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As filed with the Securities and Exchange Commission on September 25, 1996
Securities Act File No. 333-10367 Exchange Act File No. 0-18756
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WESTERN WATER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 33-0085833
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4660 La Jolla Village Drive, Suite 825
San Diego, California 92122
(619) 535-9282
(Address, including zip code, and telephone
number, including area code, of Registrant's principal executive offices)
Peter L. Jensen, President
Western Water Company
4660 La Jolla Village Drive, Suite 825
San Diego, California 92122
(619) 535-9282
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
With copies to:
Istvan Benko, Esq.
Troy & Gould Professional Corporation
1801 Century Park East, Suite 1600
Los Angeles, California 90067
(310) 553-4441
Approximate date of commencement of proposed sale to public:
From time to time 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. / /
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. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check t e
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount To Be Offering Price Aggregate Offering Amount of
To Be Registered Registered Per Share(1) Price(1) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.001 par value).... 43,536 shares $ 19.25 $ 838,068 $ 289(2)
=============================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c), solely for the purpose of calculating
the registration fee, based on the average of the high and low sale prices
per share of Common Stock, as reported on the Nasdaq National Market, on
September 19, 1996.
(2) Of which $133 was previously paid.
--------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
PROSPECTUS
WESTERN WATER COMPANY
43,536 SHARES OF COMMON STOCK
This Prospectus relates to the offer by the securityholder named
herein ("Selling Securityholder") for sale from time to time of up to 43,536
shares (the "Shares") of common Stock, $.001 par value (the "Common Stock"), of
Western Water Company, a Delaware corporation (the "Company"). The Shares
consist of (i) 23,536 outstanding shares of Common Stock and (ii) 20,000 shares
of Common Stock issuable upon the exercise of currently outstanding stock
purchase options granted under the Company's 1993 Stock Option Plan (the
"Options"). The Company will not receive any proceeds from the sale of the
Shares offered hereby. Upon the exercise of the Options, the Company will
receive $325,640 in the aggregate.
The Common Stock is quoted on the Nasdaq National Market under the
symbol "WWTR." The closing price of the Common Stock reported on the Nasdaq
National Market on September 26, 1996 was $____ per share.
The Selling Securityholders have advised the Company that they may
sell, directly or through brokers, all or a portion of the securities offered
hereby in negotiated transactions or in one or more transactions in the market
at the price prevailing at the time of sale. In connection with such sales, the
Selling Securityholders and any participating broker may be deemed to be
"underwriters" of the Common Stock within the meaning of the Securities Act of
1933, as amended. It is anticipated that usual and customary brokerage fees will
be paid by the Selling Securityholders in all open market transactions. The
Company will pay all other expenses of this offering. See "Plan of
Distribution."
The Company has informed the Selling Securityholders that the
anti-manipulation provisions of Rules 10b-6 and 10b-7 under the Securities
Exchange Act of 1934 may apply to their sales of the shares offered hereby. The
Company also has advised the Selling Securityholders of the requirement for
delivery of this Prospectus in connection with any sale of the shares offered
hereby.
--------------------------
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON
PAGES 5 THROUGH 7 OF THE PROSPECTUS.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 27, 1996
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy or information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the following regional
offices: Seven World Trade Center, New York, New York 10048, and Citicorp
Center, 500 W. Madison Street, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Additional information regarding the Company and the securities
offered hereby is contained in the Registration Statement of which this
Prospectus is a part, and the exhibits thereto, filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). For further
information pertaining to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto, which
may be inspected without charge at, and copies thereof may be obtained at
prescribed rates from, the office of the Commission at Judiciary Plaza, 450
Fifth Street, Washington, D.C. 20549. Statements contained herein concerning the
provisions of any document are not necessarily complete and in each instance
reference is made to the copy of the document filed as an exhibit or schedule to
the Registration Statement. Each such statement is qualified in its entirety by
reference to the copy of the applicable documents filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
under the Exchange Act are incorporated in this Prospectus by reference: (a) the
Company's Annual Report on Form 10-K for the year ended March 31, 1996; (b) the
Company's quarterly report on Form 10-Q for the quarter ended June 30, 1996,
filed with the Commission on August 14, 1996; (c) all other reports filed with
the Commission pursuant to Section 13 and 15(d) of the Exchange Act since August
14, 1996; and (d) the description of the Common Stock set forth in the Company's
Registration Statement on Form 8-B under the Exchange Act, including any
amendment or report subsequently filed by the Company for the purpose of
updating that description. The file number of each of the foregoing documents is
0-18756.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the securities offered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part of this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (other than
exhibits to such documents that are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to
Marilyn Buseman Dreyer, Chief Financial Officer, Western Water Company, 4660 La
Jolla Village Drive, Suite 825, San Diego, California 92122. Telephone requests
may be directed to Ms. Dreyer at (619) 535-9282.
2.
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THE COMPANY
Western Water Company (the "Company") is engaged in (i) a broad
range of activities related to the identification, acquisition, ownership,
development, transfer and sale of water and water rights primarily in the
Western United States and (ii) in the sale of real estate properties acquired in
connection with the Company's water supply business activities. The Company,
directly and indirectly, owns a diverse portfolio of water rights and real
estate interests in California, Colorado and Nevada. The Company's plan is to
develop and package its own water and water rights for sale to municipalities
and other water users and to provide a variety of water-related services to
unaffiliated owners of water rights. Such services include identifying,
developing, marketing, transporting, distributing and selling water or water
rights that are owned by the unaffiliated owners. In addition, the Company's
plan is to resell the real estate interests that it owns and occasionally
acquires in connection with its acquisition of water interests.
The principal California water interests owned by the Company
consist of (i) certain riparian and appropriative water rights, together with
certain groundwater rights, associated with approximately 9,055 acres of real
property (the "Yuba Property") located along the Yuba River in California, (ii)
the water rights associated with 2,236 acres of California rice farms and
ranches, and (iii) interests owned in various California mutual water companies.
The principal Colorado water interests owned by the Company consist
of the water rights associated with an aggregate of 4,559 acres of undeveloped
land and certain other water rights in the Cherry Creek basin. The Cherry Creek
basin is the drainage area of Cherry Creek south of Denver, Colorado. The Cherry
Creek assets were acquired primarily for the purpose of developing, processing,
packaging and selling water and water rights in the Cherry Creek basin (the
"Cherry Creek Project"). The Company has filed a plan of augmentation with the
Colorado Water Court in order to obtain the right to sell packages of long-term,
reliable water resources. In February 1996, the Company entered into an
agreement in principle with United Infrastructure Company, a company owned by
Bechtel Enterprises, Inc. and Peter Kiewit & Sons, to establish a joint venture
company for the purpose of designing, constructing, operating and maintaining
the infrastructure that will facilitate delivery of Cherry Creek water to retail
as well as wholesale purchasers of the water. The Company believes that this
arrangement with United Infrastructure Company will broaden the market for the
Company's water by enabling the Company to offer fully integrated water services
in Cherry Creek.
The Company's water interests in Nevada consists of its indirect
35.3% interest in approximately 1.4 million acres of land and related water
interests located in the State of Nevada (the "Nevada Property"). As an owner of
a 35.3% interest in the Nevada Land and Resource Company LLC (the "Nevada LLC"),
the Delaware limited liability company that owns the Nevada Property, the
Company also owns an interest in the real estate and water interests owned by
the Nevada LLC. In addition to its indirect ownership of the foregoing water
interests, the Company also has been retained by the Nevada LLC to develop and
market the Nevada LLC's water interests.
On October 18, 1995, the Company contributed $12,000,000 to the
capital of the Nevada LLC and thereby acquired a 35.3% initial percentage
interest in the Nevada LLC. Accordingly, the Company will be entitled to a 35.3%
interest in all distributions made by the Nevada LLC, which percentage interest
is subject to future increase if and when the Nevada LLC has made aggregate
distributions to its members equal to 100% of all capital contributions plus
certain specified cumulative annual returns on investment. The other member of
the Nevada LLC, a joint venture comprised of The Morgan Stanley Real Estate Fund
II, L.P. and two affiliates of that real estate partnership, contributed
$22,000,000 for its 64.7% percentage interest in the Nevada LLC. The Company and
the Morgan Stanley affiliated joint venture jointly manage the Nevada LLC. The
Nevada LLC was formed for the sole purpose of acquiring, financing, managing,
developing, leasing, selling and otherwise disposing of the real estate and
water interests that comprise the Nevada Property. In order to fund the
foregoing capital contribution, the Company in September 1995 issued and sold
$15,000,000 principal amount of debentures. The purchase price paid by the LLC
for the Nevada Property was $44,743,000.
The principal real estate interests owned by the Company consist of
(i) 2,205 acres of undeveloped land located in the Cherry Creek basin, Colorado,
(ii) a total of approximately 1,602 acres located in Northern California, and
(iii) the Company's interest in the approximately 1.4 million acres of Nevada
real estate owned by the Nevada LLC. The real estate owned by the Company in
California consists of four rice farms and ranches (adjacent 455-
3.
<PAGE> 5
acre and 744-acre farms, and 225-acre and 136-acre farms and ranches), a total
of 42 acres of the 9,055-acre Yuba Property. The Company also owns certain
mineral interests and other property rights in a total of 3,018 acres located in
California. The Company has sold or exchanged 2,343 acres of the 4,559 acres it
owned in the Cherry Creek basin and currently is marketing approximately 1,900
additional acres of its Cherry Creek, Colorado, real estate.
The Company is currently engaged by The Atchison, Topeka and Santa
Fe Railway Company and by Burlington Northern Railroad Company (collectively,
"Burlington Santa Fe") to act as Burlington Santa Fe's exclusive agent in
California, Arizona, New Mexico, Colorado, Washington and Montana in connection
with identifying, developing and marketing water assets owned by Burlington
Santa Fe, and to identify and assist in marketing Burlington Santa Fe's Texas
water rights, and to advise Burlington Santa Fe in connection with such matters.
The Company is also involved in the business of effecting water
transfers. The Company recently entered into its first agreements to transfer
water from Northern California to Southern California.
On March 28, 1996, the Company issued a 100% stock dividend whereby
the Company issued one share of Common Stock for each share of Common Stock then
outstanding (the "Stock Dividend"). A 100% stock dividend effectively is the
equivalent of a 2-for-1 stock split. All share, per share and other information
contained in this Prospectus has been adjusted to reflect the 2-for-1 stock
adjustment.
The Company's principal executive office is located at 4660 La Jolla
Village Drive, Suite 825, San Diego, California 92122. Its telephone number is
(619) 535-9282. Unless the context requires otherwise, references to the
"Company" in this report include YG Procyon Corporation, its wholly-owned
subsidiary, and YG Rice Farms, L.P., a California limited partnership directly
and indirectly wholly owned and controlled by the Company. On September 18,
1992, the Company changed its name from "YG Development Company" to "Western
Water Company," and on March 23, 1994, the Company changed its state of
incorporation from California to Delaware.
4.
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RISK FACTORS
The securities offered hereby are speculative in nature, involve a
high degree of risk, and should not be purchased by any investor who cannot
afford the loss of his entire investment. Prior to making an investment decision
with respect to the securities offered hereby, prospective investors should
carefully consider, along with the other matters discussed in this Prospectus,
the following risk factors:
LIMITED HISTORY OF OPERATIONS IN PRINCIPAL BUSINESS. To date, the
Company's activities have primarily consisted of (i) acquiring its various water
rights and related assets, (ii) raising capital to fund both the cost of such
acquisitions and its working capital needs, and (iii) developing its water
rights. Although the Company operates in two business segments (water rights
activities and its real estate development and disposition activities), the
Company anticipates that a majority of its revenues in the future will be
derived from its water rights activities. However, the Company only generated
$974,000 and $207,000 of revenues from its water rights activities during the
fiscal years ended March 31, 1996 and March 31, 1995, respectively, and only
generated $65,000 of revenues from its water rights activities during the fiscal
quarter ended June 30, 1996. Accordingly, the Company does not have an
established record of water rights transactions. To date, the Company's
administrative and interest expenses have exceeded its on-going revenues from
its water and water rights development and disposition business, and the
majority of its operating revenues have been derived from the sale of the
Company's real estate assets. No assurance can be given that the Company will
continue to be able to profitably resell its remaining real estate holdings in
the future or that it will be able to successfully develop, package and sell
water rights.
UNCERTAINTY OF FUTURE REAL ESTATE REVENUES. During the past two
fiscal years, revenues from the disposition of real estate have constituted
approximately 80% and 92%, respectively, of the Company's total revenues.
Accordingly, until the Company completes its water development activities and
derives revenues from the sale or other disposition of its water resources, the
Company's ability to generate revenues will continue to be dependent primarily
on its ability to sell its real estate holdings. To date, the Company's real
estate sales efforts in Colorado have benefitted from a strong demand for real
estate in the Cherry Creek basin. No assurance can, however, be given that the
current market conditions in the Cherry Creek market will continue or that the
Company will be able to profitably resell its real estate assets in the future.
The Company did not consummate any real estate sales for the fiscal quarter
ended June 30, 1996 and, accordingly, derived no revenues from its real estate
activities during that fiscal quarter. The Company's ability to sell its
Colorado and California real estate properties will also be dependent on general
economic conditions, on interest rates, and on the location and particular
characteristics of the properties offered for sale. The Company also has a
significant economic interest in the Nevada LLC and in that company's real
estate holdings. Revenues derived from the development and sales of the Nevada
Properties will, to a large extent, be dependent upon the ability of the Nevada
LLC to successfully develop, market and sell the Nevada LLC's real estate
holdings. To date, the Nevada LLC has not yet consummated a material sale of its
real estate holdings.
UNCERTAINTY OF FUTURE WATER REVENUES. The Company's business plan is
twofold: to engage in various water acquisition, transfer, development and sale
activities, and to develop and dispose of the real estate that it acquires in
connection with the acquisition of water rights. While the Company's current
operating revenues have been primarily derived from real estate sales, the
Company's long-term future profitability will be primarily dependent on (i) the
ability of the Nevada LLC to develop and sell water and water rights, (ii) the
Company's ability to sell significant quantities of water from the Yuba
Property, and (iii) the Company's ability to develop and sell water or water
rights packages as part of the Cherry Creek Project. The Company is currently
unable to accurately estimate the amount of developable water contained within
the Nevada Property. The Nevada LLC has not, to date, developed or sold any of
its water or water rights, and no assurance can be given that the Nevada LLC
will be able to develop or sell any water or water rights in the future. Until
May 1996, the Company's plan was to permit the Yuba County Water Agency to
integrate the Company's Yuba Property water into the Water Agency's conjunctive
use plans for developing and marketing water to third parties. The Company's
agreement with the Yuba County Water Agency regarding the joint development and
marketing of water expired in May 1996, and the Company has not yet finally
determined how it plans to commercially exploit its Yuba Property water rights.
The Colorado Water Court has rejected the Company's initial plan of
authorization based on objections that were filed with the court by the third
parties. Although the Company has since received the consent of all but one of
the objectors, no assurance can be given that the Colorado Water Court will
approve the Company's plan of augmentation in the near future, or ever.
Furthermore, while the Company believes that its agreement with United
Infrastructure Company will
5.
<PAGE> 7
broaden the market for the Company's Cherry Creek water, the Company has not yet
sold a material amount of water or water rights from its Cherry Creek Project,
and no assurance can be given that the Company will be able to profitably
dispose of its Cherry Creek water rights in the future.
YUBA PROPERTY TITLE ISSUES. It is possible that owners of adjoining
land or land located downstream from the Yuba Property could assert claims to
the groundwater adverse to the Company due to possible uncertainties as to the
source of water located on or under the Yuba Property and the complexities of
water laws. Although the Company believes that its claims would be held to be
superior to any claims by other property owners, no assurance can be given that
adverse claims, if asserted, would not be sustained.
ENVIRONMENTAL REGULATION AND RISK. Water leased or sold by the
Company may be subject to regulation as to quality by the United States
Environmental Protection Agency (the "EPA") acting pursuant to the Federal Safe
Drinking Water Act (the "US Act"). In California, the responsibility for
enforcing the US Act is delegated to the California Department of Health
Services (the "Health Department") and to the Resources Board acting pursuant to
the California Safe Drinking Water Act (the "Cal Act"). The US Act provides for
the establishment of uniform minimum national water quality standards, as well
as governmental authority to specify the type of treatment processes to be used
for public drinking water. Moreover, the EPA has an ongoing directive to issue
regulations under the US Act and to require disinfection of drinking water,
specification of maximum contaminant levels ("MCLS") and filtration of surface
water supplies. The Cal Act and the mandate of the Health Department are similar
to the US Act and the mandate of the EPA, and in many instances MCLS and other
requirements of the Health Department are more restrictive than those
promulgated by the EPA.
Both the EPA and the Health Department have promulgated regulations
and other pronouncements which require various testing and sampling of water and
inspections by producers which set MCLS for numerous contaminants. Since the
Company does not intend to sell water directly to the consumers, these standards
only affect the water agencies that may buy or lease the Company's water. While
environmental regulations do not directly affect the Company, the regulations
regarding the quality of water distributed affects the Company's intended
customers and may, therefore, depending on the quality of the Company's water,
impact the price and terms upon which the Company may in future sell its water
or water rights.
Under various federal, state and local laws, regulations and
ordinances (collectively, "Environmental Laws"), an owner or operator of real
estate interests may be liable for the costs of cleaning up, as well as certain
damages resulting from, past or present spills, disposals or other releases of
hazardous or toxic substances or wastes on, in or from a property. Certain
Environmental Laws including the federal Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA") and Resource Conservation and Recovery
Act ("RCRA"), impose such liability without regard to whether the owner knew of,
or was responsible for, the presence of hazardous or toxic substances or wastes
at or from the property. The presence of such substances or wastes, or the
failure to properly remediate any resulting contamination, also may adversely
affect the owner's or operator's ability to sell, lease, or operate its property
or to borrow using its property as collateral. Although the Company is not aware
of any such environmental contamination on any of its real estate holdings or on
any locations adjacent to its holdings, there can be no assurance that such
environmental contamination does not exist.
VOLATILE MARKET FOR COMMON STOCK. There has been significant
volatility in the market for the Company's Common Stock. Since April 1, 1995
(the beginning of the fiscal year ended March 31, 1996), the daily closing sales
prices of the Common Stock have ranged from $10.125 to $23.25 per share. The
trading price of the Common Stock has fluctuated widely, and it may be subject
to similar future fluctuations in response to quarter-to-quarter variations in
the Company's operating results, Company announcements regarding acquisitions or
dispositions of properties, and variations in the stock market indices in
general.
ANTI-TAKEOVER EFFECT OF CHARTER AND BYLAW PROVISIONS. The Company's
Certificate of Incorporation and Bylaws contain certain provisions that may
discourage attempts to acquire control of the Company that are not negotiated
with the Company's Board of Directors. These provisions may have the effect of
discouraging takeover attempts that some stockholders might deem to be in their
best interests, including takeover proposals in which stockholders might receive
a premium for their shares over the then current market price, as well as making
it more difficult for individual stockholders or a group of stockholders to
elect directors. The Board of Directors believes, however, that these provisions
are in the best interests of the Company and its stockholders because such
provisions
6.
<PAGE> 8
may encourage potential acquirors to negotiate directly with the Board of
Directors which is in the best position to act on behalf of all stockholders.
The Certificate of Incorporation provides that the affirmative vote of the
holders of at least 66-2/3% of the total voting power of all outstanding
securities of the Company then entitled to vote generally in the election of
directors, voting together as a single class, is required to amend certain
provisions of the Certificate of Incorporation, including among others, those
provisions relating to the number, election and term of directors; the removal
of directors and the filling of vacancies; and the supermajority voting
requirements of the Certificate of Incorporation. These voting requirements will
have the effect of making more difficult any amendments, even if a majority of
the Company's stockholders believes that such amendment would be in their best
interest.
DIVIDENDS UNLIKELY. The Company has never paid cash dividends on its
Common Stock and anticipates that for the foreseeable future all earnings, if
any, will be retained for operations and for the development of the Company's
assets and business. The Company's ability to pay any dividends is dependent on
its financial condition and on Delaware law. Under Delaware law, a corporation
is permitted to pay dividends only out of surplus (including paid-in and earned
surplus) or out of net profits for the current and immediately preceding fiscal
years. Although the Company currently is permitted by Delaware law to make
dividend payments, no assurance can be given that the Company will in the future
be permitted under Delaware law to pay dividends.
DEPENDENCE ON KEY PERSONNEL. The success of the Company is largely
dependent upon the knowledge, efforts and active participation of Mr. Peter L.
Jensen, its President, and Messrs. John H. Huston and Eric R. Robbins, its Vice
Presidents. The Company's employment agreements with Messrs. Jensen, Huston and
Robbins expire in January, February and November, 1997, respectively. The loss
of the services of either Messrs. Jensen, Huston or Robbins could have a
material adverse effect on the Company.
AUTHORIZATION OF PREFERRED STOCK; PROVISIONS AFFECTING CHANGES IN
CONTROL. The Company's Certificate of Incorporation authorizes the issuance of
"blank check" preferred stock with such designation, rights and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue a new
series of preferred stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power or other rights of
the holders of the Company's Common Stock. In the event of issuance, the new
series of preferred stock could be utilized, under certain circumstances, as a
method of discouraging, delaying or preventing a change in control of the
Company. Although the Company has no present intention to issue any additional
shares of its preferred stock, there can be no assurance that the Company will
not do so in the future.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale by
the Selling Securityholders of any of the Shares offered hereby. The Company
will, however, receive $325,640 in the aggregate if all of the Options are
exercised. The Company will pay all of the costs of this offering.
7.
<PAGE> 9
SELLING SECURITYHOLDERS
On July 25, 1996, the Company entered into that certain Agreement
for Sale of Water Rights and Option to Sell Water Rights (the "Agreement") with
Golden West Refining Company, a California corporation ("Golden West"). Pursuant
to the Agreement, the Company agreed to purchase from Golden West, and Golden
West agreed to sell to the Company the rights to 100 acre feet per year of water
located in the Central Water Basin, Los Angeles County, California, for a
purchase price of $320,000. In addition, the Agreement grants Golden West the
option, but not the obligation, to sell to the Company the water rights to up to
an additional 978 acre feet per year of water in the Central Water Basin for a
price of $3,200 per acre foot. The option has a term of one year, although
Golden West, in its discretion, may terminate the option at any time during the
last nine months of the option term. The purchase price paid by the Company for
the first 100 acre feet sold under the Agreement was paid in the Shares included
in this Prospectus, and the purchase price for all future sales under the
Agreement will likewise be paid in shares of Common Stock. The amount of shares
to be issued to Golden West was determined, and in the event that the option is
exercised by Golden West will in the future be determined, by the average last
trading price of the Common Stock as reported by The Nasdaq Stock Market during
the 20 trading days immediately preceding the closing date of each sale. The
Agreement also contained registration rights provisions that require the Company
to register the shares of Common Stock to be issued to Golden West.
The terms of the foregoing transaction were determined by
arm's-length negotiations between the Company and Golden West. Neither Golden
West nor its affiliates had or has any material relationship with the Company or
its officers, directors or affiliates except as described above.
The Options consist of (i) options to purchase 10,000 shares of the
Common Stock at a price of $13.867 per share, which options were granted on
April 1, 1995, and (ii) options to purchase 10,000 shares of the Common Stock at
a price of $18.697 per share, which options were granted on April 1, 1996. All
of the Options are held by Jay B. Abramson, a director of the Company.
Of the outstanding shares included in this Prospectus, 6,666 shares
are owned by Jeffrey A. Smith. Mr. Smith acquired the 6,666 shares in August
1996 upon the exercise of options granted to him on April 1, 1995 in his
capacity as a director of the Company. Mr. Smith resigned as a director of the
Company of August 16, 1996.
SELLING SECURITYHOLDERS TABLE
The following table sets forth as of the date of this Prospectus the
number and percent of shares of Common Stock owned by the Selling
Securityholders, the number of shares of Common Stock offered by them, and the
number and percent of shares of Common Stock to be held by them after the
conclusion of this offering.
<TABLE>
<CAPTION>
Before Offering After Offering
------------------------- ------------------------------
Number of Number of
Shares Number of Shares
Selling Beneficially Shares Beneficially
Securityholders Owned Percent Being Offered Owned Percent
--------------- ------------ ------- ------------- ------------ -------
<S> <C> <C> <C> <C> <C>
Golden West Refining Company 16,870 *% 16,870 -0- 0%
Jay B. Abramson 1,175,900(1) 14.5% 20,000 1,155,900 14.2%
Jeffrey A. Smith 254,966(2) 3.2% 6,666 248,300 3.1%
</TABLE>
- --------------
(1) Consists of 60,000 shares of Common Stock issuable upon exercise of
currently exercisable options, 20,000 shares of Common Stock owned
directly by Mr. Abramson, 233,600 shares of Common Stock owned by
partnerships as to which Mr. Abramson has shared voting power and
shared investment power and 862,300 shares over which a corporation,
as investment advisor, has shared voting and shared investment
power.
8.
<PAGE> 10
(2) Consists of 6,666 shares of Common Stock owned by Mr. Smith,
248,300 shares of Common Stock owned by a corporation of
which Mr. Smith is an executive officer and director and therefore
has shared voting power and shared investment power over these
shares. Mr. Smith disclaims beneficial ownership of the shares
held by the foregoing corporation.
* less than 1%.
9.
<PAGE> 11
PLAN OF DISTRIBUTION
The Selling Securityholders may sell, directly or through brokers,
the shares of Common Stock in negotiated transactions or in one or more
transactions in the market at the price prevailing at the time of sale. In
connection with such sales, the Selling Securityholders and any participating
broker may be deemed to be "underwriters" of the shares of Common Stock within
the meaning of the Securities Act, although the offering of these securities
will not be underwritten by a broker-dealer firm. Sales in the market may be
made to broker-dealers making a market in the Common Stock or other
broker-dealers, and such broker-dealers, upon their resale of such securities,
may be deemed to be "selling securityholders" in this offering. The NASD member
firms who make a market in the Company's Common Stock, as most recently reported
to the Company by The Nasdaq Stock Market, are Bear Stearns & Co.; L.H. Friend,
Weinress & Frankson, Inc.; Dean Witter Reynolds, Inc.; Neuberger & Berman;
Herzog, Heine, Geduld, Inc.; Troster Singer Corp.; Mayer & Schweitzer, Inc.;
Sherwood Securities Corp.; Fahnestock & Co., Inc.; Everen Securities, Inc.; and
Knight Securities L.P. The Company will not receive any of the proceeds from the
sale of the Shares by the Selling Securityholders. Pursuant to the terms under
which the Shares were sold, the Company has agreed to indemnify Golden West
Refining Company against such liabilities as it may incur as a result of any
untrue statement of a material fact in the Registration Statement of which this
Prospectus forms a part, or any omission herein or therein to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading. Such indemnification
includes liabilities that the Golden West Refining Company may incur under the
Securities Act.
The Company will bear all costs and expenses of the registration
under the Securities Act and certain state securities laws of the Common Stock,
other than fees of counsel (if any) for the Selling Securityholders and any
discounts or commissions payable with respect to sales of such securities.
From time to time this Prospectus will be supplemented and amended
as required by the Securities Act. During any time when a supplement or
amendment is so required, the Selling Securityholders are required to cease
sales until the Prospectus has been supplemented or amended.
The Company has informed the Selling Securityholders that the
antimanipulation provisions of Rules 10b-6 and 10b-7 under the Securities
Exchange Act of 1934 may apply to their sales of the Shares and has furnished
the Selling Securityholders with a copy of these rules, as well as a copy of
certain interpretations thereof by the Commission. The Company also has advised
the Selling Securityholders of the requirement for delivery of this Prospectus
in connection with any sale of the Shares.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon
by Troy & Gould Professional Corporation, Los Angeles, California. Troy & Gould
Professional Corporation owns 47,686 shares of Common Stock.
EXPERTS
The audited consolidated financial statements contained in the
Annual Report on Form 10-K of Western Water Company for the year ended March 31,
1996 and incorporated in this Prospectus by reference, have been so incorporated
in reliance on the reports of Harlan & Boettger, independent public accountants,
given on the authority of said firm as experts in auditing and accounting.
10.
<PAGE> 12
No dealer, salesman or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus, in connection with the offering hereby, and, if given or made, such
information and representations must not be relied upon as having been
authorized by the Company or the Selling Securityholders. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to buy, any
securities to any person in any State or other jurisdiction in which such offer
or solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or the facts herein set
forth since the date hereof.
---------------
TABLE OF CONTENTS
Page
Available Information................................... 2
Incorporation of Certain
Documents by Reference................................ 2
The Company............................................. 3
Risk Factors............................................ 5
Use of Proceeds......................................... 7
Selling Securityholders................................. 8
Plan of Distribution..................................... 10
Legal Matters........................................... 10
Experts................................................. 10
43,536 Shares of Common Stock
WESTERN WATER COMPANY
------------
PROSPECTUS
------------
September 27, 1996
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Company estimates that expenses in connection with the
distribution described in this Registration Statement will be as follows. All
expenses incurred with respect to the distribution will be paid by the Company.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee...................................... $ 310
Accounting fees and expenses.............................. 3,000
Legal fees and expenses................................... 6,000
Miscellaneous............................................. 690
-------
Total.................................................. $10,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Section 102(b)(7) of the General Corporation Law of the
State of Delaware (the "GCL"), the Certificate of Incorporation of the Company
eliminates the liability of the Company's directors to the Company or its
stockholders, except for liabilities related to breach of duty of loyalty,
actions not in good faith, and certain other liabilities.
The Certificate of Incorporation, and the Bylaws of the Company
provide for the indemnification of directors and officers to the fullest extent
permitted by the GCL.
Section 145 of the GCL authorizes indemnification when a person is
made a party to any proceeding by reason of the fact that such person is or was
a director, officer, employee or agent of the corporation or was serving as a
director, officer, employee or agent of another enterprise, at the request of
the corporation, and if such person acted in good faith and in a manner
reasonably believed by him or her to be in, or not opposed to, the best
interests of the corporation. With respect to any criminal proceeding, such
person must have had no reasonable cause to believe that his or her conduct was
unlawful. If it is determined that the conduct of such person meets these
standards, he or she may be indemnified for expenses incurred and amounts paid
in such proceeding if actually and reasonably incurred by him or her in
connection therewith.
If such a proceeding is brought by or on behalf of the corporation
(i.e., a derivative suit), such person may be indemnified against expenses
actually and reasonably incurred if he or she acted in good faith and in a
manner reasonably believed by him or her to be in, or not opposed to, the best
interests of the corporation. There can be no indemnification with respect to
any manner as to which such person is adjudged to be liable to the corporation;
however, a court may, even in such case, allow such indemnification to such
person for such expenses as the court deems proper. Where such person is
successful in any such proceeding, he or she is entitled to be indemnified
against expenses actually and reasonably incurred by him or her. In all other
cases, indemnification is made by the corporation upon determination by it that
indemnification of such person is proper because such person has met the
applicable standard of conduct.
The registration rights agreement between the Company and Golden
West Refining Company provides that the Company shall indemnify Golden West
Refining Company, and the Selling Securityholders shall indemnify the Company
and the officers and directors of the Company, for certain liabilities,
including certain liabilities under the Securities Act.
(i)
<PAGE> 14
ITEM 16. EXHIBITS
4.1 Form of Common Stock certificate.(1)
5.1 Opinion of Troy & Gould Professional Corporation.(2)
23.1 Consent of Harlan & Boettger
23.2 Consent of Troy & Gould Professional Corporation (contained in
Exhibit 5.1).
99 Agreement for Sale of Water Rights and Option to Sell Water Rights,
dated July 25, 1996, between the Company and Golden West.(2)
- ------------------
(1) Previously filed as Exhibit 4.1 to the Company's Form 10 filed
August 9, 1990, (and incorporated herein by reference).
(2) Previously filed as an exhibit to this Registration Statement.
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby, a post-effective amendment
to this Registration Statement.
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective
date of this 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
this Registration Statement;
(iii) To include any material information
with respect to the plan of distribution
not previously disclosed in the
registration statement or any material
change to such information in the
registration statement;
(ii)
<PAGE> 15
provided, however, that (i) and (ii) do not apply if the Registration Statement
is on Form S-3, and the information required to be included in a post-effective
amendment is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each post- effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(iii)
<PAGE> 16
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 Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of San Diego, State of California, on
September 25, 1996.
WESTERN WATER COMPANY
By /s/ PETER L. JENSEN
--------------------------------------
Peter L. Jensen, President
Pursuant to the requirements of the Securities Act of 1933,
Amendment No. 1 to this Registration Statement has been signed by the following
person in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ PETER L. JENSEN Director, President and Chief September 25, 1996
- ----------------------------- Executive Officer (Principal)
Peter L. Jensen Executive Officer)
/s/ MARILYN B. DREYER Chief Financial Officer and September 25, 1996
- ----------------------------- Secretary (Principal Financial
Marilyn Buseman Dreyer and Accounting Officer)
/s/ JOHN H. HUSTON Director, Vice President September 25, 1996
- -----------------------------
John H. Huston
/s/ JAY B. ABRAMSON Director September 25, 1996
- -----------------------------
Jay B. Abramson
</TABLE>
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Description Page
- ------- ----------- ------------
<S> <C>
4.1 Form of Common Stock certificate.(1)
5.1 Opinion of Troy & Gould Professional Corporation.(2)
23.1 Consent of Harlan & Boettger.
23.2 Consent of Troy & Gould Professional Corporation (contained in
Exhibit 5.1).
99 Agreement for Sale of Water Rights and Option to Sell Water
Rights, dated July 25, 1996, between the Company and Golden
West.(2)
</TABLE>
- --------------
(1) Previously filed as Exhibit 4.1 to the Company's Form 10 filed August 9,
1990, (and incorporated herein by reference).
(2) Previously filed as an exhibit to this Registration Statement.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of Western Water Company:
We consent to the use of our report incorporated herein by reference and to the
reference of our firm under the heading "Experts" in the Prospectus included in
the attached Pre-Effective Amendment No. 1 to Form S-3.
Harlan & Boettger
San Diego, California
September 25, 1996
