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PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
SJW Corp.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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SJW CORP.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 19, 2001
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To The Shareholders:
The Annual Meeting of the Shareholders of SJW Corp., a California
corporation, will be held as provided in the By-Laws on Thursday, July 19, 2001
at 10 o'clock in the morning at the principal executive offices of the
Corporation, 374 West Santa Clara Street, San Jose, California, 95113 for the
following purposes:
1. To amend the By-Laws of the Corporation to increase the possible number
of directors from nine to eleven, and to set the number of directors at
ten directors.
2. To elect a Board of Directors of the Corporation to serve for the
ensuing year.
3. To consider and act upon a proposal to ratify the selection of KPMG LLP
as independent auditors of the Corporation for 2001.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors' nominees for directors are set forth in the
enclosed proxy statement.
The close of business on Monday, June 11, 2001 has been fixed as the record
date for the determination of shareholders entitled to vote at the annual
meeting or any adjournment thereof. If you are unable to be present, please
mark, date and sign the enclosed proxy and return it in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
Robert A. Loehr, Secretary
San Jose, California
June 15, 2001
PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY
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TABLE OF CONTENTS
2001 SJW CORP. PROXY STATEMENT
PAGE
----
Table of Contents........................................... i
Solicitation of Proxy and Revocability, Voting Securities... 1
Termination of Merger with American Water Works Company,
Inc. ..................................................... 2
Increase in Number of Directors (PROXY PROPOSAL ITEM 1)..... 2
Election of Directors (PROXY PROPOSAL ITEM 2)............... 4
Security Ownership of Certain Beneficial Owners and
Management................................................ 5
Section 16(A) Beneficial Ownership Compliance............... 6
Executive Compensation...................................... 7
Compensation Committee Interlocks and Insider
Participation............................................. 8
Certain Relationships and Related Transactions.............. 8
Ratification of Approval of Independent Auditors (PROXY
PROPOSAL ITEM 3).......................................... 9
Board Implements SEC Audit Committee Recommendations........ 9
Fees Billed To The Corporation By KPMG LLP During Fiscal
Year Ended December 31, 2000.............................. 9
Report of the Audit Committee............................... 10
Report of the Executive Compensation Committee.............. 10
Stock Performance Graph..................................... 11
General Information......................................... 12
Shareholder Proposals....................................... 12
Appendix A -- Audit Committee Charter....................... A-1
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PROXY STATEMENT
SOLICITATION OF PROXY AND REVOCABILITY,
VOTING SECURITIES
The enclosed proxy is solicited on behalf of the Board of Directors of SJW
Corp., a California corporation (the "Corporation"), for use at the Annual
Meeting of Shareholders to be held on July 19, 2001 at 10 o'clock in the morning
at the principal executive offices of the Corporation, 374 West Santa Clara
Street, San Jose, California 95113, or at any adjournments or postponements
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders. Only shareholders of record at the close of business on June
11, 2001 will be entitled to vote.
This proxy statement and the accompanying form of proxy are being mailed to
the Corporation's shareholders on or about June 22, 2001. The Corporation's
Annual Report, including all required financial statements, for the year ended
December 31, 2000 has previously been distributed to shareholders of record as
of March 20, 2001.
As of the close of business on June 11, 2001, the Corporation had 3,045,147
common shares of issued and outstanding voting securities. Each common share is
entitled to 1 vote. Every shareholder, or his proxy (including the persons named
in the enclosed proxy), entitled to vote upon the election of directors may
cumulate his votes and give one candidate a number of votes equal to the number
of directors to be elected or distribute his votes on the same principle among
as many candidates as he thinks fit. No shareholder or proxy, however, shall be
entitled to cumulate votes unless such candidate or candidates have been placed
in nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination.
Discretionary authority to cumulate votes in the event that cumulative voting is
invoked by any shareholder is solicited by the Board of Directors. The nine
nominees receiving the highest number of votes will be elected directors.
A majority of the Corporation's common shares whether present in person or
represented by proxy shall constitute a quorum for purposes of the Annual
Meeting. In all matters other than the election of directors, the affirmative
vote of a majority of the shares present in person or represented by proxy at
the Annual Meeting and entitled to vote on the subject matter shall be required.
Directors may be elected by a plurality of the votes present in person pursuant
to cumulative voting (as described above) or by the affirmative vote of a
majority of the shares present in person or represented by proxy without
cumulative voting. Abstentions and broker non-votes are each included in the
number of shares present for quorum purposes. Abstentions, which may be
specified on all proposals other than the election of directors, are counted in
tabulations of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
The shares represented by duly executed proxies will be voted in accordance
with the directions given by the shareholders by means of the ballot on the
proxy. All shares represented by duly executed proxies will be voted "FOR" the
election as directors of each of the nominees named herein unless the proxy is
marked to indicate that such authority is withheld. In the event any of said
nominees should be unavailable to serve as a director, it is the intention of
the persons named in the enclosed proxy to vote "FOR" the election of such other
person or persons as the Board of Directors may designate as a nominee. With
respect to the ratification of the selection of the independent auditors, all
shares represented by duly executed proxies will be voted "FOR" the proposal if
no choice is indicated on the proxy.
Any person giving a proxy has the power to revoke it at any time before its
exercise. It may be revoked by filing an instrument of revocation with the
Corporation or by the presentation to the meeting of a duly executed proxy
bearing a later date. It may also be revoked by attending the meeting and voting
in person.
The Corporation will bear the entire cost of preparing, assembling,
printing and mailing the proxy statement, the proxies and any additional
materials that may be prepared by the Corporation and furnished to shareholders.
The solicitation of proxies will be made by mail and may also be made by
telephone or other
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electronic means, or personally by directors, officers and regular employees of
the Corporation who will receive no extra compensation for such services.
The Annual Report of the Corporation for the fiscal year ended December 31,
2000 is enclosed with the mailing of the Notice of Annual Meeting and Proxy
Statement to all shareholders entitled to notice of and to vote at the Annual
Meeting. The Annual Report is not incorporated into this Proxy Statement and is
not considered proxy-soliciting material.
TERMINATION OF MERGER
WITH AMERICAN WATER WORKS COMPANY, INC.
On October 28, 1999 SJW Corp. and American Water Works Company, Inc.
(American Water Works) entered into an Agreement and Plan of Merger. SJW Corp.
and American Water Works filed a joint application with the California Public
Utilities Commission (CPUC) requesting approval of the merger. The Agreement and
Plan of Merger provided for 18 months, until April 28, 2001, to obtain
regulatory approval of the merger.
In August 2000, the CPUC established its first schedule for consideration
of the proposed merger. The CPUC timeline contemplated a decision in April 2001.
In October 2000 the CPUC's Office of Ratepayer Advocates issued its report
opposing the merger and questioning the extent of benefits to ratepayers. The
CPUC began formal hearings on the application in November 2000, but then
postponed them in December 2000. In February 2001, the CPUC issued a revised
schedule, setting further hearing dates in late March 2001. The revised schedule
contemplated a possible CPUC decision in September 2001.
Following the CPUC announcement of the new schedule, American Water Works
advised SJW Corp. that it would terminate the merger process on April 28, 2001
because of the regulatory uncertainties and delays. It offered to consent to
mutual termination of the agreement. On March 1, 2001 SJW Corp.'s Board of
Directors decided that it would be in the best interests of the Corporation to
accept American Water Work's offer and the merger was terminated.
INCREASE IN NUMBER OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Securities and Exchange Commission (SEC) rules on the make-up of corporate
Audit Committees have changed in recent years. For example, the Audit Committee
is now required to publish its charter every three years, conduct more frequent
meetings and report directly to shareholders. The Corporation must also certify
to the SEC that all members of the Audit Committee meet new standards of
financial literacy, financial expertise and independence.
To ensure that the Audit Committee will meet the new standards without
disruption, the Board of Directors desires to add one new director and appoint
him or her to the Audit Committee. That director will be selected and appointed
based upon his or her possession of the particular financial credentials sought
by the SEC. To do so, however, the By-Laws of the Corporation must be amended to
permit ten directors. The Board of Directors asks your vote to amend section
2.2(a) of the By-Laws to permit up to eleven directors, and to amend section
2.2(c) of the By-Laws to set the number of directors at ten directors.
Should a majority of shareholders approve the increase in number of
directors, the Board at this time contemplates that Frederick R. Ulrich, Jr. of
Sherman Oaks, California will be appointed to fill the new directorship and to
serve on the Audit Committee. Mr. Ulrich's biographical information is as
follows:
Frederick R. Ulrich, Jr. Mr. Ulrich won a competitive appointment to the
United States Military Academy at West Point from the enlisted ranks of the U.S.
Army. He graduated from West Point in 1966 with a B.S. degree in Engineering.
After four years of military service, which included one year in Vietnam, he
entered Harvard Graduate School of Business Administration. Mr. Ulrich graduated
from Harvard in 1972 with a concentration in finance.
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Mr. Ulrich was a member of the corporate finance and mergers and
acquisitions departments of Morgan Stanley & Co. Incorporated in New York from
1972 until 1978 and was a member of the corporate finance department of Warburg
Paribas Becker, Inc. in Los Angeles from 1978 to 1982. During his ten years as
an investment banker, Mr. Ulrich worked on public offerings and private
placements of debt and equity securities for industrial companies, financial
institutions and foreign governments totaling billions of dollars. He also
worked on numerous corporate acquisitions and divestitures, financial advisory
and strategic assignments and extensive new business development.
In 1982, Mr. Ulrich left investment banking to pursue new ventures and
leveraged buy-outs. Between 1982 and 1986, Mr. Ulrich consulted extensively with
corporations and management teams regarding mergers and acquisitions. During
this period, Mr. Ulrich led a group of private investors in the acquisition of
Marquee Entertainment Corporation, a company that produced musical and
theatrical events for two theaters it owned and promoted national tours for
major music groups. Mr. Ulrich was also a general partner of twenty partnerships
formed to pursue new television licenses. From 1983 to 1985, Mr. Ulrich worked
with a group of private investors on the acquisition of a venture to reconfigure
and exploit technology in the ambulatory cardiac-monitoring field.
Mr. Ulrich founded Raebarn Corporation in 1986 with two partners and served
as its Chairman and Chief Executive Officer until 1995 when it was dissolved.
Raebarn was a Los Angeles merchant bank that specialized in leveraged
acquisitions. Raebarn completed the leveraged acquisition of five companies and
fifty follow on acquisitions, investitures or refinancings. Raebarn raised $1
billion of financing including almost $400 million for completed acquisitions.
Raebarn also rendered advice on financial matters and strategic planning and
assisted in starting new ventures. All of the companies financed through Raebarn
have been sold or have executed initial public offerings.
In 1994, Mr. Ulrich founded Buttonwood Capital with a partner to continue
the merchant banking activities of Raebarn. Until 1998, Buttonwood Capital was
an affiliate of Rosecliff, Inc., a New York based investment firm that has $150
million of capital available to invest in leveraged acquisitions. Buttonwood
completed three leveraged acquisition transactions with Rosecliff, which
involved total financing of approximately $160 million. All of these companies
have been sold or merged with public companies.
Overall, $95 million of equity was invested in Raebarn and Buttonwood
Capital deals and investors and principals realized $487 million. The average
life of these investments was 3.7 years and an IRR of 44.5% was generated.
In 2000, Mr. Ulrich and two partners formed Buttonwood Capital Group to
focus on leveraged build-ups of manufacturing companies with world-class
managers and prominent investment funds. Buttonwood Capital Group currently has
eight employees. Since formation, Buttonwood has entered into partnership with
Whitney and Co. (an investment fund with $5 billion in assets) to build a series
of companies that focus on outsourced manufacturing trends. Other strategies are
in the process of being developed and auctioned to investment funds.
Mr. Ulrich is a director of the Oz Entertainment Corporation and Affinity
Corporation. He has served as the Chairman of the Board of Ames Company and as a
director of Pinnacle Automation, Paul Sebastian, Data Documents, The Holophane
Company, Fresh Point, and Industrial Bank. Mr. Ulrich has also served as chief
financial officer for three privately held entities.
Mr. Ulrich is an Advisory Director of the Entrepreneurial Association at
the John E. Anderson Graduate School of Management at UCLA. He is also a
director of the Center Theater Group, which operates the Ahmanson and Taper
theaters, and is chairman of its Finance Committee and a member of its Executive
Committee.
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ELECTION OF DIRECTORS
(ITEM 2 ON PROXY CARD)
At the Annual Meeting nine directors (constituting the entire Board) are to
be elected to hold office until the next annual meeting of the Corporation's
shareholders and until a successor for such director is elected and qualified,
or until the death, resignation or removal of such director.
If the shareholders approve Item 1 above, the Board of Directors
contemplates filling the new directorship with the appointment of Mr. Frederick
R. Ulrich, Jr. Mr. Ulrich would hold his appointed position until the Annual
Meeting of Shareholders in April 2002 at which time he would first stand for
election.
A brief biography of each nominee (including the nominee's business
experience during the past 5 years) is set forth below. All nominees are also
directors of San Jose Water Company, a wholly owned public utility water
corporation subsidiary of the Corporation, and of SJW Land Company, a wholly
owned real estate development company subsidiary of the Corporation. It is the
Corporation's intention to appoint all persons elected as directors of the
Corporation at the Annual Meeting to be directors of San Jose Water Company and
SJW Land Company for a concurrent term.
Mark L. Cali, Attorney at Law, with the firm Clark, Cali and Negranti, LLP
since December 1996. He was with the firm Bledsoe, Cathcart, Diestel,
Livingston, and Pedersen from October 1994 through November 1996. Mr. Cali, age
35, has served as a director of SJW Corp., San Jose Water Company and SJW Land
Company since 1992.
J. Philip DiNapoli, Attorney at Law, Chairman of Comerica California Inc.
(California bank holding company). He serves as a director of Comerica, Inc.
(bank holding company) and Comerica Bank-California (bank). He served as
Chairman of Citation Insurance Company (Workers Compensation specialty carrier)
until November 20, 1996. He is also the owner of DiNapoli Development Company
(real estate development company). Mr. DiNapoli, age 61, is a member of the
Audit Committee and has served as a director of SJW Corp., San Jose Water
Company and SJW Land Company since 1989.
Drew Gibson, Principal of Gibson Speno LLC (real estate development and
investment company) and Chairman of the Board of the Gibson Speno Management
Company, a real estate management company. He has served as a director of
Comerica Bank-California, a California bank holding company, and is currently a
director of Celluphone, Inc., a Los Angeles based cellular agent. Mr. Gibson,
age 58, is a member of the Audit and Executive Compensation Committees and has
served as a director of SJW Corp., San Jose Water Company and SJW Land Company
since 1986.
Ronald R. James, President Emeritus of the San Jose Chamber of Commerce
(business promotion organization), formerly President and Chief Executive
Officer of the Chamber. Mr. James, age 72, is a member of the Audit and
Executive Compensation Committees and has served as a director of San Jose Water
Company since 1974, and of SJW Corp. and SJW Land Company since 1985.
George E. Moss, Vice Chairman of the Board of Roscoe Moss Manufacturing
Company (manufacturer of steel water pipe and well casing). Mr. Moss was
formerly President of the Roscoe Moss Company (holding company). Mr. Moss, age
69, is a member of the Executive and Executive Compensation Committees and has
served as a director of San Jose Water Company since 1984, and of SJW Corp. and
SJW Land Company since 1985.
Roscoe Moss, Jr., Chairman of the Board of Roscoe Moss Manufacturing
Company (manufacturer of steel water pipe and well casing). Mr. Moss was
formerly Chairman of the Board of Roscoe Moss Company (holding company). Mr.
Moss, age 71, is a member of the Executive and Executive Compensation Committees
and has served as a director of San Jose Water Company since 1980, and of SJW
Corp. and SJW Land Company since 1985.
W. R. Roth, President and Chief Executive Officer of the Corporation. Prior
to becoming Chief Executive Officer in 1999, he was President from October 1996,
Vice President from April 1992 until October 1996 and Chief Financial Officer
and Treasurer of the Corporation from January 1990 until October 1996. He has
been President of San Jose Water Company since October 1994 and Chief Executive
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Officer since October 1996. Mr. Roth, age 48, has served as a director of SJW
Corp., San Jose Water Company and SJW Land Company since 1994.
Charles J. Toeniskoetter, President of Toeniskoetter & Breeding Inc.
(construction and real estate development company). He also serves as a director
of Redwood Trust, Inc. (real estate investment trust). Mr. Toeniskoetter, age
56, serves as a member of the Audit Committee, and has served as a director of
SJW Corp., San Jose Water Company and SJW Land Company since 1991.
J. W. Weinhardt, Chairman of the Corporation. Prior to becoming Chairman in
October 1996 he was President and Chairman of the Board of San Jose Water
Company. Prior to his election to Chairman of the Board in October 1994, he was
President of the San Jose Water Company. He also served as Chief Executive
Officer of the San Jose Water Company until October 1996. Mr. Weinhardt, age 69,
is a member of the Executive Committee and has served as a director of San Jose
Water Company since 1975, and of SJW Corp. and SJW Land Company since 1985.
Nominees Roscoe Moss, Jr. and George Moss are brothers. With that
exception, no nominee has any family relationship with any other nominee or with
any executive officer.
In the unanticipated event that a nominee is unable or declines to serve as
a director at the time of the Annual Meeting, proxies will be voted for any
nominee named by the present Board of Directors to fill the vacancy. As of the
date of this Proxy Statement, the Corporation is not aware of any nominee who is
unable or will decline to serve as a director.
No nominee is or has been employed in his principal occupation or
employment during the past 5 years by a corporation or other organization that
is a parent, subsidiary or other affiliate of the Corporation, other than Mr.
Weinhardt and Mr. Roth whose employment relationship with San Jose Water Company
is described above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 2000, certain
information concerning ownership of shares of SJW Corp. common stock by each
director of the Corporation, each of the Chief Executive Officer and the four
most highly compensated executive officers of San Jose Water Company for the
year ended December 31, 2000 and all directors and executive officers of SJW
Corp. as a group. Unless otherwise indicated, the beneficial ownership consists
of sole voting and investment power with respect to the shares indicated, except
to the extent that authority is shared by spouses under applicable law.
SHARES BENEFICIALLY OWNED
NAME DIRECTLY OR INDIRECTLY PERCENT OF CLASS
---- ------------------------- ----------------
Directors:
Mark L. Cali.......................................... 4,321
J. Philip DiNapoli.................................... 600
Drew Gibson........................................... 1,000
Ronald R. James....................................... 200
George E. Moss(1)(2).................................. 497,812 16.3%
Roscoe Moss, Jr.(2)................................... 523,878 17.2%
W. R. Roth............................................ 6,350
Charles J. Toeniskoetter.............................. 300
J. W. Weinhardt....................................... 7,250
Officers
G. J. Belhumeur....................................... 918
R. J. Balocco......................................... 762
R. J. Pardini......................................... 514
All directors and executive officers as a group (18
individuals).......................................... 1,044,755 34.3%
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(1) Includes 119,139 shares held by the John Kimberly Moss Trust for which Mr.
George Moss is trustee or co-trustee.
(2) The address for George Moss and Roscoe Moss, Jr. is 4360 Worth Street, Los
Angeles, CA 90063. Information with respect to beneficial ownership is based
upon reports furnished by the officers and directors.
Gabelli Funds, Inc. et al. reported to the Securities and Exchange
Commission that effective March 22, 2000 it owned or controlled 198,300 shares
of common stock, or 6.51%.
The Corporation and San Jose Water Company pay their non-employee directors
annual retainers of $6,000 and $16,000, respectively. In addition, all directors
of the Corporation and San Jose Water Company are paid $1,000 for each Board or
committee meeting attended. SJW Land Company directors are paid $500 for each
Board meeting attended.
Upon ceasing to serve as a director of the Corporation or San Jose Water
Company, as the case may be, directors or their estate are currently entitled to
receive from the respective corporations a benefit equal to the annual retainer
paid to its directors. This benefit will be paid for the number of years the
director served on the board up to a maximum of 10 years.
The Board of Directors has an Executive Committee, an Executive
Compensation Committee and an Audit Committee. During 2000 there were 4 regular
meetings of the Board of Directors, 3 regular meetings and 2 telephone meetings
of the Audit Committee and 1 meeting of the Executive Compensation Committee.
The Executive Compensation Committee reviews and recommends to the Board of
Directors compensation for executive officers of the San Jose Water Company.
There is no standing nominating committee. All directors attended 100% of all
Board and applicable committee meetings, except that Roscoe Moss, Jr. missed one
set of Board meetings, J. Philip DiNapoli missed two sets of Board meetings and
Drew Gibson missed one Audit Committee meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the executive
officers and directors of the Corporation, and persons who own more than ten
percent of a registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the SEC and the American
Stock Exchange. Officers, directors and greater than ten percent shareholders
are required by SEC regulation to furnish the Corporation with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such reports received by it,
and written representations from certain reporting persons that no other reports
were required during 2000, the Corporation believes that during 2000 all
officers, directors and greater than ten percent beneficial owners were in
compliance with all Section 16(a) filing requirements.
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EXECUTIVE COMPENSATION
The following table contains certain summary information regarding the cash
compensation paid by the Corporation and its subsidiaries for each of the
corporations' last three completed fiscal years to the Chairman and Chief
Executive Officer and to the four other highest paid executive officers whose
total annual salary and bonus exceeded $100,000.
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION(1)
---------------------------------------- -------------------------------------------
OTHER AWARDS PAYOUTS ALL
ANNUAL RESTRICTED --------- OTHER
NAME AND PRINCIPAL COMPEN- STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARD(S) SAR'S PAYOUTS SATION
------------------ ---- -------- ---------- -------- ---------- -------- --------- -------
J. W. Weinhardt........... 2001 $1,250,000(2)
Chairman of 2000 $150,000 $16,800(3)
SJW Corp., San Jose 1999 $147,596 $19,404(3)
Water Company, and 1998 $126,442 $16,793(3)
SJW Land Company
W. R. Roth................ 2001 $1,250,000(2)
President and CEO of 2000 $395,000 $17,569(3)
SJW Corp., President 1999 $347,596 $19,900(3)
and Chief Executive 1998 $324,038 $17,800(3)
Officer of San Jose
Water Company
G. J. Belhumeur........... 2001 $ 170,500(2)
Vice President 2000 $170,500 $ 6,800(4)
San Jose Water Company 1999 $158,557 $ 6,342(4)
1998 $148,558 $ 4,289(4)
R. J. Pardini............. 2001 $ 160,500(2)
Vice President 2000 $160,500 $ 6,420(4)
San Jose Water Company 1999 $148,558 $ 5,942(4)
1998 $138,577 $ 4,002(4)
R. S. Yoo................. 2001 $ 160,500(2)
Vice President 2000 $160,500 $ 6,420(4)
San Jose Water Company 1999 $148,077 $ 5,923(4)
1998 $133,654 $ 3,860(4)
R. J. Balocco............. 2001 $ 160,500(2)
Vice President 2000 159,450 $ 6,131(4)
San Jose Water Company 1999 148,558 $ 5,942(4)
1998 138,173 $ 4,145(4)
---------------
(1) Long Term Compensation Award or Payout Plans are not provided to employees
of the Corporation or its subsidiaries.
(2) Represents one-time payment of retention bonus in 2001.
(3) Represents matching contributions paid by the San Jose Water Company under
its Salary Deferral Plan of $4,800 in 1998, $6,400 in 1999 and $6,800 in
2000. Mr. Weinhardt received deferred compensation of $3,793 in 1998, $5,904
in 1999 and $6,000 in 2000. The balances are amounts received for Directors
fees.
(4) Represents matching contributions paid by the San Jose Water Company under
its Salary Deferral Plan.
The foregoing table does not include benefits provided under San Jose Water
Company's Retirement Plan (the "Retirement Plan"), Supplemental Executive
Retirement Plan (SERP), Transaction Incentive Plan or Severance Plan.
All employees of San Jose Water Company participate in the Retirement Plan.
Although subject to adjustment to comply with Internal Revenue Code
requirements, the regular benefit formula of the plan provides for a monthly
retirement benefit equal to 1.6% of the employee's average monthly compensation
for each year of credited service. Compensation means the employee's regular
salary prior to reduction under the Deferral Plan. The plan also contains a
minimum benefit formula which, although also subject to adjustment, provides for
a monthly retirement benefit equal to up to 55% of the employee's average
compensation for the highest 36 consecutive months of compensation, less 50% of
primary social security benefits. This minimum monthly benefit is reduced by
1/30 for each year of credited service less than 30 years. Benefits vest after 5
years of service or at age 65 and there are provisions for early retirement. In
1992 the Board of Directors of San Jose
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Water Company adopted a nonqualified, unfunded Supplemental Executive Retirement
Plan (SERP) for certain executives and officers of the San Jose Water Company.
It is intended that the SERP in combination with the Retirement Plan will
provide the covered executives and officers with a total retirement benefit
commensurate with executives and officers of other comparable private water
utilities. A minimum of ten years of service is required for vesting in the
SERP.
The amounts contributed to the Retirement Plan by San Jose Water Company to
fund retirement benefits with respect to any individual employee cannot be
readily ascertained. The following table sets forth combined estimated
retirement benefits, payable as a straight life annuity, assuming retirement at
age 65 using the minimum benefit formula and the SERP:
PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------
AVERAGE COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
-------------------- -------- -------- -------- -------- --------
$150,000.......................... $ 49,500 $ 66,000 $ 78,000 $ 90,000 $ 90,000
$175,000.......................... $ 57,750 $ 77,000 $ 91,000 $105,000 $105,000
$200,000.......................... $ 66,000 $ 88,000 $104,000 $120,000 $120,000
$225,000.......................... $ 74,250 $ 99,000 $117,000 $135,000 $135,000
$250,000.......................... $ 82,500 $110,000 $130,000 $150,000 $150,000
$275,000.......................... $ 90,750 $121,000 $143,000 $165,000 $165,000
$350,000(1)....................... $192,500 $192,500 $192,500 $210,000 $210,000
$375,000(1)....................... $206,250 $206,250 $206,250 $225,000 $225,000
$400,000(1)....................... $220,000 $220,000 $220,000 $240,000 $240,000
$425,000(1)....................... $233,750 $233,750 $233,750 $255,000 $255,000
Note (1) applies to Mr. Roth only. The number of years of credited service
and covered compensation at December 31, 2000 is for Mr. Roth, 11 years,
$395,000; Mr. Belhumeur, 30 years, $170,500; Mr. Pardini, 13 years, $160,500;
Mr. Yoo, 15 years, $160,500, and Mr. Balocco, 18 years, $159,450. No additional
benefits are accrued at the present time. Applicable laws and regulations may
limit the amounts, which may actually be paid. Mr. Roth shall be entitled to a
retirement benefit hereunder, payable to him on a monthly basis, at the later of
his attainment of fifty-five (55) years of age or his actual retirement in an
amount equal to the greater of (i) the benefit to which he would otherwise be
entitled under the SERP or (ii) fifty-five percent (55%) of the highest average
monthly compensation for 36 calendar months during Mr. Roth's employment. Mr.
Weinhardt, effective January 1, 1997, commenced receiving benefits under the
Retirement Plan and SERP.
COMPENSATION COMMITTEE INTERLOCKS
AND
INSIDER PARTICIPATION
No member of the Executive Compensation Committee was at any time during
the 2000 fiscal year or at any other time an officer or employee of the
Corporation or any of its subsidiaries. No executive officer of the Corporation
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as a member of the
Corporation's Board of Directors or Executive Compensation Committee. The
following non-employee directors served on the Executive Compensation Committee
during fiscal 2000: Drew Gibson, Ronald R. James, Roscoe Moss, Jr. and George E.
Moss.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Charles J. Toeniskoetter, President and Chief Executive Officer of
Toeniskoetter and Breeding, Inc., serves as a member of the Audit Committee and
has served as a director of SJW Corp., San Jose Water
8
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Company and SJW Land Company since 1991. Mr. Toeniskoetter has an ownership
interest in excess of 10% of Toeniskoetter and Breeding, Inc., a construction
and real estate development company. In 1999, SJW Land Company and Toeniskoetter
& Breeding, Inc. formed a limited partnership whose sole purpose was to
construct and manage a new office building at 450 West Santa Clara Street in San
Jose, California. The building, which consists of 22,080 square feet of office
space, was completed in June 2000 and was subsequently leased to an
international real estate firm. The limited partnership engaged Toeniskoetter &
Breeding, Inc. Construction to construct the building shell for approximately
$2,300,000. The partnership also paid Toeniskoetter & Breeding, Inc. a developer
fee of $133,000 in 2000 in connection with the construction.
RATIFICATION OF APPROVAL OF INDEPENDENT AUDITORS
(ITEM 3 ON PROXY CARD)
The Audit Committee of the Board of Directors has recommended the services
of KPMG LLP as independent auditors for the Corporation. The Board of Directors
recommends a vote "FOR" the adoption of the proposal to ratify the selection of
KPMG LLP, certified public accountants, to audit the accounts of the Corporation
for the year 2001.
Representatives of KPMG LLP are expected to be present at the Annual
Meeting. They have been offered the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
BOARD IMPLEMENTS SEC AUDIT COMMITTEE RECOMMENDATIONS
The Corporation's Audit Committee reviews the results of the annual audit,
the financial statements, any supplemental management information submitted by
the auditors, and internal accounting and control procedures. It also recommends
the selection of auditors to the Corporation's shareholders.
The Securities and Exchange Commission recently promulgated new
requirements for Audit Committee composition and practice. Among those
requirements are strict tests for independence of audit committee members,
adoption of a formal audit committee charter, and an annual report to
shareholders on Audit Committee activities. Every three years, the audit
committee charter must be included in the annual report to shareholders. With
the addition of the tenth director, the Board will have adopted all requirements
and will certify such compliance to the Securities and Exchange Commission. A
copy of the Audit Committee Charter as adopted by the full Board at its regular
meeting in July, 2000 is attached as Appendix A to this proxy statement.
FEES BILLED TO THE CORPORATION BY KPMG LLP DURING FISCAL YEAR ENDED DECEMBER 31,
2000
Audit Fees: The aggregate fees billed by KPMG LLP for professional services
rendered for the audit of the Corporation's annual financial statements for the
fiscal year ended December 31, 2000 and the reviews of the financial statements
included in the Corporation's quarterly reports on Form 10-Q for that year
totaled $116,000.
Financial Information Systems Design and Implementation Fees: The
Corporation did not engage KPMG LLP to provide advice to the Corporation
regarding financial information systems design and implementation during fiscal
year ended December 31, 2000.
All Other Fees: The aggregate fees billed by KPMG LLP during the fiscal
year ended December 31, 2000 for professional services rendered to the
Corporation other than as stated under the captions Audit Fees and Financial
Information Systems Design and Implementation Fees above totaled $48,000.
The Audit Committee has considered whether the provision of services
described in the preceding two paragraphs is compatible with maintaining KPMG
LLP's independence.
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13
REPORT OF THE AUDIT COMMITTEE
"In connection with the December 31, 2000 financial statements, the Audit
Committee (1) reviewed and discussed the audited financial statements with
management (2) discussed with the auditors the matters required by Statement on
Auditing Standards No. 61 and (3) received and discussed with the auditors the
maters required by Independence Standards Board Standard No. 1. Based upon these
reviews and discussions, the audit committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-K for the fiscal year ending December 31, 2000 filed with the
Securities and Exchange Commission."
AUDIT COMMITTEE
Ronald R. James, Chair
J. Philip DiNapoli
Drew Gibson
Charles Toeniskoetter
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
"As members of the Executive Compensation Committee it is our duty to
review compensation levels of the executive officers of the Corporation and its
subsidiaries, and to make appropriate recommendations to the Board of Directors.
The Committee also reviews with the Board all aspects of compensation for the
Chairman J. W. Weinhardt and San Jose Water Company President and Chief
Executive Officer W. R. Roth. The Committee conducted its annual review January
25, 2001.
The compensation policy of the Corporation, as recommended by the Committee
and approved by the Board of Directors, requires that a portion of the annual
compensation of each officer relate to and must be contingent upon the long-term
total return to shareholders of the Corporation, within the constraints imposed
upon the Water Company by the regulatory process, as well as the individual
contribution of each officer. A goal of this process is to attract, develop and
retain high-quality senior management through competitive compensation.
Since January 1997 it has been the policy of the Committee to review the
reasonableness of compensation paid to executive officers of the Corporation
based in part on information provided by the President. In doing so, the
Committee takes into account how the particular compensation compares to
compensation paid by other similarly situated companies, individual performance,
tenure and internal comparability considerations.
The Committee's recommendations were found to be reasonable and the Board
of Directors approved the compensation schedule for the executive officers
effective February 1, 2001."
EXECUTIVE COMPENSATION COMMITTEE
Drew Gibson
Ronald R. James
George E. Moss
Roscoe Moss, Jr.
Dated: January 25, 2001
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14
PERFORMANCE GRAPH
The following performance graph compares the changes in the cumulative
shareholder return on the Corporation's common shares with the cumulative total
return on the Water Utility Index and the S&P 500 Index during the last five
years ended December 31, 2000. The comparison assumes $100 was invested on
January 1, 1995 in the Corporation's common shares and in each of the foregoing
indices and assumes reinvestment of dividends.
SJW CORP. FIVE YEAR CUMULATIVE TOTAL RETURN
1/1/96 TO 12/31/00
[PERFORMANCE GRAPH]
--------------------------------------------------------------------------------
1996 1997 1998 1999 2000
--------------------------------------------------------------------------------
SJW 132 177 179 379 328
Water Utility Index 121 166 208 206 261
S&P 500 123 164 211 255 232
The Water Utility Index is the 14 company Water Utility Index prepared by
Edward D. Jones & Co.
The preceding Compensation Committee Report on Executive Compensation and
the preceding SJW Corp. Stock Performance Chart shall not be deemed incorporated
by reference into any previous filings under the Securities Act of 1933 or the
Exchange Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, nor are such Report or Chart to be incorporated
by reference into any future filings.
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15
GENERAL INFORMATION
The Board of Directors is not aware of any matters to come before the
Meeting other than as set forth herein. If any other matters should be brought
before the Meeting, the persons named in the enclosed form of proxy will have
discretionary authority to vote all proxies with respect thereto in accordance
with their judgment. Whether or not you intend to be present at the Meeting, you
are urged to complete, sign and return your proxy promptly.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at next year's Annual
Meeting of Shareholders, tentatively scheduled for April 18, 2002, must be
received by the Corporation by November 19, 2001 for inclusion in the
Corporation's proxy materials relating to that Meeting. Proposals which comply
with rules and regulations of the Securities and Exchange Commission and are
timely received will be included in next year's Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Robert A. Loehr, Corporate Secretary
San Jose, California
June 15, 2001
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APPENDIX A
SJW CORP.
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the Corporation's policies, procedures and practices
at all levels. The Audit Committee's primary duties and responsibilities are to:
1. Serve as an independent and objective party to monitor the
Corporation's financial department process and internal control system.
2. Review and appraise the audit efforts of the Corporation's
independent accountants.
3. Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee. A
Board member is considered to be independent when he or she neither stands to
benefit financially nor suffer materially from the decision being addressed and
has no relationship to the Corporation that may appear to interfere with
unbiased consideration of Audit Committee matters.
All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee shall
have accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least three times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately. In
addition, the Committee or at least its Chair should confer with the independent
accountants and management quarterly to review the Corporation's financials
consistent with Section IV.4. below.
A-1
17
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
2. Review the organization's annual financial statements, which are
intended for submission to any governmental body or for dissemination to
the public, including any certification, report, opinion, or review of such
financial statements rendered by the independent accountants.
3. Review with management any internal control issues or concerns and
recommendations if necessary.
4. Review with financial management and the independent accountants
the financial statements to be incorporated in the 10-Q prior to the
release of all earnings reports. The Chair of the Committee may represent
the entire Committee for purposes of this review.
5. Recommend to the Board of Directors the selection of the
independent accountants, considering independence and effectiveness and
approve the fees and other compensation to be paid to the independent
accountants. On an annual basis, the Committee should review and discuss
with the accountants all significant relationships the accountants have
with the Corporation to determine the accountants' independence.
6. Review the performance of the independent accountants and approve
any proposed discharge of the independent accountants when circumstances
warrant.
7. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and
accuracy of the organization's financial statements.
8. In consultation with the independent accountants, review the
integrity of the organization's financial reporting processes, both
internal and external.
9. Consider the independent accountants' judgments about the quality
and appropriateness of the Corporation's accounting principles as applied
in its financial reporting.
10. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as suggested
by the independent accountants and management.
11. Establish regular and separate systems of reporting to the Audit
Committee by management and the independent accountants regarding any
significant judgments made in management's preparation of the financial
statements and the view of each as to appropriateness of such judgments.
12. Following completion of the annual audit, review separately with
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
13. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the financial
statements.
14. Review with the independent accountants and management the extent
to which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented (This review should
be conducted at an appropriate time subsequent to implementation of changes
or improvements, as decided by the Committee).
15. Establish, review and update periodically a Code of Ethical
Conduct and ensure that management has established a system to enforce this
Code.
16. Review management's monitoring of the Corporation's compliance
with the organization's Ethical Code, and ensure that management has the
proper review system in place to ensure that Corporation's financial
statements, reports and other financial information disseminated to
governmental organizations and the public satisfy legal requirements.
A-2
18
17. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
18. Review, with the organization's counsel, any legal matter that
could have a significant impact on the organization's financial statements.
19. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing labs as the Committee or the Board
deems necessary or appropriate.
V. ADOPTION AND AMENDMENT
This Charter for the Audit committee of SJW Corp. is approved and adopted
by the Board of Directors effective July 20, 2000. It may be amended by a
majority vote of the Board of Directors at any regular or special meeting of the
Board. Copies of this charter, and all amendments thereto, are to be distributed
by the Chair to the members of the Board once a year and to new members of the
Committee on the date of their appointment or election.
Dated: July 20, 2000 Ronald R. James
Chairman, Audit Committee of
Board of Directors, SJW Corp.
A-3
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SJW CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
June 11, 2001
P
R
O
X
Y
J.W. WEINHARDT, Chairman, and ROBERT A. LOEHR, Corporate Secretary, and
each of them with full power of substitution, are hereby authorized to vote, as
designated on the reverse side, the shares of stock of the undersigned at the
annual meeting of shareholders of SJW Corp. to be held at 374 West Santa Clara
Street, San Jose, California on Thursday, July 19, 2001 at 10:00 A.M., or at any
adjournments or postponements thereof.
If not otherwise directed, this proxy will be voted FOR amendment of the
By-Laws of the Corporation to increase the possible number of directors from
nine to eleven and to set the number of directors at ten directors, FOR the
election of each of management's nominees for directors and FOR ratification of
the selection of KPMG LLP as independent auditors and at the discretion of the
proxy holders upon such other business as may properly come before the meeting.
The Board of Directors recommends voting in favor of these matters.
(continued and to be dated and signed on the reverse side)
SEE REVERSE SIDE
Please mark
votes as in
[X] this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO AMEND THE BY-LAWS OF THE
CORPORATION, FOR THE ELECTION OF THE NOMINEES LISTED BELOW AS DIRECTORS, FOR THE
RATIFICATION OF THE SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS AND OTHERWISE
AT THE DISCRETION OF THE PROXIES.
1. To amend the By-Laws of the Corporation to increase the permissible number of
directors from nine to eleven, and to set the number of directors at ten
directors.
2. Election of Directors: Nominees are M.L. Cali, J.P. DiNapoli, D. Gibson, R.R.
James, G. Moss, R. Moss, W.R. Roth, C.J. Toeniskoetter, and J.W. Weinhardt
FOR
WITHHELD
25
20
ALL
FROM ALL
For all nominees
NOMINEES
------
NOMINEES
------
except as noted above
------
3. Ratification of the selection of KPMG LLP as independent auditors of the
corporation.
FOR
--------
AGAINST
--------
ABSTAIN
--------
4. In their discretion upon any other matter that may properly come before the
Annual Meeting of Shareholders or any adjournments or postponements thereof.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
--------
Please sign exactly as your name appears hereon. If signing as attorney,
executor, administrator, trustee, guardian or the like, please give your full
title as such. If signing for a corporation, please give your title. In the case
of shares standing in the name of two or more persons, California law permits
the voting of such shares under a proxy signed by any one of such persons if
none of the others is present in person or represented by proxy.
26