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.


 


	
  Participant

  	
   

  	
                                                      

  
	
   

  	
   

  	
   

  
	
  Award Date:

  	
   

  	
                     ,                   

  
	
   

  	
   

  	
   

  
	
  Number of Shares

  Subject to Award:

  	
   

  	
                       shares
  of Common Stock (the “Shares”)

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  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.

  



 

















 


	
  Issuance Schedule:

  	
   

  	
  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.

  



 


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 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 this 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 Issuance Date.
Notwithstanding any provision to the contrary in this Agreement, no Shares or
other amounts which become issuable or distributable by reason of Participant’s
Separation from Service shall actually be issued or distributed to 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.


 


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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 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.


 


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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.


 


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


 


	
   

  	
  SJW CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [PARTICIPANT’S
  NAME]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


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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 Participant pursuant to the terms of the
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 that results in such person or related group beneficially owning
securities representing thirty percent (30%) 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 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 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 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, however, that
solely for purposes of determining whether a permissible Section 409A distribution
can be made under Paragraph 6.D in connection with such Change in Control
event, the period for measuring a change in the composition of the Board shall
be limited to a period of twelve (12) consecutive months or less;


 


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.


 


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


 


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


 


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


 


I.                                         Disability shall mean the
Participant’s permanent and total disability as determined pursuant to Section 22(e)(3) of
the Code.


 


J.                                        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 Employee
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.


 


K.                                    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.


 


L.                                      Good Cause shall mean:


 


(i)                                     Any
act or omission by the Participant 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, or


 


(ii)                                  Participant’s
conviction of a criminal violation involving fraud or dishonesty.


 


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 Participant 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.


 


M.                                 Good
Reason  shall be deemed to exist with respect to Participant if and only if,
without Participant’s express written consent:


 


(i)                                     there
is a significant change in the nature or the scope of Participant’s authority
or in his or her overall working environment;


 


(ii)                                  Participant
is assigned duties materially inconsistent with his or her present duties,
responsibilities and status;


 


(iii)                               there is a reduction in
the sum of Participant’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 Participant is required to perform services;


 


provided that, in the case of each such reason, that
the Corporation has not cured such condition within thirty (30) days after written
notice by Participant to the Corporation that such condition exists and
constitutes Good Reason.


 


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


 

















 


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


 


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 al classes of stock
in one of the other corporations in such chain.


 


Q.                                    Plan  shall mean the Corporation’s
Long Term Incentive Plan.


 


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


 


S.                                      Restricted Stock Unit  shall mean
each unit subject to the Award which shall entitle Participant to receive one (1)
share of Common Stock upon the vesting of that unit.


 


T.                                     Separation from Service  shall mean
the Participant’s cessation of Employee status by reason of his or her death,
retirement or termination of employment. 
The Participant shall be deemed to have terminated employment for such
purpose at such time as the level of his or her 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 or she 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 or
she 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 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.


 


U.                                    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:


 


(i)                                     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).


 


(ii)                                  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 or her position of
employment with the Corporation (or any Parent or Subsidiary) or any
substantially similar position of employment.


 


(iii)                               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.


 


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


 


W.                                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.


 


X.                                    Withholding Taxes  shall mean the
federal, state and local income and employment taxes required to be withheld by
the Corporation in connection with the vesting and issuance of the shares of
Common Stock (or any other property) under the Award.