Cadiz Inc. Announces CFO Succession Plan With Stanley Speer Retirement and Jacinto Hernandez Appointment

Outgoing CFO Transition and Advisory Period Details

Stanley E. Speer's retirement from his position as Chief Financial Officer becomes effective on September 1, 2026, marking the end of his tenure in the executive leadership role at Cadiz Inc. However, his departure will not be immediate or absolute. The disclosure states that from the CFO Transition Date through December 31, 2026, or such earlier date as the Company may determine, Speer will continue to serve as an advisor to the Company on matters the organization deems appropriate to request from him. This staggered transition approach allows the Company to benefit from Speer's institutional knowledge during the changeover period.

During the Advisory Period, Speer will receive compensation of $10,000 per month for providing transition and advisory services as the Company may reasonably request, consistent with his knowledge of the Company's business and operations. This arrangement reflects a structured approach to managing continuity during leadership transitions, allowing the incoming CFO time to become fully integrated into the organization while maintaining access to outgoing executive expertise. The advisory compensation is separate from other severance benefits provided under the Separation Agreement executed on July 27, 2026.

Jacinto Hernandez Background and Board Experience

Jacinto J. Hernandez, age 47, brings a distinguished career spanning more than two decades in investment management and corporate governance. According to the disclosure, Hernandez founded Cummings Consulting & Management in July 2022 and has served as its principal, advising corporations and boards on capital allocation, mergers and acquisitions, and capital markets strategy. Prior to launching his consulting firm, he spent 22 years at Capital Group companies, retiring in June 2022 after holding a number of leadership and operational roles within the investment organization.

During his tenure at Capital Group and its subsidiary Capital World Investors, Hernandez held positions as a partner and investment analyst, starting in August 2000. His experience encompasses coverage of a broad range of industries and market capitalizations, including oil and gas, human capital management, and small-capitalization companies. According to the filing, he helped lead the research portfolio for one of the world's largest growth mutual funds and oversaw various governance and technology initiatives. The disclosure notes that over the course of his investment career, Hernandez built a successful track record across equities, convertible securities, and high-yield investments.

Board Memberships at Major Publicly Traded Companies

Hernandez's governance experience is substantial and spans multiple sectors within the energy and consumer industries. The filing discloses that he has served on the boards of directors of Pioneer Natural Resources Company (NYSE: PXD), Altria Group, Inc. (NYSE: MO), Aris Water Solutions, Inc. (NYSE: ARIS), Coterra Energy Inc. (NYSE: CTRA), and Devon Energy Corporation (NYSE: DVN). His board service has included positions on audit, governance, nominating, and environmental, social and governance (ESG) committees, demonstrating broad exposure to oversight responsibilities in strategic planning, compliance, and stakeholder management.

In addition to his board experience, Hernandez holds a Bachelor of Science in Economics from Stanford University, with a minor in Political Science. The filing confirms that there are no family relationships between Hernandez and any director or executive officer of the Company, and there are no transactions between Hernandez and the Company that would be required to be reported under Item 404(a) of Regulation S-K, thereby establishing the independence of his appointment and the absence of related-party concerns.

Hernandez Compensation Package Structure

Under the Employment Agreement executed on July 27, 2026, Hernandez will receive an annual base salary of $400,000 as compensation for his services as CFO. In addition to base salary, the agreement provides an annual cash bonus opportunity with a target equal to 100% of base salary, contingent upon achievement of performance goals established by the Board. This structure aligns a significant portion of Hernandez's annual compensation with Company performance, creating incentive alignment between the CFO and shareholder interests.

Beyond cash compensation, the Employment Agreement provides for substantial equity incentive awards consisting of one-time inducement grants outside of the Company's 2019 Equity Incentive Plan and pursuant to Nasdaq Listing Rule 5635(c)(4), subject to approval by the Compensation Committee and execution of a customary award agreement. The disclosure states that these inducement awards comprise 800,000 restricted stock units (RSUs), of which 200,000 RSUs will be vested upon grant, with the remaining 600,000 RSUs vesting in twelve approximately equal quarterly installments over three years. Additionally, Hernandez will receive 800,000 performance stock units (PSUs) which will vest upon achievement of specified stock price hurdles, providing long-term performance incentives tied to shareholder value creation.

Severance and Change of Control Protections

The Employment Agreement provides comprehensive severance benefits in specified circumstances designed to protect Hernandez during various employment scenarios. The filing discloses that the agreement includes 180 days of base salary continuation following termination due to death or disability. In the event of a change in control of the Company, or if Hernandez is terminated by the Company concurrently with or within 12 months following such a change in control, he would receive 12 months of base salary continuation, a lump-sum payment equal to 100% of his then-current target annual bonus, and 12 months of certain fringe benefits.

Additionally, if Hernandez resigns for specified good reason or is terminated by the Company without cause, the agreement provides 180 days of base salary, a prorated target annual bonus, and 180 days of certain fringe benefits. The disclosure states that in the event of a change in control, or if Hernandez's employment is terminated by the Company without cause, or by Hernandez for good reason, all outstanding unvested RSUs and PSUs will accelerate and immediately vest. The Employment Agreement also contains confidentiality, non-competition, and employee non-solicitation covenants, protecting the Company's proprietary information and business interests.

Additional Compensation and Benefits for Hernandez

Beyond salary, bonus opportunity, and equity awards, the Employment Agreement provides Hernandez with four weeks of paid annual vacation, medical coverage, and participation in the Company's other employee benefit plans. These provisions align with typical executive benefit arrangements and reflect a competitive total compensation package designed to attract and retain a senior financial executive of Hernandez's caliber and experience level. The medical coverage provisions provide security and alleviate certain employee financial concerns regarding health insurance expenses.

The filing indicates that Hernandez's role as Chief Financial Officer will expand his responsibilities upon the transition date. Effective as of the CFO Transition Date, Hernandez will also serve as the Company's principal financial officer, principal accounting officer, and Secretary. This consolidation of financial and administrative officer responsibilities under one executive reflects a streamlined governance structure and centralizes accountability for financial reporting and SEC compliance matters.

Separation Agreement Provisions for Stanley Speer

The Separation Agreement between Cadiz Inc. and Stanley E. Speer, executed on July 27, 2026, provides detailed severance arrangements in connection with his retirement from the Company. Subject to Speer's timely execution and non-revocation of a release of claims and compliance with his continuing obligations, the agreement provides for accelerated vesting of unvested service-based restricted stock units representing 68,700 shares. Additionally, the Company will grant fully vested restricted stock units representing 100,000 shares under the Plan in lieu of Speer's forfeited 2026 bonus opportunity, providing compensation for foregone annual incentive compensation.

The Separation Agreement also permits continued eligibility for vesting of a milestone-based restricted stock unit tranche representing 85,000 shares tied to the closing of the LLC project financing for the Northern Pipeline if such closing occurs within the Advisory Period. However, the disclosure indicates that Speer will forfeit unvested milestone-based restricted stock units representing 150,000 shares as part of the separation terms. These provisions create a balanced approach to Speer's equity holdings, accelerating some awards while allowing contingent vesting on project milestones and forfeiting others based on the separation agreement's terms.

Health Insurance and Benefits Continuation for Departing CFO

The Separation Agreement provides for reimbursement of COBRA premiums for up to 18 months following the CFO Transition Date, or if necessary to comply with applicable law, equivalent taxable monthly cash payments. This provision ensures continuity of health insurance coverage during Speer's transition to retirement, addressing a critical need during the departure period. The flexibility to provide either direct COBRA premium reimbursement or taxable cash payments accommodates various tax and employment law considerations that may arise in different jurisdictions or circumstances.

The filing states that the benefits described in the Separation Agreement constitute the sole severance benefits payable to Speer in connection with his separation from employment, establishing clear parameters around the total scope of his severance package. This comprehensive severance structure reflects what the Company considers an appropriate balance between honoring Speer's years of service and establishing definitive boundaries around separation payments. The agreement's structure—combining equity acceleration, new equity grants, advisory compensation, and benefits continuation—creates a multi-faceted severance arrangement addressing various aspects of executive separation.

Governance and Regulatory Compliance Matters

The disclosure addresses governance considerations relevant to the leadership transition. The filing confirms that there are no family relationships between Hernandez and any director or executive officer of the Company, establishing the absence of nepotism concerns that might complicate his appointment. Additionally, the filing states that there are no transactions between Hernandez and the Company that would be required to be reported under Item 404(a) of Regulation S-K, confirming the absence of related-party transaction disclosures and supporting the arms-length nature of the employment relationship.

The inducement awards provided to Hernandez were structured pursuant to Nasdaq Listing Rule 5635(c)(4), which permits companies to grant equity awards outside of stockholder-approved equity plans to newly hired or promoted employees in connection with their commencement of employment or assumption of new positions. The disclosure indicates that such awards remain subject to approval by the Compensation Committee and execution of a customary award agreement, maintaining appropriate governance oversight over equity grants. These regulatory compliance measures reflect the Company's commitment to adhering to stock exchange listing standards and maintaining proper governance practices during the leadership transition.

Timing and Operational Implications of the Leadership Transition

The timing of the announced leadership changes establishes a clear transition schedule that provides both immediate and forward-looking clarity to the organization and investors. Hernandez's appointment as Executive Vice President of Finance takes effect immediately upon execution of the Employment Agreement on July 27, 2026, allowing him to begin integration into the organization and assume supervisory responsibilities within the finance function before formally assuming the CFO title. The CFO Transition Date of September 1, 2026, provides a defined point at which formal CFO responsibilities transfer to Hernandez while Speer's advisory period commences.

This staggered approach to the leadership transition—with Hernandez assuming a senior finance role immediately and then transitioning to the CFO position approximately five weeks later—allows time for knowledge transfer and relationship establishment with key stakeholders, the Board, investors, and external auditors. The specification that Speer's advisory period may end earlier than December 31, 2026, if the Company determines, provides flexibility to the organization regarding when to formally terminate the advisory relationship. This structured transition approach reflects careful planning designed to minimize operational disruption while ensuring continuity of financial leadership and reporting responsibilities during a period of organizational leadership change.