advisers, Inc., investment management
Continuing Directors and Principal Occupation or Employment(1)
--------------------------------------------------------------
Otis Booth, Jr.(3) 1970 78
Private investments and ranching; Director of Clipper Fund, Inc.
Craig Cadwalader(3) 1994 61
President and Director, Ardell Investment Company, investments;
Director, M.H. Sherman Company
Dan T. Daniels(2)(3)(4)(5) 1982 60
President and Director, M.H. Sherman Company, investments
Rayburn S. Dezember(2)(4) 1990 71
Private investments; Chairman of the Board, Tejon Ranch Co.;
Director, Bolthouse Farms, Inc., and The Bakersfield Californian
George G.C. Parker(3) 1999 63
Dean Witter Distinguished Professor of Finance, Graduate School of
Business, Stanford University; Director of Continental Airlines, Inc.,
Barclays Global Investors, and California Casualty Insurance Companies
Robert C. Ruocco(4) 1997 43
General Partner, Carl Marks Management Company, L.P.,
investment management; Director of Sport & Health
Company, L.C. and Anchor Glass Container Corporation
Geoffrey L. Stack(3)(5) 1998 58
Managing Director, SARES.REGIS Group, real estate development
and management; Director of Arral & Partners
Robert A. Stine(2)(5) 1996 55
President and Chief Executive Officer, Tejon Ranch Co.;
Director of First Community Bancorp and The Bakersfield
Californian
5
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(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. Goolsby served as President and Chief Executive Officer of The
Howard Hughes Corporation, a real estate development company, from 1990
until his retirement in July 1998. Mr. Parker also served as Senior
Associate Dean for Academic Affairs and Director of the MBA Program at
Stanford from 1993 to 2001. Mr. Winer has been a Portfolio Manager at
M.J. Whitman Advisers since September 1998 and at EQSF Advisers since
June 2001. Previously, he held other positions at EQSF and certain of
its affiliates, including Real Estate Analyst and Managing Director.
(2) Member of Executive Committee.
(3) Member of Audit Committee.
(4) Member of Compensation Committee.
(5) Member of Real Estate Committee.
The terms of Messrs. Booth, Daniels, Ruocco and Stack expire at the
2003 Annual Meeting, and the terms of Messrs. Calwalader, Dezember, Parker and
Stine expire at the 2004 Annual Meeting.
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 be exercised
only 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 Executive Committee also functions as the
Nominating Committee as needed. In this role, it periodically searches for and
considers qualified candidates to serve on the Board of Directors. However, the
nominees for director proposed by the Board of Directors are selected by the
entire Board. The Committee will consider nominees for director recommended by
stockholders. Any such recommendations should be submitted in writing to the
Secretary of the Company at its principal office.
The Audit Committee acts on behalf of the board of directors in
fulfilling the board's oversight responsibility relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
Company's financial statements, and the legal compliance and ethics programs as
established by management and the board. The Charter of the Audit Committee was
adopted and approved by the Board of Directors in 2000 and is attached as an
Appendix to this Proxy Statement. Each of the members of the Audit Committee is
independent as defined under the listing standards of the New York Stock
Exchange.
The Compensation Committee periodically reviews and either adjusts or
recommends to the Board of Directors 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 and opportunities. It receives and considers
the analyses of the Company's outside land use and development consultants. The
Committee directs management on the direction that the Company's real estate
activities should take.
During 2001, there were four meetings of the Board of Directors, none
of the Executive Committee, two of the Audit Committee, two of the Compensation
Committee, and two of the Real Estate Committee. The Board of Directors has
determined that the Audit Committee should meet quarterly in 2002 and future
years. During 2001 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.
6
Director Compensation
Directors who are not employees of the Company receive an annual
retainer of $24,000, a fee of $1,000 for attendance at any meeting of the Board,
a fee of $500 per Committee meeting attended by such director on the day of a
Board meeting, and a fee of $1,000 per Committee meeting attended by such
director on a day when the Board is not meeting. The fees are payable if the
meeting was attended in person or by telephone conference call. The annual
retainer is payable one-half in cash and one-half in stock options valued using
the Black-Scholes method, unless the director elects to receive his entire
retainer in stock options. If a director owns beneficially, or is affiliated
with a person or entity which owns beneficially, 5% or more of the outstanding
shares of the Common Stock of the Company, then that director may elect to
receive his entire annual retainer in cash.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own beneficially more
than 10% of the Company's Common Stock to file reports of beneficial ownership
and changes in ownership with the Securities and Exchange Commission. Messrs.
Drew, Lyda and Severy failed to timely file reports due following changes in
their ownership of the Company's Common Stock during 2001, but promptly
completed the filings when the failure to file was called to their attention.
EXECUTIVE COMPENSATION
The following table shows the aggregate compensation paid on an accrual
basis by the Company and its subsidiaries during 2001 and each of the two
previous years to the Chief Executive Officer and to the four other executive
officers of the Company who were most highly compensated in 2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
COMPENSATION
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NAME RESTRICTED SECURITIES
AND STOCK UNDERLYING ALL OTHER
PRINCIPAL SALARY(1) BONUS(1) AWARDS(2) OPTIONS COMPENSATION(3)
POSITION YEAR ($) ($) ($) (#) ($)
--------------------------------------------------------------------------------------------------------------------------
Robert A. Stine 2001 310,000 137,268 0 167,500 6,250
President and Chief 2000 310,000 149,182 0 0 5,700
Executive Officer 1999 310,000 142,442 120,000 106,137 5,600
Dennis Mullins 2001 170,000 61,081 92,354 46,000 3,800
Vice President, 2000 155,000 55,493 0 0 3,500
General Counsel and 1999 155,000 78,825 0 28,946 3,400
Secretary
Allen E. Lyda 2001 170,000 49,419 0 39,000 3,800
Vice President, Chief 2000 155,000 53,968 0 0 3,500
Financial Officer, Treasurer 1999 155,000 59,734 60,000 28,946 3,400
and Assistant Secretary
Jeffrey H. Warren (4) 2001 135,000 50,301 0 22,500 0
Vice President 2000 11,250 0 0 0 0
Joseph E. Drew (4) 2001 112,500 35,000 0 35,000 0
Vice President
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7
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(1) Amounts shown include salary earned and received by executive
officers. The bonus amounts shown were accrued by the Company in the
years shown but were received by the officers in January and February
of the following years.
(2) The amounts in this column represent the value of restricted stock
granted under the 1998 Stock Incentive Plan based on the closing price
of the Company's Common Stock on the New York Stock Exchange on the
date the issuance of the shares was authorized by the Board of
Directors. The valuations of the shares in the table do not reflect
the effect of the contingencies on the value of the shares when they
were granted. The restrictions were removed in September 2001 when the
contingencies were satisfied.
(3) The amounts in this column include the matching contributions made by
the Company under its 401(k) defined contribution plan and
contributions made to the officers' Supplemental Executive Retirement
Plans.
(4) Mr. Warren commenced employment with the Company on December 1, 2000,
and Mr. Drew commenced employment with the Company on March 19, 2001.
The Company has entered into an agreement with Mr. Stine providing for
him to serve as President, Chief Executive Officer and a director of the
Company. Although the agreement does not provide for a term of employment, Mr.
Stine will be entitled to continuation of his salary for one year if the Company
terminates his employment without cause. In addition such a termination would
result in acceleration of the exercise dates of Mr. Stine's stock options. The
agreement also provides for customary perquisites.
The Company has entered into agreements with each of the officers
named in the Summary Compensation Table providing each officer with specified
severance benefits in the event the Company terminates his employment without
cause, or the employee terminates his employment for good cause, within two
years following, or prior to and in connection with or anticipation of, a change
of control of the Company. "Change of control" is defined to mean a liquidation
of the Company; a change in the identity of a majority of the directors on the
Board (with certain exceptions); the acquisition by any person or group of
beneficial ownership of 20% or more of the outstanding shares of Common Stock or
voting power of the Company (with certain exceptions); or a transaction or
series of transactions resulting in the sale of substantially all of the
Company's assets or the merger, consolidation or reorganization of the Company,
unless control of the Company or a successor company that acquires the Company's
assets is substantially the same after the transaction (as defined). The
severance benefits generally consist of the continuation (for up to 36 months
for Mr. Stine and 30 months for the other officers (subject to certain
limitations) of the employee's salary and Company health and life insurance, the
continuation for a substantially shorter period of time of applicable
perquisites, including Company car, country club membership and/or Company
housing, and the acceleration of the exercise dates of all outstanding options
to purchase capital stock of the Company.
Stock Options
The Company has a 1992 Stock Option Plan providing for the granting of
options to purchase a maximum of 230,000 shares of Common Stock and a 1998 Stock
Incentive Plan providing for the granting of awards, including stock options,
with respect to a maximum of 1,600,000 shares of Common Stock. During 2001
options were granted to the officers named in the Summary Compensation Table
under the 1998 Stock Incentive Plan to purchase shares as shown in the table
below. No options were granted under the 1992 Stock Option Plan in 2001.
8
OPTION GRANTS IN LAST FISCAL YEAR
PERCENT OF
TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR GRANT DATE
NAME GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
FISCAL YEAR (per share) (1) DATE VALUE(2)
---------------------------------------------------------------------------------------------------------------------------
Robert A. Stine 77,500 20% $20.32 1/22/11 626,975
90,000 23% $23.55 12/3/11 813,600
Dennis Mullins 21,000 5% $20.32 1/22/11 169,890
25,000 6% $23.55 12/3/11 226,000
Allen E. Lyda 21,000 5% $20.32 1/22/11 169,890
18,000 5% $23.55 12/3/11 162,720
Jeffrey H. Warren 5,000 1% $20.32 1/22/11 40,450
17,500 4% $23.55 12/3/11 158,200
Joseph E. Drew 30,000 8% $23.55 12/3/11 271,200
------------
(1) The options granted in 2001 become exercisable as to 20% of the shares
on the first through fifth, inclusive, anniversary of the dates of
grant. The term of the options in ten years. If the option holder
leaves the employ of the Company for any reason other than death of
disability, the options terminate three months after such termination
of employment and are exercisable during that period only to the
extent that they were exercisable on the date of termination of
employment. In the case of termination of employment as a result of
death or disability, the options terminate one year after such death
or disability and are exercisable during that period only to the
extent they were exercisable on the date of death or disability. The
exercise dates of the options accelerate in the event of a "change of
control," which is defined to include a merger, consolidation,
transfer of all or substantially all assets, or the issuance or
transfer of stock or other transactions or series of related
transactions as a result of which persons or entities other than the
stockholders of the Company immediately before the transaction or
transactions own at least 80% of the voting stock of the Company or
its successor immediately after the transaction or transactions.
(2) Based on the Black-Scholes option pricing model adapted for use in
valuing executive stock options. The grant date present value of these
options was estimated with the following weighted average assumptions
for 2001: Risk-free interest rate of 5.00%; dividend rate of 0%;
volatility factor of the expected market price of the Company's common
stock of .34; and a weighted average expected live of the options of 5
years from the option grant date.
The following table shows the number of shares issued upon exercise of
options in 2001 and the number of shares subject to exercisable and
nonexercisable stock options outstanding at December 31, 2001, and held by
executive officers named in the preceding Summary Compensation Table.
OPTION EXERCISES AND YEAR-END VALUE TABLE
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FY-END(#) AT FY-END($)(1)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) VALUED REALIZED ($) UNEXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------------------------
Robert A. Stine 0 0 176,454/367,181 $920,738/$752,895
Dennis Mullins 0 0 29,688/90,568 $125,325/$161,690
Allen E. Lyda 14,000 $145,040 19,978/89,968 $27,509/$170,994
Jeffrey H. Warren 0 0 0/22,500 $0/$24,250
Joseph E. Drew 0 0 0/30,000 $0/$10,800
-----------------
(1) Market value of underlying securities at year end, minus the exercise
price of options.
9
Pension Plan
The Company contributes each year to a Pension Plan for most of its
employees the amount necessary to fund the Plan on an actuarially 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 five year final average annual compensation, 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 has
been accrued and 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). 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
does not meet the foregoing requirements. In December 1999 the SERP was amended
to give Mr. Stine credit for 1.875 years of service for each year of actual
service, to allow him to receive benefits calculated on the basis of up to 30
years of service instead of the 25-year maximum applicable to other participants
and to impose an overall formula limit on his maximum monthly retirement
benefit. Under the amendment, if Mr. Stine remains in the employ of the Company
and retires at age 65, he would receive benefits based upon 30 years of service.
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.
Five Year Final Years of Service
Average Annual -----------------------------------------------------------------------
Compensation 10 20 25 30 or more
----------------- -- -- -- ----------
$ 100,000 $12,439 $24,879 $31,098 $37,318
150,000 20,689 41,379 51,723 62,068
* 200,000 28,939 57,879 72,348 86,818
250,000 37,189 74,379 92,973 111,568
300,000 45,439 90,879 113,598 136,318
350,000 53,689 107,379 134,223 161,068
400,000 61,939 123,879 154,848 185,818
450,000 70,189 140,379 175,473 210,568
500,000 78,439 156,879 196,098 235,318
550,000 86,689 173,379 216,723 260,068
600,000 94,939 189,879 237,348 284,818
* Current maximum annual compensation limit for all qualified plan benefit
calculation purposes. (IRC 401(a)(17)).
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 "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 benefits
presented reflect deductions for Social Security as required by the Plan. The
amounts of compensation for 2001 that could affect the five-year final average
annual compensation of the executives named in the Summary Compensation Table if
they are retired are: Mr. Stine - $459,182; Mr. Mullins - $225,493; Mr. Lyda -
$223,968; Mr. Warren - $135,000; and Mr. Drew - $112,500. The credited years of
service under the Plan and the SERP as of December 31, 2001, for those named in
the Summary Compensation Table
10
are: Mr. Stine - 9.375 years, Mr. Mullins - 8 years, and Mr. Lyda - 11 years,
Mr. Warren - 1 year, and Mr. Drew - 0 years. In addition, Mr. Warren has a
vested pension benefit from his prior employment with the Company from 1988 to
1994. All employees having one year in service with the Company participate in
the Plan, including all current officers of the Company other than Dana C.
Severy, Senior Vice President-Residential and Resort Properties, who joined the
Company in September 2001.
Certain Transactions
In December 2000 the Company offered to its stockholders the right to
purchase 1,578,947 additional shares of its Common Stock for a purchase price of
$19 per share or an aggregate of $30 million. In connection with that offering
the Company entered into an agreement with Third Avenue Trust (acting on behalf
of Third Avenue Value Fund, Third Avenue Small-Cap Value Fund and Third Avenue
Real Estate Value Fund) and a private investment fund managed by Carl Marks
Management Company, L.P. to purchase any of the shares offered to the extent
that the gross proceeds to the Company from the offering to its stockholders
were less than $30 million. The price payable per share under the agreement was
the same as the price in the offering to the stockholders, $19 per share, and
the respective obligations of the purchasers were proportional to the number of
shares of Company common stock owned by each of them at the time the agreement
was entered into. In addition the purchasers committed to exercise their own pro
rata rights to purchase shares in the offering as stockholders but not to
exercise their rights to purchase additional shares in the offering which other
stockholders declined to purchase. Because the offering to the stockholders was
oversubscribed, none of the purchasers purchased any shares pursuant to this
agreement, but the Company reimbursed the Carl Marks Management Company, L.P.
investment fund $45,000 for its Hart-Scott-Rodino filing fees incurred in
connection with the offering.
Martin J. Whitman, a director of the Company until he retired in May
2001, is Chairman of the Board and Chief Executive Officer of Third Avenue Trust
and EQSF Advisers, Inc., investment advisor to Third Avenue Trust, and is
Chairman of the Board, Chief Executive Officer and Chief Investment Officer of
M.J. Whitman Advisers, Inc., an affiliate of EQSF Advisers, Inc. Third Avenue
Value Fund and the other funds listed in footnote 3 on page 3 owned beneficially
an aggregate of 3,848,935 shares of Common Stock of the Company as of March 20,
2001, and investment accounts managed by M.J. Whitman Advisers, Inc. owned an
additional 32,119 shares as of March 20, 2001. These shares in the aggregate
constituted approximately 27.16% of the outstanding shares of Common Stock of
the Company on March 20, 2001. Robert C. Ruocco, a director of the Company, is a
General Partner of Carl Marks Management Company, L.P., and investment funds
managed by it owned an aggregate of 792,838 shares or approximately 5.55% of the
outstanding shares of Common Stock of the Company as of March 20, 2001.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The policies recommended by the Compensation Committee and adopted by
the Board of Directors for determining the compensation of executive officers
for 2001 were essentially the same as for 2000 with total compensation
consisting of three components: salary, cash bonuses and stock options. The
percentages of total compensation represented by salary, bonuses and stock
options for 2001 were determined by the Committee and the Board. Among the
factors considered by the Committee and the Board was a 1999 study provided by
an independent consultant for setting compensation for 2000 as well as input
from individual members of the Committee and the Board. No specific formulas
were used to determine the relative mix of the three forms of compensation,
although guidelines for the mix provided by the independent consultant affected
the final decisions of the Committee and the Board.
The salaries for all executives named in the Summary Compensation
Table above remained the same for 2001 as they were for 2000, except for Mr.
Lyda and Mr. Mullins. The salaries for Mr. Lyda and Mr. Mullins were increased
to $170,000 per year for 2001, reflecting the Committee's favorable evaluation
of the performance by each of them and the fact that neither of them had
received a salary increase since 1999. The Committee also believed that the
prior salary levels were below what other companies were paying for comparable
positions. Mr. Drew, who joined the Company in March 2001 as Vice
President-Commercial and Industrial Development, received a salary based on an
annual rate of $135,000 for 2001, and Dana C. Severy, who joined the Company in
September 2001 as Senior Vice President-Residential and Resort Properties,
received a salary based on an annual rate of $225,000. Mr. Severy would have
been included in the Summary Compensation Table above if he had been employed
for the entire year. The amounts of the salaries of Mr. Drew and Mr. Severy were
11
determined based upon information available to Mr. Stine and Committee members
as to what other companies were paying for comparable positions and negotiations
with each of the executives.
For 2001 executives other than Mr. Severy and Mr. Drew had the
opportunity to earn bonus compensation ranging from 22% to 79% of base salary
for Mr. Stine and 19% to 57% for other executives. Sixty percent of the maximum
bonus Mr. Stine could earn was based upon the extent to which he achieved a
number of individual performance objectives relating to the business
development, operations and staffing of the Company, and forty percent was based
upon the revenues and income of the Company. Of the portion of the bonus based
upon individual objectives, Mr. Stine earned 67% of the maximum that could be
earned, and of the portion based upon the revenues and income of the Company he
earned 40% of the maximum.
For the two executives in charge of particular operating divisions,
Mr. Warren, Vice President, Property Management and Ranch Operations, and Dennis
Atkinson, Vice President, Agriculture, the portion of the maximum bonus that
could be earned by each of them based upon their individual performance
objectives was 50%, the portion based upon division revenues and income was 35%
and the portion based upon Company revenues and income was 15%. For Mr. Lyda,
whose performance does not relate to any particular division of the Company, 60%
of the bonus was based upon achieving individual performance objectives and 40%
was based upon the Company's revenues and income. For Mr. Mullins, whose
performance also does not relate to any particular division of the Company,
those percentages were 65% and 35%, respectively. Mr. Drew's bonus for 2001 was
an agreed minimum of $35,000 and Mr. Severy's bonus was an agreed $30,000,
reflecting the fact that he was employed for a shorter portion of the year.
The Company has adopted a long-term compensation plan that
contemplates the granting of stock options on a periodic basis in the discretion
of the Board of Directors pursuant to the Company's 1998 Stock Incentive Plan.
The Committee believes that stock options are a desirable form of long-term
compensation because they more closely align the interests of the executives
with those of the stockholders. For 2001 the Committee recommended, and the
Board approved, the granting of options to purchase an aggregate of 305,000
shares of Common Stock of the Company to the five executive officers named in
the Summary Compensation Table. Of that amount 167,500 shares were the options
granted to Mr. Stine. These options for all executives were intended to be for
both 2001 and 2000, since no options were granted for 2000. In addition, Mr.
Severy, who is not included in the Summary Compensation Table, was granted an
option to purchase 25,000 shares. The number of shares subject to options
granted to each executive reflects the nature of his duties as well as a
subjective evaluation of the executive's performance and/or potential.
Dan T. Daniels (Chairman), Rayburn S. Dezember,
Norman Metcalfe, Robert C. Ruocco
Members of the Compensation Committee
12
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.
[GRAPH]
1997 1998 1999 2000 2001
----------------------------------------------------------
TEJON RANCH 71.76% -18.31% 17.75% -18.99% 24.27%
DJ EQUITY MKT 34.06% 27.34% 20.37% -9.27% -20.08%
DJ REAL ESTATE 18.96% -22.54% -6.83% 27.52% 11.80%
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.
13
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has been selected by the Board of Directors to
serve as the Company's independent public accountants for the year 2002 and
served in that capacity for the year ended December 31, 2001. Representatives of
Ernst & Young LLP are expected to be present at the meeting and will have an
opportunity to make a statement if they wish and will be available to respond to
appropriate questions from stockholders.
Audit Fees. The aggregate fees billed by Ernst & Young LLP for
professional services rendered for the audit of the Company's annual financial
statements for the year ended December 31, 2001 and for the reviews of the
financial statements included in the Company's Forms 10-Q for that year were
$129,550.
All Other Fees. The aggregate fees billed by Ernst & Young LLP for
all other services not referred to above for the year ended December 31, 2001
were $52,300.
The Audit Committee of Board of Directors considered whether the
provision of the services referred to above under the heading "All Other Fees"
is compatible with maintaining the independence of Ernst & Young LLP.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors has furnished the
following report:
The Audit Committee reviewed the Company's financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process. The
Company's independent auditors are responsible for expressing an opinion on
the conformity of the Company's audited financial statements to generally
accepted accounting principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). In addition, the Audit Committee has
received from the independent auditors the written disclosures required by
Independence Standards Board No. 1 (Independence Discussion with Audit
Committees) and discussed with them their independent from the Company and its
management. The Audit Committee has also considered whether the independent
auditors' providing of [information technology services and] other non-audit
services to the Company is compatible with their independence.
In reliance on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors, and the Board of
Directors has approved, that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2001
as filed with the Securities and Exchange Commission.
Otis Booth, Jr. (Chairman), Craig Cadwalader, Dan T. Daniels,
George G.C. Parker, Kent G. Snyder and Geoffrey L. Stack
Members of the Audit Committee
14
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 (including the financial statements and financial statement schedules but
without exhibits) filed with the Securities and Exchange Commission may be
obtained without charge by calling or writing Corporate Secretary, Tejon Ranch
Co., Post Office Box 1000, Lebec, California 93243, (661) 248-3000.
Stockholder Proposals. A stockholder's proposal will be considered at
the 2002 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 the 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 2003 Annual Meeting, stockholder proposals are
required to be delivered to the Company on or before December 10, 2002.
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 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,
RAYBURN S. DEZEMBER, Chairman of the Board
DENNIS MULLINS, Secretary
April 10, 2002
15
APPENDIX
--------
TEJON RANCH CO.
AUDIT COMMITTEE CHARTER
Organization
The audit committee shall be appointed by the board of directors and shall
comprise at least three directors, each of whom is independent of management and
the Company. The board of directors shall also designate one member as the
"Chair." Members of the committee shall be considered independent only if they
have no relationship that may interfere with the exercise of their independence
from management and the Company and if they meet the restrictions set forth in
Section 303.01(B)(3) of the New York Stock Exchange Rules. All committee members
shall be financially literate or shall become financially literate within a
reasonable period of time after appointment to the committee, and at least one
member shall have accounting or related financial management expertise. The
independence, financial literacy and accounting or related financial management
expertise of committee members shall be determined by the board of directors in
the exercise of its business judgment.
Responsibilities and Processes
The primary responsibility of the audit committee is to act on behalf of the
board of directors in fulfilling the board's oversight responsibility relating
to the Company's financial statements and the financial reporting process, the
systems of internal accounting and financial controls, the annual independent
audit of the Company's financial statements, and the legal compliance and ethics
programs as established by management and the board. In so doing, it is the
responsibility of the committee to maintain free and open communication between
the committee, independent auditors, and management of the Company. The policies
and procedures of the committee in carrying out its responsibilities shall
remain flexible in order to best react to changing conditions and circumstances.
In discharging its oversight role, the committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company and the power to retain outside counsel
or other experts for this purpose. The following shall be the principal
recurring processes of the audit committee in carrying out its oversight
responsibilities. The processes are set forth as a guide with the understanding
that the committee may supplement them as appropriate.
.. The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representative of
the Company's stockholders. The committee and the board of directors
shall have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the independent auditors. The
committee shall be responsible for ensuring that the independent
auditors submit on a periodic basis to the committee a formal written
statement delineating all relationships between the independent
auditors and the Company. In addition the committee shall engage in a
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the independent auditors, and the committee shall be
responsible for recommending that the board of directors take
appropriate action in response to the independent auditors' reports to
satisfy itself of the independent auditors' independence. Annually,
the committee shall review and recommend to the board the selection of
the Company's independent auditors.
.. The committee shall discuss with the independent auditors the overall
scope and plans for their audits including the scope, timing, adequacy
of staffing and compensation. Also, the committee shall discuss with
management and the independent auditors the adequacy and effectiveness
of the accounting and financial controls, including the Company's
system to monitor and manage business risk, and legal and ethical
compliance programs. Further, at least once annually, the committee
shall meet separately with the independent auditors, with and without
management present, to discuss the results of their examinations.
16
.. The committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the committee by the independent
auditors under generally accepted auditing standards. The chair of the
committee may represent the entire committee for the purposes of these
discussions.
.. The committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K (or the annual report to stockholders if
distributed prior to the filing of Form 10-K), including the judgment
of management and the independent auditors about the quality, not just
acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Also, the committee shall discuss the results of
the annual audit and any other matters required to be communicated to
the committee by the independent auditors under generally accepted
auditing standards.
.. The committee shall review and reassess the adequacy of the charter at
least annually and make recommendations to the board of directors as
to any changes in the charter.
.. The committee shall report committee actions to the board of directors
with such recommendations as the committee may deem appropriate.
17
________________________________________________________________________________
TEJON RANCH CO. PROXY
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, 2002, and hereby appoints
RAYBURN S. DEZEMBER and ROBERT A. STINE 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 all shares of Common Stock of Tejon Ranch Co. held of
record by the undersigned on March 20, 2002, at the Annual Meeting of
Stockholders to be held on May 7, 2002, or any adjournment or postponement
thereof.
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the meeting.
(Continued on reverse side)
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING
ENVELOPE.
________________________________________________________________________________
.FOLD AND DETACH HERE.
TEJON RANCH CO.
Annual Meeting of Stockholders
May 7, 2002, 9:30 a.m.
Beale Memorial Library
Auditorium
701 Truxtun Avenue
Bakersfield, California 93301
____________________________________________________________________________________________________________________________________
Please mark [X]
your votes
as indicated
FOR all nominees WITHHOLD
listed below (except AUTHORITY to vote
as written to the for ALL nominees
contrary below) listed below
1. Election of four directors [_] [_]
(Class III)
01 JOHN L. GOOLSBY 02 NORMAN METCALFE
03 KENT G. SNYDER 04 MICHAEL H. WINER
INSTRUCTION: To withhold authority to vote for any individual
nominee write in the nominee's name(s) in the space below:
_______________________________________________________________________
This Proxy, when properly executed, will be
voted in the manner directed herein by the
undersigned. If no direction is made, this
proxy will be voted for the election of
directors listed above.
Date _________________________________________
______________________________________________
Signature(s)
______________________________________________
Signature(s)
Please sign exactly as your name appears. When
shares are held by joint tenants, both should
sign. 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.
____________________________________________________________________________________________________________________________________
. FOLD AND DETACH HERE .
TEJON RANCH CO.
Annual Meeting of Stockholders
May 7, 2002, 9:30 a.m.
Beale Memorial Library
Auditorium
701 Truxtun Avenue
Bakersfield, California 93301