Exhibit 10.23

SJW CORP.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

AMENDED AND RESTATED EFFECTIVE OCTOBER 22, 2008

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. The Board previously made an Award of Restricted Stock Units to Participant
on January 25, 2007, and that Award is evidenced by a Restricted Stock Unit
Issuance Agreement between the Corporation and Participant dated that same date.

D. The Corporation and Participant wish to execute this Amended and Restated
Agreement solely for the purpose of bringing the Restricted Stock Unit Issuance
Agreement into documentary compliance with the final Treasury Regulations under
Section 409A of the Code, effective October 22, 2008.

E. 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 the
Participant, as of the Award Date, Restricted Stock Units under the Plan. Except
as otherwise provided in this Agreement, the Restricted Stock Units shall vest
upon the attainment of a pre-established performance objective tied to total
shareholder return measured over a specified period, provided the Participant
continues in Service through the completion date of that measurement period.
Each Restricted Stock Unit which so vests shall entitle the Participant to
receive one share of Common Stock on the specified issue date. The number of
shares of Common Stock subject to the awarded Restricted Stock Units, the
applicable performance target for the vesting of those shares, the alternative
and special vesting provisions which may become applicable to such shares, the
date on which the 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.

--------------------------------------------------------------------------------

AWARD SUMMARY

 

Award Date:    January 25, 2007

Number of Shares

Subject to Award:

   7,000 shares of Common Stock (the “Shares”) Vesting Schedule:    The Shares
shall vest upon the attainment of the Performance Objective set forth in
attached Schedule I, provided the Participant continues in Service through the
completion of the Measurement Period (the “Normal Vesting Schedule”). However,
the Shares may also vest in accordance with the alternative vesting provisions
of Paragraph 4 of this Agreement and the special vesting provisions of Paragraph
6 of this Agreement. Issuance Schedule    The Shares in which the Participant
vests in accordance with the Normal Vesting Schedule will become issuable on
January 15, 2010 (the “Issuance Date”). The actual issuance of the Shares shall
be subject to the Corporation’s collection of all applicable Withholding Taxes
and shall be effected on the Issuance Date or as soon as administratively
practicable thereafter, but in no event later than the close of the calendar
year in which such Issuance Date occurs. 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 procedures pursuant to which the
applicable Withholding Taxes are to be collected are set forth in Paragraph 8 of
this Agreement.

2. Limited Transferability. Prior to actual receipt of the Shares which vest and
become issuable hereunder, the 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 the Participant’s death may be
transferred pursuant to the provisions of the Participant’s will or the laws of
inheritance or to the Participant’s designated beneficiary or beneficiaries of
this Award. The 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 the Participant and/or his or her family members. The
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 below,
should the Participant cease Service for any reason prior to the completion of
the Measurement Period, then the Restricted Stock Units subject to this Award
shall be immediately cancelled, and the Participant shall cease to have any
right or entitlement to receive any Shares under those cancelled units.

 

2

--------------------------------------------------------------------------------

4. Alternative Vesting.

(a) Should any of the following events occur prior to the completion of the
Measurement Period: (i) the Participant’s cessation of Employee status by reason
of death or Permanent Disability, (ii) the Participant’s resignation from
Employee status for Good Reason or (iii) the Corporation’s termination of the
Participant’s Employee status other than for Good Cause, then all the Restricted
Stock Units, together with the underlying Shares, shall immediately vest.

(b) The Shares to which the Participant becomes entitled pursuant to the vesting
provisions of Paragraph 4(a) shall be issued on the date of his Separation from
Service in connection with such cessation of Employee status 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 of this Agreement.

(c) Each Share in which Participant may be deemed, by reason of the vesting
acceleration provisions of this Paragraph 4, to vest prior to the actual
termination or cessation of his Employee status shall in no event be issued
prior to the earlier of (i) the Issuance Date applicable to that Share in
accordance with the Normal Vesting Schedule or (ii) the date determined in
accordance with Paragraph 4(b).

5. Stockholder Rights. The holder of this Award shall not have any stockholder
rights, including voting or dividend rights, with respect to the Shares subject
to the Award until the Participant becomes the record holder of those Shares
upon their actual issuance following the Corporation’s collection of the
applicable Withholding Taxes.

6. Change of 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
of Common Stock at the time of the Change in Control and provides for the
subsequent vesting and payout of that value in accordance with the provisions of
this Paragraph 6(a). No accelerated vesting of the Restricted Stock Units or the
underlying Shares shall occur in the event of such assumption or continuation of
the Award or such replacement of the Award with a cash retention program.
However, the vesting provisions in effect for the Award following the Change in
Control shall no longer be tied to the attainment of the Performance Objective
set forth in Schedule I and shall instead be converted into the following
Service-vesting schedule:

(i) The Award (whether in its assumed or continued form or as converted into a
cash retention program) shall vest in full upon the Participant’s continuation
in Service through December 31, 2009. Following the completion of

 

3

--------------------------------------------------------------------------------

such Service vesting period, the securities, cash or other property underlying
the vested Award shall be issued on the normal January 15, 2010 Issuance Date 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 Issuance Date occurs.

(ii) Should any of the following events occur after such Change in Control but
prior to December 31, 2009: (A) the Participant’s cessation of Employee status
by reason of death or Permanent Disability, (B) the Participant’s resignation
from Employee status for Good Reason or (C) the termination of the Participant’s
Employee status other than for Good Cause, then the Award shall immediately vest
in full, and the securities, cash or other property underlying the Award shall
be distributed on the date of the Participant’s Separation from Service in
connection with such cessation of Employee status 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 of this Agreement.

(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 their Common Stock in consummation of the Change in Control,
the successor corporation may, in connection with the assumption or continuation
of the 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) If the Restricted Stock Units subject to this Award at the time of the
Change in Control are not so assumed or otherwise continued in effect or
replaced with a cash retention program under Paragraph 6(a), then those units
will 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 shall be distributed to Participant on the tenth (10th) business
day following the earliest to occur of (i) the January 15, 2010 Issuance Date,
(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.

 

4

--------------------------------------------------------------------------------

(d) This Agreement shall not in any way affect the right of the Corporation to
adjust, reclassify, 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 of Common Stock/Collection of Withholding Taxes.

(a) On the 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 underlying shares of Common Stock,
subject, however, to the Corporation’s collection of the applicable Withholding
Taxes.

(b) The Corporation shall collect the applicable Withholding Taxes with respect
to the vested Shares issued hereunder through an automatic share withholding
procedure pursuant to which the Corporation will withhold, at the time of such
issuance, a portion of the Shares with a Fair Market Value (measured as of the
applicable issuance 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. In the event payment is made in a
form other than the Shares, the Corporation shall collect from the Participant
the applicable Withholding Taxes pursuant to such procedures as the Corporation
deems appropriate under the circumstances.

(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.

 

5

--------------------------------------------------------------------------------

Accordingly, to the extent the applicable 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(c) and Paragraph 8(b), the
settlement of all Restricted Stock Units which vest under the Award shall be
made solely in shares of Common Stock. In no event, however, shall any
fractional shares be issued. Accordingly, the total number of shares of Common
Stock to be issued pursuant to the Award shall, to the extent necessary, be
rounded down to the next whole share in order to avoid the issuance of a
fractional share.

9. Deferred Issue Date. Notwithstanding any provision to the contrary in this
Agreement, no Shares (or other property) which become issuable or payable
hereunder by reason of the Participant’s Separation from Service shall actually
be issued to the Participant prior to the earlier of (i) the first day of the
seventh (7th) month following the date of such Separation from Service or
(ii) the date of Participant’s death, if Participant is deemed at the time of
such Separation from Service to be a specified employee under
Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A,
as determined by the Plan Administrator in accordance with consistent and
uniform standards applied to all other Code Section 409A arrangements of the
Corporation, and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2). The deferred
Shares or other distributable amount shall be issued or distributed in a lump
sum on the first day of the seventh (7th) month following the date of
Participant’s Separation from Service or, if earlier, the first day of the month
immediately following the date the Corporation receives proof of Participant’s
death.

10. Benefit Limit. The benefit limitation of this Paragraph 10 shall apply only
to the extent Participant is not otherwise entitled to a Code Section 4999 tax
gross-up, pursuant to the terms of the Corporation’s Executive Severance Plan,
with respect to the Shares that vest on an accelerated basis in connection with
a Change in Control or subsequent cessation of Employee status:

In the event the vesting and issuance of the Shares subject to this Award would
otherwise constitute a parachute payment under Code Section 280G, then the
vesting and issuance of those Shares shall be subject to reduction to the extent
necessary to assure that the number of Shares which vest and are issued under
this Award will be limited to the greater of (i) the number of Shares which can
vest and be issued without triggering a parachute payment under Code
Section 280G or (ii) the maximum number of Shares which can vest and be issued
under this Award so as to provide the Participant with the greatest after-tax
amount of such vested and issued Shares after taking into account any excise tax

 

6

--------------------------------------------------------------------------------

the Participant may incur under Code Section 4999 with respect to those Shares
and any other benefits or payments to which the Participant may be entitled in
connection with any change in control or ownership of the Corporation or the
subsequent termination of the Participant’s Service.

11. Compliance with Laws and Regulations. The issuance of shares of Common Stock
pursuant to the Award shall be subject to compliance by the Corporation and
Participant with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which the Common Stock may
be listed for trading at the time of such issuance.

12. Notices. Any notice required to be given or delivered to the Corporation
under the terms of this Agreement shall be in writing and addressed to the
Corporation at its principal corporate offices. Any notice required to be given
or delivered to Participant shall be in writing and addressed to Participant at
the address indicated below Participant’s signature line on this Agreement. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

13. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and
be binding upon, the Corporation and its successors and assigns and Participant,
Participant’s assigns, the legal representatives, heirs and legatees of
Participant’s estate and any beneficiaries of the Award designated by
Participant.

14. Construction. This Agreement and the Award evidenced hereby are made and
granted pursuant to the Plan and are in all respects limited by and subject to
the terms of the Plan. All decisions of the Plan Administrator with respect to
any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in the Award.

15. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.

16. Employment at Will. Nothing in this Agreement or in the Plan shall confer
upon Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining Participant) or
of Participant, which rights are hereby expressly reserved by each, to terminate
Participant’s Service at any time for any reason, with or without cause.

 

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Agreement on the respective dates indicated below.

 

  SJW CORP. By:  

 

 

David A. Green, Chief Financial Officer

and Treasurer

Dated:                                            , 2008   W. Richard Roth
Signature:  

 

Address:  

 

 

 

Dated:                                            , 2008

 

8

--------------------------------------------------------------------------------

APPENDIX A

DEFINITIONS

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.

B. Award shall mean the award of Restricted Stock Units made to the Participant
pursuant to the terms of this Agreement.

C. Award Date shall mean the date the Restricted Stock Units are awarded to
Participant pursuant to the Agreement and shall be the date indicated in
Paragraph 1 of the Agreement.

D. Board shall mean the Corporation’s Board of Directors.

E. Change in Control shall mean any change in control or ownership of the
Corporation which occurs by reason of one or more of the following events:

(i) the acquisition, directly or indirectly by any person or related group of
persons (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation or a person that directly or indirectly controls, is
controlled by, or is under control with, the Corporation or an employee benefit
plan maintained by any such entity, of beneficial ownership (as defined in Rule
13d-3 of the Exchange Act) of securities of the Corporation which, when added to
other acquisitions effected by such person or related group during the twelve
(12)-month period ending with the most recent acquisition, represent thirty-five
percent (35%) or more of the total combined voting power of the Corporation’s
then-outstanding securities;

(ii) a merger, recapitalization, consolidation, or other similar transaction to
which the Corporation is a party, unless securities representing more than 50%
of the combined voting power of the then-outstanding securities of the surviving
entity or a parent thereof are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the persons
who beneficially owned the Corporation’s outstanding voting securities
immediately before the transaction;

(iii) a sale, transfer or disposition of all or substantially all of the
Corporation’s assets, unless securities representing at least 50% of the
combined voting power of the then-outstanding securities of the entity acquiring
the Corporation’s assets or parent thereof are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation’s outstanding
voting securities immediately before the transaction;

 

A-1

--------------------------------------------------------------------------------

(iv) a merger, recapitalization, consolidation, or other transaction to which
the Corporation is a party or the sale, transfer, or other disposition of all or
substantially all of the Corporation’s assets if, in either case, the members of
the Board immediately prior to consummation of the transaction do not, upon
consummation of the transaction, constitute at least a majority of the board of
directors of the surviving entity or the entity acquiring the Corporation’s
assets, as the case may be, or a parent thereof (for this purpose, any change in
the composition of the board of directors that is anticipated or pursuant to an
understanding or agreement in connection with a transaction will be deemed to
have occurred at the time of the transaction, provided such change occurs within
twelve (12) months after the effective date of the transaction); or

(v) a change in the composition of the Board over a period of twelve
(12) consecutive months or less such that a majority of the Board members ceases
by reason of one or more contested elections for Board membership, to be
comprised of individuals who either (a) have been Board members since the
beginning of such period or (b) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members who
were described in clause (a) or who were previously so elected or approved and
who were still in office at the time the Board approved such election or
nomination;

provided that no Change in Control shall occur if the result of the transaction
is to give more ownership or control of the Corporation to any person or related
group of persons who held securities representing thirty-five percent (35%) or
more of the combined voting power of the Corporation’s outstanding securities as
of March 3, 2003.

F. Code shall mean the Internal Revenue Code of 1986, as amended.

G. Common Stock shall mean shares of the Corporation’s common stock.

H. Corporation shall mean SJW Corp., a California corporation, and any successor
corporation to all or substantially all of the assets or voting stock of SJW
Corp. which shall by appropriate action adopt the Plan and/or assume the Award.

I. Employee shall mean an individual who is in the employ of the Corporation (or
any Parent or Subsidiary), subject to the control and direction of the employer
entity as to both the work to be performed and the manner and method of
performance; provided, however, that solely for purposes of determining whether
Participant has incurred a Separation from Service, the term “Employee” shall
have the meaning assigned to such term in the Separation from Service definition
set forth in this Appendix.

 

A-2

--------------------------------------------------------------------------------

J. Fair Market Value per share of Common Stock on any relevant date shall be the
closing selling price per share on the date in question on the Stock Exchange on
which the Common Stock is at that time primarily traded, as such price is
officially quoted in the composite tape of transactions on such exchange. If
there is no reported sale of Common Stock on such Stock Exchange on the date in
question, then the Fair Market Value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.

K. Good Cause shall be deemed to exist if, and only if: (i) Participant engages
in acts or omissions that result in substantial harm to the business or property
of the Corporation or any Parent or Subsidiary and that constitute dishonesty,
intentional breach of fiduciary obligation or intentional wrongdoing or
(ii) Participant is convicted of a criminal violation involving fraud or
dishonesty.

L. Good Reason shall mean the occurrence of any of the following events without
Participant’s express written consent: (i) his removal from any of the following
positions: President and Chief Executive Officer of the Corporation, President
and Chief Executive Officer of San Jose Water Company and President and Chief
Executive Officer of SJW Land Company, or any other significant change in the
nature or the scope of his authority or overall working environment; (ii) the
assignment to Participant of duties materially inconsistent with his duties,
responsibilities and status as President and Chief Executive Officer of the
Corporation, President and Chief Executive Officer of San Jose Water Company and
President of SJW Land Company; (iii) a reduction in Participant’s rate of base
salary or target annual bonus, other than a reduction in an amount not in excess
of fifteen percent (15%) of either his base salary or the sum of his base salary
and target annual bonus pursuant to a uniform reduction in the base salary or
target bonus payable to all senior executives of the Corporation to which
Participant and the Executive Compensation Committee have mutually agreed and
which occurs prior to a Change in Control; (iv) a change by the Corporation by
fifty-five (55) miles or more of the principal location at which Participant is
required to perform Participant’s services hereunder or (v) a material breach by
the Corporation of any of its obligations under its existing employment
agreement with the Participant (or any successor agreement) which remains
uncured for more than thirty (30) days following Participant’s written notice to
the Board in which Participant specifically identifies the material breach which
has occurred.

M. Measurement Period shall mean the period over which the Performance Objective
is to be measured. That period shall be the three (3)-year period measured from
January 1, 2007 to December 31, 2009.

N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from time
to time.

O. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.

 

A-3

--------------------------------------------------------------------------------

P. Parent shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation, provided each corporation in
the unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

Q. Performance Objective shall the attainment of the total shareholder return
objective set forth in attached Schedule I, as calculated over the specified
Measurement Period.

R. Permanent Disability shall mean the Participant’s inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration of
twelve (12) months or more.

S. Plan shall mean the Corporation’s Long-Term Incentive Plan.

T. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.

U. Restricted Stock Unit shall mean each unit subject to this Award which shall
entitle the Participant to receive one share of Common Stock under the Plan at a
designated time following the vesting of that unit.

V. Separation from Service shall mean the Participant’s cessation of Employee
status by reason of his death, retirement of termination of employment. The
Participant shall be deemed to have terminated employment for such purpose at
such time as the level of his bona fide services to be performed as an Employee
(or as a consultant or independent contractor) permanently decreases to a level
that is not more than twenty percent (20%) of the average level of services he
rendered as an Employee during the immediately preceding thirty-six (36) months.
Solely for purposes of determining when a Separation from Service occurs,
Participant will be deemed to continue in “Employee” status for so long as he
remains in the employ of one or more members of the Employer Group, subject to
the control and direction of the employer entity as to both the work to be
performed and the manner and method of performance. “Employer Group” means the
Corporation and any Parent or Subsidiary and any other corporation or business
controlled by, controlling or under common control with, the Corporation, as
determined in accordance with Sections 414(b) and (c) of the Code and the
Treasury Regulations thereunder, except that in applying Sections 1563(1),
(2) and (3) for purposes of determining the controlled group of corporations
under Section 414(b), the phrase “at least 50 percent” shall be used instead of
“at least 80 percent” each place the latter phrase appears in such sections and
in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of
determining trades or businesses that are under common control for purposes of
Section 414(c), the phrase “at least 50 percent” shall be used instead of “at

 

A-4

--------------------------------------------------------------------------------

least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of
the Treasury Regulations. Any such determination as to Separation from Service,
however, shall be made in accordance with the applicable standards of the
Treasury Regulations issued under Section 409A of the Code.

W. Service shall mean Participant’s performance of services for the Corporation
(or any Parent or Subsidiary) in the capacity of an Employee, a non-employee
member of the Board or a consultant or independent advisor. Participant shall be
deemed to cease Service immediately upon the occurrence of either of the
following events: (i) Participant no longer performs services in any of the
foregoing capacities for the Corporation (or any Parent or Subsidiary) or
(ii) the entity for which Participant performs such services ceases to remain a
Parent or Subsidiary of the Corporation, even though Participant may
subsequently continue to perform services for that entity. Service as an
Employee shall not be deemed to cease during a period of military leave, sick
leave or other personal leave approved by the Corporation; provided, however,
that the following special provisions shall be in effect for any such leave:

 

  •  

Should the period of such leave (other than a disability leave) exceed six
(6) months, then Participant shall be deemed to cease Service and to incur a
Separation from Service upon the expiration of the initial six (6)- month period
of that leave, unless Participant retains a right to re-employment under
applicable law or by contract with the Corporation (or any Parent or
Subsidiary).

 

  •  

Should the period of a disability leave exceed twenty-nine (29) months, then
Participant shall be deemed to cease Service and to incur a Separation from
Service upon the expiration of the initial twenty-nine (29)-month period of that
leave, unless Participant retains a right to re-employment under applicable law
or by contract with the Corporation (or any Parent or Subsidiary). For such
purpose, a disability leave shall be a leave of absence due to any medically
determinable physical or mental impairment that can be expected to result in
death or to last for a continuous period of not less than six (6) months and
causes Participant to be unable to perform the duties of his position of
employment with the Corporation (or any Parent or Subsidiary) or any
substantially similar position of employment.

 

  •  

Except to the extent otherwise required by law or expressly authorized by the
Plan Administrator or by the Corporation’s written policy on leaves of absence,
no Service credit shall be given for vesting purposes for any period Participant
is on a leave of absence.

X. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or
Global Select Market or the New York Stock Exchange.

 

A-5

--------------------------------------------------------------------------------

Y. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

Z. Withholding Taxes shall mean (i) 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 of Common Stock (or any other
property) under the Award and any phantom dividend equivalents relating to those
shares and (ii) the federal, state and local income taxes required to be
withheld by the Corporation in connection with the issuance of those vested
shares (or any other property) and the distribution of any phantom dividend
equivalents relating to such shares.

 

A-6

--------------------------------------------------------------------------------

SCHEDULE I

PERFORMANCE OBJECTIVE

The performance objective which must be attained for all the Restricted Stock
Units to vest shall be the realization of a total return to the Corporation’s
shareholders for the three (3)-year period measured from January 1, 2007 to
December 31, 2009 (the “Measurement Period”) of at least eight percent (8%) per
year, compounded annually. Such total shareholder return shall be measured as
follows:

first, the base value of the Common Stock at the January 1, 2007 start of the
Measurement Period shall be determined by averaging the closing selling prices
per share of such Common Stock over the days in December 2006 on which the
Common Stock was traded;

then, the ending value of the Common Stock on the December 31, 2009 close of the
Measurement Period shall be determined by averaging the closing selling prices
per share of Common Stock for the days in December 2009 on which the Common
Stock is traded,

then, there shall be determined the dollar amount by which the ending value of
the Common Stock as so determined exceeds the base value of the Common Stock as
determined above (the “Increase in Value”);

then, an additional dollar amount (the “Additional Value”) shall be calculated
by multiplying (i) the number of shares of Common Stock (including fractional
shares) which could have been purchased during the period from January 1, 2007
to December 31, 2009 had the cash dividend paid per share of Common Stock during
that period been immediately re-invested in Common Stock at the closing selling
price per share on each such dividend payment date by (ii) the average of the
closing selling prices per share of Common Stock for the days in December 2009
on which the Common stock is traded; and

finally, the Increase in Value calculated above shall be added to the Additional
Value, and the resulting dollar amount shall then be expressed as a percentage
of the base value of the Common Stock calculated at the start of the Measurement
Period.

If the resulting percentage obtained from the foregoing calculation yields a
total shareholder return of at least eight percent (8%) per year, compounded
annually, then the Performance Objective shall be deemed to have been attained.

The foregoing formula shall be appropriately adjusted to reflect any stock
dividends, stock splits, exchange of shares, spin-off transaction, extraordinary
dividend or distribution, combination of shares, recapitalization or other
similar transaction affecting the outstanding shares of Common Stock without the
Corporation’s receipt of consideration.

 

A-1