EXHIBIT 10.3
SJW CORP.
RESTRICTED STOCK UNIT ISSUANCE
AGREEMENT
RECITALS
A.
The Board has adopted the Plan for
the purpose of retaining the services of selected Employees of the
Corporation (or any Parent or Subsidiary).
B.
Participant is to render valuable
services to the Corporation (or a Parent or Subsidiary), and this
Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation’s
issuance of an equity incentive award under the Plan designed to
retain Participant’s continued service.
C.
All capitalized terms in this
Agreement shall have the meaning assigned to them in the attached
Appendix A.
NOW, THEREFORE , it is hereby agreed as follows:
1.
Grant of Restricted Stock
Units . The
Corporation hereby awards to Participant, as of the Award Date,
Restricted Stock Units under the Plan. Each Restricted Stock
Unit which vests during Participant’s period of Service shall
entitle Participant to receive one share of Common Stock on the
applicable vesting date. The number of shares of Common Stock
subject to the awarded Restricted Stock Units, the applicable
vesting schedule for those shares, the applicable date or dates on
which those vested shares shall become issuable to Participant and
the remaining terms and conditions governing the award (the
“Award”) shall be as set forth in this
Agreement.
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Participant
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Award Date :
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Number of Shares
Subject to Award :
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shares
of Common Stock (the “Shares”)
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Vesting Schedule :
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The Shares shall vest in a series of four
(4) successive equal annual installments upon
Participant’s completion of each year of Service over the
four (4)-year period measured from the Award Date (the
“Normal Vesting Schedule”). However, the Shares may be
subject to accelerated vesting in accordance with the provisions of
Paragraphs 4 and 6 below.
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Issuance Schedule :
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The Shares in which the Participant vests on an
annual basis in accordance with the Normal Vesting Schedule shall
be issued, subject to the Corporation’s collection of all
applicable Withholding Taxes, on the applicable annual vesting date
or as soon thereafter as administratively practicable (the
“Issuance Date”), but in no event later than the close
of the calendar year in which such annual vesting date occurs or
(if later) the fifteenth day of the third calendar month following
such vesting date. The Shares which vest pursuant to Paragraph 4 or
Paragraph 6 of this Agreement shall be issued in accordance with
the provisions of the applicable Paragraph. The applicable
Withholding Taxes are to be collected pursuant to the procedure set
forth in Paragraph 8 of this Agreement.
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2.
Limited
Transferability . Prior to actual receipt of the Shares
which vest and become issuable hereunder, Participant may not
transfer any interest in the Award or the underlying Shares. Any
Shares which vest hereunder but which otherwise remain unissued at
the time of Participant’s death may be transferred pursuant
to the provisions of Participant’s will or the laws of
inheritance or to Participant’s designated beneficiary or
beneficiaries of this Award. Participant may also direct the
Corporation to re-issue the stock certificates for any Shares which
in fact vest and become issuable under the Award during his or her
lifetime to one or more designated family members or a trust
established for Participant and/or his or her family members.
Participant may make such a beneficiary designation or certificate
directive at any time by filing the appropriate form with the Plan
Administrator or its designee.
3.
Cessation of
Service .
Except as otherwise provided in Paragraph 4 or Paragraph 6 below,
should Participant cease Service for any reason prior to vesting in
one or more Shares subject to this Award, then the Award shall be
immediately cancelled with respect to those unvested Shares, and
the number of Restricted Stock Units will be reduced
accordingly. Participant shall thereupon cease to have any
right or entitlement to receive any Shares under those cancelled
units.
4.
Accelerated
Vesting .
Should Participant cease Employee status by reason of death or
Disability, then all of the Shares at the time subject to this
Award shall immediately vest and shall be issued on the date of the
Participant’s Separation from Service or as soon as
administratively practicable thereafter, subject to the
Corporation’s collection of the applicable Withholding Taxes,
but in no event later than the close of the calendar year in which
such Separation from Service occurs or (if later) the fifteenth
(15th) day of the third (3rd) calendar month following the date of
such Separation from Service.
5.
Stockholder
Rights .
Participant shall not have any stockholder rights, including voting
rights or dividend rights, with respect to the Shares subject to
the Award until the Shares vest and Participant becomes the record
holder of those Shares upon their actual issuance following the
Company’s collection of the applicable Withholding
Taxes.
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6.
Change in
Control .
A.
Any Restricted Stock Units subject
to this Award at the time of a Change in Control may be assumed by
the successor entity or otherwise continued in full force and
effect or may be replaced with a cash retention program of the
successor entity which preserves the Fair Market Value of the
underlying Shares at the time of the Change in Control and provides
for the subsequent vesting and payout of that value in accordance
with the same vesting and payout provisions that would be
applicable to those Shares in the absence of such Change in
Control. In the event of such assumption or continuation of the
Award or such replacement of the Award with a cash retention
program, no accelerated vesting of the Restricted Stock Units shall
occur at the time of the Change in Control.
B.
In the event the Award is assumed or
otherwise continued in effect, the Restricted Stock Units subject
to the Award will be adjusted immediately after the consummation of
the Change in Control so as to apply to the number and class of
securities into which the Shares subject to those units immediately
prior to the Change in Control would have been converted in
consummation of that Change in Control had those Shares actually
been issued and outstanding at that time. To the extent the
actual holders of the outstanding Common Stock receive cash
consideration for the Common Stock in consummation of the Change in
Control, the successor corporation may, in connection with the
assumption or continuation of the Restricted Stock Units subject to
the Award at that time, substitute one or more shares of its own
common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in the Change in
Control transaction, provided such shares are registered under the
federal securities laws and readily tradable on an established
securities exchange.
C.
Should either of the following
events occur during the period commencing with the
earlier of (i) the execution date of any
definitive agreement for a Change in Control transaction or
(ii) the actual occurrence of a Change in Control and ending
with the earlier of (x) the expiration of the
twenty-four (24)-month period measured from the effective date of
the Change in Control or, to the extent applicable, (y) the
date the definitive agreement for the Change in Control transaction
is terminated or cancelled without the consummation of the
contemplated Change in Control transaction:
(i)
Participant’s Employee status
is terminated other than for Good Cause, or
(ii)
Participant resigns from Employee
status for Good Reason,
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then all of the Shares at the time
subject to this Award shall immediately vest and shall be issued on
the date of the Participant’s Separation from Service or as
soon as administratively practicable thereafter, subject to the
Corporation’s collection of the applicable Withholding Taxes,
but in no event later than the close of the calendar year in which
such Separation from Service occurs or (if later) the fifteenth
(15th) day of the third (3rd) calendar month following the date of
such Separation from Service, unless a further deferral is required
pursuant to Paragraph 9.
D.
If the Restricted Stock Units
subject to this Award at the time of the Change in Control are not
assumed or otherwise continued in effect or replaced with a cash
retention program in accordance with Paragraph 6.A above, then
those units shall vest immediately prior to the closing of the
Change in Control. The Shares subject to those vested units shall
be converted into the right to receive the same consideration per
share of Common Stock payable to the other stockholders of the
Corporation in consummation of that Change in Control, and such
consideration per Share shall be distributed to Participant upon
the tenth (10th) business day following the earliest
to occur of (i) the Issuance Date determined for that Share in
accordance with the Normal Vesting Schedule, (ii) the date of
Participant’s Separation from Service or (iii) the first
date following the Change in Control on which the distribution can
be made without contravention of any applicable provisions of Code
Section 409A. Such distribution shall be subject to the
Corporation’s collection of the applicable Withholding Taxes
pursuant to the provisions of Paragraph 8.
E.
This Agreement shall not in any way
affect the right of the Corporation to adjust, reorganize or
otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
7.
Adjustment in
Shares . Should any change be made to the Common
Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares,
spin-off transaction, extraordinary dividend or distribution or
other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration, or should
the value of outstanding shares of Common Stock be substantially
reduced as a result of a spin-off transaction or an extraordinary
dividend or distribution, or should there occur any merger,
consolidation or other reorganization, then equitable adjustments
shall be made by the Plan Administrator to the total number and/or
class of securities issuable pursuant to this Award in order to
reflect such change and thereby prevent a dilution or enlargement
of benefits hereunder. The determination of the Plan Administrator
shall be final, binding and conclusive. In the event of a
Change in Control, the adjustments (if any) shall be made in
accordance with the provisions of Paragraph 6.
8.
Issuance of Shares/Collection
of Withholding Taxes .
A.
On each applicable Issuance Date (or
any earlier date on which the Shares are to be issued in accordance
with the terms of this Agreement), the Corporation shall issue to
or on behalf of the Participant a certificate (which may be in
electronic form) for the applicable number of shares of Common
Stock, subject, however, to the Corporation’s collection of
the applicable Withholding Taxes.
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B.
The Corporation shall collect the
applicable Withholding Taxes with respect to the Shares which vest
and become issuable hereunder through an automatic share
withholding procedure pursuant to which the Corporation will
withhold, at the time of such vesting, a portion of the Shares with
a Fair Market Value (measured as of the applicable vesting date)
equal to the amount of those taxes; provided, however
, that the amount of any Shares so withheld shall not exceed the
amount necessary to satisfy the Corporation’s required tax
withholding obligations using the minimum statutory withholding
rates for federal and state tax purposes that are applicable to
supplemental taxable income.
C.
Notwithstanding the foregoing
provisions of Paragraph 8.B, the employee portion of the federal,
state and local employment taxes required to be withheld by the
Corporation in connection with the vesting of the Shares or any
other amounts hereunder (the “Employment Taxes”) shall
in all events be collected from the Participant no later than the
last business day of the calendar year in which the Shares or other
amounts vest hereunder. Accordingly, to the extent the
Issuance Date for one or more vested Shares or the distribution
date for such other amounts is to occur in a year subsequent to the
calendar year in which those Shares or other amounts vest, the
Participant shall, on or before the last business day of the
calendar year in which the Shares or other amounts vest, deliver to
the Corporation a check payable to its order in the dollar amount
equal to the Employment Taxes required to be withheld with respect
to those Shares or other amounts. The provisions of this
Paragraph 8.C shall be applicable only to the extent necessary to
comply with the applicable tax withholding requirements of Code
Section 3121(v).
D.
Except as otherwise provided in
Paragraph 6 an
