ALEXANDER & BALDWIN, INC.
PERFORMANCE-BASED RESTRICTED STOCK ISSUANCE AGREEMENT
AGREEMENT made as of January ___, 200__ (the "Award Date"), by and
between ALEXANDER & BALDWIN, INC., a Hawaii corporation (the "Corporation"), and
<<First_Name>> <<Last_Name>> (the "Participant").
All capitalized terms in this Agreement, to the extent not otherwise
expressly defined herein, shall have the meaning assigned to them in the
Corporation's 1998 Stock Option/Stock Incentive Plan, as amended (the "Plan").
A. ISSUANCE OF SHARES
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1. Issuance. The Participant is hereby issued ________ shares (the
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"Issued Shares") of common stock of the Corporation (the "Common Stock")
pursuant to the provisions of the Stock Issuance Program in effect under the
Plan. The Issued Shares shall be unvested and subject to both the performance
vesting and Service vesting requirements set forth in Paragraph C.1 hereof. To
the extent such vesting requirements or the vesting acceleration provisions of
Paragraph C.2 hereof are not satisfied, the Issued Shares shall be subject to
cancellation in accordance with the provisions of Paragraph C.3 hereof.
2. Stockholder Rights. Except to the extent all or a portion of the
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Issued Shares are cancelled pursuant to the provisions of Paragraph C.3 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 applicable vesting
provisions of Paragraph C.1 or Paragraph C.2 hereof. The Issued Shares which so
vest shall be released from escrow, subject to the Corporation's collection of
the applicable Withholding Taxes in accordance with Paragraph C.5 hereof. For
purposes of this Agreement, the Withholding Taxes mean the federal, state and
local income taxes and the employee portion of the federal, state and local
employment taxes (including FICA taxes) required to be withheld by the
Corporation in connection with 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 national securities
exchange on which the Common Stock is at the time listed for trading 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.3 hereof.
2. Restrictive Legend. The stock certificate(s) for unvested Issued
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Shares shall be endorsed with the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE 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 UNVESTED AND SUBJECT TO CANCELLATION BY THE
CORPORATION UPON THE TERMS AND CONDITIONS SPECIFIED IN A WRITTEN
AGREEMENT DATED AS OF JANUARY ___, 200__ 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 THE
SHARES REMAIN UNVESTED AND SUBJECT TO CANCELLATION, THE SHARES
REPRESENTED BY THIS CERTIFICATE 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 shall
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vest only in accordance with the vesting provisions of this Paragraph C.1 or the
special vesting acceleration provisions of Paragraph C.2. The number of Issued
Shares in which the Participant shall vest under this Paragraph C.1 shall be
determined pursuant to a two-step process: (i) first there shall be calculated
the maximum number of Issued Shares in which the Participant can vest based upon
the level of attainment of the Corporation's pre-tax income target for the
200__ fiscal year specified on Schedule I and (ii) then the number of the Issued
Shares calculated under clause (i) in which the Participant shall actually vest
shall be determined on the basis of his or her completion of the applicable
Service vesting provisions set forth below. Accordingly, the vesting of the
Issued Shares shall be calculated as follows:
(i) Performance Vesting: The pre-tax income target established
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for the Corporation for the 200__ fiscal year is set forth in attached Schedule
I and has three levels: Threshold, Target and Extraordinary. As soon as
administratively practicable following the completion of the Corporation's
200__ fiscal year, the Plan Administrator shall, on the basis of the
Corporation's financial statements for that fiscal year, determine the actual
level of attainment of the pre-tax income target for such fiscal year and shall
then measure that level of attainment against the Threshold, Target and
Extraordinary levels set forth in attached Schedule I. The maximum number of
Issued Shares in which the Participant can vest based upon the actual level of
pre-tax income attained by the Corporation shall be determined as follows:
- attainment below the Threshold level: 0% of the Issued Shares
- attainment at the Threshold level: 50% of the Issued Shares
- attainment at the Target level: 100% of the Issued Shares
To the extent the actual level of attainment is at a point
between the Threshold and Target levels, the maximum number of Issued Shares in
which the Participant can vest shall be pro-rated between the two points on a
straight-line basis.
The maximum number of Issued Shares in which the Participant can
vest on the basis of the foregoing shall be hereinafter designated the "Maximum
Number of Shares."
If the actual level of attainment is at or above the
Extraordinary level of pre-tax income specified in Schedule I, then the
Participant shall, as soon as administratively practical following the Plan
Administrator's determination and certification of such Extraordinary level of
attainment, be issued an additional number of shares of Common Stock equal to
the actual number of Issued Shares in which he or she vests hereunder on the
basis of his or her completion of the applicable Service vesting requirement
set forth below. To the extent the actual level of attainment is at a point
between the Target and Extraordinary levels, the maximum number of additional
shares to which the Participant may become entitled shall be pro-rated between
the two points on a straight-line basis, and the percentage of those additional
shares that will actually be issued to the Participant will be equal to the
percentage of the Issued Shares in which the Participant vests of the basis of
his or her completion of the Service vesting requirement. The issuance of any
such additional shares of Common Stock shall be subject to the Corporation's
collection of all applicable Withholding Taxes in accordance with same
procedures in effect for the Issued Shares under Paragraph C.5 hereof.
(ii) Service Vesting. The application of the performance vesting
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provisions shall determine the maximum number of Issued Shares in which the
Participant can vest hereunder. The actual number of Issued Shares in which the
Participant shall vest shall be determined as follows:
- If the Participant continues in Service for the one-year
period measured from the Award Date (the "Service Vesting Period"), the
Participant shall vest in one hundred percent (100%) of the Maximum
Number of Shares.
- If the Participant ceases Service prior to the completion of
the Service Vesting Period by reason of Retirement, death or Permanent
Disability, then the Participant shall vest in a portion of the Maximum
Number Shares determined by multiplying the Maximum Number of Shares by
a fraction, the numerator of which is the number of full or partial
months of actual Service completed in the Service Vesting Period and
the denominator of which is twelve (12).
- If the Participant's Service ceases for any other reason
prior to the completion of the Service Vesting Period, then the
Participant shall not vest in any of the Issued Shares.
For purposes of the foregoing Service vesting provisions:
- The term Service shall mean the Participant's
performance of services for the Corporation (or any Parent or
Subsidiary) in the capacity of an Employee or a non-employee member of
the board of directors of any Subsidiary. Participant shall be deemed to
cease such Service immediately upon the occurrence of either of the
following events: (i) the Participant no longer performs services in any
of the foregoing capacities for the Corporation (or any Parent or
Subsidiary) or (ii) the entity for which the Participant performs such
services ceases to remain a Parent or Subsidiary of the Corporation,
even though the Participant may subsequently continue to perform
services for that entity. Service shall not be deemed to cease during a
period of military leave, sick leave or other personal leave approved by
the Corporation; provided, however, that except to the extent otherwise
required by law or expressly authorized by the Plan Administrator or the
Corporation's written leave of absence policy, no Service credit shall
be given for vesting purposes for any period the Participant is on a
leave of absence.
- The Participant will be deemed to cease Service by
reason of Retirement if he or she terminates Service on or after
attainment of age sixty-five (65) or by reason of approved early
retirement (age 55 plus 5 years Service).
(iii) Vesting. The Participant shall acquire a fully-vested
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interest in, and the transfer restrictions of Paragraph B hereof and the
cancellation provisions of Paragraph C.2 hereof shall terminate with respect
to, all Issued Shares in which the Participant vests on the basis of the
performance vesting and Service vesting requirements set forth in this
Paragraph C.1. The vested Issued Shares shall be released from escrow as soon
as administratively practicable, subject to the Corporation's collection of the
applicable Withholding Taxes.
Schedule II attached to this Agreement sets forth examples
illustrating the calculation of the number of Issued Shares in which the
Participant may vest based upon hypothetical levels of pre-tax income and
service vesting requirements.
2. 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.3 hereof shall lapse in their entirety, and the Issued Shares shall vest in
full and shall be released from escrow as soon as administratively practicable,
subject to the Corporation's collection of the applicable Withholding Taxes in
accordance with Paragraph C.5 hereof.
3. Cancellation of Issued Shares. To the extent the Participant
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does not vest in the Issued Shares in accordance with either the performance
vesting or the Service vesting requirements set forth in Paragraph C.1 hereof
or the vesting acceleration provisions of Paragraph C.2 hereof, those unvested
Issued Shares, together with the stock certificates evidencing those shares,
shall be immediately cancelled, without any cash or other payment due the
Participant 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.
4. 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 the
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 vesting requirements,
cancellation provisions and the escrow requirements hereunder.
5. Collection of Withholding Taxes. In the absence of any other
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arrangement agreed to by the Corporation with respect to the collection of the
applicable Withholding Taxes which become due upon the vesting of the Issued
Shares, the Participant shall pay such Withholding Taxes to the Corporation in
cash or cash equivalent, such as a check payable to the Corporation's order.
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 Agreement
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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 provisions contained
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in Paragraph C.3 hereof become applicable in connection with the Participant's
failure to vest in all or part of the Issued Shares, then from and after that
time, the Participant or any other record holder of those shares shall no longer
have any stockholder or other rights with respect to those 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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whatever additional 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
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and 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 in
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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, each
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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 ________________________________
Its Vice President
_____________________________________
Participant
Address:
_____________________________________
_____________________________________
SCHEDULE I
PRE-TAX INCOME TARGET
The Corporation's pre-tax income targets for the 200__ fiscal year at
the Threshold, Target and above-Target levels are as follows:
Threshold Level: ______________
Target Level: ______________
Extraordinary Level: ______________
Pre-tax income shall be calculated on a consolidated basis with the
Corporation's consolidated subsidiaries for financial reporting purposes and
shall be determined on the basis of the Corporation's financial statements for
the 200__ fiscal year, subject to any adjustments as determined by the Plan
Administrator that are needed to accurately reflect the performance of the
Corporation (e.g., because of changes in accounting rules, extraordinary gains
from the sale of Company assets, or other similar or dissimilar circumstances
occurring during the 200__ fiscal year that may or may not have been beyond the
control of the Corporation).
SCHEDULE II
ILLUSTRATION OF VESTING CALCULATIONS
The following examples are for illustration purposes only:
1. A Participant receives 1,000 Issued Shares and the Participant
continues in Service for the one-year period following the Award Date.
If the Corporation's actual level of attainment for that year is at the
Target level, the Participant shall vest in all 1,000 of his or her
Issued Shares. If the Corporation's actual level of attainment for that
year is at the Extraordinary level, the Participant shall vest in all
1,000 of his or her Issued Shares, and he or she will be issued an
additional 1,000 shares.
2. A Participant receives 1,000 Issued Shares and the Participant ceases
Service halfway through the one-year period following the Award Date
due to a Permanent Disability. If the Corporation's actual level of
attainment for that year is at the Target level, the Participant shall
vest in 500 of his or her Issued Shares. On the other hand, if the
Corporation's actual level of attainment for that year is at the
Extraordinary level, the Participant shall vest in 500 of his or her
Issued Shares, and he or she will also be issued an additional 500
shares.
3. A Participant receives 1,000 Issued Shares and the Participant
continues in Service for the one-year period following the Award Date.
If the Corporation's actual level of attainment for that year is
halfway between the Threshold and Target level, the Participant shall
vest in 750 Issued Shares. On the other hand, if the Corporation's
actual level of attainment for that year is halfway between the Target
and Extraordinary level, the Participant shall vest in all 1,000 of his
or her Issued Shares, and he or she will also be issued an additional
500 shares.
4. A Participant receives 1,000 Issued Shares and the Participant ceases
Service halfway through the one-year period following the Award Date
due to Permanent Disability. If the Corporation's actual level of
attainment for that year is halfway between the Threshold and Target
level, the Participant shall vest in 375 Issued Shares. On the other
hand, if the Corporation's actual level of attainment for that year is
halfway between the Target and Extraordinary level, the Participant
shall vest in 500 of his or her Issued Shares, and he will also be
issued an additional 250 shares.