- Accelerated De-staggering of Board
Prior to 2017 Annual Meeting
PICO Holdings, Inc. (NASDAQ:PICO) announced today that it has taken
a number of actions designed to further enhance its corporate
governance practices.
In conjunction with these enhancements, PICO has
agreed to terminate the Settlement Agreement dated March 18, 2016
with Central Square Management LLC. Concurrent with agreeing
to the termination of the Settlement Agreement, each PICO Director
whose term was not scheduled to expire at the 2017 Annual Meeting
executed a resignation letter which voluntarily shortened his term
so that it concludes at the 2017 Annual Meeting. The effect
of these resignations is that the entire PICO Board will stand for
election for a one-year term at the 2017 Annual Meeting and at each
annual meeting thereafter. The Board has fixed the date of
the 2017 Annual Meeting of Shareholders to be held on May 4, 2017
in Reno, Nevada.
The Corporate Governance & Nominating
Committee has recommended and the Board has approved the reduction
in size of the Board to five members immediately following the 2017
Annual Meeting of Shareholders. As part of this decision, Messrs.
Raymond V. Marino II and Howard Brod Brownstein have informed the
Board that they do not intend to stand for election as directors
upon the expiry of their respective terms at the 2017 Annual
Meeting of Shareholders. Each of Andrew F. Cates, Michael J.
Machado, Daniel B. Silvers, Eric H. Speron and Maxim C.W. Webb will
be nominated for election at the 2017 Annual Meeting of
Shareholders to serve as directors for a one year term at the
expiration of their respective existing terms.
As part of the changes, the Board announced that
Mr. Marino has resigned as Chairman and that Mr. Webb, the
Company’s Chief Executive Officer and a director, has been elected
to the additional position of Chairman of the Board, effective
immediately. Additionally, also effective immediately, the
Board has elected Mr. Silvers to the position of Lead Independent
Director. In connection with these changes, the Board also
decided that Mr. Silvers will become Chairman of the Company’s
Corporate Governance & Nominating Committee and Mr. Cates will
become Chairman of the Company’s Compensation Committee, both with
immediate effect. Mr. Brownstein will continue to serve as
Chairman of the Company’s Audit Committee until his term as a
director ends.
PICO’s Board believes that combining the
Chairman and Chief Executive Officer positions is the most
efficient structure for the Company at this time. However,
the Board also recognizes that this is a topic on which investors
have different points of view. Accordingly, in order to
ensure that the Company’s shareholders are able to express their
respective views as to the appropriateness of the combination of
the Chairman and Chief Executive Officer positions, PICO intends to
hold an advisory vote on the matter at its 2017 Annual Meeting.
PICO’s Chairman and Chief Executive Officer, Max
Webb commented, “the Board believes these changes will serve to
streamline decision making at this critical juncture for the
Company. I wish to thank Ray for his service as Chairman
through the recent management transition, as well as Howard for his
service as Audit Chair. Ray’s leadership and efforts during
2016 led to improvements in shareholder communications, governance
and the management of the Company. I also welcome Dan to the
role of Lead Independent Director and look forward to continuing to
work with him and the rest of the Board as we all seek to maximize
shareholder value.”
PICO’s outgoing Chairman, Ray Marino commented,
“After leading the company through a difficult period and
completing a number of critical objectives, I’ve concluded that
this is the right time to streamline the Board as we seek to
continue to improve efficiency and harvest value for
shareholders.”
PICO’s Lead Independent Director, Daniel Silvers
commented, “I look forward to serving as Lead Independent Director
and continuing to work with the Board and the management team to
maximize shareholder value. Max has shown himself to be both ready
to accept this additional role and highly-focused on the goal of
maximizing shareholder value, and he will continue to have strong
oversight and support from the Independent Directors.”
Andrew Cates, Chairman of PICO’s Compensation
Committee commented, “in short order, we expect to announce the
terms of Max’s employment agreement as well as a revised incentive
compensation program which will incorporate much of the feedback we
have received from shareholders since March of this year.
While no terms are final, Max has agreed that his base salary will
remain at the level at which it was set prior to his promotion to
Chief Executive Officer on October 12, 2016.”
Mr. Silvers and Mr. Cates jointly commented,
“the Board has also undertaken a process of reviewing the
compensation program for non-employee directors. We expect to
implement a revised program effective January 1, 2017, the terms of
which will be outlined in the proxy statement for PICO’s 2017
Annual Meeting.”
UCP Update
On December 1, 2016, UCP appointed Eric Speron,
pursuant to his selection by PICO, as a Director on its board
effective December 12, 2016. Simultaneously, John R. Hart
submitted his resignation, effective December 12, 2016, from the
UCP board. Max Webb commented, “we look forward to the impact
that Eric will be able to make in joining me on the UCP board as we
work with our fellow UCP directors to realize value for all UCP
shareholders.”
About PICO Holdings, Inc.
PICO Holdings is a diversified holding
company. Currently, we believe the highest potential return
to shareholders is from a return of capital to shareholders.
As we monetize assets, rather than reinvest the proceeds, we intend
to return the capital derived therefrom, less any working capital
requirements, back to shareholders through a stock repurchase
program or by other means such as special dividends taking into
effect liquidity requirements, debt covenants and any other
contractual and legal restrictions that may exist at the time.
As of September 30, 2016, our two major
investments were:
- Vidler Water Company, Inc., a water resource development
business; and
- a 56.9% interest in UCP, Inc. (NYSE: UCP), a publicly-traded
homebuilder and land developer in markets located in California,
Washington State, North Carolina, South Carolina and
Tennessee.
OTHER INFORMATION
At September 30, 2016, PICO Holdings, Inc.
had a market capitalization of $272 million, and 23,069,381 shares
outstanding.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Statements in this press release that are not
historical, including statements regarding our corporate governance
enhancements, our business objectives, and our ability to monetize
assets and return capital to shareholders through stock repurchases
or through other means, are forward-looking statements based on
current expectations and assumptions that are subject to risks and
uncertainties.
In addition, a number of other factors may cause
results to differ materially from our expectations, such as: any
slow down or downturn in the housing recovery or in the real estate
markets in which UCP and Vidler operate; fluctuations in the prices
of water and water rights; physical, governmental and legal
restrictions on water and water rights; a downturn in some sectors
of the stock market; general economic conditions; prolonged
weakness in the overall U.S. and global economies; the performance
of the businesses; the continued service and availability of key
management personnel; and potential capital requirements and
financing alternatives.
For further information regarding risks and
uncertainties associated with our business, please refer to the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of our SEC
filings, including our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q, copies of which may be obtained by contacting
us at (858) 456-6022 or at http://investors.picoholdings.com.
We undertake no obligation to (and we expressly
disclaim any obligation to) update our forward-looking statements,
whether as a result of new information, subsequent events, or
otherwise, in order to reflect any event or circumstance which may
arise after the date of this press release, except as may otherwise
be required by law. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release.
Important Additional Information and
Where to Find It
PICO, its directors and certain of its executive
officers and employees may be deemed to be participants in the
solicitation of proxies from shareholders in connection with the
2017 Annual Meeting. PICO plans to file a proxy statement with the
U.S. Securities and Exchange Commission (the “SEC”) in connection
with the solicitation of proxies for the 2017 Annual Meeting (the
“2017 Proxy Statement”). SHAREHOLDERS ARE URGED TO READ THE
2017 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT PICO WILL FILE WITH
THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Additional
information regarding the identity of these potential participants
and their direct or indirect interests, by security holdings or
otherwise, will be set forth in the 2017 Proxy Statement and other
materials to be filed with the SEC in connection with the 2017
Annual Meeting. Information relating to the foregoing can also be
found in PICO’s definitive proxy statement for its 2016 Annual
Meeting of Shareholders (the “2016 Proxy Statement”), filed with
the SEC on May 31, 2016. To the extent holdings of PICO’s
securities by such potential participants have changed since the
amounts printed in the 2016 Proxy Statement, such changes have been
or will be reflected on Statements of Change in Ownership on Forms
3 and 4 filed with the SEC.
Shareholders will be able to obtain the 2017
Proxy Statement, any amendments or supplements to the proxy
statement and other documents filed by PICO with the SEC for no
charge at the SEC's website at www.sec.gov. Copies will also be
available at no charge at PICO’s website
(http://investors.picoholdings.com) or by writing to PICO’s
Corporate Secretary at PICO Holdings, Inc., 7979 Ivanhoe Avenue,
Suite 300, La Jolla, CA 92037 or by calling PICO’s Corporate
Secretary at (858) 456-6022.
This news release was distributed by
GlobeNewswire, www.globenewswire.com.
CONTACT:
Max Webb
Chairman and Chief Executive Officer
(858) 652-4114
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