Document:

2011 Q4 10K Exhibit 10.33 SJW

EXHIBIT 10.33
SAN JOSE WATER COMPANY  
SPECIAL DEFERRAL ELECTION   PLAN

JANUARY 25, 2012 AMENDMENT AND RESTATEMENT 

EFFECTIVE AS OF JANUARY 1, 2012 

ARTICLE I

NAME AND PURPOSE

1.01    Purpose. San Jose Water Company, a corporation duly organized and existing under the laws of State of California (the “Corporation”), established the Special Deferral Election Plan (the “Plan”), effective as of January 1, 2005, in order to provide a select group of the management personnel and other highly compensated employees of one or more participating employers with an opportunity to defer a portion of their earnings each year and to realize an investment return on those funds during the deferral period. The Plan was amended  and restated by the Executive Compensation Committee of the Board of Directors of SJW Corp. (the Corporation’s parent company) on October 22, 2008, effective as of January 1, 2008, to conform the provisions of the plan document to the applicable requirements of Section 409A of the Internal Revenue Code and the Treasury Regulations issued thereunder.  The Plan as so amended and restated shall continue to function solely as a so-called “top hat” plan of deferred compensation subject to the provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time) applicable to such a plan. The provisions of the Plan and its various amendments in effect prior to this amendment and restatement were intended to comply with the proposed Treasury Regulations under Internal Revenue Code Section 409A and the regulatory guidance provided by the U.S. Treasury and the Internal Revenue Service with respect to Section 409A compliance and transitional relief. This January 2012 amendment and restatement of the Plan was adopted by the Executive Compensation Committee of the Board of Directors of SJW Corp. on January 25, 2012, effective as of January 1, 2012, to provide for the delegation of authority over the day-to-day administration of the Plan to either a plan administrative committee comprised of two (2) or more employees of the Corporation or a third-party plan administrator. 
1.02    General.  The benefits provided under the Plan shall be paid, as they become due, either directly from the Participating Employer’s general assets or through a grantor trust arrangement established in accordance with the provisions of Article VIII.  The interest of each participant (and his or her beneficiary) in any benefits that become payable under the Plan shall be no greater than that of an unsecured creditor of the Participating Employer.

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ARTICLE II
ADMINISTRATION OF THE PLAN
2.01    Plan Administrator.  The Plan shall be administered by the Executive Compensation Committee of the Board of Directors of SJW Corp.  The Executive Compensation Committee may delegate one or more of its administrative duties and responsibilities under the Plan to (i) a plan administrative committee comprised of two or more employees of the Corporation (the “Designated Plan Committee”) appointed to the Designated Plan Committee by the Executive Compensation Committee or (ii) a third-party plan administrator selected by the Executive Compensation Committee. If the Designated Plan Committee is delegated authority under the Plan, the members of the Designated Plan Committee may thereafter be comprised of employees of the Corporation appointed by either the Executive Compensation Committee or the Corporation’s Chief Executive Officer. The Executive Compensation Committee, the Designated Plan Committee and any third-party administrator shall each, in carrying out the respective administrative duties and responsibilities delegated to them under the Plan, be referred to in this document as the Plan Administrator and each may, to the extent such authority is within the scope of the respective duties and responsibilities delegated to it under the Plan, have full and complete authority to administer the Plan, select the eligible employees who are to participate in the Plan, determine the benefit entitlement of each participant under the Plan and his or her vested status,  authorize the payment of all benefits that become due and payable under the Plan, perform any administrative duties or responsibilities under any grantor trust agreement for the Plan and administer the benefit claims process under the Plan.
2.02    Authority.  The interpretation and construction of any provision of the Plan and the adoption of rules and regulations for plan administration shall be made by the Plan Administrator.   Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan, including (without limitation) all decisions relating to an individual’s eligibility for participation in the Plan, his or her entitlement to benefits hereunder and the amount of any such benefit entitlement.
ARTICLE III
DEFINITIONS
3.01    “Account” shall mean the account maintained for each Participant on the books and records of the Participating Employer to which there shall be credited the Eligible Earnings deferred by such Participant pursuant to his or her Deferral Elections under the Plan.   
The Participant’s Account will be divided into a series of subaccounts, and there will accordingly be a separate Deferral Election Subaccount for each year the Participant defers a portion of his or her Eligible Earnings.  There shall also be established a separate Deferral Election Subaccount with respect to the March 2005 bonus payment which the Participant may have elected in whole or in part to defer under the Plan in accordance with the provisions of the Plan as in effect at that time.  

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3.02    “Affiliated Company” shall mean (i) the Corporation and (ii) any other member of the group of commonly controlled corporations or other businesses that include the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder.
3.03     “Board” shall mean the Corporation’s Board of Directors.
3.04    “Change in Control” shall mean a change in ownership or control of the Corporation  or a change in ownership or control of SJW Corp., a California corporation (“SJW Corp.) which occurs while SJW  Corp. is the beneficial owner (as determined pursuant to Rule 13d-3 of the 1934 Act) of securities that possess more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding voting securities.
A Change in Control of the Corporation shall be deemed to occur if: 
 (i)     any one person or more than one person acting as a group (other than the Corporation or any entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation) acquires beneficial ownership (as determined pursuant to Rule 13d-3 of the 1934 Act) of securities that, together with any other securities  beneficially owned by such person or group, possess more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding voting securities;  
(ii)    a merger, reorganization, consolidation or other similar transaction to which the Corporation in a party, unless (A) securities possessing more than fifty percent (50%) of the total combined voting power of the surviving entity or the parent thereof are, immediately after such transaction, owned beneficially, directly or indirectly, by the person or persons who beneficially owned the Corporation’s outstanding voting securities immediately before such transaction or (B) the other party to the merger, reorganization or other transaction is an entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation; 
(iii)     a majority of the Board members is replaced over a twelve (12)- month period by Board members whose appointment or election is not endorsed by a majority of those individuals serving as Board members immediately prior to the date of such appointment or election; or
(iv)    the Corporation sells all or substantially all of its assets in connection with the liquidation or dissolution of the Corporation (other than to an entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation), unless securities possessing more than fifty percent (50%) of the total combined voting power of the entity acquiring such assets or the parent thereof are, immediately after such sale, owned beneficially, directly or indirectly, by the person or persons who beneficially owned the Corporation’s outstanding voting securities immediately before such sale.

        

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A Change in Control of SJW Corp. shall be deemed to occur upon the closing of any of the following transactions: 

(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 SJW Corp. or a person that directly or indirectly controls, is controlled by, or is under, control with SJW Corp. or an employee benefit plan maintained by any such entity, of beneficial ownership (as defined in Rule 13d-3 of the 1934 Act) of securities of SJW Corp. which, when aggregated with any other acquisition of such securities by such person or group within the twelve (12)-month period ending with the date of the latest such acquisition,  results in such person or related group of persons beneficially owning securities representing thirty percent (30%) or more of the combined voting power of the then-outstanding securities of SJW Corp.;

(ii)    A merger, recapitalization, consolidation, or other similar transaction to which SJW Corp. is a party, unless securities representing more than fifty percent (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, by the persons who beneficially owned the outstanding voting securities  of SJW Corp. immediately before the transaction;

(iii)    A sale, transfer or disposition of all or substantially all of the assets of SJW Corp., unless securities representing more than fifty percent (50%) of the combined voting power of the then-outstanding securities of the entity acquiring the SJW Corp. assets or the parent of such acquiring entity are immediately thereafter beneficially owned, directly or indirectly, by the persons who beneficially owned the outstanding voting securities of SJW Corp. immediately before the transaction;

(iv)    A change in the composition of the Board of Directors of SJW Corp. over a twelve (12)-month period such that a majority of those 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 no Change in Control of SJW Corp. shall be deemed to occur if the result of the transaction is to give more ownership or control of SJW Corp. to any person or related group of persons who held securities representing more than thirty percent (30%) of the combined voting power of the outstanding securities of SJW Corp. as of March 3, 2003.

3.05     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
3.06    “Corporation” shall mean San Jose Water Company and any successor or assignee corporation, whether by way of merger, acquisition or other reorganization.  

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3.07    “Deferral Election” shall mean the irrevocable election filed by the Participant under Article V of this Plan pursuant to which a portion of his or her Eligible Earnings for the Plan Year is to be deferred in accordance with the provisions of the Plan.  
3.08     “Eligible Earnings” shall mean any direct and current cash compensation, including salary, bonuses and other incentive-type compensation, earned by the Participant for service as an Employee during the Plan Year.  Eligible Earnings shall also include any bonus earned by the Participant for service as an Employee during the period commencing January 1, 2004 and continuing through March 31, 2005 and otherwise payable to such Participant in March 2005 in the absence of a Deferral Election under the Plan (the “March 2005 Bonus Payment”). In no event, however, shall a Participant’s Eligible Earnings include, for purposes of the Plan: 
(i)    any item of compensation (other than the March 2005 Bonus Payment) earned for a period of service rendered prior to the effective date of the Deferral Election which the Participant filed with respect to that item, or 
(ii)    any item of compensation paid or distributed to the Participant after a period of deferral, whether under this Plan or any other program of deferred compensation maintained by the Corporation or any Affiliated Company. 
3.09    “Eligible Employee” shall mean any Employee who is either a highly compensated employee of his or her Participating Employer or part of its management personnel, as determined pursuant to guidelines established from time to time by the Plan Administrator.  In no event shall any of the following individuals be deemed to be Eligible Employees:
(i)    an Employee who is not resident in the United States, 

(ii)    any individual classified as an independent contractor or consultant or as a temporary employee, or 

(iii)    any individual who has ceased Employee status, whether by reason of Retirement or otherwise.

3.10    “Employee” shall mean an individual for so long as he or she is in the employ of at least one member 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.
3.11    “Employer Group” means the (i) Corporation and (ii) any other member of the group of commonly controlled corporations or other businesses that include 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 

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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. 
3.12    “Extended Deferral Election” shall mean a Participant’s election, made in accordance with the terms and conditions of Section 7.02 of this Plan, to defer the distribution of his or her Deferral Election Subaccount for an additional period of at least five (5) years measured from the January 31 date (or the date of any other specified event) on which that particular subaccount was scheduled to first become due and payable under the Plan. 
3.13    “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
3.14     “Participant” shall mean each Eligible Employee who participates in the Plan through one or more Deferral Elections under Article V. 
3.15    “Participating Employer” shall mean, with respect to each Participant, the Affiliated Company employing that individual which has, with the consent of the Plan Administrator, adopted this Plan as a deferred compensation program for one or more of its Eligible Employees. The Participating Employers for the 2007 Plan Year are set forth in attached Schedule I. Any additional Affiliated Companies which may from time to time become Participating Employers shall be listed in revised Schedule I.
3.16     “Plan Year” shall mean each calendar year the Plan continues in effect, beginning with the 2005 calendar year. 
3.17    “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 non-employee consultant) 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 (or such shorter period for which he or she may have rendered such Employee service).  Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A.  In addition to the foregoing, a Separation from Service will not be deemed to have occurred while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which such Participant’s right to reemployment with one or more members of the Employer Group is provided either by statute or contract; provided, however, that in the event of a Participant’s 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 that causes such individual to be unable to perform his or her duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave.  If the period of leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Participant’s right to reemployment is not 

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provided either by statute or contract, then such Employee will be deemed to have a Separation from Service on the first day immediately following the expiration of such six (6)-month or twenty-nine (29)-month period.
 3.18    “Specified Employee” shall mean any employee of the Employer Group who is, pursuant to procedures established by the Plan Administrator in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, deemed at the time of his or her Separation from Service to be a “specified  employee” under Code Section 409A. The Specified Employees shall be identified on December 31 of each calendar year and shall include each employee who is a “key employee” (within the meaning of that term under Code Section 416(i)) of the Employer Group at any time during the twelve (12)-month period ending with such date.  An individual  who is so identified as a Specified Employee will have that status for the twelve (12)-month period beginning on April 1 of the following calendar year. 
3.19    “Valuation Date” shall mean any date as of which the balance credited to each of the Participant’s Deferral Election Subaccounts under the Plan is to be determined. If the date in question is coincident with a date on which the U.S. financial markets are open for business, then the Valuation Date shall be that same date; otherwise, the Valuation Date shall be first date immediately preceding the date in question on which the U.S. financial markets are open for business. 
ARTICLE IV
PARTICIPATION
4.01    Eligibility Rules.  The Plan Administrator shall have absolute discretion in selecting the Eligible Employees who are to participate in the Plan for each Plan Year.  An Eligible Employee selected for participation for any Plan Year must, in order to participate in the Plan for that year, file his or her Deferral Election on or before the last day of the immediately preceding Plan Year. However, an Eligible Employee who is first selected for participation in the Plan after the start of a Plan Year and who has not otherwise been eligible for participation in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more Affiliated Companies will have until the thirtieth (30th) day following the date he or she is so selected in which to file his or her Deferral Election for that Plan Year.
4.02    Cessation of Participation.  Every Eligible Employee who becomes a Participant may continue to file Deferral Elections under the Plan for one or more subsequent Plan Years until the earliest of (i) his or her exclusion from the Plan upon written notice from the Plan Administrator, (ii) his or her cessation of Employee status or (iii) the termination of the Plan.  The Plan Administrator shall have complete discretion to exclude one or more individuals from Participant status for one or more Plan Years as the Plan Administrator deems appropriate, including the entire period the Participant continues in Employee status following such 

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exclusion.  However, no such exclusion authorized by the Plan Administrator shall become effective until the first day of the first Plan Year next following the date of the Plan Administrator resolution authorizing such exclusion.  If any individual is excluded from Participant status for one or more Plan Years, then such individual shall not be entitled to defer any part of his or her Eligible Earnings for those Plan Years. 
ARTICLE V
DEFERRAL ELECTION
5.01    Annual Election.  Each Participant shall have the right to file a Deferral Election to defer a portion of his or her Eligible Earnings for each Plan Year for which he or she is to be or remain a Participant. 
5.02    Election Procedure.  Each Deferral Election shall be made in compliance with all of the following requirements and shall not be effective unless such requirements are met:
A.    The Deferral Election must be exercised by means of a written notice filed with the Plan Administrator or its designate. The notice shall be substantially in the form of the Deferral Election attached as Exhibit A and must be filed on or before the last day of the calendar year immediately preceding the start of the Plan Year for which the Eligible Earnings subject to that election are to be earned.  However, an Eligible Employee who is first selected for participation in the Plan after the start of a Plan Year and who has not otherwise been eligible for participation in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more Affiliated Companies must file his or her initial Deferral Election no later than thirty (30) days after the date he or she is so selected.  Such Deferral Election shall only be effective for Eligible Earnings attributable to Employee service for the period commencing with the first day of the first calendar month coincident with or next following the filing of such Deferral Election and ending with the close of such Plan Year.
B.    The percentage of Eligible Earnings which a Participant may elect to defer each Plan Year pursuant to his or her Deferral Election must comply with the following guidelines:
(i)    To the extent the Participant’s base salary is the subject of the Deferral Election, the amount to be deferred pursuant to such election must not be less than five percent (5%), nor more than fifty percent (50%), of the portion of such base salary included within his or her Eligible Earnings for such Plan Year. 

(ii)    To the extent the Participant’s bonus or other incentive compensation is the subject of the Deferral Election, the amount to be deferred pursuant to such election must be a multiple of five percent (5%), up to 

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one hundred percent (100%) of the portion of such bonus or other incentive compensation included in his or her Eligible Earnings for such Plan Year. 
C.    The Participant must also specify in the Deferral Election the event or date which shall serve as the commencement date for the distribution of the Deferral Election Subaccount attributable to that election. The following commencement dates shall be permissible:
-     January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned, 
-     January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service,   
-     the earlier of (i) January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned or (ii) January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service, or 
-     the closing of a Change in Control transaction.
-     the earliest of (i) January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned, (ii) January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service or (iii) the closing of a Change in Control transaction, or
-     any other combination of the foregoing. 
D.    The Participant shall also specify in the Deferral Election the manner in which the Deferral Election Subaccount attributable to that election shall be distributed.  The following methods of distribution shall be permissible: 
-     lump sum payment,
-     annual installments over five (5)-year term, or
-    annual installments over ten (10)-year term
For purposes of Sections 7.02 and 7.08, an installment distribution shall be treated as a single aggregate payment, and not as a series of individual installment payments. 

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E.    The Deferral Election for a particular Plan Year shall become irrevocable as of the first day of that Plan Year (or any later day the Deferral Election for such Plan Year may be filed under Section 5.02 by a newly-eligible Participant), and no subsequent changes may be made to that Deferral Election once it becomes irrevocable. 
5.03    Deferral Election Subaccounts.  A separate Deferral Election Subaccount shall be established for each Plan Year for which the Participant defers a portion of his or her Eligible Earnings under the Plan.  Such subaccount shall be credited with the Eligible Earnings subject to the Deferral Election in effect for that Plan Year, as and when those Eligible Earnings would have otherwise become due and payable to the Participant in the absence of such Deferral Election. A separate Deferral Election Subaccount shall also be maintained for any portion of the March 2005 Bonus Payment which the Participant may have elected to defer under the Plan.  The Participant shall at all times be fully vested in the balance credited to each of his or her Deferral Election Subaccounts.
5.04    Withholding Taxes.  The Participant shall be responsible for the satisfaction of all federal, state and local employment and other payroll taxes (including FICA taxes) which are required to be withheld on the Eligible Earnings deferred under the Plan and shall accordingly pay such taxes as and when they become due under applicable law, either by separate check payable to the Participating Employer or through the Participating Employer’s withholding of those taxes from other wages and earnings payable to the Participant.  Accordingly, the  Participant’s  Deferral Election shall be deemed to authorize such tax withholding by the Participating Employer in the absence of any other arrangement made by the Participant to satisfy his or her withholding tax liability. 
5.05    Subsequent Distribution.  The Deferral Election Subaccounts shall be distributed in accordance with the provisions of Article VII of the Plan. 
ARTICLE VI
INVESTMENT RETURN
6.01    Investment Return for 2005 Calendar Year. For the period from January 1, 2005 to December 31, 2005 (the “2005 Investment Year”), each of the Participant’s outstanding Deferral Election Subaccounts was adjusted periodically to reflect the earnings, gains and losses equal to the actual investment experience realized for the period by one or more of the investment funds selected by the Participant from the investment alternatives available under the Plan for the 2005 Investment Year. At the close of the 2005 Investment Year, each of the Participant’s outstanding Deferral Election Subaccounts was valued in accordance with the valuation procedures set forth in Section 6.05, and the balance shall thereafter be credited with a fixed rate of interest in accordance with the applicable provisions of Sections 6.02 and 6.03.

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6.02    Investment Return for 2006 Calendar Year. For the period from January 1, 2006 to December 31, 2006 (the “2006 Investment Year”), each of the Participant’s outstanding Deferral Election Subaccounts was credited with a fixed rate of interest, compounded semi-annually, equal to the 30-year long-term borrowing cost of funds to the Corporation (or the equivalent thereof), as measured as of the start of the 2006 Investment Year. Following the close of the 2006 Investment Year, the Deferral Election Subaccounts shall be credited with a fixed rate of interest in accordance with the applicable provisions of Section 6.03.
6.03    Investment Return for Subsequent Calendar Years.  Commencing January 1, 2007 and continuing throughout the period there remains an outstanding balance credited to such subaccount, each of the Participant’s Deferral Election Subaccounts shall be credited with a fixed rate of interest, compounded semi-annually and periodically reset in accordance with the following procedures: 
-    For each Plan Year, beginning with the 2007 Plan Year, the fixed rate of interest shall be equal to the lower of (i) the then current 30-year long-term borrowing cost of funds to the Corporation (or the equivalent thereof), as measured as of the start of such Plan Year, or (ii) 120% of the long-term Applicable Federal Rate determined as of the start of such Plan Year and based on semi-annual compounding. 
6.04    Charges to Account.  Each of the Participant’s Deferral Election Subaccounts shall be charged with its allocable share of the costs and expenses incurred in connection with the administration of the investment return provisions of this Article VI, except to the extent one or more Participating Employers elect in their sole discretion to pay all or a portion of those costs and expenses. 
6.05    Account Value.   The value of each of the Participant’s Deferral Election Subaccounts on any Valuation Date in question shall be equal to the balance credited to that subaccount as of the close of business on that date, including the appropriate adjustments for (i) any deferred Eligible Earnings or investment gains or earnings or interest return credited to such subaccount as of such date and (ii) any distributions, hardship withdrawals or investment losses charged against the subaccount as of such date. 
6.06    Account Statements.  Following the close of each calendar quarter, each Participant shall receive a written statement of the value of each of his or her Deferral Election Subaccounts as of the last Valuation Date in that quarter.  
ARTICLE VII
DISTRIBUTION OF BENEFITS
7.01    Normal Distribution.  The Participant’s Deferral Election Subaccount for a particular Plan Year shall become due and payable in accordance with the commencement date and method of distribution designated by the Participant in his or her Deferral Election for that 

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Plan Year, and such distribution shall be made or begin on the designated commencement date or event or as soon as administratively practicable thereafter, but in no event later than the later of (i) the close of the calendar year in which the designated commencement date or event occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the occurrence of such commencement date or event.  
7.02    Extended Deferral Election.  A Participant may make an Extended Deferral Election with respect to any Deferral Election Subaccount maintained for him or her under the Plan, provided the Participant remains at the time of such election a highly compensated Employee or member of the management group of an Affiliated Company (as determined pursuant to guidelines established by the Plan Administrator).  However, only one Extended Deferral Election may be made per Deferral Election Subaccount. The Extended Deferral Election must be made by filing an appropriate election form with the Plan Administrator at least twelve (12) months prior to the date the Deferral Election Subaccount subject to such election is scheduled to become payable pursuant to Section 7.01, and the Extended Deferral Election for that subaccount shall in no event become effective or otherwise have any force or applicability until the expiration of the twelve (12)-month period measured from the date such election is filed with the Plan Administrator. Accordingly, the Extended Deferral Election shall become null and void should the Participant’s pre-existing specified commencement date or event occur within that twelve (12)-month period. The Extended Deferral Election must also specify a January 31 commencement date in a Plan Year which is at least five (5) Plan Years later than the Plan Year in which the distribution of that subaccount would have otherwise been made or commenced in the absence of the Extended Deferral Election.  As part of the Extended Deferral Election, the Participant may also elect a different method of distribution, provided the selected method complies with one of the forms of distribution specified in Section 5.02E. Once the Extended Deferral Election becomes effective in accordance with the foregoing provisions of this Paragraph 7.02, such election shall remain in effect, whether or not the Participant continues in Employee status; provided, however, that in the event of the Participant’s death, the provisions of Paragraph 7.05 shall apply.
7.03    Special Distribution Election in 2007.  Notwithstanding the limitations and restrictions of Section 7.02, Participants may make a special election to change the time and form of the distribution of one or more of their Deferral Election Subaccounts, provided that the distribution election is made at least twelve months in advance of the newly elected distribution date, and the election is made no later than December 31, 2007.  An election made pursuant to this Section 7.03 shall be treated as an initial distribution election and shall be subject to any special administrative rules imposed by the Plan Administrator, including rules intended to comply with Section 409A of the Code. No election under this Section 7.03 shall (i) change the payment date of any distribution otherwise scheduled to be paid in 2007 or cause a payment to be made in 2007 that was otherwise scheduled for payment in a later year or (ii) be permitted after December 31, 2007.
7.04     Hardship Withdrawal.  If a Participant (A) incurs a severe financial hardship as a result of (i) a sudden and unexpected illness or accident involving the Participant or his or her spouse or any dependent (as determined pursuant to Section 152(a) of the Code),  (ii) a casualty loss involving the Participant’s property or (iii) other similar extraordinary and 

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unforeseeable event beyond the Participant’s control and (B) does not have any other resources available, whether through reimbursement or compensation (by insurance or otherwise), liquidation of existing assets (to the extent such liquidation would not itself result in financial hardship) or cancellation of his or her existing Deferral Election under the Plan, to satisfy such financial emergency, then the Participant may apply to the Plan Administrator for an immediate distribution from his or her Account in an amount necessary to satisfy such financial hardship and the tax liability attributable to such distribution.  The Plan Administrator shall have complete discretion to accept or reject the request and shall in no event authorize a distribution in an amount in excess of that reasonably required to meet such financial hardship and the tax liability attributable to that distribution. 
7.05    Death Before Full Distribution. If the Participant dies before the entire balance of his or her Account is distributed, then the unpaid  balance shall be paid in a lump sum to his or her designated beneficiary(ies) under the Plan.  Such payment shall be made within sixty (60) days after the date of the Participant’s death or as soon as administratively practical following the Participant’s death, but in no event later than the later of (i) the end of the calendar year in which the Participant’s death occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the date of the Participant’s death. The Participant may designate one or more such beneficiaries, or may revoke his or her existing beneficiary designation and make a new designation, by filing a properly completed Beneficiary Designation, in substantially the form of attached Exhibit B, with the Plan Administrator or its designate.  Should the Participant die without a valid beneficiary designation in effect or after the death of his or her designated beneficiary(ies), then any amounts due him or her under the Plan shall be paid to the personal representative of his or her estate.
7.06    Valuation.   The amount to be distributed from any Deferral Election Subaccount pursuant to this Article VII shall be determined on the basis  of the balance credited to that subaccount as of the most recent practicable Valuation Date (as determined by the Committee or its designate) preceding the date of the actual distribution. For a Participant who has elected an installment distribution for any Deferral Election Subaccount, such distribution shall be effected through a series of substantially equal payments (as adjusted for investment gains or losses), and the amount of each such annual installment shall accordingly be determined by dividing the balance credited to that subaccount as of the most recent practicable Valuation Date (as determined by the Plan Administrator) preceding the date of the actual distribution of that installment by the number of installments (including the current installment) remaining in the selected five (5) or ten (10)-year distribution period.
7.07    Withholding.  All payments made under the Plan shall be subject to the Participating Employer’s withholding of all required federal, state and local income and employment/payroll taxes, and all such payments shall be net of such tax withholding. 
7.08    Small Account Balances.   
A.    If the aggregate balance of the Participant’s Account is not greater than the applicable dollar amount in effect under Code Section 402(g)(1)(B) at the time of the Participant’s Separation from Service and the Participant is not otherwise at that time 

 13

participating in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more members of the Affiliated Group, then that balance shall be distributed to the Participant in a lump sum distribution on the date of such Separation from Service or as soon as administratively practical thereafter, whether or not the Participant elected that form of distribution or distribution event, but in no event shall such lump sum distribution be made later than the later of (i) the end of the calendar year in which such Separation from Service occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service.
B.    Should the aggregate present value of all of the remaining unpaid installments due to a Participant who is receiving one or more installment distributions under the Plan fall below Twenty-Five Thousand Dollars ($25,000), then those unpaid installments shall be paid to the Participant in a single lump sum within thirty (30) days thereafter. 
7.09    Mandatory Deferral of Distribution.  Notwithstanding any provision to the contrary in this Article VII or any other article in the Plan, no distribution which becomes due and payable by reason of a Participant’s Separation from Service shall be made to such  Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of the Participant’s Separation from Service or (ii) the date of his or her death, if  the Participant is deemed at the time of such Separation from Service to be a Specified Employee and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable deferral period, all payments deferred pursuant to this Section 7.09 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid in a lump sum to the Participant, and any remaining payments due under the Plan shall be paid in accordance with the normal payment dates specified for them herein.  During such deferral period, the Participant’s Account shall continue to be subject to the investment return provisions of Article VI. 
ARTICLE VIII
MISCELLANEOUS
8.01    Benefits Not Funded.  The obligation to pay the vested balance of each Participant’s Deferral Election Subaccounts hereunder shall at all times be an unfunded and unsecured obligation of the Participating Employer. Except to the extent the Corporation or any Participating Employer may in its sole discretion elect to implement a grantor trust to hold funds for the payment of any benefits which become due and payable hereunder, neither the Corporation nor any Participating Employer shall have any obligation to establish any trust, escrow arrangement or other fiduciary relationship for the purpose of segregating funds for the payment of the balances credited to such subaccounts, nor shall the Corporation or any Participating Employer be under any obligation to invest any portion of its general assets in mutual funds, stocks, bonds, securities or other similar investments in order to accumulate funds for the satisfaction of its obligations under the Plan. 

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8.02    General Creditor Status. The Participant (or his or her beneficiary) shall look solely and exclusively to the general assets of the Participating Employer for the payment of the Deferral Election Subaccounts maintained on the Participant’s behalf under the Plan.  Payments from any grantor trust established by the Corporation or any Participating Employer under the Plan shall be made as and when benefits become payable to Participants in accordance with the distribution provisions of Article VII of the Plan, with any remaining balance due the Participants to be paid out of the general assets of the Participating Employer.
8.03    No Employment Right.  Neither the action of the Corporation or the Participating Employer in establishing or maintaining the Plan, nor any action taken under the Plan by the Committee, nor any provision of the Plan itself shall be construed so as to grant any person the right to remain in the employ of the Participating Employer or any other Affiliated Company for any period of specific duration, and the Participant may be discharged at any time, with or without cause.
8.04    Amendment/Termination.  The Executive Compensation Committee of the Board of Directors of SJW Corp. may at any time amend the provisions of the Plan to any extent and in any manner the Executive Compensation Committee shall deem advisable, and such amendment shall become effective at the time of such action by the Executive Compensation Committee. Without limiting the generality of the foregoing, the Executive Compensation Committee may amend the Plan to impose such restrictions upon (i) the timing, filing and effectiveness of Deferral Elections or Extended Deferral Elections and (ii) the distribution provisions of Article VII which the Executive Compensation Committee  deems appropriate or advisable in order to avoid the current income taxation of amounts deferred under the Plan which might otherwise occur as a result of changes to the tax laws and regulations governing deferred compensation arrangements such as the Plan. The Executive Compensation Committee may also at any time terminate the Plan in whole or in part.  Except for such modifications, limitations or restrictions as may otherwise be required to avoid current income taxation or other adverse tax consequences to Participants as a result of changes to the tax laws and regulations applicable to the Plan, no such plan amendment or plan termination authorized by the Executive Compensation Committee shall adversely affect the benefits of Participants accrued to date under the Plan or otherwise reduce the then outstanding balances credited to their Deferral Election Subaccounts or otherwise adversely affect the distribution provisions in effect for those subaccounts, and all amounts deferred prior to the date of any such plan amendment or termination shall, subject to the foregoing exception, continue to become due and payable in accordance with the distribution provisions of Article VII as in effect immediately prior to such amendment or termination. 
8.05    Applicable Law.  The Plan is intended to constitute an unfunded deferred compensation arrangement for a select group of management and other highly compensated persons, and all rights hereunder shall be construed, administered and governed in all respects in accordance with the provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time) applicable to such an arrangement and, to the extent not pre-empted thereby, by the laws of the State of California without resort to its conflict-of-laws provisions.  If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of the Plan shall continue in full force and effect.

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8.06    Satisfaction of Claims.  Any payment made to a Participant or his or her legal representative or beneficiary in accordance with the terms of this Plan shall to the extent thereof be in full satisfaction of all claims with respect to that payment which such person may have against the Plan, the Plan Administrator (or its designate), the Corporation, the Participating Employer and all other Affiliated Companies, any of whom may require the Participant or his or her legal representative or beneficiary, as a condition precedent to such payment, to execute a receipt and release in such form as shall be determined by the Plan Administrator.
8.07    Alienation of Benefits.  No person entitled to any benefits under the Plan shall have the right to alienate, pledge, hypothecate or otherwise encumber his or her interest in such benefits, and those benefits shall not, to the maximum extent permissible by law, be subject to claim of his or her creditors or liable to attachment, execution or other process of law. Notwithstanding the foregoing, any benefits in which the Participant has a vested right under the Plan may instead be distributed to one or more third parties (including, without limitation, the Participant’s former spouse) to the extent such distribution is required by a domestic relations order or other order or directive of a court with jurisdiction over the Participant and his or her benefits hereunder, and the Participant shall cease to have any right, interest or entitlement to any benefits to be distributed pursuant to such order or directive.
8.08    Expenses.  In addition to the expenses and costs set forth in Section 6.03, each  Participant’s Account shall also be charged with its allocable share of all other costs and expenses incurred in the operation and administration of the Plan, except to the extent one or more Participating Employers elect in their sole discretion to pay all or a portion of those costs and expenses. 
8.09    Successors and Assigns.  The obligation of each Participating Employer  to make the payments required hereunder shall be binding upon the successors and assigns of that Participating Employer, whether by merger, consolidation, acquisition or other reorganization. Except for such modifications, limitations or restrictions as may otherwise be required to avoid current income taxation or other adverse tax consequences to Participants as a result of changes to the tax laws and regulations applicable to the Plan, no amendment or termination of the Plan by any such successor or assign shall adversely affect or otherwise impair the rights of Participants to receive benefit payments hereunder, to the extent attributable to amounts deferred prior to the date of such amendment or termination, in accordance with the applicable distribution provisions of Article VII hereof as in effect immediately prior to such amendment or termination.
8.10    Compliance with Code Section 409A. To the extent there is any ambiguity as to whether any provision of this Plan would otherwise contravene one or more requirements or limitations of Code Section 409A, such provision shall be interpreted and applied in a manner that does not result in a violation of the applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder.

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ARTICLE IX
BENEFIT CLAIMS
9.01    Claims Procedure.  No application is required for the payment of benefits under the Plan.  However, if any Participant (or beneficiary) believes he or she is entitled to a benefit from the Plan which differs from the benefit determined by the Plan Administrator,  then such individual may file a written claim for benefits with the Plan Administrator.  Each claim shall be acted upon and approved or disapproved within ninety (90) days following receipt by the Plan Administrator.
9.02    Denial of Benefits.  In the event any claim for benefits is denied, in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial and of his or her right to a review by the Plan Administrator and shall set forth, in a manner calculated to be understood by the claimant, specific reasons for such denial, specific references to pertinent provisions of the Plan on which the denial is based, a description of any additional material or information necessary to perfect the claim, an explanation of why such material or information is necessary, and an explanation of the review procedure.
9.03    Review.
A.    Any person whose claim for benefits is denied in whole or in part may appeal to the Plan Administrator for a full and fair review of the decision by submitting to the Plan Administrator, within ninety (90) days after receiving written notice from the Plan Administrator of such denial, a written statement:
(i)    requesting a review by the Plan Administrator of his or her claim for benefits;
(ii)    setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and
(iii)    setting forth any issues or comments which the claimant deems pertinent to his or her claim.
B.    The Plan Administrator shall act upon each such appeal within sixty (60) days after receipt of the claimant’s request for review by the Plan Administrator, unless special circumstances require an extension of time for processing.  If such an extension is required, written notice of the extension shall be furnished to the claimant within the initial sixty (60)-day period, and a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the initial request for review.  The Plan Administrator shall make a full and fair review of each such appeal and any written materials submitted by the claimant or the Participating Employer in connection therewith and may require the Participating Employer or the claimant to submit such additional facts, documents or other evidence as the 

 17

Plan Administrator may, in its sole discretion, deem necessary or advisable in making such a review.  On the basis of its review, the Plan Administrator shall make an independent determination of the claimant’s eligibility for benefits under the Plan.  The decision of the Plan Administrator  on any benefit claim shall be final and conclusive upon all persons.
C.    Should the Plan Administrator deny an appeal in whole or in part, the Plan Administrator shall give written notice of such decision to the claimant, setting forth in a manner calculated to be understood by the claimant the specific reasons for such denial and specific reference to the pertinent Plan provisions on which the decision was based.  The notice shall also  include a statement that the claimant has a right to bring a right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974 (as amended from time to time).

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SCHEDULE I

LIST OF PARTICIPATING EMPLOYERS

San Jose Water Company

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EXHIBIT A
SPECIAL DEFERRAL ELECTION PLAN
DEFERRAL ELECTION FORM
200__ PLAN YEAR
Please check the applicable boxes and complete form as appropriate. 
		
	[ ]
	A.    I hereby elect to participate in the Special Deferral Election Plan (the “Plan”) for the 200__ plan year.

I hereby elect to defer payment of a portion of my eligible earnings for services rendered in the 200__
plan year, in the dollar amount determined in accordance with the following elections:

Base Salary:   ____% (in increments of one percent, with a minimum of 5% and a maximum of 50%)  of my base salary earned for service rendered during the 200__ plan year. 
Bonus/Incentive Compensation:  ____% (in increments of 5%, up to a maximum of 100%) of any cash bonus or other cash incentive compensation earned for service rendered during the 200__ plan year. 
		
	[ ]
	B.    I hereby elect the following commencement date for the distribution of my deferral election

subaccount for the 200__ plan year:  

____    January 31 of calendar year _______________  (must be at least five (5) calendar years after the 200__ calendar year).
____    January 31 of the calendar year following the calendar year in which my separation from service occurs. 
_____    the closing of a Change in Control (as such term is defined in the Plan).
____    the earlier of (i) January 31 of  calendar year _________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year) or (ii) January 31 of the calendar year following the calendar year in which my separation from service occurs.                           
____    the earlier of (i) January 31 of the calendar year following the calendar year in which my separation from service occurs or (ii) the closing of a Change in Control.

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_____    the earlier of (i) January 31 of calendar year ___________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year) or (ii) the closing of a Change in Control. 
_____    the earliest of (i) January 31 of  calendar year ___________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year), (ii) January 31 of the calendar year following the calendar year in which my separation from service occurs or (iii) the closing of a Change in Control. 
		
	[ ]
	C.    I hereby elect the following method of distribution for my deferral election 

subaccount for the 200__ plan year:  
___    lump sum payment
___    annual installments over five (5)-year term, or
___    annual installments over ten (10)-year term
I understand that no distribution shall be made or commence, in connection with my separation from service, prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of such separation from service or (ii) the date of my death, if I am deemed at the time of such separation from service to be a “specified employee” within the meaning of that term under Code Section 409A and the applicable regulations thereunder. 

As required by the Federal tax laws, my deferral election shall become  irrevocable on the first day of the 200___  plan year and cannot be changed or modified under any circumstances after that day. 
To the extent my rights under law to the earnings deferred pursuant to this election are greater than the rights of a general unsecured creditor of my Participating Employer, I hereby waive those rights and agree that I shall have only the rights of a general unsecured creditor with respect to the payment of my deferred earnings.
I understand I am responsible for the satisfaction of all federal, state and local employment and other payroll taxes (including FICA taxes) which are required to be withheld on the compensation I defer under the Plan, and I shall pay such taxes as and when they become due under applicable law, either by separate check payable to my Participating Employer or through my Participating Employer's withholding of those taxes from other wages and earnings payable to me.  Accordingly, this deferral election shall be deemed to authorize such tax withholding by my Participating Employer in the absence of any other arrangement made by me to satisfy such withholding tax liability. 

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	[ ]
	D.    I hereby elect not to defer any portion of my base salary for the 200__ Plan Year     under the  Plan. 

		
	[ ]
	E.    I hereby elect not to defer any portion of my bonus or other incentive compensation for the 200__ Plan Year under the Plan. 

		
	[ ]
	F.    I hereby elect to have the deferral elections specified in Sections A through C above continue for each subsequent plan year, until I change my deferral elections in accordance with the provisions of the Plan.  Any such change shall become effective for a particular plan year only if the new deferral election is filed not later than the December 31 immediately prior to the start of that plan year. 

                                                         	
	
	Printed Name: ________________________________

	 

	Signature: ___________________________________

	 

	Dated: _______________________, 200___________

	 

	 

	 

	 

	 

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EXHIBIT B

SPECIAL  DEFERRAL ELECTION  PLAN
DESIGNATION OF BENEFICIARY
I hereby designate the following individual or individuals as the beneficiary or beneficiaries of all my right, title and interest in and to the unpaid vested balance credited to my account under the Special Deferral Election Plan at the time of my death, hereby revoking any prior designation of beneficiaries made by me under such Plan:
	
				
	 
	Name
	Relationship
	Percent of Total

	 
	 
	 
	 

	(1)
	_________________________
	___________________________________
	__________________

	(2)
	_________________________
	___________________________________
	__________________

	(3)
	_________________________
	___________________________________
	__________________

	(4)
	_________________________
	______________________________________
	__________________

The beneficiary must survive me; otherwise, his or her designated share is to be divided equally among the beneficiaries who do survive me.

                                                             	
	
	Signature: ________________________________

	 

	Name: ___________________________________

	 

	Date: _______________________, 20__________

	 

 232011 Q4 10K Exhibit 10.49 SJW

EXHIBIT 10.49

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 issuance 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 _______ (___) successive equal annual installments upon Participant’s completion of each year of Service over the _____ (___)-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.

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	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 (the “Issuance Date”) or as soon thereafter as administratively practicable, 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 lifetime to one or more designated family members or a trust established for Participant and/or his 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.  
A.Upon (i) the Participant’s cessation of Employee status by reason of death or Permanent Disability, (ii) the Participant’s resignation from Employee status for Good Reason or (iii) the Corporation’s termination of the Participant’s Employee status other than for Good Cause, all the Restricted Stock Units at the time subject to this Award, together with the underlying Shares, shall immediately vest. 
B.The Shares to which the Participant becomes entitled pursuant to the vesting provisions of Paragraph 4.A shall be issued on the date of his Separation from Service due to such cessation of Employee status or as soon as administratively practicable thereafter, subject to the Corporation’s collection of the applicable Withholding Taxes, but in no event later than the close of the calendar year in which such Separation from Service occurs or (if later) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service.

2

C.The accelerated vesting provisions of this Paragraph 4 shall apply and be effective whether such cessation or termination of Employee status occurs before or after the consummation of a Change in Control transaction.
5.    Stockholder Rights.  Participant shall not have any stockholder rights, including voting, dividend or liquidation 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.
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.    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 a Qualifying 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.

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D.    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.  
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 issuance, a portion of the Shares with a Fair Market Value (measured as of the applicable issuance date) equal to the amount of those taxes; provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Corporation‘s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income. In the event payment is to be made in a form other than the Shares, then the Corporation shall collect from the Participant the applicable Withholding Taxes pursuant to such procedures as the Corporation deems appropriate under the circumstances.
C.    Notwithstanding the foregoing provisions of Paragraph 8.B, the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the Shares or any other amounts hereunder (the “Employment Taxes”) shall in all events be collected from the Participant no later than the last business day of the calendar year in which the Shares or other amounts vest hereunder.  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 

4

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. 
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 (or any successor 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.  

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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. To the extent there is any ambiguity as to whether any provision of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A and the Treasury Regulations thereunder, such provision shall be interpreted and applied in a manner that complies with the applicable requirements of Code Section 409A  and the Treasury Regulations thereunder. 
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.

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IN WITNESS WHEREOF, the parties have executed this Restricted Stock Unit Issuance Agreement on the respective dates indicated below.

	
		
	SJW CORP.

	 
	 

	By:
	____________________________

	

Title:
	

____________________________

	

Dated: 
	

____________________________

	 
	 

	 
	 

	                 [NAME OF PARTICIPANT]

	 
	 

	Signature:
	____________________________

	

Address:
	

____________________________

	 
	 

	Dated:
	____________________________

	 
	 

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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 owning 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); 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.C 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 however, 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 all of the assets or voting stock of SJW Corp. which shall by appropriate action adopt the Plan and/or assume the Award.
I.    Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance; provided, however, that solely for purposes of determining whether Participant has incurred a Separation from Service, the term “Employee” shall have the meaning assigned to such term in the Separation from Service definition set forth in this Appendix.

J.    Fair Market Value per share of Common Stock on any relevant date shall be the closing selling price per share on the date in question on the Stock Exchange on which the Common Stock is at that time primarily traded, as such price is officially quoted in the composite tape of transactions on such exchange.  If there is no reported sale of Common Stock on such Stock Exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.
K.    Good Cause shall be deemed to exist if, and only if: (i) Participant engages in acts or omissions that result in substantial harm to the business or property of the Corporation or any Parent or Subsidiary and that constitute dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or (ii) Participant is convicted of a criminal violation involving fraud or dishonesty.
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.

L.    Good Reason shall mean the occurrence of any of the following events without Participant’s express written consent: (i) his removal from any of the following positions: President and Chief Executive Officer of the Corporation, President and Chief Executive Officer of San Jose Water Company and President and Chief Executive Officer of SJW Land Company, or any other significantly adverse change in the nature or the scope of his authority or overall working environment; (ii) the assignment to Participant of duties materially inconsistent with his duties, responsibilities and status as President and Chief Executive Officer of the Corporation, President and Chief Executive Officer of San Jose Water Company and President and Chief Executive Officer of SJW Land Company; (iii) a reduction in Participant’s rate of base salary or target annual bonus, other than a reduction in an amount not in excess of fifteen percent (15%) of either his base salary or the sum of his base salary and target annual bonus pursuant to a uniform reduction in the base salary or target bonus payable to all senior executives of the Corporation to which Participant and the Executive Compensation Committee have mutually agreed and which occurs prior to a Change in Control; (iv) a change by the Corporation by fifty-five (55) miles or more of the principal location at which Participant is required to perform Participant’s services hereunder or (v) a material breach by the Corporation of any of its obligations under its restated employment agreement with the Participant dated December 9, 2008 (as amended from time to time or any successor agreement) which remains uncured for more than thirty (30) days following Participant’s written notice to the Board in which Participant specifically identifies the material breach which has occurred.
M.    1934 Act shall mean the Securities Exchange Act of 1934, as amended.
N.    Participant shall mean the person to whom the Award is made pursuant to the Agreement.

O.    Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
P.    Permanent Disability shall mean the Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.  
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.    Qualifying Change in Control shall mean the date on which there occurs a Change in Control that also qualifies as: (i) a change in the ownership of the Corporation, as determined in accordance with  Section 1.409A-3(i)((5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Corporation, as determined in accordance with  Section 1.409A-3(i)((5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the Corporation, as determined in accordance with  Section 1.409A-3(i)((5)(vii) of the Treasury Regulations.
U.    Separation from Service shall mean the Participant’s cessation of Employee status by reason of his 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 bona fide services to be performed as an Employee (or as a consultant or independent contractor) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he rendered as an Employee during the immediately preceding thirty-six (36) months.  Solely for purposes of determining when a Separation from Service occurs, Participant will be deemed to continue in “Employee” status for so long as he remains in the employ of one or more members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. “Employer Group” means the Corporation and any Parent or Subsidiary and any other corporation or business controlled by, controlling or under common control with, the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code 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.
V.    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 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.
W.    Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.
X.    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.    

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

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