SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 1998
CALIFORNIA WATER SERVICE GROUP
(Exact name of registrant as specified in its charter)
California 77-0448994
State of Incorporation Commission File No. IRS Employer ID Number
1720 North First Street, San Jose, CA 95112
Address, including Zip code, of registrant's principal executive office
(408) 367-8200
Registrant's telephone number, including area code
Former name or former address, if changed since last report
Item 5. Other Events
On January 28, 1998, the Board of Directors of California Water Service
Group (the "Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, no par value, of the
Company (the "Common Shares"). The dividend is payable on February 18, 1998
to stockholders of record on February 6, 1998. Each Right
entitles the registered holder to purchase from the Company one one-hundredth
of a share of a Series D Preferred Stock, no par value, of the Company (the
"Preferred Shares") at a price of $120.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and BankBoston, N.A., as Rights Agent (the "Rights Agent"),
dated as of February 12, 1998.
Initially, the Rights will be attached to all certificates representing Common
Shares then outstanding, regardless of whether any such certificate has a copy
of this summary of or other reference to the Rights attached thereto, and no
separate Right Certificates will be distributed. The Rights will separate from
the Common Shares and a Distribution Date will occur upon the earlier of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (other than the Company, any subsidiary of the Company,
any employee benefit plan or dividend reinvestment plan of the Company or of
any subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such employee benefit plan or as administrator
of such dividend reinvestment plan) have either acquired beneficial ownership
of 15% or more of the outstanding Common Shares or have obtained beneficial
ownership of 10% of the outstanding Common Shares and have been determined by
the Board of Directors to pose a threat of a material adverse impact on the
Company (either, an "Acquiring Person") or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any Person becomes an acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Shares (unless the Company's
Board of Directors has approved the offer).
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Rights Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on February 11, 2008, unless earlier redeemed or exchanged by the
Company in each case as described below. Until a Right is exercised, the
holder thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
The Purchase Price payable and the number of Preferred Shares or other
securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain
rights or warrants to subscribe for Preferred Shares or convertible securities
at less than the current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends out of earnings or retained
earnings or dividends payable in Preferred Shares) or of subscription rights
or warrants (other than those referred to above). The number of outstanding
Rights associated with each Common Share is also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or combinations
of the Common Shares occurring, in any such case, prior to the Distribution
Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred or Common Shares will be issued
(other than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, a payment in cash
will be made based on the market price of the Preferred or Common Shares on
the last trading date prior to the date of exercise.
In the event that any person or group becomes an Acquiring Person (a "Trigger
Event"), each holder of a Right, other than the Acquiring Person (Whose
Rights will thereafter be void), will thereafter have the right to receive upon
exercise at its then current exercise price that number of Common Shares (or,
in the event there are insufficient authorized Common Shares, substitute
consideration such as cash, property or other securities of the Company, such
as Preferred Shares) having a market value of two times the Purchase Price of
the Right.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, each
holder of a Right (other than an Acquiring Person, whose Rights will become
void) will thereafter have the right to receive, upon the exercise of the
Right at its then current exercise price, that number of shares of common
stock of the acquiring person having a market value of two times the exercise
price of the Right.
At any time until ten days following a Trigger Event, the Company may
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
At any time after any person becomes an Acquiring Person the Board of
Directors of the Company, may, at its option, exchange all or part of the then-
outstanding and exercisable Rights (excluding Right of an Acquiring Person that
have become void) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof. Notwithstanding the
foregoing the Board of Directors shall not be empowered to effect such
exchange at any time after any Acquiring Person becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding. In lieu of Common
Shares, the Board of Directors may elect to substitute Preferred Shares for
any such exchange.
For so long as the Rights are then redeemable, the Company may amend the
Rights in any manner. After the Rights are no longer redeemable, the Company
may amend the Rights in any manner that does not adversely affect the interests
of holders of the Rights.
Preferred Shares purchased upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to an aggregate dividend of
100 times the dividend declared per Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, voting together with the Common Shares. Finally, in the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, each Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A and
is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
4. Rights Agreement between California Water Service Group and BankBoston,
N.A. dated as of February 12, 1998, including Form of Right Certificate
attached thereto as Exhibit B.
99. Press release issued by the Company on February 13, 1998.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this current report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: February 13, 1998 California Water Service Group
By: /s/ Peter C. Nelson
Peter C. Nelson
President and Chief Executive Officer
Sequential
Page
Item Number
1. Rights Agreement between California Water Service Group and
BankBoston, N.A. dated as of February 12, 1998, including
Form of Right Certificate attached thereto as Exhibit B. 8
2. Press release issued by the Company on February 13, 1998. 58