Document:

Exhibit 4.13.2

 

SOUTHWEST WATER COMPANY

2006 EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED STOCK AWARD

AND

RESTRICTED STOCK AGREEMENT

 

On                         ,
20  , [Name of Recipient] (“Recipient,” “you”
or “your”) were granted                             
shares of Restricted Common Stock (the “Restricted Stock”) of Southwest Water
Company, a Delaware corporation (the “Company”), subject to and conditioned
upon the provisions, terms, conditions and restrictions provided in the
Southwest Water Company 2006 Equity Incentive Plan (the “Plan”) and this Notice
of Restricted Stock Award and Restricted Stock Agreement dated                                 ,
200  .

 

You agree with respect to the Restricted Stock granted
by the Company as follows:  

 

	
  The Plan

  	
   

  	
  The Award of Restricted Stock to you as described in
  this Agreement (the “Award”) is pursuant to the Southwest Water Company 2006
  Equity Incentive Plan and is subject to the provisions of the Plan. The Plan
  is administered by the Committee, as described in the Plan. All capitalized
  terms used in this Agreement have the meanings specified in the Plan, unless
  otherwise defined in this Agreement.

  
	
   

  	
   

  	
   

  
	
  Payment for

  Shares

  	
   

  	
  No payment is required for the shares you receive.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  The shares vest in installments following the
  Vesting Commencement Date, as shown below. In addition, shares will vest in
  the event of your death or Disability or upon a Change in Control of the
  Company. “Vesting” means that vested stock will not be subject to forfeiture.

  
	
   

  	
   

  	
   

  
	
  Vesting

  Commencement

  Date

  	
   

  	
                            ,
  200  

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule

  	
   

  	
  [Specify Vesting – Following is 5-Year]. The first 20% of the total number of
  shares granted (rounded up to the nearest whole share) vests, subject to
  Qualifying Performance Criteria, if any, when you complete 12 months of
  continuous service with the Company or an Affiliate from the Vesting

  

 

 

	
   

  	
   

  	
  Commencement Date (the “First Vesting Date”). An
  additional 20% of the shares granted (rounded up to the nearest whole share)
  vests, subject to Qualifying Performance Criteria, if any, when you complete
  24 months of continuous service with the Company or an Affiliate from the
  Vesting Commencement Date (the “Second Vesting Date”). An additional 20% of
  the shares granted (rounded up to the nearest whole share) vests, subject to
  Qualifying Performance Criteria, if any, when you complete 36 months of
  continuous service with the Company or an Affiliate from the Vesting
  Commencement Date (the “Third Vesting Date”). An additional 20% of the shares
  granted (rounded up to the nearest whole share) vests, subject to Qualifying
  Performance Criteria, if any, when you complete 48 months of continuous
  service with the Company or an Affiliate from the Vesting Commencement Date
  (the “Fourth Vesting Date”). The balance of shares granted vests, subject to
  Qualifying Performance Criteria, if any, when you have completed 60 months of
  continuous service with the Company or an Affiliate from the Vesting
  Commencement Date (the “Fifth Vesting Date”). Shares are subject to earlier
  vesting in accordance with the Plan in the events of death, Disability and
  Sale of the Company.

  
	
   

  	
   

  	
   

  
	
  Qualifying

  Performance Criteria

  	
   

  	
  Qualifying Performance Criteria applicable to you
  (“QPC”) are set forth in Exhibit A attached. In addition to continuous
  service requirements set forth in the Vesting Schedule, Restricted Stock will
  only vest if the QPC is met on each of the First Vesting Date, Second Vesting
  Date, Third Vesting Date, Fourth Vesting Date and Fifth Vesting Date. [If the applicable QPC is not met on the First Vesting Date, Second
  Vesting Date, Third Vesting Date, Fourth Vesting Date and Fifth Vesting Date,
  the related award for such vesting date shall be suspended until the next
  vesting date, at which time such award will vest if the QPC for such
  suspended vesting date has been achieved. In no case shall any award be
  extended or vest past the Fifth Vesting Date.]

  
	
   

  	
   

  	
   

  
	
  Shares Restricted

  	
   

  	
  Unvested shares will be considered “Restricted
  Stock.” You may not sell, transfer, pledge or otherwise dispose of any shares
  of Restricted Stock.

  

 

2

 

	
  Forfeiture

  	
   

  	
  If your services as an Eligible Person terminate for
  any reason, other than by reason of death, Disability, or a Change in Control
  of the company, then your shares of Restricted Stock will be forfeited to the
  extent that they have not vested before the Termination Date. This means that
  the unvested shares of Restricted Stock will immediately revert to the
  Company. You receive no payment for the shares of Restricted Stock that are
  not vested or that are forfeited.

  
	
   

  	
   

  	
   

  
	
  Stock

  Certificates

  	
   

  	
  Your shares of Restricted Stock will be held for you
  by the Company. After the shares have vested, a stock certificate for those
  shares will be released to you.

  
	
   

  	
   

  	
   

  
	
  Voting Rights

  	
   

  	
  You may vote your shares even before they vest.

  
	
   

  	
   

  	
   

  
	
  Dividend Rights

  	
   

  	
  You will be entitled to dividends, if any, on
  Restricted Stock, payable to you in the same manner as any other stockholder.

  
	
   

  	
   

  	
   

  
	
  Withholding

  Taxes

  	
   

  	
  No stock certificates will be released to you unless
  you have made acceptable arrangements to pay any withholding taxes that may
  be due as a result of this award or the vesting of the shares. These
  arrangements may include withholding shares of Company stock that otherwise
  would be released to you when they vest. These arrangements may also include
  surrendering shares of Company stock that you already own. The fair market
  value of the shares you surrender, determined as of the date when taxes
  otherwise would have been withheld in cash, will be applied as a credit
  against the withholding taxes.

  
	
   

  	
   

  	
   

  
	
  IRC §83(b) Election

  	
   

  	
  You agree, as a condition to the Award, to make an
  election under Internal Revenue Code §83(b) to include in your gross income
  for the taxable year in which the Award has been made the fair market value
  of the Award as determined by the Committee and as required by the Plan. You
  will be provided necessary forms to make this tax election. [Or optional election]

  

 

3

 

	
  Restrictions on

  Resale

  	
   

  	
  By signing this Agreement, you agree not to sell any
  shares at a time when applicable laws or Company policies prohibit a sale.

  
	
   

  	
   

  	
   

  
	
  No Guarantee

  Of Continued

  Service

  	
   

  	
  Subject to the provisions of any written agreement
  or consulting agreement and to legal principles governing the tenure of
  directors: (i) You acknowledge and agree that vesting of the Restricted Stock
  is earned by continuing as an Eligible Person at the will of the Company (and
  not through the act of being hired, being granted an award or purchasing
  shares); and (ii) You further acknowledge and agree that this Restricted
  Stock Agreement, the transactions contemplated hereunder and the Vesting
  Schedule set forth herein do not constitute an express or implied promise of
  continued engagement as an Eligible Person for the vesting period, for any
  period, or at all, and shall not interfere with your right or the Company’s
  right to terminate your relationship as an Eligible Person at any time, for
  any reason or for no reason, with or without cause.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock split, a stock dividend or a
  similar change in Company stock, the number of shares of Restricted Stock
  that remain subject to forfeiture will be adjusted in accordance with the
  Plan.

  
	
   

  	
   

  	
   

  
	
  Entire Agreement

  	
   

  	
  This Agreement and the Plan constitute the entire
  understanding between you and the Company regarding this award. Any prior
  agreements, commitments or negotiations concerning this award are superseded.
  This Agreement may be amended only by another written agreement, signed by
  you and the Company.

  
	
   

  	
   

  	
   

  
	
  Governing Law

  	
   

  	
  This Agreement is governed by the laws of the State
  of California.

  

 

[SIGNATURES ON FOLLOWING PAGE]

 

4

 

By your signature below, you agree to all of the terms
and conditions described above, in the Plan and in the Stockholders Agreement;
and you acknowledge receipt of the Prospectus dated                                     ,
200  .

 

 

	
   

  	
  SOUTHWEST WATER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Participant]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Signature of Participant]

  
					

 

5

 

EXHIBIT A

 

Qualifying Performance CriteriaExhibit 4.13.3

 

SOUTHWEST WATER COMPANY

2006 EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED STOCK UNIT AWARD

AND

RESTRICTED STOCK UNIT AGREEMENT

 

On                                  ,
20  , [Name of Recipient] (“Recipient,” “you”
or “your”) were granted Restricted Stock Units, representing the restricted right
to receive shares of Common Stock (the “Stock”) of Southwest Water Company, a
Delaware corporation (the “Company”), as set forth below, subject to and
conditioned upon the provisions, terms, conditions and restrictions provided in
the Southwest Water Company 2006 Equity Incentive Plan (the “Plan”) and this
Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement dated
                      ,
200  .

 

You agree with respect to the Restricted Stock Units granted
by the Company as follows: 

 

	
  The Plan

  	
   

  	
  The Award of Restricted Stock Units to you as
  described in this Agreement (the “Award”) is pursuant to the Southwest Water
  Company 2006 Equity Incentive Plan (the “Plan”) and is subject to the provisions
  of the Plan. The Plan is administered by the Committee, as described in the
  Plan. All capitalized terms used in this Agreement have the meanings
  specified in the Plan, unless otherwise defined in this Agreement.

  
	
   

  	
   

  	
   

  
	
  Number Restricted

  Stock Units

  	
   

  	
                              ,
  representing
                                shares
  of the Stock.

  
	
   

  	
   

  	
   

  
	
  Payment for

  Restricted Stock Units

  	
   

  	
  No payment is required for the Restricted Stock
  Units you receive.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  The Restricted Stock Unit Award vests in
  installments following the Vesting Commencement Date, as shown below.
  “Vesting” means that you have the right to receive the shares of underlying
  Stock. Unvested Restricted Stock Units will vest in the event of your death
  or Disability or upon a Change in Control of the Company.

  
	
   

  	
   

  	
   

  
	
  Vesting

  Commencement

  Date

  	
   

  	
                           ,
  200  ,

  

 

 

	
  Vesting Schedule

  	
   

  	
  [Specify Vesting – Following is 5-Year]. The first 20% of the total number of
  Restricted Stock Units granted (rounded up to the nearest whole number)
  vests, subject to Qualifying Performance Criteria, if any, when you complete
  12 months of continuous service with the Company or an Affiliate from the
  Vesting Commencement Date (the “First Vesting Date”). An additional 20% of
  the Restricted Stock Units granted (rounded up to the nearest whole number)
  vests, subject to Qualifying Performance Criteria, if any, when you complete
  24 months of continuous service with the Company or an Affiliate from the
  Vesting Commencement Date (the “Second Vesting Date”). An additional 20% of
  the Restricted Stock Units granted (rounded up to the nearest whole number)
  vests, subject to Qualifying Performance Criteria, if any, when you complete
  36 months of continuous service with the Company or an Affiliate from the Vesting
  Commencement Date (the “Third Vesting Date”). An additional 20% of the
  Restricted Stock Units granted (rounded up to the nearest whole number)
  vests, subject to Qualifying Performance Criteria, if any, when you have
  completed 48 months of continuous service with the Company or an Affiliate
  from the Vesting Commencement Date (the “Fourth Vesting Date”). The balance
  of Restricted Stock Units granted vests, subject to Qualifying Performance
  Criteria, if any, when you have completed 60 months of continuous service
  with the Company or an Affiliate from the Vesting Commencement Date (the
  “Fifth Vesting Date”). Restricted Stock Units are subject to earlier vesting
  in accordance with the Plan in the event of death, Disability and Sale of the
  Company.

  
	
   

  	
   

  	
   

  
	
  Qualifying

  Performance Criteria

  	
   

  	
  Qualifying Performance Criteria applicable to you
  (“QPC”) are set forth in Exhibit A attached. In addition to continuous
  service requirements set forth in the Vesting Schedule, Restricted Stock will
  only vest if the QPC is met on each of the First Vesting Date, Second Vesting
  Date, Third Vesting Date, Fourth Vesting Date and Fifth Vesting Date. [If the applicable QPC is not met on the First Vesting Date, Second
  Vesting Date, Third

  

 

2

 

	
   

  	
   

  	
  Vesting Date, Fourth Vesting Date or Fifth
  Vesting Date, the related award for such vesting date shall be suspended
  until the next vesting date, at which time such award will vest if the QPC
  for such suspended vesting date has been achieved. In no case shall any award
  be extended or vest past the Fifth Vesting Date.]

  
	
   

  	
   

  	
   

  
	
  Shares Restricted

  	
   

  	
  Unvested Restricted Stock Units do not belong to you
  and you may not sell, transfer, pledge or otherwise dispose of any rights to
  unvested Stock Units.

  
	
   

  	
   

  	
   

  
	
  Forfeiture

  	
   

  	
  If your services as an Eligible Person terminate for
  any reason, then your right to unvested Restricted Stock Units will be
  forfeited to the extent that they have not vested before the Termination
  Date. Forfeiture means that the unvested Restricted Stock Units will
  immediately revert to the Company. You receive no payment for the Restricted
  Stock Units that are not vested or that are forfeited.

  
	
   

  	
   

  	
   

  
	
  Stock

  Certificates

  	
   

  	
  After the Restricted Stock Units have vested, a
  stock certificate for those shares represented by such vested Restricted
  Stock Units will be issued to you.

  
	
   

  	
   

  	
   

  
	
  Voting Rights

  	
   

  	
  You may not vote the shares representing the
  Restricted Stock Units before such Restricted Stock Units vest and stock is
  issued to you.

  
	
   

  	
   

  	
   

  
	
  Dividend Rights

  	
   

  	
  You will not be entitled to dividends on the shares
  representing the Restricted Stock Units payable to you in the same manner as
  any other stockholder. However, dividends that are received prior to vesting
  are taxable as compensation.

  
	
   

  	
   

  	
   

  
	
  Withholding

  Taxes

  	
   

  	
  No stock certificates will be issued and released to
  you unless you have made acceptable arrangements to pay any withholding taxes
  that may be due as a result of this award or the vesting of the Restricted
  Stock Units. These arrangements may include withholding shares of Company
  stock that otherwise would be released to you when the Restricted Stock Units
  vest or surrendering shares of Company stock that you already own. These

  

 

3

 

	
   

  	
   

  	
  arrangements may also include paying the withholding
  taxes directly to the Company in cash. The fair market value of the shares
  you surrender, determined as of the date when taxes otherwise would have been
  withheld in cash, will be applied as a credit against the withholding taxes.
  Please consult with your tax advisor to determine the tax implications of
  receiving Restricted Stock Units.

  
	
   

  	
   

  	
   

  
	
  Restrictions on

  Resale

  	
   

  	
  By signing this Agreement, you agree not to sell any
  stock at a time when applicable laws or Company policies prohibit a sale.

  
	
   

  	
   

  	
   

  
	
  No Guarantee

  Of Continued

  Service

  	
   

  	
  Subject to the provisions of any written employment
  or consulting agreement, and to legal principles governing the tenure of
  directors: (i) You acknowledge and agree that vesting of the Restricted Stock
  Units is earned by continuing as an Eligible Person at the will of the
  Company (and not through the act of being hired, being granted an award or
  purchasing shares); and (ii) You further acknowledge and agree that this
  Restricted Stock Unit Agreement, the transactions contemplated hereunder and
  the Vesting Schedule set forth herein do not constitute an express or implied
  promise of continued engagement as an Eligible Person for the vesting period,
  for any period, or at all, and shall not interfere with your right or the
  Company’s right to terminate your relationship as an Eligible Person at any
  time, with or without cause.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock split, a stock dividend or a
  similar change in Company stock, your number of unvested Restricted Stock
  Units will be adjusted accordingly.

  
	
   

  	
   

  	
   

  
	
  Entire Agreement

  	
   

  	
  This Agreement and the Plan constitute the entire
  understanding between you and the Company regarding this award. Any prior
  agreements, commitments or negotiations concerning this award are superseded.
  This Agreement may be amended only by another written agreement, signed by
  both parties.

  

 

4

 

	
  Governing Law

  	
   

  	
  This Agreement is governed by the laws of the State
  of California.

  

 

By your signature below, you agree to all of the terms
and conditions described above and in the Plan and acknowledge receipt of the
Prospectus dated                              ,
200  .

 

 

	
   

  	
  SOUTHWEST WATER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RECIPIENT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
							

 

5

 

EXHIBIT A

 

Qualifying
Performance Criteria

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