Document:

Exhibit 10.1

 

LIMITED GUARANTY

 

This LIMITED GUARANTY is dated as of March 14, 2013 (this “Limited Guaranty”) and is given by Dynegy Inc., a Delaware corporation (the “Guarantor”), in favor of Ameren Corporation, a Missouri corporation (the “Guaranteed Party”).  Each capitalized term used and not defined herein shall have the meaning ascribed to it in the Transaction Agreement, except as otherwise provided herein.

 

1.                                      LIMITED GUARANTY.

 

(a)                                 To induce the Guaranteed Party to enter into the Transaction Agreement, dated as of March 14, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”) entered into concurrently herewith between the Guaranteed Party and Illinois Power Holdings, LLC, a Delaware limited liability company (“IPH”), pursuant to which IPH will acquire all of the outstanding equity interest of the Transferred Company from the Guaranteed Party or an Affiliate thereof (the “Transaction”), the Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees to the Guaranteed Party, on the terms and subject to the conditions set forth herein, the due and punctual observance, performance and discharge of the payment obligations and liabilities, as and when due, subject to the terms and limitations set forth in the Transaction Agreement, of IPH with respect to (i) IPH’s obligation to pay the Termination Fee under Section 9.3(a) of the Transaction Agreement (the “Pre-Closing Obligations”), (ii) the indemnification and reimbursement obligations of IPH pursuant to Section 5.14 of the Transaction Agreement (the “Financing Cooperation Obligations”) and (iii) the indemnification obligations of IPH (A) pursuant to Section 5.9(b) of the Transaction Agreement, (B) relating to the Specified Tax-Related Claims, and (C) under Section 10.2 of the Transaction Agreement, but, subject to the following proviso, under no circumstances in the case of clauses (A), (B) and (C) after the period (the “Guaranty Period”) ending on the two year anniversary of the Closing Date (the “Indemnification Obligations” and, together with the Pre-Closing Obligations and the Financing Cooperation Obligations, the “Obligations”); provided that, subject to the Cap, if a written notice of a claim related to any of the Indemnification Obligations has been given in accordance with Section 10.4(a) of the Transaction Agreement prior to the expiration of the Guaranty Period, the Guaranty Period shall, solely with respect to the Indemnification Obligations stated in such notice, continue until such claim is finally resolved.

 

(b)                                 In no event shall the Guarantor’s aggregate liability under this Limited Guaranty exceed twenty-five million dollars ($25,000,000) (the “Cap”). The parties agree that this Limited Guaranty may not be enforced against the Guarantor without giving effect to the Cap. The Guaranteed Party hereby agrees that in no event shall the Guarantor be required to pay to the Guaranteed Party under, in respect of, or in connection with this Limited Guaranty or the Transaction Agreement any amounts other than as expressly set forth herein.  This Limited Guaranty may be enforced for money damages only and under no circumstances shall the Guarantor be liable for special, incidental, consequential, exemplary or punitive damages.  All payments hereunder shall be made in lawful money of the United States, in immediately available funds.

 

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2.                                      NATURE OF GUARANTEE.  The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that IPH becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor’s obligations hereunder.  In the event that any payment to the Guaranteed Party in respect of the Obligations is rescinded or must otherwise be returned, for any reason whatsoever (other than as set forth in Section 9(c)(ii)), the Guarantor shall remain liable hereunder with respect to the Obligations (subject to the Cap) as if such payment had not been made.  This Limited Guaranty is an unconditional guarantee of payment and not of collection.

 

3.                                      CHANGES IN OBLIGATIONS, CERTAIN WAIVERS.  The Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of or renew any of the Obligations, and may also make any agreement with IPH for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, without in any way impairing or affecting the Guarantor’s obligations under this Limited Guaranty or affecting the validity or enforceability of this Limited Guaranty.  Except as otherwise set forth herein, the Guarantor agrees that its obligations hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure or delay on the part of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against IPH; (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment to or modification of any of the terms or provisions of the Transaction Agreement made in accordance with the terms thereof or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution, discharge or release of any Person now or hereafter liable with respect to any of the Obligations or otherwise interested in the transactions contemplated by the Transaction Agreement; (d) any change in the corporate existence, structure or ownership of IPH or any other Person now or hereafter liable with respect to any of the Obligations or otherwise interested in the transactions contemplated by the Transaction Agreement; (e) any insolvency, bankruptcy, reorganization or other similar proceeding affecting IPH or any other Person now or hereafter liable with respect to any of the Obligations or otherwise interested in the transactions contemplated by the Transaction Agreement; (f) the existence of any claim, set-off or other right that the Guarantor may have at any time against IPH or the Guaranteed Party or any of their Affiliates, except in connection with the Obligations; (g) the adequacy of any other means the Guaranteed Party may have of obtaining payment related to any of the Obligations; (h) the value, genuineness, validity, regularity, illegality or enforceability of the Transaction Agreement; and (i) any discharge of the Guarantor as a matter of applicable Law (other than as a result of payment of the Obligations in accordance with their terms).

 

To the fullest extent permitted by applicable Law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any applicable Law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guaranty and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (other than notices expressly required to be provided to IPH pursuant to the Transaction Agreement), all defenses that may be available by virtue of any valuation, stay, moratorium, applicable Law or other similar applicable Law now or hereafter in effect, any right to require the marshalling of assets of IPH or any other Person now

 

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or hereafter liable with respect to any of the Obligations or otherwise interested in the transactions contemplated by the Transaction Agreement, and all suretyship defenses generally (other than fraud or willful misconduct by the Guaranteed Party or any of its Affiliates or defenses to the payment of the Obligations that are available to IPH under the Transaction Agreement or to the Guarantor in respect of a breach by the Guaranteed Party of this Limited Guaranty).  The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Transaction Agreement and that this Limited Guaranty and the waivers set forth in this Limited Guaranty, are knowingly made in contemplation of such benefits.  The Guaranteed Party hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause its controlled Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Transaction Agreement or the transactions contemplated thereby, against the Guarantor or any Non-Recourse Party (as defined in Section 10 herein) (other than IPH), except for claims against the Guarantor under this Limited Guaranty (subject to the limitations described herein).  The Guarantor hereby covenants and agrees that it shall not assert, directly or indirectly, and shall cause its Affiliates not to assert, any proceeding that this Limited Guaranty is illegal, invalid or unenforceable in accordance with its terms.

 

The Guarantor hereby unconditionally waives any rights that it may now have or hereafter acquire against IPH or such other Person that arise from the existence, payment, performance, or enforcement of the Guarantor’s obligations under or in respect of this Limited Guaranty or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against IPH or such other Person, whether or not such claim, remedy or right arises in equity, under contract or applicable Law, including, without limitation, the right to take or receive from IPH or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and all other amounts payable under this Limited Guaranty shall have been previously paid in full in immediately available funds.  If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in immediately available funds of the Obligations and all other amounts payable under this Limited Guaranty, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and other amounts payable under this Limited Guaranty, in accordance with the terms of the Transaction Agreement and herewith, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable under this Limited Guaranty thereafter arising.

 

4.                                      EXPENSES.  The Guarantor agrees to pay on demand all reasonable out-of-pocket expenses (including reasonable fees of counsel) incurred by the Guaranteed Party in connection with the enforcement of its rights hereunder if (i) the Guarantor asserts in any litigation or other proceeding that this Limited Guaranty is illegal, invalid or unenforceable in accordance with its terms or fails to comply with its obligations under this Limited Guaranty and

 

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(ii) the Guaranteed Party prevails in such litigation or proceeding and the payment of any such amounts shall be in addition to, and shall not be considered for purposes of calculating, the Cap.

 

5.                                      NO WAIVER; CUMULATIVE RIGHTS.  No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder.  Each and every right, remedy and power hereby granted to the Guaranteed Party shall be cumulative and not exclusive of any other right, remedy or power, and may be exercised by the Guaranteed Party at any time or from time to time.  The Guaranteed Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Guaranteed Party’s rights against, IPH prior to proceeding against the Guarantor hereunder.

 

6.                                      REPRESENTATIONS AND WARRANTIES.  The Guarantor hereby represents and warrants that:

 

(a)                                 the execution, delivery and performance of this Limited Guaranty have been duly and validly authorized by all necessary action, and do not contravene any provision of the Guarantor’s certificate of incorporation, by-laws or similar governing documents or any applicable Law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets;

 

(b)                                 all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Entity necessary for the due execution, delivery and performance of this Limited Guaranty by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Entity or regulatory body is required in connection with the execution, delivery or performance of this Limited Guaranty;

 

(c)                                  this Limited Guaranty constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar applicable Laws affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at applicable Law); and

 

(d)                                 the Guarantor has the financial capacity to pay and perform its obligations under this Limited Guaranty, and all funds necessary for the Guarantor to fulfill its obligations under this Limited Guaranty shall be available to the Guarantor (or its permitted assignee pursuant to Section 7 hereof) for so long as this Limited Guaranty shall remain in effect in accordance with Section 9(b) hereof.

 

7.                                      NO ASSIGNMENT.  This Limited Guaranty may not be assigned by any party (except by operation of applicable Law) without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed); provided that, notwithstanding any other provision hereof, no assignment of the Guarantor’s rights, interests or obligations

 

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hereunder shall relieve the Guarantor of any of its obligations hereunder (except to the extent actually performed or satisfied by the assignee).  Any attempted assignment in violation of this section shall be null and void.

 

8.                                      NOTICES.  All notices, requests, claims, demands and other communications hereunder shall be given by the means specified in the Transaction Agreement (and shall be deemed given as specified therein), as follows:

 

if to the Guarantor:

 

Dynegy Inc.
       601 Travis, Suite 1400

Houston, Texas 77002

Attention: Catherine Callaway

Facsimile: 713-507-6588

 

with a copy to (which alone shall not constitute notice):

 

Skadden, Arps, Slate, Meagher & Flom LLP

1440 New York Ave. N.W.

Washington, D.C. 20005

Attention: Michael P. Rogan

Facsimile: 202-371-7550

 

If to the Guaranteed Party, as provided in the Transaction Agreement.

 

9.                                      CONTINUING GUARANTEE.

 

(a)                                 This Limited Guaranty may not be revoked or terminated and shall remain in full force and effect and shall be binding on the Guarantor, its successors and permitted assigns until all of the Obligations payable under this Limited Guaranty have been indefeasibly paid in full in cash or otherwise extinguished pursuant to the terms of the Transaction Agreement or this Limited Guaranty.

 

(b)                                 Notwithstanding the foregoing, this Limited Guaranty shall terminate and the Guarantor shall have no further obligations under this Limited Guaranty as of the earliest to occur of the following events:

 

(i) in the event of a termination of the Transaction Agreement in accordance with Section 9.1 of the Transaction Agreement (other than (x) a Regulatory Termination or (y) a termination at or after the time of the occurrence of a IPH Termination Fee Event);

 

(ii) in the event of (x) a Regulatory Termination or (y) a termination of the Transaction Agreement by the Guaranteed Party, if, at or prior to such termination, a IPH Termination Fee Event has occurred, upon full payment, performance or other extinguishment of the Termination Fee in accordance with Section 9.3 of the Transaction Agreement; or

 

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(iii) if the Closing shall occur (x) upon full payment, performance or other extinguishment of the Indemnification Obligations pursuant to the terms of the Transaction Agreement and subject to the Cap; or (y) the Guaranty Period.

 

(c)                                  Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its controlled Affiliates or their respective successors and assigns asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap, or that any other provisions of this Limited Guaranty are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against the Guarantor or any Affiliates of the Guarantor (other than IPH) with respect to the transactions contemplated by the Transaction Agreement other than liability of the Guarantor under this Limited Guaranty (as limited by the provisions of Section 1) or under the Confidentiality Agreement, then (i) the obligations of the Guarantor under this Limited Guaranty shall terminate ab initio and shall thereupon be null and void, (ii) if the Guarantor has previously made any payments under this Limited Guaranty, it shall be entitled to recover such payments from the Guaranteed Party, and (iii) neither the Guarantor nor any Non-Recourse Parties (as defined below) shall have any liability to the Guaranteed Party or any of its Affiliates with respect to the Transaction Agreement, the transactions contemplated thereby or under this Limited Guaranty.

 

10.                               NO RECOURSE.

 

(a)                                 Notwithstanding anything that may be expressed or implied in this Limited Guaranty by its acceptance of the benefits of this Limited Guaranty, the Guaranteed Party covenants, agrees and acknowledges that no Person other than the Guarantor (or a permitted assignee of the Guarantor) has any obligations hereunder and that, notwithstanding that the Guarantor (and any assignee permitted in accordance with Section 7) may be a limited liability company, the Guaranteed Party has no right of recovery under this Limited Guaranty, or any claim based on such obligations against, and no personal liability shall attach to, the former, current or future equity holders, controlling persons, directors, officers, employees, agents, Affiliates (other than any assignee permitted in accordance with Section 7) or member of any of the Guarantor or IPH or any former, current or future stockholder, controlling person, director, officer, employee, member, or Affiliate (other than any assignee permitted in accordance with Section 7) or agent of any of the foregoing (collectively, but not including IPH, each a “Non-Recourse Party”), through IPH or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of IPH against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law,  or otherwise, and the Guaranteed Party further covenants, agrees and acknowledges that the only rights of recovery that the Guaranteed Party has in respect of the Transaction Agreement or the transactions contemplated thereby are its rights to recover from IPH under, and to the extent expressly provided in, the Transaction Agreement and its right to recover from the Guarantor (but not any Non-Recourse Party) under, and to the extent expressly provided in, this Limited Guaranty and subject to the Cap and the other limitations described herein; provided, however, that, in the event that the Guarantor (i) consolidates with or merges with any other Person and is not the continuing or surviving entity of such

 

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consolidation or merger or (ii) sells, transfers, conveys or otherwise disposes of, including, without limitation, by the liquidation, dissolution or winding up of the Guarantor, all or a substantial portion of its properties and other assets to any Person such that the sum of the Guarantor’s remaining net assets plus any other available funds is less than the Cap, then, and in each such case, the Guaranteed Party may seek recourse, whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any statue, regulation or other applicable Law, against such continuing or surviving entity or such Person, as the case may be, but only to the extent of the liability of the Guarantor hereunder.

 

(b)                                 The Guaranteed Party acknowledges and agrees that IPH has no assets other than certain contract rights and that no additional funds are expected to be contributed to IPH unless and until the Closing occurs.  Recourse against the Guarantor under and pursuant to the terms of this Limited Guaranty shall be the sole and exclusive remedy of the Guaranteed Party and all of its Affiliates against the Guarantor and the Non-Recourse Parties in respect of any liabilities or obligations arising under, or in connection with, the Transaction Agreement or the transactions contemplated thereby, including by piercing of the corporate veil or by a claim by or on behalf of IPH.  The Guaranteed Party hereby covenants and agrees that it shall not institute, and it shall cause its controlled Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Transaction Agreement or the transactions contemplated thereby, against the Guarantor or any Non-Recourse Party except for claims against the Guarantor under this Limited Guaranty or arising in respect of the Confidentiality Agreement.  Nothing set forth in this Limited Guaranty shall confer or give or shall be construed to confer or give to any Person other than the Guaranteed Party (including any Person acting in a representative capacity) any rights or remedies against any Person including the Guarantor, except as expressly set forth herein.  Notwithstanding anything to the contrary, in connection with the pursuit by the Guaranteed Party of a claim under this Limited Guaranty, the Guaranteed Party may pursue a declaratory judgment claim against IPH, but solely to the extent necessary to demonstrate that IPH has failed to perform its obligations under the Transaction Agreement.

 

11.                               GOVERNING LAW; JURISDICTION.

 

(a)                                 This Limited Guaranty shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts executed and to be performed wholly within such State and without reference to the choice-of-law principles that would result in the application of the laws of a different jurisdiction.

 

(b)                                 Each party to this Limited Guaranty irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or to the extent such Court does not have subject matter jurisdiction, the Superior Court of the State of Delaware or any federal court in the State of Delaware, with respect to any Action arising out of or relating to this Limited Guaranty, and hereby irrevocably agrees that all claims in respect of such Action may be heard and determined in such Delaware state or federal courts.  Each party to this Limited Guaranty hereby irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such

 

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Action.  The parties further agree, to the extent permitted by Law, that final and unappealable judgment against any of them in any Action contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment.

 

12.                               WAIVER OF JURY TRIAL.  EACH PARTY TO THIS LIMITED GUARANTY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LIMITED GUARANTY, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN.  NO PARTY TO THIS LIMITED GUARANTY SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS LIMITED GUARANTY OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN.  NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EACH PARTY TO THIS LIMITED GUARANTY CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTY OR INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN SECTION 11.  NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF SECTION 11 AND THIS SECTION 12 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

13.                               COUNTERPARTS.  This Limited Guaranty may be executed in any number of separate counterparts (including by facsimile), each such counterpart when executed shall be deemed to be an original instrument, and all such counterparts shall together constitute one and the same agreement.

 

14.                               NO THIRD PARTY BENEFICIARIES.  Except as provided in Section 10, the parties hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other party hereto and its successors and permitted assigns, in accordance with and subject to the terms of this Limited Guaranty, and this Limited Guaranty is not intended to, and does not, confer upon any Person other than the parties hereto and their respective successors and permitted assigns any rights or remedies hereunder, including, the right to rely upon the representations and warranties set forth herein.

 

15.                               CONFIDENTIALITY.  This Limited Guaranty is being provided to the Guaranteed Party solely in connection with the Transaction Agreement.  This Limited Guaranty may not be used, circulated, quoted or otherwise referred to in any document, except with the written consent of the Guarantor and the Guaranteed Party; provided that no such written consent is required for any disclosure of the existence or terms of this Limited Guaranty (i) to the extent required by applicable Law, to the extent required by the applicable rules of any national securities exchange or if required in connection with any required filing or notice with any

 

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Governmental Entity relating to the Transaction or (ii) in order to facilitate the resolution of any claims made against or incurred by the Guaranteed Party or the Guarantor in connection with this Limited Guaranty or the Transaction Agreement.

 

16.                               MISCELLANEOUS.

 

(a)                                 This Limited Guaranty contains the entire agreement between the parties with respect to the subject matter of this Limited Guaranty and supersedes any prior discussion, correspondence, negotiation, agreement, understanding or arrangement and there are no agreements, understandings, representations or warranties between the parties other than those set forth or referred to in this Limited Guaranty.

 

(b)                                 This Limited Guaranty may not be modified or amended except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought.  Either party to this Limited Guaranty may, only by an instrument in writing, waive compliance by the other parties to this Limited Guaranty with any term or provision of this Limited Guaranty with which such other parties to this Limited Guaranty are obligated to perform or comply.  The waiver by any party to this Limited Guaranty of a breach of any term or provision of this Limited Guaranty shall not be construed as a waiver of any subsequent breach.  No delay or omission on the part of the Guaranteed Party in exercising any right, power or remedy under this Limited Guaranty will operate as a waiver thereof.

 

(c)                                  Any term or provision hereof that is prohibited, invalid or unenforceable in any situation in any jurisdiction shall be, as to such jurisdiction, ineffective solely to the extent of such prohibition, invalidity or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any situation in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided, however, that this Limited Guaranty may not be enforced without giving effect to the limitation of the amount payable hereunder to the Cap provided in Section 1 hereof and the provisions of Sections 9 and 10 and this Section 16(c).

 

(d)                                 The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Limited Guaranty.

 

(e)                                  All parties acknowledge that each party and its counsel have reviewed this Limited Guaranty and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Limited Guaranty.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Guarantor has caused this Limited Guaranty to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

 

	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
DYNEGY   INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert C. Flexon
    
	
 
    	
 
    	
Name:   Robert C. Flexon
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    

 

[Signature Page to Limited Guaranty]

 

 

IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guaranty to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

 

	
 
    	
GUARANTEED PARTY:
    
	
 
    	
 
    
	
 
    	
AMEREN   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/Gregory   L. Nelson
    
	
 
    	
 
    	
Name:   Gregory J. Nelson
    
	
 
    	
 
    	
Title:   Senior Vice President, General Counsel and Secretary
    

 

[Signature Page to Limited Guaranty]Exhibit 10.1

 

AMERICAN STATES WATER COMPANY

AMENDED AND RESTATED 2008 STOCK INCENTIVE PLAN

2013 PERFORMANCE AWARD AGREEMENT

 

THIS PERFORMANCE AWARD AGREEMENT (this “Agreement”) is dated as of [   ], 2013 by and between American States Water Company, a California corporation (the “Corporation”), and [      ] (the “Participant”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to the American States Water Company Amended and Restated 2008 Stock Incentive Plan (the “Plan”), the Corporation has granted to the Participant effective as of the date hereof (the “Award Date”), an award of Performance Awards under the Plan (the “Award”), upon the terms and conditions set forth herein and in the Plan.

 

NOW, THEREFORE, in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

 

1.                                    Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in the Plan.  The following phrases shall have the following meanings:

 

“Aggregate GSWC Operating Expense Level” means the cumulative operating expenses of the Water Segment as reported in the Corporation’s Form 10-Ks filed with the Securities and Exchange Commission for the period beginning January 1, 2013 and ending on the last day of the Performance Period, as adjusted to remove (i) Water Supply, depreciation and amortization and maintenance expenses as reported in such Form 10-Ks, (ii) public relations, legal and other professional services expenses of GSWC during the Performance Period applicable to defending GSWC from condemnation actions applicable to the Water Segment,  (iii) costs of defense, costs of settlement and judgments incurred in connection with claims arising from perchlorate contamination in the Barstow service area, and any other costs of defense, settlement and judgments accruing during the Performance Period which are incurred in connection with claims determined by the Compensation Committee to be extraordinary events,  (iv) write-offs associated with decisions of the CPUC applicable to the financial statements in the Performance Period for the Water Segment, and (v) gross-up of certain surcharges authorized by the CPUC to recover previously incurred cost recorded pursuant to generally accepted accounting principles.

 

“ASUS” means American States Utility Services, Inc., a wholly subsidiary of the Corporation.

 

“ASUS Cumulative Net Earnings” means the cumulative net income of ASUS and its subsidiaries for the period beginning January 1, 2013 and ending on the last day of the Performance Period.

 

 

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

 

“Compensation Committee” means the compensation committee of the Board.

 

“CPUC” means the California Public Utilities Commission.

 

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

 

“GSWC Operating Expense Controls” means the operating expenses for the Water Segment for the period commencing January 1, 2013 and ending on the last day of the Performance Period, as adjusted to remove Water Supply, depreciation and amortization and maintenance expenses of the Water Segment.

 

“Payout Percentage” means, with respect to each Performance Criteria, the percentage of the Participant’s Target Performance Award that is payable with respect to such Performance Criteria based on the degree of satisfaction of the Performance Target for such Performance Criteria.

 

“Peer Group” means the following eight companies: American Water Works Company, Inc., Aqua America, Inc., California Water Service Group, SJW Corp., Middlesex Water Company, Connecticut Water Service, Inc., York Water Company and Artesian Resources Corporation.  For this purpose total shareholder return for the Corporation and each of the other eight companies shall be calculated using the Securities and Exchange Commission guidelines for reporting financial performance.  If any of the stock of any of the members of the Peer Group is no longer or traded or is suspended from trading as of the last business day of the Performance Period, that company shall not be included in the Peer Group.

 

“Performance Criteria” means ASUS Cumulative Net Income, GSWC Operating Expense Controls and Total Shareholder Return.

 

“Performance Target” means the specific goal established by the Compensation Committee with respect to each of the Performance Criteria set forth in Exhibit A.

 

“Retirement Age” means the time that the Participant is at least age 55 and the sum of the age of the Participant and the Participant’s years of service with the Corporation and/or one of its wholly owned subsidiaries is at least 75.

 

“Target Performance Award” means with respect to each Performance Criteria, the number of Performance Awards set forth on Exhibit A as the target for such Performance Criteria.

 

“Total Shareholder Return” means the Corporation’s total shareholder return, including reinvestment of dividends,  as compared to the total shareholder return, including reinvestment of dividends, of each of the members of the Peer Group.   If any of the stock of any of the 

 

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members of the Peer Group is no longer traded or is suspended from trading as of the last business day in the Performance Period, the Performance Target for Total Shareholder Return set forth in subsection A of Exhibit A shall be adjusted as provided therein.

 

“Water Segment” means the water segment of GSWC, one of the three reportable segments as defined in the Form 10-K.

 

“Water Supply” means water purchased, power purchased for pumping, groundwater production assessment and the water supply balancing accounts.

 

2.                                    Grant.

 

a.                                    Amount of Award.  Subject to the terms of this Agreement, the Corporation hereby grants to the Participant the performance awards set forth on Exhibit A (subject to adjustment as provided in Section 5.2 of the Plan (the “Performance Awards”).

 

b.                                   Account. The Corporation will maintain a Performance Award bookkeeping account for the Participant (the “Account”).  The Performance Awards shall be used solely as a device for determination of the payment eventually to be made to the Participant if such Performance Awards vest pursuant to Section 3.  The Performance Awards shall not be treated as property or as a trust fund of any kind.

 

3.                                    Vesting.

 

a.                                    General.  The Performance Awards shall vest and become nonforfeitable with respect to thirty-three percent (33%) of the total number of Performance Awards on the first Installment Vesting Date, thirty-three percent (33%) of the total number of Performance Awards on the second Installment Vesting Date and thirty-four percent (34%) of the total number of Performance Awards on the last Installment Vesting Date; provided, however, that the final number of Performance Awards shall be determined only upon completion of the Performance Period as contemplated by Section 3(b).  Except as otherwise provided in this Agreement, the first Installment Vesting Date shall be December 31, 2013, the second Installment Vesting Date shall be December 31, 2014 and the last Installment Date Vesting Date shall be December 31, 2015 (each an “Installment Vesting Date”).

 

b.                                   Performance Criteria Satisfaction Condition.  Notwithstanding any provision of this Section 3, the vesting of the Performance Awards (and any Performance Awards credited as dividend equivalents thereon) shall be contingent upon certification by the Compensation Committee on or prior to March 15 of the year following the end of the Performance Period of the number of Performance Awards (including any Performance Awards credited as dividend equivalents thereon) that have been earned as provided in Section 4 for the period commencing on January 1, 2013 and ending on the earliest of (i) December, 31, 2015, and (ii) if applicable, the date of vesting of the Performance Awards pursuant to Section 3(e) (the “Performance Period”).

 

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c.                                     Termination of Employment Prior to Vesting.  Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon) shall terminate to the extent that such Performance Awards have not become vested prior to the first date the Participant is no longer employed by the  Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Participant’s employment with the Corporation or a Subsidiary, subject to early vesting as provided in Sections 3(e) and 3(f).  If the Participant is employed by a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment of the Participant for the purposes of this Agreement (unless the Participant otherwise continues to be employed by the Corporation or another of its Subsidiaries following such event).

 

d.                                   Termination of Performance Awards.  If any unvested Performance Awards are terminated under Section 3(b) or 3(c), such Performance Awards (and any Performance Awards credited as dividend equivalents thereon) shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Participant or the Participant’s beneficiary or personal representative, as the case may be.

 

e.                                     Early Vesting as a Result of Death, Disability or a Change in Control Event. Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon), to the extent such Performance Awards are not then vested, shall become fully vested upon the termination of employment as a result of death or Total Disability or the occurrence of a Change in Control Event.

 

f.                                      Early Vesting if Attained Retirement Age. Notwithstanding Section 3(a), the Participant’s Performance Awards (and any Performance Awards credited as dividend equivalents thereon), to the extent such Performance Awards are not then vested, shall become fully vested upon the Participant attaining Retirement Age.

 

4.                                    Determination of Performance Awards Payable.

 

a.                                    Basis of Determination. The number of Performance Awards payable to the Participant (and any Performance Awards credited as the dividend equivalents thereon) shall be determined on the basis of the extent to which the Performance Targets for each of the Performance Criteria have been achieved.  The number of Performance Awards payable to the Participant shall be equal to the sum of the number of Performance Awards payable to the Participant with respect to each Performance Criteria, together with any dividend equivalents credited on such Performance Awards.  The number of Performance Awards payable with respect to each Performance Criteria shall be equal to the Target Performance Award for such Performance Criteria multiplied by the Payout Percentages set forth in Exhibit A for such Performance Criteria, together with any dividend equivalents credited on such Performance Awards.

 

4

 

b.                                   Compensation Determination and Certification.  As soon as practicable following the end of the Performance Period and the completion of the independent auditor’s report for the last year of the Performance Period, but in no event later than March 15 of the year following the end of the Performance Period, the Compensation Committee shall determine the extent to which the Performance Targets for Performance Criteria are achieved and determine the Payout Percentages for each of the Performance Criteria.  For levels of achievement between target and zero and target and the maximum, the Compensation Committee shall determine the Payout Percentage by interpolation, to the extent not otherwise expressly set forth in subsection A, B or C of Exhibit A.  If the Performance Period is less than 1,095 days as a result of early vesting pursuant to Section 3(e), then the Performance Criteria for Aggregate GSWC Operating Expense Level and ASUS Cumulative Net Earnings shall be adjusted by multiplying such Performance Criteria by the number of days in the shortened Performance Period and dividing the result by 1,095; and the Performance Period will be considered to have ended as of the end of the fiscal quarter most recently completed on or prior to the date of termination or, if applicable, the date of the Change in Control.   At the time that the Compensation Committee makes such determinations, it shall certify in accordance with Section 4A.4(b) of the Plan, the number of Performance Awards payable to the Participant.

 

c.                                     Adjustments and Limitations.  Notwithstanding the foregoing, the number of Performance Awards payable to the Participant (and the Performance Awards credited as dividend equivalents thereon) shall be subject to the adjustments, limitations (including the share limitation under Section 4A.4(c) of the Plan), the Compensation Committee’s discretionary authority to make downward adjustments and other terms and conditions set forth in the Plan.

 

5.                                    Continuance of Employment.  The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Partial employment or service, even if substantial, during any vesting period will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services.

 

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Participant’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or consent hereto.

 

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6.                                    Dividend and Voting Rights.

 

a.                                    Limitation of Rights Associated with Performance Awards.  The Participant shall have no rights as a shareholder of the Corporation, no dividend rights (except as expressly provided in Section 6(b) with respect to dividend equivalent rights) and no voting rights, with respect to the Awards and any Common Shares underlying or issuable in respect of such Awards until such Common Shares are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the Common Shares.

 

b.                                   Dividend Equivalents.  The Participant shall be entitled to be credited with dividend equivalents in the form of additional Performance Awards with respect to the Awards credited to his or her Account as the Corporation declares and pays dividends in cash on its Common Shares.  The number of Performance Awards to be credited to the Participant’s Account as a dividend equivalent will equal (1) the sum of the per share cash dividends paid by the Corporation on its Common Shares during the Performance Period multiplied by the number of Awards credited to the Participant’s Account on the last day of the Performance Period divided by (2) the average of the Fair Market Value of the Common Shares on each dividend payment date during the Performance Period.  Performance Awards credited as dividend equivalents will become vested to the same extent as the Awards to which they relate.  For purposes of clarity, no dividend equivalents shall be credited for a dividend record date with respect to any Awards that were paid or terminated prior to such dividend record date and the dividend equivalents will vest only if and to the extent that the underlying Performance Awards vest.

 

7.                                    Timing and Manner of Distribution.

 

a.                                    General.  On or soon as administratively practicable following the end of the Performance Period 3(a), but in no event later than March 15 of the year following the end of the Performance Period, the Corporation shall deliver to the Participant (or the Participant’s Beneficiary) a number of Common Shares equal to the number of Performance Awards subject to this Award that become vested on or prior to the end of the Performance Period (including any Performance Awards credited as dividend equivalents with respect to such vested Performance Awards), unless such Performance Awards terminate prior to such Installment Vesting Date pursuant to Section 3(b) or 3(c).

 

b.                                   Payment of Performance Awards upon Early Vesting as a Result of Death, Disability or a Change in Control Event.  Notwithstanding Section 7(a), upon termination of the Participant’s employment as a result of death or Total Disability, or upon the occurrence of a Change in Control Event, the Corporation shall deliver to the Participant or his or her Beneficiary a number of Common Shares equal to the number of Performance Awards subject to this Award that become vested in accordance with Section 3 (including any Performance Awards credited as dividend equivalents with respect to such Performance Awards) as soon as administratively practicable following such termination of employment or Change in Control Event (but in no event later than

 

6

 

March 15 of the year following the year in which such termination of employment or a Change in Control occurs).

 

c.                                     Termination of Performance Awards Upon Payment.   A Performance Award will terminate upon the payment of that Performance Award in accordance with the terms hereof, and the Participant shall have no further rights with respect to such Performance Award.

 

d.                                   Form of Payment.  The Corporation may deliver the Common Shares payable to the Participant under this Section 7 either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion.

 

8.                                    Restrictions on Transfer.  Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred,  pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, (b) transfers by will or the laws of descent and distribution, or (c) transfers pursuant to a QDRO order if approved or ratified by the Compensation Committee.

 

9.                                    Adjustments Upon Specified Events.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 5.2 of the Plan, the Compensation Committee shall make adjustments if appropriate in the number of Performance Awards then outstanding and the number and kind of securities that may be issued in respect of the Award.

 

10.                            Tax Withholding.  Upon the vesting and/or distribution of Common Shares in respect to the Performance Awards, the Corporation (or the Subsidiary last employing the Participant) shall have the right at its option to (a) require the Participant to pay or provide for payment in respect of cash of the amount of any taxes that the Corporation or any Subsidiary may be required to withhold with respect to such vesting and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any taxes which the Corporation or any Subsidiary may be required to withhold with respect to such vesting and/or distribution.  In any case where a tax is required to be withheld in connection with the delivery of Common Shares under this Agreement, the Compensation Committee may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then Fair Market Value (with the “Fair Market Value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates.

 

11.                            Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s records, or at such other address as either party may hereafter designate in writing to the other.  Any such notice shall be given only when received, but if the Participant is no longer an employee of the  Corporation, shall be deemed to have been duly given by the Corporation when enclosed in a

 

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properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch office regularly maintained by the United States Government.

 

12.                            Plan.  The Award and all rights of the Participant under this Agreement are subject to, and the Participant agrees to be bound by, all of the terms and conditions of the provisions of the Plan, incorporated herein by reference.  In the event of a conflict or inconsistency between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the Plan shall govern.  The Participant agrees to be bound by the terms of the Plan and this Agreement.  The Participant acknowledges having read and understood the Plan and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Compensation Committee do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Compensation Committee so conferred by appropriate action of the Compensation Committee under the Plan after the date hereof.

 

13.                            Entire Agreement.  This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.  The Plan and this Agreement may be amended pursuant to Section 5.6 of the Plan.  Such amendment must be in writing and signed by the Corporation.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

 

14.                            Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation, with respect to amounts credited and payable, if any, with respect to the Performance Awards, and rights no greater than the right to receive the Common Shares as a general unsecured creditor with respect to such Awards, as and when payable hereunder.

 

15.                            Counterparts.  This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

16.                            Section Headings.    The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

 

17.                            Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California without regard to conflict of law principles thereunder.

 

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18.                            Construction.    It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.

 

19.                            Recoupment.   The Award under this Agreement and the Common Shares received by the Participant upon the vesting of the Award, or the value, proceeds or other benefits received by the Participant upon the sale of such Common Shares, shall be subject to the  Corporation’s Policy Regarding Recoupment of Certain Performance-Based Compensation Payments, as it may be amended from time to time, or as otherwise required by law.

 

20.                            Section 409A.  This Agreement is intended to be exempt from, or in the alternative comply with, Section 409A and the interpretative guidance thereunder, and shall be administered and interpreted accordingly.

 

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the date and year first above written.

 

	
 
    	
AMERICAN   STATES WATER COMPANY, a California corporation
    
	
 
    	
 
    
	
 
    	
By:___________________________________
    
	
 
    	
 
    
	
 
    	
Print   Name:____________________________
    
	
 
    	
 
    
	
 
    	
Its:___________________________________
    
	
 
    	
 
    
	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
Signature:   ____________________________
    
	
 
    	
 
    
	
 
    	
Print Name:   ___________________________
    

 

 

CONSENT OF SPOUSE

 

In consideration of the execution of the foregoing Performance Award Agreement by American States Water Company, I, ________________________, the spouse of the Participant therein named, do hereby join with my spouse in executing the foregoing Performance Award Agreement and do hereby agree to be bound by all of the terms and provisions thereof and of the Plan.

 

Dated: ______________________________

 

	
 
    	
Signature:   ____________________________________
    
	
 
    	
 
    
	
 
    	
Print Name:   ___________________________________
    

 

 

EXHIBIT A

2013 PERFORMANCE AWARD AGREEMENT

 

 

	
Target   Performance Award for Each Performance Criteria
    
	
A.   Total
   Shareholder Return

 
    	
B.   Aggregate GSWC
   Operating Expense
   Controls

 
    	
C. ASUS
   Cumulative Net
   Earnings

 
    	
Target
    Total

 
    
	
[    ]
    	
[    ]
    	
[    ]
    	
[    ]
    

 

 

A.        Performance Targets and Payout Percentages for Total Shareholder Return:

 

1.            If the Peer Group consists of eight companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   8 members of the Peer Group
    	
200%
    
	
>   7 members of the Peer Group
    	
175%
    
	
>   6 members of the Peer Group
    	
150%
    
	
>   5 members of the Peer Group
    	
125%
    
	
>   4 members of the Peer Group
    	
100%
    
	
>   3 members of the Peer Group
    	
75%
    
	
>   2 members of the Peer Group
    	
50%
    
	
>   1 member of the Peer Group
    	
25%
    

 

2.            If the Peer Group consists of seven companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   7 members of the Peer Group
    	
200%
    
	
>   6 members of the Peer Group
    	
171.43%
    
	
>   5 members of the Peer Group
    	
142.86%
    
	
>   4 members of the Peer Group
    	
114.29%
    
	
>   3 members of the Peer Group
    	
85.71%
    
	
>   2 members of the Peer Group
    	
57.14%
    
	
>   1 member of the Peer Group
    	
28.57%
    

 

3.            If the Peer Group consists of six companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   6 members of the Peer Group
    	
200%
    
	
>   5 members of the Peer Group
    	
166.67%
    
	
>   4 members of the Peer Group
    	
133.33%
    
	
>   3 members of the Peer Group
    	
100%
    
	
>   2 members of the Peer Group
    	
66.67%
    

 

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   1 member of the Peer Group
    	
33.33%
    

 

4.            If the Peer Group consists of five companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   5 members of the Peer Group
    	
200%
    
	
>   4 members of the Peer Group
    	
160%
    
	
>   3 members of the Peer Group
    	
120%
    
	
>   2 members of the Peer Group
    	
80%
    
	
>   1 member of the Peer Group
    	
40%
    

 

5.            If the Peer Group consists of four companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   4 members of the Peer Group
    	
200%
    
	
>   3 members of the Peer Group
    	
150%
    
	
>   2 members of the Peer Group
    	
100%
    
	
>   1 member of the Peer Group
    	
50%
    

 

6.            If the Peer Group consists of three companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   3 members of the Peer Group
    	
200%
    
	
>   2 members of the Peer Group
    	
133.33%
    
	
>   1 member of the Peer Group
    	
66.67%
    

 

7.            If the Peer Group consists of two companies at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   2 members of the Peer Group
    	
200%
    
	
>   1 member of the Peer Group
    	
100%
    

 

8.            If the Peer Group consists of one company at the end of the Performance Period:

 

	
Total   Shareholder Return
    	
Payout   as a Percentage of Target
    
	
>   1 member of the Peer Group
    	
150%
    

 

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B.         Performance Targets and Payout Percentages for GSWC Operating Expense Controls

 

	
Aggregate   GSWC Operating Expense 
   Level
    	
Payout   as a Percentage of Target
    
	
<$273.5   million
    	
150%
    
	
>$273.5 million and <$279   million
    	
125%
    
	
>$279 million and <$300   million
    	
100%
    
	
>$300 million and <$305.5   million
    	
50%
    
	
>$305.5 million
    	
0%
    

 

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C.        Performance Targets and Payout Percentages for ASUS Cumulative Net Earnings

 

	
ASUS   Cumulative Net Earnings
    	
Payout   as a Percentage of Target
    
	
>$42.7   million
    	
150%
    
	
>$36.8   million and <$42.7 million
    	
125%
    
	
>$28.1   million and <$36.8million
    	
100%
    
	
>$22.2   million and <$28.1 million
    	
50%
    
	
<$22.2   million
    	
0%
    

 

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