ALEXANDER & BALDWIN, INC.
PERFORMANCE-BASED RESTRICTED STOCK ISSUANCE AGREEMENT
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AGREEMENT made as of ________, 20__ (the "Award Date"), by and
between ALEXANDER & BALDWIN, INC., a
Hawaii corporation (the "Corporation"), and ______________ (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 "Issued Shares")
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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 Issued
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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 until those
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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 minimum 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 Common Stock be
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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 Global Select Market or any other 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, assign, encumber
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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 Shares shall
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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 _____________, 20__ 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 vest only in
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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 20__ 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 for the
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Corporation for the 20__ 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 20__ 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
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 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 does not vest in
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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 or other
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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, spin-off transaction, extraordinary
dividend 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.
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(i) The Participant is hereby provided with the right (the "Share
Withholding Right"), exercisable in accordance with the terms and conditions set
forth in Paragraph C.5(ii) below, to satisfy the Withholding Taxes which become
due upon the vesting of the Issued Shares under this Agreement by directing the
Corporation to withhold, from the vested Issued Shares to be released from
escrow and delivered to the Participant at that time, a portion of those Issued
Shares with a Fair Market Value (measured as of the vesting date) equal to the
percentage of the applicable Withholding Taxes (not to exceed one hundred
percent (100%)) designated by the Participant; provided, however, that the
amount of Issued Shares which the Corporation shall be required to so withhold
shall not exceed the amount necessary to satisfy the Corporation's required tax
withholding obligations using the minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
supplemental taxable income.
(ii) The Participant may only exercise the Share Withholding Right by
providing written notice to the Corporation's Vice President-Human Resources:
- at least three (3) months prior to the scheduled vesting
date for the Issued Shares, and
- during an open window period in which trading in the
Corporation's securities is not precluded by the Corporation's
insider trading policies.
The notice, once given, shall be irrevocable and cannot be modified or revised
in any manner.
(iii) Should the Participant not exercise the Share Withholding Right in
accordance with the applicable timing requirements of Paragraph C.5(ii), then
none of the Issued Shares shall be applied to the satisfaction of the
Withholding Taxes due upon the vesting of the Issued Shares, and the Participant
must deliver to the Corporation a check in the amount of those Withholding Taxes
at or before the time the Issued Shares vest.
(iv) Should the Participant exercise the Share Withholding Right in
accordance with the requirements of Paragraph C.5(ii), then the number of vested
Issued Shares which shall be delivered to him or her shall be reduced by the
number of Issued Shares withheld by the Corporation to satisfy the percentage of
the applicable Withholding Taxes specified by the Participant in his or her
notice of exercise of such right. No fractional Issued Shares shall be withheld
pursuant to such Share Withholding Right. To the extent the number of Issued
Shares withheld is not sufficient to cover all the applicable Withholding Taxes,
the Participant shall pay the remaining amount to the Corporation in 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 shall confer
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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 shall be in
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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 shall be
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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 in
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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 whatever
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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 and the Plan
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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 of which
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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 inure to the
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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 Vice President
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Participant
Address:
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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 20__ 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.