Annual Option Payments. Commencing ​, PEF shall pay an “Annual Option Payment” equal to the product of 30% of 2,000 AF (representing the maximum Annual Volume discussed in [Section 3.1] above) multiplied by that year’s Unit Volume Charge (discussed in [Section 7.2] below). On or after ​, if PEF elects to increase the maximum Annual Volume in accordance with [Section 3.2] above, the Annual Option Payment shall be increased for the remainder of the Term of the Agreement such that PEF shall pay an Annual Option Payment equal to the product of 30% of 3,500 AF (representing the maximum increased Annual Volume discussed in [Section 3.2] above) multiplied by that year’s Unit Volume Charge (discussed in [Section 7.2] below). By way of example:

Annual LTIP Option Award. For each fiscal year of the Company, except as otherwise determined by the Committee and set forth in the applicable Award Agreement, the Annual LTIP Option Award with respect to each Participant # shall vest as to one-fourth of the shares of Common Stock subject to such Annual LTIP Option Award on each of the first four anniversaries of the Grant Date, subject to the Participant’s continued employment with the Company through the applicable vesting date (except as may be otherwise provided in the Award Agreement), and # shall have such other terms and conditions as shall be set forth in the applicable Award Agreement approved by the Committee.

The Annual Option Payment will be credited toward Unit Volume Payments discussed in [Section 7.2] below and Groundwater Storage and Recovery Payments discussed in [Section 7.3] below. If the Annual Option Payment exceeds the amount of the Unit Volume Payments, Tejon shall retain any balance.

Tejon shall invoice PEF monthly for Unit Volume Payments for Annual Volume and Additional Supply delivered to the Points of Delivery. The balance owed for Unit Volume Payments in excess of Annual Option Payment shall be paid within 30 days of receipt of invoice from Tejon.

Annual. After the end of each fiscal year of Regional, and in any event within 120 days thereafter, # balance sheets and # statements of income of Regional and its Subsidiaries, prepared on a consolidated basis including a Special Purpose Subsidiary; together with:

“Annual Accelerated Put Option Multiple”: with respect to the Annual Accelerated Put Option Right, the following multiple:

Option. An option to purchase shares of Common Stock granted to a Participant pursuant to Section 6.

Option. On the terms and conditions set forth in the 2005 Stock Option Plan (the “Plan”) and this Stock Option Agreement (“Agreement”), ​, a California corporation (the “Corporation”) grants to , ☐ an Employee or ☐ an Outside Director or ☐ a Consultant (the “Optionee”), on ,20 (the “Date of Grant”), the option to purchase ( ) shares of Common Stock (the “Option Shares”), at the Exercise Price per share of $ (the “Exercise Price”) (not to be less than eighty-five percent [85%] of Fair Market Value, or one hundred percent [100%] of Fair Market Value for Ten Percent Holders). This Option is intended to be ☐ an ISO (Employees only) or ☐ an NQSO. This Option will expire ☐ sixty (60) months after the Date of Grant (maximum for an ISO granted to a Ten Percent Holder) or ☐ one hundred twenty (120) months after the Date of Grant (maximum) or ☐ . Vesting of this grant shall commence on ,20 (“Initial Vest Date”).

Option. I was granted an option (the “Option”) to purchase shares of the common stock (the “Shares”) of ​ (the “Company”) pursuant to the Company’s (choose one) ☐ 2006 Equity Incentive Plan or ☐ 2004 Equity Incentive Plan or the ☐ Taxcient, Inc. 2005 Stock Option Plan (each, a “Plan”), my Stock Option Agreement (the “Option Agreement”) and/or my Notice of Grant of Stock Option (the “Notice”), as follows:

Annual Bonus. In addition to Base Salary, the Executive will be eligible to earn a Bonus for each fiscal year ending during the Protected Period. For each such Bonus, the Target Opportunity will be at least equal to the target opportunity for which the Executive is eligible for the fiscal year in which the Change in Control occurs, as such target opportunity has been established by the Company for such year under the Company’s annual bonus plan, or any comparable successor plan. If the Company has not yet established a Target Opportunity for the Executive for the fiscal year in which the Change in Control occurs, then the Target Opportunity shall be at least equal to the last such target opportunity established by the Company for the Executive. Each such Bonus will be paid no later than 2-1/2 months following the end of the fiscal year for which the Bonus is awarded, unless the Executive has elected to defer receipt of all or part of the Bonus pursuant to a deferral plan sponsored by the Company.