Pour water to depth of 1 1/2 inches into a 3 1/2-qt. saucepan; bring to a boil over medium-high heat. Reduce heat to medium, and simmer.
Combine egg whites, sugar, next 2 ingredients, and 1/4 cup water in a 2 1/2-qt. glass bowl; beat mixture at high speed with an electric mixer until blended. Place bowl over simmering water, and beat at high speed 5 to 7 minutes or until soft peaks form; remove from heat. Beat icing to spreading consistency (about 2 to 3 minutes). Use immediately.