0000898430-01-502526.txt : 20011009
0000898430-01-502526.hdr.sgml : 20011009
ACCESSION NUMBER: 0000898430-01-502526
CONFORMED SUBMISSION TYPE: S-3
PUBLIC DOCUMENT COUNT: 4
FILED AS OF DATE: 20010926
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SOUTHWEST WATER CO
CENTRAL INDEX KEY: 0000092472
STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941]
IRS NUMBER: 951840947
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-70194
FILM NUMBER: 1745011
BUSINESS ADDRESS:
STREET 1: 225 N BARRANCA AVE
STREET 2: STE 200
CITY: WEST COVINA
STATE: CA
ZIP: 91791-1605
BUSINESS PHONE: 8189151551
MAIL ADDRESS:
STREET 1: 225 N BARRANCA AVENUE
STREET 2: SUITE 200
CITY: WEST COVINA
STATE: CA
ZIP: 91791-1605
FORMER COMPANY:
FORMER CONFORMED NAME: SUBURBAN WATER SYSTEMS
DATE OF NAME CHANGE: 19751202
S-3
1
ds3.txt
FORM S-3
As filed with the Securities and Exchange Commission on September 26, 2001
Registration Number 333-______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
SOUTHWEST WATER COMPANY
(Exact Name of Registrant as Specified in Its Charter)
--------------------
Delaware 95-1840947
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
--------------------
225 North Barranca Avenue, Suite 200
West Covina, California 91791-1605
(626) 915-1551
(Address, Including Zip Code and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
--------------------
Peter J. Moerbeek
Chief Financial Officer
Southwest Water Company
225 North Barranca Avenue, Suite 200
West Covina, California 91791-1605
(626) 915-1551
(Name, Address, Including Zip Code and Telephone Number, Including Area Code,
of Agent for Service)
--------------------
Copy to:
--------------------
James W. Daniels, Esq.
Latham & Watkins
650 Town Center Drive, Twentieth Floor
Costa Mesa, California 92626
(714) 540-1235
Approximate date of commencement of proposed sale to the public: On the
first dividend payment date after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [X]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
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 of 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
===================================================================================================================================
Amount to Proposed Maximum Proposed Maximum Amount of
Title of Securities be Offering Price Aggregate Registration
to be Registered Registered(1) Per Share (2) Offering Price Fee
-----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per 300,000 shares $13.28 $3,984,000 $996
share (3)
-----------------------------------------------------------------------------------------------------------------------------------
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Company's common stock, the number of shares registered
shall automatically be increased to cover the additional shares in
accordance with Rule 416(a) under the Securities Act.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act
of 1933 based on the average of the high and low sales prices of the
Registrant's common stock on the Nasdaq National Market on September 21,
2001.
(3) Pursuant to Southwest Water Company's Rights Agreement dated April 6,
1998, each share of common stock being registered in this prospectus
includes one preferred share purchase right. Prior to the occurrence of
specific events, the preferred share purchase rights will not be
exercisable or evidenced separately from the common stock.
================================================================================
PROSPECTUS
SOUTHWEST WATER COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
300,000 Shares of Common Stock
The Dividend Reinvestment and Stock Purchase Plan of Southwest Water
Company provides holders of record of our common stock with a convenient way to
purchase additional shares.
Participants in the plan may at the time of each cash dividend payment
on the common stock:
. have all or a portion of their cash dividends automatically invested
in additional shares of common stock, or
. purchase additional shares of common stock with optional cash
payments of between $25 and $3,000, or
. do both.
Under the plan, the administrator purchases shares directly from us.
These shares may be either authorized but unissued shares or treasury shares.
When shares are purchased with reinvested cash dividends, the price per share
will be 95% of the "Average Sales Price," which the plan defines as the average
of the daily high and low sales prices of the common stock, as published in
Western Edition of The Wall Street Journal, for the period of the last three
trading days immediately prior to the dividend payment date or, if not so
reported, then the average of the closing bid and ask prices as reported on the
Nasdaq National Market. When shares are purchased with optional cash payments,
the per share price will be the Average Sales Price. Plan participants will not
be charged any brokerage commission or plan administration fee for the purchase
of common stock under the plan.
Stockholders who do not wish to participate in the plan will continue
to receive cash dividends, as declared, in the usual manner.
This prospectus relates to 300,000 shares of common stock registered
for sale pursuant to the plan. Our common stock is quoted on the Nasdaq National
Market under the symbol "SWWC." On September 25, 2001, the last reported sale
price of our common stock was $13.42. You should retain this prospectus for
further reference.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------------
The date of this prospectus is September 26, 2001
This prospectus is part of a Registration Statement which we filed with
the SEC. We have omitted certain parts of the Registration Statement in
accordance with the rules and regulations of the SEC; therefore, this prospectus
does not contain all of the information included in the Registration Statement.
For further information, we refer you to the Registration Statement filed on
Form S-3 including exhibits, schedules, and the documents incorporated by
reference therein. We have not authorized anyone to provide you with any
information that differs from that contained in this prospectus. Accordingly,
you should not rely on any information that is not contained in this prospectus.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front cover of this
prospectus.
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION............................................................................1
FORWARD-LOOKING STATEMENTS.....................................................................................2
SOUTHWEST WATER COMPANY........................................................................................3
USE OF PROCEEDS................................................................................................4
DESCRIPTION OF THE DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN...............................................5
ANTIDILUTION PROVISION........................................................................................14
COMMON STOCK DIVIDENDS AND PRICE RANGE........................................................................14
DESCRIPTION OF CAPITAL STOCK..................................................................................14
EXPERTS.......................................................................................................19
VALIDITY OF COMMON STOCK......................................................................................19
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES..........................................................................................19
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information
with the SEC. Our SEC filings are available to the public over the Internet at
the SEC's web site at http://www.sec.gov. You may also read and copy any
document we file at the SEC's public reference facility located at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference facility.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made by us with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 until we sell all of the Securities that we are registering.
. Our Annual Report on Form 10-K for the year ended December 31, 2000;
. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001 and June 30, 2001;
. Our Current Report on Form 8-K dated August 31, 2001;
. Our Current Report on Form 8-K dated April 23, 1998; and
. The description of our common stock contained in our Form S-2,
Registration Number 33-14342, filed on June 23, 1987, pursuant to
Section 12 of the Securities Act.
Any statement contained in a document which, or a portion of which, is
incorporated by reference herein shall be deemed to be modified or superceded
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 supercedes such statement. Any
such statement so modified or superceded shall not be deemed, except as so
modified or superceded, to constitute a part of this prospectus.
You may request a copy of these filings, excluding any filed exhibits,
at no cost by writing or telephoning us at the following address or telephone
number:
Southwest Water Company
225 North Barranca Avenue, Suite 200
West Covina, CA 92791-1605
Attention: Secretary
Telephone: (626) 915-1551
1
FORWARD-LOOKING STATEMENTS
In addition to historical information, we have made forward-looking
statements in this prospectus and in the documents incorporated by reference in
this prospectus, such as those pertaining to our capital resources and
performance of our operations. "Forward-looking statements" are projections,
plans, objectives or assumptions about us. Forward-looking statements involve
numerous risks and uncertainties, and you should not place undue reliance on
these statements because we cannot assure you that the events or circumstances
reflected in these statements will actually occur. Forward-looking statements
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," "seeks," "approximately," "intends,"
"plans," "pro forma," "estimates," "anticipates," or the negative thereof or
other variations thereof or comparable terminology, or by discussions of
strategy, plans or intentions. Forward-looking statements are necessarily
dependent on assumptions, data or methods that may be incorrect, imprecise or
incapable of being realized. The following factors, among others set forth in
our filings with the Securities and Exchange Commission or in our press
releases, could cause actual results and future events to differ materially from
those set forth or contemplated in our forward-looking statements:
. Weather and seasonal variations;
. Competition;
. Failure to effectively and efficiently manage our growth;
. Rate regulation and rates of return;
. Certain litigation and other risks regarding water quality;
. Financing capital expenditures; and
. Rapidly increasing operating costs.
Readers are cautioned not to place undue reliance on forward-looking
statements. We assume no obligation to update forward-looking statements.
2
SOUTHWEST WATER COMPANY
Southwest Water Company was incorporated in California in 1954 and
reincorporated in Delaware in 1988. All of our operations are conducted through
our subsidiaries which provide a broad range of services including water
production and distribution, wastewater collection and treatment and utility
submetering. We own regulated public water utilities. State regulatory agencies
oversee the operations of our utilities as well as establish the rates that we
can charge for our services. We also operate and manage water and wastewater
treatment facilities which are owned by cities, public agencies, municipal
utility districts and private companies under contract. These facilities are
also subject to regulatory oversight; however, the pricing of our services is
not subject to regulation. We serve more than 1.5 million people in 29 states
nationwide.
We own and operate water and wastewater utilities through four
subsidiaries. Suburban, New Mexico Utilities and Hornsby Bend Utility Company
are wholly owned and we also own 80% of Windermere Utility Company. Through two
subsidiaries, ECO Resources and 90%-owned OpTech, we operate and manage water
and wastewater treatment facilities owned by cities, public agencies, municipal
utility districts and private entities. Nationwide, we provide utility
submetering and billing and collection services through our 80%-owned
subsidiary, Master Tek.
Suburban Water Systems
Suburban is a regulated public water utility that produces and supplies
water for residential, commercial, industrial and public authority use, and for
private and public fire protection service under the jurisdiction of the
California Public Utilities Commission. Suburban's service area contains a
population of approximately 300,000 people within Los Angeles and Orange
Counties, California. Suburban owns 14 active wells that pump water from two
major groundwater basins in the Southern California coastal watershed. Suburban
also purchases water from two mutual water companies that also produce their
water from one of the basins. In addition, Suburban purchases water from the San
Gabriel Municipal Water District and has interconnections with other water
purveyors for supplemental and emergency sources of supply. During 2000,
Suburban accounted for approximately 35% of our total revenue.
New Mexico Utilities
New Mexico Utilities is a regulated public water utility that provides
water supply and sewage collection services for residential, commercial,
irrigation and fire protection customers under the jurisdiction of the New
Mexico Public Regulation Commission. New Mexico Utilities' service area contains
a population of approximately 28,000 people within the northwest portion of the
City of Albuquerque, New Mexico and the northern portion of Bernalillo County,
New Mexico. New Mexico Utilities owns five wells and four reservoirs. New Mexico
Utilities' wells produce water from the Rio Grande Underground Basin. During
2000, New Mexico Utilities accounted for approximately 6% of our total revenue.
Windermere Utility Company and Hornsby Bend Utility Company
Windermere Utility Company and Hornsby Bend Utility Company are two
small public water utilities operating near Austin, Texas. Both are regulated
public water utilities that provide water supply and sewage collection services
for residential, commercial, irrigation and fire protection customers under the
jurisdiction of the Texas Natural Resources Conservation Commission. Together,
these utilities currently provide water supply and sewage collection and
treatment services to approximately 4,800 customers. Their service areas are
located near the city of Austin, Texas and contain a population of about 17,000
people. During 2000, Windermere Utility Company and Hornsby Bend Utility
Company, which were acquired in October 2000, accounted for approximately 1% of
our total revenue.
ECO Resources
ECO Resources provides contract water and wastewater system management,
operations and maintenance services in the states of Texas, Mississippi, New
Mexico and California. ECO Resources' services include facility and equipment
maintenance and repair, sewer pipeline cleaning, water and wastewater
operations, billing and collection services and state-certified laboratory
analysis. ECO Resources does not own any of the water sources,
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water production facilities, water distribution systems, wastewater collection
systems or wastewater treatment facilities that it operates for its clients. ECO
Resources has two distinct types of contractual relationships: time and material
contracts (primarily with municipal utility districts in Texas) and fixed fee
operations and maintenance contracts. Areas served by ECO Resources have an
aggregate population of approximately 580,000 people. During 2000, ECO Resources
accounted for approximately 52% of our total revenue.
Operations Technologies
Our majority interest in OpTech was acquired in August 2001, and
provides contract water and wastewater system management, operations and
maintenance services and public works services in the states of Georgia and
Mississippi. OpTech's services include facility and equipment maintenance and
repair, water and wastewater operations, street maintenance, public works
services such as maintaining ditches and repairing potholes, billing and
collection services. OpTech does not own any of the water systems, water
production facilities, water distribution systems, wastewater collection systems
or wastewater treatment facilities that it operates for its clients. OpTech's
contracts are all fixed fee operations and maintenance contracts. Areas served
by OpTech have an aggregate population of approximately 315,000 people. Since
our interest in OpTech was acquired in August 2001, it did not account for any
of our total revenue in 2000.
Master Tek International
Master Tek is engaged in the utility submetering business, which
involves the installation of electronic equipment in apartments, condominiums,
mobile home parks and other multi-family dwellings to monitor each resident's
usage of various utilities. Submetering allows water, gas and electricity usage
to be measured and charged to each individual residential unit. In addition,
Master Tek provides billing, collection and customer relations services for
these usage charges. The billing process involves the transmission of utility
usage data via radio frequency and telephone lines to Master Tek's headquarters
near Denver, Colorado, where service representatives prepare bills and handle
customer inquiries. Currently, Master Tek provides service to approximately
140,000 dwelling units in 28 states throughout the country. During 2000, Master
Tek accounted for approximately 6% of our total revenue.
Our principal executive offices are located at 225 North Barranca,
Suite 200, West Covina, California 91791-1605, and our telephone number is (626)
915-1551.
USE OF PROCEEDS
The net proceeds from the sale of shares of common stock offered by
this prospectus will be added to our general operating funds and, among other
things, may be used for acquisitions, capital improvements and other capital
needs. We cannot predict how many shares of common stock will be sold under the
plan and, therefore, cannot estimate the total amount of net proceeds that we
will receive.
4
DESCRIPTION OF THE DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
The following, in question and answer form, describes the Dividend
Reinvestment and Stock Purchase Plan of Southwest Water Company, which we refer
to as the "Plan" in this section. Those holders of our common stock who do not
participate in the Plan will receive cash dividends on the common stock
registered in the name of the stockholder and held directly by the stockholder,
as declared, in the usual manner.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide eligible holders of record of the
common stock of Southwest Water Company who elect to participate in the Plan
with a simple, convenient and automatic way to invest common stock cash
dividends and optional cash payments in additional shares of our common stock
without payment of any brokerage commission or service or other charge.
ADVANTAGES
2. What are the advantages of the Plan?
The Plan offers the following advantages:
(a) Common stock purchased with reinvested cash dividends will be
priced at ninety-five percent (95%) of the common stock's average
market price. (See Number 13 below pertaining to the purchase price of
common stock under the Plan);
(b) Cash dividends and, within certain limits, optional cash payments
are automatically invested in common stock without any charge for
brokerage commission or Plan administration;
(c) You obtain full investment use of your funds as the Plan
provides for whole and fractional shares to be credited to your
account under the Plan;
(d) You avoid the issues associated with safekeeping of certificates
for the common stock received under the Plan; and
(e) You receive periodic statements regarding the common stock
purchased under the Plan, thus providing you with simplified record
keeping.
ADMINISTRATION
3. Who is administering the Plan?
Mellon Investor Services, LLC (the "Agent") administers the Plan for
you. The Agent will establish an account for you (your "Plan Account") and will
purchase common stock on your behalf with your cash dividends and optional cash
payments. The common stock purchased under the Plan will be registered in the
name of the Agent (or its nominee), as your agent, and credited to your Plan
Account.
4. What is the responsibility of the Agent under the Plan?
The Agent, in administering the Plan, 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 your Plan
Account upon your death, the prices at which shares of common stock are
purchased for your Plan Account, the times when purchases are made or
fluctuations in the market value of the common stock.
You should recognize that neither we nor the Agent can provide any
assurance of a profit or protection against loss on any common stock purchased
under the Plan.
5
5. What is the address of the Agent?
All correspondence pertaining to your participation in the Plan should
be sent to:
Mellon Investor Services, LLC
Re: Southwest Water Company Dividend
Reinvestment and Stock Purchase Plan
P.O. Box 3315
South Hackensack, NJ 07606
PARTICIPATION
6. Who is eligible to participate in the Plan?
All holders of record of our common stock ("Eligible Stockholders") are
eligible to participate in the Plan.
You may not participate in the Plan through your broker or nominee.
Cash dividends declared on the common stock registered in the name of your
broker or nominee, as your agent, may not be reinvested under the Plan. Also,
your broker or nominee, as your agent, may not remit optional cash payments to
purchase common stock under the Plan.
7. How does an Eligible Stockholder participate in the Plan?
An Eligible Stockholder may join the Plan by completing and signing the
Authorization Card and returning it to the Agent.
If you do not send a signed Authorization Card to the Agent then you
will receive directly the cash dividends on the shares of common stock
registered in your name and held directly by you, in the usual manner.
Additional Authorization Cards may be obtained at any time from the
Agent. (See Number 5 above for the address of the Agent.)
8. When may an Eligible Stockholder join the Plan?
An Eligible Stockholder may join the Plan at any time. Once in the Plan
you will remain enrolled in the Plan until you discontinue your participation or
sell all of your common stock participating in the Plan as well as the common
stock purchased under the Plan and credited to your Plan Account. (See Number 27
below pertaining to discontinuance of dividend reinvestment.)
If you submit the Authorization Card specifying reinvestment of cash
dividends so that it is received by the Agent on or before the record date (or,
if the record date is not a business day, the next preceding business day)
established for the then current quarter's dividend payment, reinvestment will
commence with the then current quarter's dividend payment date (or, if the
payment date is not a business day, the next following day). Quarterly record
dates and their related dividend payment dates for the common stock have
typically been as follows:
Approximate Dividend Payment
Approximate Record Date - Date -
Last Day of: Twentieth Day of:
------------------------- ----------------------------
March April
June July
September October
December January
If the Authorization Card is received by the Agent after the then
current quarter's record date, then your cash dividends will not be reinvested
until the next quarter's dividend payment date. In other words, an Authorization
Card first becomes effective on the first dividend record date following the
Agent's receipt of your Authorization Card. (See Number 18 below for information
pertaining to the investment of optional cash payments.)
6
9. What does the Authorization Card provide?
The Authorization Card provides for the purchase of additional shares
of common stock through the following three investment options:
(i) FULL DIVIDEND REINVESTMENT directs the Agent to invest
in accordance with the Plan all of the cash dividends on all of the
common stock then or subsequently registered in your name, and also
permits you to make optional cash payments for the purchase of
additional common stock in accordance with the Plan;
(ii) PARTIAL DIVIDEND REINVESTMENT directs the Agent to
invest in accordance with the Plan all of the cash dividends on only
that number of shares of common stock registered in your name which is
designated in the appropriate space on the Authorization Card, and also
permits you to make optional cash payments for the purchase of
additional common stock in accordance with the Plan; and
(iii) OPTIONAL CASH PAYMENTS ONLY permits you to make optional
cash payments for the purchase of additional common stock in accordance
with the Plan without reinvesting dividends on the common stock then or
subsequently registered in your name. After you receive your statement
reflecting the purchase of common stock made with your optional cash
payment, you may elect to directly receive subsequent cash dividends on
such common stock by withdrawing such common stock from your Plan
Account. (See Number 25 below pertaining to the withdrawal of common
stock under the Plan.)
You may select either of the automatic reinvestment options or the
optional cash payment option. In all cases, cash dividends on all of the common
stock held in your Plan Account will be reinvested in accordance with the Plan,
including dividends on the common stock purchased with optional cash payments.
10. How may I change investment options under the Plan?
You may change your investment option under the Plan at any time by
signing and returning to the Agent a subsequent Authorization Card, specifying
an option which differs from your then current participation under the Plan.
Additional Authorization Cards may be obtained at any time from the Agent. Any
such change will become effective with the next common stock dividend record
date. (See Number 5 above for the address of the Agent and Number 8 above for
approximate quarterly dividend record dates.)
COSTS
11. Do I bear any of the transactional expense of purchasing common stock
with reinvested cash dividends or optional cash payments under the Plan?
You will incur no brokerage commission or service charge for the
purchase of common stock with reinvested cash dividends or optional cash
payments under the Plan. All costs incident to the administration of the Plan
will be paid by us.
PURCHASE OF COMMON STOCK
12. How many shares of common stock will be purchased and credited to my Plan
Account?
The number of shares of common stock to be purchased and credited to
your Plan Account is an amount equal to your total quarterly investment under
the Plan (the amount of cash dividends declared per share for that quarter
multiplied by the number of shares of common stock registered in your name and
participating in the Plan, plus your optional cash payment(s), if any, for that
quarter), divided by the purchase price per share of the common stock. (See
Number 13 below pertaining to the purchase price of common stock.) Your Plan
Account will be credited with whole and fractional shares, computed to three
decimal places, of the common stock purchased on your behalf by the Agent under
the Plan.
Cash dividends issued on any full or fractional shares of common stock
remaining in your Plan Account on subsequent record dates will be automatically
reinvested in common stock for your Plan Account.
7
13. At what price will the common stock be purchased under the Plan?
Purchase of common stock with optional cash payments will be made at
the average of the daily high and low sales prices of the common stock as
reported in The Wall Street Journal for the period of the last three days on
which the stock was traded immediately preceding the dividend payment date, or
if not so reported, then at the average of the closing bid and asked prices as
reported by the Nasdaq National Market (the "Average Sales Price").
Purchase of common stock with reinvested cash dividends will be made at
ninety-five percent (95%) of the Average Sales Price.
14. What is the source of the common stock purchased under the Plan?
The common stock purchased under the Plan with reinvested cash
dividends or optional cash payments will be purchased directly from us. The
common stock so purchased from us will be either authorized but unissued shares
of common stock or shares of the common stock held in our treasury.
15. When will the common stock be purchased under the Plan?
Purchases of the common stock with reinvested cash dividends or
optional cash payments will be made on the quarterly dividend payment date (or,
if that is not a business day, on the next following business day).
(See Number 8 above for approximate quarterly dividend payment dates.)
16. When will the common stock purchased under the Plan be credited to my
Plan Account?
Common stock purchased under the Plan with reinvested cash dividends or
optional cash payments will be automatically credited to your Plan Account as
soon as practicable after that same quarterly dividend payment date.
OPTIONAL CASH PAYMENTS
17. Who is eligible to make optional cash payments?
All Eligible Stockholders who submit an Authorization Card are eligible
to make optional cash payments under the Plan.
18. How does the optional cash payment future work?
An initial optional cash payment may be made when enrolling in the Plan
by enclosing a check or money order with the Authorization Card. The first
dividend payment after the date of this prospectus will be October 22, 2001, and
to be invested on that date the Agent must receive your check or money order by
the record date of September 28, 2001. Thereafter, optional cash payments may be
made at any time by sending a check or money order to the Agent. (See Number 5
above for the address of the Agent.) Checks or money orders should be made
payable to Mellon Investor Services LLC, and the "Dividend Reinvestment Plan of
Southwest Water Company" should be included on the face of each such check or
money order remitted to the Agent.
While optional cash payments may be made at any time, you should send
all optional cash payments so that they are received by the Agent within one to
two weeks before the then current quarter's record date because no interest will
be paid on any optional cash payments. (See Number 8 above for approximate
quarterly record dates.)
The Agent will apply any optional cash payment received from you before
the then current quarter's record date to the purchase of common stock for your
Plan Account on that quarter's dividend payment date. Optional cash payments
received after the then current quarter's record date will be applied to the
purchase of common stock on the next quarter's dividend payment date.
If you want to make only optional cash payments and not reinvest your
cash dividends, we will pay cash dividends on the common stock registered in
your name and held by you directly to you in the usual manner. The Agent will
apply any optional cash payments received from you to the purchase of additional
common stock for
8
your Plan Account. Unless the shares of common stock acquired with optional cash
payments under the Plan are withdrawn from your Plan Account, subsequent cash
dividends paid on such common stock will be automatically reinvested. (See
Number 25 below pertaining to withdrawal of common stock from the Plan.)
19. What are the limitations on the amount of optional cash payments I may
make under the Plan?
Any optional cash payment made by you under the Plan may not be less
than twenty-five dollars ($25.00) per payment nor may it total more than three
thousand dollars ($3,000.00) per quarter. The same amount of money need not be
sent each quarter and you are under no obligation to make an optional cash
payment in any quarter.
20. Under what circumstances will optional cash payments be returned?
Optional cash payments received by the Agent will be returned to you
upon your written request, which must be received by the Agent at least
forty-eight (48) hours prior to the then current quarter's dividend payment
date.
Optional cash payments remitted in excess of three thousand dollars
($3,000.00) per quarter will be automatically returned to you by the Agent
within ten (10) days after that quarter's dividend payment date.
REPORTS TO PARTICIPANTS
21. What kind of reports will be sent to me as a participant in the Plan?
As soon as practicable after the dividend payment date, the Agent will
mail to you a statement itemizing (i) the number of shares of common stock
registered in your name and enrolled in the Plan on the previous quarter's
record date, (ii) the amount of cash dividends declared for the previous quarter
on your common stock, (iii) the number of shares of common stock purchased under
the Plan with the cash dividends received on your common stock enrolled in the
Plan and credited to your Plan Account, (iv) the price per share of common stock
paid and (v) the total number of shares, including fractional shares, of common
stock credited to your Plan Account after purchase of the common stock on that
dividend payment date. In addition, if you elected to make an optional cash
payment prior to such quarter's record date, the statement will include the
amount of the optional cash payment(s) made by you, information as to full and
fractional shares of common stock purchased with such optional cash payment(s)
and any excess payment (optional payment made in excess of $3,000.00 per
quarter) remitted to you.
You will also receive a statement at year-end itemizing your taxable
distribution in a manner similar to that found at Number 33(a) below and showing
your total dividend income and the amount of your return of capital
distribution. (See Number 33 below pertaining to Federal income tax consequences
of participation in the Plan.)
These statements are a continuing record of the cost of purchase of
common stock under the Plan and should be retained by you for tax purposes.
You will also receive copies of our annual and quarterly reports to
stockholders and proxy materials.
STOCK CERTIFICATES
22. Will certificates be issued to me for the common stock purchased under
the Plan and credited to my Plan Account?
Unless requested, the Agent will not issue to you certificates for the
common stock purchased under the Plan and credited to your Plan Account. The
common stock purchased under the Plan will be held in the name of the Agent or
its nominee, as your agent. Interests in fractional shares will be represented
by outstanding shares held by the Agent for this purpose. The amount of common
stock purchased for your account under the Plan, including fractional shares to
three decimal places, will be shown on your statement account. This feature
protects against loss, theft or destruction of stock certificates. (See Number
25 below pertaining to withdrawal of common stock from the Plan.)
9
23. In whose name will the certificates be registered when issued?
Your Plan Account will be maintained in the name in which your stock
certificates were registered at the time you enrolled in the Plan. Therefore,
certificates for whole shares of common stock will be similarly registered when
issued at your request. Should you want your shares registered and issued in a
different name or should you want to change the name in which your Plan Account
is maintained, you must so indicate in a written request sent to the Agent, and
comply with any applicable transfer requirements, including the payment of
normal transfer fees.
24. May the common stock credited to my Plan Account be pledged?
The common stock credited to your Plan Account may not be pledged. If
you wish to pledge the common stock credited to your Plan Account you must first
withdraw such stock from your Plan Account. (See Number 25 below pertaining to
withdrawal of common stock from the Plan.)
WITHDRAWAL OF SHARES IN THE PLAN ACCOUNT
25. How may I withdraw the common stock purchased under the Plan and credited
to my Plan Account?
You may withdraw all or a portion of the common stock from your Plan
Account by notifying the Agent in writing to that effect and specifying in the
notice the number of whole shares of common stock to be withdrawn. (See Number 5
above for the address of the Agent.) In no case will certificates for fractional
shares be issued. If your Plan Account contains a fractional share for which
withdrawal is requested (or your Plan Account is terminated by the Agent as
provided in Number 29 below) the Agent will issue a check to you in an amount
equal to the fractional share multiplied by the Average Sales Price of the
common stock on the last dividend payment date. The check and the certificates
for the shares of common stock so withdrawn will be issued to you within
forty-five (45) days after the Agent's receipt of your request to withdraw
shares of the common stock credited to your Plan Account.
Any notice requesting withdrawal received after a record date will not
be effective until dividends for such record date have been reinvested and the
common stock so purchased is credited to your Plan Account. (See Number 8 above
for approximate quarterly record dates.)
If you are reinvesting dividends on all of the common stock registered
in your name (i.e., you elected Full Dividend Reinvestment), then cash dividends
with respect to the common stock withdrawn from your Plan Account will continue
to be reinvested unless you thereafter submit a new Authorization Card reducing
the number of shares subject to the Plan.
Withdrawal of all of the common stock credited to your Plan Account
does not terminate your participation under the Plan. (See Number 27 below
pertaining to discontinuance of participation in the Plan.)
26. What happens to my Plan Account if all of the common stock registered in
my own name is transferred or sold?
If you dispose of all of the common stock registered in your own name
and participating in the Plan, the Agent will continue to reinvest the dividends
on the common stock credited to and held in your Plan Account until you notify
the Agent that you wish to withdraw such stock from your Plan Account. (See
Number 25 above pertaining to the withdrawal of common stock from your Plan
Account.)
DISCONTINUANCE OF DIVIDEND REINVESTMENT
27. How do I discontinue the automatic reinvestment of my cash dividends
under the Plan?
You may discontinue the automatic reinvestment of your cash dividends
under the Plan with regard to a portion of your common stock at any time by
signing and returning to the Agent a subsequent Authorization Card, specifying
an investment option which differs from your then current participation under
the Plan. Additional
10
Authorization Cards may be obtained at any time from the Agent. (See Number 5
above for the address of the Agent.)
You need not discontinue the optional cash investment option of the
Plan when discontinuing an automatic reinvestment option under the Plan.
You may discontinue the automatic reinvestment of your cash dividends
with regard to all of your common stock participating in the Plan and all of the
common stock credited to your Plan Account by requesting such discontinuance in
writing from the Agent. The Agent will, within forty-five (45) days after
receipt of your notice of discontinuance, close your Plan Account, issue to you
certificates for all of the whole shares of common stock credited to and held in
your Plan Account and a check in an amount equal to the fractional share
credited to your Plan Account multiplied by the Average Sales Price for the
common stock on the previous dividend payment date. To prevent the reinvestment
of cash dividends in accordance with the Plan, such notice of discontinuance
must be received prior to the record date for the next quarterly dividend
payment. (See Number 8 above for the approximate quarterly record dates.)
28. May the Plan be changed or discontinued by us?
While we hope to continue the Plan or a variation of the Plan
indefinitely, we reserve the right to suspend or terminate the Plan at any time,
including the period between a quarterly record date and the related dividend
payment date. We also reserve the right to make modifications to the Plan. You
will be notified of any such suspension, termination, or any material
modification of the Plan.
29. May my participation in the Plan be discontinued by the Agent?
Yes. The Agent, at its discretion, may terminate your participation in
the Plan if your Plan Account contains only credit for a fractional share, by
issuing a check to you in an amount equal to the fractional share credited to
your Plan Account multiplied by the Average Sales Price for the common stock on
the previous dividend payment date.
RIGHTS OF STOCKHOLDERS
30. What happens if we have a rights offering?
In the event we distribute to our stockholders rights to subscribe for
or purchase additional common stock or other securities, such rights accruing to
common stock credited to your Plan Account shall be delivered by us to the
Agent. The Agent shall sell such rights and invest the proceeds of such sale in
additional common stock on the next dividend payment date and credit your Plan
Account with the common stock so purchased. Stock rights distributed on the
common stock held directly by you and registered in your name will be mailed
directly to you.
31. What happens if we issue a stock dividend or declare a stock split?
Any stock dividends or stock splits distributed by us on the common
stock credited to your Plan Account will be added to your Plan Account. Stock
dividends or stock splits distributed on the common stock held directly by you
and registered in your name will be mailed directly to you.
32. How will the common stock in my Plan Account be voted?
All of the common stock credited to your Plan Account will be voted as
you direct. For each Annual Meeting of Stockholders you will receive proxy
materials that will enable you to vote by proxy all of the common stock credited
to your Plan Account as well as all of the common stock registered in your name.
Or, you may elect to vote all of your common stock, the shares that are credited
to your Plan Account and all other shares registered in your name in person at
the Annual Meeting of Stockholders.
11
FEDERAL INCOME TAX INFORMATION
33. What are the federal income tax consequences of participating in the Plan?
(a) Distribution.
Under Internal Revenue Service rulings pertaining to similar plans, cash
dividends paid with respect to common stock which are reinvested in common stock
under the Plan generally will be treated for federal income tax purposes as
having been received by a Plan participant in the form of a taxable stock
distribution rather than as a cash dividend. Under these rulings an amount
equal to the fair market value of the common stock purchased and credited to the
participant's Plan Account will be treated as a taxable distribution to the
participant by us. The fair market value of the common stock will be based on
one hundred percent (100%) of the Average Sales Price of the common stock and
not the discounted price (ninety five percent (95%) of the Average Sales Price)
at which the common stock is credited to the participant's Plan Account. (See
Number 13 above pertaining to the Average Sales Price.)
Stockholders who do not participate in the Plan and Plan participants who
purchase additional shares of common stock only with optional cash payments will
also be treated as having received a taxable distribution in an amount equal to
the cash dividends received on their common stock. Plan participants who
purchase additional shares of common stock only with optional cash payments will
not otherwise be treated as having received a taxable distribution for federal
income tax purposes.
The following example may be helpful to illustrate the federal income tax
consequences of automatic reinvestment of your cash dividends under the Plan.
Total cash dividends.......................................... $100.00
Assumed Average Sales Price per share*........................ $ 20.00
Less 5% discount per share.................................... $ 1.00
-------
Net purchase price per share.................................. $ 19.00
=======
Number of shares purchased ($100.00 / $19.00)................. 5.263
-------
A participant's taxable distribution ($20.00 x 5.263 shares).. $105.26
-------
A non-participant's taxable distribution...................... $100.00
-------
_____________
* These figures are assumed for illustrative purposes only.
A taxable distribution by us will be treated for federal income tax
purposes as a dividend to the extent we have current and accumulated earnings
and profits. Taxable distributions in excess of our current and accumulated
earnings and profits will not be taxable to a Plan participant to the extent
that the distributions do not exceed the adjusted tax basis of the participant's
shares. To the extent these distributions exceed the adjusted tax basis of a
participant's shares, such excess must be included in the participant's income
as capital gain.
Your statements of account will show the fair market value on the dividend
payment date of the common stock purchased with reinvested cash dividends and
optional cash payments under the Plan. A statement mailed to you at year-end
will itemize your taxable distributions in a manner similar to that above in
this subsection (a) and will show your total dividend income and the amount of
your return of capital and capital gain distributions.
(b) Basis.
The tax basis of the shares of common stock credited to a participant's
Plan Account, whether purchased with reinvested cash dividends or optional cash
payments, will equal the fair market value (Average Sales Price) of the common
stock on the dividend payment date when such shares of common stock were
purchased for the participant's Plan Account.
12
(c) Holding Period.
The tax-related holding period for shares of common stock acquired under
the Plan, whether purchased with reinvested cash dividends or optional cash
payments, will begin on the day following the dividend payment date on which
such shares of common stock were purchased.
(d) Realizing Gain or Loss.
A Plan participant will not realize any taxable gain or loss when the
participant receives certificates for whole shares of common stock credited to
such participant's Plan Account, whether upon a request for such certificates or
upon withdrawal from or termination of the Plan. However, a participant will
recognize gain or loss when the shares of common stock credited to the
participant's Plan Account are sold or exchanged. A participant will also
recognize gain or loss when the Agent issues a check to the participant as
payment in lieu of a fractional share of common stock credited to the
participant's Plan Account. The amount of any gain or loss recognized by a
participant upon the sale or exchange of whole shares, or the receipt of payment
in lieu of a fractional share, of common stock purchased under the Plan, will
equal the difference between the amount that the participant receives for such
whole or fractional shares of common stock and the participant's adjusted tax
basis in such stock.
(e) Other.
The foregoing summary of certain federal income tax considerations
regarding the Plan is based on current law, is for general information only and
is not tax advice. This discussion does not purport to deal with all aspects of
taxation that may be relevant to particular investors in light of their personal
investment circumstances, or to certain types of investors (including, without
limitation, insurance companies, tax-exempt organizations, financial
institutions or broker dealers, foreign corporations and persons who are not
citizens or residents of the United States) subject to special treatment under
the federal income tax laws. This discussion also assumes that all Plan
participants hold their common stock as a capital asset. Those considering
participation in the Plan are urged to consult with their tax advisors regarding
the specific tax consequences (including the federal, state, local and foreign
tax consequences) that may result from their participation in the Plan and of
potential changes in applicable tax laws. This summary does not reflect every
possible outcome that could result from participation in the Plan and,
therefore, participants are advised to consult their tax advisors with respect
to the tax consequences applicable to their particular situations.
PLAN INTERPRETATION
34. How is the Plan to be interpreted?
Any question of interpretation under the Plan will be determined by us and
any such determination will be final.
13
ANTIDILUTION PROVISION
The aggregate number of shares of common stock registered for issuance
and purchase under the Stockholder Rights Plan, as provided in the Registration
Statement, of which this prospectus forms a part, shall be appropriately
adjusted to reflect any increase or decrease in the number of issued shares of
common stock resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend, or other increase or
decrease in such shares.
COMMON STOCK DIVIDENDS AND PRICE RANGE
Since 1960, we have paid quarterly cash dividends on our common stock.
Our practice has been to pay common stock dividends on or about the 20th day of
January, April, July and October. The amount and timing of future dividends
depends on our growth, results of operations, profitability and financial
condition, as well as other factors deemed relevant by our board of directors.
Our common stock is traded on the Nasdaq National Market under the
symbol "SWWC". The following table shows the range of market prices of our
common stock for the periods indicated. The prices shown reflect inter-dealer
prices without retail markup, markdown or commissions and may not necessarily
represent actual transactions. Our current quarterly dividend rate is $.056 per
common share.
Market Price Range Dividends
---------------------
1999 High Low Paid Per Share
---- ------- -------- --------------
First Quarter.................................................. $ 8.73 $ 6.67 $.043
Second Quarter................................................. $ 9.60 $ 5.90 $.043
Third Quarter.................................................. $ 14.37 $ 9.07 $.043
Fourth Quarter................................................. $ 14.90 $ 9.20 $.048
2000
----
First Quarter.................................................. $ 12.70 $ 8.40 $.048
Second Quarter................................................. $ 11.50 $ 8.30 $.048
Third Quarter.................................................. $ 11.20 $ 9.20 $.056
Fourth Quarter................................................. $ 13.40 $ 9.90 $.056
2001
----
First Quarter.................................................. $ 13.75 $ 11.50 $.056
Second Quarter................................................. $ 14.94 $ 11.70 $.056
Third Quarter (through September 24, 2001)..................... $ 15.62 $ 12.05 $.056*
________________
* $.056 represents the dividend we expect to pay per share of common stock
for the third quarter of 2001.
DESCRIPTION OF CAPITAL STOCK
Authorized Shares
Under our certificate of incorporation, we are currently authorized to
issue 25,000,000 shares of common stock at a par value of $0.01 per share. As of
September 10, 2001, there were 8,718,767 shares of common stock issued and
outstanding.
We are also authorized to issue up to 3,000 shares of Series E
Convertible Preferred Stock as compensation to certain business brokers for
obtaining water and sewer contracts for our 99%-owned subsidiary, Inland Pacific
Water Company (IPWC). IPWC is primarily a marketing vehicle for contract
operations in the Inland Empire area of California. None of the Series E
Convertible Preferred Stock has been issued to date, and no contracts requiring
such issuance appear imminent at this time. Any Series E Convertible Preferred
Stock, if issued, would be entitled to dividends based upon an agreed formula.
The Series E Convertible Preferred Stock, if issued, would vest over the lives
of the long- term (10 to 15 year) water or sewer contracts obtained by the
brokers and, to the extent vested, would be convertible into our common stock at
the rate of 1,000 shares of common stock for each share of Series E Convertible
Preferred Stock, subject to certain adjustments.
14
We are currently authorized to issue 250,000 preferred shares at a par
value of $.01 per share. As of September 10, 2001, there were 10,288 Series A
Preferred shares outstanding. Series A Preferred stockholders are entitled to
annual dividends of $2.625 per share and are entitled to five votes per share on
all matters voted on by the stockholders.
Common Stock
During the past four years, we increased the number of shares of common
stock outstanding through a series of stock splits and stock dividends. Since
December 31, 1997, the number of outstanding shares of our common stock has
increased from 3,330,207 shares to 8,718,767 shares as of September 10, 2001. On
September 25, 2001 the Company declared a five percent stock dividend payable on
October 22, 2001 to stockholders of record on October 1, 2001. We cannot assure
you that we will continue such stock splits and stock dividends in the future.
Holders of our common stock are entitled to one vote for each share
held on all matters voted on by stockholders, including the election of
directors. Upon liquidation or dissolution, the holders of common stock will be
entitled to share ratably in the assets legally available for the distribution
to stockholders after payment of liabilities and subject to the prior rights of
any holders of preferred stock then outstanding. Holders of our common stock do
not have subscription, sinking fund, preemptive, redemption or conversion
privileges. The rights, preferences and privileges of holders of common stock
are subject to the rights of the holders of shares of any series of preferred
stock that is issued or may be issued in the future.
Under the Delaware General Corporation Law, we may pay dividends out of
"surplus" (as determined in accordance with the Delaware General Corporation
Law) or, if there is no surplus, out of net profits for the fiscal year in which
the dividends are declared and/or the preceding fiscal year (subject to certain
restrictions). Subject to the preferences or other rights of any of our
preferred stock that may be issued from time to time, holders of our common
stock are entitled to participate ratably in dividends on the common stock as
declared by our Board of Directors. The Board of Directors establishes our
dividend policy. Subject to legal and contractual restrictions, our Board of
Directors' decisions regarding dividends are based on all considerations that in
its business judgment are relevant at the time, including past and projected
earnings, cash flows, economic, business and securities market conditions and
anticipated developments concerning our business and operations. Currently we
pay dividends on a quarterly basis. Please see the section entitled "Common
Stock Dividends and Price Range" for information about the dividends recently
paid. We cannot guarantee that, in the future, we will have funds available to
pay dividends, or that our Board of Directors will declare dividends.
Transfer Agent and Registrar
The transfer agent and registrar of our common stock is Mellon Investor
Services, LLC, P.O. Box 3315, South Hackensack, New Jersey, 07606 and their
phone number is (800) 356-2017.
Anti-takeover Effects of Certain Provisions
Our certificate of incorporation and bylaws, the Delaware General
Corporation Law and our Stockholder Rights Plan, described below, contain
provisions that may discourage or delay the acquisition of control of our
company by means of a tender offer, open market purchases, a proxy contest or
otherwise.
Purposes of Provisions of Certificate of Incorporation and Bylaws
The relevant provisions of our certificate of incorporation and bylaws
are intended to discourage certain types of transactions that may involve an
actual or threatened change of control of our company and to encourage any
person who might seek to acquire control of our company to negotiate with our
Board of Directors. We believe generally that the interests of our stockholders
would be served best if any change in control results from negotiations with our
Board of Directors of the proposed terms. However, to the extent that these
provisions do discourage takeover attempts, they could make it more difficult to
accomplish transactions that are opposed by the incumbent board and could
deprive stockholders of opportunities to realize takeover premiums for their
shares.
The description below is a summary only. We encourage you to read our
certificate of incorporation, our Bylaws and our Stockholder Rights Plan, each
of which we have filed with the Securities and Exchange Commission, or SEC.
15
Classification of our Board of Directors
We have a classified Board of Directors, comprised of seven directors,
divided into three classes. The terms of our current directors will expire as
follows:
. the term of our one Class I director will expire at the annual
meeting of stockholders held in 2002;
. the term of our three Class II directors will expire at the annual
meeting of stockholders held in 2003; and
. the term of our three Class III directors will expire at the annual
meeting of stockholders held in 2004.
The structure of the classified board is intended to promote continuity
and stability of our management and policies since a majority of the directors
serving at any given time will have prior experience as our directors. The
classification of directors could make it more difficult for stockholders to
quickly change the composition of our Board of Directors. At least two annual
meetings of stockholders, instead of one, would generally be required to effect
a change in the majority of our Board of Directors.
Number of Directors
Our certificate of incorporation provides that the number of directors
shall be no less than seven and shall not exceed nine. Our Board of Directors is
currently comprised of seven persons. The exact number of directors is set by
resolution from time to time of the majority of the directors then in office.
Interim vacancies on our Board of Directors, or vacancies created by an increase
in the number of directors, may be filled by a majority of the directors then in
office. A director appointed to fill a vacancy will hold office for the
remainder of the term of the class of director in which the vacancy occurred or
the new directorship was created.
Stockholder Action
Our certificate of incorporation requires all stockholder action to be
taken at an annual or special meeting of stockholders and prohibits stockholder
action by written consent. Our certification of incorporation and Bylaws also
provide that special meetings of stockholders may be called only by the Board of
Directors pursuant to a resolution adopted by a majority of the authorized
directors, or by one or more stockholders holding at least 20% of the voting
power of all then outstanding shares of our capital stock entitled to vote at
any meeting of the stockholders. This may have the effect of delaying
consideration of a stockholder proposal until the next annual meeting of the
stockholders.
Requirements for Advance Notification of Stockholder Nominations and Proposals
Our bylaws establish an advance notice procedure of 90 days for
nominations, other than by or at the direction of our board, of candidates for
election as directors at, and for proposals to be brought before, an annual
meeting of stockholders. These provisions are intended to facilitate planning
for the conduct of our annual meeting of stockholders and to provide time for
proposals to be fully evaluated. These provisions may have the effect of
precluding a nomination or the conduct of business at a particular meeting if
the advance notice and other proper procedures are not followed. These
provisions may also deter a potential acquirer from conducting a solicitation of
proxies to elect its own slate of directors or from otherwise attempting to
obtain control, even if the conduct of such solicitation or such attempt might
be beneficial to the stockholders.
Preferred Stock and Additional Common Stock
Our Board of Directors' authority to issue shares of common stock and
preferred stock and to fix by resolution the terms and conditions of each series
of preferred stock may either impede or facilitate the completion of a merger,
tender offer or other takeover attempt. For example, the issuance of new shares
might impede a business combination if the terms of those shares include series
voting rights that would enable the holder to block business combinations, or
the issuance of new shares might facilitate a business combination if those
shares have general voting rights sufficient to cause an applicable percentage
vote requirement to be satisfied. Our Board of Directors will make any
determination regarding issuance of additional shares based on its business
judgment.
16
Stockholder Approval of Business Combinations
Our certificate of incorporation contains provisions which provide
that, subject to certain exceptions, we may not engage in certain "business
combinations" with any "interested stockholder" or "reorganizations" unless
there is an affirmative vote of at least two-thirds of the voting power of all
then outstanding shares of voting stock, voting together as a single class, a
majority of which must be voting stock other than that of which an interested
stockholder or its affiliate is the beneficial owner.
Under certain circumstances, such provisions make it more difficult for
a person who would be an "interested stockholder" to effect various business
combinations with a corporation. We anticipate that these provisions may
encourage companies interested in acquiring us to negotiate in advance with our
Board of Directors.
Stockholder Rights Plan
In 1998, we adopted a Stockholder Rights Plan and have issued, for each
share of our common stock, one preferred share purchase right, or a Right. As
long as the Rights are attached to our common stock, we will issue one Right
(subject to adjustment) with each new share of common stock so that all such
shares will have attached Rights. When exercisable, each Right will entitle the
registered holder to purchase from us one one-hundredth of a share of Series B
Junior Participating Preferred Stock, or Preferred Share, at an original price
of $65.00 per one one-hundredth of a Preferred Share, subject to adjustment. The
description and terms of the Rights are set forth in our Stockholder Rights Plan
available from Mellon Investor Services, LLC, our Rights Agent.
Until the earlier to occur of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of our common stock (an "Acquiring Person") or (ii) ten (10) business days (or
such later date as may be determined by action of our Board or Directors prior
to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement or announcement of an intention to make a
tender offer or exchange offer which would result in the beneficial ownership by
a person or group of 15% or more of our common stock, the earlier of (i) and
(ii) being called the "Distribution Date," the Rights will be evidenced, with
respect to any of our common stock certificates outstanding as of the adoption
of the Stockholder Rights Plan, by such common stock certificate together with a
summary of rights.
The Stockholder Rights Plan provides that until the Distribution Date
(or earlier redemption, exchange, termination, or expiration of the Rights), the
Rights will be transferred with and only with our common stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
common stock certificates issued after the adoption of the Stockholder Rights
Plan will contain a notation incorporating the Stockholder Rights Plan by
reference. Until the Distribution Date (or earlier redemption, exchange,
termination or expiration of the Rights), the surrender or transfer of any
certificates for our common stock, with or without such notation or a copy of a
summary of rights, will also constitute the transfer of the Rights associated
with the common stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of our common stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 6, 2008, subject to our right to extend such date (the
"Final Expiration Date"), unless earlier redeemed or exchanged by us or
terminated.
Each Preferred Share purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate quarterly
dividend of 100 times the dividend, if any, declared per share of our common
stock. In the event of our liquidation, dissolution or winding up, the holders
of the Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share (plus any accrued but unpaid dividends) and will be
entitled to an aggregate payment of 100 times the payment made per share of our
common stock. Each Preferred Share will have 100 votes and will vote together
with our common stock. Finally, in the event of any merger, consolidation or
other transaction in which our common stock is exchanged, each Preferred Share
will be entitled to receive 100 times the amount received per share of our
common stock. Preferred Shares will not be redeemable. These rights are
protected by customary antidilution provisions. Because of the nature of the
Preferred Share's dividend, liquidation and voting rights, the
17
value of one one-hundredth of a Preferred Share purchasable upon exercise of
each Right should approximate the value of one share of our common stock.
The purchase price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average of our net income per share for the four quarters ended immediately
prior to the payment of such dividend, or dividends payable in Preferred Shares
(which dividends will be subject to the adjustment described in clause (i)
above)) or of subscription rights or warrants (other than those referred to
above).
In the event that a Person becomes an Acquiring Person, or if we were
the surviving corporation in a merger with an Acquiring Person or any affiliate
or associate of an Acquiring Person, and our common stock was not changed or
exchanged, each holder of a Right, other than Rights that are or were acquired
or beneficially owned by the Acquiring Person (which Rights will thereafter be
void), will thereafter have the right to receive upon exercise that number of
shares of our common stock having a market value of two times the then current
purchase price of the Right. In the event that, after a person has become an
Acquiring Person, we were acquired in a merger or other business combination
transaction or more than 50% of our assets or earning power were sold, each
holder of a Right shall thereafter have the right to receive, upon the exercise
thereof at the then current purchase price of the Right, that number of shares
of common stock of the acquiring company which at the time of such transaction
would have a market value of two times the then current purchase price of the
Right.
At any time after a Person becomes an Acquiring Person and prior to the
earlier of one of the events described in the last sentence of the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of our
outstanding common stock, our Board of Directors may cause us to exchange the
Rights (other than Rights owned by an Acquiring Person which will have become
void), in whole or in part, for shares of our common stock at an exchange rate
of one share of our common stock per Right (subject to adjustment).
No adjustment in the purchase price of a Right will be required until
cumulative adjustments require an adjustment of at least 1% in such purchase
price. No fractional Preferred Shares or shares of our common stock will be
issued (other than fractions of Preferred Shares which are integral multiples of
one one-hundredth of a Preferred Share, which may, at our election, be evidenced
by depository receipts), and in lieu thereof, a payment in cash will be made
based on the market price of the Preferred Shares or shares of our common stock
on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by our Board or Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as our Board of Directors, in its sole discretion, may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as one of our stockholders beyond those as an existing stockholder,
including, without limitation, the right to vote or to receive dividends.
Any of the provisions of the Stockholder Rights Plan may be amended by
our Board of Directors for so long as the Rights are then redeemable, and after
the Rights are no longer redeemable, we may amend or supplement the Stockholder
Rights Plan in any manner that does not adversely affect the interests of the
holders of the Rights.
This summary description of the Rights does not purport to be complete,
and is qualified in its entirety by reference to the Stockholder Rights Plan,
which is incorporated by reference to our Report on Form 8-K filed with the SEC
on April 23, 1998.
18
EXPERTS
The consolidated financial statements of Southwest Water Company as of
December 31, 2000 and 1999, and for each of the years in the three-year period
ended December 31, 2000, which are incorporated in this prospectus by reference
to our Annual Report on Form 10-K, have been incorporated by reference herein in
reliance upon the report by KPMG LLP, independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in auditing and
accounting.
VALIDITY OF COMMON STOCK
The validity of the common stock being offered by this prospectus is
being passed on by Latham & Watkins, Costa Mesa, California.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our bylaws provide that we shall indemnify our directors and officers
to the maximum extent permitted by the General Corporation Law of Delaware
("Delaware Law"). Section 145 of Delaware Law provides for the indemnification
of our officers, directors and other agents in terms sufficiently broad to
permit indemnification under certain circumstances for liabilities, including
expenses, arising under the Securities Act. Our bylaws also permit us to
maintain insurance to protect any of our officers, directors, employees or
agents against any expense, liability or loss whether or not we would have the
power to indemnify such person against such expense, liability or loss under
Delaware Law. Our bylaws also authorize us to enter into a contract with any of
our officers, directors, employees or agents providing for indemnification
rights equivalent to or, if our board of directors so determines, greater than,
those provided for in our bylaws.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling us pursuant
to the foregoing provisions, we have been informed that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities
Act, and is therefore unenforceable.
19
================================================================================
300,000 SHARES OF COMMON STOCK
SOUTHWEST WATER COMPANY
PROSPECTUS
September 26, 2001
================================================================================
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the distribution of the securities
being registered are set forth in the following table (all amounts except the
registration fee are estimated):
Registration fee.................................... $ 996
Legal fees and expenses............................. $ 10,000
Accounting fees and expenses........................ $ 5,000
Miscellaneous....................................... $ 5,004
------------------
Total...................................... $ 21,000
==================
All expenses in connection with the issuance and distribution of the
securities being offered will be borne by us (other than selling commissions, if
any).
Item 15. Indemnification of Directors and Officers.
Statutory Provisions
Section 102(b)(7) of the General Corporation Law of the State of
Delaware (the "DGCL") enables a corporation in its certificate of incorporation
to eliminate or limit the personal liability of members of its board of
directors to the corporation or its stockholders for monetary damages for
violations of a director's fiduciary duty of care. Such a provision would have
no effect on the availability of equitable remedies, such as an injunction or
rescission, for breach of a fiduciary duty. In addition, no such provision may
eliminate or limit the liability of a director for breaching his duty of
loyalty, failing to act in good faith, engaging in intentional misconduct or
knowingly violating a law, paying an unlawful dividend or approving an illegal
stock repurchase or obtaining an improper personal benefit.
Section 145 of the DGCL empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is, or was, a
director, officer, employee or agent of the corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with an action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. No indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper. Additionally, a corporation is required to
indemnify its directors and officers against expenses to the extent that such
directors or officers have been successful on the merits or otherwise in any
action, suit or proceeding or in defense of any claim, issue or matter therein.
Indemnification can be made by the corporation only upon a
determination that indemnification is proper in the circumstances because the
party seeking indemnification has met the applicable standard of conduct as set
forth in the DGCL. The indemnification provided by the DGCL shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. A corporation also has the power to purchase and
maintain insurance on behalf of any person, whether or not the corporation would
have the power to indemnify him against such liability. The indemnification
provided by the DGCL shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
II-1
Our Certificate of Incorporation and Bylaws
Our certificate of incorporation limits our directors' liability for
monetary damages to us and our stockholders for breaches of fiduciary duty
except under the circumstances outlined in Section 102(b)(7) of the DGCL as
described above under "Statutory Provisions." Our bylaws extend indemnification
rights to the fullest extent authorized by the DGCL to directors and officers
involved in any action, suit or proceeding where the basis of such involvement
is such person's alleged action in an official capacity or in another capacity
while serving as a director or officer of our company. Our bylaws also permit us
to maintain insurance to protect ourselves and any of our directors, officers,
employees or agents against any expense, liability or loss incurred as a result
of any action, suit or proceeding whether or not we would have the power to
indemnify the person under the DGCL. Our bylaws also authorize us to enter into
a contract with any of our directors, officers, employees or agents providing
for indemnification rights equivalent to or, if our Board of Directors so
determines, greater than, those provided for in our bylaws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
Item 16. Exhibits.
4.1A Agreement and Plan of Merger of Registrant dated May 25, 1988
(incorporated by reference to Exhibit 2 to Registrant's Form 10-K
Report for the year ended December 31, 1988).
4.1B Registrant's Restated Certificate of Incorporation dated April
4,1988 (incorporated by reference to Exhibit 3.1 to Registrant's
Form 8-B Report filed with the Commission on July 5, 1988).
4.1C Certificate of Amendment of Article Four of Articles of
Incorporation dated March 30, 1995 (incorporated by reference to
Exhibit 3.1B to Registrant's Form 10-Q Report for the quarter
ended March 31, 1995).
4.1D Certificate of Amendment of Restated Certificate of Incorporation
dated June 4, 1998 (incorporated by reference to Appendix A of
Registrant's 1998 Proxy Statement filed with the Commission on
April 20, 1998).
4.1E Certificate of Correction of Amendment of Restated Certificate of
Incorporation dated September 14, 1998 (incorporated by reference
to Exhibit 3.1D of Registrant's Form 10-K Report for the year
ended December 31, 1999).
4.1F Certificate of Designation of Series E Convertible Preferred Stock
of Southwest Water Company dated January 12, 2000 (incorporated by
reference to Exhibit 3.1E of Registrant's Form 10-K Report for the
year ended December 31, 1999).
4.2A Registrant's Bylaws as amended April 4, 1988 (incorporated by
reference to Exhibit 3.2 to Registrant's Form 8-B Report filed
with the Commission on July 5, 1988).
4.2B Amendment to Registrant's Bylaws dated March 15, 1991
(incorporated by reference to Exhibit 3.2A to Registrant's Form
10-K Report for the year ended December 31, 1990).
4.2C Amendment to Registrant's Bylaws dated June 27, 1995 (incorporated
by reference to Exhibit 3.2B to Registrant's Form 10-K Report for
the year ended December 31, 1995).
4.2D Amendment to Registrant's Bylaws dated December 12, 1996
(incorporated by reference to Exhibit 3.2C to Registrant's Form
10-K Report for the year ended December 31, 1996).
4.3 Stockholder's Rights Plan dated April 6, 1998 (incorporated by
reference to the Registrant's Form 8-K Report filed with the
Commission April 23, 1998).
5.1 Opinion of Latham & Watkins re legality of shares being issued
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Latham & Watkins (included in Exhibit 5)
24.1 Power of Attorney (included on signature page)
99.1 Form of Stockholder Authorization
II-2
Item 17. Undertakings.
(a) 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) To reflect in the prospectus any acts 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. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(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 (a)(1)(i) and (a)(1)(ii) herein do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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; and
(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.
(b) 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.
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 the City of West Covina, State of California, on September 26,
2001.
SOUTHWEST WATER COMPANY,
a Delaware corporation
By: /s/ ANTON C. GARNIER
-------------------------------
Anton C. Garnier
President, Chief Executive Officer and Director
Each person whose signature appears below hereby constitutes and
appoints Anton C. Garnier and Peter J. Moerbeek his or her true and lawful
attorneys-in-fact and agents, each acting alone, 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, without
limitation, post-effective amendments) to this Registration Statement and any
subsequent Registration Statement filed by the Registrant pursuant to Rule
462(b) of the Securities Act of 1933, which relates to this Registration
Statement and to file the same, with all exhibits thereto, and all documents in
connection herewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, 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, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agents, each acting alone, or his or their 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 by the following persons in the
capacities on September 26, 2001.
Signature Title
------------------------------------------ -------------------------------------------------
President, Chief Executive Officer and Director
/s/ ANTON C. GARNIER (Principal Executive Officer)
------------------------------------------
Anton C. Garnier
/s/ PETER J. MOERBEEK Chief Financial Officer, Secretary and Director
------------------------------------------ (Principal Financial Officer)
Peter J. Moerbeek
/s/ THOMAS C. TEKULVE Vice President, Finance
------------------------------------------ (Principal Accounting Officer)
Thomas C. Tekulve
/s/ H. FREDERICK CHRISTIE Director
------------------------------------------
H. Frederick Christie
/s/ MONROE HARRIS Director
------------------------------------------
Monroe Harris
/s/ DONOVAN D. HUENNEKENS Director
------------------------------------------
Donovan D. Huennekens
/s/ MAUREEN A. KINDEL Director
------------------------------------------
Maureen A. Kindel
/s/ RICHARD G. NEWMAN Director
------------------------------------------
Richard G. Newman
S-1
EXHIBIT INDEX
4.1A Agreement and Plan of Merger of Registrant dated May 25, 1988
(incorporated by reference to Exhibit 2 to Registrant's Form 10-K
Report for the year ended December 31, 1988).
4.1B Registrant's Restated Certificate of Incorporation dated April
4,1988 (incorporated by reference to Exhibit 3.1 to Registrant's
Form 8-B Report filed with the Commission on July 5, 1988).
4.1C Certificate of Amendment of Article Four of Articles of
Incorporation dated March 30, 1995 (incorporated by reference to
Exhibit 3.1B to Registrant's Form 10-Q Report for the quarter
ended March 31, 1995).
4.1D Certificate of Amendment of Restated Certificate of Incorporation
dated June 4, 1998 (incorporated by reference to Appendix A of
Registrant's 1998 Proxy Statement filed with the Commission on
April 20, 1998).
4.1E Certificate of Correction of Amendment of Restated Certificate of
Incorporation dated September 14, 1998 (incorporated by reference
to Exhibit 3.1D of Registrant's Form 10-K Report for the year
ended December 31, 1999).
4.1F Certificate of Designation of Series E Convertible Preferred Stock
Of Southwest Water Company dated January 12, 2000 (incorporated by
reference to Exhibit 3.1E of Registrant's Form 10-K Report for the
year ended December 31, 1999).
4.2A Registrant's Bylaws as amended April 4, 1988 (incorporated by
reference to Exhibit 3.2 to Registrant's Form 8-B Report filed
with the Commission on July 5, 1988).
4.2B Amendment to Registrant's Bylaws dated March 15, 1991
(incorporated by reference to Exhibit 3.2A to Registrant's Form
10-K Report for the year ended December 31, 1990).
4.2C Amendment to Registrant's Bylaws dated June 27, 1995 (incorporated
by reference to Exhibit 3.2B to Registrant's Form 10-K Report for
the year ended December 31, 1995).
4.2D Amendment to Registrant's Bylaws dated December 12, 1996
(incorporated by reference to Exhibit 3.2C to Registrant's Form
10-K Report for the year ended December 31, 1996).
4.3 Stockholder's Rights Plan dated April 6, 1998 (incorporated by
reference to the Registrant's Form 8-K Report filed with the
Commission April 23, 1998).
5.1 Opinion of Latham & Watkins re legality of shares being issued
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Latham & Watkins (included in Exhibit 5)
24.1 Power of Attorney (included on signature page)
99.1 Form of Stockholder Authorization
EX-5.1
3
dex51.txt
OPINION OF LATHAM & WATKINS
EXHIBIT 5.1
[LETTERHEAD OF LATHAM & WATKINS]
____________________
September 26, 2001
Southwest Water Company
225 North Barranca Avenue
Suite 200
West Covina, California 91791-1605
Re: Form S-3 Registration Statement; 300,000
Shares of Common Stock, par value $.01 per share
------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of 300,000 shares of common stock
of the Company, par value $.01 per share (the "Shares"), issuable pursuant to
the Dividend Reinvestment and Stock Purchase Plan of Southwest Water Company
(the "Plan"), under the Securities Act of 1933, as amended (the "Act"), by
Southwest Water Company, a Delaware corporation (the "Company"), on Form S-3
filed with the Securities and Exchange Commission (the "Commission") on
September 25, 2001 (the "Registration Statement"), you have requested our
opinion with respect to the matters set forth below.
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization, issuance and sale of the Shares,
and for the purposes of this opinion, have assumed such proceedings will be
timely completed in the manner presently proposed. We are also familiar with
the proceedings taken by you in connection with the authorization and adoption
of the Plan. In addition, we have made such legal and factual examinations and
inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and instruments, as we have deemed necessary or appropriate for purposes of this
opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We are opining herein as to the effect on the subject transaction only
of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or any other laws, or as to any matters of
municipal law or the laws of any local agencies within any state.
LATHAM & WATKINS
Southwest Water Company
September 26, 2001
Page 2
Subject to the foregoing, it is our opinion that the Shares have been
duly authorized, and, upon issuance, delivery and payment therefor in the manner
contemplated by the Registration Statement and the Plan, will be validly issued,
fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Validity of Common Stock."
Very truly yours,
/s/ LATHAM & WATKINS
EX-23.1
4
dex231.txt
CONSENT OF KPMG PEAT MARWICK
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors
Southwest Water Company
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Registration Statement.
/s/ KPMG LLP
Los Angeles, California
September 26, 2001
EX-99.1
5
dex991.txt
FORM OF STOCK HOLDER AUTHORIZATION
EXHIBIT 99.1
AUTHORIZATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
SOUTHWEST WATER COMPANY
I hereby appoint Mellon Investor Services LLC (the "Agent") as my
agent under the terms and conditions of the Dividend Reinvestment and Stock
Purchase Plan of Southwest Water Company (the "Plan") as described in the
Prospectus of the Plan, a copy of which I have received and read. The Agent is
to receive and apply to the purchase of shares of Common Stock of Southwest
Water Company without charge as provided in the Plan the following:
___(i) FULL DIVIDEND REINVESTMENT - any cash dividends that
become payable to me on all Southwest Water Company
Common Stock now or hereafter registered in my name,
and any optional cash payments I may choose to send.
___(ii) PARTIAL DIVIDEND REINVESTMENT - any cash dividends
that become payable to me on the following shares of
my Southwest Water Company Common Stock, and any
optional cash payments I may choose to send:
__________ Shares.
___(iii) OPTIONAL CASH PAYMENTS ONLY - the attached cash
payment and any future optional cash payments I may
choose to send.
I understand that I may change my investment option under the
Plan at any time by signing and returning to the Agent a subsequent
Authorization Card specifying an option which differs from my then current
participation under the Plan.
I understand that I may revoke this authorization and terminate
my participation under the Plan at any time by notifying the Agent, in writing,
of my desire to terminate my participation under the Plan.
A check or money order for my initial optional cash payment of
$________________ is enclosed and made payable to Mellon Investor Services LLC.
Stockholder
__________________________
Signature Date
THIS IS NOT A PROXY
Stockholder
___________________________
Signature Date
*IMPORTANT - READ INSTRUCTIONS ON REVERSE SIDE BEFORE COMPLETING AND SIGNING
INSTRUCTIONS
1. Please check only one of the three investment options numbered
(i), (ii) or (iii). If you do not check any of these, then (i)-
FULL DIVIDEND REINVESTMENT will be assumed.
2. If you checked (ii) - PARTIAL DIVIDEND REINVESTMENT, and:
- If you wish to reinvest cash dividends on all of the
shares of Common Stock now registered in your name but not
on any additional shares that may be registered in your name
in the future, write the total number of shares now
registered in your name in the space provided.
- If you wish to reinvest cash dividends on less than all of
the shares of Common Stock now registered in your name and
continue to receive a check for cash dividends on the
remaining shares, write the number of shares for which you
want cash dividends reinvested in the space provided.
3. Under each of the three investment options - FULL DIVIDEND
REINVESTMENT, PARTIAL DIVIDEND REINVESTMENT and OPTIONAL CASH
PAYMENT ONLY - regardless of the one you select, the cash
dividends issued on the Common Stock credited to your account
under the Plan will be automatically reinvested toward the
purchase of Common Stock for your account.
4. If you elect to participate in the Plan be sure to date and sign
this Authorization Card and return it to Mellon Investor Services
LLC, Re: Southwest Water Company Dividend Reinvestment and Stock
Purchase Plan, P. O. Box 3315, South Hackensack, New Jersey
07606; a postage-paid envelope is enclosed for this purpose.
THIS IS NOT A PROXY
-------------------