PICO Holdings, Inc. (NASDAQ:PICO) today announced that its board of
directors has terminated John R. Hart as CEO of the Company, and as
CEO of Vidler Water Company, effective immediately. In
connection with his termination, Mr. Hart will receive severance
benefits in accordance with his Amended and Restated Employment
Agreement dated March 11, 2016. Raymond Marino, Chair of
PICO’s board of directors, indicated, “The decision to terminate
Mr. Hart was in the best interest of the Company and its
shareholders.”
Mr. Hart was not contractually obligated to
resign from the PICO or UCP, Inc. (NYSE:UCP) boards of directors
upon the termination of his employment, and he currently remains a
director of both companies. The independent directors of PICO
are currently evaluating a range of options with respect to the
removal of Mr. Hart from these director roles as soon as
possible.
In connection with this change, the PICO board
appointed:
Maxim C. W. Webb, Chief Financial Officer and
Treasurer since 2001, as PICO’s new Chief Executive Officer,
effective immediately. Mr. Webb was also appointed as a
director on the PICO board. Mr. Webb served in various
capacities with the Global Equity Corporation group of companies
since 1993, including Vice President, Investments of Forbes Ceylon
Limited from 1994 through 1996. Mr. Webb became an officer of
Global Equity Corporation in November 1997 and Vice President,
Investments of PICO in November 1998. The board determined Mr.
Webb’s depth of experience at PICO made him an excellent choice to
succeed Mr. Hart as CEO of PICO.
John T. Perri, Vice President and Chief
Accounting Officer since 2010, as PICO’s new Chief Financial
Officer and Treasurer, effective immediately. Mr. Perri has
served in various capacities since joining the Company in 1998,
including Financial Reporting Manager, Corporate Controller and
Vice President, Controller from 2003 to 2010. The board determined
Mr. Perri’s many years of experience at PICO made him a highly
qualified successor to Mr. Webb.
Dorothy Timian-Palmer, P.E., President and Chief
Operating Officer of Vidler Water Company, a wholly owned
subsidiary of PICO, as Vidler’s new Chief Executive Officer,
effective immediately. Ms. Timian-Palmer has over 25 years of
experience within the water resource field in the southwest United
States. She joined Vidler in December 1997 as its Chief Operating
Officer and was promoted to President in April 2006. Ms.
Timian-Palmer will continue to oversee the day-to-day operations,
and work closely with Mr. Webb to set the strategic direction of
Vidler. Prior to joining Vidler, she held the position of Utilities
Director for Carson City, Nevada, having started as its Water
Engineer in 1988. Previously, Ms. Timian-Palmer worked for the USDA
Soil Conservation Service. The PICO board determined Ms.
Timian-Palmer’s wealth of experience and accomplishments at Vidler
made her an excellent choice to succeed Mr. Hart as CEO of
Vidler.
Mr. Marino emphasized, “the independent
directors of the PICO board unanimously supports these
appointments, and strongly believes each of these individuals have
the abilities and commitment to execute the Company’s strategy.”
Transition Plan
Mr. Marino further stated, “As we transition the
executive leadership of the Company and at Vidler, I would like to
thank my fellow independent directors for their support and efforts
during the last seven months in evaluating the Company’s assets,
management and strategy. In addition, with the previously
announced sale of a majority of the Mendell assets, the board and
management believe the Company has adequate liquidity to meet its
obligations and operational needs. In connection with this
management transition, the PICO board and Mr. Webb have formulated
a detailed plan to insure the Company:
- Continues to execute on its plans to monetize assets as
appropriate, and return capital to shareholders;
- Implements modifications to the PICO executive bonus plan in
order to better align that plan with the interests of the Company’s
shareholders. In connection with the transition, Messrs. Webb
and Perri have waived any rights under PICO’s current executive
bonus plan, and are committed to working with the board on
formulating such modifications;
- Further reduces corporate overhead by eliminating or reducing
costs in several areas;
- Accelerates the declassification of the board of directors so
that, if possible, all directors are nominated for election at the
2017 annual meeting of shareholders to serve one-year terms;
- Remains committed to improving shareholder communications;
and,
- Follows the standards of good corporate governance.”
Synthonics Matter
The independent members of the PICO board, in
conjunction with its independent legal advisors, have completed
their review of PICO’s investment in and loan to Synthonics, Inc.,
and related public disclosures, and concluded: (i) prior to PICO’s
initial investment in 2010 the Audit Committee received all
material information regarding Mr. Ken Slepicka’s and Mr. Hart’s
interest in Synthonics, including Mr. Hart’s ownership of
Synthonics’ equity; and, (ii) Mr. Hart’s ownership in Synthonics
(which at all relevant times was below 1% of Synthonics’
outstanding equity and represented an investment of approximately
$55,000) was not required to be disclosed in PICO’s filings with
the SEC under applicable legal requirements. Mr. Marino
added, “The independent directors consider this matter
concluded.”
About PICO Holdings
PICO Holdings, Inc. is a diversified holding
company that seeks to maximize long-term shareholder value.
As previously announced, PICO’s current business plan contemplates
that, as assets are monetized, rather than reinvest the proceeds,
PICO intends to return capital to shareholders through a stock
repurchase program or by other means such as special dividends. For
more information, please visit www.picoholdings.com.
Cautionary Note Regarding
Forward-Looking Statements
Statements in this press release that are not
historical, including statements regarding our business plan, our
intention to monetize assets and return capital to shareholders,
and the effect of the transition in executive leadership at PICO,
are forward-looking statements based on current expectations and
assumptions that are subject to risks and uncertainties.
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 and investments in foreign companies; the continued
service and availability of key management personnel; potential
capital requirements and financing alternatives; the impact of
international events; and the costs of responding to the actions of
activist investors and the disruption caused to PICO’s business
activities by these actions.
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.
Contact:
John Perri
858-456-6022
Chief Financial Officer
UCP, Inc. (NYSE:UCP)
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