Stockholder Rights Plan The Company’ s Stockholder Rights Plan (Plan) is designed to pro- vide stockholders protection and to maximize stockholder v alue by encouraging a prospective acquirer to negotiate with the Board.The Plan was adopted in 1998 and authorized a dividend distribution of one right (Right) to purchase 1/100th share of Series D Preferred Stock for each outstanding share of Common Stock in certain circumstances.The Rights are for a ten-year per iod that expires in February 2008. Each Right represents a right to purchase 1/100th share of Series D Preferred Stock at the price of $120, subject to adjustment (Purchase Price). Eac h share of Series D Preferred Stock is entitled  to receive a dividend equal to 100 times an dividend paid on common stock and 100 votes per share in any stockholder election.The Rights become exercisable upon occurrence of a Distribution Date. A Distribution Date event occurs if (a) any person accumulates 15% of the then outstanding Common Stock, (b) any person presents a tender offer which would cause the person’s o wnership level to exceed 15% and the Board deter- mines the tender offer not to be fair to the Company’ stockholders, or (c) the Board determines that a stockholder maintaining a 10% interest in the Common Stoc k could have an adverse impact on the Company  or could attempt to pressure the Company to repurchase the holder’s shares at a premium. Until the occurrence of a Distribution Date, each Right trades with the Common Stock and  is not separately transferable.When a Distribution Date occurs: (a) the Company would distribute separate Rights Certificates to Common Stockholder and the Rights would subsequently trade separate from the Common Stock; and (b) each holder of a Right, other than the acquiring person (whose Rights would there- after be void), would have the right to receive upon exercise at its then current Purchase Price that number of shares of Common Stock having a market value of tw o times the Purchase Price of the Right. If the Company merges into the acquiring person or enter into any transaction that unfairly favors the acquiring person or disfavors the Company’s other stockholders, the Right becomes a right to purchase Common  Stock of the acquiring person having a market value of tw o times the Purchase Price. The Board may determine that in certain circumstances a proposal that would cause a Distribution Date is in the Company stockholders’ best interest.Therefore, the Board may, at its option, redeem the Rights at a redemption price of $0.001 per Right. At December 31, 2002, the Compan maintained a bank line of credit providing unsecured borrowings of up to $10,000,000 at the prime lending ra te or lower rates as quoted by the bank. Cal  Water maintained a separate bank line of credit for an additional $50,000,000 on the same terms as the Company’s line of credit.The agreements require a 30-da y out-of-debt period for borrowings under the agreements in calendar year 2002. However, on September 23, 2002, the agreements were amended to extend the out-of-debt compliance period to between J anuary 1, 2002, and April 30, 2003. As explained  in Note 16 Subsequent Events, the lines of credit, whic h were scheduled to expire on April 30, 2003, were renegotiated on February 28, 2003. At December 31, 2002, $34,000,000 was outstanding. Washington Water has a loan commitment for $100,000 from a bank to meet its operating and capital equipment purchase requirements at interest ra tes negotiated with the bank. At December 31, 2002, nothing was outstanding under the short-ter commitment. New Mexico Water has a $2.9 million credit agreement with a New Mexico bank that was renewed in January 2003 for a 16-month period.The inter est rate for the agreement is based on prime rate plus 75 basis points. At December 31, 2002, the amount borrowed was $2,379,000. The following table represents borrowings under the bank lines of credit: Dollars in thousands 2002 2001 2000 Maximum short-term borrowings $52,285 $36,800 $26,750 Average amount outstanding $25,495 $24,453 $16,810 Weighted average interest rate 3.44% 5.29% 7.77% Interest rate at December 31 3.61% 3.16% 7.88% CALIFORNIA WATER SERVICE GROUP SHORT- TERM BORROWINGS 8 46