EXHIBIT 10.17
SJW CORP.
STOCK OPTION
DIVIDEND EQUIVALENT RIGHTS AGREEMENT
------------------------------------
RECITALS
--------
A. The Board has adopted the Plan for the purpose of retaining the services
of selected Employees and non-employee members of the Board (or the board of
directors of any Parent or Subsidiary).
B. Participant has this day been granted an Option under the Plan which
provides for dividend equivalent rights with respect to the shares of Common
Stock subject to that Option.
C. The purpose of this Agreement is to set forth the terms and conditions
governing those dividend equivalent rights.
C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the Plan and the Notice of Grant and Stock Option Agreement
evidencing the granted Option (collectively, the "Option Agreement").
NOW, THEREFORE, it is hereby agreed as follows:
1. An Option Deferred Stock Account with respect to the Option will be
established for the Participant on the books and records of the Corporation.
2. Each time a dividend is paid on the Corporation's outstanding shares of
Common Stock after the Grant Date, the Option Deferred Stock Account will be
credited with a dollar amount equal to the amount of that dividend paid per
share multiplied by the number of shares of Common Stock at the time subject to
the Option (plus the number of shares previously credited to the Option Deferred
Stock Account pursuant to the dividend equivalent rights hereunder) as of the
record date for the dividend; provided, however, that no further amounts shall
be credited after the earlier of the fourth anniversary of the Grant Date or the
first exercise of the Option.
3. As of the first business day in January each year, the cash dividend
amounts credited to the Option Deferred Stock Account during the immediately
preceding calendar year shall be converted into a book entry of an additional
number of shares of Common Stock determined by dividing (i) those cash dividend
equivalent amounts by (ii) the average of the Fair Market Value per share of
Common Stock on each of the dates in the immediately preceding calendar year on
which those dividend amounts were credited to the Option Deferred Stock Account.
4. The shares of Common Stock credited to the Option Deferred Stock Account
will vest at the same time and in the same manner as the Option Shares to which
they are attributable vest. The shares which so vest shall be distributed to the
Participant in the form of actual shares of Common Stock issued under the Plan
on the earlier of the following dates (the "Distribution Date"): (i) the fourth
anniversary of the Grant Date of the Option or (ii) the date of the
Participant's separation from service (as determined in accordance with the
provisions of Code Section 409A and the applicable Treasury Regulations
thereunder) or as soon after such Distribution Date as administratively
practicable, but in no event later than the end of the calendar year in which
the Distribution Date occurs or (if later) the fifteenth day of the third
calendar month following such date. Such payment shall be subject to the
Corporation's collection of all applicable withholding taxes. In no event shall
any shares of Common Stock credited to the Option Deferred Stock Account be
distributed to the Participant if and to the extent those shares do not vest in
accordance with the foregoing provisions.
5. Notwithstanding any provision to the contrary in the Plan, the Option
Agreement or this Agreement, no distribution which becomes due and payable by
reason of the Participant's separation from service shall be made to a
Participant prior to the earlier of (i) the expiration of the six (6)-month
period measured from the date of such separation from service or (ii) the date
of his or her death, if the Participant is deemed at the time of such separation
from service to be a "key employee" within the meaning of that term under Code
Section 416(i) and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2). Upon the
expiration of the applicable Code Section 409A(a)(2) deferral period, all
distributions deferred pursuant to this Paragraph 5 shall be paid in a lump sum
to the Participant.
6. This Agreement and the Dividend Equivalent Rights evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan and the Option Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
_______ day of _______________, 2006.
SJW CORP.
By: __________________________________
Title: _______________________________
______________________________________
PARTICIPANT
