AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT NO. 1 ("Amendment No. 1") to that certain Agreement
and Plan of Reorganization among the parties hereto and dated as of November
13, 1998 (the "Agreement") is made and entered into as of the 22nd day of
March, 1999, by and among CALIFORNIA WATER SERVICE GROUP, a California
Corporation ("CWSG"), CALIFORNIA WATER SERVICE COMPANY, a California
corporation and wholly owned subsidiary of CWSG ("Water Company"), and
XXXXXXXXX SERVICES CORPORATION, a California corporation ("DSC").
WHEREAS, DSC has received an unsolicited offer from another publicly
owned water utility and has deemed it to be a Superior Offer, and, in
response thereto, CWSG has determined to increase its bid; and
WHEREAS, the above parties deem it to be advisable and in the best
interest of their respective shareholders to enter into this Amendment No. 1;
and
WHEREAS, the Boards of Directors of CWSG, Water Company and DSC have
approved the Agreement and the transactions contemplated thereby and have
authorized the officers of the respective parties to take such further
actions as they deem necessary or advisable to carry out the provisions of
the Agreement;
NOW, THEREFORE, on the basis of the foregoing recitals and in
consideration of the mutual covenants, agreements, representations and
warranties contained herein, the parties hereto do covenant and agree as
follows:
1. Unless otherwise set forth herein, capitalized terms have the
meaning set forth in the Agreement.
2. Amend Article I ("DEFINITIONS") of the Agreement to add the
following definitions:
"Base Numerator" has the meaning set forth in Section 2.3(a).
"Denominator" has the meaning set forth in Section 2.3(a).
"Market Price" has the meaning set forth in Section 2.3(a).
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3. Amend Section 2.3, subdivision (a) to read:
2.3 CONVERSION OF DSC STOCK. (a) On the Effective Time of the
Merger, pursuant to the Agreement of Merger, each outstanding share of DSC
Stock excluding, if any, DSC Perfected Dissenting Shares or shares of DSC
Stock held by CWSG shall, without any further action on the part of DSC or
the holders of any such shares, be converted into the right to receive a
number of shares of CWSG Stock determined as set forth below (the "Conversion
Ratio"). The Conversion Ratio shall be equal to $33.75 (the "Base Numerator")
divided by either (i) the Market Price of CWSG Stock if the Market Price of
CWSG Stock is no greater than $27.00 and no less than $22.65, (ii) $27.00 if
the Market Price of CWSG Stock is greater than $27.00, in which case the
Conversion Ratio shall equal 1.25, or (iii) $22.65, if the price of CWSG
Stock is less than $22.65, in which case the Conversion Ratio shall be 1.49
(as applicable, the "Denominator"). The "Market Price" of CWSG Stock means
the average closing price per share of CWSG Stock on the NYSE for each of the
twenty consecutive trading days prior to and including the fifth trading day
prior to the Closing Date.
4. Amend Section 9.1 as follows:
9.1. Shareholder Approval. The Agreement and the transactions
contemplated hereby shall have received all requisite approvals of the
shareholders of DSC no later than the later of (i) May 7, 1999 or (i) 45 days
after the effective date of the Registration Statement, on S-4 filed with the
SEC on January 28, 1999, and all amendments thereafter.
5. In all other respects the Agreement is hereby ratified and affirmed.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties to this Amendment No. 1 have duly
executed this Amendment No. 1 as of the day and year first above written.
CALIFORNIA WATER SERVICE GROUP,
a California corporation
By: /s/
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Xxxxxx X. Xxx
Chairman of the Board
By: /s/
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Xxxxx X. Xxxxxx
President & Chief Executive Officer
CALIFORNIA WATER SERVICE COMPANY,
a California corporation
By: /s/
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Xxxxxx X. Xxx
Chairman of the Board
By: /s/
---------------------------------------------
Xxxxx X. Xxxxxx
President & Chief Executive Officer
XXXXXXXXX SERVICES CORPORATION,
a California corporation
By: /s/
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Xxxxx X. Xxxxx
Chairman of the Board and
President & Chief Executive Officer
By: /s/
---------------------------------------------
Xxxx X. Xxxxxx
Chief Financial Officer
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