Exhibit 4.2
PERFORMANCE AWARD AGREEMENT
This Agreement is made as of the _______________________, between Citizens
Utilities Company, a Delaware corporation (the "Company") and ______________
(the "Grantee"). In consideration of the agreements set forth below, the Company
and the Grantee agree as follows:
1. Grant. A performance award ("Award") of ________ shares ("Award
Shares") of the Company's common stock ("Common Stock"), is
hereby granted by the Company to the Grantee subject to the
following terms and conditions and to the provisions of the
Equity Incentive Plan (the "Plan"), the terms of which are
incorporated by reference herein.
2. Transfer Restrictions. None of the Award Shares shall be sold,
assigned, pledged or otherwise transferred, voluntarily or
involuntarily, by the Grantee.
3. Release of Restrictions.
(a) The restrictions set forth in Section 2 above shall lapse
upon achievement by the Company of ____________ of Earnings
Before Interest, Taxes, Depreciation and Amortization
(EBITA) for the ________ performance period of _________.
(b) The restrictions set forth in Section 2 above with respect
to the Award Shares, to the extent they have not lapsed in
accordance with subsection (a) of this Section 3 , shall
lapse in accordance with the Plan as a result of Grantee's
disability, death, retirement or an action by the Plan
Committee, in its sole discretion, terminating such
restrictions.
4. Forfeiture. The Award Shares shall be forfeited to the Company on
__________________, if the performance criteria as provided in
Section 3 (a) is not attained or upon the Grantee's termination
of employment with the Company prior to the date the performance
period ends.
5. Adjustment of Shares. Notwithstanding anything contained herein
to the contrary, in the event of any change in the outstanding
Common Stock resulting from a subdivision or consolidation of
shares, whether through reorganization, recapitalization, share
split, reverse share split, share distribution or combination of
shares or the payment of a share dividend, the Award Shares shall
be treated in the same manner in any such transaction as other
Common Stock. Any Common Stock or other securities received by
the Grantee with respect to the Award Shares in any such
transaction shall be subject to the restrictions and conditions
set forth herein.
6. Rights as Stockholder. The Grantee shall be entitled to all of
the rights of a stockholder with respect to the Award Shares
including the right to vote such shares and to receive dividends
and other distributions payable with respect to such shares since
the Date of Award. Any stock dividends payable with respect to
such shares shall bear the same restrictions as the underlying
shares. Said restrictions shall lapse at the same time as
restrictions lapse on the underlying shares.
7. Escrow of Share Certificates. Certificates for the Award Shares
shall be issued in the Grantee's name and shall be held by the
Company's transfer agent until all performance criteria are met
or such shares are forfeited as provided herein. A certificate or
certificates representing the Award Shares as to which
restrictions have lapsed shall be delivered upon the Grantee's
request upon such lapse.
8. Government Regulations. Notwithstanding anything contained herein
to the contrary, the Company's obligation to issue or deliver
certificates evidencing the Award Shares shall be subject to all
applicable laws, rules and regulations and to such approvals by
any governmental agencies or national securities exchanges as may
be required.
9. Withholding Taxes. The Company shall have the right to require
the Grantee to remit to the Company, or to withhold from other
amounts payable to the Grantee, as compensation or otherwise, an
amount sufficient to satisfy all federal, state and local
withholding tax requirements. The Company may offer Grantee the
right to have withholding requirements satisfied by the Company's
withholding of shares upon the timely written election of Grantee
to utilize shares for withholding tax purposes.
10. Confidentiality
(a) The Grantee acknowledges that the selection of Grantee to
receive the Award Shares as well as the amount and terms of the
Award are to be held confidential by Grantee and by the Company.
Grantee may disclose the Award to immediate family members and
non-employee investment or legal advisors who all are to be
required by grantee to respect the confidentiality obligations of
Grantee. Breech of Grantee's duty of the confidentiality required
by this Section 10 shall subject Grantee to forfeiture of the
Award and other discipline including discharge.
Company shall notify Grantee of such breech of the duty of
confidentiality in writing. Grantee may within 10 days of
receipt of such notice, request review of the determination by
the Compensation Committee of Company's Board of Directors.
(b) Company may disclose information as to the Award to Employees
administering the Award, to Grantee's supervisors and to the
Company's transfer Agent. Information regarding the Award may be
disclosed by either Grantee or Company if required by the terms
of an order by any court or regulatory agency.
11. Employment. Nothing in this Agreement shall confer upon Grantee
any right to continue in the employ of Company, nor shall it
interfere in any way with the right of the Company to terminate
Grantee's employment at any time.
12. Plan. Grantee acknowledges receipt of a copy of the Plan, agrees
to be bound by the terms and provisions of the Plan, and agrees
to acknowledge, upon request of Company, receipt of any
prospectus or prospectus amendment provided to Grantee by
Company.
13. Securities Laws. Grantee agrees to comply with all applicable
securities laws upon sale or disposition of shares acquired
hereunder.
14. Notices. Notices to Company shall be addressed to it at:
3 High Ridge Park
Stamford, CT 06905
and to Grantee at:
Company or Grantee may from time to time designate in writing
different addresses for receipt of notice. Notice shall be deemed
given when properly addressed and sent first class or express
mail.
15. Governing Law. The terms of this Agreement shall be binding upon
Company, Grantee and their respective successors and assigns.
This Agreement shall be performed under and determined in
accordance with the laws of the State of Connecticut.
In Witness Thereof, the Company has caused this Award to be
granted on the date first above written.
CITIZENS UTILITIES COMPANY
By: _____________________________________
ACCEPTED BY GRANTEE:
__________________________