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) September 12, 2007
AMERICAN STATES WATER COMPANY
(Exact name of registrant as specified in its charter)
California 001-14431 95-4676679
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
630 East Foothill Blvd.
San Dimas, California 91773
(Address of principal (Zip Code)
executive offices)
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 Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The Company has entered into a Retention Agreement with Floyd Wicks, the
President and Chief Executive Officer of the Company and each of its
subsidiaries. Under the terms of the Retention Agreement, Mr. Wicks will
continue to serve as President and Chief Executive Officer of the Company
through December 31, 2008, unless the Retention Agreement is extended by mutual
agreement of the parties to December 31, 2009 or either party terminates the
Retention Agreement upon 90 days notice. The Board has also agreed to nominate
Mr. Wicks as a director during his tenure as President and Chief Executive
Officer of the Company, subject to the vote of the Company's shareholders and
compliance by Mr. Wicks with his fiduciary duties as a director.
Mr. Wicks will be entitled to a base salary at his current rate of $540,000
per year for the remainder of 2007. Mr. Wicks' total compensation thereafter
will depend upon an annual performance review, provided that the Company may not
reduce his annual base salary below $540,000. The Company has also agreed to
grant Mr. Wicks a minimum of $200,000 in fair value of equity incentives during
his remaining tenure as President and Chief Executive Officer for 2008, 50% of
which must be in the form of stock options and 50% of which must be in the form
of restricted stock units.
If Mr. Wicks' employment is terminated prior to December 31, 2008 for any
reason other than death, disability, good cause or a change in control or Mr.
Wicks voluntarily terminates his employment for a company breach, he will be
entitled to total cash compensation for the remainder of the term of the
Retention Agreement based upon the assumption that any annual bonus measured by
performance in the year of termination is achieved at the targeted level and
total compensation otherwise remains unchanged. If Mr. Wicks' employment is
terminated within 12 months following a change in control for any reason other
than death, disability or good cause or Mr. Wicks terminates his employment for
good reason following a change in control, he will also be entitled to (i) 2.99
times his annual total cash compensation in effect at the time of termination,
less the amount of any total cash compensation described above, (ii) COBRA
coverage; and (iii) a gross up payment for excise taxes payable under Section
4999 of the Internal Revenue Code as provided in the Retention Agreement in lieu
of his current change in control benefits.
The Company has agreed that, for the purposes of the Company's Pension
Restoration Plan, it will calculate Mr. Wicks' benefit based on 3% of
compensation (as defined in the Plan) per credited years of service commencing
January 13, 1988, up to a maximum limit of 60% of compensation, less a
percentage of primary social security benefits and amounts payable to Mr. Wicks
under the Company's defined benefit pension plan. Mr. Wicks will otherwise
generally continue to have the same benefits that he currently enjoys.
Mr. Wicks has agreed to serve as a consultant to the Company, in certain
circumstances, to assist it in its operations on an as-needed basis commencing
upon termination of employment until the end of the sixth full calendar month
after termination of employment at the rate of one-half of his monthly base
salary on the date of termination of employment, plus $250 per hour for each
hour in excess of 40 hours during any month.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
Exhibit 10.1. Retention Agreement for Floyd Wicks
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: September 14, 2007 /s/ Robert J. Sprowls
---------------------------------------
Robert J. Sprowls
Chief Financial Officer, Senior Vice
President Corporate Secretary and
Treasurer
Exhibit 10.1
American States
WATER COMPANY
Exhibit 10.1
September 12, 2007
Mr. Floyd Wicks
1647 Posilipo Lane
Santa Barbara, CA 93108
Re: Retention
Agreement. Dear Floyd:
The following describes our agreement between you and American States
Water Company (the "Company") with respect to your continued employment and
success at the Company. This agreement is effective as of September 12,
2007)
1. Positions and Duties. You will continue in your position as President
and Chief Executive Officer of the Company, reporting to the Board of the
Company (the "Board"). Your duties and responsibilities will be those
assigned from time to time by the Board and will be commensurate with your
position. You will be expected to perform all such assigned duties and
responsibilities, to devote substantially all of your time, attention and effort
to the business and affairs of the Company, and to use your reasonable best
efforts to promote the best interests of the Company. Your principal office
location will be the Company's corporate office, subject to travel associated
with your duties. During your employment with the Company, you must not render
any services for any other person, fine or entity that operates for profit
or otherwise represents a conflict of interest with the business of the Company.
Subject to the vote of shareholders and compliance with director's respective
fiduciary duties, during your tenure as President and Chief Executive Officer,
the Board will cause you to be nominated for election as a director of the
Company.
2. Term. The term of this agreement shall be from the above referenced
date thru December 31, 2008, provided, however, that the Company, by mutual
agreement, may elect to extend the term of this agreement to December 31,
2009, by delivery of written notice to you no later than September 30, 2008.
Notwithstanding the foregoing, in the event that the Company does not so elect
to extend the term and your employment with the Company ends after December
31, 2008 but prior to June 30, 2009, (i) you and the Company commence the
consulting agreement in the form attached hereto as Annex A (provided that
you have informed the Company in writing between September 15 and September
29, 2008 that you are willing and able to so extend this agreement); and
(2) you shall simultaneously execute and deliver to the Company a general
release in
substantially the form attached hereto as Exhibit II.
3. At-Will Employment. Your employment with the Company may be terminated by
you or by the Company at any time during or after the term of the agreement, for
any reason, upon 90 days notice; provided, however, if your employment is
terminated during the term of this agreement, you shall be entitled to receive
the severance benefits in such amounts and under the circumstances described
below under "Severance Benefits". The at-will nature of your employment
relationship with the Company, as described immediately above, may only be
changed in an express written approval by a disinterested majority of the Board.
4. Salary and Bonus. Your base salary will be at an initial annual rate of
$540,000 per year, to be paid according to the Company's standard payroll
practices, for the balance of calendar year 2007. Your base salary will be
reviewed as set forth below. Your salary as in effect from time to time during
the term of this agreement will be referred to as `"Base Salary". Your Base
Salary plus any annual bonus for any given year are together referred to as your
"Total Cash Compensation."
Payment of your "Total Cash Compensation" and other taxable compensation
and benefits will be subject to all applicable withholdings and deductions.
5. Annual Review. The Compensation Committee of the Board will annually review
your performance. In connection with that review, the Compensation Committee
will also review and consider appropriate adjustments to your Total Cash
Compensation, long-term equity incentives and other compensation in an attempt
to compensate you within the third quartile (i.e., 60th to 75th percentile) of
a peer group of companies (determined in good faith by the Compensation
Committee or its consultant). It is agreed that the Peer Group shall not include
American Water Company. However, your Base Salary will not decrease from the
level paid to you currently. The Compensation Committee of the Board will
perform an annual review of the Total Cash Compensation, which is to include the
target annual bonus, in accordance with recommendations from its consultant,
which consultant recommends compensation amounts based on peer group analyses.
6. Annual Stock Options and Restricted Stock Units. During your service as
President and Chief Executive, annually you will be granted a minimum of
$200,000 in fair value of equity incentives (as estimated in good faith by the
Compensation Committee's consultant), 50% of which will be in the form of stock
options and 50% in the form of restricted stock units. The restricted stock will
have a three year vesting period (1/3 each year) from the date of grant
(consistent with the current standard form of restricted stock unit grant
agreement utilized by the Company). The options will vest over a three year
period (113 each year) with a ten year exercise period (consistent with the
current standard form of option grant agreement utilized by the Company).
7. SERP. The Company intends to continue its Pension Restoration Plan
("SERP"). The Company will, for purposes of the SERP, calculate your SERP
benefit based on 3% of Compensation (as defined in the SERP) per credited years
of service and
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give you credit for years of service commencing January 13, 1988; provided that
the benefit shall in no event exceed 60% of Compensation. Nothing in this
agreement is intended to amend the definition of compensation used by the SERP
to calculate benefits under the SERP.
8. Expense Reimbursement. The Company will reimburse you for the reasonable
expenses incurred in connection with the performance of your duties, consistent
with Company policy and practice.
9. Additional Benefits. Except as otherwise precluded by applicable law or
regulations, you will receive during your employment the following additional
benefits:
o A Company-provided vehicle appropriate for the position, with replacement
upon the earlier of 80,000 miles or three years, and standard vehicle fuel
and maintenance;
o First class business travel for one-way business trips that exceed four
hours in duration;
o Home office set-up and reimbursement (as currently provided);
o Dedicated executive assistant (as currently provided);
o Vacation, sick leave and insurance;
o Housing/Relocation Assistance in the event the company's headquarters
relocates beyond southern California (i.e., anywhere south of the City of
San Luis Obispo).
10. Severance Benefits. In lieu of benefits under any other severance
program maintained by the Company, you shall be eligible for benefits under the
following Executive Severance Plan.
A. Generally
If no "Change in Control" (as defined in Exhibit I hereto) has occurred, and
your employment is involuntarily terminated for any reason other than death,
disability or Good Cause, or you voluntarily terminate your employment for a
Company Breach, you will be entitled to the following contractual severance
benefits:
i. You will be paid the Total Cash Compensation attributable to the
remainder of the term under this agreement (based upon the
assumption that any annual bonus measured by performance in your
year of termination, is achieved at the targeted level, and that
your annual Total Compensation otherwise remains unchanged from that
in effect at your termination).
ii. If you elect to continue health benefit coverage under the Company's
plans
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pursuant to COBRA, the Company will provide such COBRA coverage,
without charge, to you and your eligible dependents until the
earlier of (i) three years from the date your employment terminates,
or (ii) the first date on which you are covered under another
employer's substantially similar health benefit program without
exclusion for any pre-existing medical condition.
iii. If your employment is so terminated prior to December 31, 2008, you
and the Company shall commence the consulting agreement in the form
attached hereto as Annex A.
B. Following Change in Control
If your employment by the Company is terminated within twelve (12) months
following a Change in Control for any reason other than death, disability or
Good Cause, or you voluntarily terminate your employment for Good Reason within
twelve (12) months following a Change in Control, in addition to the amounts
paid to you under Section A above, you will be entitled to the following
contractual severance benefits:
i. You will be paid 2.99 times the annual Total Cash Compensation in
effect at your termination, less any amounts payable under
Section A(i) above. . You will also be permitted to make the
election contemplated by Section A(ii) above.
ii. In the event that any payment by the Company to you under clause
(i) of this Section B is determined to be subject to the excise
tax (the "Excise Tax") imposed by Section 4999 of the Internal
Revenue Code (the "Code"), then the Company shall pay promptly to
you an additional amount (a "Gross-up Payment") such that after
payment of such taxes (including any interest or penalties
imposed with respect thereto) and any Excise Tax imposed on the
Gross-up Payment, you retain an amount of Gross-up Payment equal
to all such Excise Taxes. Such Gross-up Payment will be paid to
you within six months of the end of the taxable year in which you
pay such Excise Taxes.
For purposes of this agreement:
o "Good Cause" shall be deemed to exist if, and only if (i) you engage
in any act of gross negligence or willful misconduct that result in
substantial harm to the business or property of the Company or its
affiliates, or (ii) you refuse to carry out any lawful directive of
the Board, (iii) prior to any Change in Control, you fail to comply
with Company policies or neglect or fail to perform your duties
after written notice of such neglect or failure from the Board, or
(iv) you are convicted of a criminal violation involving dishonesty,
theft, fraud or embezzlement involving the Company.
o "Company Breach" shall exist if at a time when no Change in
Control has
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occurred, there is a material breach by the Company of any of its
obligations hereunder, which remains uncured for more than thirty
(30) days following your written notice to the Board in which you
specifically identify the material breach which has occurred.
o "Good Reason" shall exist if, without your express written consent:
(i) there is a Significant Change in the nature or the scope of your
authority or overall working environment; (ii) you are assigned
duties materially inconsistent with your present duties,
responsibilities and status; (iii) there is a reduction in your
Total Cash Compensation and long-term incentives in breach of this
Agreement; (iv) the Company changes the principal location at which
you are required to perform your services hereunder, to a location
beyond southern California; or (v) the failure of the Company to
elect or to reelect you as a Director of the Board, or your removal
as a Director of the Board; or (vi) there is a material breach by
the Company of any of its obligations hereunder, which remains
uncured for more than fifteen (15) days following your written
notice to the Board in which you specifically identify the material
breach which has occurred
o "Significant Change" for purposes of this agreement shall include
removing you from any of your positions set forth above or a
material reduction in your responsibilities.
In the event of your death or disability during the term of this agreement, your
employment will terminate under this agreement. The Company shall make payments
of any salary and bonus that are earned but unpaid as of the date of death or
disability to your legal representative or trust established by you. You or your
beneficiaries, as applicable, will be entitled to any other accrued vested
benefits to which you or they are entitled under the terms of any pension or
other benefit plan upon your death or disability.
Section 409 A. Notwithstanding anything in this agreement to the contrary, the
portion of any severance benefit under this agreement required to be paid to you
during the first six (6) months following the date of your termination shall be
delayed and paid to you in a lump sum as soon as administratively practicable
following the end of such six-month period in accordance with the requirement of
Section 409A of the Internal Revenue Code ("Section 409A).
Your receipt of contractual severance benefits under Sections A or B shall be
conditioned upon your execution and delivery to the Company of a general release
in substantially the form attached hereto as Exhibit II (and the lapse of any
statutory right to revoke such release).
Nothing in this letter will reduce the benefits otherwise receivable by you
under the Company's benefit plans applicable to employees generally (except that
the severance contemplated by this letter shall be paid in lieu of any Company
severance plan or policy).
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11. Notice. Any notice to be given in connection with this agreement must be
in writing and will be deemed effectively given upon personal delivery, or when
communicated by electronically confirmed facsimile transmission; or three days
following deposit with the United States Postal Service, certified mail (postage
prepaid and return receipt requested), addressed as follows (or to such other
address as either party may specify by written notice to the other party):
If to the Company:
American States Water Company
630 East Foothill Boulevard
San Dimas, California 91773-1212
Attn: Chairman
If to you:
Mr. Floyd Wicks
1647 Posilipo Lane
Santa Barbara, CA 93108
Fax: 805-969-2967
Phone: 805-969-7742
12. Non-Solicitation. During the term of your employment and for one (1) year
thereafter, you agree that you will not (i) encourage any employee, consultant,
or person who was employed by the Company on the date of termination of your
employment (or at any time during the six (6) month period prior to termination
of your employment) to leave the company for any reason, nor will you solicit
their services; or (ii) assist any other person or entity in such encouragement
or solicitation. This provision is not intended to restrict you from performing
the duties of your employment in the best interest of the Company.
13. Confidential and Proprietary Information. You agree to comply with the
Company's standard policies regarding disclosure of confidential and proprietary
information, both during and subsequent to the term of this agreement.
14. Entire Agreement, Etc. The terms and conditions set forth in this offer
letter (together with all documents reference herein) as accepted by you will be
the entire agreement between you and the Company with regard to your employment.
This agreement supersedes any other agreements, understandings or
representations, whether written or oral, with regard to the subject matter set
forth in this letter, including without limitation, superseding and terminating
that certain Amended and Restated Change in Control Agreement between you and
the Company. This agreement shall be governed by the laws of the State of
California, without regard to choice of law rules.
15. Headings. The headings of this agreement are not part of the covenants
hereof, and shall have no binding force or effect.
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We look forward to a long a continued employment relationship. Enclosed is
an extra copy of this letter for your records. Please acknowledge your
acceptance to the terms and provisions discussed herein and return an executed
copy to this office.
Sincerely,
American States Water Company
By: /s/ Robert J.Sprowls
------------------------------
Title: SVP, CFO, Treasurer &
----------------------------
Corporate Secretary
----------------------------
I AGREE TO THE FOREGOING AS OF THE DATE SET FORTH BELOW
FLOYD WICKS
/s/ Floyd E. Wicks
- ----------------------
Signature
Date: Sept. 12, 2007
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EXHIBIT I
CHANGE IN CONTROL
A "Change in Control" shall mean any of the following events:
(a) 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 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 fifty-five percent (55%) of the continuing entity's voting
securities immediately after the event;
(b) 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 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 Company 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;
(c) an acquisition by any person, entity or group acting in concert of more than
forty-five percent (45%) 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 fifty-five percent (55%) of the
acquirer's voting securities immediately after the acquisition;
(d) the consummation of a tender offer or exchange offer by any 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 Company, unless the tender offer is made by the Company or any of its
subsidiaries or the tender offer is approved by a majority of the members of the
Board of Directors of the Company who were in office at the beginning of the
twelve month period preceding the commencement of the tender offer; or
(e) 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 a 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.
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EXHIBIT II
GENERAL RELEASE OF CLAIMS
This GENERAL RELEASE OF CLAIMS ("Release Agreement") dated as of _____,__,
200[ ] is made by Floyd E. Wicks on behalf of himself, his agents, assignees,
heirs, executors, administrators, beneficiaries, trustees and legal
representatives (the "Executive") and American States Water Company (the
"Company").
WITNESSETH:
WHEREAS, Executive's employment with the Company is terminating, effective
as of _______,___, 200[ ]; and
WHEREAS, Executive and the Company want to resolve and settle any and all
claims, asserted or unasserted, that Executive may have against the Company
arising out of facts or events, known or unknown, occurring up to and including
the date of execution of this Release Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and in Section 2 of the Retention Agreement dated as of
September__, 2007 between the Company and the Executive (the "Retention
Agreement"), the Company and the Executive hereby agree as follows:
1. Release of all Claims. In consideration of the severance benefits set
forth in the Retention Agreement {the "Severance Benefits"), Executive agrees to
release the Company and any parent, subsidiary, affiliated, and related
entities, including their past, present, or future managers, directors,
administrators, officers, employees, agents, insurance companies, attorneys,
representatives, predecessors, and assigns, and each of them (collectively,
"Released Parties") from all known and unknown claims, liabilities, and
obligations of every kind (including, without limitation, attorneys' fees and
costs) that Executive has ever had or now may have against the Company arising
out of or relating to facts, events, occurrences, or omissions up to and
including the date Executive signs this Release Agreement.
2. Claims Released. The claims that Executive is releasing include, but are not
limited to all: (a) claims arising out of his employment with the Company and
his separation from the Company; (b) claims arising under the Company's
policies, plans, or practices, including without limitation, promotion,
compensation, bonuses, stock options, severance pay or benefits; (c) claims for
breach of express or implied contract or covenant of good faith and fair
dealing; (d) all claims for violation of public policy; (e) claims for
constructive discharge; (I) claims for wrongful discharge; (g) claims for
retaliation; (h) claims for violation of state or federal common law or
statutory law, including without limitation, all claims arising under the
California Fair Employment and Housing Act, the California Labor Code ss.132a,
Title VII of the Civil Rights Act of 1964, as amended, the Fair Labor Standards
Act, the Employee Retirement Income Security Act, the National Labor Relations
Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Sarbanes-Oxley Act of 2002, or other
federal, state, or local laws relating to employment or separation from
employment or benefits associated with employment or separation from employment;
(i) claims for harassment; (j) claims for emotional distress, mental anguish,
humiliation, personal injury; and (k) claims that may be asserted on Executive's
behalf by others, as well as any and all claims that were asserted or that could
have been asserted by
1
Executive. Excluded from this Release Agreement are claims that cannot be waived
or released by law.
3. Representation of No Action Filed and Agreement Not to Sue. As a condition of
receiving the Severance Benefits, Executive agrees not to sue any of the
Released Parties regarding any claim that has been released in this Release
Agreement. Executive represents and warrants that he has not initiated, and will
not initiate any claim, charge, lawsuit, or other action against any of the
Released Parties (and that he has not transferred or assigned that right to any
other person or entity).
4. No Further Recovery. Executive understands and agrees that the Company and
the Released Parties shall neither make nor cause to be made any additional
relief to Executive, his beneficiaries or dependents, or otherwise on his
behalf, except as specifically referenced in this Release Agreement, the
Retention Agreement or the Consulting Agreement (as defined below). Should any
third party, including any state or federal agency, bring any action or claim
against the Company on Executive's behalf, either collectively or individually,
Executive acknowledges and agrees that this Release Agreement, the Retention
Agreement and the Consulting Agreement provides him with full relief and he will
not accept any other relief. In addition, except to the extent such agreement is
prohibited by applicable law, Executive agrees that if he attempts to avoid or
set aside the terms of this Release Agreement, he will first return any and all
benefits received pursuant to this Release Agreement, including but not limited
to the Severance Benefits, and that he shall be liable for reimbursing the
Company for the reasonable costs and attorneys' fees in defending against such
action.
5. Executive's Participation in Litigation. Except to the extent prohibited by
applicable law, Executive agrees that: (a) he will not persuade, support, or
convince others to raise claims against the Company or any Released Party; (b)
he will not participate in any litigation or proxy contest involving the Company
or any of the Released Parties except, in respect of litigation, at the request
of the Company or unless he is compelled by subpoena, court order or other
requirement of law to participate in a legal proceeding or as may be necessary
to protect his rights under the Retention Agreement or the Consulting Agreement;
and (c) if he should be compelled to participate in litigation, he will notify
the Company immediately by contacting the Human Resources Director and will
cooperate by making himself reasonably available to discuss the subject of any
testimony with the Company and its counsel. The service upon Executive of
process requiring his or her appearance to testify, or to produce writings or
other items, at any trial, deposition, administrative hearing, grand jury
proceeding or before any other legislative, administrative or judicial body
shall be deemed a requirement of law; provided, however, that prior to any
testimony or production, Executive shall promptly have notified Company of the
service of process received and shall have cooperated with Company's efforts to
obtain a protective order or other restriction respecting the disclosure of the
information sought. Nothing in this Release Agreement shall waive or diminish
any privilege or other defense or objection to the production or disclosure of
information that may otherwise be available to the Company or any other person
or entity. Executive further agrees to make himself available upon reasonable
notice by the Company to assist with any litigation matters involving the
Company; provided, however that to the extent Executive provides such assistance
after the expiration of the term of the Consulting Agreement, as entered into
pursuant to the Retention Agreement, then Executive shall receive an hourly fee
equal to $250 per hour.
6. No Further Obligations of the Company. Executive acknowledges that the
Severance Payment and other consideration is provided to him in full and
complete satisfaction and discharge of any and all obligations that the Company
and/or any Released Party has or may have to
2
him on or before the date hereof, other than obligations arising after the date
of this Release Agreement under the express terms of the Retention Agreement and
the Consulting Agreement, and that that he has been paid all the wages, bonuses
and benefits that are due to him. Notwithstanding the foregoing, Executive shall
continue to enjoy rights to indemnification as set forth in Article VIII of the
Company's Amended and Restated Bylaws and the Indemnification Agreements dated
as of November between the Executive and the Company and between the Executive
and certain wholly owned subsidiaries of the Company.
7. No Employment. Executive acknowledges that his employment with the Company
has terminated and he further acknowledges and agrees that he is releasing any
right he may have to reinstatement of his employment. Executive hereby
represents and warrants that he will not seek, and waives any right or claim to,
employment now or in the future by the Company or any of the Released Parties.
9. Waiver of Section 1542.
(a) Section 1542. Executive acknowledges and expressly waives any and all rights
under California Civil Code Section 1542 which provides that a "general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known to him must
have materially affected his settlement with the debtor."
(b) Waiver. Executive waives and releases any rights that he may have under
Section 1542 to the full extent that all such rights may lawfully be waived. He
understands and acknowledges that the significance and consequence of this
waiver of Section 1542 is that (a) even if he should eventually suffer
additional damage, loss or injury arising out of the facts and circumstances of
his employment or the termination of that employment, he will not be able to
make any claim for those damages, losses or injuries; and (b) he will not be
able to make any claim for any damage, loss or injury which may exist as of the
date of this Release Agreement, but which he may not know or realize to exist
and which if known, would materially affect his decision to execute this Release
Agreement, regardless of whether that lack of knowledge is the result of
ignorance, oversight, error, negligence or any other cause.
10. Adequate Opportunity to Consider and Revocation. Executive acknowledges
that he has had the opportunity to consider this Release Agreement for a full
twenty-one (21) days before executing it, whether or not he has taken that
amount of time. Executive also understand that he has a full seven (7) days
following the execution of this Release Agreement to revoke it ("Revocation
Period"). Executive understands that this Release Agreement shall not become
effective or enforceable until the Revocation Period has expired. For any
revocation to be effective it must be delivered by hand or overnight courier
before 5:00 p.m. on the seventh day to the Human Resources Director. The
Severance Benefits described above will be paid only following the expiration
of the revocation period and only if Executive does not revoke this Release
Agreement.
11. Savings Clause. If any provision of this Release Agreement or the
application thereof is held invalid, the invalidity shall not affect other
provisions or applications of the Release Agreement which can be given effect
without the invalid provisions or applications and to this end the provisions of
this Release Agreement are declared to be severable.
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12. Governing Law. This Release Agreement shall be deemed to have been
executed and delivered within the State of California, and the rights and
obligations of the parties hereunder shall be construed and enforced in
accordance with, and governed by, by the laws of the State of California without
regard to principles of conflict of laws.
13. Counterparts. This Release Agreement may be executed in one or more
counterparts and by facsimile signature. Each counterpart shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
14. Representation by Counsel. The Executive and the Company recognize that
this is a legally binding contract and acknowledge and agree that they have had
the opportunity to consult with legal counsel of their choice.
15. Entire Agreement; Amendment. Executive acknowledges that this Release
Agreement, the Retention Agreement and the Consulting Agreement dated as
September __, 2007 between the Company and the Executive (the "Consulting
Agreement") constitute the entire agreement of the parties with respect to the
subject matter hereof. The Company and the Executive each acknowledges that no
representations, inducements, promises, or agreements, oral or written, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein or in the Retention Agreement or the Consulting Agreement, and
that no other agreement, statement, or promise not contained in this Release
Agreement, the Retention Agreement or the Consulting Agreement shall be valid or
binding. This Release Agreement may not be amended or modified other than by a
written agreement executed by the Executive and the Company.
16. Headings. The headings of this Release Agreement are not part of the
provisions hereof and shall have no force or effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Release
Agreement as of the date first above written.
AMERICAN STATES WATER COMPANY
By:_______________________________
Name:
Title:
EXECUTIVE
__________________________________
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Annex A
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CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") dated as of September __, 2007 is
entered into by and between American States Water Company, a California
corporation (the "Company") and Floyd E. Wicks, but shall only be effective upon
the Commencement Date as defined in Section 2 below.
WHEREAS, Consultant possesses exceptional expertise concerning the Company
and its business gained through years of service as an officer of the Company or
its subsidiaries and his direct involvement in the public water utility
business;
WHEREAS, Consultant has been primarily responsible for the negotiation of
the Water Sales Agreement dated as of January 31, 2006 (the "Water Sales
Agreement") between Natomas Central Mutual Water Company, a California
corporation ("Natomas"), and American States Utility Services, Inc., a
California corporation and wholly owned subsidiary of the Company ("ASUS");
WHEREAS, Consultant has been primarily responsible for the attempt by
Golden State Water Company, a California corporation and wholly owned subsidiary
of the Company ("GSWC"), to obtain a new service territory in Sutter County,
California to serve new real estate developments in the county; and
WHEREAS, the Company desires to receive the benefit of such expertise and
relationships with Natomas and real estate developers in Sutter County,
California by engaging Consultant as an advisor and consultant to the Company
and its subsidiaries upon the terms and conditions set out herein; and
WHEREAS, Consultant desires to undertake to provide such services to the
Company upon the terms and conditions set out herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Company and the Executive hereby agree as follows:
1. Duties. Consultant shall provide to the Company and its subsidiaries such
advice, service and consultation (at the Company's premises or at such other
location as the Company shall reasonably deem appropriate) as the Chief
Executive Officer of the Company reasonably requests from time to time, as
needed to assist the Company in its operations, including, without limitation,
to assist ASUS or its affiliates in the sale of water pursuant to the terms of
the Water Sales Agreement, to assist GSWC in obtaining new service areas in
Sutter County, California or other counties in California in which service may
be provided by water obtained from Natomas or otherwise to assist the Company
and its subsidiaries its relations with, and in the negotiation of other
contractual arrangements with, Natomas. Any travel shall be at the Company's
expense and the Company shall promptly reimburse Consultant for all travel
expenses in accordance with Section 3(b). Consultant shall not be obligated to
devote more than 40 hours in any single calendar month under this agreement. In
the event that Consultant is required to work more than 40 hours in any calendar
month, the Company will compensate him
at the rate of $250.00 per hour. During the term of this Agreement Consultant
shall provide services exclusively to the Company; provided, however that
Consultant may serve as a director of or provide consulting services to any
entity not engaged in the production, treatment, distribution or storage of
water or wastewater (the "Water Business"). In addition, Consultant may request
that the Company consent to Consultant's provision of consulting services to an
entity in the Water Business in respect of operations that do not compete with
the operations or planned operations of the Company, and the Company shall not
unreasonably withhold its consent thereto. Any such request shall be made in
writing and shall describe in reasonable detail, the services to be provided.
2. Term. This Agreement shall be for a term (i) commencing on the date that
Consultant's service as an officer (and director) of the Company is terminated
pursuant to the second sentence of Section 2 [Term] or Section 10(A)
[Severance-Generally] of the Retention Agreement between Consultant and the
Company dated of even date with this Agreement (the "Commencement Date") and
(ii) terminating at the end of the sixth full calendar month thereafter.
3. Compensation, Expenses and Office.
(a) Following the Commencement Date, the Company shall monthly pay or
cause to be paid to Consultant during the term of this Agreement, for services
rendered under this Agreement, a consulting fee at the rate of one-half (1/2) of
Consultant's monthly base salary from the Company existing immediately prior to
the Commencement Date. The first installment shall be paid on the first business
day of the month following the Commencement Date. The remaining monthly
installments shall be paid on the first business day of each month thereafter
for the remainder of term of this Agreement. The consulting fee will represent
payment for services rendered by an independent contractor and will not be
subject to withholding for income or employment taxes.
(b) The Company shall promptly reimburse Consultant on a dollar-for-dollar
basis for any reasonable and ordinary expenses incurred by Consultant in
performing services under this Agreement, and which are reimbursable in
accordance with then-existing Company policies and have been substantiated by
Consultant to the Company's reasonable satisfaction. The expenses so incurred
shall be accounted for and submitted within a reasonable time for, and
reimbursed no more frequently than monthly, and such accounting shall be in a
form and contain such information as Company shall deem reasonably appropriate
to meet its accounting requirements and to support the expenses as a deduction
for state and federal income tax purposes.
4. Indemnification. The Company shall indemnify Consultant if Consultant is a
party to or threatened to be made a party to or is otherwise involved in any
Proceeding (as defined in the Indemnification Agreement dated as of November 8,
2004 between the Company and Consultant) by reason of the fact that Consultant
is or was performing services at the request of the Company pursuant hereto,
against Expenses (as defined in the Indemnification Agreement), judgments,
fines, penalties and excise taxes actually and reasonably incurred by Consultant
in connection with the defense or settlement of such a Proceeding in accordance
with the terms of the Indemnification Agreement to the same extent as if
Consultant had continued to be an officer and director of the Company during the
term of this Agreement.
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5. Remedies. The actual damages arising from a breach of this Agreement, by
either party would be impractical or extremely difficult to determine because of
the unique nature of the services to be provided and the difficulty of obtaining
similar services. The parties to this Agreement agree that reasonable liquidated
damages for the breach of this Agreement by the Company shall be limited to the
amount remaining unpaid pursuant to Section 3. If any action at law or equity is
necessary to enforce or interpret this Agreement, the party prevailing in such
action shall be entitled to reasonable attorney's fees and court costs from the
non-prevailing party.
6. Successors and Assigns.
(a) Not Assignable by Consultant. This Agreement is personal to Consultant
and shall not, without the prior written consent of the Company, be assignable
by Consultant.
(b) For Benefit of Company, Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns and any such successor or assignee shall be deemed substituted for the
Company under the terms of this Agreement for all purposes.
(c) Binding on Successors and Assigns. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, the term
"Company" shall mean the Company as defined and any such successor to its
business and/or assets which assumes and agrees to perform this Agreement by
operation of law or otherwise.
7. Notice. All notices, demands, consents or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given on the date mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid, or by a national overnight delivery service. Such notices, demands,
consents and other communications will be sent to the Company and Consultant at
the respective addresses indicated below:
(i) If to the Company:
Golden State Water Company
630 East Foothill Blvd.
San Dimas, California 91773
Attention: Chief Executive Officer
with a copy to:
C. James Levin, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
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(ii) If to Consultant:
Floyd E. Wicks
1647 Posilipo Lane, Unit E
Santa Barbara, California 93108
unless and until notice of another or different address will be given as
provided herein.
8. Waiver. Consultant's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Consultant or the Company may have under this Agreement shall not be
deemed to be a waiver of such provision or right or any other provision or right
under this Agreement.
9. Governing Law. This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, by the laws of the State of California without regard to principles
of conflict of laws.
10. Counterparts. This Agreement may be executed in one or more counterparts and
by facsimile signature. Each counterpart shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11. Representation by Counsel. Consultant and the Company recognize that this is
a legally binding contract and acknowledge and agree that they have had the
opportunity to consult with legal counsel of their choice.
12. Entire Agreement; Amendment. Consultant acknowledges that this Agreement and
the Employment Agreement dated as of the date hereof between the Company and the
Executive (the "Employment Agreement") constitute the entire agreement of the
parties with respect to the subject matter hereof. The Company and Consultant
each acknowledges that no representations, inducements, promises, or agreements,
oral or written, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein or in the Employment Agreement, and that no
other agreement, statement, or promise not contained in this Agreement or the
Employment Agreement shall be valid or binding. This Agreement may not be
amended or modified other than by a written agreement executed by Consultant and
the Company.
13. Survival. The provisions of this Agreement shall survive the term of this
Agreement to the extent necessary to accommodate full performance of all such
terms.
14. Headings. The headings of this Agreement are not part of the provisions
hereof and shall have no force or effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
AMERICAN STATES WATER COMPANY
By:_________________________________
Name:
Title:
CONSULTANT
____________________________________
Floyd E. Wicks