0000950130-95-001503.txt : 19950808 0000950130-95-001503.hdr.sgml : 19950808 ACCESSION NUMBER: 0000950130-95-001503 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19950807 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED WATER RESOURCES INC CENTRAL INDEX KEY: 0000715969 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 222441477 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-61617 FILM NUMBER: 95559383 BUSINESS ADDRESS: STREET 1: 200 OLD HOOK RD CITY: HARRINGTON PARK STATE: NJ ZIP: 07640 BUSINESS PHONE: 2017849434 MAIL ADDRESS: STREET 1: 200 OLD HOOK ROAD CITY: HARRINGTON PARK STATE: NJ ZIP: 07640 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on August 7, 1995 REGISTRATION NO. 33- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- UNITED WATER RESOURCES INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEW JERSEY 22-2441477 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER) INCORPORATION OR ORGANIZATION) 200 OLD HOOK ROAD HARRINGTON PARK, NEW JERSEY 07640 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 784-9434 ALLAN D. SHAKLEY 200 OLD HOOK ROAD HARRINGTON PARK, NEW JERSEY 07640 (201) 784-9434 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) --------------- COPIES TO: E. ELLSWORTH MCMEEN, III, ESQ. RICHARD B. MCGLYNN, ESQ. LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. VICE PRESIDENT AND GENERAL COUNSEL 125 WEST 55TH STREET UNITED WATER MANAGEMENT AND SERVICES INC. NEW YORK, NEW YORK 10019 200 OLD HOOK ROAD HARRINGTON PARK, NEW JERSEY 07640 --------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE
======================================================================================================================= PROPOSED PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES AMOUNT BEING MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF BEING REGISTERED REGISTERED PRICE PER SHARE(1) PRICE(1) REGISTRATION FEE ----------------------------------------------------------------------------------------------------------------------- Common Stock (no par value)............. 4,000,000 shares $13.31 $53,240,000 $18,358.62 Series A Participating Preferred Stock Purchase Rights......................... 4,000,000 rights =======================================================================================================================
(1) The proposed maximum offering price per share is the average of the high and low prices of the Common Stock reported in the consolidated reporting system for New York Stock Exchange traded securities as of August 2, 1995, and is estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) of the General Rules and Regulations under the Securities Act of 1933. --------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION DATED AUGUST 7, 1995 P R O S P E C T U S UNITED WATER RESOURCES INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of United Water Resources Inc. (the "Company") provides holders of record of shares of its Common Stock, no par value ("Common Stock"), customers of the Company's subsidiaries covered by the Plan and employees of the Company or any of its subsidiaries covered by the Plan with a simple and convenient method of purchasing shares of Common Stock without payment of any brokerage commission or service charge. Shares of Common Stock purchased under the Plan may be original issue shares and/or open market shares, in the discretion of the Company. Original issue shares will be purchased at a 3% discount from market prices (which discount is subject to change or elimination in the discretion of the Company, as discussed in the answer to Question 3) while open market purchases of shares will not be made at a discount from market prices. Each participant in the Plan who is an existing shareholder of record may elect one of the following options: FULL DIVIDEND REINVESTMENT - Reinvest dividends on all shares of Common Stock registered in the shareholder's name. Optional cash payments may also be made of not less than $25 per payment and up to $3,000 per calendar quarter in the aggregate; or PARTIAL DIVIDEND REINVESTMENT - Reinvest dividends on fewer than all shares of Common Stock registered in the shareholder's name. Optional cash payments may also be made of not less than $25 per payment and up to $3,000 per calendar quarter in the aggregate; or OPTIONAL CASH PAYMENTS - Invest in additional shares of Common Stock by making optional cash payments of not less than $25 per payment and up to $3,000 per calendar quarter in the aggregate. Under all of the Plan's investment options, dividends on shares of Common Stock credited to a participant's Plan account are automatically reinvested in shares of Common Stock. Each customer of the Company's subsidiaries covered by the Plan, and each employee of the Company or any of its subsidiaries covered by the Plan, who is not a shareholder of record, may join the Plan by making an initial cash investment of at least $25 and up to $3,000, which will be used to purchase shares of Common Stock for his or her Plan account. The per share purchase price of any original issue shares of Common Stock purchased with reinvested cash dividends or optional cash payments will be 97% of the average of the daily high and low sale prices of Common Stock on the New York Stock Exchange for five randomly selected trading days in the month preceding the applicable purchase date. The per share purchase price of any shares of Common Stock purchased on the open market with the proceeds of Common Stock dividends or with optional cash payments, as the case may be, will be the average price of all such shares of Common Stock purchased by the Designated Agent (defined herein), as agent for Participants in the Plan, during the respective investment period for reinvested dividends or for optional cash payments, as the case may be. With respect to open market purchases, such investment period will be either (a) the period of 30 days after a dividend payment date (see Question 18) in the case of reinvested dividends or (b) the period of 35 days after the fifth day preceding the first business day of a month (see Question 23) in the case of optional cash payments. (See the answer to Question 8 for an explanation of the purchase price, including the Company's right to change the purchase price.) FOR A SUMMARY DISCUSSION OF THE FEDERAL INCOME TAX CONSEQUENCES RELATING TO PARTICIPATION IN THE PLAN AND TO THE DISPOSITION OF SHARES PURCHASED PURSUANT TO THE PLAN, SEE "FEDERAL INCOME TAX INFORMATION" HEREIN. PARTICIPANTS ARE URGED, HOWEVER, TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES APPLICABLE TO THEM. Although the Plan contemplates the continuation of quarterly dividend payments on the Common Stock, the payment and amount of dividends will depend upon future earnings, the financial condition of the Company and other factors. --------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------- THE DATE OF THIS PROSPECTUS IS ________, 1995 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Information as of particular dates concerning directors and officers of the Company, their remuneration, the principal holders of securities of the Company and any material interest of such persons in transactions with the Company is disclosed in proxy statements distributed to shareholders of the Company and filed with the Commission. Such reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of this material can also be obtained at prescribed rates from the Public Reference Section of the Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock is listed on the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10048, where reports, proxy statements and other information concerning the Company can also be inspected. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have heretofore been filed by the Company with the Commission pursuant to the Exchange Act, are hereby incorporated by reference into this Prospectus: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed pursuant to the Exchange Act; (2) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, filed pursuant to the Exchange Act; (3) The Company's Registration Statement on Form 8-B, filed October 11, 1983, pursuant to the Exchange Act, as updated by pertinent information furnished in subsequent reports filed pursuant to Section 13 of the Exchange Act; and (4) The Company's Registration Statement on Form 8-A, filed July 26, 1989, pursuant to the Exchange Act, as updated by pertinent information furnished in subsequent reports filed pursuant to Section 13 of the Exchange Act. All documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. -2- This Prospectus does not contain all of the information set forth in the Registration Statement of which this Prospectus is a part, and the exhibits thereto, which the Company has filed with the Commission under the Securities Act of 1933, to which reference is hereby made. The Company hereby undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written or oral request of any such person, a copy of any or all documents which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents not specifically incorporated by reference therein. Requests for such copies should be directed to Allan D. Shakley, Assistant Secretary, United Water Resources Inc., 200 Old Hook Road, Harrington Park, N.J. 07640 (telephone number: (201) 784-9434). -3- THE COMPANY The Company is a New Jersey corporation with its principal executive office at 200 Old Hook Road, Harrington Park, New Jersey 07640 (telephone number: (201) 784-9434). The Company was organized in 1983 as the holding company for United Water New Jersey Inc. ("UWNJ") (formerly named Hackensack Water Company). UWNJ was incorporated by an act of the New Jersey Legislature in 1869 and a number of local water companies have been merged into UWNJ since its reorganization in 1880. The principal and wholly-owned subsidiary of UWNJ is United Water New York Inc. ("UWNY") (formerly named Spring Valley Water Company Incorporated), which was incorporated under the laws of New York in 1893. In 1994, the Company acquired all of the outstanding common stock of GWC Corporation. The largest subsidiary of GWC Corporation, now known as United Waterworks Inc., is a wholly-owned subsidiary of the Company and has subsidiaries that operate water and wastewater utilities in thirteen states. Other wholly-owned subsidiaries of the Company include United Properties Group Inc. (formerly named Rivervale Realty Co., Inc.), which is engaged in real estate acquisition, rental, development and sales; Laboratory Resources, Inc., which owns and operates a network of commercial laboratories performing environmental and industrial hygiene testing services; Metering Services, Inc., which provides a variety of automatic meter reading services to utilities and also applies its telemetry knowledge toward other applications and markets; and United Water Mid-Atlantic Utilities Corporation (formerly named Mid-Atlantic Utilities Corporation), which works with real estate developers to establish, own and operate water and sewerage utility systems. INDEX TO DESCRIPTION OF THE PLAN*
Refer to Questions --------- Administration 4-5 Advantages 2-3 Optional Cash Payments 19-23 Other Information 30-36 Participation 9-15 Purchases 6-8 Purpose 1 Reinvestment of Cash Dividends 16-18 Reports 29 Sale of Shares 28 Stock Certificates 24-25 Withdrawal From the Plan 26-27
---------- * This index is for convenience of reference only and is not a part of the Plan. Since other provisions of the Plan may be important to investors or may bear on the matters listed, readers are urged to study the Plan in its entirety. -4- DESCRIPTION OF THE PLAN The following is a question-and-answer statement of the provisions of the Plan. All references used herein to the Common Stock shall include Series A Participating Preferred Stock Purchase Rights of the Company (the "Rights"). For convenience of reference, the definitions of certain terms are included below. DEFINITIONS Beneficial Owner A person whose shares of Common Stock are registered in other than his or her own name (for example, in the name of a broker or other nominee). Cash Deadline The fifth day preceding the first business day of a month. Cash Payment Purchases of original issue shares of Common Stock with Purchase Date Optional Cash Payments will be made on the "Cash Payment Purchase Date", which shall occur on or about the first business day of each month. Common Stock The common stock of the Company. Customer A customer of one of the Company's subsidiaries covered at the time by the Plan. Designated Agent The agent, which will be a "registered broker or dealer" or "bank", as those terms are defined in Section 3(a) of the Exchange Act, appointed by the Company from time to time, with notice to Participants, to act on behalf of Participants in buying Common Stock on the open market. Employee An employee of the Company, or of any of its subsidiaries covered at the time by the Plan. Enrollment Form The form completed by an Employee or Customer to enroll in the Plan. Initial Investment The initial payment delivered with an Enrollment Form for an amount (not less than $25 and not more than $3,000) which is required of a Customer or Employee, who is not a Shareholder, upon enrolling in the Plan. investment period The period during which the Designated Agent purchases shares of Common Stock on the open market for the accounts of Participants pursuant to the Plan. Optional Cash Cash payments (including the Initial Investment, if any) made Payments to the Agent by a Participant, from time to time, of not less than $25 per payment and not more than $3,000 per calendar quarter in the aggregate. Participants Customers, Employees or Shareholders who participate in the Plan. -5- Shareholder A holder of record of shares of Common Stock. Shareholder The form completed by a Shareholder to enroll in the Plan. Authorization Form PURPOSE 1. WHAT IS THE PURPOSE OF THE PLAN? The purpose of the Plan is to provide Shareholders, Customers and Employees with a simple and convenient method of acquiring shares of Common Stock. The Plan allows a Participant to invest cash dividends on shares of Common Stock registered in such Participant's name in shares of Common Stock and provides the opportunity to acquire shares of Common Stock through Optional Cash Payments, in each case, without payment of any brokerage commission or service charge. The shares of Common Stock purchased may be, in the Company's discretion, original issue shares of Common Stock purchased directly from the Company and/or shares of Common Stock purchased on the open market. Original issue shares shall include authorized and unissued shares of Common Stock and shares of Common Stock held in the treasury of the Company. When original issue shares are purchased directly from the Company, the Company will receive new equity capital funds. (See "Use of Proceeds.") ADVANTAGES 2. WHAT ARE THE ADVANTAGES OF THE PLAN? The Plan offers Participants the opportunity to purchase shares of Common Stock through dividend reinvestment (a) at a discount of 3%, which discount is subject to change or elimination in the Company's discretion (see Questions 3 and 8), from market prices, in the case of purchases of original issue shares, or (b) at the average price of all open market shares purchased by the Designated Agent during a given investment period, in the case of purchases of shares in transactions on the open market. Participants may have cash dividends on all or a specified number of their shares of Common Stock automatically reinvested in shares of Common Stock each quarter. In addition, Participants may also purchase Common Stock monthly with Optional Cash Payments (a) at a discount of 3%, which discount is subject to change or elimination in the Company's discretion (see Questions 3 and 8), from market prices, in the case of purchases of original issue shares, or (b) at the average price of all open market shares purchased by the Designated Agent during a given investment period, in the case of purchases of shares in transactions on the open market. No commission or service charge is paid by Participants in connection with purchases under the Plan. Full investment of funds is possible because the Plan permits fractions of shares, as well as full shares, to be credited to Participants' Plan accounts. Dividends with respect to such fractions, as well as with respect to full shares, will be credited to Participants' Plan accounts and reinvested in shares of Common Stock under the Plan. Participants who elect to have dividends on fewer than all of the shares of Common Stock held by them reinvested through the Plan will continue to receive direct payments of cash dividends on their remaining shares. Dividends on shares credited to Participants' Plan accounts will be automatically reinvested in shares of Common Stock. Certain provisions applicable to foreign holders whose dividends are subject to income tax withholding are described under the caption "Federal Income Tax Information." -6- 3. HOW DOES THE DISCOUNT WORK WITH RESPECT TO ORIGINAL ISSUE SHARES? The discount from market prices (the "Discount") applicable to purchases of original issue shares with the proceeds of Common Stock dividends or with Optional Cash Payments, as the case may be, will initially be 3%. The Company reserves the right, in its discretion, by giving at least 20 days notice to Participants, to change or eliminate the Discount with respect to original issue shares purchased for Participants under the Plan, which Discount, if any, will be between 1% and 10%. ADMINISTRATION 4. WHO ADMINISTERS THE PLAN FOR PARTICIPANTS? First Interstate Bank of California, Stock Transfer Administration (W11-2), 707 Wilshire Boulevard, Los Angeles, CA 90017 (the "Agent"), acts as Agent for Participants under an arrangement which may be terminated by the Company or the Agent at any time. The Agent keeps a continuing record of all Participants' Plan accounts, sends statements of account activities to Participants and performs other duties relating to the Plan. Common Stock purchased under the Plan will be registered in the name of the nominee of First Interstate Bank of California, as Agent for Participants. Should First Interstate Bank of California cease to act as Agent under the Plan, another agent will be designated by the Company. (For a description of the role played by the Designated Agent in purchasing open market shares for the accounts of Participants, see the further provisions of the Plan, including Questions 6 and 8.) The Company reserves the right to make such additional or other arrangements for the administration of the Plan as it deems appropriate. Any correspondence concerning the Plan should be sent to: First Interstate Bank of California Shareholders Investment Service P.O. Box 750 Pittsburgh, Pennsylvania 15230-9625 Attention: United Water Resources Dividend Reinvestment and Stock Purchase Plan Please contact the Shareholders Investment Service representatives at 1-800-522-6645, or the Company's Investor Relations Department at 201-767-2811, if you have any inquiries concerning the Plan. 5. WHAT ARE THE COSTS TO PARTICIPANTS IN CONNECTION WITH PURCHASES UNDER THE PLAN? Participants are not required to pay a commission or service charge of any kind in connection with purchases of shares of Common Stock under the Plan. If a Participant elects to have shares of Common Stock sold upon withdrawal from the Plan, the Participant will pay all brokerage fees and transfer taxes associated with such sale. All fractional shares of Common Stock credited to a Participant's Plan account will be sold upon withdrawal from the Plan. Upon the sale of such fractional shares, the Participant will receive a check for the proceeds, reflecting a deduction for the brokerage commission incurred and any associated transfer taxes. (See Question 26.) -7- All fees incurred for administration of the Plan will be paid by the Company. PURCHASES 6. HOW ARE SHARES OF COMMON STOCK ACQUIRED UNDER THE PLAN? In connection with any reinvestment of dividends and/or purchases made with Optional Cash Payments, the Company will, in its discretion, (1) utilize such funds as consideration for original issue shares; or (2) direct the Designated Agent to purchase shares in transactions on the open market; or (3) use a combination of both. If the Company elects to utilize outstanding shares of Common Stock for the purposes of the Plan, the Designated Agent will, pursuant to the Plan, make all such open market purchases as are necessary to meet the requirements of the Plan. Neither the Company nor any affiliate thereof will exercise any direct or indirect control or influence over the prices, amounts, timing or manner of purchases made by the Designated Agent on the open market. The Company has initially elected to utilize only original issue shares in connection with all acquisitions under the Plan and will notify Participants at least 20 days prior to changing an existing election. 7. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR PARTICIPANTS? Each Participant's Plan account will be credited with the number of shares, including fractions thereof computed to three decimal places, equal to the sum of (1) any dividends to be invested on the Participant's behalf divided by the purchase price of a share of Common Stock purchased with dividends plus (2) any Optional Cash Payments divided by the purchase price of a share of Common Stock purchased with Optional Cash Payments. 8. WHAT WILL BE THE PRICE OF COMMON STOCK PURCHASED UNDER THE PLAN? The price of any original issue shares of Common Stock purchased from the Company (computed to four decimal places) with Common Stock dividends will be, in the Company's discretion (as described in the answer to Question 3), 90% to 100% of the average of the daily high and low sale prices of a share of Common Stock on the New York Stock Exchange for each of five days chosen at random by the Agent on which Common Stock was traded on the New York Stock Exchange in the month immediately preceding the dividend payment date. Such price will initially be 97% of the average price described in the foregoing sentence. Dividend payment dates are ordinarily the first business day of March, June, September and December. The price of any original issue shares of Common Stock purchased from the Company (computed to four decimal places) with Optional Cash Payments will be, in the Company's discretion (as described in the answer to Question 3), 90% to 100% of the average of the daily high and low sale prices of a share of Common Stock on the New York Stock Exchange for each of five days chosen at random by the Agent on which Common Stock was traded on the New York Stock Exchange in the month immediately preceding the Cash Payment Purchase Date. Such price will initially be 97% of the average price described in the foregoing sentence. The price of shares of Common Stock purchased on the open market (computed to four decimal places) by the Designated Agent, as agent for Participants in the Plan, during any investment period for reinvested dividends and/or Optional Cash Payments will be the average price of all such shares of Common Stock so purchased by the Designated Agent during such investment period with the proceeds of such dividends and/or Optional Cash Payments. -8- With respect to original issue shares, the Company reserves the right, in its discretion, by giving at least 20 days notice to Participants, to change or eliminate the then prevailing Discount, or establish an alternative pricing methodology for such purchases. In the event that both open market purchases and original issue purchases from the Company are made from dividends and/or Optional Cash Payments, such combination of shares will be allocated to each individual Participant's account on a pro rata basis or otherwise in the discretion of the Company. PARTICIPATION 9. WHO IS ELIGIBLE TO PARTICIPATE? (1) Shareholder. Subject to the following, the Plan is open to participation by a registered owner of shares of Common Stock. Shares of Common Stock are registered in the name of a Participant if such shares are represented by a stock certificate issued in the name of the Participant. Beneficial Owners either must cause their shares to be registered in their names or must make appropriate arrangements with their broker or other nominee to participate in the Plan on their behalf in order to be eligible to participate in the Plan. Indirect participation in the Plan by Beneficial Owners through brokers or other nominees may be on terms and conditions which differ from those set forth in this Prospectus, in which case the terms and conditions established by each broker or other nominee will govern such indirect participation. Such terms and conditions may include limitations on participation in the Plan and the requirement that the Beneficial Owner pay a commission or service charge to the broker or other nominee. Certain features of the Plan, including, for example, investment of Optional Cash Payments, may not be available to Beneficial Owners participating indirectly in the Plan through brokers or other nominees. (2) Employee. The Plan is open to enrollment by any Employee. After enrolling in the Plan and becoming a Shareholder an Employee can elect to participate in the Plan as a Shareholder. (3) Customer. The Plan is open to participation by any Customer (as defined above). After enrolling in the Plan and becoming a Shareholder a Customer can elect to participate in the Plan as a Shareholder. 10. WHEN MAY ELIGIBLE SHAREHOLDERS, CUSTOMERS AND EMPLOYEES ENROLL IN THE PLAN? Participation in the Plan is voluntary. Eligible Shareholders, Customers and Employees may enroll in the Plan at any time. Shareholder participation with respect to the reinvestment of dividends on shares of Common Stock registered in the Shareholder's name will commence with the first dividend payable following receipt by the Agent of a completed and signed Shareholder Authorization Form if such form is received by the Agent at least one business day prior to the particular dividend record date on which the Shareholder wishes to begin purchases with reinvested dividends. If a Shareholder Authorization Form is not received by that time, the dividend will be paid in cash and participation will commence on the next dividend payment date. Participation with respect to purchases of Common Stock with Optional Cash Payments will commence following receipt by the Agent on or prior to the Cash Deadline (as defined above) in a given -9- month of a completed and signed Shareholder Authorization Form or Enrollment Form, as the case may be, with a check or money order for the Optional Cash Payment. (See Question 19.) Participants are not required to remain enrolled in the Plan and may discontinue participation at any time (See Questions 26 and 27.) 11. HOW DO ELIGIBLE SHAREHOLDERS, EMPLOYEES AND CUSTOMERS PARTICIPATE? Shareholders may become Participants in the Plan by completing, signing and returning a Shareholder Authorization Form to the Agent. Shareholder Authorization Forms may be obtained at any time upon written request or by calling the Agent or the Company's Investor Relations Department. Customers and Employees who are not Shareholders may become Participants in the Plan by completing, signing and returning an Enrollment Form with an Initial Investment to the Agent. Enrollment Forms may be obtained at any time upon written request or by calling the Company's Investor Relations Department. Beneficial Owners who wish to participate indirectly in the Plan must arrange such participation with their broker or other nominee. Participants currently enrolled in the Plan will continue to participate in the same manner which they have previously authorized. Participants may change investment options by completing and signing a Shareholder Authorization Form and returning it to the Agent. (See Question 13.) Participants may elect to discontinue participation by giving written notice to the Agent. (See Questions 26 and 27.) 12. WHAT INVESTMENT OPTIONS ARE AVAILABLE TO PARTICIPANTS? (1) Each Shareholder of record may elect one of the following options: (i) Full Dividend Reinvestment. Reinvest dividends on all shares of Common Stock registered in the Shareholder's name. Optional Cash Payments may also be made; or (ii) Partial Dividend Reinvestment. Reinvest dividends on fewer than all shares of Common Stock registered in the Shareholder's name. Optional Cash Payments may also be made; or (iii) Optional Cash Payments. Invest in shares of Common Stock by making Optional Cash Payments. (2) Employees and Customers who are not Shareholders may enroll in the Plan by making an Initial Investment. They will be enrolled in the Optional Cash Payment option and may make Optional Cash Payments. Customers and Employees, after becoming Shareholders, can elect to participate in the other Plan investment options available to Shareholder Participants. Under all of the Plan's investment options, cash dividends on shares credited to a Participant's Plan account are automatically reinvested in shares of Common Stock. 13. HOW MAY A SHAREHOLDER PARTICIPANT CHANGE OPTIONS UNDER THE PLAN? A Participant may change investment options by completing, signing and returning a new Shareholder Authorization Form to the Agent. A Shareholder Authorization Form may be obtained from -10- the Agent upon written request or by calling the Agent or the Company's Investor Relations Department. Any change in investment options with respect to reinvestment of dividends will become effective in the same manner as an initial enrollment in the Plan. (See Question 10.) 14. WHAT DO THE FORMS FOR ENROLLMENT IN THE PLAN PROVIDE? The Shareholder Authorization Form and Enrollment Form serve to initiate participation in the Plan and appoint the Agent and the Designated Agent as the Participant's agents under the Plan. The Shareholder Authorization Form allows a Shareholder to elect to participate in the Plan's full dividend reinvestment, partial dividend reinvestment or Optional Cash Payment options. The Enrollment Form allows Customers and Employees who are not Shareholders to enroll in the Plan by making an Initial Investment and participating in the Optional Cash Payment option. Customers and Employees, after becoming Shareholders, can elect to participate in the other investment options available to Shareholder Participants by completing a Shareholder Authorization Form. 15. IF A CUSTOMER PARTICIPANT CEASES TO BE A CUSTOMER OR IF AN EMPLOYEE PARTICIPANT CEASES TO BE AN EMPLOYEE, MAY THE CUSTOMER OR EMPLOYEE CONTINUE TO PARTICIPATE IN THE PLAN? As long as any fraction of a share has been credited to the Participant's Plan account, the Participant may continue to participate in the Plan as a Shareholder even if the Participant is no longer a Customer or an Employee. REINVESTMENT OF CASH DIVIDENDS 16. HOW WILL CASH DIVIDENDS PAYABLE ON SHARES OF COMMON STOCK BE REINVESTED? If a Participant elects to reinvest his or her dividends through the full dividend reinvestment option, cash dividends with respect to all shares of Common Stock registered in such Participant's name as well as all fractional and whole shares credited to a Participant's Plan account on the record date are automatically reinvested in shares of Common Stock and credited to the Participant's Plan account on the dividend payment date. 17. MAY A SHAREHOLDER REINVEST DIVIDENDS ON ONLY A PORTION OF ALL SHARES OF COMMON STOCK OWNED? A Shareholder may participate in the Plan with respect to fewer than all of the shares of Common Stock registered in the Shareholder's name by indicating on a Shareholder Authorization Form the number of shares with respect to which the Shareholder has elected to reinvest dividends. If a Participant who is reinvesting the cash dividends on fewer than all of the shares of Common Stock registered in the Participant's name disposes of a portion of such shares, the Agent will continue to reinvest the dividends on the Participant's remaining shares up to the number of shares originally authorized. Cash dividends payable to a Shareholder Participant with respect to shares of Common Stock that have not been designated for reinvestment, if any, will be forwarded to the Shareholder in accordance with the Company's customary procedure as in effect at such time. No matter how many shares a Shareholder designates on the Shareholder Authorization Form, dividends on all shares credited to a Shareholder Participant's Plan account will automatically be reinvested. -11- 18. WHEN WILL SHARES OF COMMON STOCK BE ACQUIRED WITH REINVESTED DIVIDENDS? The date for the purchase of original issue shares of Common Stock with reinvested Common Stock dividends corresponds to the dividend payment date for shares of Common Stock. Cash dividends on Common Stock are generally payable on the first business day of March, June, September and December of each year. With respect to open market purchases, the Designated Agent, at its sole discretion, will determine the exact timing of purchases made on the open market, and will purchase Common Stock with reinvested dividends as promptly as practicable, consistent with the Designated Agent's obligations as agent for Participants. In any event, such purchases will be made by the Designated Agent within 30 days after the dividend payment date. If for any reason any such purchase is not made during such period, the funds therefor will be returned to the relevant Participants. (See Question 23 for information regarding dates for acquisition of Common Stock with the use of Optional Cash Payments.) No interest will be paid by the Company, the Agent or the Designated Agent on reinvested dividends pending their investment in Common Stock. OPTIONAL CASH PAYMENTS 19. HOW DOES THE OPTIONAL CASH PAYMENT PLAN WORK? Shareholders who elect to participate by making Optional Cash Payments in addition to reinvesting cash dividends on shares of Common Stock registered in their names may make their Optional Cash Payment by sending a check or money order to the Agent either with a completed and signed Shareholder Authorization Form or at any subsequent time with a completed optional cash investment stub, which is attached to the account statement sent to Participants after each purchase for the Participant's Plan account. Shareholders who elect to make only Optional Cash Payments (and not to reinvest dividends on shares registered in their name), and Customers and Employees enrolling in the Plan, must make their Optional Cash Payment at the time a completed and signed Shareholder Authorization Form or Enrollment Form, as the case may be, is sent to the Agent by enclosing a check or money order payable to the Agent with such form. Participants may make any number of Optional Cash Payments in each calendar year, but such Optional Cash Payments, which include the Initial Investment, must be at least $25 per payment and not more than $3,000 per calendar quarter in the aggregate for each Participant's Plan account. Subsequent to the Initial Investment, Participants may make Optional Cash Payments at any time by sending a check or money order to the Agent with a completed optional cash investment stub, which is attached to the account statement. There is no obligation to make any Optional Cash Payment. The amount of each optional cash payment may vary, but each payment must be at least $25 and may not exceed $3,000 per calendar quarter in the aggregate. Optional cash payments of less than $25 per payment or more than $3,000 per calendar quarter in the aggregate will be returned to the Participant. Dividends on shares purchased under this option and held in a Participant's Plan account will automatically be reinvested in shares of Common Stock. ALL OPTIONAL CASH PAYMENTS MUST BE SENT TO THE AGENT AND MUST BE MADE PAYABLE TO FIRST INTERSTATE BANK OF CALIFORNIA. Optional Cash Payments must be received on or before the Cash Deadline in order to be invested in the next investment period or on the next Cash Payment Purchase Date, as the case may be. (See -12- Question 23 for information regarding dates for acquisition of Common Stock with the use of Optional Cash Payments.) In the context of original issue shares, if it appears to the Company that any Participant is using or contemplating the use of the Optional Cash Payment investment option in a manner or with an effect that, in the sole judgment and discretion of the Company, is not in the best interests of the Company or its other shareholders, then the Company may decline to issue all or any portion of the shares of Common Stock for which any payment by or on behalf of such Participant is tendered. Such payment (or the portion thereof not to be invested in shares of Common Stock) will be returned by the Company as promptly as practicable, without interest. 20. HOW WILL OPTIONAL CASH PAYMENTS BE INVESTED? Optional Cash Payments will as a general matter be invested on a monthly basis. At the option of the Company, the Designated Agent will apply Optional Cash Payments to the open market purchases of shares of Common Stock for the account of such Participants and/or the Optional Cash Payments will be used as consideration for original issue shares. 21. CAN A CUSTOMER'S OPTIONAL CASH PAYMENTS BE SUBMITTED WITH PAYMENTS FOR HIS OR HER BILLS? No. Customer Optional Cash Payments must be sent to the Agent and not with the payment of the customer's bill. 22. MAY AN EMPLOYEE MAKE OPTIONAL CASH PAYMENTS THROUGH PAYROLL DEDUCTIONS? Yes. If an Employee elects payroll deductions on the Payroll Deduction Form, which may be obtained from the Human Resources Department or Investor Relations Department of the Company, the Company will deduct the whole dollar amount specified by the Employee. The minimum weekly deduction is $5.00; the minimum semi-monthly and bi-weekly deduction is $10.00; the maximum weekly deduction is $200 and the maximum semi-monthly and bi-weekly deduction is $400 per pay period. The Payroll Deduction Form must be received by the Company at least two weeks before the pay period on which the Employee wishes to begin deductions. Once authorized, payroll deductions will continue until changed or terminated by the Employee. 23. WHEN WILL OPTIONAL CASH PAYMENTS BE INVESTED UNDER THE PLAN? Purchases of Common Stock with Optional Cash Payments will as a general matter be made on a monthly basis. If the Common Stock is to be purchased on the open market, the date or dates for purchase will occur as soon as practicable, consistent with the Designated Agent's obligations as agent for Participants, after the Company notifies the Designated Agent of the amount of Optional Cash Payments for that month but, in any event, within 35 days after the Cash Deadline. If for any reason any such purchase is not made during such period, the funds therefor will be returned to the relevant Participants. If the Common Stock to be purchased consists of original issue shares to be purchased directly from the Company, the date for such purchase will be the Cash Payment Purchase Date. No interest will be paid by the Company, the Agent or the Designated Agent on Optional Cash Payments pending their investment in Common Stock. -13- STOCK CERTIFICATES 24. WILL CERTIFICATES BE ISSUED FOR COMMON STOCK PURCHASED UNDER THE PLAN? Certificates for shares of Common Stock purchased under the Plan will not be automatically issued to Participants. The number of shares of Common Stock credited to the Participant's Plan account will be shown on the Participant's statement of account. A Participant may, at any time, upon his or her written request to the Agent withdraw any or all of the whole shares of Common Stock credited to the Participant's Plan account from the Plan (see Questions 26 and 27), and certificates for such shares of Common Stock will be issued to such Participant. Certificates will be issued in the name in which the Participant is registered in the Plan. If fewer than all Plan shares are withdrawn, any remaining full shares of Common Stock for which certificates are not requested and any fractional shares of Common Stock will continue to be credited to the Participant's Plan account. Certificates for fractional shares of Common Stock cannot be issued under any circumstances. 25. MAY COMMON STOCK HELD PURSUANT TO THE PLAN BE PLEDGED? Shares credited to a Participant's Plan account may not be pledged. A Participant who wishes to pledge such shares must request that the certificates be issued in his or her name. WITHDRAWAL FROM THE PLAN 26. HOW MAY A PARTICIPANT WITHDRAW FROM THE PLAN? A person participating directly in the Plan may discontinue participation in the Plan and terminate his or her account at any time by providing written notification to the Agent that he or she wishes to withdraw from the Plan. As soon as practicable following receipt from the Participant of notice of withdrawal, the Agent will send the Participant certificates for the full shares of Common Stock credited to the Participant's Plan account. If the Participant so requests in writing, the Agent will arrange to sell such shares through a registered broker and send such Participant a check for the proceeds as soon as practicable after the broker has sold the shares. The Company, however, does not exercise any direct or indirect control over the price or timing of any such sales of shares of Common Stock by the registered broker. The Participant must pay the brokerage commission and any transfer tax associated with such sale, which amounts will be deducted from the check for the proceeds of the sale. The Agent will only arrange for the sale of all shares of Common Stock credited to the Plan account of a Participant who discontinues participation in the Plan. Whether the Participant requests the Agent to sell the shares of Common Stock credited to the Participant's Plan account or requests certificates for such shares, the Participant's interest in fractional shares will be paid in cash less applicable brokerage fees and transfer taxes. An Employee withdrawing from the Plan who has elected payroll deductions first must send to the Company's Human Resources Department or the Employee's Payroll Department a written request for discontinuance of payroll deductions and then must provide written notification of withdrawal to the Agent. Beneficial Owners participating indirectly in the Plan through brokers or other nominees must contact their broker or nominee regarding withdrawal from the Plan. -14- 27. WHEN MAY A PARTICIPANT WITHDRAW FROM THE PLAN? Persons participating directly in the Plan may withdraw any or all shares of Common Stock credited to their Plan accounts from the Plan at any time by notifying the Agent in writing. If the request to withdraw is received five days prior to the dividend record date for any dividend payment on which the dividends would otherwise be reinvested for a Participant, the dividend reinvestment feature will be terminated on the day of receipt of the request by the Agent. If the request to withdraw is received by the Agent after the date which is five days prior to the dividend record date for any dividend payment, such dividend declared will, when paid, be reinvested for the Participant's Plan account. After the shares are credited to the Participant's Plan account, the request for withdrawal will then be processed as promptly as possible. Any Optional Cash Payment which had been sent to the Agent prior to the request for withdrawal will be invested in the next investment period or on the next Cash Payment Purchase Date, as the case may be, unless a request for the return of the amount is received by the Agent at least one business day prior to the Cash Deadline for the month. The Company will not pay interest on any terminated investments. Beneficial Owners participating indirectly in the Plan through brokers or other nominees must contact their broker or nominee regarding withdrawal from the Plan. The written request for the discontinuance of payroll deductions sent by an Employee to the Company's Human Resources Department or the Employee's Payroll Department will normally take effect with the next pay period. SALE OF SHARES 28. WHAT HAPPENS WHEN A PARTICIPANT SELLS OR TRANSFERS ALL SHARES OF COMMON STOCK REGISTERED IN HIS OR HER NAME? If a Participant sells or transfers all of the shares of Common Stock registered in his or her name but maintains shares in such Participant's Plan account, dividends will continue to be reinvested on the balance in the Participant's Plan account and the Participant may continue to make Optional Cash Payments. REPORTS 29. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN? On a regular basis, the Agent will send a detailed statement to each Participant for whose account dividends have been reinvested and/or purchases of shares of Common Stock with Optional Cash Payments have been made. The statement will provide pertinent information with respect to such Participant's Plan account, including, to the extent available, information as to the total shares of Common Stock credited to the Participant's Plan Account, dividends received, dividends reinvested, Optional Cash Payments invested in Common Stock and purchase price per share of the Common Stock. Cumulative transaction information on a calendar year basis will be included in each statement. THESE STATEMENTS ARE THE ONLY RECORDS OF PLAN ACTIVITY SENT TO PARTICIPANTS AND SHOULD BE RETAINED FOR INCOME TAX PURPOSES. -15- In addition, each Participant will receive copies of the same communications sent to record holders of shares of Common Stock and Beneficial Owners each year, including the Company's interim reports, annual reports, notice of annual meeting and proxy statement, as well as any income tax information for reporting dividends paid or reinvested. OTHER INFORMATION 30. WHAT HAPPENS IF THE COMPANY HAS A RIGHTS OFFERING? A Participant's entitlement in a rights offering will be based upon the number of shares of Common Stock credited to the Participant's Plan account. Such rights will be mailed directly to the Participant in the same manner as to shareholders of record who are not participating in the Plan. Rights certificates will be issued for the nearest number of whole shares only. 31. WHAT HAPPENS IF THE COMPANY DECLARES A STOCK DIVIDEND OR SPLITS ITS SHARES OF COMMON STOCK? Stock dividends distributed on shares of Common Stock held and registered in the name of a Participant on the books of the Agent, as well as shares of Common Stock distributed as a result of any split of such shares, will be mailed directly to the Participant. Stock dividends distributed on shares of Common Stock credited to a Participant's Plan account, as well as shares of Common Stock distributed as a result of any split of such shares, will be credited to the Participant's Plan account. 32. HOW WILL A PARTICIPANT'S SHARES OF THE COMMON STOCK BE VOTED AT MEETINGS OF SHAREHOLDERS? Each Participant will receive a proxy for the total number of shares of Common Stock held--both the shares registered in the Participant's name and those credited to the Participant's Plan account including fractional shares under the Plan. If the proxy is returned properly signed and marked for voting, all of the Participant's shares of Common Stock--those registered in the Participant's name and those credited to the Participant's Plan account--will be voted as marked. The total number of shares may also be voted in person at a meeting. If no instructions are received on a properly signed proxy with respect to any item thereon, all of a Participant's shares of Common Stock will be voted in accordance with the recommendations of the Board of Directors of the Company, just as for non-participating shareholders who return proxies and do not provide instructions. If the proxy is not returned or if it is returned unsigned, none of the Participant's shares of Common Stock will be voted unless the Participant votes in person. 33. WHAT ARE THE RESPONSIBILITIES OF THE COMPANY, THE AGENT AND THE DESIGNATED AGENT UNDER THE PLAN? In connection with the Plan, the Company and its officers, employees and agents, the Agent and the Designated Agent will not be liable for any act done in good faith or for any good faith omission to act including, without limitation, any claim of liability arising out of failure to terminate a Participant's Plan account upon such Participant's death prior to receipt of notice in writing of such death or with respect to any fluctuation in market value before or after purchase or sale of Common Stock. -16- PARTICIPANTS SHOULD RECOGNIZE THAT NEITHER THE COMPANY, THE AGENT NOR THE DESIGNATED AGENT CAN ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON THE COMMON STOCK PURCHASED UNDER THE PLAN. 34. HOW MANY SHARES WILL BE SOLD BY THE COMPANY UNDER THE PLAN? This registration relates to 4,000,000 shares of Common Stock. The Company anticipates that it will from time to time, as required, register additional shares of Common Stock. The outstanding shares of Common Stock are, and original issue shares offered hereby, upon notice of issuance, will be, listed on the New York Stock Exchange. 35. MAY THE PLAN BE CHANGED OR DISCONTINUED? The Company reserves the right to suspend, modify or terminate the Plan at any time. All Participants will receive notice of any such suspension, modification or termination. 36. WHO INTERPRETS AND REGULATES THE PLAN? The officers of the Company may take such actions to carry out the Plan as are not contrary to the terms and conditions of the Plan. In addition, the Company reserves the right to interpret and regulate the Plan in good faith as it deems desirable or necessary in connection with the operation of the Plan. Furthermore, in the context of original issue shares, if it appears to the Company that any Participant is using or contemplating the use of the Plan in a manner or with an effect that, in the sole judgment and discretion of the Company, is not in the best interests of the Company or its other shareholders, then the Company may decline to issue all or any portion of the shares of Common Stock for which any payment by or on behalf of such Participant is tendered. Such payment (or the portion thereof not to be invested in shares of Common Stock) will be returned by the Company as promptly as practicable, without interest. FEDERAL INCOME TAX INFORMATION THE FOLLOWING IS A SUMMARY OF FEDERAL TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN. SINCE THIS IS ONLY A SUMMARY AND SINCE STATE AND LOCAL TAX LAWS MAY VARY, A PARTICIPANT SHOULD CONSULT HIS TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN. Under Internal Revenue Service rulings, dividends which are reinvested by a Participant under the Plan will be treated, for federal income tax purposes, as having been received by the Participant in the form of a taxable stock distribution rather than cash dividend. A Participant whose dividends on Common Stock are reinvested under the Plan in shares of Common Stock purchased from the Company therefore will be treated as having received a distribution equal to the fair market value, on the date such purchases are made, of the shares of Common Stock acquired through such reinvestment. A Participant for whom shares of Common Stock are purchased with Optional Cash Payments and who receives a discount on these shares will be treated, for federal income tax purposes, as having received as a distribution an amount equal to the difference between the fair market value of the shares of Common Stock on the Cash Payment Purchase Date and the Optional Cash Payment. -17- Generally, all distributions will be treated as dividends and will be taxable as ordinary income to the extent of the Company's earnings and profits. To the extent that a distribution exceeds the Company's earnings and profits, it is deemed to be a return of capital. A return of capital reduces a shareholder's basis in his shares, but not below zero. To the extent a return of capital reduces a shareholder's basis, no gain is recognized and to the extent a return of capital exceeds a shareholder's basis, it is treated as a capital gain if such shares are held as a capital asset. Form 1099 which is sent to each Participant annually will indicate the total amount of dividends paid to the Participant. A corporate recipient of dividends reinvested under the Plan generally will be entitled to a dividends-received deduction allowed by Section 243 of the Internal Revenue Code. However, if such corporate recipient is subject to the alternative minimum tax, a portion of the dividends-received deduction will be treated as an adjustment that increases alternative minimum taxable income. A Participant's basis in shares purchased from the Company with reinvested dividends on Common Stock will be equal to the fair market value of such shares on the date such purchases are made. A Participant's basis in shares of Common Stock purchased from the Company with Optional Cash Payments will be equal to the amount paid by the Participant in acquiring the shares, plus the excess of the fair market value of the shares on the date the Common Stock was purchased with the Optional Cash Payment over the Optional Cash Payment. Because the price at which Common Stock will be purchased under the Plan will be between 90% and 100% of the average of the daily high and low sales prices on five randomly chosen days (see Question 8 above), the fair market value of the shares on the date they were acquired either through the reinvestment of dividends or through Optional Cash Payments may differ from the price at which such shares are purchased. The following examples, which are for illustrative purposes only, may be helpful to illustrate the federal income tax consequences of the reinvestment of dividends or the purchase of stock with Optional Cash Payments.
Example 1 Cash Dividends Reinvested $100.00 Assumed Fair Market Value per share $ 14.00 Market Price based on random 5 day average $ 13.50 Less 3% discount per share $ (0.41) Net purchase price per share $ 13.09 Number of shares purchased (100/13.09) 7.639 Total taxable dividend (14 x 7.639) $106.95 Tax Basis per share $ 14.00
-18-
Example 2 Optional Cash Payment $100.00 Assumed Fair Market Value per share $ 14.00 Market Price based on 5 day average $ 13.50 Less 3% discount per share $ (0.41) Net purchase price per share $ 13.09 Number of shares purchased (100/13.09) 7.639 Total taxable dividend resulting from transaction ($14 x 7.639 - 100) $ 6.95 Tax Basis per share $ 14.00
A Participant who receives, upon withdrawal from or termination of the Plan, a cash adjustment for a fraction of a share credited to his account will realize a gain or loss with respect to such fraction. Gain or loss will also be realized by the Participant when whole shares of Common Stock are sold pursuant to the Participant's request when he withdraws from the Plan or when whole shares of Common Stock are sold or exchanged by the Participant himself after the shares of Common Stock have been withdrawn from the Plan. The amount of such gain or loss will be the difference between the amount which the Participant receives for his shares of Common Stock or fraction of a share and his tax basis therefor less the portion, if any, of dividends received thereon constituting a return of capital (nontaxable distributions) for federal income tax purposes. A Participant's holding period for shares of Common Stock acquired through the Plan will begin on the day following the purchase of such shares. Under backup withholding rules, dividends which are reinvested pursuant to the Plan may be subject to backup withholding at the rate of 31% unless the Participant (a) is a corporation or other form of exempt entity and, when required, demonstrates this fact, or (b) provides the Agent with the Participant's taxpayer identification number and certifies to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. In the case of foreign Participants receiving dividends that are subject to United States income tax withholding, the Company, to the extent permitted by law, will apply the net amount of any dividend which is being reinvested by such Participant, after the deduction of taxes, to the purchase of shares of Common Stock. Foreign Participants who indicate Optional Cash Payments Only on the Shareholder Authorization Form will continue to receive cash dividends on shares of Common Stock not included in the Plan in the usual manner. Optional Cash Payments received from them must be by check or money order payable in United States dollars and will be invested in the same manner as Optional Cash Payments from other Participants. USE OF PROCEEDS No proceeds will be realized by the Company when Plan shares are purchased on the open market. The Company has no basis for determining the number of original issue shares that will be purchased directly from the Company under the Plan, and the amount of proceeds of any such shares. The proceeds to the Company from the issuance and sale of any original issue shares are expected to be added to the general funds of the Company and used for general corporate purposes. -19- LEGAL OPINIONS The legality of shares of Common Stock offered hereby has been passed on for the Company by LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership including professional corporations, New York, New York and Newark, New Jersey. Douglas W. Hawes, Esq., a member of that firm, is a director and Secretary of the Company, and Alan M. Berman, Esq., a member of that firm, is a director of United Properties Group Inc., a wholly-owned subsidiary of the Company. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1994 have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. -20- ================================================================================ No dealer, salesman or other person is authorized to give any information or to make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer by the Company to sell, or a solicitation of an offer to buy any security offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct or complete as of any time subsequent to the date hereof. ---------------------------- TABLE OF CONTENTS
Page ---- Available Information........... 2 Incorporation of Certain Documents by Reference........ 2 The Company..................... 4 Index to Description of the Plan...................... 4 Description of the Plan......... 5 Federal Income Tax Information.. 17 Use of Proceeds................. 19 Legal Opinions.................. 20 Experts......................... 20
================================================================================ ================================================================================ DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN UNITED WATER RESOURCES INC. COMMON STOCK (NO PAR VALUE) ------------------------- PROSPECTUS ------------------------- ______ __, 1995 ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Registration Fee -- Securities and Exchange Commission............... $18,359.00 Auditors' Fee*............ $ 5,000.00 Legal Fees and Expenses*.. $28,000.00 Printing and Mailing*..... $35,000.00 Administration Fees*...... $ 3,000.00 Miscellaneous*............ $ 5,000.00 Total.................... $94,359.00 * Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company is incorporated in New Jersey and is subject to New Jersey law covering indemnification of any officer or director who has been or is threatened to be made a party to any legal proceeding by reason of service to the Company. New Jersey law provides that indemnification will be made to any officer or director who has been successful "on the merits" or "otherwise" with respect to the defense of any such proceeding, but does not require indemnification in any other circumstance. New Jersey law permits the advancing of expenses incurred in defending such a proceeding upon the giving of an undertaking to repay such sums by the indemnified officer or director in the event it is later determined that such officer or director should not have been indemnified. New Jersey law also permits the Company to procure insurance on behalf of its officers and directors against any liability asserted against or incurred by the officer or director, even if the Company would not otherwise have the power under applicable law to indemnify the officer or the director for such expenses. In accordance with the New Jersey Business Corporation Act, a provision of the Company's Restated Certificate of Incorporation eliminates personal liability of directors and officers to the Company or its shareholders for damages for breach of any duty owed to the Company or its shareholders to the fullest extent permissible by law. However, this provision does not relieve a director or officer from liability for any breach of duty based upon an act or omission (1) in breach of such person's duty of loyalty to the Company or its shareholders, (2) not in good faith or involving a knowing violation of law, or (3) resulting in receipt by such person of an improper personal benefit. The By-laws of the Company and indemnification agreements between the Company and each of its directors and officers provide for indemnification of directors and officers against certain liabilities arising out of their service in such capacities to the fullest extent permissible by law. The indemnification agreements between the Company and each of its directors and officers are intended to provide a contractual right to indemnification notwithstanding any future amendment of the By-laws of the Company and provide for the indemnification of directors and officers for liabilities that may relate to acts or omissions that occurred prior to the date of such indemnification agreements. The By-laws of the Company presently authorize the Company to enter into indemnification agreements providing similar II-1 rights to any future director or officer of the Company or to any person who serves as an officer, director or key employee of other corporations or entities at the request of the Company. The Company also has policies of insurance which, among other things, provide officers' and directors' liability coverage, individually or collectively, up to an annual aggregate limit of $50,000,000. ITEM 16. LIST OF EXHIBITS. 3(a) - Restated Certificate of Incorporation of United Water Resources Inc., dated July 14, 1987. (Filed as Exhibit 4(b) to Registration Statement No. 33-20067). 3(b) - Certificate of Correction to Restated Certificate of Incorporation of United Water Resources Inc., dated August 13, 1987. (Filed as Exhibit 4(c) to Registration Statement No. 33-20067). 3(c) - Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, amending Articles 5, 6, 7 and 9. 3(d) - Amended By-laws of United Water Resources Inc. dated as of March 10, 1994. (Filed as Exhibit 4(1) to Form 10-K for the year ended December 31, 1993). 4(a) - Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, for Series A Cumulative Convertible Preference Stock of United Water Resources Inc. 4(b) - Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, for Series B 7 5/8% Cumulative Preferred Stock of United Water Resources Inc. 4(c) - Dividend Reinvestment and Stock Purchase Plan (See Prospectus). 4(d) - Specimen of United Water Resources Inc. Common Stock. (Filed as Exhibit 4(d) to Registration Statement No. 2-90540). 4(e) - Rights Agreement, dated as of July 12, 1989, between United Water Resources Inc. and First Interstate Bank, Ltd. (Filed as Exhibit 4(c) to Registration Statement No. 33-32672). 4(f) - Governance Agreement between United Water Resources Inc. and Lyonnaise American Holding, Inc., dated April 22, 1994. (Filed in Appendix A to Registration Statement No. 33-51703). 5(a) - Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P. 23(a) - Consent of Price Waterhouse LLP. 23(b) - Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (Contained in their opinion filed as Exhibit 5(a)). 24(a) - Powers of Attorney (included in signature page). 24(b) - Certified copies of the resolutions of the Board of Directors. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; II-2 (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (l)(i) and (l)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) If the registrant is a foreign private issuer, to file a post- effective amendment to the registration statement to include any financial statements required by Rule 3-19 of Regulation S-X at the start of any delayed offering or throughout a continuous offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN HARRINGTON PARK, COUNTY OF BERGEN, STATE OF NEW JERSEY, ON THIS 7TH DAY OF AUGUST, 1995. UNITED WATER RESOURCES INC. (Registrant) By /s/ Donald L. Correll ----------------------------------- (Donald L. Correll, President and Chief Executive Officer) SIGNATURES KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Donald L. Correll, E. Ellsworth McMeen, III and Allan D. Shakley (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post- effective amendments) of and supplements to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each such attorney-in-fact and agent, or his substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, to all intents and purposes and as fully as he or she might or could do in person, hereby ratifying and confirming all that each such attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
Signature Title Date ------------------------------------------- ------------------------ --------------- Chairman of the Board of /s/ Donald L. Correll Directors, President and August 7, 1995 ------------------------------------------- Chief Executive Officer (Donald L. Correll, Chairman of the Board of Directors, President and Chief Executive Officer) Principal Financial /s/ John J. Turner Officer and Principal August 7, 1995 ------------------------------------------- Accounting Officer (John J. Turner, Treasurer) /s/ Edward E. Barr Director August 7, 1995 ------------------------------------------- (Edward E. Barr)
II-4
Signature Title Date ------------------------------------------- ------------------------ --------------- /s/ Frank J. Borelli Director August 7, 1995 ------------------------------------------- (Frank J. Borelli) Director ------------------------------------------- (Philippe Brogniart) /s/ Lawrence R. Codey Director August 7, 1995 ------------------------------------------- (Lawrence R. Codey) /s/ Peter Del Col Director August 7, 1995 ------------------------------------------- (Peter Del Col) /s/ Allan R. Dragone Director August 7, 1995 ------------------------------------------- (Allan R. Dragone) /s/ Robert L. Duncan, Jr. Director August 7, 1995 ------------------------------------------- (Robert L. Duncan, Jr.) /s/ Jon F. Hanson Director August 7, 1995 ------------------------------------------- (Jon F. Hanson) /s/ George M. Haskew, Jr. Director August 7, 1995 ------------------------------------------- (George M. Haskew, Jr.) Director ------------------------------------------- (Douglas W. Hawes) /s/ Dennis M. Newnham Director August 7, 1995 ------------------------------------------- (Dennis M. Newnham) Director ------------------------------------------- (Jacques F. Petry) /s/ Marcia L. Worthing Director August 7, 1995 ------------------------------------------- (Marcia L. Worthing)
II-5 EXHIBIT INDEX
Sequentially Exhibit Numbered No. Description Page --------- ------------------------------------------------------------------------------ ------------ 3(a) -- Restated Certificate of Incorporation of United Water Resources Inc., dated July 14, 1987. (Filed as Exhibit 4(b) to Registration Statement No. 33-20067). 3(b) -- Certificate of Correction to Restated Certificate of Incorporation of United Water Resources Inc., dated August 13, 1987. (Filed as Exhibit 4(c) to Registration Statement No. 33-20067). 3(c) -- Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, amending Articles 5, 6, 7 and 9. 3(d) -- Amended By-laws of United Water Resources Inc. dated as of March 10, 1994. (Filed as Exhibit 4(1) to Form 10-K for the year ended December 31, 1993). 4(a) -- Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, for Series A Cumulative Convertible Preference Stock of United Water Resources Inc. 4(b) -- Certificate of Amendment to the Restated Certificate of Incorporation of United Water Resources Inc., dated April 22, 1994, for Series B 7 5/8% Cumulative Preferred Stock of United Water Resources Inc. 4(c) -- Dividend Reinvestment and Stock Purchase Plan (See Prospectus). 4(d) -- Specimen of United Water Resources Inc. Common Stock (Filed as Exhibit 4(d) to Registration Statement No. 2-90540). 4(e) -- Rights Agreement, dated as of July 12, 1989, between United Water Resources, Inc. and First Interstate Bank, Ltd. (Filed as Exhibit 4(c) to Registration Statement No. 33-32672). 4(f) -- Governance Agreement between United Water Resources Inc. and Lyonnaise American Holding, Inc., dated April 22, 1994. (Filed in Appendix A to Registration Statement No. 33-51703). 5(a) -- Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P. 23(a) -- Consent of Price Waterhouse LLP. 23(b) -- Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (Contained in their opinion filed as Exhibit 5(a)). 24(a) -- Power of Attorney (included in signature page). 24(b) -- Certified copies of the resolutions of the Board of Directors.
II-6 EX-3.(C) 2 CERT. OF AMEND. AMENDING ART. 5,6,7, AND 9 EXHIBIT 3(c) CERTIFICATE OF AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF UNITED WATER RESOURCES INC. TO: THE SECRETARY OF STATE STATE OF NEW JERSEY Pursuant to the provisions of Sections 14A:9-2(4) and 14A:9-4(3) of the New Jersey Business Corporation Act, the undersigned corporation executes the following Certificate of Amendment to its Restated Certificate of Incorporation: 1. The name of the corporation is United Water Resources Inc. (hereinafter called the "Corporation"). 2. The following amendments to the Restated Certificate of Incorporation were approved by the Board of Directors and thereafter were duly adopted by the shareholders of the Corporation on the 10th day of March, 1994: RESOLVED, that Articles 5, 6 and 7 of the Restated Certificate of Incorporation be and hereby are amended to read in their entirety as follows: "5. The shares of capital stock which the Corporation has authority to issue shall consist of the following: (a) Common Stock divided into 50,000,000 shares, without par value, (b) Preferred Stock divided into 1,000,000 shares, without par value, and (c) Preference Stock divided into 5,000,000 shares, without par value. 6. No stock of any class shall entitle any holder thereof as a matter of right to subscribe for, purchase or receive, or to have any other preemptive rights in respect of, any part of the Corporation's capital stock. All shares of Preference Stock shall be subordinate to the Preferred Stock of the Corporation with respect to the payment of dividends, distributions, redemptions and in the distribution of assets upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary. All shares of Common Stock will participate equally with respect to dividends and will rank equally upon liquidation. The holders of Common Stock will be entitled to one vote per share in the election of Directors and other matters. 7. Subject to Article 6 above, the Board of Directors is hereby empowered with respect to the Corporation's shares of Preferred Stock and Preference Stock to determine or change for any class or series its designation, number of shares and relative, participating, optional and other special rights, preferences and limitations. The Board of Directors is further empowered to cause the Preferred Stock and Preference Stock to be issued in series with variations as to (a) the rates of dividend payable thereon, (b) the terms on which the same may be redeemed, (c) the amount which shall be paid to the holders thereof in case of dissolution or any distribution of assets, (d) the terms or amount of any sinking fund provided for the purchase or redemption thereof and (e) the terms upon which the holders thereof may convert the same into stock of any other class or classes or of any one or more series of the same class or of another class or classes." RESOLVED, that Sections 9.1 and 9.2 of Article 9 of the Restated Certificate of Incorporation be and hereby are amended to read in their entirety as follows: "9.1 The number of Directors of the Corporation shall not be less than three (3) nor more than fifteen (15) subject to the right of the holders of any series of Preferred Stock or Preference Stock then outstanding to elect additional Directors under specified circumstances, as may be specified from time to time in the By-Laws of the Corporation. The Board of Directors shall be divided into three classes, Class I, Class II and Class III. The By-Laws shall provide for the number of Directors in each of the respective classes, which shall be as nearly equal in number as possible. The initial term of office of the Directors in each class shall commence with election at the 1984 annual meeting of shareholders. Each Director elected at an annual meeting of shareholders shall hold office until the date and the time of the third annual meeting of shareholders following the annual meeting of shareholders at which such Director was elected (and until his successor shall have been elected and qualified), except as provided in Section 9.3 of this Article and except that the term of office of the initial Directors in Class I shall expire on the date and at the time of the 1985 annual meeting of shareholders (and until their respective successors shall have been elected and qualified) and the term of office of the initial Directors in Class II shall expire on the date and at the time of the 1986 annual meeting of shareholders (and until their respective successors shall have been elected and qualified). 9.2 Subject to the rights of the holders of any series of Preferred Stock or Preference Stock then outstanding, any Director may be removed from office at any time by the shareholders of the Corporation, but only for cause, by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of Directors. No removal shall be effective until a final determination by a court of competent jurisdiction that cause exists for such removal. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. -2- Subject to the rights of the holders of any series of Preferred Stock or Preference Stock then outstanding, any Director may be removed from office at any time but only for cause by the affirmative vote of a majority of all Directors." 3. The total number of shares entitled to vote on the adoption of the amendment was 20,494,184. 4. The number of shares voting for, voting against and abstaining from the vote on such amendment is as follows: NUMBER OF SHARES NUMBER OF SHARES VOTING FOR VOTING AGAINST NUMBER OF SHARES AMENDMENT AMENDMENT ABSTAINING 12,498,712 384,378 167,428 5. The effective date of this Certificate of Amendment to the Certificate of Incorporation shall be April 22, 1994. UNITED WATER RESOURCES INC. By: /s/ Donald L. Correll ------------------------- Donald L. Correll President and Chief Executive Officer Dated: April 22, 1994 -3- EX-4.(A) 3 CERT. OF AMEND FOR SERIES A CUM. PREFERENCE EXHIBIT 4(a) CERTIFICATE OF AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF UNITED WATER RESOURCES INC. TO: THE SECRETARY OF STATE STATE OF NEW JERSEY Pursuant to the provisions of Sections 14A:9-2(4) and 14A:9-4(3) of the New Jersey Business Corporation Act, the undersigned corporation executes the following Certificate of Amendment to its Restated Certificate of Incorporation: 1. The name of the corporation is United Water Resources Inc. (hereinafter called the "Corporation"). 2. The following amendment to the Restated Certificate of Incorporation was approved by the Board of Directors and thereafter was duly adopted by the shareholders of the Corporation on the 10th day of March, 1994: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the "Board of Directors") in accordance with the provisions of the Restated Certificate of Incorporation of the Corporation, the Board of Directors hereby amends the Restated Certificate of Incorporation by the addition of the following provision stating the number, designations, relative rights, preferences and limitations of a series of Preference Stock of the Corporation, designated as Series A Cumulative Convertible Preference Stock: Series A Cumulative Convertible Preference Stock: Section 1. Designation and Amount. (a) The shares of such series ---------------------- shall be designated as the "Series A Cumulative Convertible Preference Stock" (the "Series A Preference Stock") and the number of shares constituting such series shall be 4,000,000, which number may be increased or decreased by the Board of Directors without a vote of stockholders; provided, however, that such -------- ------- number may not be decreased below the number of then currently outstanding shares of Series A Preference Stock plus the number of shares of Series A Preference Stock reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preference Stock. (b) The Series A Preference Stock shall rank, with respect to voting powers, preferences and relative, participating, optional and other special rights of the shares of such series and the qualifications, limitations and restrictions thereof, including, without limitation, with respect to the payment of dividends and the distribution of assets, whether upon liquidation or otherwise, (i) equally with respect to all other series of Parity Stock (as defined in Section 10), (ii) after all shares of any class or series of the Senior Stock (as defined in Section 10), and (iii) prior to all shares of Junior Stock (as defined in Section 10). Section 2. Dividends and Distributions. (a) Subject to the rights --------------------------- of the holders of any shares of Senior Stock, the holders of shares of Series A Preference Stock, in preference to the holders of any shares of Junior Stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds of the Corporation legally available therefor, cumulative cash dividends at the annual rate of $.69 per share, and no more, in equal quarterly payments on March 31, June 30, September 30 and December 31 in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date which is at least 10 days after the Issue Date (as defined in Section 10) of the Series A Preference Stock; provided, however, that with respect to such first Quarterly Dividend -------- ------- Payment Date, the holders of shares of Series A Preference Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds of the Corporation legally available therefor, a cumulative cash dividend in respect of each share of Series A Preference Stock in an amount equal to the product of (i) $.69 and (ii) a fraction equal to the number of days from (and including) the Issue Date to (but excluding) such Quarterly Dividend Payment Date divided by 90, and no more. (b) Dividends payable pursuant to paragraph (a) of this Section 2 shall begin to accrue and be cumulative from the Issue Date. The amount of dividends so payable shall be determined on the basis of a 360-day year consisting of twelve 30-day months. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preference Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preference Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. (c) In case the Corporation shall at any time or from time to time declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any subsidiary of the Corporation) on its Common Stock, without par value (the "Common Stock"), other than (i) dividends payable in cash from retained earnings of the Corporation, as determined in accordance with generally accepted accounting principles consistently applied in accordance with past practice, (ii) any dividend or distribution of shares of Common Stock or (iii) any distribution pursuant to any employee benefit plan or program of the Corporation, then, and in each such case, the holders of shares of Series A Preference Stock -2- shall be entitled to receive from the Corporation, with respect to each share of Series A Preference Stock held, the same dividend or distribution received by a holder of the number of shares of Common Stock into which such share of Series A Preference Stock is convertible on the record date for such dividend or distribution (which amount shall be determined without regard to whether the shares of Series A Preference Stock are then actually convertible pursuant to Section 8). Any such dividend or distribution shall be declared, ordered, paid or made on the Series A Preference Stock at the same time such dividend or distribution is declared, ordered, paid or made on the Common Stock and the record date for such dividend or distribution on the Series A Preference Stock shall be the same record date for such dividend or distribution on the Common Stock. (d) The holders of shares of Series A Preference Stock shall not be entitled to receive any dividends or other distributions except as provided herein. Section 3. Voting Rights. In addition to any voting rights provided ------------- by law, the holders of shares of Series A Preference Stock shall have the following voting rights: (a) If on any date a total of six consecutive quarterly dividends on the Series A Preference Stock have fully accrued but have not been paid in full (a "Dividend Default"), the holders of shares of Series A Preference Stock shall have the right, voting together as a single class, to elect one director, which director may but need not be an officer of the Corporation, to the Board of Directors. For the taking of any action as provided in this Section 3 by the holders of shares of the Series A Preference Stock, each such holder shall have one vote for each share of such stock standing in his or her name on the transfer books of the Corporation as of any record date fixed for such purpose or, if no such date be fixed, at the close of business on the Trading Day (as defined in Section 10) next preceding the day on which notice is given, or if notice is waived, at the close of business on the Trading Day next preceding the day on which the meeting is held. Such right of the holders of shares of Series A Preference Stock to vote for the election of such director to the Board of Directors may be exercised at any annual meeting of stockholders or at any special meeting of stockholders called for such purpose as hereinafter provided or at any adjournment thereof, or by the written consent, delivered to the Secretary of the Corporation, of the holders of a majority of all outstanding shares of Series A Preference Stock, until dividends in default on the outstanding shares of Series A Preference Stock shall have been paid in full, at which time the term of office of the director so elected shall terminate automatically. So long as such right to vote continues (and unless such right has been exercised by written consent of the holders of a majority of the outstanding shares of Series A Preference Stock as hereinabove authorized), the Secretary of the Corporation may call, and upon the written request of the holders of record of a majority of the outstanding shares of Series A Pre- -3- ference Stock addressed to him at the principal office of the Corporation shall call, a special meeting of the holders of such shares for the election of such director as provided herein. Such meeting shall be held within 30 days after delivery of such request to the Secretary, at the place and upon the notice provided by law and in the Corporation's By-laws for the holding of meetings of stockholders of the Corporation. No such special meeting or adjournment thereof shall be held on a date less than 30 days before an annual meeting of stockholders or any special meeting in lieu thereof. If at any such annual or special meeting or any adjournment thereof the holders of a majority of the then outstanding shares of Series A Preference Stock entitled to vote in such election shall be present or represented by proxy, or if the holders of a majority of the outstanding shares of Series A Preference Stock shall have acted by written consent in lieu of a meeting with respect thereto, then the authorized number of directors shall be increased by one, and the holders of the Series A Preference Stock shall be entitled to elect the additional director. The absence of a quorum of the holders of any other class or series of capital stock of the Corporation at any such annual or special meeting shall not affect the exercise by the holders of the Series A Preference Stock of such voting rights. A director so elected shall serve until the next annual meeting or until his or her successor shall be elected and shall qualify, unless the term of office of the person so elected as director shall have terminated under the circumstances set forth in the second sentence of this paragraph (a). If the director so elected by the holders of the Series A Preference Stock as a class shall cease to serve as a member of the Board of Directors before his or her term shall expire, the holders of the Series A Preference Stock then outstanding and entitled to vote for such director may, by written consent as hereinabove provided, or at a special meeting of such holders called as provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. After the holders of the Series A Preference Stock shall have exercised their right to elect the director pursuant to the terms of this paragraph (a), the authorized number of directors shall not be increased or decreased, regardless of the terms of any shares of Junior Stock, or decreased, regardless of the terms of any other stock of the Corporation, except by a class vote of the holders of the Series A Preference Stock as provided above. The rights of the holders of the Series A Preference Stock to elect the director pursuant to the terms of this paragraph (a) shall not be adversely affected by the voting or other rights applicable to any other security of the Corporation. Notwithstanding anything to the contrary in this paragraph (a), the director elected or appointed pursuant to this paragraph (a) as a result of a Dividend Default shall not be elected or appointed if the Corporation is advised in writing by its outside counsel that such director would not be qualified under the Corporation's Restated Certificate of Incorporation or By-Laws or any applicable statutory or regulatory standards to serve as a director of the Corporation or if the Corporation otherwise reasonably objects to such director because such director either (i) is a director or officer of a direct -4- competitor of the Corporation or (ii) has engaged in any adverse conduct that would require disclosure under Item 7 of Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended, in which case the holders of the Series A Preference Stock shall withdraw such director and elect or nominate a replacement therefor (which replacement would be subject to the requirements of this sentence). Any such objection by the Corporation must be made no later than fourteen (14) days after the holders of the Series A Preference Stock identify such director to the Corporation. (b) Except as provided herein or as required by law, the holders of shares of Series A Preference Stock shall have no voting rights and their consent shall not be required for the taking of any corporate action. Section 4. Certain Restrictions. (a) Whenever quarterly dividends -------------------- payable on shares of Series A Preference Stock as provided in Section 2 hereof are in arrears, thereafter and until all accrued and unpaid dividends, whether or not declared, on the outstanding shares of Series A Preference Stock shall have been paid in full or declared and set apart for payment, the Corporation shall not: (i) declare or pay dividends, or make any other distributions, on any shares of Junior Stock other than dividends or distributions payable in Junior Stock; or (ii) declare or pay dividends, or make any other distributions, on any shares of Parity Stock, except (1) dividends or distributions payable in Junior Stock and (2) dividends or distributions paid ratably on the Series A Preference Stock and all Parity Stock on which dividends are payable or in arrears, in proportion to the total amounts to which the holders of all shares of the Series A Preference Stock and such Parity Stock are then entitled. (b) Whenever quarterly dividends payable on shares of Series A Preference Stock provided in Section 2 hereof are in arrears, thereafter and until all accrued and unpaid dividends, whether or not declared, on the outstanding shares of Series A Preference Stock shall have been paid in full or declared and set apart for payment, the Corporation shall not: (i) redeem or purchase or otherwise acquire for consideration any shares of Junior Stock or Parity Stock; or (ii) purchase or otherwise acquire for consideration any shares of Series A Preference Stock. (c) Notwithstanding the foregoing, nothing herein shall prevent the Corporation from declaring or effecting any dividend, distribution or redemption pursuant to the Rights Agreement (as defined in Section 10). (d) The Corporation shall not permit any majority-owned direct or indirect subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of capital stock of the Corporation unless the Corporation could, pursuant to paragraph (b) of this Section 4, purchase such shares at such time and in such manner. -5- Section 5. Redemption. (a) On the tenth anniversary of the Issue ---------- Date (the "Redemption Date"), and subject to the rights of the holders of any shares of Senior Stock, the Corporation shall, at a redemption price per share equal to the sum of $13.794 per share (the "Liquidation Preference") plus an amount equal to all dividends per share accrued and unpaid on the Redemption Date (including a per share dividend in an amount equal to the product of (i) the Liquidation Preference and (ii) a fraction equal to the number of days from (and including) the last Quarterly Dividend Payment Date to (but excluding) the Redemption Date divided by 90) (the "Redemption Price"), redeem out of funds legally available therefor, all shares of Series A Preference Stock outstanding on the Redemption Date; provided, however, that if there are insufficient -------- ------- legally available funds for redemption under this paragraph (a), the Corporation shall redeem such lesser number of shares of Series A Preference Stock, to the extent there are funds legally available therefor, and shall redeem all or part of the remainder of the shares of Series A Preference Stock subject to redemption as soon as the Corporation has sufficient funds which are legally available therefor, until all such shares of Series A Preference Stock have been redeemed. (b) In the event of a redemption of only a portion of the then outstanding shares of Series A Preference Stock, the Corporation shall effect such redemption pro rata according to the number of shares held by each holder of Series A Preference Stock. (c) Notice of the redemption of shares of Series A Preference Stock (the "Redemption Notice") shall be mailed not less than 20, but not more than 60 days prior to the Redemption Date to each holder of shares of Series A Preference Stock to be redeemed, at such holder's address as it appears, on the transfer books of the Corporation. (d) On or before the Redemption Date each holder of Series A Preference Stock shall surrender the certificate or certificates representing such shares of Series A Preference Stock to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable in cash on the Redemption Date to the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be cancelled and retired. The Corporation shall not be obligated to make any redemption payment unless or until the certificates representing the shares to be redeemed have been surrendered in accordance with this paragraph (d). In the event that less than all of the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. (e) Unless the Corporation defaults in the payment in full of the Redemption Price, dividends on the Series A Preference Stock called for redemption shall cease to accumulate on the Redemption Date, and all rights of the holders of such shares redeemed shall cease to have any further rights with respect -6- thereto on the Redemption Date, other than to receive the Redemption Price without interest. Section 6. Reacquired Shares. Any shares of Series A Preference ----------------- Stock converted, redeemed, purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of preference stock, without par value, of the Corporation and may be reissued as part of another series of preference stock, without par value, of the Corporation subject to the conditions or restrictions on authorizing or creating any class or series, or any shares of any class or series as set forth herein. Section 7. Liquidation, Dissolution or Winding Up. (a) Upon any -------------------------------------- liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, no distribution shall be made (i) to the holders of shares of Junior Stock, unless, prior thereto, the holders of shares of Series A Preference Stock shall have received the Liquidation Preference per share of Preference Stock, plus an amount per share equal to all accrued but unpaid dividends thereon, whether or not declared, to the date of such payment or (ii) to the holders of shares of Parity Stock, except distributions made ratably on the Series A Preference Stock and all such Parity Stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up of the Corporation. If, upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the net assets of the Corporation distributable among the holders of all outstanding shares of Series A Preference Stock and any other series of Parity Stock upon liquidation, dissolution or winding up shall be insufficient to permit the payment in full to all such holders of the preferential amounts to which they are entitled, then, the net assets so distributable shall be distributed among such holders ratably in proportion to the full amounts to which they would otherwise be entitled. (b) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person (as defined in Section 10) or Persons nor the sale, lease, exchange or conveyance of all or any part of the property, assets or business of the Corporation to a Person or Persons other than the holders of the Junior Stock, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 7. Section 8. Conversion. Any conversion of shares of the Series A ---------- Preference Stock or any portion thereof shall be subject to the terms and conditions set forth in this Section 8. (a) Each share of Series A Preference Stock shall be convertible at the option of the holder thereof into .83333 fully paid and nonassessable share of Common Stock (subject to adjustment -7- from time to time pursuant to paragraphs (b) through (f) of this Section 8) at any time from (and including) the second anniversary of the Issue Date to (and including) the Redemption Date. (b) The number of shares of Common Stock into which each share of Series A Preference Stock is convertible shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time pay a dividend, or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock or subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares or combine or reclassify the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, and in each such case, (A) the number of shares of Common Stock into which each share of Series A Preference Stock is convertible shall be adjusted so that the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock which the holder of a share of Series A Preference Stock would have been entitled to receive after the happening of any of the events described above had such share been converted immediately prior to the happening of such event or the record date therefor, whichever is earlier; and (B) any adjustment made pursuant to this subparagraph (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In case the Corporation shall issue shares of Common Stock (or other securities convertible into or exchangeable for shares of Common Stock) after the Issue Date (the "Issued Securities") at a price per share of Common Stock (or having a conversion or exchange price per share of Common Stock) less than the Closing Price per share of Common Stock on the Trading Day (as defined in Section 10) immediately preceding the date of issuance of such Issued Securities other than (w) in a transaction to which paragraph (c) of Section 2 or subparagraph (i) of this paragraph (b) is applicable, (x) pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation, and the investment of additional option amounts, in shares of -8- Common Stock, in any such case at a price per share of not less than 95% of the current market price (determined as provided in such plans) per share of Common Stock, or pursuant to any employee benefit plan or program of the Corporation or pursuant to the Rights Agreement, (y) pursuant to any underwritten public offering where the price to public per share of Common Stock (or the conversion or exchange price per share of Common Stock based upon the price to public) is at or above the Closing Price on the Trading Day immediately preceding the date of pricing of such offering, or (z) as consideration for the acquisition of all or a portion of the stock or assets of any Person which is not a subsidiary of the Corporation, then, and in each such case, (A) the number of shares of Common Stock into which each share of Series A Preference Stock is convertible shall be adjusted so that the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying the number of shares of Common Stock into which each share of Series A Preference Stock was convertible at the close of business on the Trading Day immediately preceding the date of issuance of such Issued Securities by a fraction (I) the numerator of which is the sum of (1) the number of shares of Common Stock outstanding at the close of business on the Trading Day immediately preceding the date of issuance of such Issued Securities and (2) the number of additional shares of Common Stock issued (or issuable upon the conversion or exchange of such Issued Securities into Common Stock) and (II) the denominator of which is the sum of (1) the number of shares of Common Stock outstanding at the close of business on the Trading Day immediately preceding the date of issuance of such Issued Securities and (2) the number of shares of Common Stock which the aggregate consideration paid for such Issued Securities would purchase at the Closing Price per share of Common Stock on the Trading Day immediately preceding the date of issuance of such Issued Securities. For purposes of this subparagraph (ii), the aggregate consideration paid for the Issued Securities shall be deemed to be equal to the sum of the aggregate subscription or purchase price paid by the purchasers of the Issued Securities from any underwriter or placement agent thereof plus the aggregate amount, if any, payable upon the conversion or exchange of the Issued Securities into shares of Common Stock; and -9- (B) any adjustment made pursuant to this subparagraph (ii) shall become effective immediately after the date of issuance of such Issued Securities. (iii) In case at any time the Corporation shall be a party to any transaction (including, without limitation, a merger, consolidation, sale of all or substantially all of the Corporation's assets, liquidation or recapitalization of the Common Stock and excluding any transaction to which subparagraph (i) or (ii) of this paragraph (b) applies) in which the previously outstanding Common Stock shall be changed into or, pursuant to the operation of law or the terms of the transaction to which the Corporation is a party, exchanged for different securities of the Corporation or common stock or other securities of another corporation or interests in a noncorporate entity or other property (including cash) or any combination of any of the foregoing, then, as a condition of the consummation of such transaction, lawful and adequate provision shall be made so that the holder of each share of Series A Preference Stock shall be entitled, upon conversion, to an amount per share equal to (A) the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged times (B) the number of shares of Common Stock into which a share of Series A Preference Stock is convertible immediately prior to the consummation of such transaction. (c) In case the Corporation shall be a party to a transaction described in subparagraph (b)(iii) above resulting in the change or exchange of the Corporation's Common Stock then, from and after the date of announcement of the pendency of such subparagraph (b)(iii) transaction until the effective date thereof, each share of Series A Preference Stock may be converted, at the option of the holder thereof, into shares of Common Stock on the terms and conditions set forth in this Section 8, and if so converted during such period, such holder shall be entitled to receive such consideration in exchange for such holder's shares of Common Stock as if such holder had been the holder of such shares of Common Stock as of the record date for such change or exchange of the Common Stock. (d) If any adjustment in the number of shares of Common Stock into which each share of Series A Preference Stock may be converted required pursuant to this Section 8 would result in an increase or decrease of less than 1% in the number of shares of Common Stock into which each share of Series A Preference Stock is then convertible, the amount of any such adjustment shall be carried forward and adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment, which, -10- together with such amount and any other amount or amounts so carried forward, shall aggregate at least 1% of the number of shares of Common Stock into which each share of Series A Preference Stock is then convertible. (e) The Board of Directors may increase the number of shares of Common Stock into which each share of Series A Preference Stock may be converted, in addition to the adjustments required by this Section 8, as shall be determined by it (as evidenced by a resolution of the Board of Directors) to be advisable in order to avoid or diminish any income deemed to be received by any holder for federal income tax purposes of shares of Common Stock or Series A Preference Stock resulting from any events or occurrences giving rise to adjustments pursuant to this Section 8 or from any other similar event. (f) The holder of any shares of Series A Preference Stock may exercise his right to convert such shares into shares of Common Stock, subject to the limitations in this Section 8, by surrendering for such purpose to the Corporation, at its principal office or at such other office or agency maintained by the Corporation for that purpose, a certificate or certificates representing the shares of Series A Preference Stock to be converted accompanied by a written notice stating that such holder elects to convert all or a specified whole number of such shares in accordance with the provisions of this Section 8 and specifying the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. In case such notice shall specify a name or names other than that of such holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of shares of Common Stock in such name or names. Other than such taxes, the Corporation will pay any and all issue and other taxes (other than taxes based on income) that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Series A Preference Stock pursuant hereto. Within 15 days after the surrender of such certificate or certificates and the receipt of such notice relating thereto and, if applicable, payment of all transfer taxes (or the demonstration to the satisfaction of the Corporation that such taxes have been paid), the Corporation shall deliver or cause to be delivered (i) certificates representing the number of validly issued, fully paid and nonassessable full shares of Common Stock to which the holder of shares of Series A Preference Stock so converted, shall be entitled and (ii) if less than the full number of shares of Series A Preference Stock evidenced by the surrendered certificate or certificates are being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares converted. Such conversion shall be deemed to have been made at the close of business on the date of giving of such notice and of such surrender of the certificate or certificates representing the shares of Series A Preference Stock to be converted so that the rights of the holder thereof as to the shares being converted shall cease except for the right to receive shares -11- of Common Stock in accordance herewith, and the person entitled to receive the shares of Common Stock shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time. (g) Upon conversion of any shares of Series A Preference Stock, the holder thereof shall not thereafter be entitled to receive any accumulated, accrued or unpaid dividends in respect of the shares of Series A Preference Stock so converted; provided, however, that such holder shall be entitled to -------- ------- receive any dividends on such shares of Series A Preference Stock declared prior to such conversion if such holder held such shares on the record date fixed for the determination of holders of shares of Series A Preference Stock entitled to receive payment of such dividend. (h) In connection with the conversion of any shares of Series A Preference Stock, no fractions of shares of Common Stock shall be issued, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price per share of Common Stock on the day on which such shares of Series A Preference Stock are deemed to have been converted. (i) The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Shares of the Series A Preference Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of Series A Preference Stock. The Corporation shall from time to time, subject to and in accordance with the laws of the State of New Jersey, increase the authorized amount of Common Stock if at any time the number of authorized shares of Common Stock remaining unissued shall not be sufficient to permit the conversion at such time of all then outstanding shares of Series A Preference Stock. (j) In computing the adjustment which a holder of Series A Preference Stock shall receive pursuant to paragraph (b) of this Section 8, the fact that shares of Series A Preference Stock may not be presently convertible shall be ignored and such computation shall be made as if such shares were presently convertible. Section 9. Reports as to Adjustments. Whenever the number of shares ------------------------- of Common Stock into which each share of Series A Preference Stock is convertible is adjusted as provided in Section 8, the Corporation shall promptly mail to the holders of record of the outstanding shares of Series A Preference Stock at their respective addresses as the same shall appear in the Corporation's stock records a notice stating that the number of shares of Common Stock into which the shares of Series A Preference Stock are convertible has been adjusted and setting forth the new number of shares of Common Stock (or describing the new stock, -12- securities, cash or other property) into which each share of Series A Preference Stock is convertible (and the new number of votes to which each share of Series A Preference Stock is entitled), as a result of such adjustment, a brief statement of the facts requiring such adjustment and the computation thereof, and when such adjustment became effective. Section 10. Definitions. For the purposes of this Certificate of ----------- Amendment relating to the Series A Preference Stock which embodies this resolution: "Closing Price" per share of Common Stock on any date shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then in use, or, if on any such date the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors. If the Common Stock is not publicly held or so listed or publicly traded, "Closing Price" shall mean the per share amount which a willing buyer would pay a willing seller in an arms-length transaction as determined in good faith by the Board of Directors of the Corporation. "Issue Date" shall mean the first date on which shares of Series A Preference Stock are issued. "Junior Stock" shall mean the Common Stock and any other capital stock of the Corporation ranking junior (either as to dividends or upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary) to the Series A Preference Stock. "Parity Stock" shall mean any capital stock of the Corporation ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary) with the Series A Preference Stock. "Person" shall mean any individual, partnership, joint venture, corporation, trust, unincorporated organization or other -13- entity, and shall include any successor (by merger or otherwise) of such entity. "Rights Agreement" shall mean the Rights Agreement dated as of July 12, 1989, as amended September 15, 1993 and as such agreement may be further amended, extended, renewed or replaced from time to time, between the Corporation and First Interstate Bank, Ltd., as Rights Agent, or any successor Rights Agent. "Senior Stock" shall mean the Corporation's Series A Participating Preferred Stock, without par value, the Corporation's Series B 7-5/8% Cumulative Preferred Stock, without par value, and any other capital stock of the Corporation ranking senior (either as to dividends or upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary) to the Series A Preference Stock. "Trading Day" shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national securities exchange, any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York or New Jersey are authorized or obligated to close. Section 11. Amendment. The Restated Certificate of Incorporation of --------- the Corporation shall not be amended in any manner which would alter or change the powers, preferences or special rights of the Series A Preference Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preference Stock, voting together as a single class. 3. The resolution set forth in the preceding paragraph was duly adopted by the Board of Directors of the Corporation on September 15, 1993. -14- 4. The total number of shares entitled to vote on the adoption of the amendment was 20,494,184. 5. The number of shares voting for, voting against and abstaining from the vote on such amendment is as follows: NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES VOTING FOR VOTING AGAINST ABSTAINING AMENDMENT AMENDMENT 12,498,712 384,378 167,428 6. The effective date of this Certificate of Amendment is April 22, 1994. UNITED WATER RESOURCES INC. By /s/ Donald L. Correll ----------------------- Donald L. Correll President and Chief Executive Officer DATED: April 22, 1994 -15- EX-4.(B) 4 CERT. OF AMEND. FOR SERIES B CUM. PREFERRED EXHIBIT 4(b) CERTIFICATE OF AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF UNITED WATER RESOURCES INC. To: THE SECRETARY OF STATE STATE OF NEW JERSEY Pursuant to the provisions of Sections 14A:9-2(4) and 14A:9-4(3) of the New Jersey Business Corporation Act, the undersigned corporation executes the following Certificate of Amendment to its Restated Certificate of Incorporation: 1. The name of the corporation is United Water Resources Inc. (hereinafter called the "Corporation"). 2. The following amendment to the Restated Certificate of Incorporation was approved by the Board of Directors and thereafter was duly adopted by the shareholders of the Corporation on the 10th day of March, 1994: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the "Board of Directors") in accordance with the provisions of the Restated Certificate of Incorporation of the Corporation, the Board of Directors hereby amends the Restated Certificate of Incorporation by the addition of the following provision stating the number, designations, relative rights, preferences and limitations of a series of Preferred Stock of the Corporation, designated as Series B 7 5/8% Cumulative Preferred Stock: Series B 7 5/8% Cumulative Preferred Stock: Section 1. Number of shares and designation. Three hundred thousand -------------------------------- (300,000) shares of the Preferred Stock (without par value) of the Corporation are hereby constituted as a series of such Preferred Stock designated as "Series B 7 5/8% Cumulative Preferred Stock" and each share of which shall have a stated value of $100 (hereinafter called the "Series B Preferred Stock"). Section 2. Dividends. (a) The holders of shares of the Series B --------- Preferred Stock shall be entitled to receive cash dividends, when and as declared by the Board of Directors of the Corporation or by a duly authorized committee of said Board of Directors, out of assets legally available for the purpose, at the rate set forth below in this Section (2) applied to the stated value of $100 per share. Such dividends shall be cumulative from the date of original issue of such shares (whether or not there shall have been net profits or net assets of the Corporation legally available for the payment of dividends at the time such dividends were payable) and shall be payable quarterly, when and as declared by the Board of Directors of the Corporation or by a duly authorized committee of said Board of Directors, on December 1, March 1, June 1 and September 1 of each year, commencing on December 1, 1992. Each such dividend shall be payable to the holders of record of shares of the Series B Preferred Stock as they appear on the stock register of the Corporation on such record date, not more than 60 days preceding the payment date thereof, as shall be fixed by the Board of Directors of the Corporation or by a duly authorized committee of said Board of Directors, provided that such record date shall not precede the date upon which the resolution fixing the record date is adopted. Dividends on account of arrears for any past dividend periods (as defined in Subsection (b) of this Section (2)) may be declared and paid at any time, without reference to any regular dividend payment date, to holders of record on such record date, not exceeding 60 days preceding the payment date thereof, as may be fixed by the Board of Directors of the Corporation or a duly authorized committee of said Board of Directors. (b) Dividend periods (hereinafter called "Dividend Periods") shall commence on March 2, June 2, September 2 and December 2 of each year (other than the initial Dividend Period which shall commence on the date of original issue of the Series B Preferred Stock) and shall end on and include the calendar day next preceding the first day of the next Dividend Period. The dividend rate on the shares of Series B Preferred Stock for the period from the date of original issue thereof to and including December 1, 1992 and for each Dividend Period thereafter shall be 7 5/8% per annum. The amount of dividends payable for each full Dividend Period for the Series B Preferred Stock shall be computed by dividing the dividend rate of 7 5/8% per annum by four and applying the resulting rate of 1.90625% to the stated valued of $100 per share. The amount of dividends payable for the initial Dividend Period on the Series B Preferred Stock or any other Dividend Period shorter or longer than a full Dividend Period shall be computed on the basis of 30-day months and a 360-day year. The dividend payable to each holder of Series B Preferred Stock shall be rounded to the nearest one cent with $.005 being rounded upward. (c) So long as any shares of the Series B Preferred Stock are outstanding, no full dividends shall be declared on the Preferred Stock of the Corporation of any series ranking, as to dividends, on a parity with the Series B Preferred Stock for any period unless full cumulative dividends have been or contemporaneously are declared on the Series B Preferred Stock for all Dividend Periods terminating on or prior to the date of payment of such full cumulative dividends. When dividends are not declared to be paid in full, as described above, upon the shares of the Series B Preferred Stock and any other Preferred Stock ranking on -2- a parity as to dividends with the Series B Preferred Stock, all dividends declared upon shares of the Series B Preferred Stock and any other Preferred Stock ranking on a parity as to dividends with the Series B Preferred Stock shall be declared pro rata so that the amount of dividends declared per share on the Series B Preferred Stock and such other Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the shares of the Series B Preferred Stock and such other Preferred Stock bear to each other. (d) So long as any shares of the Series B Preferred Stock are outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock of the Corporation or another stock ranking junior to the Series B Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other distribution declared or made upon the Common Stock or upon any other stock of the Corporation ranking junior to the Series B Preferred Stock as to dividends or upon liquidation, or upon any other stock of the Corporation ranking on a parity with the Series B Preferred Stock as to dividends except as provided in Subsection (c) of this Section 2, nor shall any Common Stock or any other stock of the Corporation ranking junior to or on a parity with the Series B Preferred Stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Corporation (except by conversion into or exchange for stock of the corporation ranking junior to the Series B Preferred Stock as to dividends and upon liquidation) unless, in each case, the full cumulative dividends on all outstanding shares of the Series B Preferred Stock shall have been paid for all past Dividend Periods and any sums then or theretofore required to be applied to a sinking fund for the Series B Preferred Stock pursuant to Section (5)(c) shall have been applied to such sinking fund. (e) Holders of shares of the Series B Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of full cumulative dividends, as herein provided, on the Series B Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect to any dividend payment or payments on the Series B Preferred Stock which may be in arrears. Section 3. Voting Rights. (a) No shares of the Series B Preferred ------------- Stock shall have any voting rights or rights to receive notice of meetings except as hereinafter set forth in this Section (3) or as otherwise from time to time required by law. Whenever, at any time, dividends payable on the Series B Preferred Stock shall be in arrears for six or more Dividend Periods, that is, not paid in full for six or more past Dividend Periods, whether or not consecutive, the holders of the outstanding shares of Series B Preferred Stock shall have the exclusive right, voting separately -3- as a class (together with the holders of shares of any one or more other series of Preferred Stock ranking on a parity with the shares of Series B Preferred Stock as to dividends or upon distribution and upon which like voting rights have been conferred and are exercisable) to elect two directors of the Corporation at the Corporation's next Annual Meeting of Stockholders and at each subsequent Annual Meeting of Stockholders, each to hold office in accordance with the By-laws (subject to the provisions hereof) until the next Annual Meeting of stockholders and the election of his successor. At elections for such directors, each holder of shares of Series B Preferred Stock shall be entitled to one vote for each share held (the holders of shares of any other series of Preferred Stock ranking on such a parity being entitled to such number of votes, if any, for each share of stock held as may have been granted to them). The presence in person or by proxy of stockholders entitled to cast 25% of the total votes of such separate class shall constitute a quorum of such class and election of directors shall be by plurality vote. The holders of Series B Preferred Stock shall have the right to receive notice of any Annual Meeting of Stockholders of the Corporation at which they have the right to elect such directors. Upon the vesting of such right of the holders of shares of Series B Preferred Stock, the maximum authorized number of members of the Board shall automatically be increased by two and the two vacancies so created shall be filled by a vote of the holders of shares of Series B Preferred Stock (either alone or together with the holders of shares of any one or more other series of Preferred Stock referred to above) as herein set forth. The right of such holders of shares of Series B Preferred Stock voting separately as a class, to elect (together with the holders of shares of any one or more other series of Preferred Stock referred to above) members of the Board as aforesaid shall continue until such time as all dividends accumulated on Series B Preferred Stock shall have been paid in full, at which time such right shall terminate, except as herein or by law expressly provided, subject to the revesting of such right in the event of each and every subsequent default of the character above mentioned. Upon any termination of the right of the holders of all shares of Preferred Stock to vote as a class for directors as herein provided, the term of office of all directors then in office elected by such holders voting as a class shall terminate immediately. If the office of any director elected by such holders voting as a class becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the remaining director elected by holders of Preferred Stock voting as a class may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. Whenever the term of office of the directors elected by holders of Preferred Stock voting as a class shall end and the special voting powers vested in such holders as provided in this Section (3) shall have expired, the number of directors of the full Board shall be reduced by two, to such number as may then be provided for in accordance with the By-laws of the Corporation. -4- (b) So long as any shares of Series B Preferred Stock remain outstanding, the consent of the holders of at least two thirds of the shares of the Series B Preferred Stock outstanding at the time, voting separately as a class (together with all other series of Preferred Stock ranking on a parity with the Series B Preferred Stock either as to dividends or upon distribution and upon which like voting rights have been conferred and are exercisable) given in person or by proxy, either by consent in writing or by vote at any special or annual meeting called for the purpose, shall be necessary to permit, effect or validate any one or more of the following actions: (i) The authorization, creation or issuance, or any increase in the authorization or issued amount, of any class or series of stock ranking prior to the Series B Preferred Stock with respect to payment of dividends or the distribution of assets on liquidation, dissolution or winding up, or the authorization, creation or issuance of any obligation or security convertible into or exchangeable for shares of any class or series having such preference over the Series B Preferred Stock, or (ii) The amendment, alteration or repeal, whether by merger, consolidation or otherwise, of any of the provisions of the Restated Certificate of Incorporation or of the resolutions set forth in the Certificate of Amendment for the Series B Preferred Stock or any other series of Preferred Stock, or any prior amendment thereto, which would materially and adversely affect the rights, preferences, privileges or voting power of the Series B Preferred Stock or of the holders thereof; provided, however, that any increase in the amount of authorized Preferred Stock of the Corporation or the creation and issuance of other series of Preferred Stock, or any increase in the amount of authorized shares of any series, in each case ranking on a parity with or junior to the Series B Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers so as to require such two-thirds consent. (c) So long as any shares of Series B Preferred Stock remain outstanding, the consent of the holders of at least a majority of the shares of the Series B Preferred Stock outstanding at the time, voting separately as a class (together with all other series of Preferred Stock ranking on a parity with the Series B Preferred Stock either as to dividends or upon distribution and upon which like voting rights have been conferred and are exercisable) given in person or by proxy, either by consent in writing or by vote at any special or annual meeting called for the purpose, shall be necessary to permit, effect or validate the authorization or any increase in the authorization (over and above the one million (1,000,000) shares of Preferred Stock of the Corporation authorized at the date of filing hereof) of any class or series of stock ranking on a parity with the Series B Preferred Stock with respect to payment of dividends or the distribution of -5- assets on liquidation, dissolution or winding up, or the authorization, creation or issuance of any obligation or security convertible into or exchangeable for shares (over and above such existing authorized shares) of any class or series having such parity with the Series B Preferred Stock. The foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required, all outstanding shares of Series B Preferred Stock shall have been redeemed or sufficient funds shall have been deposited in trust to effect such redemption. Section 4. Liquidation Preference. (a) In the event of any ---------------------- liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of any series or class or classes of stock of the Corporation ranking junior to the Series B Preferred Stock upon liquidation, dissolution or winding up, the holders of the shares of the Series B Preferred Stock shall be entitled to receive the stated value of $100 per share plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders; but such holders shall not be entitled to any further payment. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the shares of the Series B Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payment on any other Preferred Stock ranking, as to liquidation, dissolution or winding up, on a parity with the Series B Preferred Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series B Preferred Stock and any other such Preferred Stock ratably in accordance with respective amounts which would be payable on such shares of Series B Preferred Stock and any other Preferred Stock if all amounts payable thereon were paid in full. For the purposes of this Section (4), a consolidation or merger of the Corporation with one or more corporations shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary. (b) Subject to the rights of the holders of shares of any series or class or classes of stock ranking on a parity with or prior to the Series B Preferred Stock upon liquidation, dissolution or winding up, upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been in full to the holders of the Series B Preferred Stock as provided in this Section (4), but not prior thereto, any other series or class or classes of stock ranking junior to the Series B Preferred Stock upon liquidation shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Stock shall not be entitled to share therein. -6- Section 5. Redemption. (a) The Series B Preferred Stock may not be ---------- redeemed prior to September 1, 1997. At any time or from time to time on and after September 1, 1997, the Corporation, at its option, may redeem shares of the Series B Preferred Stock, as a whole or in part, together in each case with accrued and unpaid dividends, if any, to the date fixed for redemption, at the redemption prices set forth below:
Redemption dates Redemption Price (both dates inclusive) (per share) ---------------------- ---------------- September 1, 1997 through August 31, 1998 $105.08 September 1, 1998 through August 31, 1999 $104.58 September 1, 1999 through August 31, 2000 $104.07 September 1, 2000 through August 31, 2001 $103.56 September 1, 2001 through August 31, 2002 $103.05 September 1, 2002 through August 31, 2003 $102.54 September 1, 2003 through August 31, 2004 $102.03 September 1, 2004 through August 31, 2005 $101.53 September 1, 2005 through August 31, 2006 $101.02 September 1, 2006 through August 31, 2007 $100.51 September 1, 2007 and thereafter $100.00
(b) As a sinking fund for the Series B Preferred Stock, the Corporation shall, so long as any shares of the Series B Preferred Stock shall be outstanding, redeem on September 1, 1998 and on each September 1 thereafter, at a redemption price at the stated value of $100 per share, together with accrued and unpaid dividends, if any, to the date fixed for redemption pursuant to such sinking fund, fifteen thousand (15,000) shares of the Series B Preferred Stock. However, the Corporation shall be entitled to receive a credit against the foregoing mandatory redemption -7- obligation for the aggregate number of shares of the Series B Preferred Stock which shall be owned by the Corporation, credited to such sinking fund and retired and which shall have not been previously so credited. In the event the number of shares constituting the Series B Preferred Stock shall be increased at any time by action of the Board of Directors pursuant to the provisions hereof, the number of shares of Series B Preferred Stock to be redeemed annually by operation of such sinking fund following the date of such increase shall be increased to 5% of the increased number of shares (adjusted to the nearest full share). On September 1, 2017, all shares of Series B Preferred Stock then remaining outstanding shall be redeemed by the Corporation at a redemption price at the stated value of $100 per share, together with accrued and unpaid dividends, if any, to such redemption date. (c) In the event the Corporation shall redeem shares of Series B Preferred Stock, notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the redemption date, to each holder of record of the shares to be redeemed, at such holder's address as the same appears on the stock register of the Corporation at the record date for such redemption, which record date shall be no more than 60 days prior to the date of the mailing of such notice, provided that such record date shall not precede the date upon which the resolution fixing the record date is adopted. Each such notice shall state (i) the redemption date, (ii) the total number of shares of Series B Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder, (iii) the redemption price, (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price, and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. Notice having been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in making available money for the payment of the redemption price) dividends on the shares of the Series B Preferred Stock so called for redemption shall cease to accrue and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease, whether or not the certificate representing such shares shall have been surrendered to the Corporation. The Corporation's obligation to make money available in accordance with the preceding sentence shall be deemed fulfilled if, on or before the redemption date, the Corporation shall deposit with a bank or trust company having a paying office in the Borough of Manhattan, The City of New York, having a capital and surplus of at least $50,000,000, funds necessary for such redemption, in trust, with irrevocable instructions that such funds be applied to the redemption of the shares of Series B Preferred Stock so called for redemption. Any interest accruing on such funds shall be paid to the Corporation from time to time. Any funds so deposited and unclaimed at the end of three years from such redemption date shall be released or repaid to the Corporation, after which the holder or holders of unredeemed shares of Series B Preferred Stock so called -8- for redemption shall look only to the Corporation for payment of the redemption price. Upon surrender in accordance with said notice of the certificates representing any shares so called for redemption (and, if the Board of Directors of the Corporation shall so require and the notice shall so state, such certificates shall be properly endorsed or signed for transfer or accompanied by stock powers therefor properly signed), such shares shall be redeemed by the Corporation at the applicable redemption price. (d) If less than all the outstanding shares of Series B Preferred Stock are to be redeemed, the shares to be redeemed may be selected by the Corporation from outstanding shares of Series B Preferred Stock not previously called for redemption by lot or pro rata (as near as may be) or by any other method determined by the Corporation in its sole discretion to be equitable. (e) In no event shall the Corporation redeem less than all the outstanding shares of Series B Preferred Stock unless full cumulative dividends have been paid or declared and set apart for payment upon all outstanding shares of Series B Preferred Stock for all past Dividend Periods. (f) All shares of Series B Preferred Stock redeemed or purchased by the Corporation and credited against its sinking fund obligation shall be retired and canceled and shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series, and may thereafter be issued, but not as shares of Series B Preferred Stock. (g) Sums so set aside for the sinking fund for the Series B Preferred Stock shall be applied to the redemption of shares of Series B Preferred Stock on the applicable September 1 as provided herein. Section 6. Exclusion of Other Rights. The holders of shares of Series ------------------------- B Preferred Stock shall not have any rights to convert such shares into or exchange such shares for shares of any other class or classes of capital stock (or any other security) of the Corporation. Unless otherwise required by law, shares of Series B Preferred Stock shall not have any rights, including preemptive rights, or preferences other than those specifically set forth herein. 3. The resolution set forth in the preceding paragraph was duly adopted by the Board of Directors of the Corporation on September 15, 1993. -9- 4. The total number of shares entitled to vote on the adoption of the amendment was 20,494,184. 5. The number of shares voting for, voting against and abstaining from the vote on such amendment is as follows: NUMBER OF SHARES NUMBER OF SHARES VOTING AGAINST NUMBER OF SHARES VOTING FOR AMENDMENT AMENDMENT ABSTAINING 12,498,712 384,378 167,428 6. The effective date of this Certificate of Amendment is April 22, 1994. UNITED WATER RESOURCES INC. By /s/ Donald L. Correll ------------------------- Donald L. Correll President and Chief Executive Officer DATED: April 22, 1994 -10- EX-5.(A) 5 OPINION OF LEBOEUF, LAMB EXHIBIT 5(a) LeBOEUF, LAMB, GREENE & MacRAE, L.L.P. A Limited Liability Partnership Including Professional Corporations 125 West 55th Street New York, New York 10019 August 7, 1995 United Water Resources Inc. 200 Old Hook Road Harrington Park, New Jersey 07640 Re: Registration Statement on Form S-3, Covering 4,000,000 Shares of Common Stock, No Par Value, and 4,000,000 Series A Participating Preferred Stock Purchase Rights, To Be Issued Under Dividend Reinvestment and Stock Purchase Plan ------------------------------------------------------------------- Ladies and Gentlemen: We are acting as counsel to United Water Resources Inc. (the "Company") in connection with the Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan"). This opinion is being furnished to the Company in connection with the filing of a Registration Statement by the Company under the Securities Act of 1933, as amended (the "Act"), on Form S-3 (the "Registration Statement"), providing for the registration of 4,000,000 shares of the Company's Common Stock, no par value (the "Stock"), and 4,000,000 Series A Participating Preferred Stock Purchase Rights (the "Rights"), each such Right being attached to each share of Stock, all pursuant to the Plan. In connection with this opinion, we have examined the Registration Statement and originals, or copies certified or otherwise identified to our satisfaction, of the Rights Agreement, dated as of July 12, 1989, as amended, by and between the Company and First Interstate Bank of California (formerly known as First Interstate Bank, Ltd.), as Rights Agent, together with the exhibits thereto (the "Rights Agreement"), pursuant to United Water Resources Inc. August 7, 1995 Page 2 which the Rights were created, and such instruments, certificates, records and documents, and such matters of law, as we have deemed necessary or appropriate for purposes of this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted as copies and the authenticity of the originals of such latter documents. As to any facts material to our opinion, we have relied upon the aforesaid Registration Statement, Rights Agreement, instruments, certificates, records and documents. We have assumed without investigation that the Rights Agent had the power and authority to execute and deliver the Rights Agreement, that such execution and delivery were duly authorized, that the Rights Agreement constitutes and will constitute the legal, valid and binding obligation of the Rights Agent, enforceable in accordance with its terms, that the form of instrument used to evidence the Rights after severance from the Common Stock would comport with the Form of Right Certificate appended as Exhibit B to the Rights Agreement and that the terms and conditions of the Rights will continue to be incorporated by reference into certificates representing the Common Stock. Upon the basis of such examination, and subject to the limitations and qualifications contained in this opinion, we are of the opinion that, when the Registration Statement becomes effective, and assuming that (i) it remains continuously effective for the purpose of the offer and sale of the Stock and the Rights, (ii) shares of the Stock are duly credited to the Plan participants by the agent for the participants and, with respect to certificated shares of the Stock, the certificates representing such shares in substantially the form currently employed and incorporating the terms of the Rights by reference are duly executed, countersigned, registered and delivered, and, in each case, the consideration therefor is received by the Company and (iii) the pertinent provisions of the Act and such "blue-sky" and securities laws as may be applicable have been complied with, (a) the Stock will be validly issued, fully- paid and non-assessable under the laws of the State of New Jersey, and (b) the Rights associated therewith will be legal and binding obligations of the Company under the laws of the State of New Jersey. United Water Resources Inc. August 7, 1995 Page 3 We hereby consent to the use of this opinion letter as Exhibit 5(a) to the Registration Statement, and to the use of our name in the Registration Statement and the Prospectus contained in the Registration Statement and in any amendments thereof or supplements thereto. Very truly yours, /s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P. EX-23.(A) 6 CONSENT OF PRICE WATERHOUSE EXHIBIT 23(a) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated February 23, 1995 appearing on page 31 of United Water Resources Inc.'s Annual Report on Form 10-K for the year ended December 31, 1994. We also consent to the references to us under the heading "Experts" in such Prospectus. /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP New York, New York August 4, 1995 EX-24.(B) 7 CERT. COPIES OF RESOLUTIONS OF BOARD OF DIRECTORS EXHIBIT 24(b) UNITED WATER RESOURCES INC. --------------------------- Extract from Minutes of Meeting of Board of Directors held Thursday, July 6, 1995 ----------------------------------------------------- The undersigned, ALLAN D. SHAKLEY, Assistant Secretary of UNITED WATER RESOURCES INC., hereby certifies that the following is a true and correct copy of an extract from the Minutes of a meeting of the Board of Directors of UNITED WATER RESOURCES INC. held on Thursday, July 6, 1995, at which time a quorum was present and voting throughout: RESOLVED, that 4,000,000 additional shares of the Company's authorized but unissued Common Stock, no par value per share (the "Additional Common Stock"; every reference to the term Additional Common Stock shall include the Company's Series A Participating Preferred Stock Purchase Rights appertaining thereto), be and they hereby are reserved for issuance in connection with the Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan"); and be it further RESOLVED, that the officers of the Company be and they are, and each of them singly is, hereby authorized to cause to be prepared a Registration Statement of the Company on Form S-3 (or any other form as may be appropriate) for describing the Plan (including any changes from the existing Plan approved by the Chairman of the Board of Directors) and for the registration under the Securities Act of 1933, as amended, of the Additional Common Stock; and that the Chairman of the Board of Directors, the President, the Secretary, the Treasurer or any Assistant Secretary of the Company be and they are, and each of them singly is, hereby authorized to execute in the name and on behalf of the Company such Registration Statement and such other documents or instruments and any amendments thereto or other documents pertaining thereto, and, when so executed on behalf of the Company, and by the proper officers of the Company and a majority of its directors, to file said Registration Statement with the Securities and Exchange Commission; and be it further RESOLVED, that any and all actions by the officers of the Company, and each of them singly, previously taken to cause to be prepared, executed and filed an application with the New York Stock Exchange, Inc. for the listing of the Additional Common Stock on such Exchange are hereby ratified and approved; and that the Chairman of the Board of Directors, the President, the Secretary, the Treasurer, and any Assistant Secretary of the Company, and counsel to the Company, be and they are, and each of them singly is, hereby authorized to appear before officials of such Exchange with authority to make such additions, deletions or other changes in such application and to take such actions as in his discretion may be necessary to effect such listing; and be it further RESOLVED, that the Company hereby constitutes and appoints Donald L. Correll, E. Ellsworth McMeen III, and Allan D. Shakley, and each of them (with full power to each of them to act alone), its true and lawful attorney-in-fact and agent for it and on its behalf and in its name, place and stead, to sign, execute and file in connection with the Plan the Registration Statement and any and all amendments and supplements thereto and documents required in connection therewith, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully and to all intents and purposes as this Company might or could do; and be it further RESOLVED, that the Chairman of the Board of Directors, the President, the Secretary, the Treasurer, and any Assistant Secretary of the Company be and they are, and each of them singly is, hereby authorized to take any and all action and furnish any and all information which, in the judgment of the officer taking the action, is necessary, useful or appropriate in order to render eligible for offering and sale under the so-called Blue Sky or securities laws of any of the states of the United States of America the Additional Common Stock, including, but without limiting the foregoing, making applications for and obtaining permits, orders, authorizations or exemptions or effecting qualifications or registrations under such Blue Sky or securities laws whether relating to the Additional Common Stock or to the Company as an issuer, broker, dealer or seller of such securities and in that connection, executing and -2- filing such documents, including consents to service of process or the appointment of agents to receive service of process, and making such agreements as may appear necessary, useful or appropriate; and be it further RESOLVED, that the officers of the Company be and they are, and each of them singly is, hereby authorized and directed, upon receipt by the Company of payment in full for the Additional Common Stock pursuant to the terms of the Plan, to cause to be issued on behalf of the Company, such Additional Common Stock as contemplated under the Plan, all shares so issued constituting fully paid and non-assessable shares; and be it further RESOLVED, that the proceeds from the sale of Additional Common Stock be used for general corporate purposes; and be it further RESOLVED, that First Interstate Bank of California, Transfer Agent for shares of Common Stock of the Company, is hereby authorized and requested to issue, countersign and deliver, in accordance with the order or orders of the Company evidenced by a writing or writings signed by the Company's Chairman of the Board of Directors, the President, the Secretary, the Treasurer, or any Assistant Secretary certificates for up to 4,000,000 shares of the Company's Common Stock, no par value per share, to the extent certificates are required pursuant to the Plan; and be it further RESOLVED, that First Interstate Bank of California, Registrar for shares of Common Stock of the Company, is hereby authorized and requested to register and countersign certificates for the Additional Common Stock when issued and countersigned by the Transfer Agent; and be it further RESOLVED, that when and as certificates for the Additional Common Stock of the Company may hereafter be surrendered to First Interstate Bank of California, as Transfer Agent for the Company's Common Stock, properly endorsed for transfer, said Bank is hereby authorized and requested to issue and countersign new certificates for the same number of shares of Common Stock of the Company in the name or names of the transferee or transferees and First Interstate Bank of California, as Registrar for the Company's Common Stock, is hereby authorized and requested to register and -3- countersign such new certificates when and as the same are issued by First Interstate Bank of California, as Transfer Agent; and be it further RESOLVED, that the officers of the Company be and they are, and each of them singly is, hereby authorized and directed on behalf of the Company to do all acts and things and to execute any and all documents that may be necessary or, in the opinion of the officer so acting, desirable or expedient in connection with the issue and sale of Additional Common Stock and to employ such counsel, financial advisors and assistants as may be deemed necessary or expedient by them, or any of them, to accomplish the purposes of these resolutions; and be it further RESOLVED, that if the Chairman of the Board of Directors shall determine that the Plan should cover not only authorized and unissued shares of the Company's Common Stock but also shares purchased on the open market for Plan participants, the term "Additional Common Stock" used in the foregoing resolutions shall, to the extent necessary for the full and proper authorization of such Plan feature, include shares that are so purchased on the open market, and First Interstate Bank of California (or another entity selected by or acceptable to said Chairman) shall be authorized to act in connection with said purchase of open-market shares of the Company's Common Stock; and be it further RESOLVED, that the officers of the Company be and they are, and each of them singly is, hereby authorized and directed to do and perform all such acts and things and to sign all such documents and to take all such other steps as may be necessary, advisable or convenient and proper to carry out the intent of the foregoing resolutions. WITNESS, my hand and the seal of the company this 17th day of July 1995. /s/ Allan D. Shakley ---------------------------- Assistant Secretary -4-