Exhibit 10.31

SJW GROUP
STOCK OPTION AGREEMENT
RECITALS
A.The Board has adopted the Plan for the purpose of retaining the services of
selected Employees and non-employee members of the Board (or the board of
directors of any Parent or Subsidiary).
B.Optionee is to render valuable services to the Corporation, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation’s grant of an option to Optionee.
C.All capitalized terms in this Agreement shall have the meaning assigned to
them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1.Grant of Option. The Corporation hereby grants to Optionee, as of the Grant
Date, an option to purchase up to the number of Option Shares specified in the
Grant Notice at the Exercise Price. The Option Shares shall be purchasable from
time to time during the option term specified in Paragraph 2, as set forth
herein.
2.Option Term. This option shall have a maximum term of ten (10) years measured
from the Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.
3.Limited Transferability. This option shall be neither transferable nor
assignable by Optionee other than by will or the laws of descent and
distribution following Optionee’s death and may be exercised, during Optionee’s
lifetime, only by Optionee. However, Optionee may designate one or more persons
as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee’s death while holding this
option. Such beneficiary or beneficiaries shall take the transferred option
subject to all the terms and conditions of this Agreement, including (without
limitation) the limited time period during which this option may, pursuant to
Paragraph 5, be exercised following Optionee’s death.
4.Dates of Exercise. This option shall vest and become exercisable for the
Option Shares in one or more installments in accordance with the Vesting
Schedule specified in the Grant Notice. As the option becomes exercisable for
such installments, those installments shall accumulate, and the option shall
remain exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5 or 6.

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5.Cessation of Service. The option term specified in Paragraph 2 shall terminate
(and this option shall cease to be outstanding) prior to the Expiration Date
should any of the following provisions become applicable:
(a)Except as otherwise expressly provided in subparagraphs (b) through (e) of
this Paragraph 5, should Optionee cease to remain in Service for any reason
while this option is outstanding, then Optionee shall have a ninety (90)-day
period measured from the date of such cessation of Service during which to
exercise this option for any or all of the Option Shares for which this option
is vested and exercisable at the time of Optionee’s cessation of Service, but in
no event shall this option be exercisable at any time after the Expiration Date.
(b)Should Optionee’s Service terminate by reason of his or her death while this
option is outstanding, then this option, to the extent not otherwise at that
time vested and exercisable for all the Option Shares, shall immediately vest
and become exercisable for all the Option Shares. Upon Optionee’s death (whether
before or after termination of Service) this option may be exercised, for any or
all of the Option Shares for which this option is vested and exercisable at the
time of Optionee’s cessation of Service (including any Option Shares which vest
on an accelerated basis should such cessation of Service occur by reason of
Optionee’s death), by (i) the personal representative of Optionee’s estate or
(ii) the person or persons to whom the option is transferred pursuant to
Optionee’s will or the laws of inheritance following Optionee’s death. However,
if Optionee dies while holding this option and has an effective beneficiary
designation in effect for this option at the time of his or her death, then the
designated beneficiary or beneficiaries shall have the exclusive right to
exercise this option following Optionee’s death. Any such right to exercise this
option shall lapse, and this option shall cease to be outstanding, upon the
earlier of (i) the expiration of the four (4)-year period measured from the date
of Optionee’s death or (ii) the Expiration Date. Upon the expiration of such
limited exercise period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option Shares
for which the option has not otherwise been exercised.
(c)Should Optionee’s Service terminate by reason of Disability while this option
is outstanding, then this option, to the extent not otherwise at that time
vested and exercisable for all the Option Shares, shall immediately vest and
become exercisable for all the Option Shares. Optionee shall have a four
(4)-year period measured from the date of such cessation of Service during which
to exercise this option for any or all the Option Shares. In no event, however,
shall this option be exercisable at any time after the Expiration Date.
(d)Should Optionee cease Service by reason of Normal Retirement while this
option is outstanding, then Optionee shall have a four (4)-year measured from
the date of such cessation of Service during which to exercise this option for
(i) any or all Option Shares for which this option is vested and exercisable at
the time of such cessation of Service and (ii) any additional Option Shares for
which this option vests and becomes exercisable during such four (4)-year
period. In no event, however, shall this option be exercisable at any time after
the Expiration Date. To the extent this option is not otherwise vested and
exercisable for all of the Option Shares at the time of Optionee’s cessation of
Service by reason of Normal Retirement, this option shall, during the limited

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period of post-Service exercisability following such cessation of Service,
continue to vest and become exercisable for one or more additional Option Shares
in accordance with the Vesting Schedule specified in the Grant Notice or the
special vesting acceleration provisions of Paragraph 6, as if Optionee continued
in Service throughout that limited exercise period. Upon the expiration of such
limited exercise period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option Shares
for which the option has not otherwise been exercised.
(e)Should Optionee’s Service be terminated for Good Cause or should Optionee
otherwise engage in any misconduct which could result in a termination for Good
Cause while this option is outstanding, then this option shall terminate
immediately and cease to remain outstanding.

(f)Except as otherwise expressly provided in the preceding subparagraphs of this
Paragraph 5, during the limited period of post-Service exercisability, this
option may not be exercised in the aggregate for more than the number of Option
Shares for which this option is, at the time of Optionee’s cessation of Service,
vested and exercisable pursuant to the Vesting Schedule specified in the Grant
Notice or the special vesting acceleration provisions of Paragraph 6. Except as
otherwise provided in this Paragraph 5 or except to the extent (if any)
specifically authorized by the Plan Administrator pursuant to an express written
agreement with the Optionee, this option shall not vest or become exercisable
for any additional Option Shares, whether pursuant to the normal Vesting
Schedule specified in the Grant Notice or the special vesting acceleration
provisions of Paragraph 6, following the Optionee’s cessation of Service. Upon
the expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise been exercised.

6.Special Acceleration of Option.

(a)This option, to the extent outstanding at the time of a Change in Control,
but not otherwise fully exercisable, shall automatically accelerate so that this
option shall, immediately prior to the effective date of such Change in Control,
become exercisable for all of the Option Shares at the time subject to this
option and may be exercised for any or all of those Option Shares as fully
vested shares of Common Stock. However, this option shall not become exercisable
on such an accelerated basis, if and to the extent: (i) this option is to be
assumed by the successor corporation (or parent thereof) or is otherwise to be
continued in full force and effect pursuant to the terms of the Change in
Control transaction or (ii) this option is to be replaced with a cash retention
program of the successor corporation which preserves the spread existing at the
time of the Change in Control on any Option Shares for which this option is not
otherwise at that time vested and exercisable (the excess of the Fair Market
Value of those Option Shares over the aggregate Exercise Price payable for such
shares) and provides for the subsequent vesting and payout of that spread, over
Optionee’s period of continued Service, at the same time or times as this option
would have vested and become exercisable for those Option Shares in accordance
with the Vesting Schedule set forth in the Grant Notice.

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(b)Immediately following the Change in Control, this option shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in effect pursuant to the
terms of the Change in Control transaction.

(c)If this option is assumed in connection with a Change in Control or otherwise
continued in effect, then this option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Change in Control had the option been exercised immediately prior to such Change
in Control, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s 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 of
this option, 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 such Change in Control.

(d)This option, to the extent outstanding at the time of a Qualifying
Termination but not otherwise fully exercisable, shall automatically accelerate
so that this option shall become immediately exercisable for all the Option
Shares at the time subject to the option and may be exercised for any or all of
those Option Shares as fully vested shares. The option shall remain so
exercisable until the expiration or sooner termination of the Option Term.
Should this option be replaced with a cash retention program in accordance with
Paragraph 6(a), then the balance credited to Optionee under that program at the
time of his or her Qualifying Termination shall vest and be immediately paid to
Optionee in a lump sum, subject to the Corporation’s collection of all
applicable withholding taxes.

(e)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.

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7.Adjustment in Option 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 (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price.
The adjustments shall be made in such manner as the Plan Administrator deems
appropriate in order to reflect such change, and those adjustments shall be
final, binding and conclusive upon Optionee and any other person or persons
having an interest in the option. In the event of any Change in Control
transaction, the adjustment provisions of Paragraph 6(c) shall be controlling.

8.Shareholder Rights. The holder of this option shall not have any shareholder
rights with respect to the Option Shares until such person shall have exercised
the option and become a holder of record of the purchased shares.

9.Manner of Exercising Option.

(a)In order to exercise this option with respect to all or any part of the
Option Shares for which this option is at the time exercisable, Optionee (or any
other person or persons exercising the option) must take the following actions:

(i)Execute and deliver to the Corporation a Notice of Exercise for the Option
Shares for which the option is exercised or comply with such other procedures as
the Corporation may establish for notifying the Corporation of the exercise of
this option for one or more Option Shares.

(ii)Pay the aggregate Exercise Price for the purchased shares in one or more of
the following forms:

(A)cash or check made payable to the Corporation;

(B)shares of Common Stock (whether delivered in the form of actual stock
certificates or through attestation of ownership in a manner reasonably
satisfactory to the Corporation) held for the requisite period (if any)
necessary to avoid any resulting charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date or

(C)through a special sale and remittance procedure, if and to the extent
approved by the Plan Administrator, pursuant

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to which Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (i) to a brokerage firm
(reasonably satisfactory to the Corporation for purposes of administering such
procedure in accordance with the Corporation’s pre-clearance/pre-notification
policies) to effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for the purchased
shares plus all applicable Withholding Taxes required to be withheld by the
Corporation by reason of such exercise and (ii) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm on
such settlement date in order to complete the sale.

Except to the extent the sale and remittance procedure is utilized in connection
with the option exercise, payment of the Exercise Price must accompany the
Notice of Exercise delivered to the Corporation in connection with the option
exercise.
(iii)Furnish to the Corporation appropriate documentation that the person or
persons exercising the option (if other than Optionee) have the right to
exercise this option.

(iv)Make appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all applicable
Withholding Taxes.

(b)As soon as practical after the Exercise Date, the Corporation shall issue to
or on behalf of Optionee (or any other person or persons exercising this option)
a certificate for the purchased Option Shares, with the appropriate legends
affixed thereto.

(c)In no event may this option be exercised for any fractional shares.

10.Compliance with Laws and Regulations.

(a)The exercise of this option and the issuance of the Option Shares upon such
exercise shall be subject to compliance by the Corporation and Optionee 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 exercise and issuance.

(b)The inability of the Corporation to obtain approval from any regulatory body
having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the
Corporation of any liability with respect to the non-issuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use its best efforts to obtain all such approvals.

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11.Successors and Assigns. Except to the extent otherwise provided in Paragraphs
3 and 6, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Corporation and its successors and assigns and Optionee,
Optionee’s assigns, the legal representatives, heirs and legatees of Optionee’s
estate and any beneficiaries of this option designated by Optionee.

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 Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee’s signature line on the Grant Notice. 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.Construction. This Agreement and the option 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 this option.

14.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.

15.Excess Shares. If the Option Shares covered by this Agreement exceed, as of
the Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be void
with respect to those excess shares, unless shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.

16.Additional Terms Applicable to an Incentive Option. In the event this option
is designated an Incentive Option in the Grant Notice, the following terms and
conditions shall also apply to the grant:

(a)This option shall cease to qualify for favorable tax treatment as an
Incentive Option if (and to the extent) this option is exercised for one or more
Option Shares: (A) more than three (3) months after the date Optionee ceases to
be an Employee for any reason other than death or Disability or (B) more than
twelve (12) months after the date Optionee ceases to be an Employee by reason of
Disability. The Optionee shall not be deemed to cease to be an Employee during a
period of military leave, sick leave or other personal leave approved by the
Corporation; provided, however, that for a leave which exceeds three (3) months,
the Optionee shall be deemed, for purposes of determining the period within
which this option may be exercised as an Incentive Option (if designated as such
in the Grant Notice), to cease to be an Employee on the first day

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following the expiration of that three (3)-month period, unless the Optionee is
provided with the right to return to Service as an Employee following such leave
either by law or by contract.

(b)No installment under this option shall qualify for favorable tax treatment as
an Incentive Option if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted to
Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be
exceeded in any calendar year, this option shall nevertheless become exercisable
for the excess shares in such calendar year as a Non-Statutory Option.

(c)Should the exercisability of this option be accelerated upon a Change in
Control, then this option shall qualify for favorable tax treatment as an
Incentive Option only to the extent the aggregate Fair Market Value (determined
at the Grant Date) of the Common Stock for which this option first becomes
exercisable in the calendar year in which the Change in Control transaction
occurs does not, when added to the aggregate value (determined as of the
respective date or dates of grant) of the Common Stock or other securities for
which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

(d)Should Optionee hold, in addition to this option, one or more other options
to purchase Common Stock which become exercisable for the first time in the same
calendar year as this option, then for purposes of the foregoing limitations on
the exercisability of such options as Incentive Options, this option and each of
those other options shall be deemed to become first exercisable in the calendar
year in the same chronological order in which such options were granted, except
to the extent otherwise provided under applicable law or regulation.

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EXHIBIT I
NOTICE OF EXERCISE

I hereby notify SJW Group (the “Corporation”) that I elect to purchase
______________ shares of the Corporation’s Common Stock (the “Purchased Shares”)
at the option exercise price of $___________ per share (the “Exercise Price”)
pursuant to that certain option (the “Option”) granted to me under the
Corporation’s Long-Term Incentive Plan on ___________________, 200___.
Concurrently with the delivery of this Exercise Notice to the Corporation, I
shall hereby pay to the Corporation the Exercise Price for the Purchased Shares
in accordance with the provisions of my agreement with the Corporation (or other
documents) evidencing the Option and shall deliver whatever additional documents
may be required by such agreement as a condition for exercise. Alternatively, I
may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

____________________, 20_______
Date

 
 
 
 
 
Optionee
 
 
 
 
 
Address:
 
 
 
 
 
 
 
 
 
Print name in exact manner it is to appear on the stock certificate:
 
 
 
 
 
Address to which certificate is to be sent, if different from address above:
 
 
 
 
 
 
 
 
 
 
 
Social Security Number:
 
 

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APPENDIX

The following definitions shall be in effect under the Agreement:
A.    Agreement shall mean this Stock Option Agreement.
B.    Board shall mean the Corporation’s Board of Directors.
C.    Change in Control shall be deemed to take place on the occurrence of any
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),
but 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 that results
in such person or related group of persons beneficially owning securities
representing 30% or more of the 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 at least 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,

(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 directors
of the Corporation 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 director composition 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); or

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(v)    A change in the composition of the Board over a period of thirty-six (36)
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 more than thirty percent (30%)
of the combined voting power of the Corporation's outstanding securities as of
March 3, 2003.

D.    Code shall mean the Internal Revenue Code of 1986, as amended.
E.    Common Stock shall mean shares of the Corporation’s common stock.
F.    Corporation shall mean SJW Group, a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock
of SJW Group which shall by appropriate action adopt the Plan.
G.    Disability shall mean the permanent and total disability of an individual
as determined pursuant to Section 22(e)(3) of the Code.
H.    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.
I.    Exercise Date shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J.    Exercise Price shall mean the exercise price per Option Share as specified
in the Grant Notice.
K.    Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.
L.    Fair Market Value per share of Common Stock on any relevant date shall be
the closing selling price per share of Common Stock on that date on the New York
Stock Exchange, as such price is officially quoted in the composite tape of
transactions on such Stock Exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such quotation
exists.

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M.    Good Cause shall mean:
(i)Any act or omission by the Optionee that results 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,
(ii)the Optionee’s conviction of a criminal violation involving fraud or
dishonesty, or
(iii)the Optionee’s intentional and knowing participation in the preparation or
release of false or materially misleading financial statements relating to the
Corporation’s operations and financial condition or the Optionee’s intentional
and knowing submission of any false or erroneous certification required of him
or her under the Sarbanes-Oxley Act of 2002 or any securities exchange on which
the Common Stock is at the time listed for trading.
The foregoing definition shall not in any way preclude or restrict the right of
the Corporation (or any Parent or Subsidiary) to discharge or dismiss Optionee
or any other person in the Service of the Corporation (or any Parent or
Subsidiary) for any other acts or omissions, but such other acts or omissions
shall not be deemed, for purposes of the Plan or this Agreement, to constitute
grounds for termination for Good Cause.
N.    Good Reason shall exist with respect to an Optionee, if and only if,
without the Optionee's express written consent:
(i)there is a significant change in the nature or the scope of the Optionee's
authority or in his or her overall working environment;
(ii)the Optionee is assigned duties materially inconsistent with his or her
present duties, responsibilities and status;
(iii)there is a reduction in the sum of Optionee's rate of base salary and
target bonus; or
(iv)the Corporation changes by fifty-five (55) miles or more the principal
location in which the Optionee is required to perform services;
provided, however, that before the Optionee may resign for any Good Reason
event, the Optionee must first provide written notice to the Corporation
identifying such Good Reason event within ninety (90) days after the occurrence
of such event and the Corporation shall have failed to cure such event within
thirty (30) days after receipt of such written notice.

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O.    Grant Date shall mean the date of grant of the option as specified in the
Grant Notice.
P.    Grant Notice shall mean the Notice of Grant of Stock Option accompanying
the Agreement, pursuant to which Optionee has been informed of the basic terms
of the option evidenced hereby.
Q.    Incentive Option shall mean an option which satisfies the requirements of
Code Section 422.
R.    Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
S.    Normal Retirement shall mean an Optionee’s termination of Service with the
Corporation or an Affiliate under circumstances which make such Optionee
eligible for an immediate pension benefit to be paid by the Corporation or an
Affiliate or, in the case of an Optionee who is a non-employee Board member, any
termination of Service, unless such termination is due to misconduct, as
determined by the Plan Administrator in its sole discretion.
T.    Notice of Exercise shall mean the notice of exercise in the form attached
hereto as Exhibit I or in such other form as may be prescribed by the
Corporation from time to time.
U.    Option Shares shall mean the number of shares of Common Stock subject to
the option as specified in the Grant Notice.
V.    Optionee shall mean the person to whom the option is granted as specified
in the Grant Notice.
W.    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.
X.    Plan shall mean the Corporation’s Long-Term Incentive Plan, as amended and
restated.
Y.    Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.
Z.    Qualifying Termination shall mean: (i) an involuntary termination of
Optionee’s Service other than for Good Cause at any time during the period
beginning with the execution of a definitive agreement to effect a Change in
Control and ending with the earlier of (x) the termination of that agreement
without the consummation of the Change in Control or (y) the expiration of the
twenty‑four (24)-month period measured from the effective date of the Change

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in Control contemplated by that agreement or (ii) a resignation from Service for
Good Reason effected by the Optionee within twenty-four (24) months after the
effective date of the Change in Control.
AA.    Service shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary, whether now existing or subsequently
established) in the capacity of an Employee, a non-employee member of the board
of directors or a consultant or independent advisor. However, Optionee shall be
deemed to cease Service immediately upon the occurrence of either of the
following events: (i) Optionee no longer performs services in any of the
foregoing capacities for the Corporation or any Parent or Subsidiary or (ii) the
entity for which Optionee is performing such services ceases to remain a Parent
or Subsidiary of the Corporation, even though the Optionee may subsequently
continue to perform services for that entity. Service shall not be deemed to
cease during a period of military leave, sick leave or other personal leave
approved by the Corporation. However, 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 the Optionee is on a leave of absence.
BB.    Stock Exchange shall mean the American Stock Exchange, the New York Stock
Exchange or the Nasdaq National Market.
CC.    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.
DD.    Vesting Schedule shall mean the schedule set forth in the Grant Notice
pursuant to which the option is to vest and become exercisable for the Option
Shares in a series of one or more installments over the period of Optionee’s
continued Service.
EE.    Withholding Taxes shall mean the federal, state and local income taxes
and the employee portion of the federal, state and local employment taxes
required to be withheld by the Corporation in connection with the exercise of
the option.

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