Document:

Exhibit 4.12

 

GUARANTEE

 

THIS GUARANTEE is entered into as of the 9th day of December, 2016.

 

BETWEEN

 

Canadian Imperial Bank of Commerce, a bank governed by the Bank Act (Canada) with its registered and head office at 199 Bay Street, Commerce Court, Toronto, Ontario, Canada, M5L 1A2 (the “Bank”)

 

AND

 

JCSD Trustee Services Limited, a company incorporated under the laws of Jamaica with its registered office at 40 Harbour Street, in the City and Parish of Kingston, in the Island of Jamaica (the “Trustee”)

 

WHEREAS:

 

A.                                    FirstCaribbean International Bank (Jamaica) Limited, a bank duly licensed under the laws of Jamaica, with its registered office at 23-27 Knutsford Boulevard, Kingston 5 in the parish of St. Andrew, in the Island of Jamaica (the “Subsidiary”) proposes to issue One Billion, Eight Hundred and Seventy Five Million Jamaican Dollars (J$1,875,000,000.00) principal amount of unsecured promissory notes due 2019 (the “Notes”), which Notes will be guaranteed as to principal and interest by Canadian Imperial Bank of Commerce (the “Bank”), subject to certain conditions;

 

B.                                    The Trustee was appointed pursuant to that certain Trust Deed dated 9th December 2016, between the Subsidiary and the Trustee for the issue of the Notes, subject to the terms and conditions set forth therein; and

 

C.                                    The Subsidiary is a wholly-owned subsidiary of FirstCaribbean International Bank Limited, a company incorporated under the laws of Barbados, with a registered number of 8521, whose registered office is at FirstCaribbean International Bank Head Office, Warrens, St Michael, Barbados (“FCIB Limited”), which, in turn, is a majority-owned subsidiary of the Bank.

 

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Bank agrees as follows:

 

1.                                      GUARANTEED DEBT.  The Bank guarantees to the Trustee on behalf of the holders of the Notes on the basis provided herein the due and punctual payment of principal and interest payable by the Subsidiary under the terms of the Notes from time to time, and any additional amounts required to be paid pursuant to this Agreement (the “Guaranteed Obligations”).  Notwithstanding any other provision of this Agreement, the liability of the Bank hereunder shall be for an amount not exceeding the aggregate of the Guaranteed Obligations.

 

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2.                                      RANKING.  The Guaranteed Obligations under this Agreement rank pari passu with all other direct, unsubordinated and unsecured debt obligations of the Bank from time to time outstanding, including its deposit liabilities.

 

3.                                      PAYMENT ON DEMAND.  The Bank will, immediately upon the failure of the Subsidiary to satisfy its obligations pursuant to the terms of the Notes, pay on demand by the Trustee the amount (and in the currency) of the Guaranteed Obligations, plus any expenses (including reasonable counsel fees and disbursements) incurred by or on behalf of a holder of Notes (each, a “Noteholder” and collectively, the “Noteholders”) in connection with its preservation and enforcement of rights against the Subsidiary in respect of the Guaranteed Obligations and against the Bank in respect of its obligations under this Agreement.  Any demand hereunder shall be in writing, signed by the Trustee (or by an authorised officer of the Trustee) making the demand, and shall be made by personal delivery or sent by pre-paid mail or fax to the Bank to the attention of Vice-President, Treasury, Head Office - Commerce Court, Toronto, Canada M5L 1A2, fax: (416) 956-3755, together with a copy to the attention of Vice-President and Associate General Counsel, CIBC Legal Division, Head Office - Commerce Court, Toronto, Canada M5L 1A2, fax: (416) 368-9826.  Any demand delivered as aforesaid shall be deemed effectively delivered and received if sent by fax, on the calendar day next following receipt of such transmission and, if delivered (by personal delivery or by pre-paid mail), to have been delivered and received on the date of such delivery; provided, however, in either case, that if such day is not a business day in Toronto, Ontario, Canada then it shall be deemed to have been delivered and received on the first business day following such delivery.

 

4.                                      INTEREST ACT (CANADA).  For purposes of the Interest Act (Canada), whenever any interest is calculated using a rate based on a year of 360 days or 365 days, as the case may be, such rate determined pursuant to such calculation, when expressed as an annual rate is equivalent to (i) the applicable rate based on a year of 360 days or 365 days, as the case may be, (ii) multiplied by the actual number of days in the calendar year in which the period for such interest is payable (or compounded) ends, and (iii) divided by 360 or 365, as the case may be.

 

5.                                      EXHAUSTING RECOURSE.  The Noteholders or the Trustee need not exhaust any recourse which they may have against the Subsidiary or other persons before being entitled to full payment from the Bank under this Agreement.

 

6.                                      ABSOLUTE LIABILITY.  The Bank’s liability under this Agreement is absolute and unconditional and will not be limited or reduced, nor will the Trustee or the Noteholders be responsible or owe a duty (as a fiduciary or otherwise) to the Bank, nor will the rights of the Noteholders under this Agreement be prejudiced by the existence or occurrence (with or without the knowledge or consent of the Trustee or the Noteholders) of any one or more of the following events:

 

a)  the invalidity, unenforceability or illegality, in whole or in part, of the Agreement, any security therefor and any agreements, instruments or other documents held by the

 

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Noteholders to create, represent or evidence any of the Guaranteed Obligations and any security therefor;

 

b)  any increase, reduction or other change in, transfer of, or discontinuance of, the Agreement or the terms relating to the Guaranteed Obligations and any security therefor; any extensions of time or other indulgences granted to the Subsidiary or any other persons; any accepting of compositions or granting of releases and discharges; or any other dealing with the Subsidiary or other persons;

 

c)  any change in the Subsidiary’s name, or any reorganization (whether by way of reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or otherwise) or dissolution or winding-up of the Subsidiary or its business; or the bankruptcy or insolvency of the Subsidiary;

 

d)  any incapacity, disability or lack or limitation or status or of the power of the Subsidiary or of the Subsidiary’s directors, managers, officers, partners or agents, or any irregularity, defect or informality in the incurring of any of the Guaranteed Obligations and any security therefor; or

 

e)  any other event which might otherwise be a defence available to, or a discharge of, the Bank or any other person or liability under this Agreement.

 

For the purposes of certainty, if as a result of the existence or occurrence of any one or more of the events above the Trustee on behalf of the Noteholders cannot recover any amount from the Bank as a guarantor, the Bank will immediately on demand as provided in this Agreement pay that amount to the Noteholders as principal debtor.

 

7.                                      WITHHOLDING TAXES AND LEVIES.  Unless a law requires otherwise, the Bank will make all payments under this Agreement free and clear of, and without withholding of or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature.  If a law does so require, the Subsidiary or, as the case may be, the Bank shall deduct and withhold the amount so required, remit it to the relevant taxing authority within the time required and pay such additional amount as is necessary to ensure the Noteholders receive such amounts as would have been received by them had no such withholding or deduction been required.

 

8.                                      JUDGEMENT CURRENCY.  The Bank’s liability to provide payment under this Agreement in a particular currency (the “First Currency”) will not be discharged or satisfied by any tender or recovery under any judgement expressed in or converted into another currency (the “Other Currency”) except to the extent the tender or recovery results in the effective receipt by the Noteholders of the full amount of the First Currency so payable.  Accordingly, the Bank will be liable to the Noteholders in an additional cause of action to recover in the Other Currency the amount (if any) by which that effective receipt falls short of the full amount of the First Currency so payable, without being affected by any judgement obtained for any other sums due.

 

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9.                                      SEVERABILITY.  A provision of this Agreement which is void or unenforceable in a jurisdiction is, as to that jurisdiction, ineffective to that extent without invalidating the remaining provisions.

 

10.                               CONTINUING GUARANTEE.  The Bank’s liability under this Agreement is a continuing guarantee and shall cover all the Guaranteed Obligations, and it shall apply to and secure the ultimate balance due or remaining unpaid to the Noteholders.  Notwithstanding the foregoing, the Bank shall be released from all further liability under this Agreement and this Agreement shall be terminated upon the payment in full of the Guaranteed Obligations to the Noteholders.

 

11.                               VALUATIONS AND SUBROGATION.  The liabilities of the Bank under this Agreement shall not be considered as wholly or partially satisfied by the payment or liquidation at any time or times of any sum or sums of money for the time being due or remaining unpaid to the Noteholders, and all payments received by the Noteholders from the Subsidiary or from others shall be regarded for all purposes as payments in gross without any right on the part of the Bank to claim in reduction of the liability under this Agreement the benefit of any such payments, and the Bank shall have no right to be subrogated in any rights of the Noteholders until the Noteholders shall have received payment in full of the Guaranteed Obligations.  The Bank shall be subrogated to the rights of the Noteholders against the Subsidiary.

 

12.                               ENTIRE AGREEMENT.  There are no representations, collateral agreements or conditions with respect to, or affecting, the Bank’s liability under this Agreement other than as contained in this Agreement.

 

13.                               GOVERNING LAW.  This Agreement shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.  The Bank irrevocably submits to the non-exclusive jurisdiction of the courts of the Province of Ontario in any action or proceeding arising out of or relating to this Agreement, and irrevocably agrees that all such actions and proceedings may be heard and determined in such courts, and irrevocably waives, to the fullest extent possible, the defence of an inconvenient forum.  The Bank agrees that a judgment or order in any such action or proceeding may be enforced in other jurisdictions in any matter provided by law.

 

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IN WITNESS WHEREOF this Agreement has been executed as of the date first written above.

 

	
 
    	
CANADIAN   IMPERIAL BANK OF COMMERCE
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peter Levitt
    
	
 
    	
 
    	
Name:
    	
Peter   Levitt
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President & Treasurer
    
	
 
    	
 
    
	
 
    	
JCSD   TRUSTEE SERVICES LIMITED
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robin Levy
    
	
 
    	
 
    	
Name:
    	
Robin   Levy
    
	
 
    	
 
    	
Title:
    	
General   Manager
    

 

5Exhibit 10.1

 

AMERICAN STATES WATER COMPANY

 

2018 SHORT-TERM INCENTIVE PROGRAM

 

 

1.                                    Purpose of 2018 Short-Term Incentive Program

 

American States Water Company, a California corporation, (the “Corporation”) has adopted the American States Water Company Performance Incentive Plan (the “Plan”) to promote the success of the Corporation by (a) motivating executives selected to participate in the Plan to maximize the performance of the Corporation both from a financial perspective and in serving its customers and (b) rewarding them with cash Objective Bonuses directly related to such performance.  The Corporation’s board of directors recognizes that the ability of the Corporation and its subsidiaries to attract capital at a low cost is based on its financial performance and that the Corporation’s customers benefit through its ability to attract low cost capital.  This 2018 Short-Term Incentive Program (the “2018 STIP”) sets forth the names of the individuals selected to be Participants who are eligible to earn Objective Bonuses under the Plan for the 2018 calendar year and the applicable Business Criteria, Additional Objective Criteria, Performance Targets, and Payout Percentages for the 2018 calendar year.  The 2018 STIP also provides for Discretionary Bonuses, which when added to the Objective Bonuses under the Plan, equal the Aggregate Bonuses payable under the 2018 STIP for the 2018 calendar year.

 

2.                                    Term of 2018 STIP

 

The Performance Period covered by the 2018 STIP (the “Term”) began on January 1, 2018 and will end on December 31, 2018.

 

3.                                    Relationship to American States Water Company Performance Incentive Plan

 

The Objective Bonuses based on the Business Criteria payable under Awards granted under the 2018 STIP are granted under the authority of the Plan and are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Committee in accordance with the terms of the Plan, as such rules are in effect from time to time.  The Discretionary Bonuses and the Objectives Bonuses based solely on the satisfaction of the Additional Objective Criteria are granted under the general authority of the Compensation Committee to determine the compensation payable to Executives.

 

4.                                    Definitions

 

Capitalized terms used and not otherwise defined herein have the meanings set forth in the Plan.  In addition, the following phrases shall have the meanings specified below:

 

“Additional Objective Criteria” means Direct Operating Margin - ASUS.

 

“Adjusted EPS - ASUS” means the EPS of ASUS for 2018 adjusted to remove the general office allocation to ASUS related to any transaction fees and/or gain or loss on sale recognized in the financial statements in 2018 associated with a sale of any of the Corporation’s business units or the acquisition of any new businesses.

 

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“Adjusted EPS - AWR Consolidated” means the Corporation’s EPS for 2018 adjusted to remove 1) any write-offs associated with the CPUC’s 2018 procurement audit of GSWC arising out of the settlement of claims approved by the CPUC in December 2011 related to the capital projects contracting matter and 2) any transaction fees and/or gain or loss on sale recognized in the financial statements in 2018 associated with a sale or restructuring of any of the Corporation’s business units or the acquisition of any new businesses.

 

“Adjusted EPS - Regulated Utilities” means the sum of the EPS of each of the Regulated Utilities for 2018 adjusted to remove 1) any write-offs associated with the CPUC’s 2018 procurement audit of GSWC arising out of the settlement of claims approved by the CPUC in December 2011 related to the capital projects contracting matter and 2) any transaction fees and/or gain or loss on sale recognized in the financial statements in 2018 associated with a sale or restructuring of any of the Corporation’s business units or the acquisition of any new businesses.

 

“Aggregate Bonus” means the combination of a Participant’s Objective Bonus and his or her Discretionary Bonus.

 

“ASUS” means American States Utility Services, Inc., a California corporation, and wholly owned subsidiary of the Corporation, and its wholly owned subsidiaries.

 

“Award Agreement” means a written agreement setting forth the material terms and conditions of the Award as determined by the Committee consistent with the express limitations of the Plan and the 2018 STIP.

 

“Base Salary” means the Participant’s rate of annual base pay on the date the Committee approves the Business Criteria, the Additional Objective Criteria and the Performance Targets.

 

“Board of Directors” means the Corporation’s board of directors.

 

“Budget” or “Budgeted” means, in the case of Adjusted EPS for the Corporation, the Regulated Utilities or ASUS, as the case may be, the projected Adjusted EPS for 2018 as set forth in the Operating Budget and for Construction Revenues – ASUS, Expense Optimization – ASUS, Direct Construction Margin – ASUS and Direct Operating Margin – ASUS, the amounts included for these metrics in the Operating Budget.

 

“Business Criteria” means Adjusted EPS-AWR Consolidated, Adjusted EPS-Regulated Utilities, Adjusted EPS-ASUS, Customer Complaints-RU, Customer Complaint Standards-RU, Capital Expenditures-RU, Construction Revenues-ASUS, Direct Construction Margin-ASUS, Expense Optimization-ASUS, SOX Deficiencies-RU, SOX Deficiencies-ASUS, Economic Value Added-ASUS, Safety Recordable Work Incidents-ASUS, Safety-Recordable Work Incidents-RU and Supplier Diversity-RU.

 

“CAB” means the CPUC Consumer Affairs Branch.

 

“Capital Expenditures - RU” means the dollar amount of capital expenditures for 2018 for the Regulated Utilities.

 

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“Construction Revenues – ASUS” – means the total revenues from the construction segment of ASUS during 2018 for the military bases served by subsidiaries of ASUS.

 

“Committee” means the Compensation Committee of the Board of Directors.

 

“CPUC” means the California Public Utilities Commission.

 

“Customer Complaint Standards - RU” means the number of complaints on all matters on the Regulated Utilities received by CAB in 2018 divided by the average number of customers served by the Regulated Utilities during 2018.

 

“Customer Complaints - RU” means the number of water quality, pressure, and leak complaints received from water customers by GSWC divided by the average number of water customers served by GSWC during 2018.

 

“Direct Construction Margin – ASUS” means a percentage determined by dividing total construction revenues less ASUS construction costs (reported as expenses in the Corporation’s Form 10-K for 2018 filed with the Securities and Exchange Commission) by total construction revenues. Construction revenues and construction costs for this purpose shall exclude the construction revenues and construction costs of Fort Riley Utility Services, Inc. and any new base construction revenues and construction costs.

 

“Direct Operating Margin – ASUS” means a percentage determined by dividing total operations and maintenance revenues less direct operations and maintenance expense by total operations and maintenance revenues as recorded in the Corporation’s Form 10-K.  Total operations and maintenance revenues for this purpose shall exclude revenues of Fort Riley Utility Services, Inc. and any new base awards received in 2018. Direct operations and maintenance expense for this purpose shall include other operation, administration and general, depreciation and amortization, maintenance and property and other taxes as reflected in the Corporation’s Form 10-K, but shall exclude (i) expenses of Fort Riley Utility Services, Inc. and any new base received during 2018, (ii) expenses of ASUS administration and centralized functions, (iii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, and (iv) property and other taxes allocable to construction activities.

 

“Discretionary Bonus” means a bonus payable to a Participant based on that Participant’s Individual Performance Measures.

 

“Economic Value Added – ASUS” means the percentage increase over the EV Goal – ASUS.

 

“EPS” means fully diluted earnings per share as reported in the Corporation’s consolidated financial statements for 2018.

 

“EV Goal – ASUS” means the economic value goal established for the combined amount of government-approved monthly fixed fees (as annualized) during the Compensation Committee meeting on March 22, 2018 for (i) operations and maintenance and (ii) renewal and replacement for the military bases served as of December 31, 2018, as a result of price adjustments approved by a Contracting Officer on such military bases during 2018.

 

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“Expense Optimization – ASUS” means the sum of other operations, maintenance, and administrative and general expenses of ASUS in 2018 (as reflected in the Corporation’s 10-K) excluding (i) expenses of Fort Riley Utility Services, Inc., (ii) expenses of ASUS incurred in connection with any new base awards during 2018, (iii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, (iv) expenses incurred in connection with ASUS’s new business development cost center, and (v) expenses included in the Corporation’s Form 10-K for awards recorded under the plan and the 2016 Stock Incentive Plan.

 

“GSWC” means Golden State Water Company, a California corporation and wholly owned subsidiary of the Corporation.

 

“Individual Performance Measures” means the criteria or goals utilized to determine the amounts of each Participant’s Discretionary Bonus.

 

“Objective Bonus” means a bonus based on the degree of achievement of the Performance Targets for the Business Criteria and the Additional Objective Criteria.

 

“Operating Budget” means the Company’s operating budget for 2018 as presented to the Board of Directors at its January 30, 2018 meeting as adjusted for the impact of decisions of the CPUC and other adjustments required to be made under Section 4.6 of the Plan.

 

“Payout Percentage” means the percentage of a Participant’s Target Aggregate Bonus that is payable based on the degree of satisfaction of a Performance Target or the Individual Performance Measures.

 

“Performance Measures” means the Business Criteria, the Additional Objective Criteria and Individual Performance Measures.

 

“Performance Target” means a specific goal established by the Committee with respect to the Business Criteria or the Additional Objective Criteria as set forth in Section 6.

 

“Regulated Utilities” means GSWC and any other utility that becomes a direct or indirect subsidiary of the Corporation which is designated a “regulated utility” by the Committee.

 

“Safety-Recordable Work Incidents – ASUS” means the number of work-related injuries and illnesses as reported on the OSHA Form 300s for ASUS other than for Fort Riley Utility Services, Inc.

 

“Safety-Recordable Work Incidents - RU” means the number of work-related injuries and illnesses as reported on the OSHA Form 300 for GSWC.

 

“SOX” means the Sarbanes-Oxley Act of 2002.

 

“SOX Deficiencies - ASUS” means the number of “control deficiencies” (each a “CD”), “significant deficiencies” (each an “SD”) and “material weaknesses” (each a “MW”) reported for ASUS in the independent auditor’s report for 2018 pursuant to Section 404 of SOX.

 

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“SOX Deficiencies - RU” means the number of CDs, SDs and MWs reported for the Regulated Utilities in the independent auditor’s report for 2018 pursuant to Section 404 of SOX.

 

“Supplier Diversity - RU” means the percentage reported by the Regulated Utilities to the CPUC annually by March 1 in its General Order 156 Compliance Filing.  The percentage is calculated by taking the Regulated Utilities’ total procurement dollars for the reporting period with CPUC qualified women-owned, minority-owned, disabled veteran-owned, and lesbian, gay, bisexual and transgender-owned business enterprises divided by the Regulated Utilities’ total procurement dollars (net of exclusions allowed under the General Order 156 Compliance Filing for the reporting period, such as payments for purchased water, purchased power, pump taxes, income taxes, franchise fees, and postage).

 

“Target Aggregate Bonus” means the amount of bonus that would be payable if each of the Performance Targets were met at the targeted level and the Participant’s Individual Performance Measures were met at the targeted level.

 

5.                                    Participation and Individual Awards

 

The individuals who have been selected as Participants in the 2018 STIP are set forth below together with the amount of their Target Aggregate Bonuses as a percentage of Base Salary:

 

 

 

	
 
    	
Participant
    	
Target
   Aggregate Bonus
    
	
GSWC Officers
    
	
 
    	
Robert J.   Sprowls
    	
71.0%
    
	
Administrative   and General
    	
Eva G. Tang
    	
31.5%
    
	
 
    	
Gladys M. Farrow
    	
26.0%
    
	
 
    	
Denise L. Kruger
    	
31.5%
    
	
 
    	
Paul J. Rowley
    	
26.0%
    
	
Operations
    	
Patrick R.   Scanlon
    	
26.0%
    
	
 
    	
William C.   Gedney
    	
26.0%
    
	
 
    	
Bryan K. Switzer   (Keith)
    	
26.0%
    
	
ASUS Officers
    
	
 
    	
James C. Cotton   III
    	
51.5%
    
	
 
    	
Granville R.   Hodges, Jr. (Rusty)
    	
26.0%
    

 

For purposes of this 2018 STIP, the GSWC officers will be divided into (1) Administrative and General Officers and (2) Operations Officers.

 

The Corporation will enter into an Award Agreement with each Participant that (a) describes his or her Individual Performance Measures and sets forth his or her Target Aggregate Bonus, (b) sets forth his or her threshold, target and maximum Performance Targets and (c) incorporates the terms and conditions of the Plan and this 2018 STIP by reference.  The Target Aggregate Bonus amount set forth above shall represent the aggregate amount of up to three separate bonuses: an Objective Bonus under the Plan, an Objective Bonus based solely on satisfaction of the Additional Objective Criteria and a Discretionary Bonus.

 

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6.                                    Performance Targets for Objective Bonuses

 

The threshold, target and maximum Performance Targets for the 2018 STIP are set forth in Exhibit A to this 2018 STIP.

 

7.                                    Determination of Participants’ Aggregate Bonuses

 

The Aggregate Bonus payable to each Participant shall be determined on the basis of the extent to which the Performance Targets for the Business Criteria, the Additional Objective Criteria and that Participant’s Individual Performance Measures are achieved.  The amount of Aggregate Bonus payable is equal to the amount of the Target Aggregate Bonus multiplied by the sum of the Payout Percentages for each of the Performance Measures as determined pursuant to the tables in (a) Section B of Exhibit A for Participants that are Administrative and General Officers employed by GSWC, (b) Section C for Participants that are Operations Officers employed by GSWC and (c) Section D for Participants employed by ASUS.

 

As soon as practicable following the end of the Term of the 2018 STIP and the completion of the independent auditor’s report for 2018, the Committee shall determine the extent to which the Performance Targets for the Business Criteria and the Additional Objective Criteria are achieved and the extent to which the Individual Performance Measures are achieved, and determine the Payout Percentage for each of the Performance Measures.  In order for a Participant to receive any payment with respect to the Participant’s Discretionary Bonus, the Participant must meet the standards established for the Participant’s position, which standards shall be one of the components of the Participant’s Individual Performance Measures.  The determination of whether the standards established for the Participant’s position are achieved shall be made by the Committee, which (other than for the Company’s President and Chief Executive Officer) determination shall be based on the recommendations of the President and Chief Executive Officer or another direct supervisor of the Participant.

 

For levels of achievement between threshold and maximum, the Committee shall determine the Payout Percentage by interpolation.  Subject to Section 8 below, the Aggregate Bonus for each Participant shall be the sum of the Payout Percentages determined with respect to each Performance Measure multiplied by the amount of Participant’s Target Aggregate Bonus.

 

8.                                    Payment of Accounts

 

At the time the Committee makes the determinations described in Section 7, it shall certify, in accordance with Section 4.8 of the Plan, the amounts of the Objective Bonuses payable to Participants.  The Committee shall, at the same time, determine the amount of the Discretionary Bonus payable to Participants.  Payment of such bonuses (the Aggregate Bonuses) shall be made as soon as practicable following the Committee’s determination and certification, but in no event later than December 31, 2019.

 

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Notwithstanding the foregoing, any Objective Bonus otherwise payable to any Participant under this 2018 STIP shall be subject to the adjustments, limitations (including the dollar limitation  under Section 4.3 of the Plan), the Committee’s discretionary authority to make downward adjustments and other terms and conditions set forth in the Plan.  Any Discretionary Bonus otherwise payable under this 2018 STIP shall be subject to any adjustments, limitations, upward or downward adjustments in amounts and any other terms or conditions that the Committee may impose in its sole discretion.

 

9.                                    Effect of Termination of Employment

 

Except as otherwise provided in an employment agreement, memorandum of understanding, other contract between a Participant and the Corporation or one of its Subsidiaries, or by the Committee in its sole discretion, the bonuses payable under a Participant’s Award will be forfeited, and the Participant will not be entitled to any bonus payments with respect to such Award if the Participant ceases to be employed by the Corporation or one of its Subsidiaries for any reason prior to the date the bonus payments under the 2018 STIP are paid to Participants.

 

10.                            Recoupment of Bonuses

 

Any payment of an Objective Bonus, Discretionary Bonus or Aggregate Bonus under this 2018 STIP is subject to recoupment pursuant to the Corporation’s Policy Regarding the Recoupment of Certain Performance-Based Compensation Payments as in effect from time to time, or as otherwise may be required by law and a Participant shall promptly make any reimbursement requested by the Board of Directors or the Committee pursuant to such policy with respect to any such bonuses.  Further, each Participant shall agree, by accepting an Award under the 2018 STIP and executing an Award Agreement, that the Corporation and/or any of its affiliates may deduct from any amounts it may owe the Participant from time to time (such as wages or other compensation) any and all amounts the Participant is required to reimburse the Corporation pursuant to such policy with respect to the Award.

 

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EXHIBIT A

 

2018 STIP

 

PERFORMANCE TARGETS AND PAYOUT PERCENTAGES

 

A.        PERFORMANCE TARGETS FOR OBJECTIVE BONUSES

 

	
Performance 
    Measure
     	
Performance Targets
     
	
Threshold
     	
Target
     	
Maximum
     
	
Adjusted EPS - AWR   Consolidated
    	
80% Budget
    	
100% Budget
    	
120% Budget
    
	
Adjusted EPS -   Regulated Utilities (RU)
    	
80% Budget
    	
100% Budget
    	
120% Budget
    
	
Adjusted EPS - ASUS
    	
80% Budget
    	
100% Budget
    	
130% Budget
    
	
Customer Complaints -   RU
    	
< 0.16%
    	
< 0.12%
    	
< 0.08%
    
	
Customer Complaint   Standards - RU 
    	
Rate of   Complaints to the CAB

< 0.0275%
    	
Rate of   Complaints to the CAB

< 0.0225%
    	
Rate of   Complaints to the CAB

< 0.0175%
    
	
Capital Expenditures -   RU
    	
> $96.5 million 
    	
> $110 million 
    	
> $120 million
    
	
Supplier   Diversity - RU
    	
> 24.5%
    	
> 27.5%
    	
> 30.5%
    
	
Safety -   Recordable Work Incidents  - RU
    	
23
    	
17
    	
13
    
	
SOX Deficiencies - RU
    	
No MW, No   SD & No more than 4 CDs
    	
No MW, No   SD & No more than 2 CDs
    	
No MW, No   SD & No CD
    
	
SOX Deficiencies - ASUS
    	
No MW, No   SD & No more than 1 CD
    	
No MW, No SD &   No CD
    	
N/A
    
	
Economic Value Added -   ASUS
    	
> 100% of EV Goal
    	
> 102.8% of EV Goal
    	
> 105.6% of EV Goal
    
	
Construction Revenues -   ASUS
    	
> 90% of Budget
    	
> 100% of Budget
    	
> 110% of Budget
    
	
Expense Optimization -   ASUS
    	
< 101% of Budget
    	
< 98% of Budget
    	
< 96% of Budget
    
	
Direct Construction   Margin - ASUS
    	
> Budget less 100 basis points
    	
> Budget
    	
> Budget plus 100 basis points
    
	
Direct Operating Margin   – ASUS
    	
> Budget plus 100 basis points
    	
> Budget plus 200 basis points
    	
> Budget plus 300 basis points
    
	
Safety - Recordable   Work Incidents  - ASUS
    	
13
    	
10
    	
7
    

 

A-1

 

B.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - GSWC ADMINISTRATIVE AND GENERAL OFFICERS

 

	
Performance 
    Measure
     	
Payout Percentage
     
	
Threshold
     	
Target
     	
Maximum
     
	
Adjusted EPS - AWR   Consolidated
    	
10.0%
    	
20.0%
    	
35.0%
    
	
Adjusted EPS -   Regulated Utilities (RU) 
    	
11.5%
    	
20.0%
    	
29.0%
    
	
Adjusted EPS - ASUS 
    	
5.0%
    	
10.0%
    	
20.0%
    
	
Customer Complaints -   RU
    	
1.5%
    	
5.0%
    	
7.0%
    
	
Customer Complaint Standards   - RU
    	
1.5%
    	
5.0%
    	
7.0%
    
	
Capital Expenditures -   RU
    	
4.0%
    	
10.0%
    	
15.0%
    
	
SOX Deficiencies - RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
SOX Deficiencies - ASUS
    	
2.0%
    	
5.0%
    	
N/A
    
	
Objective Bonus Total
    	
37.5%
    	
80.0%
    	
120.0%
    
	
Individual Performance   Measure
    (Discretionary Bonus)
    	
12.5%
    	
20.0%
    	
35.0%
    
	
Aggregate Bonus
    	
50.0%
    	
100.0%
    	
155.0%
    

 

A-2

 

C.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - GSWC OPERATIONS OFFICERS

 

	
Performance 
    Measure
     	
Payout Percentage
     
	
Threshold
     	
Target
     	
Maximum
     
	
Adjusted EPS -   Regulated Utilities (RU) 
    	
20.0%
    	
40.0%
    	
60.0%
    
	
Customer Complaints -   RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
Customer Complaint   Standards - RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
Capital Expenditures -   RU
    	
7.5% 
    	
15.0%
    	
20.0%
    
	
Supplier Diversity - RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
Safety - Recordable   Work Incidents - RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
SOX Deficiencies - RU
    	
2.0%
    	
5.0%
    	
7.0%
    
	
Objective Bonus Total
    	
37.5%
    	
80.0%
    	
115.0%
    
	
Individual Performance   Measure
   (Discretionary Bonus)
    	
12.5%
    	
20.0%
    	
35.0%
    
	
Aggregate Bonus
    	
50.0%
    	
100.0%
    	
150.0%
    

 

A-3

 

D.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - ASUS

 

	
Performance 
   Measure
    	
Payout Percentage
    
	
Threshold
    	
Target
    	
Maximum
    
	
Adjusted EPS - ASUS 
    	
15.0%
    	
40.0%
    	
70.0%
    
	
Economic Value Added - ASUS
    	
3.0%
    	
6.0%
    	
12.0%
    
	
Construction Revenues -   ASUS
    	
3.0%
    	
6.0%
    	
12.0%
    
	
Expense Optimization -   ASUS
    	
4.0%
    	
6.0%
    	
12.0%
    
	
Direct Construction   Margin - ASUS
    	
4.0%
    	
6.5%
    	
12.0%
    
	
SOX Deficiencies - ASUS
    	
2.0%
    	
5.0%
    	
N/A
    
	
Direct Operating Margin   - ASUS
    	
4.0%
    	
6.5%
    	
12.0%
    
	
Safety – Recordable   Work Incidents -ASUS
    	
2.5%
    	
4.0%
    	
5.0%
    
	
Objective Bonus Total
    	
37.5%
    	
80.0%
    	
135.0%
    
	
Individual Performance   Measure
   (Discretionary Bonus)
    	
12.5%
    	
20.0%
    	
35.0%
    
	
Aggregate Bonus
    	
50.0%
    	
100.0%
    	
170.0%
    

 

A-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}]]