ALEXANDER & BALDWIN, INC.
1998 STOCK OPTION/STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
Discretionary Option Grant Program
AGREEMENT made as of _____________, by and between
ALEXANDER & BALDWIN, INC., a Hawaii corporation (the "Company"), and
___________________________________________ (the "Optionee").
W I T N E S S E T H:
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RECITALS
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A. The Company has, with the approval of the shareholders, adopted the
Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan (the "Plan")
for the purpose of providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Company as an incentive for them to join and/or remain in the service of the
Company or its subsidiaries.
B. Optionee is an individual who is to render valuable services to the
Company or its subsidiaries, and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the Company's
grant of a stock option to Optionee.
C. The granted option is intended to be a non-qualified stock option
which does not satisfy the requirements of Section 422 of the Internal Revenue
Code.
D. For purposes of this Agreement, the following definitions shall be
in effect:
Common Stock: Common Stock shall mean the shares of the
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Company's common stock, without par value.
Employee: Optionee shall be considered to be an Employee for so
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long as such individual remains in the employ of the Company or one or more of
its Subsidiaries.
Parent: A corporation shall be deemed to be a Parent of the Company
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if it is a corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken
chain (other than the Company) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
Section 16(b) Insider: Optionee shall be considered to be a
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Section 16(b) Insider on any relevant date under this Agreement if Optionee is
at the time an officer or director of the Company subject to the short-swing
profit restrictions of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Service: Optionee shall be deemed to be in the Service of the
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Company for so long as Optionee renders services on a periodic basis to the
Company (or any Subsidiary or Parent) as an Employee.
Subsidiary: A corporation shall be deemed to be a Subsidiary
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of the Company if it is a member of an unbroken chain of corporations beginning
with the Company, provided each corporation in such chain (other than the last
corporation) owns, at the time of determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain. The term "Subsidiary" shall also
include any partnership, joint venture or other business entity of which the
Company owns, directly or indirectly through another subsidiary corporation,
more than a fifty percent (50%) interest in voting power, capital or profits.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. Subject to and upon the terms and
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conditions set forth in this Agreement, the Company hereby grants to Optionee,
as of the date of this Agreement (the "Grant Date"), a stock option to purchase
up to _________ shares of Common Stock (the "Optioned Shares") at the price of
the Fair Market Value on the date of this Agreement per share (the "Option
Price"). In addition, Optionee shall be eligible to receive a new option (a
"reload option"), subject to the terms and conditions set forth in the Addendum
attached hereto and incorporated herein by reference, on each occasion Optionee
exercises this option for one or more Optioned Shares by delivering
previously-acquired shares of Common Stock in payment of the Option Price and
satisfying certain other conditions set forth in such Addendum.
2. Option Term. This option shall have a maximum term of ten
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years measured from the Grant Date and shall accordingly expire at the close of
business on ____________ (the "Expiration Date"), unless sooner terminated in
accordance with Paragraph 5 or 7 of this Agreement.
3. Limited Transferability. During the Optionee's lifetime,
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this option shall be exercisable only by Optionee and shall not be transferable
or assignable by Optionee except for a transfer of this option by will or by the
laws of descent and distribution following Optionee's death.
4. Exercisability. The option shall become exercisable for the
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Optioned Shares in a series of three (3) successive equal annual installments,
as set forth in the Exercise Schedule below, with the first such installment to
become exercisable on the first anniversary of the Grant Date. As the option
becomes exercisable for one or more installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the expiration or sooner termination of the option term.
Except as otherwise expressly provided in subparagraph 5(iv) below, the option
shall not become exercisable for any additional Optioned Shares following
Optionee's cessation of Service.
Exercise Schedule
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Number of
Optioned Shares Exercise Date
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5. Cessation of Service; Termination of Options. The option
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term specified in Paragraph 2 shall terminate (and this option shall cease to be
exercisable) prior to the Expiration Date should one of the following provisions
become applicable:
(i) Except as otherwise provided in
subparagraphs (ii) through (vi) below, should Optionee cease to remain in the
Service of the Company at any time during the option term, then the period for
exercising this option shall be reduced to a three-month period commencing with
the date of such cessation of Service. During such three-month period, this
option may not be exercised for more than that number of Optioned Shares
(if any) for which this option is exercisable at the time of Optionee's
cessation of Service. In no event, however, shall this option be exercisable at
any time after the Expiration Date.
(ii) If Optionee is a Section 16(b) Insider
at the time of cessation of Service, then Optionee shall have a period of six
months following such cessation of Service in which to exercise this option for
any or all of the Optioned Shares for which this option is exercisable at the
time of Optionee's cessation of Service. In no event, however, shall this
option be exercised at any time after the specified Expiration Date.
(iii) Should Optionee die while this option
is outstanding, then (A) this option, to the extent it is not otherwise at the
time fully exercisable, shall automatically accelerate so that such option shall
become fully exercisable with respect to the total number of Optioned Shares at
the time subject to this option, and (B) the personal representative of
Optionee's estate (or the person or persons to whom the option is transferred
pursuant to Optionee's will or in accordance with the laws of descent and
distribution) shall have the right to exercise this option for any or all of the
Optioned Shares. Such right shall lapse, and this option shall cease to be
exercisable, upon the earlier of (A) the expiration of the twelve-month period
measured from the date of Optionee's death or (B) the Expiration Date.
(iv) Should Optionee retire on or after
attaining age fifty-five (55) in accordance with the terms of the Company's
retirement plan, or become disabled and cease by reason thereof to remain in the
Service of the Company, at any time while this option is outstanding, then
Optionee shall have a period of three years (commencing with the date of such
retirement or cessation of Service) to exercise this option for (i) any or all
of the Optioned Shares for which this option is exercisable at the time of
Optionee's retirement or cessation of Service and (ii) any additional Optioned
Shares for which the option becomes exercisable during the subsequent three-year
period. In no event, however, shall this option be exercised at any time after
the Expiration Date. For purposes of this Agreement, Optionee shall be deemed to
be disabled if Optionee is, by reason of any medically-determinable physical or
mental impairment (A) which is expected to result in death or (B) which is
expected to be, or is, of continuous duration of twelve consecutive months or
more, unable to perform his/her usual duties for the Company (or any Subsidiary
or Parent) employing his/her services.
(v) Should Optionee's Service be terminated
for Misconduct, or should Optionee (a) engage in any post-Service activity,
whether as an Employee, consultant, advisor, or otherwise, competitive with the
business operations of the Company (or any Subsidiary or Parent), or (b) engage
in any other conduct, while in Service or following cessation of Service,
materially detrimental to the business or affairs of the Company (or any
Subsidiary or Parent), as determined in the sole discretion of the Plan
Administrator, then this option shall terminate immediately and cease to be
outstanding. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
such person of confidential information or trade secrets of the Company (or any
Subsidiary or Parent), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Company (or any Subsidiary
or Parent) in a material manner. The foregoing definition shall not be deemed to
be inclusive of all the acts or omissions which the Company (or any Subsidiary
or Parent) may consider as grounds for the dismissal or discharge of any
Optionee or other person in the Service of the Company (or any Subsidiary or
Parent).
(vi) Except as otherwise expressly provided
in subparagraph 5(iv) above, upon Optionee's cessation of Service, this option
shall, to the extent it is not otherwise exercisable at the time, for one or
more Optioned Shares, immediately terminate and cease to be outstanding with
respect to those shares.
6. Adjustment in Optioned Shares.
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a. In the event any change is made to the Common Stock by
reason of any stock dividend, stock split, combination of shares or other change
affecting the outstanding Common Stock as a class without the Company's receipt
of consideration, the number and/or class of shares purchasable under this
option and the Option Price payable per share shall be adjusted appropriately to
prevent the dilution or enlargement of Optionee's benefits hereunder.
b. If this option remains outstanding following any
merger or other business combination involving the Company, then this option
shall be adjusted appropriately to apply and pertain to the number and class of
securities which would have been issuable, in the consummation of such merger or
business combination, to an actual holder of Common Stock for the same number of
shares as are subject to this option immediately prior to such merger or
business combination. Appropriate adjustments also shall be made to the Option
Price payable per share; provided, however, that the aggregate Option Price
shall remain the same.
7. Acceleration and Cancellation of Options. In the event
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there should occur a Change in Control (defined below), then this option, to the
extent outstanding at the time, but not otherwise fully exercisable, shall
automatically accelerate so that such option shall, immediately prior to the
specified effective date of the Change in Control, become fully exercisable for
the total number of Optioned Shares at the time subject to this option and may
be exercised for all or any portion of such Optioned Shares. Immediately
following the consummation of the Change in Control, all outstanding options
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise expressly continued in
full force and effect pursuant to the terms of the Change in Control
transaction.
"Change in Control" shall mean a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the 1934 Act, whether or not
the Company in fact is required to comply with Regulation 14A thereunder;
provided that, without limitation, such a change in control shall be deemed to
have occurred if:
(i) any "person" (defined as such term is used in
Sections 13(d) and 14(d) of the 1934 Act) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Company representing 35% or more of the combined voting power
of the Company's then outstanding securities;
(ii) at least a majority of the Company's Board of
Directors (the "Board") ceases to consist of (a) individuals who have served
continuously on the Board since January 1, 2001 and (b) new directors (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least two-thirds of the directors then still in office
who shall at that time have served continuously on the Board since January 1,
2001 or whose election or nomination was previously so approved;
(iii) there is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of the Company with any
other entity, other than (a) a merger or consolidation immediately following
which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the Company, the
entity surviving such merger or consolidation or any parent thereof or (b) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person is or becomes the beneficial owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly
from the Company or its affiliates) representing 35% or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity at least a majority of
the board of directors of which or of any parent thereof is comprised of
individuals who comprised the Board immediately prior to such sale or
disposition.
Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
8. Shareholder Rights. The holder of this option shall have
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none of the rights of a shareholder with respect to the Optioned Shares until
such individual shall have exercised the option, paid the Option Price and been
issued one or more stock certificates for the purchased shares.
9. Manner of Exercising Option.
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a. In order to exercise this option for one or more of the
Optioned Shares, Optionee (or in the case of exercise after Optionee's death,
Optionee's legal representative, executor, administrator, heir or legatee, as
the case may be) must take the following actions:
(i) Deliver to the Secretary of the Company, or his/her
designee, a written notice of exercise (the "Exercise Notice") in which there is
specified the number of Optioned Shares for which the Option is being exercised.
(ii) Pay the aggregate Option Price for the purchased
shares in one of the following alternative forms:
full payment in cash or cash equivalents, such as a
certified check, bank draft, personal check or postal or express money
order made payable to the Company's order; or
full payment in shares of Common Stock held by the
Optionee for the requisite period necessary to avoid a charge to the
Company's reported earnings and valued at Fair Market Value on the
Exercise Date; or
full payment in a combination of the foregoing.
(iii) Furnish to the Company appropriate documentation
that the person or persons exercising the option, if other than Optionee, have
the right to exercise this option.
b. For purposes of this Agreement, the following
definitions shall be in effect:
Exercise Date: The Exercise Date shall be the first date on
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which there shall have been delivered to the Company both (I) the
Exercise Notice and (II) the payment of the Option Price for the
purchased shares.
Fair Market Value: The Fair Market Value of a share of Common
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Stock on any relevant date shall be the mean between the highest and
lowest selling prices per share of Common Stock on the date in
question, as quoted on the NASDAQ National Market (or any successor
system). Should the Common Stock become traded on a national securities
exchange, then the Fair Market Value per share shall be the mean
between the highest and lowest selling prices on such exchange on the
date in question. If there is no reported sale of Common Stock on the
NASDAQ National Market (or national securities exchange) on the date in
question, then the Fair Market Value shall be the mean between the
highest and lowest selling prices on the NASDAQ National Market (or
such securities exchange) on the last preceding date for which such
quotations exist.
c. As soon as practicable after the Exercise Date,
the Company shall issue to Optionee (or to the other person or persons
exercising this option) a certificate or certificates representing the purchased
shares.
d. In no event may this option be exercised for any
fractional shares.
10. Compliance with Laws and Regulations.
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a. The exercise of this option and the issuance of
Optioned Shares upon such exercise shall be subject to compliance by the Company
and Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange on which shares of the Common
Stock may be listed at the time of such exercise and issuance.
b. In connection with the exercise of this option,
Optionee shall execute and deliver to the Company such representations in
writing as may be requested by the Company in order for it to comply with the
applicable requirements of federal and state securities laws.
11. Successors and Assigns. Except to the extent otherwise
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provided in Paragraph 3 or 7, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, administrators, heirs,
legal representatives and assigns of Optionee and the successors and assigns of
the Company.
12. Non-Liability of Company.
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a. If the Optioned Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall
be void with respect to such excess shares unless stockholder approval of an
amendment to the Plan sufficiently increasing the number of shares of Common
Stock issuable thereunder is obtained.
b. The inability of the Company to obtain approval
from any regulatory body having authority deemed by the Company to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Company of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
However, the Company shall use reasonable efforts to obtain all such approvals.
13. No Impairment of Company's Rights. This Agreement shall
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not in any way affect the right of the Company to adjust, reclassify, reorganize
or otherwise make changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
14. No Employment or Service Contract. Nothing in this
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Agreement or in the Plan shall confer upon Optionee any right to continue in the
Service of the Company (or any Subsidiary or Parent employing or retaining
Optionee) for any period of time or otherwise interfere with or restrict in any
way the rights of the Company (or such Subsidiary or Parent) or Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's Service at
any time for any reason whatsoever, with or without cause.
15. Notices. Any notice required to be given or delivered to
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the Company under the terms of this Agreement shall be in writing and addressed
to the Company in care of the Corporate Secretary or his/her designee at the
principal corporate offices at 822 Bishop Street, Honolulu, HI 96813. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on this
Agreement. All notices shall be deemed to have been given or delivered upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
16. Construction. This Agreement and the option evidenced
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hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the express terms and provisions of the Plan. All decisions of
the Plan Administrator with respect to any question or issue arising under the
Plan or this Agreement shall be conclusive and binding on all persons having an
interest in this option.
17. Tax Withholding.
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a. The Company's obligation to deliver shares of Common
Stock upon the exercise of this option shall be subject to the satisfaction of
all applicable Federal, State and local income and employment tax withholding
requirements.
b. Optionee may elect to have the Company withhold,
at the time this option is exercised, a portion of the shares purchased under
the option with an aggregate Fair Market Value equal to the designated
percentage (any multiple of 5% up to 100% as specified by Optionee) of the
applicable Federal and State income tax withholding liability incurred by
Optionee in connection with the option exercise (the "Withholding Taxes").
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the date
the amount of the Withholding Taxes incurred by Optionee in connection
with the exercise of the option is determined (the "Tax Determination
Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval of
the Plan Administrator, either at the time the election is made or at
any earlier time, and none of the shares purchased under the option
actually shall be withheld in satisfaction of the Withholding Taxes
incurred in connection with the exercise of the option, except to the
extent the election is so approved by the Plan Administrator.
(iv) The shares withheld pursuant to the election
shall be valued at Fair Market Value on the Tax Determination Date in
accordance with the valuation provisions of paragraph 9.b of this
Agreement.
(v) In no event may the number of shares of Common
Stock requested to be withheld exceed in Fair Market Value the dollar
amount of the Withholding Taxes incurred by Optionee in connection with
the exercise of the option.
c. Optionee may elect to deliver to the Company, at
the time the option is exercised, shares of Common Stock previously acquired by
such individual (other than in connection with such option exercise) with an
aggregate Fair Market Value equal to the designated percentage (any multiple of
5% up to 100% as specified by Optionee) of the Withholding Taxes incurred by
Optionee in connection with the option exercise.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the Tax
Determination Date.
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval of
the Plan Administrator, either at the time the election is made or at
any earlier time, and none of the delivered shares shall be accepted in
satisfaction of the Withholding Taxes, except to the extent the
election is so approved by the Plan Administrator.
(iv) The delivered shares shall be valued at Fair
Market Value on the Tax Determination Date in accordance with the
valuation provisions of paragraph 9.b of this Agreement.
(v) In no event may the number of delivered shares
exceed in Fair Market Value the dollar amount of the Withholding Taxes
incurred by the Optionee in connection with the exercise of the option.
18. Governing Law. The interpretation, performance, and
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enforcement of this Agreement shall be governed by the laws of the State of
Hawaii.
19. Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in duplicate on its behalf by its duly authorized officer, and
Optionee also has executed this Agreement in duplicate, all as of the day and
year indicated above.
ALEXANDER & BALDWIN, INC.
By
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Its Vice President
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Optionee
Address:
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ADDENDUM
TO
NON-QUALIFIED STOCK OPTION AGREEMENT
The provisions of this Addendum hereby are incorporated into,
and made a part of, that certain Non-Qualified Stock Option Agreement dated
____________ (the "Option Agreement"), by and between the Company and Optionee,
evidencing the option grant (the "Original Option") made on such date to
Optionee under the terms of the Company's 1998 Stock Option/Stock Incentive Plan
(the "Plan"). All capitalized terms in this Addendum shall have the meanings
assigned to them in the Option Agreement.
RELOAD OPTION GRANT
1. Automatic Reload Grant. Optionee hereby is made eligible to
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receive one or more automatic option grants under the Plan to the extent
Optionee subsequently exercises the Original Option on one or more separate
occasions, in accordance with the following requirements:
(i) The Original Option is exercised prior to the expiration
of the five (5)- year period measured from its Grant Date.
(ii) The Option Price is, in connection with such exercise,
paid in shares of Common Stock held by the Optionee for a period of at
least six (6) months.
(iii) The Original Option is exercised by Optionee, and not by
the legal representative, heirs or legatees of the Optionee's estate.
On each occasion on which the Original Option is so exercised
by Optionee, Optionee automatically shall be granted at that time (the "Reload
Grant Date") a new option (the "Reload Option") to purchase the same number of
shares of Common Stock as is delivered in payment of the Option Price. No reload
option will be granted for shares of Common Stock delivered or withheld in
satisfaction of the withholding tax liability arising from such exercise.
2. Reload Option Terms. The terms and provisions of each
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Reload Option granted pursuant to this Addendum shall be exactly the
same as the terms and provisions of the Original Option as set forth in
the Option Agreement to which this Addendum is attached, except to the
extent otherwise indicated below:
A. Option Price. The option price per share of the Common
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Stock purchasable under the Reload Option (the "Reload Option Price")
shall be equal to the greater of (i) the mean between the highest and
lowest selling prices per share of Common Stock as quoted on the NASDAQ
National Market or any successor system on the Reload Grant Date or
(ii) one hundred fifty percent (150%) of the Option Price per share in
effect under the Original Option.
B. Payment. The Reload Option Price shall become immediately
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due upon exercise of the Reload Option and shall be payable in any of
the forms authorized under the Option Agreement for payment of the
Option Price.
C. Exercisability. The Reload Option shall not become
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exercisable until all the Option Shares purchased under the Original
Option on the Reload Grant Date have been held by Optionee (or the
legal representatives or heirs or legatees of Optionee's estate) for a
period of at least two (2) years measured from the Reload Grant Date.
In the event any of such Option Shares are sold or otherwise cease to
be held by Optionee before the end of such two (2)- year period, the
Reload Option immediately shall expire in its entirety. Upon the
satisfaction of such holding period requirement, the Reload Option
shall become exercisable for any or all of the shares of Common Stock
at the time subject to such option and shall remain so exercisable
until the expiration or sooner termination of the option term of the
Reload Option. The exercisability of the Reload Option shall, however,
be subject to acceleration in accordance with Paragraph 5 of this
Addendum.
D. Option Term. The Reload Option shall have the same maximum
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option term and Expiration Date as the Original Option, subject to
earlier termination, pursuant to the provisions of the Option
Agreement, in connection with the Optionee's cessation of Service.
E. Limited Transferability. During Optionee's lifetime, the
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Reload Option shall be exercisable only by the Optionee and shall not
be assignable or transferable by Optionee other than by will or by the
laws of descent and distribution following Optionee's death.
3. No Additional Reload Option. No additional Reload Option
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shall be granted in connection with the exercise of any Reload Option
granted pursuant to this Addendum, whether or not shares of Common
Stock are delivered in payment of the Reload Option Price in effect
under that Reload Option.
4. Stockholder Rights. The holder of the Reload Option shall
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have none of the rights of a stockholder with respect to any shares
covered by the Reload Option until such individual shall have exercised
the Reload Option, paid the Reload Option Price and satisfied all other
conditions precedent to the issuance of certificates for the purchased
shares.
5. Change in Control. The following provisions shall govern
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the treatment of each Reload Option granted pursuant to this Addendum
in the event a Change in Control (as such term is defined in the Option
Agreement) should occur while that Reload Option is outstanding:
A. Should such Change in Control occur while the reload option
is outstanding, then the reload option will, immediately prior to the
specified effective date of the Change in Control, become exercisable
for all the shares of Common Stock at the time subject to that option,
and may be exercised for any or all of those shares.
B. Upon the consummation of the Change in Control, the Reload
Option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation or its parent company or
otherwise expressly continued in full force and effect pursuant to the
terms of the Change in Control transaction.
C. If the Company is the surviving entity in any merger or
other business combination which does not result in the termination of
the Reload Option, then the Reload Option shall be adjusted
appropriately to apply and pertain to the number and class of
securities which would be issuable, in consummation of such merger or
business combination, to an actual holder of the same number of shares
of Common Stock as is subject to such Reload Option immediately prior
to such merger or business combination. Appropriate adjustments shall
be made to the Reload Option Price per share payable under the Reload
Option, provided the aggregate Reload Option Price shall remain the
same.
D. The grant of any Reload Option pursuant to this Addendum
shall in no way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
6. Miscellaneous Provisions. Each Reload Option granted
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pursuant to this Addendum shall be subject to the following additional
terms and provisions.
A. The Company's obligation to deliver shares of Common Stock
upon the exercise of each Reload Option shall be subject to the
satisfaction of all applicable Federal, State and local income and
employment tax withholding requirements.
B. To the extent the Optionee has the right to have a portion
of the shares purchased under the Original Option withheld by the
Company in satisfaction of the applicable withholding taxes incurred in
connection with the exercise of that Option (or otherwise to deliver
existing shares of Common Stock in satisfaction of such tax liability),
the Optionee shall have the similar right with respect to the
withholding tax liability incurred in connection with the exercise of
the Reload Option.
ALEXANDER & BALDWIN, INC.
RESTRICTED STOCK ISSUANCE AGREEMENT
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AGREEMENT made as of _______________, by and between ALEXANDER &
BALDWIN, INC., a Hawaii corporation (the "Corporation"), and
_________________________ (the "Participant").
All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the Corporation's 1998 Stock Option/Stock
Incentive Plan, as amended (the "Plan").
A. ISSUANCE OF SHARES
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1. Issuance. In consideration for Services and as an incentive to
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remain in the Service of the Corporation (or any Parent or Subsidiary), the
Participant shall be issued __________ shares (the "Issued Shares") of common
stock of the Corporation (the "Common Stock") pursuant to the provisions of the
Stock Issuance Program of the Plan. The Issued Shares shall have an issue price
per share equal to the mean between the highest and lowest selling prices per
share of Common Stock as quoted on the NASDAQ National Market or any successor
system on the date of this Agreement. The Issued Shares shall be unvested and
shall be subject to cancellation under the terms described in Paragraph C.2
hereof.
2. Stockholder Rights. Until such time as the Issued Shares vest
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pursuant to the provisions of Paragraph C.1 hereof, the Participant shall have
all the rights of a stockholder (including voting, dividend and liquidation
rights) with respect to the Issued Shares, subject, however, to the
restrictions and conditions of this Agreement.
3. Escrow. The Corporation shall hold the Issued Shares in escrow
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until those shares have vested in accordance with the vesting schedule described
in Paragraph C.1 hereof. The Issued Shares which so vest shall be released from
escrow upon the Participant's payment to the Corporation of the federal and
state income and employment withholding taxes to which the Participant becomes
subject by reason of the Participant's vesting in the Issued Shares.
4. Compliance with Law. Under no circumstances shall shares of
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Common Stock be issued or delivered to the Participant pursuant to the
provisions of this Agreement unless there shall have been compliance with all
applicable requirements of Federal and state securities laws, all applicable
listing requirements of the Nasdaq National Market or any successor system and
all other requirements of law or of any regulatory bodies having jurisdiction
over such issuance and delivery.
B. TRANSFER RESTRICTIONS
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1. Restriction on Transfer. The Participant shall not transfer,
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assign, encumber or otherwise dispose of any of the Issued Shares which are
subject to the cancellation provisions of Paragraph C.2 hereof.
2. Restrictive Legend. The stock certificate(s) for unvested Issued
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Shares shall be endorsed with the following restrictive legend:
"THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY HAVE BEEN ISSUED
PURSUANT TO THE PROVISIONS OF THE STOCK ISSUANCE PROGRAM OF THE
ALEXANDER & BALDWIN, INC. 1998 STOCK OPTION/STOCK INCENTIVE PLAN, AS
AMENDED ("PLAN") AND ARE SUBJECT TO CANCELLATION BY THE CORPORATION,
UPON THE TERMS AND CONDITIONS SPECIFIED IN A WRITTEN AGREEMENT DATED AS
OF _________________ BETWEEN THE CORPORATION AND THE REGISTERED HOLDER
OF THE SHARES. A COPY OF SUCH AGREEMENT IS MAINTAINED AT THE
CORPORATION'S PRINCIPAL CORPORATE OFFICES. WHILE SUCH CANCELLATION
RIGHT IS IN EFFECT, THE CERTIFICATE AND THE SHARES REPRESENTED HEREBY
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR PLEDGED."
C. VESTING/CANCELLATION OF THE ISSUED SHARES
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1. Vesting. The Issued Shares shall initially be unvested and
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subject to cancellation in accordance with the provisions of Paragraph C.2
hereof. The following vesting schedule shall be in effect for the Issued Shares:
Twenty percent (20%) of the Issued Shares shall vest in five
(5) successive equal annual installments upon Participant's completion
of each year of Service over a five-year period measured from the date
of this Agreement; provided, however, that any unvested shares shall
automatically vest upon the occurrence of:
(i) the Participant's normal retirement (age 65) or approved early
retirement (age 55 plus 5 years Service), or
(ii) the Participant's termination of Service by reason of death or
Permanent Disability.
Upon vesting, the Participant shall acquire a fully-vested
interest in, and the transfer restrictions of Paragraph B hereof and
the cancellation provisions of Paragraph C.2 hereof shall terminate
with respect to, the vested Issued Shares.
2. Cancellation of Issued Shares. Should the Participant cease
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Servoce for any reason prior to the completion of the vesting schedule described
in Paragraph C.1 hereof, then all of the unvested Issued Shares shall be
immediately cancelled, and the stock certificates for those Issued Shares shall
be immediately cancelled, without any cash or other payment due from the
Corporation with respect to the cancelled Issued Shares, and the Participant
shall no longer be entitled to any rights as a stockholder with respect to those
shares or to any other entitlement or interest with respect to such shares.
3. Recapitalization. Any new, substituted or additional securities
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or other property (including cash paid other than as a regular cash dividend)
which the Participant might have the right to receive with respect to unvested
Issued Shares by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchanges of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, shall be issued subject to the cancellation provisions and the
escrow requirements hereunder.
4. Change in Control. In the event of a Change in Control during the
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Participant's period of Service, then the cancellation provisions of Paragraph
C.2 hereof shall lapse in their entirety, and the Issued Shares shall vest in
full.
D. GENERAL PROVISIONS
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1. At Will Employment. Nothing in this Agreement or in the Plan
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shall confer upon the Participant any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Subsidiary employing or retaining the
Participant) or of the Participant, which rights are hereby expressly reserved
by each, to terminate the Participant's Service at any time for any reason, with
or without cause.
2. Notices. Any notice required to be given under this Agreement
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shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
3. No Waiver. No waiver of any breach or condition of this
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Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
4. Cancellation of Shares. Should the cancellation provision
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contained in Paragraph C.2 hereof become applicable in connection with the
Participant's termination of Service, then from and after that time, the person
from whom such shares are to be cancelled shall no longer have any rights as a
holder of such shares. Such shares shall be deemed cancelled in accordance with
the applicable provisions hereof, and the Corporation shall be deemed the owner
and holder of such shares, whether or not the certificates therefor have been
delivered to the Corporation.
5. Participant Undertaking. The Participant hereby agrees to take
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whateveradditional action and execute whatever additional documents the
Corporation may deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either the Participant or
the Issued Shares pursuant to the provisions of this Agreement.
6. Agreement and Plan Constitute Entire Contract. This Agreement and
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the Plan constitute the entire contract between the parties hereto with regard
to the subject matter hereof. This Agreement is made pursuant to the provisions
of the Plan and shall in all respects be construed in conformity with the terms
of the Plan.
7. Governing Law. This Agreement shall be governed by, and construed
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in accordance with, the laws of the State of Hawaii without resort to that
State's choice of law rules.
8. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
9. Successors and Assigns. The provisions of this Agreement shall
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inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
ALEXANDER & BALDWIN, INC.
By
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Its
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Participant
Address:
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