Exhibit 10.38
CALIFORNIA WATER SERVICE GROUP
EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
Pursuant to the Restricted Stock Award Grant Notice ("Grant Notice") and
this Restricted Stock Award Agreement (collectively, the "Award") and in
consideration of your past services, California Water Service Group (the
"Company") has awarded you restricted stock under its Equity Incentive Plan (the
"Plan") for the number of shares of the Company's Common Stock subject to the
Award as indicated in the Grant Notice. Defined terms not explicitly defined in
this Restricted Stock Award Agreement but defined in the Plan have the same
definitions as in the Plan.
The details of your Award are as follows:
1. VESTING. Subject to the limitations contained herein, your Award will
vest as provided in the Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
2. NUMBER OF SHARES. The number of shares subject to your Award may be
adjusted from time to time for Capitalization Adjustments, as provided in the
Plan.
3. SECURITIES LAW COMPLIANCE. You may not be issued any shares under your
Award unless the shares are either (i) then registered under the Securities Act
or (ii) the Company has determined that such issuance would be exempt from the
registration requirements of the Securities Act. Your Award must also comply
with other applicable laws and regulations governing the Award, and you will not
receive such shares if the Company determines that such receipt would not be in
material compliance with such laws and regulations.
4. RIGHT OF FIRST REFUSAL. Shares that are received under your Award are
subject to any right of first refusal that may be described in the Company's
bylaws in effect at such time the Company elects to exercise its right.
5. RIGHT OF REACQUISITION.
(a) To the extent provided in the Company's bylaws, as amended from
time to time, the Company will have the right to reacquire all or any part
of the shares received pursuant to your Award (a "Reacquisition Right").
(b) To the extent a Reacquisition Right is not provided in the
Company's bylaws, as amended from time to time, the Company will have a
Reacquisition Right as to the shares you received pursuant to your Award
that have not as yet vested in accordance with the Vesting Schedule on the
Grant Notice ("Unvested Shares") on the following terms and conditions:
(i) The Company will, simultaneously with termination of your
Continuous Service, automatically reacquire for no consideration all
of the Unvested Shares, unless the Company agrees to waive its
Reacquisition Right as to some or all of the Unvested Shares. Any such
waiver shall be exercised by the Company by written notice to you or
your representative (with a copy to the Escrow Holder as defined
below) within 90 days after the termination of your Continuous
Service, and the Escrow Holder may then release to you the number of
Unvested Shares not being reacquired by the Company. If the Company
does not waive its Reacquisition Right as to all of the Unvested
Shares, then upon such termination of your Continuous Service, the
Escrow Holder shall transfer to the Company the number of shares the
Company is reacquiring.
(ii) The Company will have the right to reacquire Unvested shares
for no monetary consideration (that is, for $0.00).
(iii) The shares issued under your Award will be held in escrow
pursuant to the terms of the Joint Escrow Instructions attached to the
Grant Notice as Attachment IV. You agree to execute two Assignment
Separate From Certificate forms (with date and number of shares blank)
substantially in the form attached to the Grant Notice as Attachment
III and deliver the same, along with the certificate or certificates
evidencing the shares, for use by the escrow agent pursuant to the
terms of the Joint Escrow Instructions.
(iv) Subject to the provisions of your Award, you shall, during
the term of your Award, exercise all rights and privileges of a
shareholder of the Company with respect to the shares deposited in
escrow. You will be deemed to be the holder of the shares for purposes
of receiving any dividends which may be paid with respect to such
shares and for purposes of exercising any voting rights relating to
such shares, even if some or all of such shares have not yet vested
and been released from the Company's Reacquisition Right.
(v) If, from time to time, there is any stock dividend, stock
split or other change in the character or amount of any of the
outstanding stock of the corporation the stock of which is subject to
the provisions of your Award, then in such event any and all new,
substituted or additional securities to which you is entitled by
reason of your ownership of the shares acquired under your Award will
be immediately subject to the Reacquisition Right with the same force
and effect as the shares subject to this Reacquisition Right
immediately before such event.
6. RESTRICTIVE LEGENDS. The shares issued under your Award will be endorsed
with appropriate legends determined by the Company.
7. AWARD NOT A SERVICE CONTRACT. Your Award is not an employment or service
contract, and nothing in your Award will be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or on the part of the Company or an Affiliate to continue your
employment. In addition, nothing in your Award will obligate the Company or an
Affiliate, their respective shareholders, boards of directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.
8. WITHHOLDING OBLIGATIONS.
(a) At the time your Award is made, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and
any other amounts payable to you, and otherwise agree to make adequate
provision for any sums required to satisfy the federal, state, local and
foreign tax withholding obligations of the Company or an Affiliate, if any,
which arise in connection with your Award.
(b) Unless the tax withholding obligations of the Company and/or any
Affiliate are satisfied, the Company will have no obligation to issue a
certificate for such shares or release such shares from any escrow provided
for herein.
9. TAX CONSEQUENCES. The acquisition and vesting of the shares may have
adverse tax consequences to you that may avoided or mitigated by filing an
election under Section 83(b) of the Internal Revenue Code, as amended (the
"Code"). Such election must be filed within 30 days after the date of your
Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE
COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU
REQUEST THE COMPANY TO MAKE THE FILING ON YOUR BEHALF.
10. NOTICES. Any notices provided for in your Award or the Plan will be
given in writing and will be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five days after deposit in the
United States mail, postage prepaid, addressed to you at the last address you
provided to the Company.
11. MISCELLANEOUS.
(a) The rights and obligations of the Company under your Award will be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by
the Company's successors and assigns. Your rights and obligations under
your Award may only be assigned with the prior written consent of the
Company.
(b) You agree upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company
to carry out the purposes or intent of your Award.
(c) You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award and fully understand all provisions of
your Award.
12. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of your Award, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of your Award and those of the
Plan, the provisions of the Plan will control.
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award
Grant Notice and Restricted Stock Award Agreement (the "Award"), [Participant's
Name] hereby assigns and transfers unto California Water Service Group, a
Delaware corporation ("Assignee"), __________ shares of the common stock of the
Assignee, standing in the undersigned's name on the books of said corporation
represented by Certificate No. ____ herewith and do hereby irrevocably appoint
__________________________ as attorney-in-fact to transfer the said stock to the
Assignee with full power of substitution in the premises. This Assignment may be
used only in accordance with and subject to the terms and conditions of the
Award, in connection with the reacquisition of shares of common stock of the
Assignee issued to the undersigned pursuant to the Award, and only to the extent
that such shares remain subject to the Assignee's reacquisition right under the
Award.
Dated:
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Signature:
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[Participant's Name], Recipient
JOINT ESCROW INSTRUCTIONS
[date]
Corporate Secretary
California Water Service Group
c/o California Water Service Company
0000 X. Xxxxx Xx.
Xxx Xxxx, XX 00000
Dear Sir/Madam:
As Escrow Agent for both California Water Service Group, a Delaware
corporation (the "Company"), and the undersigned recipient of stock of the
Company ("Recipient"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Restricted
Stock Award Grant Notice (the "Grant Notice"), dated ________________ to which a
copy of these Joint Escrow Instructions is attached as Attachment IV, and
pursuant to the terms of that certain Restricted Stock Award Agreement
("Agreement"), which is Attachment I to the Grant Notice, in accordance with the
following instructions:
1. In the event Recipient ceases to render services to the Company or an
affiliate of the Company during the vesting period set forth in the Grant
Notice, the Company or its assignee will give to Recipient and you a written
notice specifying that the shares of stock will be transferred to the Company.
Recipient and the Company hereby irrevocably authorize and direct you to close
the transaction contemplated by such notice in accordance with the terms of said
notice.
2. At the closing you are directed (a) to date any stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company.
3. Recipient irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Grant Notice.
Recipient does hereby irrevocably appoint you as Recipient's attorney-in-fact
and agent for the term of this escrow to execute with respect to such securities
and other property all documents of assignment and/or transfer and all stock
certificates necessary or appropriate to make all securities negotiable and
complete any transaction herein contemplated.
4. This escrow will terminate upon vesting of the shares or upon the
earlier return of the shares to the Company.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Recipient,
you shall deliver all of same to any pledgee entitled thereto or, if none, to
Recipient and will be discharged of all further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and will be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You will not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while
acting in good faith and any act done or omitted by you pursuant to the advice
of your own attorneys will be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
you will not be liable to any of the parties hereto or to any other person, firm
or corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You will not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver the Grant Notice or any documents or papers deposited or
called for hereunder.
10. You will not be liable for the outlawing of any rights under any
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You will be entitled to employ such legal counsel, including but not
limited to Xxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxx, LLP, and other experts as
you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent xxxxxxxxx will terminate if you
cease to be Secretary of the Company or if you resign by written notice to each
party. In the event of any such termination, the Company may appoint any officer
or assistant officer of the Company as successor Xxxxxx Agent and Recipient
hereby confirms the appointment of such successor or successors as his
attorney-in-fact and agent to the full extent of your appointment.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities, you
may (but are not obligated to) retain in your possession without liability to
anyone all or any part of said securities until such dispute has settled either
by mutual written agreement of the parties concerned or by a final order, decree
or judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but you will be under no duty
whatsoever to institute or defend any such proceedings.
15. Any notice required or permitted hereunder will be given in writing and
will be deemed effectively given upon personal delivery or upon deposit in any
United States Post Box, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties hereunto entitled at the
following addresses, or at such other addresses as a party may designate by 10
days' written notice to each of the other parties hereto:
COMPANY: California Water Service Group
c/o California Water Service Company
0000 X. Xxxxx Xx.
Xxx Xxxx, XX 00000
Attn: General Counsel / Chief Financial Officer
RECIPIENT:
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ESCROW AGENT: California Water Service Group
c/o California Water Service Company
0000 X. Xxxxx Xx.
Xxx Xxxx, XX 00000
Attn: Corporate Secretary
16. By signing these Joint Escrow Instructions you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Grant Notice.
17. This instrument will be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Grant Notice and these Joint Escrow Instructions in
whole or in part.
Very truly yours,
CALIFORNIA WATER SERVICE GROUP
By:
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RECIPIENT
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[Participant's Name]
ESCROW AGENT:
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