DEFA14A: Additional definitive proxy soliciting materials and Rule 14(a)(12) material
Published on April 13, 2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Filed by a Party other than the Registrant o
Check the appropriate box:
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
o | Definitive Proxy Statement | |
þ | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
California Water Service Group
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þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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April 12,
2007
Dear Fellow Shareholder:
Attached for your information are updated pages from our proxy
statement that was mailed to you on March 20, 2007. The
first table included herein, Summary Compensation, was modified
so the total (column J) is correctly computed. The second
table included herein, Director Compensation, was modified so
the total (column H) is correctly computed. Lastly, the
section Relationship with Independent Registered Public
Accounting Firm, was modified to reflect accrued audit
fees (versus paid) for the annual audit and it separately
discloses fees associated with the Companys registration
statement and stock offering during 2006.
This information is being provided to supplement and correct our
annual proxy statement dated March 20, 2007. In the event
you want to change or revoke your vote or any proxy that you
have granted, please refer to the proxy statement for
instructions.
Sincerely,
Lynne P.
McGhee
Acting Corporate Secretary
Acting Corporate Secretary
Summary
Compensation Table
The table below summarizes the total compensation paid or earned
by our Chief Executive Officer, Chief Financial Officer and the
four most highly compensated executive officers of the Group for
the fiscal year ended December 31, 2006.
(h) |
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Change in Pension |
||||||||||||||||||||||||||||||||||||
Value and |
||||||||||||||||||||||||||||||||||||
(g) |
Nonqualified |
|||||||||||||||||||||||||||||||||||
Non-Equity |
Deferred |
(i) |
||||||||||||||||||||||||||||||||||
(a) |
(c) |
(d) |
(e) |
(f) |
Incentive Plan |
Compensation |
All Other |
(j) |
||||||||||||||||||||||||||||
Name and Principal |
(b) |
Salary |
Bonus |
Stock Awards |
Option Grants |
Compensation |
Earnings |
Compensation |
Total |
|||||||||||||||||||||||||||
Position
|
Year | ($) | ($)(1) | ($)(2) | ($)(2) | ($) | ($)(3) | ($)(4) | ($) | |||||||||||||||||||||||||||
Peter C. Nelson
|
2006 | $ | 676,500 | (5) | 0 | $ | 14,749 | $ | 22,081 | 0 | $ | 522,752 | $ | 27,274 | $ | 1,263,356 | ||||||||||||||||||||
President
and Chief Executive Officer
|
||||||||||||||||||||||||||||||||||||
Robert W. Foy
|
2006 | $ | 344,500 | (6) | 0 | $ | 8,780 | $ | 13,246 | 0 | $ | 2,322 | (7) | $ | 26,248 | $ | 395,096 | |||||||||||||||||||
Chairman of
the Board
|
||||||||||||||||||||||||||||||||||||
Martin A. Kropelnicki
|
2006 | (8) | $ | 219,232 | (9) | 0 | $ | 1,998 | $ | 3,301 | 0 | $ | 37,534 | $ | 15,342 | $ | 277,407 | |||||||||||||||||||
Vice
President, Chief Financial Officer and
Treasurer
|
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Francis S. Ferraro
|
2006 | $ | 295,000 | (10) | 0 | $ | 2,850 | $ | 4,410 | 0 | $ | 185,598 | $ | 18,330 | $ | 506,188 | ||||||||||||||||||||
Vice
President, Regulatory
Matters and Corporate Relations
|
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Robert R. Guzzetta
|
2006 | $ | 245,000 | (11) | 0 | $ | 2,850 | $ | 4,410 | 0 | $ | 88,045 | $ | 11,305 | $ | 351,610 | ||||||||||||||||||||
Vice
President, Operations
|
(1) | The executive officers were not entitled to receive payments which would be characterized as bonus payments for the fiscal year ended December 31, 2006. | |
(2) | Amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2006, in accordance with the provisions of Statement of Financial Accounting Standards No. 123R and thus may include amounts from awards granted in and prior to 2006. Assumptions used in the calculation of these amounts are included in footnote 13 of Groups annual report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2007. | |
(3) | Amounts in this column reflect the actuarial increase in the present value of the executive officers benefits under the Groups pension plan determined using interest rate and mortality rate assumptions consistent with those used in the Groups financial statements and includes amounts which the executive officers may not currently be entitled to receive because such amounts are not vested. | |
(4) | All other compensation is comprised of 401(k) matching contributions made by Group on behalf of the executive officer and the personal use of company-provided cars. The value attributable to personal use of company-provided cars are included as compensation on the W-2 of each executive officer who receives such benefits. Each such officer is responsible for paying income tax on such amount. | |
(5) | For 2007, the Organization and Compensation Committee recommended and the board approved a $735,000 annual salary for Mr. Nelson as well as the issuance of 1,650 shares of restricted stock and 8,140 shares of stock appreciation rights. Such equity was granted on the close of business on March 6, 2007, four business days after the release of year-end results. The restricted stock vests ratably over 48 months, and the stock appreciation rights have a 10-year term and vest ratably over 48 months. | |
(6) | For 2007, the Organization and Compensation Committee recommended and the board approved a $360,500 annual salary for Mr. Foy. The Organization and Compensation Committee awarded the issuance of 665 shares of restricted stock consistent with provisions of stock grants to non-employee directors. Such equity was granted on the close of business on March 6, 2007, four business days after the release of year-end results. | |
(7) | Includes a $2,322 change in Mr. Foys pension he received as a director of Group. | |
(8) | Mr. Kropelnicki commenced employment with California Water Service Group on March 13, 2006. | |
(9) | For 2007, the Organization and Compensation Committee recommended and the board approved a $315,000 annual salary for Mr. Kropelnicki, as well as the issuance of 400 shares of restricted stock and 2,000 shares of stock appreciation rights. Such equity was granted on the close of business on March 6, 2007, four business days after the release of year-end results. The restricted stock vests ratably over 48 months, and the stock appreciation rights have a 10-year term and vest ratably over 48 months. |
(10) | For 2007, the Organization and Compensation Committee recommended and the board approved a $315,000 annual salary for Mr. Ferraro, as well as the issuance of 400 shares of restricted stock and 2,000 shares of stock appreciation rights. Such equity was granted on the close of business on March 6, 2007, four business days after the release of year-end results. The restricted stock vests ratably over 48 months, and the stock appreciation rights have a 10-year term and vest ratably over 48 months. | |
(11) | For 2007, the Organization and Compensation Committee recommended and the board approved a $262,000 annual salary for Mr. Guzzetta, as well as the issuance of 400 shares of restricted stock and 2,000 shares of stock appreciation rights. Such equity was granted on the close of business on March 6, 2007, four business days after the release of year-end results. The restricted stock vests ratably over 48 months, and the stock appreciation rights have a 10-year term and vest ratably over 48 months. |
Director
Compensation
For Fiscal Year Ended 2006
For Fiscal Year Ended 2006
Change in Pension |
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Value and |
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Nonqualified |
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Non-Equity |
Deferred |
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Fees Earned or Paid |
Incentive Plan |
Compensation |
All Other |
|||||||||||||||||||||||||
in Cash |
Stock Awards |
Option Awards |
Compensation |
Earnings |
Compensation |
Total |
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Name |
($)(1) |
($)(2) |
($) |
($) |
($)(3) |
($)(4) |
($) |
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(a)
|
(b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Douglas M. Brown
|
$ | 61,000 | $ | 23,491 | 0 | 0 | $ | 13,848 | 0 | $ | 98,339 | |||||||||||||||||
Lead director
|
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Edward D.
Harris, Jr., M.D.
|
$ | 52,004 | $ | 23,491 | 0 | 0 | $ | 2,905 | 0 | $ | 78,400 | |||||||||||||||||
Bonnie G. Hill
|
$ | 47,504 | $ | 23,491 | 0 | 0 | $ | 11,317 | 0 | $ | 82,312 | |||||||||||||||||
David N. Kennedy
|
$ | 50,504 | $ | 23,491 | 0 | 0 | $ | 15,504 | 0 | $ | 89,499 | |||||||||||||||||
Richard P. Magnuson
|
$ | 65,504 | $ | 23,491 | 0 | 0 | $ | 2,233 | 0 | $ | 91,228 | |||||||||||||||||
Linda R. Meier
|
$ | 53,504 | $ | 23,491 | 0 | 0 | $ | 1,610 | 0 | $ | 78,605 | |||||||||||||||||
George A. Vera
|
$ | 68,000 | $ | 23,491 | 0 | 0 | $ | 10,812 | 0 | $ | 102,303 |
(1) | In 2006, each director received an annual retainer of $23,500. The Audit Committee Chair, Mr. Vera, is paid an additional retainer of $8,500. | |
(2) | Amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2006, in accordance with the provisions of Statement of Financial Accounting Standards No. 123R and thus may include amounts from awards granted in and prior to 2006. Assumptions used in the calculation of these amounts are included in footnote 13 of Groups annual report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2007. | |
(3) | Increase in present value of accumulated benefit in 2006. Change in pension value for directors also includes any change in Senior Executive Retirement Plan (SERP) benefit for 2006. | |
(4) | Any current director who retires after serving on the Board for a total of five or more years will receive a retirement benefit equivalent to $22,000 per year. This benefit will be paid for the number of years the director served on the Board, up to 10 years. Retirement benefit payments will be made monthly at the same time as retainer payments are made to active directors. In December 2005, the Director Retirement Plan was cancelled for future directors. No amounts were paid to directors under this program in fiscal 2006. |
RELATIONSHIP
WITH THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected KPMG LLP to serve as the
Groups independent registered public accounting firm for
the year ending December 31, 2007. The Committees
selection of KPMG LLP as independent registered public
accounting firm is submitted for ratification by vote of the
stockholders at their Annual Meeting.
Category of Services
|
2005 | 2006 | ||||||
Audit Fees(1)
|
$ | 861,000 | $ | 763,500 | ||||
Audit-Related Fees(2)
|
$ | 0 | $ | 0 | ||||
Tax Fees(3)
|
$ | 0 | $ | 0 | ||||
Subtotal
|
$ | 861,000 | $ | 763,500 | ||||
All Other Fees(4)
|
$ | 0 | $ | 143,000 |
(1) | The audit services included audits of California Water Service Group and California Water Service Company annual financial statements for the year ended December 31, 2005 and 2006, and quarterly reviews of the Groups interim financial statements. Included for the year ended December 31, 2006, fees are related to the audit of managements assessment of internal control over financial reporting and an audit of the effectiveness of internal control over financial reporting. | |
(2) | Services include assurance and related services by the auditor that are reasonably related to the performance of the audit or review of the Groups financial statements and are not reported under Audit Fees. | |
(3) | Services include tax compliance, tax advice, and tax planning. | |
(4) | Services include other services (and products) provided by the independent registered public accounting firm, other than the services reported above in this table. For 2006, it includes fees paid for work associated with the companys filing of a registration statement and stock offering. |
Fees reported in the above table relate to that fiscal year and
were incurred either during the fiscal year or in the quarter
following the fiscal year end.
All non-audit services provided by the independent registered
public accounting firm are subject to preapproval by the Audit
Committee, as described in the Audit Committee Charter, which is
available on the Groups website at
http://www.calwatergroup.com.