UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) May 19, 2008
AMERICAN
STATES WATER COMPANY
(Exact
name of registrant as specified in its charter)
|
California
|
001-14431
|
95-4676679
|
|
(State
or other jurisdiction of incorporation or organization)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
|
630
East Foothill Blvd.
San
Dimas, California
|
91773
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Registrant’s
telephone number, including area code: (909)
394-3600
|
||
GOLDEN
STATE WATER COMPANY
(Exact
name of registrant as specified in its charter)
|
California
|
001-12008
|
95-1243678
|
|
(State
or other jurisdiction of incorporation or organization)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
|
630
East Foothill Blvd.
San
Dimas, California
|
91773
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Registrant’s
telephone number, including area code: (909)
394-3600
|
||
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing requirement of the registrant under any of the following
provisions (see General
Instruction A.2 below):
¨ Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule
14a-12 under the exchange Act (17 CFR 14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
5 - Corporate Governance and Management
Item
5.02. Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers; Compensatory Arrangements of Certain
Officers
On May 19,
2008, the Compensation Committee approved $30,800 for Senior Vice President
Denise Kruger for costs to be incurred for relocation to Southern
California.
On May 20,
2008, the shareholders approved the 2008 Stock Incentive Plan or 2008 plan. The
compensation committee makes stock awards to executive officers and as of March
21, 2008, only 131,846 of our common shares were available for the grant of new
awards under the 2000 Stock Incentive Plan or 2000 plan.
The board
adopted, subject to shareholder approval, the 2008 plan, in order to enable the
compensation committee to continue to make stock awards to eligible employees in
a manner consistent with the executive compensation program adopted by the
compensation committee in 2006.
The board
also approved an amendment to the 2000 plan to prohibit the award of additional
awards, other than pursuant to dividend equivalent rights granted to our
executive officers as of March 31, 2008. This amendment was to be
effective only if shareholders approved the 2008 plan.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial Statements
and Exhibits.
Exhibit
10.1. 2008 Stock Incentive
Plan dated April 1, 2008
Exhibit
10.2. American
States Water Company 2000 Stock Incentive Plan as amended
Exhibit
10.3. American
States Water Company 2008 Stock Incentive Plan Form of NonQualified Stock Option
Agreement
Exhibit
10.4. American
States Water Company 2008 Stock Incentive Plan Form of Restricted Stock Unit
Award Agreement
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
AMERICAN
STATES WATER COMPANY
|
|||
|
Date:
May 23, 2008
|
By:
|
/s/
Robert J. Sprowls
|
|
|
Robert
J. Sprowls
|
|||
|
Chief
Financial Officer, Exec. Vice
President, Corporate Secretary and Treasurer |
|||
EXHIBIT
10.1.
2008
STOCK INCENTIVE PLAN
(Effective
April 1, 2008)
ii
TABLE
OF CONTENTS
| Page | ||
ii
AMERICAN
STATES WATER COMPANY
2008
STOCK INCENTIVE PLAN
(Effective
April 1, 2008)
The
purpose of this Plan is to promote the success of the Company by providing an
additional means through the grant of Awards to attract, motivate, retain and
reward key employees, including officers, whether or not directors, of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. Capitalized terms are
defined in Article 6.
(a) Committee. This
Plan shall be administered by and all Awards to Eligible Employees shall be
authorized by the Committee. Action of the Committee with respect to
the administration of this Plan shall be taken pursuant to a majority vote or by
written consent of its members. With respect to Awards intended to
satisfy the requirements of performance-based compensation under Section 162(m)
of the Code, this Plan shall be administered by a committee consisting solely of
two or more outside directors (as this requirement is applied under Section
162(m) of the Code); provided, however, that the failure to satisfy such
requirement shall not affect the validity of the action of any committee
otherwise duly authorized and acting in the matter. Award grants, and
transactions in or involving Awards, intended to be exempt under Rule 16b-3
under the Exchange Act must be duly and timely authorized by the Board or a
committee consisting solely of two or more non-employee directors (as this
requirement is applied under Rule 16b-3 promulgated under the Exchange
Act). To the extent required by any applicable listing agency, this
Plan shall be administered by a committee composed entirely of independent
directors (within the meaning of the applicable listing
agency).
(b) Plan Awards; Interpretation;
Powers of Committee. Subject to the express provisions of this
Plan, the Committee shall have the authority:
(i) to determine eligibility and,
from among those persons determined to be eligible, the particular Eligible
Employees who will receive an Award;
(ii) to grant Awards to Eligible
Employees, determine the price at which securities will be offered or awarded
and the number of securities to be offered or awarded to any of such persons,
and determine the other specific terms and conditions of such Awards consistent
with the express limits of this Plan, and establish the installments (if any) in
which such Awards shall become exercisable or shall vest (which may include,
without limitation, performance and/or time-based schedules), or determine that
no delayed exercisability or vesting is required, and establish the events of
termination or reversion of such Awards;
(iii) to approve the forms of
Award Agreements (which need not be identical either as to type of Award or
among Participants);
(iv) to construe and interpret
this Plan and any agreements defining the rights and obligations of the Company
and Participants under this Plan, further define the terms used in this Plan,
and prescribe, amend and rescind rules and regulations relating to the
administration of this Plan or the Awards granted under this
Plan;
(v) to cancel, modify, or waive
the Corporation’s rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible Employees, subject to
any required consent under Section 5.6;
(vi) to accelerate or extend the
vesting or exercisability or extend the term of any or all such outstanding
Awards (in the case of Options, within the original term of such Awards under
Section 1.6), subject to Section 5.3;
(vii) to adjust the number
of shares of Common Stock subject to any Award, adjust the price of any or all
outstanding Awards or otherwise previously imposed terms and conditions, in such
circumstances as the Committee may deem appropriate, in each case subject to
Sections 1.4 and 5.6, and provided that in no case (except due to an adjustment
contemplated by Section 5.2 or any repricing that may be approved by
shareholders) shall such an adjustment constitute a repricing (by amendment,
substitution, cancellation and regrant, exchange or other means) of the per
share exercise or base price of any Option;
(viii) to determine the date of
grant of an Award, which may be a designated date after but not before the date
of the Committee’s action (unless otherwise designated by the Committee, the
date of grant of an Award shall be the date upon which the Committee took the
action granting the Award);
(ix) to determine whether,
and the extent to which, adjustments are required pursuant to Section 5.2 hereof
and authorize the termination, conversion, substitution or succession of Awards
upon the occurrence of an event of the type described in Section
5.2;
(x) to determine the Fair Market
Value of the Common Stock of Awards under this Plan from time to time and/or the
manner in which such value will be determined; and
(xi) to make all other
determinations and take such other action as contemplated by this Plan or as may
be necessary or advisable for the administration of this Plan and the
effectuation of its purposes.
(c) Binding
Determinations/Liability Limitation. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. Neither the
Board nor any Committee, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with this Plan
(or any Award made under this Plan), and all such persons shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors and officers liability insurance coverage that may be in effect from
time to time.
(d)
Reliance on
Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including employees and
professional advisors to the Corporation. No director, officer or
agent of the Company shall be liable for any such action or determination taken
or made or omitted in good faith.
(e) Delegation. The
Committee may delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Company or to third parties.
2
Awards may
be granted by the Committee only to those persons that the Committee determines
to be Eligible Employees. An Eligible Employee who has been granted
an Award may, if otherwise eligible, be granted additional Awards if the
Committee shall so determine.
(a) Shares
Available. Subject to the provisions of Section 5.2, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation’s authorized but unissued Common Stock. The shares may be
delivered for any lawful consideration.
(b) Share
Limits. The maximum number of shares of Common Stock that may
be delivered pursuant to Awards granted to Eligible Employees under this Plan
(the “Share
Limit”) is equal to the sum of the following: (i) 1,100,000
shares of Common Stock, plus (ii) the number of shares of Common Stock reserved
for purposes of the Corporation’s 2000 Stock Incentive Plan (the “2000 Plan”) on
March 31, 2011 in excess of the number of shares of Common Stock then subject to
outstanding awards grants under the 2000 Plan without regard to any shares that
are withheld to satisfy tax withholding obligations or that are subject to or
underlie awards that expire or for any reason are cancelled, terminated,
forfeited, fail to vest or for any other reason are not paid or delivered under
the 2000 Plan. Shares issued in respect of any “Full-Value Award”
granted under this Plan shall be counted against the foregoing Share Limit as
2.45 shares for every one share actually issued in connection with such
Award. (For example, if an Award of 100 Restricted Stock shares is
granted under this Plan, 245 shares shall be charged against the Share Limit in
connection with that Award.) For this purpose, a “Full-Value Award”
means any Award under this Plan that is not an
Option. The following limits also apply with respect to Awards
granted under this Plan:
(1) The maximum number of
shares of Common Stock that may be delivered pursuant to Options qualified as
Incentive Stock Options granted under this Plan is 187,500 shares.
(2) The maximum number of shares
of Common Stock subject to those Options that are granted during any calendar
year to any individual under this Plan is 50,000 shares.
(c) Share Reservation;
Replenishment and Reissue of Unvested Awards. No Award may be
granted under this Plan unless, on the date of grant, the sum of (i) the maximum
number of shares issuable at any time pursuant to such Award, plus (ii) the
number of shares that have previously been issued pursuant to Awards granted
under this Plan, plus (iii) the maximum number of shares that may be issued at
any time after such date of grant pursuant to Awards that are outstanding on
such date, does not exceed the Share Limit. Shares that are subject
to or underlie Awards which expire or for any reason are cancelled or
terminated, are forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan shall not be available for subsequent Awards under the
Plan. Shares that are withheld by the Corporation to satisfy the tax
withholding obligations related to the Award shall not be available for
subsequent Awards under this Plan. Except as limited by law, if an
Award is or may be settled only in cash, such Award need not be counted against
any of the limits under this Section 1.4.
Subject to
the express provisions of this Plan, the Committee shall determine the number of
shares of Common Stock subject to each Award and the price (if any) to be paid
for the shares or the Award. Each Award shall be evidenced by an
Award Agreement signed by the Corporation and, if required by the Committee, by
the Participant. The Award Agreement shall set forth the material
terms and conditions of the Award established by the Committee consistent with
the specific provisions of this Plan.
3
Each Award
and all executory rights or obligations under the related Award Agreement shall
expire on such date (if any) as shall be determined by the Committee, but in the
case of Options not later than ten (10) years after the Award Date.
(a) Provisions for
Exercise. Unless the Committee otherwise expressly provides,
no Award shall be exercisable or shall vest until at least six months after the
initial Award Date, and once exercisable an Award shall remain exercisable until
the expiration or earlier termination of the Award.
(b) Procedure. Any
exercisable Award shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the Participant,
together with any required payment made in accordance with Section
2.2.
(c) Fractional Shares/Minimum
Issue. Fractional share interests shall be disregarded, but
may be accumulated. The Committee, however, may determine in the case of
Eligible Employees that cash, other securities, or other property will be paid
or transferred in lieu of any fractional share interests. No fewer
than 100 shares may be purchased on exercise of any Award at one time unless the
number purchased is the total number at the time available for purchase under
the Award.
(a) Limit On Exercise and
Transfer. Unless otherwise expressly provided in (or pursuant
to) this Section 1.8, by applicable law and by the Award Agreement, as the same
may be amended, (i) all Awards are non-transferable and shall not be subject in
any manner to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; (ii) Awards shall be exercised only by the Participant;
and (iii) amounts payable or shares issuable pursuant to an Award shall be
delivered only to (or for the account of) the Participant.
(b) Exceptions. The
Committee may permit Awards to be exercised by and paid only to certain persons
or entities related to the Participant, including but not limited to members of
the Participant’s immediate family, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Participant’s immediate
family, pursuant to such conditions and procedures as the Committee may
establish in writing. Any permitted transfer shall be (i) subject to
compliance with applicable federal and state securities laws and (ii) subject to
the condition that the Committee receive evidence satisfactory to it that the
transfer is being made for essentially estate and/or tax planning purposes on a
gratuitous or donative basis and without consideration (other than nominal
consideration or in exchange for an interest in a qualified
transferee). Notwithstanding the foregoing or anything to the
contrary in Section 1.8(c), Incentive Stock Options and Restricted Stock Awards
shall be subject to any and all additional transfer restrictions under the
Code.
(c) Further Exceptions to Limits
On Transfer. The exercise and transfer restrictions in Section
1.8(a) shall not apply to:
(i) transfers to the
Corporation,
(ii) the designation of a
beneficiary to receive benefits in the event of the Participant’s death or, if
the Participant has died, transfers to or exercise by the Participant’s
beneficiary, or, in the absence of a validly designated beneficiary, transfers
by will or the laws of descent and distribution,
4
(iii) subject to applicable
limits on Incentive Stock Options, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or ratified by
the Committee,
(iv) if the Participant has
suffered a disability, permitted transfers or exercises on behalf of the
Participant by his or her legal representative, or
(v) the authorization by the
Committee of “cashless exercise” procedures with third parties who provide
financing for the purpose of (or who otherwise facilitate) the exercise of
Awards consistent with applicable laws and the express authorization of the
Committee.
One or
more Options may be granted under this Article to any Eligible
Employee. Each Option granted shall be designated in the applicable
Award Agreement, by the Committee as either an Incentive Stock Option, subject
to Section 2.3, or a Non-Qualified Stock Option.
(a) Pricing
Limits. The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time of the
Award, but shall not be less than 100% (110% in the case of an Incentive Stock
Option granted to a Participant described in Section 2.4) of the Fair Market
Value of the Common Stock on the date of grant.
(b) Payment Provisions.
The purchase price of any shares purchased on exercise of an Option granted
under this Article shall be paid in full at the time of each purchase in one or
a combination of the following methods: (i) in cash or by electronic
funds transfer; (ii) by check payable to the order of the Corporation; (iii) by
notice and third party payment in such manner as may be authorized by the
Committee; or (iv) by the delivery of shares of Common Stock of the Corporation
already owned by the Participant, provided, however, that the
Committee may in its absolute discretion limit the Participant’s ability to
exercise an Award by delivering such shares, and provided further that any
shares delivered which were initially acquired upon exercise of a stock option
must have been owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise price
of an Option shall be valued at their Fair Market Value on the date of
exercise.
(a) $100,000
Limit. To the extent that the aggregate “Fair Market Value” of
stock with respect to which Incentive Stock Options first become exercisable by
a Participant in any calendar year exceeds $100,000, taking into account both
Common Stock subject to Incentive Stock Options under this Plan and stock
subject to incentive stock options under all other plans of the Company, such
options shall be treated as Nonqualified Stock Options. For this
purpose, the “Fair Market Value” of the stock subject to Options shall be
determined as of the date the Options were awarded. In reducing the
number of Options treated as Incentive Stock Options to meet the $100,000 limit,
the most recently granted Options shall be reduced first. To the
extent a reduction of simultaneously granted Options is necessary to meet the
$100,000 limit, the Committee may, in the manner and to the extent permitted by
law, designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option
Period. Each Option and all rights thereunder shall expire no
later than 10 years after the Award Date.
5
(c) Other Code
Limits. Incentive Stock Options may only be granted to
Eligible Employees of the Corporation or a Subsidiary that satisfies the other
eligibility requirements of the Code. There shall be imposed in any
Award Agreement relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the Option be an
“incentive stock option” as that term is defined in Section 422 of the
Code.
No
Incentive Stock Option may be granted to any person who, at the time the Option
is granted, owns (or is deemed to own under Section 424(d) of the Code) shares
of outstanding Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
The
Committee may, in its discretion, grant one or more Restricted Stock Awards to
any Eligible Employee. Each Restricted Stock Award Agreement shall
specify the number of shares of Common Stock to be issued to the Participant,
the date of such issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by the Participant,
the extent (if any) to which and the time (if ever) at which the Participant
shall be entitled to dividends, voting and other rights in respect of the shares
prior to vesting, and the restrictions (which may be based on performance
criteria, passage of time or other factors or any combination thereof) imposed
on such shares and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than six
months after the Award Date, except to the extent the Committee may otherwise
provide. Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions (“Restricted Shares”) shall bear a legend
making appropriate reference to the restrictions imposed hereunder and shall be
held by the Corporation or by a third party designated by the Committee until
the restrictions on such shares shall have lapsed and the shares shall have
vested in accordance with the provisions of the Award and Section
1.7. Upon issuance of the Restricted Stock Award, the Participant may
be required to provide such further assurance and documents as the Committee may
require to enforce the restrictions.
(a) Pre-Vesting
Restraints. Except as provided in Section 3.1 and 1.8,
Restricted Shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until the restrictions on such shares have lapsed
and the shares have become vested.
(b) Dividend and Voting
Rights. Unless otherwise provided in the applicable Award
Agreement, a Participant receiving a Restricted Stock Award shall be entitled to
cash dividend and voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as to any
Restricted Shares which cease to be eligible for vesting.
(c) Cash
Payments. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any Restricted Shares which
cease to be eligible for vesting.
6
Unless the
Committee otherwise expressly provides, Restricted Shares that remain subject to
restrictions at the time of termination of employment or are subject to other
conditions to vesting that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned to the
Corporation in such manner and on such terms as the Committee shall therein
provide.
The
Committee may, in its discretion, (a) authorize and grant to any Eligible
Employee a Stock Unit Award, (b) credit to any Eligible Employee Stock Units,
(c) permit an Eligible Employee to irrevocably elect to defer by means of Stock
Units or receive in Stock Units all or a portion of any Award hereunder, or (d)
grant Stock Units in lieu of, in exchange for, in respect of, or in addition to
any other compensation or Award under this Plan. The specific terms,
conditions, and provisions relating to each Stock Unit grant or election,
including the applicable vesting and payout provisions of the Stock Units and
the form of payment to be made at or following the vesting thereof, shall be set
forth in or pursuant to the applicable Award Agreement and any relevant Company
bonus, performance or other service or deferred compensation plan, in form
substantially as approved by the Committee, in each case subject to compliance
with Section 409A of the Code.
Subject to
compliance with Section 409A of the Code, the Committee in the applicable Stock
Unit Award Agreement or other Award Agreement or the relevant Company deferred
compensation plan may permit the Eligible Employee to elect the form and time of
payout of vested Stock Units on such conditions or subject to such procedures as
the Committee may impose, and may permit Stock Unit offsets or other provision
for payment of any applicable taxes that may be due on the crediting, vesting or
payment in respect of the Stock Units.
Rights in
respect of Stock Unit Awards may not be sold, pledged, assigned, hypothecated,
transferred, or otherwise disposed of or encumbered, either voluntarily or
involuntarily, other than by will or the laws of descent or
distribution.
In its
discretion, the Committee may grant to any Eligible Employee “Dividend
Equivalent Rights” concurrently with the grant of any Stock Unit Award, on such
terms as set forth by the Committee in the Stock Unit Agreement or other
applicable Award Agreement. Dividend Equivalent Rights shall be based
on all or part of the amount of dividends declared on shares of Common Stock and
shall be credited as of dividend payment dates, during the period between the
date of grant (or such later date as the Committee may set in the Award
Agreement) and the date the Stock Unit Award expires (or such earlier date as
the Committee may set in the Award Agreement), as determined by the
Administrator. Dividend Equivalent Rights shall be payable in cash or
shares at the same time as the Stock Units to which they relate, and may be
subject to such conditions, as may be determined by the
Administrator.
Unless the
Committee otherwise expressly provides, Restricted Stock Units that remain
subject to conditions to vesting at the time of termination of employment or
service or are subject to other conditions to vesting that have not been
satisfied by the time specified in the applicable Award Agreement shall not vest
and shall be cancelled, unless the Committee otherwise provides in or by
amendment to the applicable terms of the Award.
7
(a) Employment
Status. Status as an Eligible Employee shall not be construed
as a commitment that any Award will be made under this Plan to an Eligible
Employee or to Eligible Employees generally.
(b) No Employment
Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any Award) shall confer upon any Eligible
Employee or Participant any right to continue in the employ or other service of
the Company, constitute any contract or agreement of employment or other service
or affect an employee’s status as an employee at will, nor shall interfere in
any way with the right of the Company to change a person’s compensation or other
benefits, or to terminate his or her employment or other service, with or
without cause. Nothing in this Section, however, is intended to
adversely affect any express independent right of such person under a separate
employment or service contract other than an Award Agreement.
(c) Plan Not
Funded. Awards payable under this Plan shall be payable in
shares or from the general assets of the Corporation, and (except as provided in
Section 1.4(c)) no special or separate reserve, fund or deposit shall be made to
assure payment of such Awards. No Participant, Beneficiary or other
person shall have any right, title or interest in any fund or in any specific
asset (including shares of Common Stock, except as expressly otherwise provided)
of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person
acquires a right to receive payment pursuant to any Award hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.
(a) Adjustments.
(1) Upon (or, as may be necessary
to effect the adjustment, immediately prior to): any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Corporation, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock;
then the Committee shall equitably and proportionately adjust (1) the
number and type of shares of Common Stock (or other securities) that thereafter
may be made the subject of Awards (including the specific share limits, maximums
and numbers of shares set forth elsewhere in this Plan), (2) the number,
amount and type of shares of Common Stock (or other securities or property)
subject to any outstanding Awards, (3) the grant, purchase or exercise
price of any outstanding Awards, and/or (4) the securities, cash or other
property deliverable upon exercise or payment of any outstanding Awards, in each
case to the extent necessary to preserve (but not increase) the level of
incentives intended by the Plan and the then-outstanding Awards.
8
Unless
otherwise expressly provided in the applicable Award Agreement, upon (or, as may
be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Corporation as an entirety,
the Committee shall equitably and proportionately adjust the performance
standards applicable to any then-outstanding performance-based Awards to the
extent necessary to preserve (but not increase) the level of incentives intended
by the Plan and the then-outstanding performance-based Awards.
It is
intended that, if possible, any adjustments contemplated by the preceding two
paragraphs be made in a manner that satisfies applicable legal, tax (including,
without limitation and as applicable in the circumstances, Section 424 of
the Code, Section 409A of the Code and Section 162(m) of the Code) and
accounting (so as to not trigger any charge to earnings with respect to such
adjustment) requirements.
Without
limiting the generality of Section 1.2, any good faith determination by the
Committee as to whether an adjustment is required under the circumstances
pursuant to this Section 5.2(a)(1), and the extent and nature of any such
adjustment, shall be conclusive and binding on all persons.
(2) Corporate
Transactions-Assumption or Termination of Awards. Upon the
occurrence of any of the following: any merger, combination,
consolidation, or other reorganization; any exchange of Common Stock or other
securities of the Corporation; a sale of all or substantially all the business,
stock or assets of the Corporation; a dissolution of the Corporation; or any
other event in which the Corporation does not survive (or does not survive as a
public company in respect of its Common Stock); then the Committee may make
provision for a cash payment in settlement of, or for the assumption,
substitution or exchange of any or all outstanding share-based Awards or the
cash, securities or property deliverable to the holder of any or all outstanding
share-based Awards, based upon, to the extent relevant under the circumstances,
the distribution or consideration payable to holders of the Common Stock upon or
in respect of such event.
The
Committee may adopt such valuation methodologies for outstanding Awards as it
deems reasonable in the event of a cash or property settlement and, in the case
of Options or similar rights, but without limitation on other methodologies, may
base such settlement solely upon the excess if any of the per share amount
payable upon or in respect of such event over the exercise or base price of the
Award.
In any of
the events referred to in this Section 5.2(a)(2), the Committee may take
such action contemplated by this Section 5.2(a)(2) prior to such event (as
opposed to on the occurrence of such event) to the extent that the Committee
deems the action necessary to permit the participant to realize the benefits
intended to be conveyed with respect to the underlying shares.
Without
limiting the generality of Section 1.2, any good faith determination by the
Committee pursuant to this Section 5.2(a)(2) shall be conclusive and
binding on all persons.
(b) Possible Early Termination
of Accelerated Awards. If any Option or other right to acquire Common
Stock under this Plan has been fully accelerated as required or permitted by
Section 5.2(c) but is not exercised prior to (1) a dissolution of the Company,
or (2) an event described in Section 5.2(a) that the Company does not survive,
or (3) the consummation of an event described in Section 5.2(a) involving a
Change in Control Event approved by the Board, such Option or right shall
terminate, subject to any provision that has been expressly made by the Board or
the Committee, through a plan of reorganization or otherwise, for the survival,
substitution, assumption, exchange or other settlement of such Option or
right.
9
(c) Acceleration of Awards Upon
Change in Control. Unless prior to a Change in Control Event
the Committee determines that, upon its occurrence, benefits under any or all
Awards shall not be accelerated or determines that only certain or limited
benefits under any or all Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Change in Control Event for such acceleration, then upon the occurrence of
a Change in Control Event:
(1) Each
Option shall become immediately exercisable, and
(2)
Restricted Stock shall immediately vest free of restrictions, and
(3)
Restricted Stock Units shall immediately vest free of restrictions and become
payable.
The
Committee may override the limitations on acceleration in this Section 5.2(c) by
express provision in the Award Agreement and may accord any Eligible Employee a
right to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Committee may approve. Any
acceleration of Awards shall comply with applicable legal requirements and, if
necessary to accomplish the purposes of the acceleration or if the circumstances
require, may be deemed by the Committee to occur (subject to Section 5.2(d)) a
limited period of time not greater than 30 days before the
event. Without limiting the generality of the foregoing, the
Committee may deem an acceleration to occur immediately prior to the applicable
event and/or reinstate the original terms of an Award if an event giving rise to
an acceleration does not occur. Notwithstanding the foregoing, an
Award shall not be accelerated and/or become payable pursuant to this Section
5.2(c) to the extent that such acceleration and/or payment would cause the
holder of such Award to be subject to additional tax under Section 409A of the
Code with respect to such Award.
(d) Possible Rescission of
Acceleration. If the vesting of an Award has been accelerated
expressly in anticipation of an event or upon shareholder approval of an event
and the Committee or the Board later determines that the event will not occur,
the Committee may rescind the effect of the acceleration as to any then
outstanding and unexercised or otherwise unvested Awards.
(e) Acceleration Upon
Termination of Service Following a Change in Control. If any
Participant’s employment is terminated by the Company upon or within one year
after a Change in Control Event, and the termination is not the result of death,
Total Disability, Retirement or a termination for Cause, then, subject to the
other provisions of this Section 5.2 (including without limitation Section
5.2(b) and Section 5.4), all outstanding Options and other Awards held by the Participant
shall be deemed fully vested immediately prior to the Severance Date and Stock
Units shall become payable upon such Severance Date (or, to the extent
applicable under Section 409A, upon the date that is six months after such
Severance Date), unless the Award Agreement specifies a different result in the
case of a Change in Control Event. Notwithstanding the foregoing, an
Award shall not be accelerated and/or become payable pursuant to this Section
5.2(e) to the extent that such acceleration and/or payment would cause the
holder of such Award to be subject to additional tax under Section 409A of the
Code with respect to such Award.
(a) General. The
Committee shall establish the effect of a termination of employment on the
rights and benefits under each Award under this Plan and in so doing may make
distinctions based upon the cause of termination.
(b) Options - Resignation or
Dismissal. If the Participant’s employment by the Company
terminates for any reason (the date of such termination being referred to as the
“Severance
Date”) other than Retirement, Total Disability or death, or for Cause (as
determined in the discretion of the Committee), the Participant shall have,
unless otherwise provided in the Award Agreement and subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 5.2, three months
after the Severance Date to exercise any Option to the extent it shall have
become exercisable on the Severance Date. In the case of a
termination for Cause, the Option shall terminate on the Severance
Date. In other cases, the Option, to the extent not exercisable on
the Severance Date, shall terminate.
10
(c) Options - Death or
Disability. If the Participant’s employment by the Company
terminates as a result of Total Disability or death, the Participant,
Participant’s Personal Representative or his or her Beneficiary, as the case may
be, shall have, unless otherwise provided in the Award Agreement and subject to
earlier termination pursuant to or as contemplated by Section 1.6 or 5.2, until
12 months after the Severance Date to exercise any Option to the extent it shall
have become exercisable by the Severance Date. Any Option to the
extent not exercisable on the Severance Date shall terminate.
(d) Options -
Retirement. If the Participant’s employment by the Company
terminates as a result of Retirement, the Participant, Participant’s Personal
Representative or his or her Beneficiary, as the case may be, shall have, unless
otherwise provided in the Award Agreement and subject to earlier termination
pursuant to or as contemplated by Section 1.6 or 5.2, until 12 months after the
Severance Date to exercise any Option to the extent it shall have become
exercisable by the Severance Date. The Option, to the extent not
exercisable on the Severance Date, shall terminate.
(e) Events Not Deemed
Terminations of Service. Unless Company policy or the
Committee otherwise provides, the employment relationship shall not be
considered terminated in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence authorized by the Company or the Committee;
provided that unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any Eligible Employee on an approved leave of absence,
continued vesting of the Award while on leave from the employ of the Company
shall be suspended, unless the Committee otherwise provides or applicable law
otherwise requires. In no event shall an Award be exercised after the
expiration of the term set forth in the Award Agreement.
(f) Effect of Change of
Subsidiary Status. For purposes of this Plan and any Award, if
an entity ceases to be a Subsidiary a termination of employment shall be deemed
to have occurred with respect to each Eligible Employee in respect of the
Subsidiary who does not continue as an Eligible Employee in respect of another
entity within the Company.
(g) Committee
Discretion. Notwithstanding the foregoing provisions of this
Section 5.3, in the event of, or in anticipation of, a termination of employment
with the Company for any reason, other than discharge for Cause, the Committee
may, in its discretion, increase the portion of the Participant’s Option
available to the Participant, or Participant’s Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions of Section
1.6, extend the exercisability period upon such terms as the Committee shall
determine and expressly set forth in or by amendment to the Award Agreement;
provided, however, that in no event shall any such extension of the
exercisability period extend such period beyond the earlier of the following
dates: (i) the latest date the Option could have expired by its
original terms or (ii) the 10th
anniversary of the Award Date.
This Plan,
the granting and vesting of Awards under this Plan, the offer, issuance and
delivery of shares of Common Stock and/or the payment of money under this Plan
or under Awards are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to state and federal
securities law) and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. The person acquiring any
securities under this Plan will, if requested by the Company, provide such
assurances and representations to the Company as the Committee may deem
necessary or desirable to assure compliance with all applicable legal and
accounting requirements.
11
(a) Provision for Tax
Withholding or Offset. Upon any exercise, vesting, or payment
of any Award or upon the disposition of shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company shall have
the right at its option to (i) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or provide for payment
of the minimum amount of any taxes which the Company may be required to withhold
with respect to such Award event or payment or (ii) deduct from any amount
payable in cash the minimum amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case
where a tax is required to be withheld in connection with the delivery of shares
of Common Stock under this Plan, the Committee may in its sole discretion
(subject to Section 5.4) grant (either at the time of the Award or thereafter)
to the Participant the right to elect, pursuant to such rules and subject to
such conditions as the Committee may establish, to have the Corporation reduce
the number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their Fair Market Value, necessary to satisfy such
minimum withholding obligation, determined in each case as of the trading day
next preceding the applicable date of exercise, vesting or payment. In no event shall shares
be withheld in excess of the minimum whole number required for tax withholding
under applicable law.
(a) Board
Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this
Plan.
(b) Shareholder
Approval. To the extent then required by applicable law or any
applicable listing agency or required under Sections 162, 422 or 424 of the
Code to preserve the intended tax consequences of the Plan, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be subject to
shareholder approval.
(c) Amendments to
Awards. Without limiting any other express authority of the
Committee under (but subject to) the express limits of this Plan, the Committee
by agreement or resolution may waive conditions of or limitations on Awards to
Participants that the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and (subject to the requirements
of Section 1.2(b) and 5.6(d)) may make other changes to the terms and conditions
of Awards that do not affect in any manner materially adverse to the
Participant, the Participant’s rights and benefits under an
Award. Any amendment or other action that would constitute a
repricing of an Award is subject to the limitations set forth in Section
1.2(b)(viii).
(d) Limitations on Amendments to
Plan and Awards. No amendment, suspension or termination of
this Plan or change affecting any outstanding Award shall, without written
consent of the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or obligations of the
Company under any Award granted under this Plan prior to the effective date of
such change. Changes contemplated by Section 5.2 shall not be deemed
to constitute changes or amendments for purposes of this Section
5.6.
Except as
otherwise expressly authorized by the Committee or this Plan, a Participant
shall not be entitled to any privilege of stock ownership as to any shares of
Common Stock not actually delivered to and held of record by the
Participant. No adjustment will be made for dividends or other rights
as a shareholder for which a record date is prior to such date of
delivery.
12
This Plan
is effective as of April 1, 2008. The Plan shall be submitted for and
subject to shareholder approval no later than twelve months after the effective
date.
No Award
will be granted under this Plan after March 31, 2018 (the “termination
date”). Unless otherwise expressly provided in this Plan or in an
applicable Award Agreement, any Award granted prior to the termination date may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder, including the authority to amend an Award, shall continue
during any suspension of this Plan and in respect of Awards outstanding on the
termination date.
(a) Choice of
Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the State of California.
(b) Severability. If
a court of competent jurisdiction holds any provision invalid and unenforceable,
the remaining provisions of this Plan shall continue in effect.
(c) Plan Construction.
(1) Rule
16b-3. It is the intent of the Corporation that the Awards and
transactions permitted by Awards be interpreted in a manner that, in the case of
Participants who are or may be subject to Section 16 of the Exchange Act,
satisfies the applicable requirements for exemptions under Rule
16b-3. The exemption will not be available if the authorization of
actions by any Committee of the Board with respect to such Awards does not
satisfy the applicable conditions of Rule 16b-3. Notwithstanding the
foregoing, the Corporation shall have no liability to any Participant for
Section 16 consequences of Awards or events under Awards.
(2) Section
162(m). It is the further intent of the Company that (to the
extent the Company or Awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code), Options granted
with an exercise or base price not less than Fair Market
Value on the date of grant will qualify as performance-based compensation or
otherwise be exempt from deductibility limitations under Section 162(m) of the
Code, to the extent that the authorization of the Award (or the payment thereof,
as the case may be) satisfies any applicable administrative requirements
thereof.
Captions
and headings are given to the sections and subsections of this Plan solely as a
convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
this Plan or any provision thereof.
13
Awards may
be granted to Eligible Employees under this Plan in substitution for employee
stock options, stock appreciation rights, restricted stock or other stock-based
awards granted by other entities to persons who are or who will become Eligible
Employees in respect of the Company, in connection with a distribution, merger
or other reorganization by or with the granting entity or an affiliated entity,
or the acquisition by the Company, directly or indirectly, or all or a
substantial part of the stock or assets of the employing entity. The
awards so granted need not comply with other specific terms of this Plan,
provided the awards reflect only adjustments giving effect to the assumption nor
substitution consistent with the conversion applicable to the Common Stock in
the transaction and any change in the issuer of the security. Any
shares that are delivered and any awards that are granted by, or become
obligations of, the Corporation, as a result of the assumption by the
Corporation of, or in substitution for, outstanding awards previously granted by
an acquired company (or previously granted by a predecessor employer (or direct
or indirect parent thereof) in the case of persons that become employed by the
Corporation or one of its Subsidiaries in connection with a business or asset
acquisition or similar transaction) shall not be counted against the Share Limit
in Section 1.4 or other limits on the number of shares available for issuance
under the Plan.
Nothing in
this Plan shall limit or be deemed to limit the authority of the Board or the
Committee to grant awards or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or authority.
The
existence of the Plan, the Award Agreements and the Awards granted hereunder
shall not limit, affect or restrict in any way the right or power of the Board
or the shareholders of the Corporation to make or authorize: (a) any adjustment,
recapitalization, reorganization or other change in the Corporation’s or any
Subsidiary’s capital structure or its business, (b) any merger, amalgamation,
consolidation or change in the ownership of the Corporation or any subsidiary,
(c) any issue of bonds, debentures, capital, preferred or prior preference stock
ahead of or affecting the Corporation’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the Corporation or
any Subsidiary’s assets or business, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary. No Participant,
Beneficiary, Personal Representative or any other person shall have any claim
under any Award or Award Agreement against any member of the Board or the
Committee, or the Corporation or any employees, officers or agents of the
Corporation or any Subsidiary, as a result of any such action.
Payments
and other benefits received by a Participant under an Award made pursuant to
this Plan shall not be deemed a part of a Participant’s compensation for
purposes of the determination of benefits under any other employee welfare or
benefit plans or arrangements, if any, provided by the Corporation or any
Subsidiary, except where the Committee or the Board expressly otherwise provides
or authorizes in writing. Awards under this Plan may be made in
addition to, in combination with, as alternatives to or in payment of grants,
awards or commitments under any other plans or arrangements of the Corporation
or the Subsidiaries.
(a) “Award” means an award
of any Option, Restricted Stock or Stock Unit or any combination thereof,
whether alternative or cumulative, authorized by and granted under this
Plan.
(b) “Award Agreement”
means any writing setting forth the terms of an Award that has been authorized
by the Committee.
14
(c) “Award Date” means the
date upon which the Committee took the action granting an Award or such later
date as the Committee designates as the Award Date at the time of the
Award.
(d) “Award Period” means
the period beginning on an Award Date and ending on the expiration date of such
Award.
(e) “Beneficiary” means
the person, persons, trust or trusts designated by a Participant or, in the
absence of a designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award Agreement and under
this Plan in the event of a Participant’s death, and shall mean the
Participant’s executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.
(f) “Board” means the
Board of Directors of the Corporation.
(g) “Cause” with respect
to a Participant means (unless otherwise expressly provided in the applicable
Award Agreement or another applicable contract with the Participant) a
termination of employment based upon a finding by the Company, acting in good
faith and based on its reasonable belief at the time, that the
Participant:
(1) has failed to render services
to the Company where such failure amounts to gross negligence or misconduct of
the Participant’s responsibility and duties; or
(2) has committed an act of fraud
or been dishonest against the Company or any affiliate of the Company;
or
(3) has been convicted of a
felony or other crime involving moral turpitude.
A
termination for Cause shall be deemed to occur (subject to reinstatement upon a
contrary final determination by the Committee) on the date on which the Company
first delivers written notice to the Participant of a finding of termination for
Cause.
(h) “Change in Control
Event” means any of the following events:
(1) the
dissolution or liquidation of the Corporation, unless its business is continued
by another entity in which holders of the Corporation’s voting securities
immediately before the event own, either directly or indirectly, more than 55%
of the continuing entity’s voting securities immediately after the
event;
(2) any
sale, lease, exchange or other change in ownership (in one or a series of
transactions) of all or substantially all of the assets of the Corporation,
unless its business is continued by another entity in which holders of the
Corporation’s voting securities immediately before the event own, either
directly or indirectly, more than fifty-five percent (55%) of the continuing
entity’s voting securities immediately after the event;
(3) any
reorganization or merger of the Corporation, unless (i) the holders of the
Corporation’s voting securities immediately before the event own, either
directly or indirectly, more than fifty-five percent (55%) of the continuing or
surviving entity’s voting securities immediately after the event, and (ii) at
least a majority of the members of the Board of Directors of the surviving
entity resulting from such reorganization or merger were members of the
incumbent Board of Directors of the Corporation at the time of the execution of
the initial agreement or of the action of such incumbent Board of Directors
providing for such reorganization or merger;
15
(4) an acquisition by any person,
entity or group acting in concert of more than forty-five percent (45%) of the
voting securities of the Corporation, unless the holders of the Corporation’s
voting securities immediately before the event own, either directly or
indirectly, more than fifty-five percent (55%) of the acquirer’s voting
securities immediately after the acquisition;
(5) the consummation of a tender
offer or exchange offer by an individual, entity or group which results in such
individual, entity or group beneficially owning (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934) twenty-five percent
(25%) or more of the voting securities of the Corporation, unless the tender
offer is made by the Corporation or any of its subsidiaries or the tender offer
is approved by a majority of the members of the Board of Directors of the
Corporation who were in office at the beginning of the twelve-month period
preceding the commencement of the tender offer; or
(6) a change of one-half or more
of the members of the Board of Directors of the Corporation within a
twelve-month period, unless the election or nomination for election by
shareholders of new directors within such period constituting a majority of the
applicable Board was approved by the vote of at least two-thirds (2/3) of the
directors then still in office who were in office at the beginning of the
twelve-month period.
(i) “Code” means the
Internal Revenue Code of 1986, as amended from time to time.
(j) “Commission” means the
Securities and Exchange Commission.
(k) “Committee” means the
Board or one or more committees appointed by the Board to administer all or
certain aspects of this Plan, each committee to be comprised solely of one or
more directors or such number as may be required under applicable
law.
(l) “Common Stock” means
the Common Shares of the Corporation and such other securities or property as
may become the subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 5.2 of this Plan.
(m) “Company” means,
collectively, the Corporation and its Subsidiaries.
(n) “Corporation” means
American States Water Company, a California corporation, and its
successors.
(o) “Eligible Employee”
means an officer (whether or not a director) or key employee of the
Company.
(p) “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.
(q) “Fair Market Value” on
any date means (1) if the stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock listed on The Wall Street
Journal website (www.online.wsj.com), of the principal national securities
exchange on which the stock is so listed or admitted to trade, on such date, or,
if there is no trading of the stock on such date, then the closing price of the
stock as quoted on such website on the next preceding date on which there was
trading in such shares; (2) if the stock is not listed or admitted to trade on a
national securities exchange, the last price for the stock on such date, as
furnished by the National Association of Securities Dealers, Inc. (“NASD”)
through the NASDAQ National Market Reporting System or a similar organization if
the NASD is no longer reporting such information; (3) if the stock is not listed
or admitted to trade on a national securities exchange and is not reported on
the National Market Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a similar organization;
or (4) if the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if bid and
asked prices for the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such time for
purposes of this Plan.
16
(r) “Incentive Stock
Option” means an Option which is intended, as evidenced by its
designation, as an incentive stock option within the meaning of Section 422
of the Code, the award of which contains such provisions and is made under such
circumstances and to such persons as may be necessary to comply with that
section.
(s) “Nonqualified Stock
Option” means an Option that is designated as a Nonqualified Stock Option
and shall include any Option intended as an Incentive Stock Option that fails to
meet the applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an incentive stock option shall be deemed to
be designated a Nonqualified Stock Option under this Plan and not an incentive
stock option under the Code.
(t) “Option” means an
option to purchase Common Stock granted under this Plan. The
Committee shall designate any Option granted to an Eligible Employee as a
Nonqualified Stock Option or an Incentive Stock Option.
(u) “Participant” means an
Eligible Employee who has been granted an Award under this Plan.
(v) “Personal
Representative” means the person or persons who, upon the disability or
incompetence of a Participant, shall have acquired on behalf of the Participant,
by legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan and who shall have become the legal representative of
the Participant.
(w) “Plan” means this 2008
Stock Incentive Plan, as it may be amended from time to time.
(x) “Restricted Shares” or
“Restricted Stock” means shares of Common Stock awarded to a Participant
under this Plan, subject to payment of such consideration, if any, and such
conditions on vesting (which may include, among others, the passage of time,
specified performance objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan and the related
Award Agreement, for so long as such shares remain unvested under the terms of
the applicable Award Agreement.
(y) “Restricted Stock
Unit” means a Stock Unit subject to such conditions on vesting and payout
as the Committee may determine.
(z) “Retirement” means
retirement from active service as an employee or officer of the Company on or
after attaining age 65.
(aa)
“Rule 16b-3”
means Rule 16b-3 as promulgated by the Commission pursuant to the Exchange Act,
as amended from time to time.
(bb)
“Section 16
Person” means a person subject to Section 16(a) of the Exchange
Act.
(cc)
“Securities
Act” means the Securities Act of 1933, as amended from time to
time.
(dd)
“Stock Unit”
means a bookkeeping entry that serves as a unit of measurement relative to a
share of Common Stock for purposes of determining the payment of the Stock Unit
grant. Stock Units are not outstanding shares of Common Stock and do
not entitle a grantee to any dividend, voting or other rights in respect of any
Common Stock. Stock Units may, however, by express provision in the
applicable Award Agreement, entitle a Participant to dividend equivalent rights,
credited in the form of cash or additional Stock Units, as determined by the
Committee. Stock Units are payable in shares of Common
Stock.
17
(ee)
“Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation.
(ff)
“Total
Disability” means a “permanent and total disability” within the meaning
of Section 22(e)(3) of the Code and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include
18
EXHIBIT
10.2.
AMERICAN
STATES WATER COMPANY
2000
STOCK INCENTIVE PLAN
(As
Amended as of January 31, 2006)
TABLE
OF CONTENTS
ii
AMERICAN
STATES WATER COMPANY
2000
STOCK INCENTIVE PLAN
(As
Amended as of January 31, 2006)
The
purpose of this Plan is to promote the success of the Company by providing an
additional means through the grant of Awards to attract, motivate, retain and
reward key employees, including officers, whether or not directors, of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. “Corporation” means
American States Water Company and “Company” means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized terms
are defined in Article 6.
(a) Committee. This
Plan shall be administered by and all Awards to Eligible Employees shall be
authorized by the Committee. Action of the Committee with respect to
the administration of this Plan shall be taken pursuant to a majority vote or by
written consent of its members.
(b) Plan Awards; Interpretation;
Powers of Committee. Subject to the express provisions of this
Plan, the Committee shall have the authority:
(i) to
determine eligibility and, from among those persons determined to be eligible,
the particular Eligible Employees who will receive an Award;
(ii) to
grant Awards to Eligible Employees, determine the price at which securities will
be offered or awarded and the amount of securities to be offered or awarded to
any of such persons, and determine the other specific terms and conditions of
such Awards consistent with the express limits of this Plan, and establish the
installments (if any) in which such Awards shall become exercisable or shall
vest, or determine that no delayed exercisability or vesting is required, and
establish the events of termination or reversion of such Awards;
(iii) to
approve the forms of Award Agreements (which need not be identical either as to
type of award or among Participants);
(iv) to
construe and interpret this Plan and any agreements defining the rights and
obligations of the Company and Participants under this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind rules and regulations
relating to the administration of this Plan;
(v) to
cancel, modify, or waive the Corporation’s rights with respect to, or modify,
discontinue, suspend, or terminate any or all outstanding Awards held by
Eligible Employees, subject to any required consent under Section
5.6;
(vi) to
accelerate or extend the exercisability or extend the term of any or all such
outstanding Awards (in the case of Options, within the maximum ten-year term of
such Awards under Section 1.6); and
(vii) to
make all other determinations and take such other action as contemplated by this
Plan or as may be necessary or advisable for the administration of this Plan and
the effectuation of its purposes.
(c) Binding
Determinations/Liability Limitation. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. Neither the
Board nor any Committee, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with this Plan
(or any Award made under this Plan), and all such persons shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors and officers liability insurance coverage that may be in effect from
time to time.
(d) Reliance on
Experts. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including professional
advisors to the Corporation. No director, officer or agent of the
Company shall be liable for any such action or determination taken or made or
omitted in good faith.
(e) Delegation. The
Committee may delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Company.
Awards may
be granted by the Committee only to those persons that the Committee determines
to be Eligible Employees. An Eligible Employee who has been granted
an Award may, if otherwise eligible, be granted additional Awards if the
Committee shall so determine.
(a) Shares
Available. Subject to the provisions of Section 5.2, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation’s authorized but unissued Common Stock. The shares may be
delivered for any lawful consideration.
(b) Share
Limits. The maximum number of shares of Common Stock that may
be delivered pursuant to Awards granted to Eligible Employees under this Plan
shall not exceed 1,050,000 shares (the “Share
Limit”). The maximum number of shares of Common Stock
that may be delivered pursuant to options qualified as Incentive Stock Options
granted under this Plan is 187,500 shares. The maximum number of
shares subject to those options that are granted during any calendar year to any
individual shall be limited to 50,000 and the maximum individual limit on the
number of shares in the aggregate subject to all Awards that during any calendar
year are granted under this Plan shall be 50,000. Each of the four
foregoing numerical limits shall be subject to adjustment as contemplated by
this Section 1.4 and Section 5.2.
(c) Share Reservation;
Replenishment and Reissue of Unvested Awards. No Award may be
granted under this Plan unless, on the date of grant, the sum of (i) the maximum
number of shares issuable at any time pursuant to such Award, plus (ii) the
number of shares that have previously been issued pursuant to Awards granted
under this Plan, other than reacquired shares available for reissue consistent
with any applicable legal limitations, plus (iii) the maximum number of shares
that may be issued at any time after such date of grant pursuant to Awards that
are outstanding on such date, does not exceed the Share Limit. Shares
that are subject to or underlie Awards which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan, as well as reacquired shares, shall
again, except to the extent prohibited by law, be available for subsequent
Awards under the Plan. Except as limited by law, if an Award is or
may be settled only in cash, such Award need not be counted against any of the
limits under this Section 1.4.
2
Subject to
the express provisions of this Plan, the Committee shall determine the number of
shares of Common Stock subject to each Award and the price (if any) to be paid
for the shares or the Award. Each Award shall be evidenced by an
Award Agreement signed by the Corporation and, if required by the Committee, by
the Participant. The Award Agreement shall set forth the material
terms and conditions of the Award established by the Committee consistent with
the specific provisions of this Plan.
Each Award
and all executory rights or obligations under the related Award Agreement shall
expire on such date (if any) as shall be determined by the Committee, but in the
case of Options not later than ten (10) years after the Award Date.
(a) Provisions for
Exercise. Unless the Committee otherwise expressly provides,
no Award shall be exercisable or shall vest until at least six months after the
initial Award Date, and once exercisable an Award shall remain exercisable until
the expiration or earlier termination of the Award.
(b) Procedure. Any
exercisable Award shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the Participant,
together with any required payment made in accordance with Section
2.2.
(c) Fractional Shares/Minimum
Issue. Fractional share interests shall be disregarded, but
may be accumulated. The Committee, however, may determine in the case of
Eligible Employees that cash, other securities, or other property will be paid
or transferred in lieu of any fractional share interests. No fewer
than 100 shares may be purchased on exercise of any Award at one time unless the
number purchased is the total number at the time available for purchase under
the Award.
To the
extent permitted by applicable law, the Corporation may, with the Committee’s
approval, accept one or more notes from any Eligible Employee in connection with
the exercise or receipt of any outstanding Award; provided that any such note
shall be subject to the following terms and conditions:
3
(a) The
principal of the note shall not exceed the amount required to be paid to the
Corporation upon the exercise or receipt of one or more Awards under the Plan
and the note shall be delivered directly to the Corporation in consideration of
such exercise or receipt.
(b) The
initial term of the note shall be determined by the Committee; provided that the
term of the note, including extensions, shall not exceed a period of five
years.
(c) The
note shall provide for full recourse to the Participant and shall bear interest
at a rate determined by the Committee but not less than the interest rate
necessary to avoid the imputation of interest under the Code.
(d) If the
employment of the Participant terminates, the unpaid principal balance of the
note shall become due and payable on the 10th business day after such
termination; provided, however, that if a sale of such shares would cause such
Participant to incur liability under Section 16(b) of the Exchange Act, the
unpaid balance shall become due and payable on the 10th business day after the
first day on which a sale of such shares could have been made without incurring
such liability assuming for these purposes that there are no other transactions
(or deemed transactions in securities of this Corporation) by the Participant
subsequent to such termination.
(e) If
required by the Committee or by applicable law, the note shall be secured by a
pledge of any shares or rights financed thereby in compliance with applicable
law.
(f) The
terms, repayment provisions, and collateral release provisions of the note and
the pledge securing the note shall conform with applicable rules and regulations
of the Federal Reserve Board asthen in effect.
(a) Limit On Exercise and
Transfer. Unless otherwise expressly provided in (or pursuant
to) this Section 1.9, by applicable law and by the Award Agreement, as the same
may be amended, (i) all Awards are non-transferable and shall not be subject in
any manner to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; (ii) awards shall be exercised only by the Participant;
and (iii) amounts payable or shares issuable pursuant to an Award shall be
delivered only to (or for the account of) the Participant.
(b) Exceptions. The
Committee may permit Awards to be exercised by and paid only to certain persons
or entities related to the Participant, including but not limited to members of
the Participant’s immediate family, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Participant’s immediate
family, pursuant to such conditions and procedures as the Committee may
establish. Any permitted transfer shall be subject to the condition
that the Committee receive evidence satisfactory to it that the transfer is
being made for essentially estate and/or tax planning purposes on a gratuitous
or donative basis and without consideration (other than nominal consideration or
in exchange for an interest in a qualified
transferee). Notwithstanding the foregoing or anything to the
contrary in Section 1.9(c), ISOs and Restricted Stock Awards shall be subject to
any and all additional transfer restrictions under the Code.
(c) Further Exceptions to Limits
On Transfer. The exercise and transfer restrictions in Section
1.9(a) shall not apply to:
4
(i)
transfers to the Corporation,
(ii) the
designation of a beneficiary to receive benefits in the event of the
Participant’s death or, if the Participant has died, transfers to or exercise by
the Participant’s beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and
distribution,
(iii)
transfers pursuant to a QDRO order if approved or ratified by the
Committee,
(iv) if
the Participant has suffered a disability, permitted transfers or exercises on
behalf of the Participant by his or her legal representative, or
(v) the
authorization by the Committee of “cashless exercise” procedures with third
parties who provide financing for the purpose of (or who otherwise facilitate)
the exercise of Awards consistent with applicable laws and the express
authorization of the Committee.
One or
more Options may be granted under this Article to any Eligible
Employee. Each Option granted shall be designated in the applicable
Award Agreement, by the Committee as either an Incentive Stock Option, subject
to Section 2.3, or a Non-Qualified Stock Option.
(a)
Pricing Limits. The
purchase price per share of the Common Stock covered by each Option shall be
determined by the Committee at the time of the Award, but shall not be less than
100% (110% in the case of an ISO granted to a Participant described in Section
2.4) of the Fair Market Value of the Common Stock on the date of
grant.
(b) Payment Provisions.
The purchase price of any shares purchased on exercise of an Option granted
under this Article shall be paid in full at the time of each purchase in one or
a combination of the following methods: (i) in cash or by electronic
funds transfer; (ii) by check payable to the order of the
Corporation; (iii) if authorized by the Committee or specified in the
applicable Award Agreement, by a promissory note of the Participant consistent
with the requirements of Section 1.8; (iv) by notice and third party payment in
such manner as may be authorized by the Committee; or (v) by the delivery of
shares of Common Stock of the Corporation already owned by the Participant,
provided, however, that the
Committee may in its absolute discretion limit the Participant’s ability to
exercise an Award by delivering such shares, and provided further that any
shares delivered which were initially acquired upon exercise of a stock option
must have been owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise price
of an Option shall be valued at their Fair Market Value on the date of
exercise.
5
(a) $100,000
Limit. To the extent that the aggregate “Fair Market Value” of
stock with respect to which incentive stock options first become exercisable by
a Participant in any calendar year exceeds $100,000, taking into account both
Common Stock subject to Incentive Stock Options under this Plan and stock
subject to incentive stock options under all other plans of the Company, such
options shall be treated as Nonqualified Stock Options. For this
purpose, the “Fair Market Value” of the stock subject to options shall be
determined as of the date the options were awarded. In reducing the
number of options treated as incentive stock options to meet the $100,000 limit,
the most recently granted options shall be reduced first. To the
extent a reduction of simultaneously granted options is necessary to meet the
$100,000 limit, the Committee may, in the manner and to the extent permitted by
law, designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option
Period. Each Option and all rights thereunder shall expire no
later than 10 years after the Award Date.
(c) Other Code
Limits. Incentive Stock Options may only be granted to
Eligible Employees of the Corporation or a Subsidiary that satisfies the other
eligibility requirements of the Code. There shall be imposed in any
Award Agreement relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the Option be an
“incentive stock option” as that term is defined in Section 422 of the
Code.
No
Incentive Stock Option may be granted to any person who, at the time the Option
is granted, owns (or is deemed to own under Section 424(d) of the Code) shares
of outstanding Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
Subject to
Section 1.4 and Section 5.6 and the specific limitations on Awards contained in
this Plan, the Committee from time to time may authorize, generally or in
specific cases only, for the benefit of any Eligible Employee any adjustment in
the exercise or purchase price, the vesting schedule, the number of shares
subject to, the restrictions upon or the term of, an Option granted under this
Article by cancellation of an outstanding Option and a subsequent regranting of
an Option, by amendment, by substitution of an outstanding Option, by waiver or
by other legally valid means. Such amendment or other action may
result in, among other changes, an exercise or purchase price which is higher or
lower than the exercise or purchase price of the original or prior Option,
provide for a greater or lesser number of shares subject to the Option, or
provide for a longer or shorter vesting or exercise period; provided, however,
that, except for adjustments contemplated by Section 5.2, any such amendment
that results in the reduction of the exercise or purchase price below the
exercise price or purchase price of the original or prior Option shall be
subject to prior shareholder approval.
6
(a) Options - Resignation or
Dismissal. If the Participant’s employment by the Company
terminates for any reason (the date of such termination being referred to as the
“Severance
Date”) other than Retirement, Total Disability or death, or for Cause (as
determined in the discretion of the Committee), the Participant shall have,
unless otherwise provided in the Award Agreement and subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 5.2, three months
after the Severance Date to exercise any Option to the extent it shall have
become exercisable on the Severance Date. In the case of a
termination for Cause, the Option shall terminate on the Severance
Date. In other cases, the Option, to the extent not exercisable on
the Severance Date, shall terminate.
(b) Options - Death or
Disability. If the Participant’s employment by the Company
terminates as a result of Total Disability or death, the Participant,
Participant’s Personal Representative or his or her Beneficiary, as the case may
be, shall have, unless otherwise provided in the Award Agreement and subject to
earlier termination pursuant to or as contemplated by Section 1.6 or 5.2, until
12 months after the Severance Date to exercise any Option to the extent it shall
have become exercisable by the Severance Date. Any Option to the
extent not exercisable on the Severance Date shall terminate.
(c) Options -
Retirement. If the Participant’s employment by the Company
terminates as a result of Retirement, the Participant, Participant’s Personal
Representative or his or her Beneficiary, as the case may be, shall have, unless
otherwise provided in the Award Agreement and subject to earlier termination
pursuant to or as contemplated by Section 1.6 or 5.2, until 12 months after the
Severance Date to exercise any Option to the extent it shall have become
exercisable by the Severance Date. The Option, to the extent not
exercisable on the Severance Date, shall terminate.
(d) Committee
Discretion. Notwithstanding the foregoing provisions of this
Section 2.6, in the event of, or in anticipation of, a termination of employment
with the Company for any reason, other than discharge for Cause, the Committee
may, in its discretion, increase the portion of the Participant’s Option
available to the Participant, or Participant’s Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions of Section
1.6, extend the exercisability period upon such terms as the Committee shall
determine and expressly set forth in or by amendment to the Award Agreement;
provided, however, that in no event shall any such extension of the
exercisability period exceed the latest of (i) the 15th day of
the third month following the date that the Option would have otherwise
terminated in connection with a termination of employment, (ii) December 31 of
the calendar year in which the Option would have otherwise terminated in
connection with a termination of employment (but in no event shall such
exercisability period be extended to a date after the termination of the
original term pursuant to Section 1.6 hereof), or (iii) such other date that is
allowable under Section 409A of the Code without making the Option subject to
Section 409A.
The
Committee may, in its discretion, grant one or more Restricted Stock Awards to
any Eligible Employee. Each Restricted Stock Award Agreement shall
specify the number of shares of Common Stock to be issued to the Participant,
the date of such issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by the Participant,
the extent (if any) to which and the time (if ever) at which the Participant
shall be entitled to dividends, voting and other rights in respect of the shares
prior to vesting, and the restrictions (which may be based on performance
criteria, passage of time or other factors or any combination thereof) imposed
on such shares and the conditions of release or lapse of such
restrictions. Such restrictions shall not lapse earlier than six
months after the Award Date, except to the extent the Committee may otherwise
provide. Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions (“Restricted Shares”) shall bear a legend
making appropriate reference to the restrictions imposed hereunder and shall be
held by the Corporation or by a third party designated by the Committee until
the restrictions on such shares shall have lapsed and the shares shall have
vested in accordance with the provisions of the Award and Section
1.7. Upon issuance of the Restricted Stock Award, the Participant may
be required to provide such further assurance and documents as the Committee may
require to enforce the restrictions.
7
(a) Pre-Vesting
Restraints. Except as provided in Section 3.1 and 1.9,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until the restrictions on such shares have lapsed
and the shares have become vested.
(b) Dividend and Voting
Rights. Unless otherwise provided in the applicable Award
Agreement, a Participant receiving a Restricted Stock Award shall be entitled to
cash dividend and voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as to any
Restricted Shares which cease to be eligible for vesting.
(c) Cash
Payments. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any Restricted Shares which
cease to be eligible for vesting.
Unless the
Committee otherwise expressly provides, Restricted Shares that remain subject to
restrictions at the time of termination of employment or are subject to other
conditions to vesting that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned to the
Corporation in such manner and on such terms as the Committee shall therein
provide.
The
Committee may, in its discretion, (a) authorize and grant to any Eligible
Employee a Stock Unit Award, (b) credit to any Eligible Employee Stock Units,
(c) permit an Eligible Employee to irrevocably elect to defer by means of Stock
Units or receive in Stock Units all or a portion of any Award hereunder, or (d)
grant Stock Units in lieu of, in exchange for, in respect of, or in addition to
any other compensation or Award under this Plan. The specific terms,
conditions, and provisions relating to each Stock Unit grant or election,
including the applicable vesting and payout provisions of the Stock Units and
the form of payment to be made at or following the vesting thereof, shall be set
forth in or pursuant to the applicable Award Agreement and any relevant Company
bonus, performance or other service or deferred compensation plan, in form
substantially as approved by the Committee, in each case subject to compliance
with Section 409A of the Code.
8
Subject to
compliance with Section 409A of the Code, the Committee in the applicable Stock
Unit Award Agreement or other award agreement or the relevant Company deferred
compensation plan may permit the Eligible Employee to elect the form and time of
payout of vested Stock Units on such conditions or subject to such procedures as
the Committee may impose, and may permit Stock Unit offsets or other provision
for payment of any applicable taxes that may be due on the crediting, vesting or
payment in respect of the Stock Units.
Rights in
respect of Stock Unit awards may not be sold, pledged, assigned, hypothecated,
transferred, or otherwise disposed of or encumbered, either voluntarily or
involuntarily, other than by will or the laws of descent or distribution, until
any restrictions have lapsed and the shares issuable pursuant to the Stock Unit
award have been issued.
In its
discretion, the Committee may grant to any Eligible Employee “Dividend
Equivalent Rights” concurrently with the grant of any Stock Unit award, on such
terms as set forth by the Committee in the Stock Unit Agreement or other
applicable award agreement. Dividend Equivalent Rights shall be based
on all or part of the amount of dividends declared on shares of Common Stock and
shall be credited as of dividend payment dates, during the period between the
date of grant (or such later date as the Committee may set) and the date the
Stock Unit award expires (or such earlier date as the Committee may set), as
determined by the Administrator. Dividend Equivalent Rights shall be
payable in cash or Shares, and may be subject to such conditions, as may be
determined by the Administrator.
Unless the
Committee otherwise expressly provides, Restricted Stock Units that remain
subject to conditions to vesting at the time of termination of employment or
service or are subject to other conditions to vesting that have not been
satisfied by the time specified in the applicable Award Agreement shall not vest
and shall be cancelled, unless the Committee otherwise provides in or by
amendment to the applicable terms of the Award.
(a) Employment
Status. Status as an Eligible Employee shall not be construed
as a commitment that any Award will be made under this Plan to an Eligible
Employee or to Eligible Employees generally.
(b) No Employment
Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any Award) shall confer upon any Eligible
Employee or Participant any right to continue in the employ or other service of
the Company, constitute any contract or agreement of employment or other service
or affect an employee’s status as an employee at will, nor shall interfere in
any way with the right of the Company to change a person’s compensation or other
benefits, or to terminate his or her employment or other service, with or
without cause. Nothing in this Section, however, is intended to
adversely affect any express independent right of such person under a separate
employment or service contract other than an Award Agreement.
9
(c) Plan Not
Funded. Awards payable under this Plan shall be payable in
shares or from the general assets of the Corporation, and (except as provided in
Section 1.4(c)) no special or separate reserve, fund or deposit shall be made to
assure payment of such Awards. No Participant, Beneficiary or other
person shall have any right, title or interest in any fund or in any specific
asset (including shares of Common Stock, except as expressly otherwise provided)
of the Company by reason of any Award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person. To the extent that a Participant, Beneficiary or other person
acquires a right to receive payment pursuant to any Award hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.
(a) Adjustments. Upon
or in contemplation of any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend) or reverse stock
split; any merger, combination, consolidation, or other reorganization; any
spin-off, split-up, or similar extraordinary dividend distribution (“spin-off”)
in respect of the Common Stock (whether in the form of securities or property);
any exchange of Common Stock or other securities of the Corporation, or any
similar, unusual or extraordinary corporate transaction in respect of the Common
Stock; or a sale of all or substantially all the assets of the Corporation as an
entirety (“asset sale”); then the Committee shall, in such manner, to such
extent (if any) and at such time as it deems appropriate and equitable in the
circumstances:
(1)
proportionately adjust any or all of (a) the number and type of shares of Common
Stock (or other securities) that thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth elsewhere in this
Plan), (b) the number, amount and type of shares of Common Stock (or other
securities or property) subject to any or all outstanding Awards, (c) the grant,
purchase, or exercise price of any or all outstanding Awards, (d) the
securities, cash or other property deliverable upon exercise of any outstanding
Awards, or (e) (subject to limitations under Section 5.10(c)) the performance
standards appropriate to any outstanding Awards, or
(2) make
provision for a cash payment or for the assumption, substitution or exchange of
any or all outstanding share-based Awards or the cash, securities or property
deliverable to the holder of any or all outstanding share-based Awards, based
upon the distribution or consideration payable to holders of the Common Stock
upon or in respect of such event.
The
Committee may adopt such valuation methodologies for outstanding Awards as it
deems reasonable in the event of a cash or property settlement and, in the case
of Options, but without limitation on other methodologies, may base such
settlement solely upon the excess if any of the amount payable upon or in
respect of such event over the exercise or strike price of the
Award.
10
In each
case, with respect to Awards of Incentive Stock Options, no adjustment shall be
made in a manner that would cause the Plan to violate Section 422 or 424(a) of
the Code or any successor provisions without the written consent of holders
materially adversely affected thereby. Further, in each case, no
adjustment shall be made to any Award that would subject the holder of such
Award to additional tax under Section 409A of the Code with respect to such
Award.
In any of
such events, the Committee may take such action prior to such event to the
extent that the Committee deems the action necessary to permit the Participant
to realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is or will be available to shareholders
generally.
(b) Possible Early Termination
of Accelerated Awards. If any Option or other right to acquire Common
Stock under this Plan has been fully accelerated as required or permitted by
Section 5.2(c) but is not exercised prior to (1) a dissolution of the Company,
or (2) an event described in Section 5.2(a) that the Company does not survive,
or (3) the consummation of an event described in Section 5.2(a) involving a
Change of Control Event approved by the Board, such Option or right shall
terminate, subject to any provision that has been expressly made by the Board or
the Committee, through a plan of reorganization or otherwise, for the survival,
substitution, assumption, exchange or other settlement of such Option or
right.
(c) Acceleration of Awards Upon
Change in Control. Unless prior to a Change in Control Event
the Committee determines that, upon its occurrence, benefits under any or all
Awards shall not be accelerated or determines that only certain or limited
benefits under any or all Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Event for such acceleration, then upon the occurrence of a Change in
Control Event:
(1) each
Option shall become immediately exercisable, and
(2)
Restricted Stock shall immediately vest free of restrictions, and
(3)
Restricted Stock Units shall immediately vest free of restrictions and become
payable.
The
Committee may override the limitations on acceleration in this Section 5.2(c) by
express provision in the Award Agreement and may accord any Eligible Employee a
right to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Committee may approve. Any
acceleration of Awards shall comply with applicable legal requirements and, if
necessary to accomplish the purposes of the acceleration or if the circumstances
require, may be deemed by the Committee to occur (subject to Section 5.2(d) a
limited period of time not greater than 30 days before the
event. Without limiting the generality of the foregoing, the
Committee may deem an acceleration to occur immediately prior to the applicable
event and/or reinstate the original terms of an Award if an event giving rise to
an acceleration does not occur. Notwithstanding the foregoing, an
Award shall not be accelerated and/or become payable pursuant to this Section
5(c) to the extent that such acceleration and/or payment shall cause the holder
of such Award to be subjected to additional tax under Section 409A of the Code
with respect to such Award.
(d) Possible Rescission of
Acceleration. If the vesting of an Award has been accelerated
expressly in anticipation of an event or upon shareholder approval of an event
and the Committee or the Board later determines that the event will not occur,
the Committee may rescind the effect of the acceleration as to any then
outstanding and unexercised or otherwise unvested Awards.
11
(e) Acceleration Upon
Termination of Service Following a Change in Control.
(1) Termination After Change in
Control. If any Participant’s employment is terminated by the
Company upon or within one year after a Change in Control Event, and the
termination is not the result of death, Total Disability, Retirement or a
termination for Cause, then, subject to the other provisions of this Section 5.2
(including without limitation Section 5.2(b) and Section 5.4), all outstanding
Options and other Awards held by the Participant
shall be deemed fully vested immediately prior to the Severance Date and Stock
Units shall become payable upon such Severance Date (or, to the extent
applicable under Section 409A, upon the date that is six months after such
Severance Date), irrespective of the vesting and/or payment provisions of the
Participant’s Award Agreement, unless the Award Agreement specifies a different
result in the case of a Change in Control Event.
(2) No Extension Beyond
Expiration. Notwithstanding the foregoing, in no event shall
an Award be reinstated or extended beyond its final expiration
date.
(a) General. The
Committee shall establish the effect of a termination of employment on the
rights and benefits under each Award under this Plan and in so doing may make
distinctions based upon the cause of termination.
(b) Events Not Deemed
Terminations of Service. Unless Company policy or the
Committee otherwise provides, the employment relationship shall not be
considered terminated in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence authorized by the Company or the Committee;
provided that unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any Eligible Employee on an approved leave of absence,
continued vesting of the Award while on leave from the employ of the Company
shall be suspended, unless the Committee otherwise provides or applicable law
otherwise requires. In no event shall an Award be exercised after the
expiration of the term set forth in the Award Agreement.
(c) Effect of Change of
Subsidiary Status. For purposes of this Plan and any Award, if
an entity ceases to be a Subsidiary a termination of employment shall be deemed
to have occurred with respect to each Eligible Employee in respect of the
Subsidiary who does not continue as an Eligible Employee in respect of another
entity within the Company.
This Plan,
the granting and vesting of Awards under this Plan, the offer, issuance and
delivery of shares of Common Stock, the acceptance of promissory notes and/or
the payment of money under this Plan or under Awards are subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law and federal margin requirements)
and to such approvals by any listing, regulatory or governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. The person acquiring any securities under this
Plan will, if requested by the Company, provide such assurances and
representations to the Company as the Committee may deem necessary or desirable
to assure compliance with all applicable legal and accounting
requirements.
12
(a) Provision for Tax
Withholding or Offset. Upon any exercise, vesting, or payment
of any Award or upon the disposition of shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company shall have
the right at its option to (i) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or provide for payment
of the minimum amount of any taxes which the Company may be required to withhold
with respect to such Award event or payment or (ii) deduct from any amount
payable in cash the minimum amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case
where a tax is required to be withheld in connection with the delivery of shares
of Common Stock under this Plan, the Committee may in its sole discretion
(subject to Section 5.4) grant (either at the time of the Award or thereafter)
to the Participant the right to elect, pursuant to such rules and subject to
such conditions as the Committee may establish, to have the Corporation reduce
the number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their Fair Market Value, to satisfy such minimum
withholding obligation, determined in each case as of the trading day next
preceding the applicable date of exercise, vesting or payment. Shares in no event shall
be withheld in excess of the minimum number required for tax withholding under
these provisions.
(a) Board
Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this
Plan.
(b) Shareholder
Approval. To the extent then required under Sections 162, 422
or 424 of the Code or any other applicable law, or by the provisions of Section
2.5 of the Plan, or deemed necessary or advisable by the Board, any amendment to
this Plan shall be subject to shareholder approval.
(c) Amendments to
Awards. Without limiting any other express authority of the
Committee under (but subject to) the express limits of this Plan, the Committee
by agreement or resolution may waive conditions of or limitations on Awards to
Participants that the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and (subject to the requirements
of Section 1.2(b)) may make other changes to the terms and conditions of Awards
that do not affect in any manner materially adverse to the Participant, the
Participant’s rights and benefits under an Award.
(d) Limitations on Amendments to
Plan and Awards. No amendment, suspension or termination of
this Plan or change of or affecting any outstanding Award shall, without written
consent of the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or obligations of the
Company under any Award granted under this Plan prior to the effective date of
such change. Changes contemplated by Section 5.2 shall not be deemed
to constitute changes or amendments for purposes of this Section
5.6.
13
Except as
otherwise expressly authorized by the Committee or this Plan, a Participant
shall not be entitled to any privilege of stock ownership as to any shares of
Common Stock not actually delivered to and held of record by the
Participant. No adjustment will be made for dividends or other rights
as a shareholder for which a record date is prior to such date of
delivery.
This Plan
is effective as of January 27, 2000 the date of approval by the
Board. The Plan shall be submitted for and subject to shareholder
approval.
No Award
will be granted under this Plan after January 26, 2010 (the “termination
date”). Unless otherwise expressly provided in this Plan or in an
applicable Award Agreement, any Award granted prior to the termination date may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder, including the authority to amend an Award, shall continue
during any suspension of this Plan and in respect of Awards outstanding on the
termination date.
(a) Choice of
Law. This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the State of California.
(b) Severability. If
a court of competent jurisdiction holds any provision invalid and unenforceable,
the remaining provisions of this Plan shall continue in effect.
(c) Plan Construction.
(1) Rule
16b-3. It is the intent of the Corporation that the Awards and
transactions permitted by Awards be interpreted in a manner that, in the case of
Participants who are or may be subject to Section 16 of the Exchange Act,
satisfies the applicable requirements for exemptions under Rule
16b-3. The exemption will not be available if the authorization of
actions by any Committee of the Board with respect to such Awards does not
satisfy the applicable conditions of Rule 16b-3. Notwithstanding the
foregoing, the Corporation shall have no liability to any Participant for
Section 16 consequences of Awards or events under Awards.
(2) Section
162(m). It is the further intent of the Company that (to the
extent the Company or Awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code), Options granted
with an exercise or base price not less than Fair Market
Value on the date of grant will qualify as performance-based compensation or
otherwise be exempt from deductibility limitations under Section 162(m) of the
Code, to the extent that the authorization of the Award (or the payment thereof,
as the case may be) satisfies any applicable administrative requirements
thereof.
14
Captions
and headings are given to the sections and subsections of this Plan solely as a
convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
this Plan or any provision thereof.
Awards may
be granted to Eligible Employees under this Plan in substitution for employee
stock options, stock appreciation rights, restricted stock or other stock-based
awards granted by other entities to persons who are or who will become Eligible
Employees in respect of the Company, in connection with a distribution, merger
or other reorganization by or with the granting entity or an affiliated entity,
or the acquisition by the Company, directly or indirectly, or all or a
substantial part of the stock or assets of the employing entity.
Nothing in
this Plan shall limit or be deemed to limit the authority of the Board or the
Committee to grant awards or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or authority.
The
existence of the Plan, the Award Agreements and the Awards granted hereunder
shall not limit, affect or restrict in any way the right or power of the Board
or the shareholders of the Corporation to make or authorize: (a) any adjustment,
recapitalization, reorganization or other change in the Corporation’s or any
Subsidiary’s capital structure or its business, (b) any merger, amalgamation,
consolidation or change in the ownership of the Corporation or any subsidiary,
(c) any issue of bonds, debentures, capital, preferred or prior preference stock
ahead of or affecting the Corporation’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the Corporation or
any Subsidiary’s assets or business, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary. No participant,
beneficiary or any other person shall have any claim under any Award or Award
Agreement against any member of the Board or the Committee, or the Corporation
or any employees, officers or agents of the Corporation or any Subsidiary, as a
result of any such action.
Payments
and other benefits received by a Participant under an Award made pursuant to
this Plan shall not be deemed a part of a Participant’s compensation for
purposes of the determination of benefits under any other employee welfare or
benefit plans or arrangements, if any, provided by the Corporation or any
Subsidiary, except where the Committee or the Board expressly otherwise provides
or authorizes in writing. Awards under this Plan may be made in
addition to, in combination with, as alternatives to or in payment of grants,
awards or commitments under any other plans or arrangements of the Company or
the Subsidiaries.
15
(a) “Award” means an award
of any Option, Restricted Stock or Stock Unit or any combination thereof,
whether alternative or cumulative, authorized by and granted under this
Plan.
(b) “Award Agreement”
means any writing setting forth the terms of an Award that has been authorized
by the Committee.
(c) “Award Date” means the
date upon which the Committee took the action granting an Award or such later
date as the Committee designates as the Award Date at the time of the
Award.
(d) “Award Period” means
the period beginning on an Award Date and ending on the expiration date of such
Award.
(e) “Beneficiary” means
the person, persons, trust or trusts designated by a Participant or, in the
absence of a designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award Agreement and under
this Plan in the event of a Participant’s death, and shall mean the
Participant’s executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.
(f) “Board” means the
Board of Directors of the Corporation.
(g) “Cause” with respect
to a Participant means (unless otherwise expressly provided in the applicable
Award Agreement or another applicable contract with the Participant) a
termination of employment based upon a finding by the Company, acting in good
faith and based on its reasonable belief at the time, that the
Participant:
(1) has
failed to render services to the Company where such failure amounts to gross
negligence or misconduct of the Participant’s responsibility and duties;
or
(2) has
committed an act of fraud or been dishonest against the Company or any affiliate
of the Company; or
(3) has
been convicted of a felony or other crime involving moral
turpitude.
A
termination for Cause shall be deemed to occur (subject to reinstatement upon a
contrary final determination by the Committee) on the date on which the Company
first delivers written notice to the Participant of a finding of termination for
Cause.
(h) “Change in Control
Event” means any of the following events
(1) the
dissolution or liquidation of either the Company, unless its business is
continued by another entity in which holders of the Company’s voting securities
immediately before the event own, either directly or indirectly, more than 50%
of the continuing entity’s voting securities immediately after the
event;
16
(2) any
sale, lease, exchange or other transfer (in one or a series of transactions) of
all or substantially all of the assets of either the Company, unless its
business is continued by another entity in which holders of the Company’s voting
securities immediately before the event own, either directly or indirectly, more
than 50% of the continuing entity’s voting securities immediately after the
event;
(3) any
reorganization or merger of the Company, unless the holders of the Company’s
voting securities immediately before the event own, either directly or
indirectly, more than 50% of the continuing or surviving entity’s voting
securities immediately after the event;
(4) an
acquisition by any person, entity or group acting in concert of more than 50% of
the voting securities of the Company, unless the holders of the Company’s voting
securities immediately before the event own, either directly or indirectly, more
than 50% of the acquirer’s voting securities immediately after the acquisition;
or
(5) a
change of one-half or more of the members of the Board of Directors of the
Company within a twelve-month period, unless the election or nomination for
election by shareholders of new directors within such period constituting a
majority of the applicable Board was approved by the vote of at least two-thirds
of the directors then still in office who were in office at the beginning of the
twelve-month period.
(i) “Code” means the
Internal Revenue Code of 1986, as amended from time to time.
(j) “Commission” means the
Securities and Exchange Commission.
(k) “Committee” means the
Board or one or more committees appointed by the Board to administer all or
certain aspects of this Plan, each committee to be comprised solely of one or
more directors or such number as may be required under applicable
law.
(l) “Common Stock” means
the Common Shares of the Corporation and such other securities or property as
may become the subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 5.2 of this Plan.
(m) “Company” means,
collectively, the Corporation and its Subsidiaries.
(n) “Corporation” means
American States Water Company, a California corporation, and its
successors.
(o) “Eligible Employee”
means an officer (whether or not a director) or key employee of the Company,
including participants in the American States Water Company Annual Incentive
Plan.
(p) “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.
17
(q) “Fair Market Value” on
any date means (1) if the stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock on the Composite Tape, as
published in the Western Edition of The Wall Street Journal, of the principal
national securities exchange on which the stock is so listed or admitted to
trade, on such date, or, if there is no trading of the stock on such date, then
the closing price of the stock as quoted on such Composite Tape on the next
preceding date on which there was trading in such shares; (2) if the stock is
not listed or admitted to trade on a national securities exchange, the last
price for the stock on such date, as furnished by the National Association of
Securities Dealers, Inc. (“NASD”) through the NASDAQ National Market Reporting
System or a similar organization if the NASD is no longer reporting such
information; (3) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market Reporting System,
the mean between the bid and asked price for the stock on such date, as
furnished by the NASD or a similar organization; or (4) if the stock is not
listed or admitted to trade on a national securities exchange, is not reported
on the National Market Reporting System and if bid and asked prices for the
stock are not furnished by the NASD or a similar organization, the value as
established by the Committee at such time for purposes of this
Plan.
(r) “Incentive Stock
Option” means an Option which is intended, as evidenced by its
designation, as an incentive stock option within the meaning of Section 422 of
the Code, the award of which contains such provisions and is made under such
circumstances and to such persons as may be necessary to comply with that
section.
(s) “Nonqualified Stock
Option” means an Option that is designated as a Nonqualified Stock
Option and shall include any Option intended as an Incentive Stock
Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an
incentive stock option shall be deemed to be designated a nonqualified stock
option under this Plan and not an incentive stock option under the
Code.
(t) “Option” means an
option to purchase Common Stock granted under this Plan. The
Committee shall designate any Option granted to an Eligible Employee as a
Nonqualified Stock Option or an Incentive Stock Option.
(u) “Participant” means an
Eligible Employee who has been granted an Award under this Plan.
(v) “Personal
Representative” means the person or persons who, upon the disability or
incompetence of a Participant, shall have acquired on behalf of the Participant,
by legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan and who shall have become the legal representative of
the Participant.
(w) “Plan” means this 2000
Stock Incentive Plan, as it may be amended from time to time.
(x) “QDRO” means a
qualified domestic relations order.
(y) “Restricted Shares” or
“Restricted Stock” means shares of Common Stock awarded to a Participant
under this Plan, subject to payment of such consideration, if any, and such
conditions on vesting (which may include, among others, the passage of time,
specified performance objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan and the related
Award Agreement, for so long as such shares remain unvested under the terms of
the applicable Award Agreement.
18
(z) “Restricted Stock
Unit” means a Stock Unit subject to such conditions on vesting and payout
as the Committee may determine.
(aa)
“Retirement”
means retirement from active service as an employee or officer of the Company on
or after attaining age 65.
(bb)
“Rule
16b-3” means Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time.
(cc)
“Section 16
Person” means a person subject to Section 16(a) of the Exchange
Act.
(dd)
“Securities
Act” means the Securities Act of 1933, as amended from time to
time.
(ee)
“Stock Unit”
means a bookkeeping entry that serves as a unit of measurement relative to a
share of Common Stock for purposes of determining the payment of the Stock Unit
grant. Stock Units are not outstanding shares of Common Stock and do
not entitle a grantee to any dividend, voting or other rights in respect of any
Common Stock. Stock Units may, however, by express provision in the
applicable Award Agreement, entitle a Participant to dividend equivalent rights,
credited in the form of cash or additional Stock Units, as determined by the
Committee.
(ff)
“Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation.
(gg)
“Total
Disability” means a “permanent and total disability” within the meaning
of Section 22(e)(3) of the Code and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include.
19
AMENDMENT
TO
THE
AMERICAN
STATES WATER COMPANY
2000
STOCK INCENTIVE PLAN
(As
Amended as of January 31, 2006)
WHEREAS, American States Water
Company (the “Corporation”) maintains the American States Water Company 2000
Stock Incentive Plan (the “Plan”); and
WHEREAS, Section 5.6 of the
Plan provides that the Board of Directors may amend the Plan.
NOW, THEREFORE BE IT RESOLVED,
that the Plan be, and it hereby is, amended as set forth below:
Effective
as of November 1, 2006, Section 5.2(a) is amended in its entirety to
read as follows:
“(a)(1) Adjustments. Upon
(or, as may be necessary to effect the adjustment, immediately prior to): any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Corporation, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock;
then the Committee shall equitably and proportionately adjust (1) the
number and type of shares of Common Stock (or other securities) that thereafter
may be made the subject of awards (including the specific share limits, maximums
and numbers of shares set forth elsewhere in this Plan), (2) the number, amount
and type of shares of Common Stock (or other securities or property) subject to
any outstanding awards, (3) the grant, purchase, or exercise price of any
outstanding awards, and/or (4) the securities, cash or other property
deliverable upon exercise or payment of any outstanding awards, in each case to
the extent appropriate to preclude the enlargement or dilution of rights and
benefits under such awards.
Unless
otherwise expressly provided in the applicable award agreement, upon (or, as may
be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Corporation as an entirety,
the Committee shall equitably and proportionately adjust the performance
standards applicable to any then-outstanding performance-based awards to the
extent necessary to preserve (but not increase) the level of incentives intended
by the Plan and the then-outstanding performance-based awards.
It is
intended that, if possible, any adjustments contemplated by the preceding two
paragraphs be made in a manner that satisfies applicable legal, tax (including,
without limitation and as applicable in the circumstances, Section 424 of the
Code, Section 409A of the Code and Section 162(m) of the Code) and accounting
(so as to not trigger any charge to earnings with respect to such adjustment)
requirements.
Without
limiting the generality of Section 1.2, any good faith determination by the
Committee pursuant to this Section 5.2(a)(1) shall be conclusive and binding on
all persons.
(2) Corporate
Transactions-Assumption or Termination of Awards. Upon the
occurrence of any of the following: any merger, combination, consolidation, or
other reorganization; any exchange of Common Stock or other securities of the
Corporation; a sale of all or substantially all the business, stock or assets of
the Corporation; a dissolution of the Corporation; or any other event in which
the Corporation does not survive (or does not survive as a public company in
respect of its Common Stock); then the Committee may make provision for a cash
payment in settlement of, or for the assumption, substitution or exchange of any
or all outstanding share-based awards or the cash, securities or property
deliverable to the holder of any or all outstanding share-based awards, based
upon, to the extent relevant under the circumstances, the distribution or
consideration payable to holders of the Common Stock upon or in respect of such
event.
The
Committee may adopt such valuation methodologies for outstanding awards as it
deems reasonable in the event of a cash or property settlement and, in the case
of Options or similar rights, but without limitation on other methodologies, may
base such settlement solely upon the excess if any of the per share amount
payable upon or in respect of such event over the exercise or base price of the
award.
In any of
the events referred to in this Section 5.2(a)(2), the Committee may take such
action contemplated by this Section 5.2(a)(2) prior to such event (as opposed to
on the occurrence of such event) to the extent that the Committee deems the
action necessary to permit the participant to realize the benefits intended to
be conveyed with respect to the underlying shares.
Without
limiting the generality of Section 1.2, any good faith determination by the
Committee pursuant to this Section 5.2(a)(2) shall be conclusive and binding on
all persons.”
IN WITNESS WHEREOF, this
Corporation has caused its duly authorized officer to execute this Amendment on
this ___ day of November, 2006.
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
SECOND
AMENDMENT
TO
THE
AMERICAN
STATES WATER COMPANY
2000
Stock Incentive Plan
(As
Amended and Restated Effective as of January 31, 2006)
The
American States Water Company 2000 Stock Incentive Plan (the “Plan”) is amended
to provide that:
FIRST: Subject to
shareholder approval of the American States Water Company 2008 Stock Incentive
Plan, the Plan is terminated effective April 1, 2008 and no further Awards will
be issued under the Plan other than pursuant to dividend equivalent rights
granted prior to April 1, 2008.
American States Water
Company
EXHIBIT
10.3.
AMERICAN
STATES WATER COMPANY
2008
STOCK INCENTIVE PLAN
FORM OF NONQUALIFIED STOCK OPTION
AGREEMENT
THIS NONQUALIFIED STOCK OPTION
AGREEMENT (this “Option
Agreement”) by and between AMERICAN STATES WATER COMPANY,
a California corporation (the “Corporation”), and
_____________________________ (the “Participant”) evidences the
nonqualified stock option (the “Option”) granted by the
Corporation to the Participant as to the number of shares of the Corporation’s
common shares, no par value (the “Common Shares”), first set
forth below.
|
%
Vesting
|
Date
of Vesting1,2
|
||||
|
%
|
|||||
|
%
|
|||||
|
%
|
|||||
The Option
is granted under the American States Water Company 2008 Stock Incentive Plan, as
amended (the “Plan”) and
subject to the Terms and Conditions of Option (the “Terms”) attached to this
Option Agreement (incorporated herein by this reference) and to the
Plan. The Option has been granted to the Participant in addition to,
and not in lieu of, any other form of compensation otherwise payable or to be
paid to the Participant. The Option is not and shall not be deemed to
be an incentive stock option within the meaning of Section 422 of the
Code. Capitalized terms are defined in the Plan if not defined
herein. The parties agree to the terms of the Option set forth
herein, and the Participant acknowledges receipt of a copy of the Terms and the
Plan.
|
“PARTICIPANT”
|
AMERICAN
STATES WATER COMPANY,
a
California corporation
|
|||
|
Signature
|
By:
|
|||
|
Its:
|
||||
|
Print
Name
|
||||
|
Address
|
||||
|
|
||||
| City, State, Zip Code | ||||
CONSENT
OF SPOUSE
In
consideration of the Corporation’s execution of this Option Agreement, the
undersigned spouse of the Participant agrees to be bound by all of the terms and
provisions hereof and of the Plan.
__________________________________ ______________________
Signature
of
Spouse Date
1 Subject
to adjustment under Section 5.2 of the Plan.
2 Subject
to early termination as provided in Section 4 below.
TERMS
AND CONDITIONS OF OPTION
1. Vesting; Limits on
Exercise.
As set
forth in the Option Agreement, the Option shall vest and become exercisable in
percentage installments of the aggregate number of Common Shares subject to the
Option. The Option may be exercised only to the extent the Option is
vested and exercisable.
|
|
·
|
Cumulative
Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the Option (to
the extent not previously exercised), and such right shall continue, until
the expiration or earlier termination of the
Option.
|
|
|
·
|
No Fractional
Shares. Fractional share interests shall be disregarded,
but may be cumulated.
|
|
|
·
|
Minimum
Exercise. No fewer than 1001
Common Shares may be purchased at any one time, unless the number
purchased is the total number at the time exercisable under the
Option.
|
2. Continuance of Employment
Required; No Employment Commitment.
Except as
provided in Section 4.2 below, (a) the vesting schedule requires continued
service through each applicable vesting date as a condition to the vesting of
the applicable installment of the Option and the rights and benefits under this
Option Agreement and (b) employment or service for only a portion of the vesting
period, even if a substantial portion, will not entitle the Participant to any
proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment or service as provided in Section
4.2 below or under the Plan.
Nothing
contained in this Option Agreement or the Plan constitutes an employment
commitment by the Company, affects the Participant’s status as an employee at
will who is subject to termination without cause, confers upon the Participant
any right to remain employed by the Corporation or any Subsidiary, interferes in
any way with the right of the Corporation or any Subsidiary at any time to
terminate such employment, or affects the right of the Corporation or any
Subsidiary to increase or decrease the Participant’s other
compensation.
3. Method of Exercise of
Option.
The Option
shall be exercisable by the delivery to the Secretary of the Corporation of a
written notice stating the number of Common Shares to be purchased pursuant to
the Option and accompanied by:
1
|
|
·
|
delivery
of an executed Exercise Agreement in substantially the form attached
hereto as Exhibit A or such other form as from time to time may be
required by the Committee (the “Exercise
Agreement”);
|
|
|
·
|
payment
in full for the Exercise Price of the shares to be purchased, by check or
electronic funds transfer to the Corporation, subject to such specific
procedures or directions as the Committee may
establish;
|
|
|
·
|
satisfaction
of the tax withholding provisions of Section 5.5 of the Plan;
and
|
|
|
·
|
any
written statements or agreements required pursuant to Section 5.4 of the
Plan.
|
The
Committee also may but is not required to authorize a non-cash payment
alternative specified below at or prior to the time of exercise, in which case,
the Exercise Price and/or applicable withholding taxes, to the extent so
authorized, may be paid in full or in part by Common Shares already owned by the
Participant, valued at their Fair Market Value on the exercise date; provided, however, that any
shares acquired upon exercise of a stock option or otherwise directly from the
Corporation must have been owned by the Participant for at least six (6) months
before the date of such exercise.
4. Early
Termination of Option.
4.1 Possible
Termination of Option upon Change in Control. The Option is
subject to termination in connection with a Change in Control Event or certain
similar reorganization events as provided in Section 5.2 of the
Plan.
4.2 Termination
of Option upon a Termination of Participant’s Employment or
Services. Subject to
earlier termination on the Expiration Date of the Option or pursuant to Section
4.1 above, if the Participant ceases to be employed by or ceases to provide
services to the Corporation or a Subsidiary, the following rules shall apply
(the last day that the Participant is employed by or provides services to the
Corporation or a Subsidiary is referred to as the Participant’s “Severance
Date”):
|
|
·
|
if
the termination of the Participant’s employment or services is the result
of any reason other than the Participant’s death, Total Disability,
Retirement or a termination by the Corporation or a Subsidiary for Cause,
(a) the Participant will have until the date that is three months after
his or her Severance Date to exercise the Option (or portion thereof) to
the extent that it was vested on the Severance Date, (b) the Option, to
the extent not vested on the Severance Date, shall terminate on the
Severance Date, and (c) the Option, to the extent exercisable for the
3-month period following the Severance Date and not exercised during such
period, shall terminate at the close of business on the last day of the
3-month period;
|
2
|
|
·
|
if
the termination of the Participant’s employment or services is the result
of the Participant’s death, Total Disability or the Participant’s
Retirement, (a) the Option will continue to vest and become exercisable in
accordance with the vesting schedule set forth in the Option Agreement,
(b) the Participant (or his or her beneficiary or personal representative,
as the case may be) will have until the close of business on the date
immediately prior to the Expiration Date, to the extent it is then vested,
to exercise the Option, and (c) the Option, to the extent not exercised
during such period, shall terminate on the Expiration Date;
and
|
|
|
·
|
if
the Participant’s employment or services are terminated by the Company for
Cause, the Option, to the extent not exercised, whether vested or
unvested, on the Severance Date shall terminate on the Severance
Date.
|
For
purposes of the Option, “Total Disability” and “Cause” have the meanings given
to such terms in the Plan. For purposes of the Option, “Retirement” means retirement
by the Participant from active service as an officer or employee of the
Corporation and/or its Subsidiaries after attaining age 55 if the sum of the
Participant’s years of service with the Corporation and/or its Subsidiaries and
age is at least 75.
Notwithstanding
the foregoing, in all events, the Option is subject to earlier termination on
the Expiration Date of the Option or as contemplated by Section
4.1. The Administrator shall be the sole judge of whether the
Participant continues to render employment or services for purposes of this
Option Agreement.
5. Non-Transferability and
Other Restrictions.
The Option
and any other rights of the Participant under this Option Agreement or the Plan
are nontransferable and exercisable only by the Participant, except as set forth
in Section 1.8 of the Plan.
6. Notices.
Any notice
to be given under the terms of this Option Agreement or the Exercise Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Participant at the address given
beneath the Participant’s signature hereto, or at such other address as either
party may hereafter designate in writing to the other. Any such
notice shall be given only when received, but if the Participant is no longer an
Eligible Employee, shall be deemed to have been duly given when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States
Government.
3
7. Plan.
The Option
and all rights of the Participant under this Option Agreement are subject to,
and the Participant agrees to be bound by, all of the terms and conditions of
the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall
govern. The Participant acknowledges receipt of a copy of the Plan
and agrees to be bound by the terms thereof. The Participant
acknowledges reading and understanding the Plan, the prospectus for the Plan,
and this Option Agreement. Unless otherwise expressly provided in
other sections of this Option Agreement, provisions of the Plan that confer
discretionary authority on the Board or the Committee do not and shall not be
deemed to create any rights in the Participant unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board or the
Committee so conferred by appropriate action of the Board or the Committee under
the Plan after
the date hereof.
8. Entire
Agreement.
This
Option Agreement (together with the form of Exercise Agreement attached hereto)
and the Plan together constitute the entire agreement and supersede all prior
understandings and agreements, written or oral, of the parties hereto with
respect to the subject matter hereof. The Plan, this Option Agreement
and the Exercise Agreement may be amended pursuant to Section 5.6 of the
Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, consistent with the terms
of the Plan, unilaterally waive any provision hereof or of the Exercise
Agreement in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. Governing Law; Limited
Rights.
9.1. California Law. This Option
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of California without regard to conflict of law principles
thereunder.
9.2. Limited
Rights. The Participant has no rights as a shareholder of the
Corporation with respect to the Option as set forth in Section 5.7 of the
Plan. The Option does not place any limit on the corporate authority
of the Corporation as set forth in Section 5.14 of the Plan.
4
10. Miscellaneous.
10.1 Effect of this
Agreement. Subject to the Corporation’s right to terminate the
Option pursuant to Section 5.6 of the Plan, this Option Agreement shall be
assumed by, be binding upon and inure to the benefit of any successor or
successors of the Corporation.
10.2 Counterparts. This
Option Agreement may be executed simultaneously in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
10.3 Section
Headings. The section headings of this Option Agreement are
for convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
(Remainder
of Page Intentionally Left Blank)
5
Exhibit
A
AMERICAN
STATES WATER COMPANY
2008
STOCK INCENTIVE PLAN
OPTION
EXERCISE AGREEMENT
The
undersigned (the “Purchaser”) hereby irrevocably
elects to exercise his/her right, evidenced by that certain Nonqualified Stock
Option Agreement dated as of ______________ (the “Option Agreement”) under the
American States Water Company 2008 Stock Incentive Plan, as amended (the “Plan”), as
follows:
|
|
·
|
the
Purchaser hereby irrevocably elects to purchase __________________ shares
of Common Shares (the “Shares”), of American
States Water Company (the “Corporation”),
and
|
|
|
·
|
such
purchase shall be at the price of $__________________ per share, for an
aggregate amount of $__________________ (subject to applicable withholding
taxes pursuant to Section 5.5 of the
Plan).
|
Capitalized
terms are defined in the Plan if not defined herein.
Delivery of
Shares. The Purchaser requests that (1) a certificate
representing the Common Shares be registered to Purchaser and delivered to:
_____________________________ or (2) that the Common Shares be registered in the
Purchaser’s name and electronically delivered
to:__________________________________________________________________________.
Plan and Option
Agreement. The Purchaser acknowledges that all of his/her
rights are subject to, and the Purchaser agrees to be bound by, all of the terms
and conditions of the Plan and the Option Agreement, both of which are
incorporated herein by this reference. If a conflict or inconsistency
between the terms and conditions of this Exercise Agreement and of the Plan or
the Option Agreement shall arise, the terms and conditions of the Plan and/or
the Option Agreement shall govern. The Purchaser acknowledges receipt
of a copy of all documents referenced herein and acknowledges reading and
understanding these documents and having an opportunity to ask any questions
that he/she may have had about them.
“PURCHASER”
Signature
Print
Name
Address
City, State, Zip Code
EXHIBIT
10.4.
AMERICAN
STATES WATER COMPANY
2008
STOCK INCENTIVE PLAN
FORM
OF RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS RESTRICTED STOCK UNIT AWARD
AGREEMENT (this “Agreement”) is dated as of
[___________] by and between American States Water Company, a California
corporation (the “Corporation”), and [______________] (the “Participant”).
W
I T N E S S E T H
WHEREAS, pursuant to the
American States Water Company 2008 Stock Incentive Plan, as amended (the “Plan”), the Corporation has
granted to the Participant effective as of the date hereof (the “Award Date”), an award of
restricted stock units under the Plan (the “Award”), upon the terms and
conditions set forth herein and in the Plan.
NOW THEREFORE, in
consideration of services rendered and to be rendered by the Participant, and
the mutual promises made herein and the mutual benefits to be derived therefrom,
the parties agree as follows:
1. Defined
Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Plan.
2. Grant. Subject
to the terms of this Agreement, the Corporation hereby grants to the Participant
an Award with respect to an aggregate of [_________] stock units
(subject to adjustment as provided in Section 5.2 of the Plan) (the “Stock Units”). As
used herein, the term “stock unit” means a non-voting unit of measurement which
is deemed for bookkeeping purposes to be equivalent to one outstanding share of
the Corporation’s Common Shares (subject to adjustment as provided in Section
5.2 of the Plan) solely for purposes of the Plan and this
Agreement. The Corporation will maintain a Stock Unit bookkeeping
account for the Participant (the “Account”). The
Stock Units granted to the Participant under this Agreement will be credited to
the Participant’s Account as of the Award Date. The Stock Units shall
be used solely as a device for the determination of the payment to eventually be
made to the Participant if such Stock Units vest pursuant to Section
3. The Stock Units shall not be treated as property or as a trust
fund of any kind.
3. Vesting.
(a) General. The
Award shall vest and become nonforfeitable with respect to [ ]
percent ([ ]%) of the total number of Stock Units on
[ ], [ ] ([ ]%) of the total number of
Stock Units on [ ] and [ ] percent ([ ]%)
of the total number of Stock Units on [ ] (each, an “Installment Vesting Date”)
(subject to adjustment under Section 5.2 of the Plan), provided the
Participant is still employed by the Corporation or a Subsidiary on the
applicable Installment Vesting Date, subject to earlier termination as provided
herein or in the Plan.
(b) Termination
of Employment Prior to Vesting. Notwithstanding
Section 3(a), the Participant’s Stock Units (and any Stock Units credited as
dividend equivalents) shall terminate to the extent such Stock Units have not
become vested prior to the first date the Participant is no longer employed by
the Corporation or one of its Subsidiaries, regardless of the reason for the
termination of the Participant’s employment with the Corporation or a
Subsidiary; provided,
however, that if the
Participant’s employment is terminated by the Corporation or a Subsidiary as a
result of the Participant’s death or Total Disability, the Participant’s Stock
Units, to the extent such units are not then vested, shall become fully vested
as of the date of termination of the Participant’s employment. If the
Participant is employed by a Subsidiary and that entity ceases to be a
Subsidiary, such event shall be deemed to be a termination of employment of the
Participant for purposes of this Agreement (unless the Participant otherwise
continues to be employed by the Corporation or another of its Subsidiaries
following such event). If any unvested Stock Units are terminated
hereunder, such Stock Units (and any Stock Units credited as dividend
equivalents) shall automatically terminate and be cancelled as of the applicable
termination date without payment of any consideration by the Corporation and
without any other action by the Participant, or the Participant’s beneficiary or
personal representative, as the case may be.
1
(c) Early
Vesting Upon Change in Control. Notwithstanding Section 3(a),
the Participant’s Stock Units (and any Stock Units credited as dividend
equivalents), to the extent such Stock Units are not then vested, shall become
fully vested upon the occurrence of a Change in Control, as defined in the
Plan.
4. Continuance
of Employment. The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Award and the rights and benefits
under this Agreement. Partial employment or service, even if
substantial, during any vesting period will not entitle the Participant to any
proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment or services as provided in Section
3(b) or under the Plan.
Nothing
contained in this Agreement or the Plan constitutes an employment or service
commitment by the Corporation, affects the Participant’s status as an employee
at will who is subject to termination without cause, confers upon the
Participant any right to remain employed by or in service to the Corporation or
any Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or services, or affects the
right of the Corporation or any Subsidiary to increase or decrease the
Participant’s other compensation or benefits. Nothing in this
paragraph, however, is intended to adversely affect any independent contractual
right of the Participant without his consent thereto.
5. Dividend
and Voting Rights.
(a) Limitation
on Rights Associated with Units. The Participant
shall have no rights as a shareholder of the Corporation, no dividend rights
(except as expressly provided in Section 5(b) with respect to dividend
equivalent rights) and no voting rights, with respect to the Stock Units and any
Common Shares underlying or issuable in respect of such Stock Units until such
Common Shares are actually issued to and held of record by the
Participant. No adjustments will be made for dividends or other
rights of a holder for which the record date is prior to the date of issuance of
the stock certificate.
2
(b) Dividend
Equivalents. The Participant shall be entitled to receive
dividend equivalents in the form of additional Stock Units with respect to the
Stock Units credited to his or her Account as the Corporation declares and pays
dividends on its Common Shares in the form of cash. The number of
Stock Units to be credited to the Participant’s Account as a dividend equivalent
will equal (1) the per share cash dividend to be paid by the Corporation on its
Common Shares multiplied by the number of Stock Units then credited to the
Participant’s Account on the record date for that dividend divided by (2) the
Fair Market Value of the Common Shares on the related dividend payment
date. The Corporation shall credit such additional Stock Units to the
Participant’s Account as of the related dividend payment date. Stock
Units credited as dividend equivalents will become vested to the same extent as
the Stock Units to which they relate. For purposes of clarity, no
dividend equivalents shall be credited for a dividend record date with respect
to any Stock Units that were paid or terminated prior to such dividend record
date.
6. Timing
and Manner of Payment.
(a) General. On
or as soon as administratively practicable following each Installment Vesting
Date pursuant to Section 3(a), but in no event later than March 15 of the year
following the Installment Vesting Date, the Corporation shall deliver to the
Participant a number of Common Shares equal to the number of Stock Units subject
to this Award that become vested on such Installment Vesting Date (including any
Stock Units credited as dividend equivalents with respect to such vested Stock
Units), unless such Stock Units terminate prior to such Installment Vesting Date
pursuant to Section 3(b).
(b) Payment
of Stock Units upon Termination of Employment as a Result of Death or Disability
or upon a Change in Control. Notwithstanding Section 6(a),
upon a termination of the Participant’s employment as a result of his or her
death or Total Disability or upon the occurrence of a Change in Control, the
Corporation shall deliver to the Participant a number of Common Shares equal to
the number of Stock Units subject to this Award that became vested in accordance
with Section 3(b) or Section 3(c), as applicable, (including any Stock Units
credited as dividend equivalents with respect to such Stock Units) as soon as
administratively practicable following such termination of employment or Change
in Control, as applicable (but in no event later than March 15 of the year
following the year in which such termination of employment or Change in Control
occurs).
(c) Termination
of Stock Units Upon Payment. A Stock Unit will terminate upon
the payment of that Stock Unit in accordance with the terms hereof, and the
Participant shall have no further rights with respect to such Stock
Unit.
(d) Form of
Payment. The Corporation
may deliver the Common Shares payable to the Participant under this Section 6
either by delivering one or more certificates for
such shares or by entering such shares in book entry form, as determined by the
Corporation in its discretion.
7. Restrictions
on Transfer. Neither the Award, nor any interest therein or
amount or shares payable in respect thereof may be sold, assigned, transferred,
pledged or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence
shall not apply to (a) transfers to the Corporation, (b) transfers by will or
the laws of descent and distribution, or (c) transfers pursuant to a QDRO order
if approved or ratified by the Committee.
3
8. Adjustments
Upon Specified Events. Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 5.2 of the Plan, the
Administrator shall make adjustments if appropriate in the number of Stock Units
then outstanding and the number and kind of securities that may be issued in
respect of the Award.
9. Tax
Withholding. Upon the vesting and/or distribution of Common
Shares in respect of the Stock Units, the Corporation (or the Subsidiary last
employing the Participant) shall have the right at its option to (a) require the
Participant to pay or provide for payment in cash of the amount of any taxes
that the Corporation or the Subsidiary may be required to withhold with respect
to such vesting and/or distribution, or (b) deduct from any amount payable to
the Participant the amount of any taxes which the Corporation or the Subsidiary
may be required to withhold with respect to such vesting and/or
distribution. In any case where a tax is required to be withheld in
connection with the delivery of Common Shares under this Agreement, the
Administrator may, in its sole discretion, direct the Corporation or the
Subsidiary to reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of whole shares, valued at their then Fair Market Value (with the “Fair Market Value” of such
shares determined in accordance with the applicable provisions of the
Plan), to satisfy such withholding obligation at the minimum applicable
withholding rates.
10. Notices. Any
notice to be given under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal office to the attention of the
Secretary, and to the Participant at the Participant’s last address reflected on
the Corporation’s records, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be
given only when received, but if the Participant is no longer an employee of the
Corporation, shall be deemed to have been duly given by the Corporation when
enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in
a post office or branch post office regularly maintained by the United States
Government.
11. Plan. The
Award and all rights of the Participant under this Agreement are subject to, and
the Participant agrees to be bound by, all of the terms and conditions of the
provisions of the Plan, incorporated herein by reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement and of the Plan, the terms and conditions of the Plan shall
govern. The Participant agrees to be bound by the terms of the Plan
and this Agreement. The Participant acknowledges having read and
understanding the Plan, the Prospectus for the Plan, and this
Agreement. Unless otherwise expressly provided in other sections of
this Agreement, provisions of the Plan that confer discretionary authority on
the Administrator do not (and shall not be deemed to) create any rights in the
Participant unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Administrator so conferred by appropriate action
of the Administrator under the Plan after the date
hereof.
12. Entire
Agreement. This Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter
hereof. The Plan and this Agreement may be amended pursuant to
Section 5.6 of the Plan. Such amendment must be in writing and
signed by the Corporation. The Corporation may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of the Participant hereunder, but no such waiver
shall operate as or be construed to be a subsequent waiver of the same provision
or a waiver of any other provision hereof.
4
13. Limitation
on Participant’s Rights. Participation in
the Plan confers
no rights or
interests other than as herein provided. This Agreement creates only
a contractual obligation on the part of the Corporation as to amounts payable
and shall not be construed as creating a trust. Neither the Plan nor
any underlying program, in and of itself, has any assets. The
Participant shall have only the rights of a general unsecured creditor of the
Corporation with respect to amounts credited and benefits payable, if any, with
respect to the Stock Units, and rights no greater than the right to receive the
Common Shares as a general unsecured creditor with respect to Stock Units, as
and when payable hereunder.
14. Counterparts. This
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
15. Section
Headings. The section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
16. Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California without regard
to conflict of law principles thereunder.
17. Construction. It
is intended that the terms of the Award will not result in the imposition of any
tax liability pursuant to Section 409A of the Code. This Agreement
shall be construed and interpreted consistent with that intent.
IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed on its behalf by a duly
authorized officer and the Participant has hereunto set his or her hand as of
the date and year first above written.
|
AMERICAN
STATES WATER COMPANY,
a
California corporation
By:__________________________________
Print
Name:___________________________
Its:__________________________________
|
PARTICIPANT
___________________________________
Signature
____________________________________
Print
Name
|
5
CONSENT
OF SPOUSE
In
consideration of the execution of the foregoing Restricted Stock Unit Award
Agreement by American States Water Company, I, _____________________________,
the spouse of the Participant therein named, do hereby join with my spouse in
executing the foregoing Restricted Stock Unit Award Agreement and do hereby
agree to be bound by all of the terms and provisions thereof and of the
Plan.
Dated:
____________, [ ]
|
Signature
of Spouse
|
|
|
Print
Name
|
6