Document:

exv4w1

Exhibit 4.1

Unofficial English translation

Excerpt
from the public deed of the notarial minutes of the shareholders’ meeting of UBS AG, Zurich
and Basel, of April 23, 2008

	4.	 	Agenda Item 5: Ordinary Capital Increase, Rights Offering

Profond proposed that UBS AG shall effect an ordinary capital increase with subscription rights
allotted to existing shareholders (rights offering), resulting in proceeds in the amount of
approximately CHF 10 billion. The Board of Directors agrees with Profond’s proposal. The Board of
Directors believes, however, that such ordinary capital increase should result in proceeds in the
amount of approximately CHF 15 billion of equity. Therefore, the Board of Directors proposes an
ordinary capital increase with the following parameters:

	1.	 	Increase of the share capital from currently CHF 217,224,609.80 by a maximum amount of CHF
125,000,000 to a maximum of CHF 342,224,609.80 through the issuance of a maximum of
1,250,000,000 fully paid registered shares with a par value of CHF 0.10 each at an issue price
of CHF 0.10. The final number of shares to be issued will be determined by the Board of
Directors shortly before the launch of the rights offering and will be set at a number that
results in net proceeds to UBS AG of approximately CHF 15 billion. The Board of Directors is
required to implement the capital increase in the total amount of the subscribed capital.
	 
	2.	 	The Board of Directors is authorized to determine the subscription price. The new shares to
be issued shall be entitled to dividends as of the financial year 2008.
	 
	3.	 	The contributions for the new shares to be issued shall be effected in cash.
	 
	4.	 	The new shares shall have no preferential rights.
	 
	5.	 	The new shares to be issued are subject to the registration requirements set out in Article 5
of the Articles of Association.
	 
	6.	 	The subscription rights of the current shareholders shall be granted directly or indirectly.
The Board of Directors shall be authorized to determine the particulars of the exercise of the
subscription rights. Unexercised sub-

 

 

2 | 2

	 	 	scription rights or shares for which subscription rights have been granted but
not exercised are to be sold at market conditions.
	 
	.//.	 	The Chairman declares that the Meeting, after
explanation and discussion, has approved the motion
of the Board of Directors by way of electronic voting
with 650,544,285 (six hundred fifty million five
hundred forty four thousand two hundred eighty five)
votes for compared to 8,780,090 (eight million seven
hundred eighty thousand ninety) votes against and
10,712,474 (ten million seven hundred and twelve
thousand four hundred seventy four) abstentions.

After inspection of the written evaluation of the scrutineers which has been prepared immediately
after the voting, I hereby certify to the attention of the notarial minutes the following detailed
voting proportions and presence at the time of the vote:

	 	 	 
	Votes present and validly cast:
	 	 
	 
	 	 
	Votes present:

	 	670,594,742 (six hundred seventy million five hundred ninety four thousand seven hundred forty two)
	 
	 	 
	Votes validly cast:

	 	670,036,849 (six hundred seventy million thirty six thousand eight hundred forty nine)
	 
	 	 
	Pro
	 	 
	 
	 	 
	Votes:

	 	650,544,285 (six hundred fifty million five hundred forty four thousand two hundred eighty five)
	 
	 	 
	Contra
	 	 
	 
	 	 
	Votes:

	 	8,780,090 (eight million seven hundred eighty thousand ninety)
	 
	 	 
	Abstentions
	 	 
	 
	 	 
	Votes:

	 	10,712,474 (ten million seven hundred and twelve thousand four
hundred seventy four)exv4w2

Exhibit 4.2

Resolution

of the Board of Directors of

UBS AG, Zurich and Basel,

on ordinary capital increase

The Board of Directors of UBS AG, passes this resolution after taking into account the following
considerations:

	A.	 	On April 1, 2008, UBS AG (the Company) entered into an underwriting agreement with J.P.
Morgan Securities Ltd., Morgan Stanley & Co. International plc, BNP Paribas and Goldman Sachs
International regarding a rights offering in the amount of approximately CHF 15 billion (the
Rights Offering).

	B.	 	On April 23, 2008, the annual general meeting of the Company approved an ordinary share
capital increase from currently CHF 217,224,609.80 (as registered in the commercial registers
of the Cantons of Zurich and Basel-Stadt) by a maximum amount of CHF 125,000,000 to a maximum
of CHF 342,224,609.80 through the issuance of a maximum of 1,250,000,000 fully paid registered
shares with a par value of CHF 0.10 each at an issue price of CHF 0.10.
	 
	 	 	The annual general meeting further authorized the Board of Directors to determine (i) the
final number of shares to be issued and (ii) the subscription price.

In light of the above considerations, the Board of Directors resolves as follows:

	1.	 	The share capital of the Company shall be increased from currently CHF 217,224,609.80 (as
registered in the commercial registers of the Cantons of Zurich and Basel-Stadt) by an amount
of CHF 76,029,518.10 through the issuance of 760,295,181 fully paid registered shares with a par value
of CHF 0.10 each at an issue price of CHF 0.10 (the New Shares).

 

 

2/2

	2.	 	The subscription price shall be CHF 21 per New Share (the Subscription Price).

	3.	 	20 subscription rights shall grant the holder thereof the right to subscribe for 7
New Shares at the Subscription Price. Shareholders will receive one subscription right for
each share held after close of business on May 26, 2008.

	4.	 	The Board of Directors authorizes any two of Marco Suter, Bernhard Schmid, Louis Eber and
Daniel Morales to finalize the offering documents relating to the Rights Offering, and to make
all filings and give all declarations relating thereto.

	5.	 	The trading of the subscription rights on the EU-regulated market segment of SWX Europe and
the New York Stock Exchange (NYSE) and the listing of the New Shares on the “EU-compatible”
segment of the SWX Swiss Exchange and trading on the EU-regulated market segment of SWX
Europe, and the listing and trading of the New Shares on NYSE and the Tokyo Stock Exchange are
hereby approved.

	6.	 	Any and all acts and things in connection with the Rights Offering are approved, hereby also
ratifying and confirming all that has been or will be lawfully done or caused to be done,
including the execution of any agreements or documents which are deemed necessary or
appropriate in connection with the Rights Offering.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	\s\ Peter Kurer	 	 
	 

	 	 	 	 	 	 
	21 May 2008
	 	 	 	Peter Kurer	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	\s\ Luzius Cameron	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	Luzius Camerona5693523ex10-1.htm

    EXHIBIT
10.1.

    

    

    2008
STOCK INCENTIVE PLAN

    (Effective
April 1, 2008)

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

     

    
      TABLE
OF CONTENTS

      

      
        
          	 	 	Page
	 	 	 
	
                  1

                	
                  THE PLAN

                	
                  1

                
	
                  1.1

                	
                  Purpose

                	
                  1

                
	
                  1.2

                	
                  Administration and Authorization; Power and
      Procedure

                	
                  1

                
	
                  1.3

                	
                  Participation

                	
                  3

                
	
                  1.4

                	
                  Shares Available for Awards; Share Limits

                	
                  3

                
	
                  1.5

                	
                  Grant of Awards

                	
                  3

                
	
                  1.6

                	
                  Award Period

                	
                  4

                
	
                  1.7

                	
                  Limitations on Exercise and Vesting of
    Awards

                	
                  4

                
	
                  1.8

                	
                  No Transferability; Limited Exception to Transfer
      Restrictions

                	
                  4

                
	
                  2

                	
                  OPTIONS

                	
                  5

                
	
                  2.1

                	
                  Grants

                	
                  5

                
	
                  2.2

                	
                  Option Price

                	
                  5

                
	
                  2.3

                	
                  Limitations on Grant and Terms of Incentive Stock
      Options

                	
                  5

                
	
                  2.4

                	
                  Limits on 10% Holders

                	
                  6

                
	
                  3

                	
                  RESTRICTED STOCK AWARDS

                	
                  6

                
	
                  3.1

                	
                  Grants

                	
                  6

                
	
                  3.2

                	
                  Restrictions

                	
                  6

                
	
                  3.3

                	
                  Return to the Corporation

                	
                  7

                
	
                  4

                	
                  STOCK UNIT AWARDS

                	
                  7

                
	
                  4.1

                	
                  Grants.

                	
                  7

                
	
                  4.2

                	
                  Payouts

                	
                  7

                
	
                  4.3

                	
                  Non-Transferability

                	
                  7

                
	
                  4.4

                	
                  Dividend Equivalent Rights

                	
                  7

                
	
                  4.5

                	
                  Cancellation of Restricted Stock Units

                	
                  7

                
	
                  5

                	
                  OTHER PROVISIONS

                	
                  8

                
	
                  5.1

                	
                  Rights of Eligible Employees, Participants and
      Beneficiaries

                	
                  8

                
	
                  5.2

                	
                  Adjustments; Acceleration

                	
                  8

                
	
                  5.3

                	
                  Effect of Termination of Service on Awards

                	
                  10

                
	
                  5.4

                	
                  Compliance with Laws

                	
                  11

                
	
                  5.5

                	
                  Tax Matters

                	
                  12

                
	
                  5.6

                	
                  Plan Amendment, Termination and Suspension

                	
                  12

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  5.7

                	
                  Privileges of Stock Ownership

                	
                  12

                
	
                  5.8

                	
                  Effective Date of the Plan

                	
                  13

                
	
                  5.9

                	
                  Term of the Plan

                	
                  13

                
	
                  5.10

                	
                  Governing Law/Construction/Severability

                	
                  13

                
	
                  5.11

                	
                  Captions

                	
                  13

                
	
                  5.12

                	
                  Stock-Based Awards in Substitution for Stock Options or Awards
      Granted by Other Corporation.

                	
                  13

                
	
                  5.13

                	
                  Non-Exclusivity of Plan

                	
                  14

                
	
                  5.14

                	
                  No Corporate Action Restriction

                	
                  14

                
	
                  5.15

                	
                  Other Company Benefit and Compensation
    Program

                	
                  14

                
	
                  6

                	
                  DEFINITIONS

                	
                  14

                
	
                  6.1

                	
                  Definitions

                	
                  14

                

        

      

    

     

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      
        AMERICAN
STATES WATER COMPANY

        2008
STOCK INCENTIVE PLAN

        (Effective
April 1, 2008)

         

        1. THE PLAN

         

            1.1    Purpose

         

        The
purpose of this Plan is to promote the success of the Company by providing an
additional means through the grant of Awards to attract, motivate, retain and
reward key employees, including officers, whether or not directors, of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company.  Capitalized terms are
defined in Article 6.

         

            1.2    Administration
and Authorization; Power and Procedure.

         

        (a) Committee.  This
Plan shall be administered by and all Awards to Eligible Employees shall be
authorized by the Committee.  Action of the Committee with respect to
the administration of this Plan shall be taken pursuant to a majority vote or by
written consent of its members.  With respect to Awards intended to
satisfy the requirements of performance-based compensation under Section 162(m)
of the Code, this Plan shall be administered by a committee consisting solely of
two or more outside directors (as this requirement is applied under Section
162(m) of the Code); provided, however, that the failure to satisfy such
requirement shall not affect the validity of the action of any committee
otherwise duly authorized and acting in the matter.  Award grants, and
transactions in or involving Awards, intended to be exempt under Rule 16b-3
under the Exchange Act must be duly and timely authorized by the Board or a
committee consisting solely of two or more non-employee directors (as this
requirement is applied under Rule 16b-3 promulgated under the Exchange
Act).  To the extent required by any applicable listing agency, this
Plan shall be administered by a committee composed entirely of independent
directors (within the meaning of the applicable listing
agency).  

         

        (b) Plan Awards; Interpretation;
Powers of Committee.  Subject to the express provisions of this
Plan, the Committee shall have the authority:

         

        (i) to determine eligibility and,
from among those persons determined to be eligible, the particular Eligible
Employees who will receive an Award;

         

        (ii) to grant Awards to Eligible
Employees, determine the price at which securities will be offered or awarded
and the number of securities to be offered or awarded to any of such persons,
and determine the other specific terms and conditions of such Awards consistent
with the express limits of this Plan, and establish the installments (if any) in
which such Awards shall become exercisable or shall vest (which may include,
without limitation, performance and/or time-based schedules), or determine that
no delayed exercisability or vesting is required, and establish the events of
termination or reversion of such Awards;

         

        (iii) to approve the forms of
Award Agreements (which need not be identical either as to type of Award or
among Participants);

         

        (iv) to construe and interpret
this Plan and any agreements defining the rights and obligations of the Company
and Participants under this Plan, further define the terms used in this Plan,
and prescribe, amend and rescind rules and regulations relating to the
administration of this Plan or the Awards granted under this
Plan;

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    
      (v) to cancel, modify, or waive
the Corporation’s rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible Employees, subject to
any required consent under Section 5.6;

       

      (vi) to accelerate or extend the
vesting or exercisability or extend the term of any or all such outstanding
Awards (in the case of Options, within the original term of such Awards under
Section 1.6), subject to Section 5.3;

       

      (vii) to adjust the number
of shares of Common Stock subject to any Award, adjust the price of any or all
outstanding Awards or otherwise previously imposed terms and conditions, in such
circumstances as the Committee may deem appropriate, in each case subject to
Sections 1.4 and 5.6, and provided that in no case (except due to an adjustment
contemplated by Section 5.2 or any repricing that may be approved by
shareholders) shall such an adjustment constitute a repricing (by amendment,
substitution, cancellation and regrant, exchange or other means) of the per
share exercise or base price of any Option;

       

      (viii) to determine the date of
grant of an Award, which may be a designated date after but not before the date
of the Committee’s action (unless otherwise designated by the Committee, the
date of grant of an Award shall be the date upon which the Committee took the
action granting the Award);

       

      (ix) to determine whether,
and the extent to which, adjustments are required pursuant to Section 5.2 hereof
and authorize the termination, conversion, substitution or succession of Awards
upon the occurrence of an event of the type described in Section
5.2;

       

      (x) to determine the Fair Market
Value of the Common Stock of Awards under this Plan from time to time and/or the
manner in which such value will be determined; and

       

      (xi) to make all other
determinations and take such other action as contemplated by this Plan or as may
be necessary or advisable for the administration of this Plan and the
effectuation of its purposes.

       

      (c) Binding
Determinations/Liability Limitation.  Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons.  Neither the
Board nor any Committee, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with this Plan
(or any Award made under this Plan), and all such persons shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors and officers liability insurance coverage that may be in effect from
time to time.

       

      (d) 
Reliance on
Experts.   In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case may
be, may obtain and may rely upon the advice of experts, including employees and
professional advisors to the Corporation.  No director, officer or
agent of the Company shall be liable for any such action or determination taken
or made or omitted in good faith.

       

      (e) Delegation.  The
Committee may delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Company or to third parties.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    
          1.3    Participation

       

      Awards may
be granted by the Committee only to those persons that the Committee determines
to be Eligible Employees.  An Eligible Employee who has been granted
an Award may, if otherwise eligible, be granted additional Awards if the
Committee shall so determine.

      

          1.4    Shares Available
for Awards; Share Limits.

       

      (a) Shares
Available.  Subject to the provisions of Section 5.2, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation’s authorized but unissued Common Stock.  The shares may be
delivered for any lawful consideration.

       

      (b) Share
Limits.  The maximum number of shares of Common Stock that may
be delivered pursuant to Awards granted to Eligible Employees under this Plan
(the “Share
Limit”) is equal to the sum of the following:  (i) 1,100,000
shares of Common Stock, plus (ii) the number of shares of Common Stock reserved
for purposes of the Corporation’s 2000 Stock Incentive Plan (the “2000 Plan”) on
March 31, 2011 in excess of the number of shares of Common Stock then subject to
outstanding awards grants under the 2000 Plan without regard to any shares that
are withheld to satisfy tax withholding obligations or that are subject to or
underlie awards that expire or for any reason are cancelled, terminated,
forfeited, fail to vest or for any other reason are not paid or delivered under
the 2000 Plan.  Shares issued in respect of any “Full-Value Award”
granted under this Plan shall be counted against the foregoing Share Limit as
2.45 shares for every one share actually issued in connection with such
Award.  (For example, if an Award of 100 Restricted Stock shares is
granted under this Plan, 245 shares shall be charged against the Share Limit in
connection with that Award.)  For this purpose, a “Full-Value Award”
means any Award under this Plan that is not an
Option.  The following limits also apply with respect to Awards
granted under this Plan:

       

      (1) The maximum number of
shares of Common Stock that may be delivered pursuant to Options qualified as
Incentive Stock Options granted under this Plan is 187,500 shares.

       

      (2) The maximum number of shares
of Common Stock subject to those Options that are granted during any calendar
year to any individual under this Plan is 50,000 shares.

       

      (c) Share Reservation;
Replenishment and Reissue of Unvested Awards.  No Award may be
granted under this Plan unless, on the date of grant, the sum of (i) the maximum
number of shares issuable at any time pursuant to such Award, plus (ii) the
number of shares that have previously been issued pursuant to Awards granted
under this Plan, plus (iii) the maximum number of shares that may be issued at
any time after such date of grant pursuant to Awards that are outstanding on
such date, does not exceed the Share Limit.  Shares that are subject
to or underlie Awards which expire or for any reason are cancelled or
terminated, are forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan shall not be available for subsequent Awards under the
Plan.  Shares that are withheld by the Corporation to satisfy the tax
withholding obligations related to the Award shall not be available for
subsequent Awards under this Plan.  Except as limited by law, if an
Award is or may be settled only in cash, such Award need not be counted against
any of the limits under this Section 1.4.

      

          1.5    Grant of
Awards.

       

      Subject to
the express provisions of this Plan, the Committee shall determine the number of
shares of Common Stock subject to each Award and the price (if any) to be paid
for the shares or the Award.  Each Award shall be evidenced by an
Award Agreement signed by the Corporation and, if required by the Committee, by
the Participant.  The Award Agreement shall set forth the material
terms and conditions of the Award established by the Committee consistent with
the specific provisions of this Plan.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    
          1.6    Award
Period.

       

      Each Award
and all executory rights or obligations under the related Award Agreement shall
expire on such date (if any) as shall be determined by the Committee, but in the
case of Options not later than ten (10) years after the Award Date.

      

          1.7    Limitations on
Exercise and Vesting of Awards.

       

      (a) Provisions for
Exercise.  Unless the Committee otherwise expressly provides,
no Award shall be exercisable or shall vest until at least six months after the
initial Award Date, and once exercisable an Award shall remain exercisable until
the expiration or earlier termination of the Award.

       

      (b) Procedure.  Any
exercisable Award shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the Participant,
together with any required payment made in accordance with Section
2.2.

       

      (c) Fractional Shares/Minimum
Issue.  Fractional share interests shall be disregarded, but
may be accumulated. The Committee, however, may determine in the case of
Eligible Employees that cash, other securities, or other property will be paid
or transferred in lieu of any fractional share interests.  No fewer
than 100 shares may be purchased on exercise of any Award at one time unless the
number purchased is the total number at the time available for purchase under
the Award.

       

          1.8    No
Transferability; Limited Exception to Transfer
Restrictions.

       

      (a) Limit On Exercise and
Transfer.  Unless otherwise expressly provided in (or pursuant
to) this Section 1.8, by applicable law and by the Award Agreement, as the same
may be amended, (i) all Awards are non-transferable and shall not be subject in
any manner to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; (ii) Awards shall be exercised only by the Participant;
and (iii) amounts payable or shares issuable pursuant to an Award shall be
delivered only to (or for the account of) the Participant.

       

      (b) Exceptions.  The
Committee may permit Awards to be exercised by and paid only to certain persons
or entities related to the Participant, including but not limited to members of
the Participant’s immediate family, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Participant’s immediate
family, pursuant to such conditions and procedures as the Committee may
establish in writing.  Any permitted transfer shall be (i) subject to
compliance with applicable federal and state securities laws and (ii) subject to
the condition that the Committee receive evidence satisfactory to it that the
transfer is being made for essentially estate and/or tax planning purposes on a
gratuitous or donative basis and without consideration (other than nominal
consideration or in exchange for an interest in a qualified
transferee).  Notwithstanding the foregoing or anything to the
contrary in Section 1.8(c), Incentive Stock Options and Restricted Stock Awards
shall be subject to any and all additional transfer restrictions under the
Code.

       

      (c) Further Exceptions to Limits
On Transfer.  The exercise and transfer restrictions in Section
1.8(a) shall not apply to:

       

      (i) transfers to the
Corporation,

       

      (ii) the designation of a
beneficiary to receive benefits in the event of the Participant’s death or, if
the Participant has died, transfers to or exercise by the Participant’s
beneficiary, or, in the absence of a validly designated beneficiary, transfers
by will or the laws of descent and distribution,

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    
      (iii) subject to applicable
limits on Incentive Stock Options, transfers to a family member (or former
family member) pursuant to a domestic relations order if approved or ratified by
the Committee,

       

      (iv) if the Participant has
suffered a disability, permitted transfers or exercises on behalf of the
Participant by his or her legal representative, or

       

      (v) the authorization by the
Committee of “cashless exercise” procedures with third parties who provide
financing for the purpose of (or who otherwise facilitate) the exercise of
Awards consistent with applicable laws and the express authorization of the
Committee.

       

      2. OPTIONS.

       

          2.1    Grants.

       

      One or
more Options may be granted under this Article to any Eligible
Employee.  Each Option granted shall be designated in the applicable
Award Agreement, by the Committee as either an Incentive Stock Option, subject
to Section 2.3, or a Non-Qualified Stock Option.

      

          2.2    Option
Price.

       

      (a) Pricing
Limits.  The purchase price per share of the Common Stock
covered by each Option shall be determined by the Committee at the time of the
Award, but shall not be less than 100% (110% in the case of an Incentive Stock
Option granted to a Participant described in Section 2.4) of the Fair Market
Value of the Common Stock on the date of grant.

       

      (b) Payment Provisions.
The purchase price of any shares purchased on exercise of an Option granted
under this Article shall be paid in full at the time of each purchase in one or
a combination of the following methods:  (i) in cash or by electronic
funds transfer; (ii) by check payable to the order of the Corporation; (iii) by
notice and third party payment in such manner as may be authorized by the
Committee; or (iv) by the delivery of shares of Common Stock of the Corporation
already owned by the Participant, provided, however, that the
Committee may in its absolute discretion limit the Participant’s ability to
exercise an Award by delivering such shares, and provided further that any
shares delivered which were initially acquired upon exercise of a stock option
must have been owned by the Participant at least six months as of the date of
delivery.  Shares of Common Stock used to satisfy the exercise price
of an Option shall be valued at their Fair Market Value on the date of
exercise.

       

          2.3    Limitations on
Grant and Terms of Incentive Stock Options.

       

      (a) $100,000
Limit.  To the extent that the aggregate “Fair Market Value” of
stock with respect to which Incentive Stock Options first become exercisable by
a Participant in any calendar year exceeds $100,000, taking into account both
Common Stock subject to Incentive Stock Options under this Plan and stock
subject to incentive stock options under all other plans of the Company, such
options shall be treated as Nonqualified Stock Options.  For this
purpose, the “Fair Market Value” of the stock subject to Options shall be
determined as of the date the Options were awarded.  In reducing the
number of Options treated as Incentive Stock Options to meet the $100,000 limit,
the most recently granted Options shall be reduced first.  To the
extent a reduction of simultaneously granted Options is necessary to meet the
$100,000 limit, the Committee may, in the manner and to the extent permitted by
law, designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.

       

      (b) Option
Period.  Each Option and all rights thereunder shall expire no
later than 10 years after the Award Date.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        (c) Other Code
Limits.  Incentive Stock Options may only be granted to
Eligible Employees of the Corporation or a Subsidiary that satisfies the other
eligibility requirements of the Code.  There shall be imposed in any
Award Agreement relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the Option be an
“incentive stock option” as that term is defined in Section 422 of the
Code.

         

            2.4    Limits on 10%
Holders.

         

        No
Incentive Stock Option may be granted to any person who, at the time the Option
is granted, owns (or is deemed to own under Section 424(d) of the Code) shares
of outstanding Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.

        

        3.
RESTRICTED STOCK AWARDS.

         

            3.1    Grants.

         

        The
Committee may, in its discretion, grant one or more Restricted Stock Awards to
any Eligible Employee.  Each Restricted Stock Award Agreement shall
specify the number of shares of Common Stock to be issued to the Participant,
the date of such issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by the Participant,
the extent (if any) to which and the time (if ever) at which the Participant
shall be entitled to dividends, voting and other rights in respect of the shares
prior to vesting, and the restrictions (which may be based on performance
criteria, passage of time or other factors or any combination thereof) imposed
on such shares and the conditions of release or lapse of such
restrictions.  Such restrictions shall not lapse earlier than six
months after the Award Date, except to the extent the Committee may otherwise
provide.  Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions (“Restricted Shares”) shall bear a legend
making appropriate reference to the restrictions imposed hereunder and shall be
held by the Corporation or by a third party designated by the Committee until
the restrictions on such shares shall have lapsed and the shares shall have
vested in accordance with the provisions of the Award and Section
1.7.  Upon issuance of the Restricted Stock Award, the Participant may
be required to provide such further assurance and documents as the Committee may
require to enforce the restrictions.

        

            3.2    Restrictions.

         

        (a) Pre-Vesting
Restraints.  Except as provided in Section 3.1 and 1.8,
Restricted Shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until the restrictions on such shares have lapsed
and the shares have become vested.

         

        (b) Dividend and Voting
Rights.  Unless otherwise provided in the applicable Award
Agreement, a Participant receiving a Restricted Stock Award shall be entitled to
cash dividend and voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as to any
Restricted Shares which cease to be eligible for vesting.

         

        (c) Cash
Payments.  If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award, the
Award Agreement shall specify whether and to what extent such cash shall be
returned (with or without an earnings factor) as to any Restricted Shares which
cease to be eligible for vesting.

         

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
          3.3    Return to the
Corporation.

       

      Unless the
Committee otherwise expressly provides, Restricted Shares that remain subject to
restrictions at the time of termination of employment or are subject to other
conditions to vesting that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned to the
Corporation in such manner and on such terms as the Committee shall therein
provide.

      

      4. STOCK UNIT
AWARDS

       

          4.1    Grants.                                

       

      The
Committee may, in its discretion, (a) authorize and grant to any Eligible
Employee a Stock Unit Award, (b) credit to any Eligible Employee Stock Units,
(c) permit an Eligible Employee to irrevocably elect to defer by means of Stock
Units or receive in Stock Units all or a portion of any Award hereunder, or (d)
grant Stock Units in lieu of, in exchange for, in respect of, or in addition to
any other compensation or Award under this Plan.  The specific terms,
conditions, and provisions relating to each Stock Unit grant or election,
including the applicable vesting and payout provisions of the Stock Units and
the form of payment to be made at or following the vesting thereof, shall be set
forth in or pursuant to the applicable Award Agreement and any relevant Company
bonus, performance or other service or deferred compensation plan, in form
substantially as approved by the Committee, in each case subject to compliance
with Section 409A of the Code.

       

          4.2    Payouts.

       

      Subject to
compliance with Section 409A of the Code, the Committee in the applicable Stock
Unit Award Agreement or other Award Agreement or the relevant Company deferred
compensation plan may permit the Eligible Employee to elect the form and time of
payout of vested Stock Units on such conditions or subject to such procedures as
the Committee may impose, and may permit Stock Unit offsets or other provision
for payment of any applicable taxes that may be due on the crediting, vesting or
payment in respect of the Stock Units.

       

          4.3    Non-Transferability.  

       

      Rights in
respect of Stock Unit Awards may not be sold, pledged, assigned, hypothecated,
transferred, or otherwise disposed of or encumbered, either voluntarily or
involuntarily, other than by will or the laws of descent or
distribution.

       

          4.4    Dividend
Equivalent Rights.  

       

      In its
discretion, the Committee may grant to any Eligible Employee “Dividend
Equivalent Rights” concurrently with the grant of any Stock Unit Award, on such
terms as set forth by the Committee in the Stock Unit Agreement or other
applicable Award Agreement.  Dividend Equivalent Rights shall be based
on all or part of the amount of dividends declared on shares of Common Stock and
shall be credited as of dividend payment dates, during the period between the
date of grant (or such later date as the Committee may set in the Award
Agreement) and the date the Stock Unit Award expires (or such earlier date as
the Committee may set in the Award Agreement), as determined by the
Administrator.  Dividend Equivalent Rights shall be payable in cash or
shares at the same time as the Stock Units to which they relate, and may be
subject to such conditions, as may be determined by the
Administrator.

       

          4.5    Cancellation
of Restricted Stock Units.  

       

      Unless the
Committee otherwise expressly provides, Restricted Stock Units that remain
subject to conditions to vesting at the time of termination of employment or
service or are subject to other conditions to vesting that have not been
satisfied by the time specified in the applicable Award Agreement shall not vest
and shall be cancelled, unless the Committee otherwise provides in or by
amendment to the applicable terms of the Award.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      5. OTHER
PROVISIONS

      
         

            5.1    Rights of
Eligible Employees, Participants and Beneficiaries.

         

        (a) Employment
Status.  Status as an Eligible Employee shall not be construed
as a commitment that any Award will be made under this Plan to an Eligible
Employee or to Eligible Employees generally.

         

        (b) No Employment
Contract.  Nothing contained in this Plan (or in any other
documents under this Plan or in any Award) shall confer upon any Eligible
Employee or Participant any right to continue in the employ or other service of
the Company, constitute any contract or agreement of employment or other service
or affect an employee’s status as an employee at will, nor shall interfere in
any way with the right of the Company to change a person’s compensation or other
benefits, or to terminate his or her employment or other service, with or
without cause.  Nothing in this Section, however, is intended to
adversely affect any express independent right of such person under a separate
employment or service contract other than an Award Agreement.

         

        (c) Plan Not
Funded.  Awards payable under this Plan shall be payable in
shares or from the general assets of the Corporation, and (except as provided in
Section 1.4(c)) no special or separate reserve, fund or deposit shall be made to
assure payment of such Awards.  No Participant, Beneficiary or other
person shall have any right, title or interest in any fund or in any specific
asset (including shares of Common Stock, except as expressly otherwise provided)
of the Company by reason of any Award hereunder.  Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person.  To the extent that a Participant, Beneficiary or other person
acquires a right to receive payment pursuant to any Award hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.

         

            5.2    Adjustments;
Acceleration.

         

        (a) Adjustments.

         

        (1) Upon (or, as may be necessary
to effect the adjustment, immediately prior to):  any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Corporation, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock;
then the Committee shall equitably and proportionately adjust (1) the
number and type of shares of Common Stock (or other securities) that thereafter
may be made the subject of Awards (including the specific share limits, maximums
and numbers of shares set forth elsewhere in this Plan), (2) the number,
amount and type of shares of Common Stock (or other securities or property)
subject to any outstanding Awards, (3) the grant, purchase or exercise
price of any outstanding Awards, and/or (4) the securities, cash or other
property deliverable upon exercise or payment of any outstanding Awards, in each
case to the extent necessary to preserve (but not increase) the level of
incentives intended by the Plan and the then-outstanding Awards.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

    

     

    
      Unless
otherwise expressly provided in the applicable Award Agreement, upon (or, as may
be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Corporation as an entirety,
the Committee shall equitably and proportionately adjust the performance
standards applicable to any then-outstanding performance-based Awards to the
extent necessary to preserve (but not increase) the level of incentives intended
by the Plan and the then-outstanding performance-based Awards.

       

      It is
intended that, if possible, any adjustments contemplated by the preceding two
paragraphs be made in a manner that satisfies applicable legal, tax (including,
without limitation and as applicable in the circumstances, Section 424 of
the Code, Section 409A of the Code and Section 162(m) of the Code) and
accounting (so as to not trigger any charge to earnings with respect to such
adjustment) requirements.

       

      Without
limiting the generality of Section 1.2, any good faith determination by the
Committee as to whether an adjustment is required under the circumstances
pursuant to this Section 5.2(a)(1), and the extent and nature of any such
adjustment, shall be conclusive and binding on all persons.

       

      (2) Corporate
Transactions-Assumption or Termination of Awards.  Upon the
occurrence of any of the following:  any merger, combination,
consolidation, or other reorganization; any exchange of Common Stock or other
securities of the Corporation; a sale of all or substantially all the business,
stock or assets of the Corporation; a dissolution of the Corporation; or any
other event in which the Corporation does not survive (or does not survive as a
public company in respect of its Common Stock); then the Committee may make
provision for a cash payment in settlement of, or for the assumption,
substitution or exchange of any or all outstanding share-based Awards or the
cash, securities or property deliverable to the holder of any or all outstanding
share-based Awards, based upon, to the extent relevant under the circumstances,
the distribution or consideration payable to holders of the Common Stock upon or
in respect of such event.

       

      The
Committee may adopt such valuation methodologies for outstanding Awards as it
deems reasonable in the event of a cash or property settlement and, in the case
of Options or similar rights, but without limitation on other methodologies, may
base such settlement solely upon the excess if any of the per share amount
payable upon or in respect of such event over the exercise or base price of the
Award.

       

      In any of
the events referred to in this Section 5.2(a)(2), the Committee may take
such action contemplated by this Section 5.2(a)(2) prior to such event (as
opposed to on the occurrence of such event) to the extent that the Committee
deems the action necessary to permit the participant to realize the benefits
intended to be conveyed with respect to the underlying shares.

       

      Without
limiting the generality of Section 1.2, any good faith determination by the
Committee pursuant to this Section 5.2(a)(2) shall be conclusive and
binding on all persons.

       

      (b) Possible Early Termination
of Accelerated Awards. If any Option or other right to acquire Common
Stock under this Plan has been fully accelerated as required or permitted by
Section 5.2(c) but is not exercised prior to (1) a dissolution of the Company,
or (2) an event described in Section 5.2(a) that the Company does not survive,
or (3) the consummation of an event described in Section 5.2(a) involving a
Change in Control Event approved by the Board, such Option or right shall
terminate, subject to any provision that has been expressly made by the Board or
the Committee, through a plan of reorganization or otherwise, for the survival,
substitution, assumption, exchange or other settlement of such Option or
right.

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    
      (c) Acceleration of Awards Upon
Change in Control.  Unless prior to a Change in Control Event
the Committee determines that, upon its occurrence, benefits under any or all
Awards shall not be accelerated or determines that only certain or limited
benefits under any or all Awards shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Change in Control Event for such acceleration, then upon the occurrence of
a Change in Control Event:

       

      (1) Each
Option shall become immediately exercisable, and

       

      (2)
Restricted Stock shall immediately vest free of restrictions, and

       

      (3)
Restricted Stock Units shall immediately vest free of restrictions and become
payable.

       

      The
Committee may override the limitations on acceleration in this Section 5.2(c) by
express provision in the Award Agreement and may accord any Eligible Employee a
right to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Committee may approve.  Any
acceleration of Awards shall comply with applicable legal requirements and, if
necessary to accomplish the purposes of the acceleration or if the circumstances
require, may be deemed by the Committee to occur (subject to Section 5.2(d)) a
limited period of time not greater than 30 days before the
event.  Without limiting the generality of the foregoing, the
Committee may deem an acceleration to occur immediately prior to the applicable
event and/or reinstate the original terms of an Award if an event giving rise to
an acceleration does not occur.  Notwithstanding the foregoing, an
Award shall not be accelerated and/or become payable pursuant to this Section
5.2(c) to the extent that such acceleration and/or payment would cause the
holder of such Award to be subject to additional tax under Section 409A of the
Code with respect to such Award.

       

      (d) Possible Rescission of
Acceleration.  If the vesting of an Award has been accelerated
expressly in anticipation of an event or upon shareholder approval of an event
and the Committee or the Board later determines that the event will not occur,
the Committee may rescind the effect of the acceleration as to any then
outstanding and unexercised or otherwise unvested Awards.

       

      (e) Acceleration Upon
Termination of Service Following a Change in Control.  If any
Participant’s employment is terminated by the Company upon or within one year
after a Change in Control Event, and the termination is not the result of death,
Total Disability, Retirement or a termination for Cause, then, subject to the
other provisions of this Section 5.2 (including without limitation Section
5.2(b) and Section 5.4), all outstanding Options and other Awards held by the Participant
shall be deemed fully vested immediately prior to the Severance Date and Stock
Units shall become payable upon such Severance Date (or, to the extent
applicable under Section 409A, upon the date that is six months after such
Severance Date), unless the Award Agreement specifies a different result in the
case of a Change in Control Event.  Notwithstanding the foregoing, an
Award shall not be accelerated and/or become payable pursuant to this Section
5.2(e) to the extent that such acceleration and/or payment would cause the
holder of such Award to be subject to additional tax under Section 409A of the
Code with respect to such Award.

       

          5.3    Effect of
Termination of Service on Awards.

       

      (a) General.  The
Committee shall establish the effect of a termination of employment on the
rights and benefits under each Award under this Plan and in so doing may make
distinctions based upon the cause of termination.

       

      (b) Options - Resignation or
Dismissal.  If the Participant’s employment by the Company
terminates for any reason (the date of such termination being referred to as the
“Severance
Date”) other than Retirement, Total Disability or death, or for Cause (as
determined in the discretion of the Committee), the Participant shall have,
unless otherwise provided in the Award Agreement and subject to earlier
termination pursuant to or as contemplated by Section 1.6 or 5.2, three months
after the Severance Date to exercise any Option to the extent it shall have
become exercisable on the Severance Date.  In the case of a
termination for Cause, the Option shall terminate on the Severance
Date.  In other cases, the Option, to the extent not exercisable on
the Severance Date, shall terminate.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    
      (c) Options - Death or
Disability.  If the Participant’s employment by the Company
terminates as a result of Total Disability or death, the Participant,
Participant’s Personal Representative or his or her Beneficiary, as the case may
be, shall have, unless otherwise provided in the Award Agreement and subject to
earlier termination pursuant to or as contemplated by Section 1.6 or 5.2, until
12 months after the Severance Date to exercise any Option to the extent it shall
have become exercisable by the Severance Date.  Any Option to the
extent not exercisable on the Severance Date shall terminate.

       

      (d) Options -
Retirement.  If the Participant’s employment by the Company
terminates as a result of Retirement, the Participant, Participant’s Personal
Representative or his or her Beneficiary, as the case may be, shall have, unless
otherwise provided in the Award Agreement and subject to earlier termination
pursuant to or as contemplated by Section 1.6 or 5.2, until 12 months after the
Severance Date to exercise any Option to the extent it shall have become
exercisable by the Severance Date.  The Option, to the extent not
exercisable on the Severance Date, shall terminate.

       

      (e) Events Not Deemed
Terminations of Service.  Unless Company policy or the
Committee otherwise provides, the employment relationship shall not be
considered terminated in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence authorized by the Company or the Committee;
provided that unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any Eligible Employee on an approved leave of absence,
continued vesting of the Award while on leave from the employ of the Company
shall be suspended, unless the Committee otherwise provides or applicable law
otherwise requires.  In no event shall an Award be exercised after the
expiration of the term set forth in the Award Agreement.

       

      (f) Effect of Change of
Subsidiary Status.  For purposes of this Plan and any Award, if
an entity ceases to be a Subsidiary a termination of employment shall be deemed
to have occurred with respect to each Eligible Employee in respect of the
Subsidiary who does not continue as an Eligible Employee in respect of another
entity within the Company.

       

      (g) Committee
Discretion.  Notwithstanding the foregoing provisions of this
Section 5.3, in the event of, or in anticipation of, a termination of employment
with the Company for any reason, other than discharge for Cause, the Committee
may, in its discretion, increase the portion of the Participant’s Option
available to the Participant, or Participant’s Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions of Section
1.6, extend the exercisability period upon such terms as the Committee shall
determine and expressly set forth in or by amendment to the Award Agreement;
provided, however, that in no event shall any such extension of the
exercisability period extend such period beyond the earlier of the following
dates:  (i) the latest date the Option could have expired by its
original terms or (ii) the 10th
anniversary of the Award Date.

       

          5.4    Compliance with
Laws.

       

      This Plan,
the granting and vesting of Awards under this Plan, the offer, issuance and
delivery of shares of Common Stock and/or the payment of money under this Plan
or under Awards are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to state and federal
securities law) and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith.  The person acquiring any
securities under this Plan will, if requested by the Company, provide such
assurances and representations to the Company as the Committee may deem
necessary or desirable to assure compliance with all applicable legal and
accounting requirements.

       

       

      
        
          
          

        

        
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          5.5    Tax
Matters.

       

      (a) Provision for Tax
Withholding or Offset.  Upon any exercise, vesting, or payment
of any Award or upon the disposition of shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option prior to satisfaction of the
holding period requirements of Section 422 of the Code, the Company shall have
the right at its option to (i) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or provide for payment
of the minimum amount of any taxes which the Company may be required to withhold
with respect to such Award event or payment or (ii) deduct from any amount
payable in cash the minimum amount of any taxes which the Company may be
required to withhold with respect to such cash payment.  In any case
where a tax is required to be withheld in connection with the delivery of shares
of Common Stock under this Plan, the Committee may in its sole discretion
(subject to Section 5.4) grant (either at the time of the Award or thereafter)
to the Participant the right to elect, pursuant to such rules and subject to
such conditions as the Committee may establish, to have the Corporation reduce
the number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their Fair Market Value, necessary to satisfy such
minimum withholding obligation, determined in each case as of the trading day
next preceding the applicable date of exercise, vesting or payment. In no event shall shares
be withheld in excess of the minimum whole number required for tax withholding
under applicable law.

       

          5.6    Plan Amendment,
Termination and Suspension.

       

      (a) Board
Authorization.  The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in
part.  No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this
Plan.

       

      (b) Shareholder
Approval.  To the extent then required by applicable law or any
applicable listing agency or required under Sections 162, 422 or 424 of the
Code to preserve the intended tax consequences of the Plan, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be subject to
shareholder approval.

       

      (c) Amendments to
Awards.  Without limiting any other express authority of the
Committee under (but subject to) the express limits of this Plan, the Committee
by agreement or resolution may waive conditions of or limitations on Awards to
Participants that the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and (subject to the requirements
of Section 1.2(b) and 5.6(d)) may make other changes to the terms and conditions
of Awards that do not affect in any manner materially adverse to the
Participant, the Participant’s rights and benefits under an
Award.  Any amendment or other action that would constitute a
repricing of an Award is subject to the limitations set forth in Section
1.2(b)(viii).

       

      (d) Limitations on Amendments to
Plan and Awards.  No amendment, suspension or termination of
this Plan or change affecting any outstanding Award shall, without written
consent of the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or obligations of the
Company under any Award granted under this Plan prior to the effective date of
such change.  Changes contemplated by Section 5.2 shall not be deemed
to constitute changes or amendments for purposes of this Section
5.6.

       

          5.7    Privileges of
Stock Ownership.

       

      Except as
otherwise expressly authorized by the Committee or this Plan, a Participant
shall not be entitled to any privilege of stock ownership as to any shares of
Common Stock not actually delivered to and held of record by the
Participant.  No adjustment will be made for dividends or other rights
as a shareholder for which a record date is prior to such date of
delivery.

       

      
        
          
          

        

        
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          5.8    Effective Date of
the Plan.

       

      This Plan
is effective as of April 1, 2008.  The Plan shall be submitted for and
subject to shareholder approval no later than twelve months after the effective
date.

       

          5.9     Term of the
Plan.

       

      No Award
will be granted under this Plan after March 31, 2018 (the “termination
date”).  Unless otherwise expressly provided in this Plan or in an
applicable Award Agreement, any Award granted prior to the termination date may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder, including the authority to amend an Award, shall continue
during any suspension of this Plan and in respect of Awards outstanding on the
termination date.

       

          5.10    Governing
Law/Construction/Severability.

       

      (a) Choice of
Law.  This Plan, the Awards, all documents evidencing Awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the State of California.

       

      (b) Severability.  If
a court of competent jurisdiction holds any provision invalid and unenforceable,
the remaining provisions of this Plan shall continue in effect.

       

      (c) Plan Construction.

       

      (1) Rule
16b-3.  It is the intent of the Corporation that the Awards and
transactions permitted by Awards be interpreted in a manner that, in the case of
Participants who are or may be subject to Section 16 of the Exchange Act,
satisfies the applicable requirements for exemptions under Rule
16b-3.  The exemption will not be available if the authorization of
actions by any Committee of the Board with respect to such Awards does not
satisfy the applicable conditions of Rule 16b-3.  Notwithstanding the
foregoing, the Corporation shall have no liability to any Participant for
Section 16 consequences of Awards or events under Awards.

       

      (2) Section
162(m).  It is the further intent of the Company that (to the
extent the Company or Awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code), Options granted
with an exercise or base price not less than Fair Market
Value on the date of grant will qualify as performance-based compensation or
otherwise be exempt from deductibility limitations under Section 162(m) of the
Code, to the extent that the authorization of the Award (or the payment thereof,
as the case may be) satisfies any applicable administrative requirements
thereof.

       

          5.11    Captions.

       

      Captions
and headings are given to the sections and subsections of this Plan solely as a
convenience to facilitate reference.  Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
this Plan or any provision thereof.

       

          5.12    Stock-Based
Awards in Substitution for Stock Options or Awards Granted by Other
Corporation.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        Awards may
be granted to Eligible Employees under this Plan in substitution for employee
stock options, stock appreciation rights, restricted stock or other stock-based
awards granted by other entities to persons who are or who will become Eligible
Employees in respect of the Company, in connection with a distribution, merger
or other reorganization by or with the granting entity or an affiliated entity,
or the acquisition by the Company, directly or indirectly, or all or a
substantial part of the stock or assets of the employing entity.  The
awards so granted need not comply with other specific terms of this Plan,
provided the awards reflect only adjustments giving effect to the assumption nor
substitution consistent with the conversion applicable to the Common Stock in
the transaction and any change in the issuer of the security.  Any
shares that are delivered and any awards that are granted by, or become
obligations of, the Corporation, as a result of the assumption by the
Corporation of, or in substitution for, outstanding awards previously granted by
an acquired company (or previously granted by a predecessor employer (or direct
or indirect parent thereof) in the case of persons that become employed by the
Corporation or one of its Subsidiaries in connection with a business or asset
acquisition or similar transaction) shall not be counted against the Share Limit
in Section 1.4 or other limits on the number of shares available for issuance
under the Plan.

         

            5.13    Non-Exclusivity of
Plan.

         

        Nothing in
this Plan shall limit or be deemed to limit the authority of the Board or the
Committee to grant awards or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or authority.

         

            5.14    No Corporate
Action Restriction.

         

        The
existence of the Plan, the Award Agreements and the Awards granted hereunder
shall not limit, affect or restrict in any way the right or power of the Board
or the shareholders of the Corporation to make or authorize: (a) any adjustment,
recapitalization, reorganization or other change in the Corporation’s or any
Subsidiary’s capital structure or its business, (b) any merger, amalgamation,
consolidation or change in the ownership of the Corporation or any subsidiary,
(c) any issue of bonds, debentures, capital, preferred or prior preference stock
ahead of or affecting the Corporation’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the Corporation or
any Subsidiary’s assets or business, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary.  No Participant,
Beneficiary, Personal Representative or any other person shall have any claim
under any Award or Award Agreement against any member of the Board or the
Committee, or the Corporation or any employees, officers or agents of the
Corporation or any Subsidiary, as a result of any such action.

         

            5.15    Other Company
Benefit and Compensation Program.

         

        Payments
and other benefits received by a Participant under an Award made pursuant to
this Plan shall not be deemed a part of a Participant’s compensation for
purposes of the determination of benefits under any other employee welfare or
benefit plans or arrangements, if any, provided by the Corporation or any
Subsidiary, except where the Committee or the Board expressly otherwise provides
or authorizes in writing.  Awards under this Plan may be made in
addition to, in combination with, as alternatives to or in payment of grants,
awards or commitments under any other plans or arrangements of the Corporation
or the Subsidiaries.

         

        6. DEFINITIONS.

         

            6.1    Definitions.

         

        (a) “Award” means an award
of any Option, Restricted Stock or Stock Unit or any combination thereof,
whether alternative or cumulative, authorized by and granted under this
Plan.

         

        (b) “Award Agreement”
means any writing setting forth the terms of an Award that has been authorized
by the Committee.

         

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

      

    

     

    
      (c) “Award Date” means the
date upon which the Committee took the action granting an Award or such later
date as the Committee designates as the Award Date at the time of the
Award.

       

      (d) “Award Period” means
the period beginning on an Award Date and ending on the expiration date of such
Award.

       

      (e) “Beneficiary” means
the person, persons, trust or trusts designated by a Participant or, in the
absence of a designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award Agreement and under
this Plan in the event of a Participant’s death, and shall mean the
Participant’s executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.

       

      (f) “Board” means the
Board of Directors of the Corporation.

       

      (g) “Cause” with respect
to a Participant means (unless otherwise expressly provided in the applicable
Award Agreement or another applicable contract with the Participant) a
termination of employment based upon a finding by the Company, acting in good
faith and based on its reasonable belief at the time, that the
Participant:

       

      (1) has failed to render services
to the Company where such failure amounts to gross negligence or misconduct of
the Participant’s responsibility and duties; or

       

      (2) has committed an act of fraud
or been dishonest against the Company or any affiliate of the Company;
or

       

      (3) has been convicted of a
felony or other crime involving moral turpitude.

       

      A
termination for Cause shall be deemed to occur (subject to reinstatement upon a
contrary final determination by the Committee) on the date on which the Company
first delivers written notice to the Participant of a finding of termination for
Cause.

      

      (h) “Change in Control
Event” means any of the following events:

       

      (1) the
dissolution or liquidation of the Corporation, unless its business is continued
by another entity in which holders of the Corporation’s voting securities
immediately before the event own, either directly or indirectly, more than 55%
of the continuing entity’s voting securities immediately after the
event;

       

      (2) any
sale, lease, exchange or other change in ownership (in one or a series of
transactions) of all or substantially all of the assets of the Corporation,
unless its business is continued by another entity in which holders of the
Corporation’s voting securities immediately before the event own, either
directly or indirectly, more than fifty-five percent (55%) of the continuing
entity’s voting securities immediately after the event;

       

      (3) any
reorganization or merger of the Corporation, unless (i) the holders of the
Corporation’s voting securities immediately before the event own, either
directly or indirectly, more than fifty-five percent (55%) of the continuing or
surviving entity’s voting securities immediately after the event, and (ii) at
least a majority of the members of the Board of Directors of the surviving
entity resulting from such reorganization or merger were members of the
incumbent Board of Directors of the Corporation at the time of the execution of
the initial agreement or of the action of such incumbent Board of Directors
providing for such reorganization or merger;

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        (4) an acquisition by any person,
entity or group acting in concert of more than forty-five percent (45%) of the
voting securities of the Corporation, unless the holders of the Corporation’s
voting securities immediately before the event own, either directly or
indirectly, more than fifty-five percent (55%) of the acquirer’s voting
securities immediately after the acquisition;

         

        (5) the consummation of a tender
offer or exchange offer by an individual, entity or group which results in such
individual, entity or group beneficially owning (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934) twenty-five percent
(25%) or more of the voting securities of the Corporation, unless the tender
offer is made by the Corporation or any of its subsidiaries or the tender offer
is approved by a majority of the members of the Board of Directors of the
Corporation who were in office at the beginning of the twelve-month period
preceding the commencement of the tender offer; or

         

        (6) a change of one-half or more
of the members of the Board of Directors of the Corporation within a
twelve-month period, unless the election or nomination for election by
shareholders of new directors within such period constituting a majority of the
applicable Board was approved by the vote of at least two-thirds (2/3) of the
directors then still in office who were in office at the beginning of the
twelve-month period.

         

        (i) “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

         

        (j) “Commission” means the
Securities and Exchange Commission.

         

        (k) “Committee” means the
Board or one or more committees appointed by the Board to administer all or
certain aspects of this Plan, each committee to be comprised solely of one or
more directors or such number as may be required under applicable
law.

         

        (l) “Common Stock” means
the Common Shares of the Corporation and such other securities or property as
may become the subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 5.2 of this Plan.

         

        (m) “Company” means,
collectively, the Corporation and its Subsidiaries.

         

        (n) “Corporation” means
American States Water Company, a California corporation, and its
successors.

         

        (o) “Eligible Employee”
means an officer (whether or not a director) or key employee of the
Company.

         

        (p) “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.

         

        (q) “Fair Market Value” on
any date means (1) if the stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock listed on The Wall Street
Journal website (www.online.wsj.com), of the principal national securities
exchange on which the stock is so listed or admitted to trade, on such date, or,
if there is no trading of the stock on such date, then the closing price of the
stock as quoted on such website on the next preceding date on which there was
trading in such shares; (2) if the stock is not listed or admitted to trade on a
national securities exchange, the last price for the stock on such date, as
furnished by the National Association of Securities Dealers, Inc. (“NASD”)
through the NASDAQ National Market Reporting System or a similar organization if
the NASD is no longer reporting such information; (3) if the stock is not listed
or admitted to trade on a national securities exchange and is not reported on
the National Market Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a similar organization;
or (4) if the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if bid and
asked prices for the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such time for
purposes of this Plan.

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

         

        
          (r) “Incentive Stock
Option” means an Option which is intended, as evidenced by its
designation, as an incentive stock option within the meaning of Section 422
of the Code, the award of which contains such provisions and is made under such
circumstances and to such persons as may be necessary to comply with that
section.

           

          (s) “Nonqualified Stock
Option” means an Option that is designated as a Nonqualified Stock Option
and shall include any Option intended as an Incentive Stock Option that fails to
meet the applicable legal requirements thereof.  Any Option granted
hereunder that is not designated as an incentive stock option shall be deemed to
be designated a Nonqualified Stock Option under this Plan and not an incentive
stock option under the Code.

           

          (t) “Option” means an
option to purchase Common Stock granted under this Plan.  The
Committee shall designate any Option granted to an Eligible Employee as a
Nonqualified Stock Option or an Incentive Stock Option.

           

          (u) “Participant” means an
Eligible Employee who has been granted an Award under this Plan.

           

          (v) “Personal
Representative” means the person or persons who, upon the disability or
incompetence of a Participant, shall have acquired on behalf of the Participant,
by legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan and who shall have become the legal representative of
the Participant.

           

          (w) “Plan” means this 2008
Stock Incentive Plan, as it may be amended from time to time.

           

          (x) “Restricted Shares” or
“Restricted Stock” means shares of Common Stock awarded to a Participant
under this Plan, subject to payment of such consideration, if any, and such
conditions on vesting (which may include, among others, the passage of time,
specified performance objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan and the related
Award Agreement, for so long as such shares remain unvested under the terms of
the applicable Award Agreement.

           

          (y) “Restricted Stock
Unit” means a Stock Unit subject to such conditions on vesting and payout
as the Committee may determine.

           

          (z) “Retirement” means
retirement from active service as an employee or officer of the Company on or
after attaining age 65.

           

          (aa)
“Rule 16b-3”
means Rule 16b-3 as promulgated by the Commission pursuant to the Exchange Act,
as amended from time to time.

           

          (bb)
“Section 16
Person” means a person subject to Section 16(a) of the Exchange
Act.

           

          (cc)
“Securities
Act” means the Securities Act of 1933, as amended from time to
time.

           

          (dd)
“Stock Unit”
means a bookkeeping entry that serves as a unit of measurement relative to a
share of Common Stock for purposes of determining the payment of the Stock Unit
grant.  Stock Units are not outstanding shares of Common Stock and do
not entitle a grantee to any dividend, voting or other rights in respect of any
Common Stock.  Stock Units may, however, by express provision in the
applicable Award Agreement, entitle a Participant to dividend equivalent rights,
credited in the form of cash or additional Stock Units, as determined by the
Committee.  Stock Units are payable in shares of Common
Stock.

           

           

          
            
              
              

            

            
              17

              
                

              

            

            
              
              

            

          

           

          
            (ee)
“Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Corporation.

             

            (ff)
“Total
Disability” means a “permanent and total disability” within the meaning
of Section 22(e)(3) of the Code and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include

             

             

             

             

             

            18

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