SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
File by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For
Use of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Maui Land & Pineapple Company, Inc.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other than the
Registrant)
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and 0-11.
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
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MAUI LAND & PINEAPPLE COMPANY, INC.
120 Kane Street, P. O. Box 187
Kahului, Maui, Hawaii 96733-6687
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
December 11, 2003
TO THE STOCKHOLDERS OF MAUI LAND & PINEAPPLE COMPANY, INC.:
A special meeting of Stockholders of Maui Land & Pineapple
Company, Inc. (the "Company") will be held on Thursday, December 11,
2003 at 9:00 a.m. in the Corporate Office courtyard, 120 Kane Street,
Kahului, Hawaii, for the following purposes:
1. To consider and vote upon an amendment to the Articles of
Association to authorize an additional 800,000 shares of the
Company's Common Stock, and to increase the size of the Board of
Directors, from not less than five members, to not less than
nine, nor more than twelve members, divided into three classes
with staggered terms of three years each.
2. To consider and vote upon approval of the Maui Land &
Pineapple Company, Inc. Stock and Incentive Compensation Plan
of 2003.
The close of business on October 17, 2003 is the record date
for determining stockholders entitled to notice of and to vote at
the special meeting or any postponements or adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS,
ADELE H. SUMIDA
Secretary
Dated: November 4, 2003
MAUI LAND & PINEAPPLE COMPANY, INC.
120 Kane Street, P. O. Box 187
Kahului, Maui, Hawaii 96733-6687
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
December 11, 2003
This Proxy Statement is furnished by Maui Land & Pineapple
Company, Inc. (the "Company"), a Hawaii corporation, in
connection with the solicitation by the Board of Directors of
proxies to be voted at the Special Meeting of Stockholders to be
held on December 11, 2003, and all adjournments or postponements
thereof.
The person giving the proxy may revoke it at any time before
it is voted by delivering a written revocation or a signed proxy
card bearing a later date to the Company's Secretary, provided
that such revocation or proxy card is actually received by the
Secretary before it is used. Shares of the Company's common
stock, no par value ("Common Stock"), that are eligible to vote,
represented by properly executed proxies received by the Company
at or prior to the meeting and not subsequently revoked, will be
voted as directed in such proxies. If a proxy is signed and no
directions are given, shares eligible to vote represented thereby
will be voted in favor of the proposals. The proxy confers
discretionary authority on the persons named therein as to all
other matters that may come before the meeting.
This Proxy Statement is first being mailed to stockholders
on or about November 4, 2003.
VOTING SECURITIES AND RIGHT TO VOTE
Holders of record of shares of Common Stock at the
close of business on October 17, 2003 (the "Record Date") will be
entitled to vote at the Special Meeting of Stockholders to be
held on December 11, 2003, with each share entitling its owner to
one vote. The number of outstanding shares at the close of
business on the Record Date was 7,195,800.
If a majority of the Company's outstanding shares are
represented at the Special Meeting, either in person or by proxy,
a quorum will exist for conducting business. Abstentions and
broker non-votes will be treated as represented at the meeting
for purposes of determining whether a quorum is present.
Pursuant to the Hawaii Business Corporation Act, approval of the
amendment of the Company's Articles of Association described in
Proposal No. 1 requires the affirmative vote of the holders of
two-thirds of the shares entitled to vote thereon. Therefore, at
least 4,797,200 shares must be voted in favor of the amendment
for it to be approved. Broker non-votes and abstentions will
have the same effect as negative votes on Proposal No. 1. Under
American Stock Exchange rules, the adoption of the Company's
Stock and Incentive Compensation Plan of 2003 described in
Proposal No. 2 will require the affirmative vote of a majority of
the votes cast on the proposal. Abstentions will have the same
effect as negative votes on Proposal No. 2, but broker non-votes
will not affect the outcome.
MATTERS TO BE VOTED UPON
Proposal No. 1: Amendment of the Company's Articles of
Association (the "Articles") to authorize an additional 800,000
shares of Common Stock and to increase the size of the Board of
Directors from not less than five members, to not less than nine
nor more than twelve members, divided into three classes with
staggered terms of three years each.
The Articles presently state that the amount of the
authorized capital stock of the corporation is 7,200,000 shares
of Common Stock. The amendment to the Articles would increase
the authorized capital stock by 800,000 shares to 8,000,000
shares.
The increase in authorized capital stock is integral to the
compensation package of David C. Cole, President and Chief
Executive Officer of the Company, effective as of October 15,
2003. Mr. Cole would forgo participation in any annual incentive
plans offered to other executives and employees and in the
Company's Long-Term Incentive Plans (see "Executive
Compensation", on pages====). Instead, Mr. Cole would be awarded
equity compensation of up to 300,000 shares of Common Stock in
the form of restricted stock grants and nonqualified stock
options. The grants of these stock options and shares of
restricted stock are contingent upon shareholder approval of
this Proposal No. 1. If this approval is not obtained, then
Mr. Cole would have "good reason" to resign, which would trigger,
among other things, a severance payment. For further details,
see "Executive Compensation -- Employment Agreement for
David C. Cole."
The remaining 500,000 shares of Common Stock would be
reserved for the Maui Land & Pineapple Company, Inc. Stock and
Incentive Compensation Plan of 2003 (see Proposal No. 2, below).
The Company's presently authorized shares of Common Stock
(7,200,000) are listed on the American Stock Exchange ("AMEX").
Prior to issuance of any shares in excess of the amount currently
listed on AMEX, the Company would submit an additional listing
application to the AMEX. Any newly issued shares of Common Stock
will not have preemptive rights. In the opinion of the Company's
counsel, any preemptive rights that the Company's existing
shareholders had as a matter of common law may well have been
eliminated by changes to the Hawaii Business Corporation Act that
became effective in 2002, but to the extent that the shareholders
retain those rights, they should not apply to the issuance of
shares as equity compensation either to Mr. Cole as part of the
arrangements described herein, or under the Maui Land & Pineapple
Company, Inc. Stock and Incentive Compensation Plan of 2003.
The Articles presently state that the Board shall consist of
at least five members, as determined in accordance with the
Bylaws from time to time. The Bylaws of the Company presently
provide for three classes of directors consisting of two members
in each class with each class holding office for three years.
The first class consists of the two directors whose term of
office expires in 2006 ("Class One Directors"). The second class
consists of the two directors whose term of office expires in
2004 ("Class Two Directors"). The third class consists of the
two directors whose term of office expires in 2005 ("Class Three
Directors").
The Board has determined that it would be in the best
interest of the Company to increase the size of the Board to nine
members, consisting of three members in each class with each
class holding office for three years. The Hawaii Business
Corporation Act currently provides that if there are nine or more
directors, the Articles may provide for staggering their terms by
dividing the total number into two or three groups, with each
group containing one-half or one-third of the total, as near as
may be. Therefore, in order to increase the size of the Board
but maintain the staggered nature of the Board, the Board has
approved an amendment to the Articles to provide that:
- - the Board shall consist of at least nine members but no more
than twelve members, as determined in accordance with the
Bylaws from time to time;
- - the Board shall be divided into three classes, with each
class consisting of one-third of the total number of
directors, or as near to this as possible; and
- - each class shall hold office for a period of three years,
with a term of office expiring at the third annual meeting
of shareholders following his or her election, and when his
or her successor has been duly elected and qualified.
The Board of Directors has approved the amendment of the
Company's Articles of Association in these two respects pursuant
to Articles of Amendment in the form attached to this Proxy
Statement as Appendix "A." If approved by the shareholders, the
Articles of Amendment would become effective upon their filing
with the Department of Commerce and Consumer Affairs of the State
of Hawaii.
The Board also has approved an amendment to the Bylaws,
effective contingent upon shareholder approval of the foregoing
change to the Articles and the filing of the Articles of
Amendment, to provide that the first class shall consist of the
current two Class One directors plus an additional Class One
director, the second class shall consist of the current two Class
Two directors plus an additional Class Two director, and the
third class shall consist of the current two Class Three
directors plus an additional Class Three director. The Board
also has approved an amendment to the Bylaws that, instead of
requiring that all nominees for Class One be independent within
the meaning of the applicable American Stock Exchange rules,
would invalidate any nomination that would result in the
insufficient number of independent directors to meet the
requirement of those rules. The Board has designated David C.
Cole to fill the Class One vacancy that will be created upon the
effectiveness of these amendments to the Articles and the Bylaws.
The Board has not yet designated any replacement director to fill
the Class Two and Class Three vacancies that will be created upon
the effectiveness of these amendments to the Articles and the
Bylaws.
The Board of Directors recommends a vote "FOR" Proposal
No. 1, approval of the amendment to the Articles to authorize an
additional 800,000 shares of Common Stock and to increase the
size of the Board of Directors, from not less than five members,
to not less than nine members nor more than twelve members,
divided into three classes with staggered terms of three years
each.
Proposal No. 2: Approval of the Maui Land & Pineapple Company,
Inc. Stock and Incentive Compensation Plan of 2003.
Generally
The Company's Board of Directors has approved and
recommended for submission to the shareholders for approval, the
Maui Land & Pineapple Company, Inc. Stock and Incentive
Compensation Plan of 2003 (the "Stock Plan"). The purpose of the
Stock Plan is to promote the success and enhance the value of the
Company by linking the interests of participants to those of the
Company's shareholders and by providing participants with
incentive for outstanding performance. Subject to the discretion
of the Compensation Committee, the Stock Plan provides for the
award of incentive stock options ("ISOs"), nonqualified stock
options ("NQSOs"), stock appreciation rights ("SARs"); restricted
stock, restricted stock units, performance shares, performance
units, cash-based awards and stock-based awards. The Stock Plan
shall be effective as of the date of shareholder approval (the
"Effective Date").
Because the Company's Articles of Association currently do
not provide for the 500,000 authorized but unissued shares of
Common Stock required to implement the Stock Plan (see
- -Description of the Stock Plan - Authorized Shares" below), the
implementation of Proposal No. 2 also is conditioned upon
shareholder approval of Proposal No. 1 as described above.
Description of the Stock Plan
The following summary of the principal provisions of the
Stock Plan is subject in all respects to the full text of the
Stock Plan. A copy of the Stock Plan is attached hereto as
Appendix "B."
Administration
The Stock Plan is administered by the Compensation Committee
of the Board of Directors of the Company. The Compensation
Committee maintains the discretionary authority to interpret the
terms and conditions of the Stock Plan, determine the employees,
directors and independent contractors to whom awards may be
granted, determine the terms and conditions of any award, and
adopt rules, regulations, and guidelines relating to the
administration of the Stock Plan. Except with respect to awards
to certain insiders, the Compensation Committee may by resolution
authorize one or more officers of the Company to designate the
participants to whom awards are granted and to determine the size
(subject to the aggregate number as the Compensation Committee
may authorize) and terms and conditions of the awards. All
decisions made by the Compensation Committee pursuant to the
provisions of the Stock Plan are final and binding on all
persons, including the Company and participants.
Authorized Shares
The number of shares of Common Stock reserved and available
for awards under the Stock Plan is 500,000. If any award under
the Stock Plan terminates or expires or is forfeited, or is
cashed out or exchanged to a form of award not involving Common
Stock, the shares subject to such award will again be available
for grant under the Stock Plan. Further, if the option price or
tax withholding requirements with respect to an award are
satisfied by tendering shares, or if an SAR is exercised, only
the number of shares issued net of shares tendered, will be taken
into account in determining the maximum number of shares
available for awards under the Stock Plan. The number of shares
reserved and available for awards is subject to equitable
adjustment at the discretion of the Compensation Committee in
connection with any transaction or event that affects the
Company's Common Stock (including, but not limited to, a merger,
consolidation, reorganization, recapitalization, separation,
stock dividend, stock split, split up, spin-off, combination of
shares, exchange of shares, or other like change in capital
structure) which may be required in order to prevent dilution or
enlargement of rights.
Eligibility
The Compensation Committee may grant awards under the Stock
Plan to any non-bargaining regular full-time employee, including
officers and other key employees, director or independent
contractor of the Company or any of its subsidiaries or
affiliates.
Limits on Awards
Annual grant limitations under the Stock Plan apply to
awards that are intended to qualify for exemption from Section
162(m) of the Internal Revenue Code of 1986 (the "Code").
Section 162(m) precludes a publicly held corporation from
claiming a deduction for compensation in excess of $1 million
paid to its chief executive officer or to any of its four other
most highly compensated executive officers. Compensation is
exempt from this limitation if it satisfies requirements for
"qualified performance-based compensation". In order to comply
with the exemption from Section 162(m), awards that are intended
to qualify as performance based compensation to covered employees
are subject to the following annual limits: (a) the maximum
aggregate number of shares for options granted in any one
calendar year to any one covered employee is 100,000 shares;
(b) the maximum aggregate number of shares for SARs granted in any
one calendar year to any one covered employee is 100,000 shares;
(c) the maximum aggregate number of shares for restricted stock
granted in any one calendar year to any one covered employee is
100,000 shares; (d) the maximum aggregate number of shares for
restricted stock units granted in any one calendar year to any
one covered employee is 100,000 shares; (e) the maximum aggregate
number of shares for performance shares granted in any one
calendar year to any one covered employee is 100,000 shares;
(f) the maximum aggregate value for performance units in any one
calendar year to any one covered employee is the value equivalent
to 100,000 shares determined as of the date of vesting or payout;
(g) the maximum aggregate value for cash-based awards paid in any
one calendar year to any one covered employee is $1,000,000; and
(h) the maximum aggregate number of shares for any other stock-
based awards granted in any one calendar year to any one covered
employee is 100,000 shares. These annual limits, the above
description of the individuals eligible to participate in the
Stock Plan, and the description below of performance measures
upon which awards may be conditioned are material terms of the
Stock Plan required to be disclosed and approved by shareholders
for purposes of meeting the requirements for performance-based
compensation under Section 162(m) of the Code. The shareholder
approval of this Proposal No. 2 is intended to satisfy
shareholder approval of such material terms for purposes of
meeting the requirements for qualified performance-based
compensation under Section 162(m).
Stock Options
Options granted under the Stock Plan may be either an option
intended to be an ISO within the meaning of Section 422 of the
Code or an NQSO. Upon exercise of an option, the participant is
entitled to purchase option shares at a specified exercise price.
The Compensation Committee at its discretion determines the
number of option shares, duration of the option (but no later
than the tenth anniversary of the date of grant), exercise price
(e.g., equal to, greater than, or less than fair market value, or
indexed), vesting, and other terms and conditions not
inconsistent with the Stock Plan. If a participant's employment
or service with the Company or any of its subsidiaries or
affiliates terminates, the participant's options are exercisable
in the manner determined by the Compensation Committee and
provided under the award agreement. However, ISOs may be granted
only to employees, may not be granted following the tenth
anniversary of the Effective Date, and shall be subject to an
exercise price no less than fair market value of Common Stock as
of the date of grant. Tax rules require that, among other
things, following a participant's termination of employment
(other than due to death or disability) ISOs are generally
exercisable only within three months after such termination, and
the aggregate fair market value (determined at the time of grant)
of Common Stock, with respect to which ISOs are exercisable for
the first time by a participant during any calendar year, may not
exceed $100,000. Upon exercise of an option, the exercise price
is payable in cash, by tendering shares having a fair market
value equal to the exercise price, or by any other method as
determined by the Compensation Committee and provided under the
award agreement. The Compensation Committee may also permit
certain forms of "cashless exercise" of an option, including an
arrangement under which the participant instructs a registered
securities broker to sell a sufficient number of shares to cover
the costs and expenses associated with the exercise of the
option. As soon as practicable following payment of the exercise
price, the option shares are delivered to the participant and, as
may be determined by the Compensation Committee and provided
under the award agreement, the option shares acquired may
comprise restricted stock as described below.
SARs
SARs are granted either by themselves ("freestanding") or in
connection with options ("tandem SARs"). Upon exercise of an
SAR, the participant is entitled to receive an amount based upon
the appreciation in the Common Stock over the grant price. The
Compensation Committee at its discretion determines the number of
SARs, duration of the SARs (but, generally not later than the
tenth anniversary of the date of grant), grant price (e.g., equal
to, greater than, or less than fair market value, or indexed),
vesting, form of payment (i.e. cash or equivalent value in
shares), and other terms and conditions not inconsistent with the
Stock Plan. If a participant's employment or service with the
Company or any of its subsidiaries or affiliates terminates, the
participant's SARs are exercisable in the manner determined by
the Compensation Committee and provided under the award
agreement. However, the grant price of tandem SARs is equal to
the exercise price of the related option, and tandem SARs granted
in connection with ISOs are subject generally to the terms and
conditions relating to the underlying ISOs. The Compensation
Committee may at its discretion substitute SARs for outstanding
options granted to a participant, provided that the substituted
SARs are at least equivalent to the terms and economic benefit of
the options.
Restricted Stock and Restricted Stock Units
Restricted stock is a stock grant to participants that
generally remains nontransferable and subject to forfeiture until
the satisfaction of specified conditions. Restricted stock units
are similar to restricted stock except that restricted stock
units represent defined units of value and not shares of Common
Stock. The Compensation Committee at its discretion determines
the number of restricted stock or restricted stock units, term of
the restriction period, applicable restrictions (e.g., vesting
conditioned on service or attainment of performance goals, and
holding requirements or sale restrictions upon vesting), any
applicable purchase price, voting rights during the restriction
period (although voting rights do not apply to restricted stock
units), rights to dividends (or dividend equivalents in the case
of restricted stock units) during the restriction period, form of
payment, custody of restricted stock certificates during the
restriction period, and other terms and conditions not
inconsistent with the Stock Plan. If a participant's employment
or service with the Company or any of its subsidiaries or
affiliates terminates, the participant is entitled to the
restricted stock or restricted stock units in manner determined
by the Compensation Committee and provided under the award
agreement. Upon satisfaction or lapse of applicable conditions,
restricted stock generally becomes freely transferable and
nonforfeitable in favor of the participant, and restricted stock
units become payable in cash, shares, or a combination of cash
and shares as may be determined by the Compensation Committee and
provided under the award agreement.
Performance Shares and Performance Units
A performance share is a hypothetical share unit with an
initial value equal to the fair market value of a share of Common
Stock as of the date of grant, and a performance unit is a unit
of value with an initial value as of the date of grant as may be
established by the Compensation Committee and provided under the
award agreement. The Compensation Committee at its discretion
determines the number of performance shares or performance units
granted to a participant, the term of the performance period,
applicable performance goals, any applicable purchase price,
rights to dividend equivalents during the performance period,
form of payment, and other terms and conditions not inconsistent
with the Stock Plan. If a participant's employment or service
with the Company or any of its subsidiaries or affiliates
terminates, the participant is entitled to the performance share
or performance units in the manner determined by the Compensation
Committee and provided under the award agreement. Upon
satisfaction of the performance goals, the performance units or
shares become payable in cash, shares, or a combination of cash
and shares as may be determined by the Compensation Committee and
provided under the award agreement.
Cash-Based Awards and Stock-Based Awards
The Compensation Committee maintains the flexibility to
provide for cash-based awards and other types of stock-based
awards in the amount and manner that it may determine at its
discretion. Such awards may be valued and conditioned upon
performance periods and goals, and may be payable in cash,
shares, or a combination of cash and shares as may be determined
by the Compensation Committee. If a participant's employment or
service with the Company or any of its subsidiaries or affiliates
terminates, the participant shall be entitled to payment of cash-
based and stock-based awards in the manner determined by the
Compensation Committee and provided under the award agreement.
Cash-based and stock-based awards may serve as the basis for
formulating short-term or long-term, performance-based bonus
arrangements.
Performance Measures
As determined at the discretion of the Compensation
Committee, the terms and conditions of awards under the Stock
Plan (e.g., relating to amount, measurement, vesting and payment)
may be conditioned upon certain performance measures. In the
case of awards that are intended to comprise qualified
performance-based compensation to covered employees under Section
162(m) of the Code, the performance measures are limited to one
or more, separately or in combination, of the following
performance measures: (a) earnings per share (actual or targeted
growth); (b) net income (before or after taxes); (c) net income,
less total expenditures for additions to long-lived assets;
(d) return measures (including, but not limited to, return on
average assets, or return on beginning equity, or return on average
equity); (e) efficiency ratio; (f) full time equivalency control;
(g) stock price (including, but not limited to, growth measures
and total shareholder return); (h) expense targets; (i) margins;
and (j) operating efficiency. The performance measures may apply
to the Company as a whole or any subsidiary, affiliate, or
business unit of the Company.
Change In Control
In the event of a "change in control" of the Company within
the meaning of the Stock Plan, unless determined by the
Compensation Committee and provided under the award agreement:
(a) options and SARs are immediately exercisable and, if the
participant is terminated for any reason other than "cause"
within the meaning of the Stock Plan within twelve months of the
change in control, such options and SARs are exercisable within
twelve months of such termination (or, if lesser, the remaining
term of the options and SARs); (b) restricted stock and
restricted stock units are immediately vested; (c) performance
shares and performance units, and other awards conditioned upon
performance goals or restrictions, become payable based on the
assumed achievement or satisfaction of applicable performance
goals or restrictions, prorated based on completion of the
applicable performance periods.
Nontransferability
Except as may be provided under an award agreement, any
award granted is not transferable other than by will or by the
laws of descent and distribution and, further, the rights to the
award apply to and may be exercised by, during the participant's
lifetime, only by the participant.
Amendment and Termination
The Compensation Committee or the Board may amend or
terminate the Stock Plan in whole or in part at any time.
However, no amendment can be made without shareholder approval as
may be required by law, regulation, or stock exchange rule.
Further, options may not be repriced, replaced, or regranted
through cancellation without prior shareholder approval. An
amendment may not adversely affect in a material way any
outstanding award without the written consent of the participant.
Certain Federal Income Tax Considerations
The tax consequences of the Stock Plan are complex, and the
following discussion deals only with general tax principles
applicable to the Stock Plan under federal law.
ISOs are options which under certain circumstances and
subject to certain tax restrictions have special tax benefits for
employees under the Code. NQSOs are options which do not receive
such special tax treatment. When the Compensation Committee
grants an ISO and when the participant exercises an ISO and
acquires Common Stock, the participant realizes no income and the
Company can claim no deduction. (However, the difference between
the fair market value of the shares upon exercise and the
exercise price is an item of tax preference subject to the
possible application of the alternative minimum tax.) If the
participant disposes of the stock before two years from grant or
one year from exercise of the ISO (a disqualifying disposition),
any gain will be deemed compensation and taxed as ordinary income
to the extent of the lesser of (i) the spread between the option
price and the fair market value of the stock at exercise (the
spread) or (ii) the difference between the sale price and the
exercise price. If a disqualifying disposition occurs, the
Company can claim a deduction equal to the amount treated as
compensation. If one- and two-year holding periods are
satisfied, any gain realized when the shares are sold will be
treated as capital gain, and the Company will receive no
corresponding tax deduction. When the Compensation Committee
grants an NQSO, the participant realizes no income and the
Company can claim no deduction. On exercise of an NQSO, the
participant realizes ordinary income to the extent of the spread
and the Company can claim a tax deduction for the same amount.
When the Compensation Committee grants a SAR, the
participant realizes no income and the Company can claim no
deduction. The cash or the fair market value of stock received
on a SAR exercise is taxed to the participant at ordinary income
rates. The Company can claim a tax deduction in the same amount
at such time. Grants of restricted stock are generally not
taxable to participants at the time of grant and the Company
generally claims no deduction at that time. The Company receives
a deduction and the participant recognizes taxable income equal to
the fair market value of the stock at the time the restrictions
lapse, unless the participant elects, within thirty days of
notification of the award, to recognize the income on the award
date, in accordance with Section 83 of the Code. If the
participant makes an election under Section 83, the Company
receives a corresponding deduction. Any dividends received on
restricted stock prior to the date the participant recognizes
income on that stock are taxable compensation income when
received and the Company is entitled to a corresponding tax
deduction at such time.
The grant of restricted stock units, performance shares,
performance units, and cash based awards that is subject to
performance measures does not generally result in taxable income
to the participant. Following the completion of the performance
period, the award is determined and paid or distributed. The
full value paid or distributed is treated as ordinary income, and
the Company is entitled to a corresponding tax deduction at such
time.
Future Awards
The amount and nature of awards that will be issued under
the Plan for 2003 and subsequent years are not presently
determinable.
Other Equity Compensation Plans
As of the end of the Company's fiscal year ended December 31,
2002, there were no compensation plans under which equity
securities of the Company were authorized for issuance. For a
description of certain equity compensation arrangements recently
entered into with Mr. Cole, see "Executive Compensation -
Employment Agreement for David C. Cole."
The Board of Directors recommends a vote "FOR" Proposal
No. 2, the approval of the Company's Stock and Incentive
Compensation Plan of 2003.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of October 6,
2003 with respect to all persons and "groups" (as defined in
applicable securities laws) known to the Company to be the
beneficial owners of more than 5% of the Company's Common Stock,
other than those listed under "Security Ownership of Management."
Unless otherwise indicated and subject to applicable community
property and similar statutes, all persons listed below have sole
voting and investment power over all shares of Common Stock
beneficially owned. Share ownership has been computed in
accordance with SEC rules and does not necessarily indicate
beneficial ownership for any other purpose.
Number Percent
Name and Address of Shares of Class
Stephen M. Case Revocable Trust 3,130,626 (1)(2) 43.5%
P. O. Box 9040
McLean, Virginia 22102
Ka Po'e Hana LLC 3,130,626 (1) 43.5%
1711 N Street, N.W.
Washington, DC 20036
The J. Walter Cameron Family Group 2,221,189 (3)(2) 30.9%
3150 Hoomua Drive
Kihei, Hawaii 96753
Po'ohala Investments L.P. 648,331 (3) 9.0%
3694 Woodlawn Terrace Place
Honolulu, Hawaii 96822
Cameron Family Partnership 399,104 (3) 5.5%
c/o Hirose Kato & Martin
1728 Wili Pa Loop, Suite 200
Wailuku, Hawaii 96793
Maui Land & Pineapple Company, Inc.
Employee Stock Ownership Trust 363,393 (4) 5.1%
c/o Bank of Hawaii, Trustee
P. O. Box 3170
Honolulu, Hawaii 96802
1) Ka Po'e Hana LLC has power of attorney over the 3,130,626
shares of Company stock that are owned by the Stephen M.
Case Revocable Trust. The power of attorney authorizes
Ka Po'e Hana LLC to vote the stock and to sell or otherwise
make investment decisions with respect to the stock.
Therefore, Ka Po'e Hana LLC may be deemed to beneficially
own the shares owned of record and beneficially by the
Stephen M. Case Revocable Trust. The President and Chief
Executive Officer of Ka Po'e Hana LLC, John H. Agee, a
director of the Company, has authority to act alone on
behalf of the LLC in exercising powers under the power of
attorney (see "Security Ownership of Management"). Mr. Agee
disclaims beneficial ownership of the 3,130,626 shares of
Company stock.
2) Richard H. Cameron, Claire C. Sanford, Jared B. H. Sanford,
Douglas B. Cameron and the Allan G. Sanford Trust
(collectively referred to as the "Cameron Family
Stockholders") and Stephen M. Case are the parties to a
right of first refusal agreement, dated June 25, 1999 (the
"RFR Agreement"). Under the RFR Agreement, the Cameron
Family Stockholders and the Stephen M. Case Revocable Trust
each grant to the other a right of first refusal regarding
the shares of the Company's Common Stock that they each hold
from time to time, up to the total number of shares held by
the other at any such time. According to the Company's
records as of October 6, 2003 this mutual right of first
refusal applies to 908,861 shares owned by each party to the
RFR Agreement. Certain transfers for estate planning
purposes or to family members or pledges for certain loans
are exempt from the terms of the RFR Agreement. The RFR
Agreement provides that before selling any shares to a third
party, the person must offer to sell them to the other party
to the RFR Agreement.
3) The J. Walter Cameron Family holdings include 648,331 shares
owned by Po'ohala Investments L.P., with respect to which
Mary C. Sanford has sole voting and investment power;
163,861 shares owned by Claire C. Sanford; 173,240 shares
owned by Jared B. H. Sanford; 118,244 shares owned by
Richard H. Cameron, his spouse and minor children (including
5,456 shares allocated to his account in the Maui Land &
Pineapple Company, Inc. Employee Stock Ownership Plan
["ESOP"]); 310,055 shares owned by Douglas B. Cameron;
156,116 shares owned by the Allan G. Sanford Trust, of which
Mary C. Sanford is the trustee; 399,104 shares owned by the
Cameron Family Partnership, whose general partners are
Mary C. Sanford, Richard H. Cameron, Claire C. Sanford and
Frances E. C. Ort; 201,790 shares owned by the J. Walter
Cameron Trust, FBO the Sanford Family, of which Mary C.
Sanford, Claire C. Sanford and Bank of Hawaii are co-
trustees; and 50,448 shares owned by the J. Walter Cameron
Trust, FBO Richard H. Cameron, of which Richard H. Cameron
and Bank of Hawaii are co-trustees. Voting and investment
decisions with respect to shares held by the Cameron Family
Partnership generally require approval of a majority of the
general partners. However, all of the partnership's general
partners must approve dispositions of the Company's shares.
Mrs. Ort has disclaimed sole or shared voting power and sole
investment power with respect to the shares held by the
Cameron Family Partnership.
(4) Paul J. Meyer, Douglas R. Schenk and Donald A. Young,
Executive Vice Presidents of the Company, and J. Susan
Corley and John P. Kreag, respectively, Vice President
and Treasurer, of the Company, are members of the
Administrative Committee of the Company's ESOP, which
was adopted by the Company on December 27, 1978. The
Administrative Committee directs and authorizes the
trustee as to various actions; however, the ESOP
requires the trustee to inquire of each plan
participant, on a confidential basis, how to vote the
shares allocated to the plan participant's individual
account with respect to certain matters. The trustee
is required to vote shares allocated to participants'
accounts for which no instructions are received and to
vote any shares not then allocated to participants'
accounts in the same proportions as the aggregate
shares allocated to participants' accounts are voted
pursuant to participants' instructions.
Security Ownership of Management
The following table sets forth information as of October 6,
2003 with respect to the Company's voting Common Stock
beneficially owned by directors, nominees, the Company's Chief
Executive Officer and four other most highly compensated officers
("Named Executive Officers") and by all directors, nominees and
executive officers of the Company as a group (see "Directors and
Executive Officers" below). Unless otherwise indicated and
subject to applicable community property and similar statutes,
all persons listed below have sole voting and investment power
over all shares of Common Stock beneficially owned. Share
ownership has been computed in accordance with SEC rules and does
not necessarily indicate beneficial ownership for any other
purpose.
Number
of Shares
Beneficially Percent
Owned of Class
John H. Agee 3,130,626 (1) 43.5%
Richard H. Cameron 567,796 (2) 7.9%
Claire C. Sanford 764,755 (3) 10.6%
Donald A. Young 11,580 (4) *
Paul J. Meyer 8,328 (4) *
Douglas R. Schenk 5,993 (4) *
Randolph G. Moore 4,000 *
Robert M. McNatt 160 (4) *
David C. Cole (6) -- --
Gary L. Gifford (5) -- --
David A. Heenan -- --
Fred E. Trotter III -- --
All directors, nominees and Named Executive Officers
as a group (14) 4,095,998 57.0%
*less than 1%
(1) John H. Agee, as President and Chief Executive Officer of
Ka Po'e Hana LLC, may be deemed to beneficially own
3,130,626 shares, which are owned of record by the Stephen M.
Case Revocable Trust (see Note (1) under "Security Ownership
of Certain Beneficial Owners"). Mr. Agee is a Class Three
Director.
(2) Richard H. Cameron owns of record 105,588 shares and
may be deemed to own beneficially 567,796 shares.
Included are 5,456 shares allocated to him as a
participant in the Company's ESOP (see Note (4) under
"Security Ownership of Certain Beneficial Owners");
7,200 shares owned by his spouse and minor children;
399,104 shares owned by the Cameron Family Partnership
(see Note (3) under "Security Ownership of Certain
Beneficial Owners"), which also may be deemed to be
owned by Claire C. Sanford (see Note (3) below); and
50,448 shares owned by the J. Walter Cameron Trust, FBO
Richard H. Cameron (see Note (3) under "Security
Ownership of Certain Beneficial Owners"). Mr. Cameron
has sole voting and investment power with respect to
110,388 shares, and shared voting and investment power
with respect to 457,408 shares. Mr. Cameron is a Class
Three Director.
(3) Claire C. Sanford owns of record 163,861 shares and may
be deemed to own beneficially 764,755 shares. Included
are 399,104 shares owned by the Cameron Family
Partnership (see Note (3) under "Security Ownership of
Certain Beneficial Owners"), which also may be deemed
to be owned beneficially by Richard H. Cameron (see
Note (2) above); and 201,790 shares owned by the
J. Walter Cameron Trust, FBO the Sanford Family (see
Note (3) under "Security Ownership of Certain Beneficial
Owners"). Ms. Sanford has sole voting and investment
power with respect to 163,861 shares, and shared voting
and investment power with respect to 600,894 shares.
Ms. Sanford is a Class Two Director.
(4) Primarily represent shares allocated to the Named Executive
Officers as participants in the Company's ESOP (see Note (4)
under "Security Ownership of Certain Beneficial Owners").
(5) Gary L. Gifford was President and Chief Executive Officer of
the Company until his retirement on May 27, 2003.
(6) David C. Cole was appointed as President and Chief Executive
Officer of the Company, effective as of October 15, 2003,
replacing Gary L. Gifford, and has been designated to fill one
of the vacancies in the Board that will result if the
shareholders vote to approve the amendment to the Articles
discussed in Proposal No. 1. Pursuant to his Employment
Agreement (see "Executive Compensation - Employment Agreement
of David C. Cole") and contingent upon shareholder approval of
Proposal No. 1, Mr. Cole has been granted 100,000 shares of
restricted stock, which carry voting and dividend rights.
Upon issuance, Mr. Cole may be deemed to beneficially own the
100,000 shares of restricted stock.
DIRECTORS AND EXECUTIVE OFFICERS
In August 2003, the Board of Directors appointed David C.
Cole as President and Chief Executive Officer and also as
Director Emeritus of the Company, effective as of October 15,
2003. Contingent upon shareholder approval of Proposal No. 1,
described above, Mr. Cole was designated a Class One Director to
fill the vacancy that would be created by the increase in board
size. See "Designee For Class One Director" below.
In March 2001, Daniel H. Case resigned his seat on the Board
as a Class Three Director and was appointed a Director Emeritus.
The remaining Board members, in accordance with the Bylaws,
appointed John H. Agee to fill Daniel H. Case's vacant seat. In
March 1999, Mary C. Sanford was appointed a Director Emeritus in
recognition of her many years of dedicated service. Directors
Emeritus are eligible to attend all meetings of the Board of
Directors, but are not eligible to vote and are not counted as
part of the quorum at any such meeting.
Under the Company's Bylaws, no person is eligible to be
elected as a director who has attained his or her 70th birthday
at the time of election, but the directors may create exceptions
to this requirement by resolution. At the Company's March 3,
2003 Board of Directors meeting, the Company's Board of Directors
passed a resolution to waive the age restriction with regard to
Fred E. Trotter III for the three-year term that began in 2003.
The following section indicates the principal occupation or
employment of each director and designee for directorship, his or
her positions with the Company and other information, and the
year first elected as a director.
Designee For Class One Director - Term expires in 2006:
David C. Cole President and Chief Executive Officer of
(age 51) Maui Land & Pineapple Company, Inc. since
October 2003. Chairman of Sunnyside
Farms, LLC, a supplier of certified
organic fruits, vegetables, flowers, meats
and eggs headquartered on a 500-acre farm
in Washington, Virginia since =====.
Mr. Cole was also Chairman of Twin Farms, a
Mobil Five-Star resort located in Barnard,
Vermont from =========. Mr. Cole has
served in a variety of executive
positions, including Chairman, President
and CEO of Ashton-Tate, an early leader in
database software, and Chairman, President
and CEO of NaviSoft, Inc., a pioneer in
online publishing software that was
acquired by America Online, Inc. in 1994.
From 1994 to 1997, he served as an officer
of AOL, initially as President of AOL's
Internet Services Company and later as
President of AOL's New Enterprises Group.
Cole has also been the lead investor in a
variety of early-stage technology
companies, including Macromedia, Inc.,
Shiva Corporation (acquired by Intel), and
Tops, Inc. (acquired by Sun Microsystems).
Active in conservation and early childhood
education, Cole is a director of PBS,
Island Press, Sesame Workshop, and the
American Farmland Trust. He is a former
director of the Nature Conservancy and the
World Wildlife Fund. Mr. Cole has been
designated to fill the Class One vacancy
that will result if the Company's Articles
are amended upon shareholder approval of
Proposal No. 1.
Class One Directors-Term expires in 2006:
Randolph G. Moore Teacher with the State of Hawaii, Department
(age 64) of Education, 2001 to present. He was Chief
Executive Officer of Kaneohe Ranch, a
manager of family trusts in Kailua, Hawaii
and Executive Vice President of the H.K.L.
Castle Foundation, a charitable family
foundation in Kailua, Hawaii from 1989 to
2001. Mr. Moore has extensive experience
in property management and development in
Hawaii. Mr. Moore was President of
Molokai Ranch Ltd., a real estate
management and development company in
Maunaloa, Hawaii from 1986 to 1989.
Mr. Moore serves on the boards of the
Harold K. L. Castle Foundation, and the
privately held companies, Hawaii Stevedores,
Inc., Koga Engineering & Construction, Inc.,
Haleakala Ranch Company and Grove Farm
Company, Inc.He is Chairman of the Board
of Trustees of the Land Use Research
Foundation. Mr. Moore serves on the
boards of a number of community
organizations. He has been a director of
the Company since 1994.
Fred E. Trotter III President of F. E. Trotter Inc., a
(age 72) business consulting firm in Honolulu, Hawaii,
1991 to present. He was a Trustee of The
Estate of James Campbell, a private trust,
in Honolulu, Hawaii, from 1970 to 1991.
Mr. Trotter is a Director of Longs Drug
Stores Corp. and the privately held companies,
Haleakala Ranch Company and Waterhouse Inc.
He is a member of the Executive Committee of
JAIC-Shinrai Venture Capital, Investment,
Ltd., a Japanese limited partnership.
Mr. Trotter serves on the boards of the
Kahuku Community Hospital, The Aloha Council
Boy Scouts of America and various other
community organizations. Mr. Trotter has
extensive experience in agribusiness and
property management in Hawaii. He has
been a director of the Company since 1992.
On April 28, 2003, Fred E. Trotter III
filed a petition under Chapter 7 of the
Bankruptcy Code with the United States
Bankruptcy Court, District of Hawaii.
Mr. Trotter is a defendant in a civil suit
filed in the Circuit Court of the First
Circuit, Honolulu, Hawaii, Civil No.
99-4038-10. The action for collection of a
promissory note was brought by Finance
Factors, Ltd. against Koolau Agricultural
Co., Ltd., a corporation owned solely by
Mr. Trotter's wife, Valerie Mendes, but on
which debt Mr. Trotter and his wife had
given personal guarantees. In a separate
suit, Civil No. 00-1-0533-02, Pacific Loan
Holdings, Ltd., an affiliate of Finance
Factors, Ltd. filed a breach of contract
claim against Mr. Trotter for alleged
failure to pay the total debt under 12
promissory notes dated between October of
1991 and September of 1992. On April 28,
2003, Mr. Trotter, his wife and her two
corporations filed petitions in bankruptcy
in an attempt to resolve the claims
against them and related corporations -
Bankruptcy Nos. 03-01289, 03-01290,
03-01291 and 03-01292.
Class Two Directors-Term expires in 2004:
David A. Heenan Trustee of The Estate of James Campbell, a
(age 63) private trust in Honolulu, Hawaii, 1995 to
present. He was President and Chief
Executive Officer of Theo. H. Davies & Co.,
Ltd., the North American holding company for
the Hong Kong-based Jardine Matheson from 1982
to 1995. Mr. Heenan is a Director of Aloha
Airlines (privately held) and Bank of Hawaii
Corporation. Mr. Heenan has been a
director of the Company since 1999 and
Chairman of the Board since May 2003.
Claire C. Sanford Co-owner of Top Dog Studio, a jewelry and
(age 45) metal sculpture business in Gloucester,
Massachusetts, 1986 to present. Ms. Sanford
has served on one or more of the Company's
subsidiary boards since 1987 and has been a
director of the Company since 1999. Mary C.
Sanford, a Director Emeritus, is the mother
of Ms. Sanford and Director Richard H. Cameron
is a cousin of Ms. Sanford.
Class Three Directors- Term expires in 2005:
Richard H. Cameron Assistant Manager of Waldenbooks, a retail
(age 49) store in Kihei, Hawaii, 2002 to present.
Mr. Cameron was Chairman of the Board of Maui
Land & Pineapple Company, Inc. from March
1999 to May 2003. He has been a private
investor in Kihei, Hawaii since 1999. He
was the Publisher of Maui Publishing Company,
Ltd., a newspaper publishing company in
Wailuku, Hawaii, from 1995 to 2000.
Mr. Cameron was Vice President/Property
Management of Maui Land & Pineapple Company,
Inc. from 1990 to 1995. Mr. Cameron serves
on the boards of the privately held companies,
Haleakala Ranch Company and Triple C
Investment Corp. He has been a director of
the Company since 1984. Mary C. Sanford, a
Director Emeritus, is the aunt of Mr. Cameron
and Director Claire C. Sanford is a cousin of
Mr. Cameron.
John H. Agee President and Chief Executive Officer of
(age 54) Ka Po'e Hana LLC, a private family investment
office, 2000 to present. He is also Executive
Vice President of The Case Foundation, a
private foundation in Washington D.C.
Mr. Agee was President of Adler Management LLC
from 1986 to 2000. Mr. Agee serves on the
boards of the privately held companies,
Grove Farm Company, Inc. and Exclusive
Resorts LLC. Mr. Agee serves on the
boards of various community organizations.
He has been a director of the Company
since 2001.
Executive Officers of Registrant:
Below is a list of the names and ages of the Company's
executive officers, indicating their position with the Company
and their principal occupation during the last five years. The
current terms of the executive officers expire in May of 2004 or
at such time as their successors are elected.
David C. Cole President and Chief Executive Officer
(age 51) since October 2003. See "Designee for
Class One Director" above.
Paul J. Meyer Executive Vice President/Finance since 1984.
(age 55)
Douglas R. Schenk Executive Vice President/Pineapple since 1995.
(age 51)
Donald A. Young Acting President and Chief Executive Officer
(age 55) from May 2003 to October 2003; Executive
Vice President/Resort & Commercial Property
since 2001; Executive Vice President/Resort
since 1995.
J. Susan Corley Vice President/Human Resources since 2000;
(age 60) Director/Human Resources 1998 to 2000;
Director/Industrial Relations of Reynolds
Metals Co., Inc. 1994 to 1998.
Robert M. McNatt Vice President/Land Planning & Development
(age 56) since 2001; Vice President/Development of
Kapalua Land Company since 1996.
Warren A. Suzuki Vice President/Land & Water Asset
(age 51) Management since 2001; Vice President/Land
Management & Development since 1995.
Certain Transactions
See information regarding Haleakala Ranch Company in
"Compensation Committee Interlocks and Insider Participation."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires the
Company's officers and directors and beneficial owners of more
than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies of
such reports. To the Company's knowledge, based solely upon a
review of such reports and amendments thereto received by the
Company during or with respect to its most recent fiscal year
and upon written representations regarding all reportable
transactions, the Company did not identify any such required
report that was not timely filed.
Directors' Meetings and Committees
The Board of Directors held four meetings in 2002. It has
two standing committees, the Audit Committee and the Compensation
Committee. The Audit Committee held six meetings and the
Compensation Committee held one meeting in 2002. The Board has
no Nominating Committee. In 2002, all directors attended at
least 75% of the aggregate meetings of the Board and committees
on which they serve.
The Audit Committee serves as an independent check on the
reliability of the Company's financial controls and its financial
reporting, selects and monitors the independence and performance
of its independent auditors and monitors the performance of the
Company's internal auditors. Members of the Audit Committee are
Randolph G. Moore (chairman), David A. Heenan and Fred E.
Trotter III. All of the Audit Committee members are independent
from the Company and its management, as defined by Section 121A
of the American Stock Exchange Listing Standards.
The Compensation Committee reviews and approves the
compensation plans, salary recommendations and other matters
relating to compensation of senior management and directors.
Members of the Compensation Committee are Fred E. Trotter III
(chairman), John H. Agee, Richard H. Cameron, Daniel H. Case
(Director Emeritus), David A. Heenan, Randolph G. Moore,
Claire C. Sanford and Mary C. Sanford (Director Emeritus).
In 2002, directors received attendance fees of $650 for
each Board meeting attended. Directors also received an annual
fee of $14,500. The Chairman of the Board received an annual
fee of $29,000. Directors received attendance fees of $325
for each committee or subcommittee meeting. Directors Emeritus
are entitled to expense reimbursements and attendance fees, but
do not receive annual retainers.
EXECUTIVE COMPENSATION
Summary of Cash and Other Compensation
The following table summarizes the cash and non-cash
compensation paid by the Company for services rendered during
each of the last three fiscal years by the Company's Named
Executive Officers.
SUMMARY COMPENSATION TABLE
Annual Compensation
All
Name and Other
Principal Position Year Salary Bonus Compensation
(1) (2)
Gary L. Gifford (3) 2002 $422,295 $ -- $ 3,066
President & Chief 2001 399,411 -- 2,148
Executive Officer 2000 389,917 -- 2,054
Paul J. Meyer 2002 264,750 -- 2,431
Executive Vice 2001 252,567 -- 1,601
President/Finance 2000 246,958 -- 1,544
Douglas R. Schenk 2002 248,683 -- 1,445
Executive Vice 2001 235,057 -- 1,291
President/Pineapple 2000 229,317 -- 1,092
Donald A. Young 2002 236,667 -- 2,431
Executive Vice 2001 223,517 4,032 1,550
President/Resort & 2000 216,983 -- 1,459
Commercial Property
Robert M. McNatt (4) 2002 166,000 -- 986
Vice President/Land 2001 160,906 3,629 428
Planning & Development 2000 143,567 -- 386
(1) Represents annual incentive award earned for the year.
(2) Amounts represent value of life insurance benefits in
accordance with Internal Revenue Service Table PS-58.
(3) Mr. Gifford retired from the Company effective May 27, 2003.
(4) Includes amounts earned prior to May 2001 as Vice
President/Development of Kapalua Land Company, Ltd.
LONG-TERM INCENTIVE PLAN AWARDS
The following table sets forth estimates of the possible
future payouts to each of the Named Executive Officers under the
Company's Long-Term Incentive Plans:
Performance Estimated Future Payouts Under
Period Until Non-Stock Price Based Plan
Name Payout Threshold Target Maximum
Gary L. Gifford 2001 - 2003 $55,700 $111,500 $167,300
2002 - 2004 33,600 67,200 100,800
Paul J. Meyer 2001 - 2003 31,000 62,200 93,200
2002 - 2004 32,300 64,600 96,900
Douglas R. Schenk 2001 - 2003 28,900 57,800 86,700
2002 - 2004 30,100 60,100 90,200
Donald A. Young 2001 - 2003 27,300 54,700 82,100
2002 - 2004 28,600 57,200 85,900
Robert M. McNatt 2001 - 2003 10,300 20,700 31,000
2002 - 2004 12,000 24,000 36,000
The goals for the performance cycles beginning in 2001 and
2002 are based on cumulative cash flow from operating activities
for the three years ended December 31, 2003 and 2004,
respectively, and a targeted return on equity for the three-year
period. The Company's financial performance must meet the
threshold for both goals to initiate a payout. Threshold, target
and maximum award amounts for Mr. Gifford reflect the pro-rata
shares pursuant to his Employment Separation Agreement described
below.
Pension Plan
The following table shows the estimated annual retirement
benefit to employees in specified compensation and years of
service classifications under the Maui Land & Pineapple Company,
Inc. Pension Plan for Non-Bargaining Unit Employees and the
Company's Supplemental Executive Retirement Plan ("SERP"):
ESTIMATED ANNUAL BENEFIT FROM QUALIFIED DEFINED BENEFIT PLAN
AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Final
5-Year Years of Service at Age 65
Average
Annual
Salary 15 20 25 30 35
$100,000 $19,202 $25,603 $32,004 $38,405 $42,672
125,000 24,827 33,103 41,379 49,655 55,172
150,000 30,452 40,603 50,754 60,905 67,672
175,000 36,077 48,103 60,129 72,155 80,172
200,000 41,702 55,603 69,504 83,405 92,672
225,000 47,327 63,103 78,879 94,655 105,172
250,000 52,952 70,603 88,254 105,905 117,672
275,000 58,577 78,103 97,629 117,155 130,172
300,000 64,202 85,603 107,004 128,405 142,672
325,000 69,827 93,103 116,379 139,655 155,172
350,000 75,452 100,603 125,754 150,905 167,672
375,000 81,077 108,103 135,129 162,155 180,172
400,000 86,702 115,603 144,504 173,405 192,672
425,000 92,327 123,103 153,879 184,655 205,172
450,000 97,952 130,603 163,254 195,905 217,672
475,000 103,577 138,103 172,629 207,155 230,172
Compensation covered by the qualified pension plan and the
SERP is base salary. Retirement benefits are computed based on
each participant's years of service, year of birth, earnings and
retirement date and are not subject to any deduction for social
security or other offset amounts. Normal retirement age for
participants is 65 with provisions for retirement as early as 55
and after age 65. Benefits are payable as a qualified joint and
survivor annuity with options for benefits in other annuity
forms. Vesting is 100% after five years of service. When the
benefits of an employee under the pension plan are reduced
because of the maximum annual benefit limitation ($160,000 in
2002) or the maximum compensation limitation ($200,000 in 2002),
the SERP provides a benefit to make up the difference. Effective
January 1, 2000, the SERP will provide additional pension
benefits for Messrs. Gifford, Meyer, Schenk and Young such that
at age 65, pension benefits will approximate 60% of their final
5-year average earnings. At December 31, 2002, the Named
Executive Officers were credited with approximately the following
years of service for pension computation purposes: Gifford -14.3;
Meyer -17.8; Schenk -25.3; Young -23.5; McNatt -6.0.
Executive Severance Plan
An Executive Severance Plan covers the Company's executive
officers other than Mr. Cole. Payments under the Executive
Severance Plan will be made to an executive officer who is
terminated from employment as a result of a restructured or
downsized operation; discontinuance of certain business
activities; or elimination of a position with no comparable
position within the Company being offered to the executive. The
amount of the severance payment is twelve months of base salary
for vice presidents and one month's base salary for each year of
service with a minimum of twelve months and a maximum of eighteen
months for the chief executive officer and executive vice
presidents. This payment will be made on the regular payroll
schedule for the number of months that the executive is eligible
to receive payment. If an incentive plan is in effect, the
executive also will receive a pro-rated annual incentive plan
payment earned during the year in which separation from
employment occurred in accordance with the terms of such plan.
During the period that the executive is eligible to receive
severance payments, the Company will provide health care benefits
with the same coverage and same employer contributions as the
executive was receiving before termination of employment.
Change-In-Control Agreements
Change-in-Control Agreements dated March 1999 (the
"Severance Agreements") cover Named Executive Officers, Messrs.
Meyer, Schenk and Young. Any payments under the Severance
Agreements would be in lieu of any payments under the Executive
Severance Plan. The Severance Agreements with the executive
officer provide that a "change-in-control" means one or more of
the following occurrences with respect to the Company or a
Subsidiary:
- any person or group who is not on the date of the Severance
Agreements a beneficial owner of 25% or more of the voting
shares of the Company or a Subsidiary becomes the beneficial
owner of 25% or more of the total number of voting shares of
that entity;
- any person or group who is not on the date of the Severance
Agreements the beneficial owner of 50% or more of the shares
of the Company or a Subsidiary becomes the beneficial owner
of 50% or more of the total number of voting shares of that
entity;
- the persons who were directors of the Company or a
Subsidiary before a cash tender or exchange offer, merger
or other business combination, sale of assets or contested
election cease to constitute a majority of the Board of
Directors of that entity or a successor thereto;
- a merger or consolidation of the entity occurs in which the
survivor is neither the Company nor a direct or indirect
wholly owned subsidiary of the Company;
- a sale, transfer or other disposition of all or
substantially all (as defined) of the assets of the Company
or Subsidiary; and, in addition, in the case of a Subsidiary,
a disposition of 50% or more of such Subsidiary's outstanding
voting securities; or
- a spin-off, split-off, split-up or similar divisive
reorganization affecting the Company and/or its Subsidiaries.
"Subsidiary" means Maui Pineapple Company, Ltd. and Kapalua
Land Company, Ltd.
The Severance Agreements with the executive officer entitle
the executive to severance payments if a change-in-control occurs
and within 36 months thereafter the executive's employment
terminates involuntarily without "just cause" (as defined) or the
executive voluntarily terminates employment for "good reason" (as
defined).
Severance payments include:
- a lump sum cash payment of 2.99 times the executive's annual
base salary in effect on the effective date of termination
(or, if greater, in effect ninety days prior to the change-in-
control);
- a payout under the Company's annual incentive plan (if any),
in accordance with the terms of such plan;
- a continuation of all welfare benefits at normal employee
cost for three full years from the effective date of termination;
- special retirement benefits equal to the retirement benefit
that the executive would have received under the Maui Land &
Pineapple Company, Inc. Pension Plan for Non-Bargaining Unit
Employees, the Supplemental Executive Retirement Plan and
Executive Supplemental Insurance Plan/Executive Deferred
Compensation Plan, or any successor plans or arrangements to
such plans, had the executive's employment continued for
36 months following the executive's effective date of
termination; and
- standard outplacement services as selected by the executive
for a period of up to 36 months from the effective date of
termination.
The Severance Agreements provide that if any portion of the
severance payment or payment under any other agreement or plan of
the Company would constitute an "excess parachute payment," then
the payment to the executive will be reduced if such reduction
results in an increase in the executive's net benefit. If it is
ultimately determined pursuant to a final determination by the
Internal Revenue Service that any portion of the severance
payment is a "parachute payment" subject to excise tax, which was
not contemplated to be a "parachute payment" at the time of
payment, the executive will be entitled to a lump sum cash
payment sufficient to place the executive in the same net after
tax position that would have existed if such payment had not been
subject to the excise tax.
Employment Separation Agreement for Gary L. Gifford
Pursuant to the retirement of Gary L. Gifford, President and
CEO, effective as of May 27, 2003, the Company and Mr. Gifford
entered into an Employment Separation Agreement (the "Separation
Agreement") covering the terms and conditions regarding his
separation. Prior to his retirement, Mr. Gifford was covered by
a Change-in-Control Agreement, but his separation from the
Company did not trigger payments under that agreement.
In the Separation Agreement, the Company and Mr. Gifford
agreed to general confidentiality, mutual release and
indemnification provisions and cooperation with regard to future
litigation if necessary. The Separation Agreement provided that
annual pension payments to Mr. Gifford under the Maui Land &
Pineapple Company, Inc. Pension Plan for Non-Bargaining Unit
Employees and the Company's Supplemental Executive Retirement
Plan would be increased to $152,000 per year (based on single-
life annuity). The Separation Agreement also provided for a
lump sum payment from the unfunded Executive Severance Plan of
$708,000. The Separation Agreement included provisions for
Mr. Gifford to receive a pro-rata share of any award payable
under the Company's 2003 unfunded Annual Incentive Plan and the
unfunded Long-Term Incentive Plans. The Separation Agreement
provided for health plan benefits pursuant to the Executive
Severance Plan and benefits pursuant to any and all other
employee benefit plans and policies provided to salaried
employees generally.
Employment Agreement for David C. Cole
Mr. Cole has entered into an Employment Agreement with the
Company (the "Employment Agreement") to serve as President and
Chief Executive Officer, effective October 15, 2003, continuing
for an indefinite term at the pleasure of the Board of Directors.
Mr. Cole will also serve on the Board, contingent upon the
approval by the shareholders at the Special Meeting of the
expansion of the Board to nine members pursuant to Proposal
No. 1. The Company will use its best efforts to appoint
Mr. Cole to the position of Chairman of the Board within six
months from Mr. Cole's start date.
Mr. Cole will receive a base salary of $450,000 per year,
with his performance to be reviewed annually by the Board to
determine if an increase is warranted. He will be eligible to
participate in the Company's employee and executive benefit
plans and programs, other than the Annual Incentive, Long Term
Incentive and Executive Separation Plans. In lieu of
participation in those plans, Mr. Cole is to receive equity
compensation of up to 300,000 shares of Common Stock, of which
100,000 would be shares of restricted stock and 200,000 would be
nonqualified stock options, contingent upon the approval by the
shareholders of the authorization of the required additional
shares pursuant to Proposal No. 1. In that regard, Mr. Cole also
has entered into a Restricted Share Agreement (the "Restricted
Share Agreement") and a Stock Option Agreement (the "Option
Agreement") with the Company, which are further described below.
Mr. Cole is entitled to reimbursement for reasonable expenses
incurred in the performance of his duties, reasonable relocation
expenses, and up to $10,000 for legal fees for his counsel's
review of the Employment Agreement.
Mr. Cole's employment will continue at the pleasure of the
Board until terminated with or without cause by the Board or by
his death, disability, voluntary resignation or resignation for
good reason. If Mr. Cole's employment is terminated due to his
death or disability, he (or his estate) will be entitled to his
salary earned through the termination date, the right to exercise
vested options for a year following termination, any vested
restricted shares (including, if he dies or is disabled after
June 30 of 2005, 2006 or 2007, a pro rata amount based on the
portion of the period he served), and any other vested employment
benefits. If Mr. Cole's employment is terminated for "cause," he
will be entitled only to salary earned through the date of
termination, any vested restricted shares, and any other vested
employee benefits. If Mr. Cole's employment is terminated
without "cause" or he resigns for "good reason," he will be
entitled to a severance payment of $450,000, in addition to any
salary earned through the date of termination or resignation, the
immediate vesting of all unvested restricted shares and stock
options, and the right to exercise vested options for six months
following termination, in addition to all other amounts earned or
accrued but not paid and any vested employee benefits. However,
if the "good reason" triggering resignation is a failure by the
Company to implement Mr. Cole's restricted share grants or stock
options or his failure to be elected Chairman or the Board within
the time described below, in lieu of immediate vesting of his
restricted shares and stock options he will instead receive an
additional $50,000 severance payment.
"Cause" includes: a breach of the Employment Agreement by
Mr. Cole that is not cured after 15 days notice; a failure or
refusal to carry out the Board's policies; a material and
intentional or grossly negligent breach of the duty of care or
a willful or grossly negligent breach of the duty of loyalty
resulting in a material injury to the Company or its
shareholders; a conviction or plea of guilty or no contest to
any crime for which imprisonment is a possibility or which results
in a fine or penalty by the Company; or any knowing violation
of a law or regulation that results in a fine or penalty to the
Company exceeding $50,000 or a judgment of $1,000,000 or more.
A resignation for "good reason" includes a resignation
within 180 days after: any failure by the Company to implement
Mr. Cole's restricted share grants or stock options (including
the approval by the shareholders of Proposal No. 1 at the Special
Meeting) or to appoint him to the Board (including the approval
by the shareholders of Proposal No. 1 at the Special Meeting) by
December 31, 2003, or to elect him as Chairman of the Board by
April 15, 2004, or in each case any later date as is agreed in
writing; a material breach of the Employment Agreement by the
Company; material interference by the Company with Mr. Cole's
access to the Board; a decrease in title or compensation or a
material decrease in authority; or a "Change in Control." For
these purposes, a "Change in Control" includes:
- - if any person or group (other than an existing stockholder
or group of stockholders or their affiliates) beneficially
owns more than 30% of the total voting power of the Company's
stock on a fully diluted basis, and such beneficial ownership
represents a greater percentage of the total voting power of
the Company's stock, on a fully diluted basis, than is held by
any existing stockholder or group, together with their
respective affiliates;
- - if a majority of the Board comes to consist of those who are
not members on the date of the Employment Agreement, or were
not nominated or elected by two-thirds of such directors;
- - a merger or consolidation of the Company after which one or
more of the current shareholders retains less than 60% of the
voting shares of the surviving entity;
- - the sale or transfer, not recommended by Mr. Cole of 50% or
more of the Company's assets; or
- - the Company's approval and implementation of a plan of
liquidation or dissolution or the filing of a bankruptcy
petition.
Mr. Cole will be entitled to indemnity pursuant to the
applicable law and the Company's current Bylaws and resolutions
in effect as to the most favorably indemnified officer or
director, or if more favorable, the terms of such bylaws or
resolutions as may later become effective. Mr. Cole will comply
with the Company's existing policies on conflicts of interest and
business ethics, and will have standard confidentiality and
invention assignment obligations. For a one year period after
Mr. Cole's employment is terminated, he agrees not to solicit or
encourage Company employees or contractors to leave the Company
(without Board approval), or to solicit or encourage current or
prospective customers to cease or reduce their business with the
Company.
Under the Restricted Share Agreement, Mr. Cole's 100,000
shares of restricted stock will vest at the rate of up to 25,000
shares per fiscal year from 2004 through 2007, subject to the
achievement of certain agreed performance measures. For 2004, up
to 25,000 shares will vest, based on the Compensation Committee's
assessment of the achievement of the following objectives:
- - return of the agricultural group to break-even by the end
of 2004;
- - adoption of a strategic plan describing the Company's chosen
markets and methods;
- - configuring and aligning an executive team with the skills
and incentives to implement the strategic plan; and
- - enriching and extending the Company's reputation as a good
corporate citizen on Maui and throughout Hawaii.
An additional 25,000-share block will be subject to vesting
for each fiscal year 2005 through 2007. The number of shares
vested will be determined based on the Company's achievement of a
minimum return on equity (i.e., net income after tax, exclusive
of extraordinary items such as discontinued operations, asset
sales outside the ordinary course of business, and major
impairment losses, divided by beginning stockholders' equity, all
in accordance with generally accepted accounting principles,
unless otherwise agreed), of 10%, with maximum vesting at 20%.
The number of shares vested would be calculated on a straight-
line basis between the minimum and the maximum. In addition, if
any shares do not vest in any year under this calculation, then
they would be available for additional vesting based on the
Company's average return on equity beginning in 2005. For
example, assume that for fiscal year 2005 the Company's return on
equity is 15%. Therefore, 50% of the 25,000 share block for
2005, or 12,500 shares, would vest. However, assume that for
fiscal years 2005 and 2006 the average return on equity was 16%.
An additional 10% of the 25,000 share block for 2005, or 2,500
shares, would vest, in addition to whatever shares vested for
fiscal year 2006. Any nonvested restricted shares generally will
be forfeited if Mr. Cole's employment is terminated or if not
vested in accordance with this schedule, except that any
nonvested shares will vest immediately if Mr. Cole is terminated
without cause, or if he resigns with good reason. However, if
Mr. Cole dies or is disabled after June 30 of 2005, 2006 or 2007,
the number of shares that vest according to the above
calculations will be prorated based on the portion of the period
served. Also, in the case of the failure of the Company to
implement his restricted shares or options or his failure to be
elected to Chairman of the Board, as described above within the
required time, he will instead receive an additional $50,000
severance payment.
Under the Option Agreement, the grant of Mr. Cole's stock
options was effective as of his start date of October 15, 2003.
The exercise price for the options is $19.70 per share, the fair
market value of the Company's Common Stock on August 11, 2003.
The term of the options expires ten years from the date of grant.
One-third of the options will vest and become exercisable one
year from the date of grant, with the remaining two-thirds
vesting in eight equal quarterly installments between the first
and third anniversaries of the grant date. Any nonvested options
generally will vest immediately if Mr. Cole is terminated without
cause, or if he resigns with good reason. However, in the case
of the failure of the Company to implement his restricted shares
or options or his failure to be elevated to Chairman of the Board
within the required time, he would instead receive and additional
$50,000 severance payment as described above.
Report of Compensation Committee on Executive Compensation
(Please note that, pursuant to SEC rules, the following
report of the Compensation Committee relates to compensation for
fiscal year 2002, the Company's last full fiscal year, and does
not address compensation matters occurring in 2003, including the
negotiation of Mr. Cole's employment arrangements discussed above
under "-- Employment Agreement for David C. Cole.")
The Compensation Committee of the Board of Directors is
composed entirely of directors who are not members of the
Company's management. The Board of Directors has charged the
Committee with the responsibility of administering the Company's
executive compensation program. The Committee is assisted from
time to time by independent management consultants who advise the
Committee on compensation matters.
The Committee's philosophy with regard to executive
compensation is to attract, retain and reward the level of
expertise needed to achieve the Company's business objectives.
The Committee believes that compensation should emphasize
performance-based variable pay plans rather than base salary.
While base salary is an important part of the compensation
program, the Committee would like the Company to manage base
salaries with the objective of maintaining relatively low fixed
cost levels as the Company shifts reward opportunity into
variable pay plans.
Base salaries are determined based on midpoint salary
information provided by an independent management consultant with
reevaluations as conditions warrant. In March 2002, the
Committee approved increases averaging 4.7% in the base salary
midpoints for the executive officers. The Company's salary
system seeks to establish salaries that are within 80% to 120% of
the midpoint guidelines, based on experience, knowledge of the
position and performance level. Midpoint information is derived
from a group of U.S. industrial organizations that are similar in
size, scope and complexity to the Company. This group is
different from the S&P 600 Food Products referred to in the
Shareholder Return Performance Graph on page ==.
In February 2002, a subcommittee of the Committee,
consisting of Messrs. Trotter, Cameron and Moore, reviewed the
performance of the CEO in relation to the financial and non-
financial objectives set early in the year. The Committee
approved a base salary adjustment for the CEO based on its
qualitative judgment as to his job performance, including the
achievement of performance goals and with consideration given to
the midpoint salary information. In March 2002, the Committee
approved a 4% salary increase for Mr. Gifford.
In March 2002, the Committee reviewed with Mr. Gifford as
CEO, the individual performance of each of the other executive
officers and evaluated the CEO's recommendations as to
appropriate compensation awards. The CEO recommends base salary
adjustments to the Committee based on his qualitative judgment as
to overall job performance, salary midpoints, the relationship of
the executive's compensation to the midpoint and the Company's
overall budget for salaries. In March 2002, the Committee
approved increases to the base salaries for these executive
officers ranging from 2.9% to 6.3%.
In March 2002, the Committee approved measures and goals for
the 2002 Long- Term Incentive Plan cycle, which covers the
executive officers and certain other key employees. The threshold
for payout under this plan is based on cumulative cash flow from
operating activities for the years 2002 through 2004 and a
targeted return on beginning equity for the three-year period.
Potential payout percentages under this plan vary, and range from
7.5% to 52.5% of annual salary.
Compensation Committee:
Fred E. Trotter (Chairman) David A. Heenan
John H. Agee Randolph G. Moore
Richard H. Cameron Mary C. Sanford
Daniel H. Case Claire C. Sanford
Shareholder Return Performance Graph
Set forth below is a graph comparing the cumulative total
shareholder return on Maui Land & Pineapple Company, Inc. common
stock against the cumulative total return of the S&P Small Cap
600 Index and the S&P 600 Food Products.
[SEE APPENDIX FOR GRAPH POINTS]
*$100 invested on December 31, 1997 in common stock of Maui
Land & Pineapple Company, Inc., S&P Small Cap 600 Index and
S&P 600 Food Products.
Compensation Committee Interlocks and Insider Participation
Committee member Richard H. Cameron was an executive officer
of the Company until his resignation in October 1995.
The Company currently leases approximately 1,600 acres of
grazing land to Haleakala Ranch Company at an annual rent of
$16,000. The lease expires on June 30, 2018. In November 2002,
the Company's Board of Directors approved the formation of a
joint venture with Haleakala Ranch Company to develop and sell
approximately 100 acres of land in Upcountry Maui. Richard H.
Cameron and Mary C. Sanford are officers, directors and major
stockholders of Haleakala Ranch Company. Claire C. Sanford is a
major stockholder of Haleakala Ranch. Committee members Fred E.
Trotter III and Randolph G. Moore are directors of Haleakala
Ranch Company.
Except for the foregoing, no member of the Compensation
Committee during fiscal year 2002 served as an officer, former
officer or employee of the Company or any of its subsidiaries, or
had a relationship discloseable under "Certain Transactions."
Further, during fiscal year 2002, no executive officer of the
Company served as a member of the Compensation Committee (or
equivalent) of any other entity, one of whose executive officers
served as one of the Company's directors or on its Compensation
Committee; or as a director of any other entity, one of whose
executive officers served on the Company's Compensation
Committee.
OTHER MATTERS
The Board knows of no other matters that may be brought
before the meeting. However, if any other matters are properly
brought before the meeting, the persons named in the enclosed
proxy or their substitutes will vote in accordance with their
best judgment on such matters, and discretionary authority to do
so is included in the proxy.
SOLICITATION OF PROXIES
The entire cost of soliciting proxies will be borne by the
Company. The Company has engaged Mellon Investor Services to aid
in the solicitation. For these services, the Company will pay
Mellon a fee of approximately $4,500 and reimbursement of certain
out-of-pocket disbursements and expenses. The Company may make
arrangements with brokerage houses, banks and other custodians,
nominees and fiduciaries to forward proxies and proxy material to
the beneficial owners of the common stock of the Company and to
request authority for the execution of proxies. In such cases,
the Company may reimburse such brokerage houses, banks,
custodians, nominees and fiduciaries for their expenses in
connection therewith. Proxies may be solicited in person or by
telephone, mail, facsimile or other electronic means by certain
directors and officers of the Company without additional
compensation for such services, or by its Transfer Agent, and the
cost will be borne by the Company.
STOCKHOLDER PROPOSALS AND NOMINATIONS
Proposals of stockholders intended to be presented pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934 (the
"Exchange Act") must be received at the corporate offices of the
Company on or before December 2, 2003 in order to be considered
for inclusion in the Company's proxy statement and proxy card for
the 2004 Annual Meeting.
The Company's Bylaws contain additional requirements that
must be satisfied for any proposal of stockholders made other
than under Rule 14a-8 or any nomination by a stockholder of
directors to be considered at an annual or special meeting.
Compliance with these requirements will entitle the proposing
shareholder only to present such proposals or nominations before
the meeting, not to have the proposals or nominations included in
the Company's proxy statement or proxy card. Such proposals or
nominations may not be brought before an annual meeting by a
stockholder unless the stockholder has given timely written
notice in proper form of such proposal or nomination to the
Chairman of the Board, the President or the Secretary of the
Company. Such proposals or nominations may be made only by
persons who are stockholders of record on the date on which such
notice is given and on the record date for determination of
stockholders entitled to vote at that meeting.
Stockholder notices of any proposals or nominations intended
to be considered at the 2004 Annual Meeting will be timely only
if received at the Company's corporate offices no earlier than
December 31, 2003 and no later than January 31, 2004. However,
if the 2004 Annual Meeting is called for a date that is not
within thirty days before or after May 27, 2004, any such notice
will be timely only if it is received no later than the close of
business on the tenth day following the date of the Company's
first mailing of the notice of the 2004 Annual Meeting or the
date of the Company's public disclosure of the date of the 2004
Annual Meeting, whichever is earlier.
To be in proper written form, a stockholder's notice
concerning a proposal to be presented at an annual meeting must
set forth as to each matter the stockholder proposes to bring
before the annual meeting:
- - a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting;
- - the name and record address of such stockholder;
- - the number of shares of stock of the Company owned by such
stockholder beneficially and of record;
- - a description of all arrangements or understandings between
such stockholder and any other person or persons (including
their names) in connection with the proposal of such business
by such stockholder and any material interest of such
stockholder in such business; and
- - a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such
business before the meeting.
To be in proper written form, a notice concerning a
nomination for election to the Board of Directors must set forth
as to each person whom the stockholder proposes to nominate for
election as a director:
- - the name, age, business address and residence address of the
person;
- - the principal occupation or employment of the person;
- - the number of shares of stock of the Company owned by the
person beneficially and of record; and
- - any other information relating to the person that would be
required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated thereunder; and as
to the stockholder giving the notice:
- - the name and record address of such stockholder;
- - the number of shares of stock of the Company owned by such
stockholder beneficially and of record;
- - a description of all arrangements or understandings between
such stockholder and each proposed nominee and any other person
or persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder;
- - a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named
in its notice; and
- - any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to serve
as a director if elected.
In addition, assuming that the shareholders approve Proposal
No. 1 and the related Bylaw changes take effect, no person will
be eligible for election as a director if such election would
cause the Company to have insufficient "independent directors"
within the meaning of Section 121 of the Listing Standards,
Policies and Requirements of the American Stock Exchange LLC (or
any successor provision).
Any notice concerning proposals or nominations sought to be
considered at an Annual Meeting should be addressed to the
Company's Chairman, President or Secretary at 120 Kane Street,
P.O. Box 187, Kahului, Hawaii 96733-6687. The full text of the
bylaw provisions referred to above (which also set forth
requirements and limitations as to stockholder proposals or
nominations to be considered at any special meeting) may be
obtained by contacting the Company's Secretary at the foregoing
address, by telephone at 808-877-3351, facsimile 808-877-1614 or
e-mail at mauimlp@maui.net.
MULTIPLE SHAREHOLDERS SHARING THE SAME ADDRESS
Owners of common stock in street name may receive a notice
from their broker or bank stating that only one proxy statement
will be delivered to multiple security holders sharing an
address. This practice, known as "householding," is designed to
reduce printing and postage costs. However, if any shareholder
residing at such an address wishes to receive a separate proxy
statement, he or she may contact the Company's Secretary at
P.O. Box 187, Kahului, Hawaii 96733-6687 or by telephone at
808-877-3351 or e-mail at mauimlp@maui.net.
PROXY INSTRUCTIONS
A form of proxy for the Special Meeting is enclosed. You
are requested to sign and return your proxy promptly to make
certain your shares will be voted at the meeting. As previously
stated, you may revoke your proxy at any time before it is voted
by delivering a written revocation or a signed proxy card bearing
a later date to the Company's Secretary, provided that such
revocation or proxy card is actually received by the Secretary
before it is used. Attendance at the Special Meeting will not in
itself constitute revocation of a proxy. If you attend the
meeting, you may vote your shares in person if you so decide.
For your convenience, a self-addressed envelope is enclosed; it
requires no postage if mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
ADELE H. SUMIDA
Secretary
Kahului, Maui, Hawaii
November 4, 2003
Articles of Amendment
Appendix A
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
STATE OF HAWAII
ARTICLES OF AMENDMENT
ARTICLE I
NAME
The name of the Corporation is MAUI LAND & PINEAPPLE COMPANY, INC.
ARTICLE II
AMENDMENTS
Paragraph (a) of Article IV of the Corporation's Restated
Articles of Association is amended and restated in its entirety
as follows:
The amount of the authorized capital stock of
the corporation is Eight Million (8,000,000)
shares of common stock without par value.
Paragraph (b) of Article V of the Corporation's Restated Articles
of Association is amended and restated in its entirety as
follows:
The Board of Directors shall consist of such
number of persons, not less than nine (9) nor
more than twelve (12) as shall be determined
in accordance with the By-Laws from time to
time. The Board of Directors shall be
divided into three classes, with each class
consisting of one-third of the total number
of directors (or as near to this as
possible). Each class shall hold office for
a period of three years, with a term of
office expiring at the third annual meeting
of shareholders following his or her
election, and when his or her successor has
been duly elected and qualified. The
officers and directors of the corporation
need not be stockholders of the corporation.
The directors (and alternate directors and/or
substitute directors, if any) shall be
elected or appointed in the manner provided
in the By-Laws and may be removed from office
in the manner provided in the By-Laws and all
vacancies in the office of director shall be
filled in the manner provided for in the By-
Laws.
ARTICLE III
OUTSTANDING SHARES
The total number of shares outstanding is 7,195,800.
ARTICLE IV
ADOPTION OF AMENDMENTS
The amendments were adopted at a meeting of the shareholders
held on December __, 2003. Of the 7,195,800 outstanding shares
of common stock of the Corporation, constituting the sole voting
group, 7,195,800 votes were entitled to be cast, __________
shares were voted for the amendments, and _________ shares were
voted against the amendments.
The undersigned certifies under the penalties of Section
414-20, Hawaii Revised Statutes, that the undersigned has read the
above statements and that the same are true and correct.
Signed this _______ day of December, 2003.
David C. Cole
President & Chief Executive
Officer
2003 Stock and Incentive Compensation Plan
Appendix B
Maui Land & Pineapple Company, Inc.
2003 Stock and Incentive Compensation Plan
Effective __________, 2003
ARTICLE I.
ESTABLISHMENT, PURPOSE, AND DURATION
Section 1.1 Establishment of the Plan. Maui Land & Pineapple
Company, Inc., a Hawaii corporation (hereinafter referred to as
the "Company"), establishes an incentive compensation plan to be
known as the Maui Land & Pineapple Company, Inc. 2003 Stock and
Incentive Compensation Plan (hereinafter referred to as the
"Plan"), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights ("SARs"),
Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units, Cash-Based Awards, and Stock-Based Awards.
The Plan shall become effective upon shareholder approval of
the Plan (the "Effective Date") and shall remain in effect as
provided in Section 1.3 hereof.
Section 1.2 Purpose of the Plan. The purpose of the Plan is
to promote the success and enhance the value of the Company by
linking the personal interests of the Participants to those of
the Company's shareholders, and by providing Participants with an
incentive for outstanding performance.
The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract, and retain the
services of Participants upon whose judgment, interest, and
special effort the successful conduct of its operation largely is
dependent.
Section 1.3 Duration of the Plan. The Plan shall commence as
of the Effective Date, as described in Section 1.1 herein, and
shall remain in effect, subject to the right of the Committee or
the Board of Directors to amend or terminate the Plan at any time
pursuant to Article XVI herein, until all Shares subject to the
Plan have been purchased or acquired according to the Plan's
provisions.
ARTICLE II.
DEFINITIONS
Whenever used in the Plan, the following terms shall have
the meaning set forth below, and when the meaning is intended,
the initial letter of the word shall be capitalized.
Section 2.1 "Affiliate" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations of
the Exchange Act.
Section 2.2 "Award" means, individually or collectively, a
grant under this Plan of NQSOs, ISOs, SARs, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units,
Cash-Based Awards, or Stock-Based Awards.
Section 2.3 "Award Agreement" means either (a) an agreement
entered into by the Company and each Participant setting forth
the terms and provisions applicable to Awards granted under this
Plan; or (b) a statement issued by the Company to a Participant
describing the terms and provisions of such Award.
Section 2.4 "Beneficial Owner" or "Beneficial Ownership" shall
have the meaning ascribed to such term in rule 13d-3 of the
General Rules and Regulations under the Exchange Act.
Section 2.5 "Board" or "Board of Directors" means the Board of
Directors of the Company.
Section 2.6 "Cash-Based Award" means an Award granted to a
Participant as described in Article X herein.
Section 2.7 "Cause" means willful, malicious conduct by the
Participant which is detrimental to the best interests of the
Company, including theft, embezzlement, the conviction of a
criminal act, disclosure of trade secrets, a gross dereliction of
duty, other grave misconduct on the part of the Participant which
is substantially injurious to the Company. Cause also shall
include a material breach by the Participant of any of his
covenants under any written agreement with the Company, if such
breach has not been cured to the reasonable satisfaction of the
Company within thirty (30) days following written notice thereof
by the Company to the Participant.
Section 2.8 "Change in Control" means one or more of the
following occurrences with respect to the Company or a
subsidiary:
(a) Any Person, including a "group" as defined in Section 13(d)(3)
of the Exchange Act, who is not at the date of this Agreement the
beneficial owner of shares of the given entity having 25% or more
of the total number of votes that may be cast for the election of
Directors of such entity, becomes the beneficial owner (including
acquisition of beneficial ownership resulting from formation of a
"group") of shares of such entity having 25% or more of such
voting power;
(b) Any Person, including a "group" as defined in Section 13(d)(3)
of the Exchange Act, who is not at the date of this Agreement the
beneficial owner of shares of a given entity having 50% or more of
the total number of votes that may be cast for the election of
Directors of such entity, becomes the beneficial owner (including
acquisition of beneficial ownership resulting from formation of a
"group") of shares of such entity having 50% or more of such
voting power;
(c) As the result of, or in connection with any cash tender or
exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the foregoing
transactions, the Persons who were Directors of the given entity
before the transaction shall cease to constitute a majority of
the Board of Directors of such entity or any successor to such
entity;
(d) A merger or consolidation of the given entity in which the
surviving entity is neither the Company nor a direct or indirect
wholly owned subsidiary of the Company; or
(e) The sale, transfer, or other disposition of all or
substantially all of the assets of the given entity (and for this
purpose, the term "substantially all" shall mean assets having a
fair market value, whether or not realized in the transaction,
that is 50% or more of the aggregate fair market value of all
assets of such entity; and, in addition, in the case of a
Subsidiary, the sale, transfer or other disposition (other than
to an entity that is before and following such transaction a
direct or indirect wholly owned subsidiary of the Company) of
securities that immediately prior to such transaction constitute
50% or more of such Subsidiary's outstanding voting securities.
(f) A spin-off, split-off, split-up or similar divisive
reorganization affecting the Company and/or its Subsidiaries.
Section 2.9 "Code" means the U.S. Internal Revenue Code of 1986,
as amended from time to time, or any successor thereto.
Section 2.10 "Committee" means the Compensation Committee of
the Board of Directors. The members of the Committee shall be
appointed from time to time by and shall serve at the discretion
of the Board.
Section 2.11 "Company" means Maui Land & Pineapple Company, Inc.,
a Hawaii corporation, and any successor thereto as provided in
Article XVIII herein.
Section 2.12 "Covered Employee" means a Participant who is a
"covered employee," as defined in Section 162(m) of the Code and
the regulations promulgated under Section 162(m) of the Code, or
any successor statute.
Section 2.13 "Director" means any individual who is a member of
the Board of Directors of the Company.
Section 2.14 "Employee" means any non-bargaining regular full-
time employee of the Company, its Affiliates, and/or its
Subsidiaries. Directors who are not otherwise employed by the
Company, its Affiliates, and/or its Subsidiaries shall not be
considered Employees under this Plan.
Individuals described in the first sentence of this
definition who are foreign nationals or are employed outside of
the United States, or both, are considered to be Employees and
may be granted Awards on the terms and conditions set forth in
the Plan, or on such other terms and conditions as may, in the
judgment of the Committee, be necessary or desirable to further
the purpose of the Plan
Section 2.15 "Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, or any successor act
thereto.
Section 2.16 "Fair Market Value" or "FMV" means a price that is
based on the opening, closing, actual, high, low, or average
selling prices of a Share on the American Stock Exchange ("AMEX")
or other established stock exchange (or exchanges) on the
applicable date, the preceding trading day, the next succeeding
trading day, or an average of trading days, as determined by the
Committee in its discretion. Such definition of FMV shall be
specified in the Award Agreement and may differ depending on
whether FMV is in reference to the grant, exercise, vesting, or
settlement or payout of an Award. If, however, the accounting
standards used to account for equity awards granted to
Participants are substantially modified subsequent to the
Effective Date of the Plan, the Committee shall have the ability
to determine an Award's FMV based on the relevant facts and
circumstances. If Shares are not traded on an established stock
exchange, FMV shall be determined by the Committee based on
objective criteria.
Section 2.17 "Fiscal Year" means the year commencing on
January 1 and ending December 31 or other time period as approved
by the Board.
Section 2.18 "Freestanding SAR" means an SAR that is granted
independently of any Options, as described in Article VII herein.
Section 2.19 "Grant Price" means the price at which a SAR may
be exercised by a Participant, as determined by the Committee and
set forth in Section 7.1 herein.
Section 2.20 "Incentive Stock Option" or "ISO" means an Option
to purchase Shares granted under Article VI herein and that is
designated as an Incentive Stock Option and is intended to meet
the requirements of Section 422 of the Code, or any successor
provision.
Section 2.21 "Independent Contractor" means an individual
providing services to the Company, its Affiliates, and/or its
Subsidiaries, other than a Director who is not also an Employee
of the Company, its Affiliates, and/or its Subsidiaries. Such
Independent Contractor shall be eligible to participate in the
Plan as selected by the Committee in accordance with Article V.
Notwithstanding any other provision in the Plan to the contrary,
the following shall apply in the case of an Independent
Contractor who is allowed to participate in the Plan: (a) with
respect to any reference in this Plan to the working relationship
between such Independent Contractor and the Company, its
Affiliates, and/or its Subsidiaries, the term "service" shall
apply as may be appropriate in lieu of the term "employment" or
"employ"; (b) no such Independent Contractor shall be eligible
for a grant of an ISO; and (c) the exercise period and vesting of
an Award following such Independent Contractor's termination from
service shall be specified and governed under the terms and
conditions of the Award as may be determined by the Committee and
set forth in the Independent Contractor's Award Agreement related
to such Award.
Section 2.22 "Insider" shall mean an individual who is, on the
relevant date, an officer, Director, or more than ten percent
(10%) Beneficial Owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the
Exchange Act who is subject to Section 16 of the Exchange Act as
determined by the Board.
Section 2.23 "Nonqualified Stock Option" or "NQSO" means an
Option to purchase Shares, granted under Article VI herein, which
is not intended to be an Incentive Stock Option or that otherwise
does not meet such requirements.
Section 2.24 "Option" means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article VI herein.
Section 2.25 "Option Price" means the price at which a Share
may be purchased by a Participant pursuant to an Option, as
determined by the Committee.
Section 2.26 "Participant" means an Employee, Director or
Independent Contractor who has been selected to receive an Award
or who has an outstanding Award granted under the Plan.
Section 2.27 "Performance-Based Compensation" means
compensation under an Award that is granted in order to provide
remuneration solely on account of the attainment of one or more
preestablished, objective performance goals under circumstances
that satisfy the requirements of Section 162(m) of the Code.
Section 2.28 "Performance Measures" means measures as described
in Article XI, the attainment of which may determine the degree
of payout and/or vesting with respect to Awards to Covered
Employees that are designated to qualify as Performance-Based
Compensation.
Section 2.29 "Performance Period" means the period of time
during which the performance goals must be met in order to
determine the degree of payout and/or vesting with respect to an
Award.
Section 2.30 "Performance Share" means an Award granted to a
Participant, as described in Article IX herein.
Section 2.31 "Performance Unit" means an Award granted to a
Participant, as described in Article IX herein.
Section 2.32 "Period of Restriction" means the period when
Awards are subject to forfeiture based on the passage of time,
the achievement of performance goals, and/or upon the occurrence
of other events as determined by the Committee, at its
discretion.
Section 2.33 "Person" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Exchange Act and used in Sections
13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d) thereof. However, for purposes of Section 2.8,
Person shall not include any entity that is a direct or wholly
owned subsidiary of the Company.
Section 2.34 "Restricted Stock" means an Award of Shares
granted to a Participant pursuant to Article VIII herein.
Section 2.35 "Restricted Stock Unit" means an Award granted to
a Participant pursuant to Article VIII herein.
Section 2.36 "Shares" means the Shares of common stock of the
Company.
Section 2.37 "Stock Appreciation Right" or "SAR" means an
Award, designated as an SAR, pursuant to the terms of Article VII
herein.
Section 2.38 "Stock-Based Award" means an Award granted
pursuant to the terms of Section 10.5 herein.
Section 2.39 "Subsidiary" means any corporation, partnership,
joint venture, limited liability company, or other entity (other
than the Company) in an unbroken chain of entities beginning with
the Company if each of the entities other than the last entity in
the unbroken chain owns at least fifty percent (50%) of the total
combined voting power in one of the other entities in such chain.
Section 2.40 "Tandem SAR" means an SAR that is granted in
connection with a related Option pursuant to Article VII herein,
the exercise of which shall require forfeiture of the right to
purchase a Share under the related Option (and when a Share is
purchased under the Option, the Tandem SAR shall similarly be
cancelled) or an SAR that is granted in tandem with an Option but
the exercise of such Option does not cancel the SAR, but rather
results in the exercise of the related SAR.
ARTICLE III.
ADMINISTRATION
Section 3.1 General. The Committee shall be responsible for
administering the Plan. The Committee may employ attorneys,
consultants, accountants, and other persons, and the Committee,
the Company and its officers and Directors shall be entitled to
rely upon the advice, opinions, or valuations of any such
persons. All actions taken and all interpretations and
determinations made by the Committee shall be final, conclusive,
and binding upon the Participants, the Company, and all other
interested parties.
Section 3.2 Authority of the Committee. The Committee shall
have full and exclusive discretionary power to interpret the
terms and the intent of the Plan and to determine eligibility for
Awards and to adopt such rules, regulations, and guidelines for
administering the Plan as the Committee may deem necessary or
proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and
conditions and, subject to Article XVI, adopting modifications
and amendments, or subplans to the Plan or any Award Agreement,
including without limitation, any that are necessary to comply
with the laws of the countries in which the Company, its
Affiliates, and/or its Subsidiaries operate.
Section 3.3 Delegation. The Committee may delegate to one or
more of its members or to one or more officers of the Company,
its Affiliates and/or its Subsidiaries, or to one or more agents
or advisors such administrative duties as it may deem advisable,
and the Committee or any person to whom it has delegated duties
as aforesaid may employ one or more persons to render advice with
respect to any responsibility the Committee or such person may
have under the Plan. Except with respect to Awards to Insiders,
the Committee may, by resolution, authorize one or more officers
of the Company to do one or both of the following: (a) designate
Employees, Directors or Independent Contractors to be recipients
of Awards; and (b) determine the size of the Award; provided,
however, that the resolution providing such authorization sets
forth the total number of Awards such officer or officers may
grant.
ARTICLE IV.
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
Section 4.1 Number of Shares Available for Awards. Subject to
adjustment as provided in Section 4.2 herein, the number of
Shares hereby reserved for issuance to Participants under the
Plan shall be five hundred thousand (500,000). All of the
reserved Shares may be used as ISOs. Any Shares related to Awards
which terminate by expiration, forfeiture, cancellation, or
otherwise without the issuance of such Shares, are settled in
cash in lieu of Shares, or are exchanged with the Committee's
permission for Awards not involving Shares, shall be available
again for grant under the Plan. Moreover, if the Option Price of
any Option granted under the Plan or the tax withholding
requirements with respect to any Award granted under the Plan are
satisfied by tendering Shares to the Company (by either actual
delivery or by attestation), or if an SAR is exercised, only the
number of Shares issued, net of the Shares tendered, if any, will
be deemed delivered for purposes of determining the maximum
number of Shares available for delivery under the Plan. The
maximum number of Shares available for issuance under the Plan
shall not be reduced to reflect any dividends or dividend
equivalents that are reinvested into additional Shares or
credited as additional Restricted Stock, Restricted Stock Units,
Performance Shares, or Stock-Based Awards. In addition, the
Committee, in its discretion, may establish any other appropriate
methodology for calculating the number of Shares issued pursuant
to the Plan.
Unless and until the Committee determines that an Award to a
Covered Employee shall not be designed to qualify as Performance-
Based Compensation, the following limits ("Award Limits") shall
apply to grants of such Awards under the Plan:
(a) Options: The maximum aggregate number of Shares that may be
granted in the form of Options, pursuant to any Award granted in
any one Fiscal Year to any one Participant shall be one hundred
thousand (100,000).
(b) SARs: The maximum aggregate number of Shares that may be
granted in the form of Stock Appreciation Rights, pursuant to any
Award granted in any one Fiscal Year to any one Participant shall
be one hundred thousand (100,000).
(c) Restricted Stock/Restricted Stock Units: The maximum
aggregate grant with respect to Awards of Restricted
Stock/Restricted Stock Units granted in any one Fiscal Year to
any one Participant shall be one hundred thousand (100,000)
Shares.
(d) Performance Shares/Performance Units: The maximum aggregate
Award of Performance Shares or Performance Units that a
Participant may receive in any one Fiscal Year shall be one
hundred thousand (100,000) Shares, or equal to the value of one
hundred thousand (100,000) Shares determined as of the date of
vesting or payout, as applicable.
(e) Cash-Based Awards: The maximum aggregate amount awarded or
credited with respect to Cash-Based Awards to any one Participant
in any one Fiscal Year may not exceed one million dollars
($1,000,000) determined as of the date of vesting or payout, as
applicable.
(f) Stock Awards. The maximum aggregate grant with respect to
Awards of Stock-Based Awards in any one Fiscal Year to any one
Participant shall be one hundred thousand (100,000) Shares.
Section 4.2 Adjustments in Authorized Shares. In the event of
any corporate event or transaction (including, but not limited
to, a change in the Shares of the Company or the capitalization
of the Company) such as a merger, consolidation, reorganization,
recapitalization, separation, stock dividend, stock split,
reverse stock split, split up, spin-off, or other distribution of
stock or property of the Company, combination of securities,
exchange of securities, dividend in kind, or other like change in
capital structure or distribution (other than normal cash
dividends) to shareholders of the Company, or any similar
corporate event or transaction, the Committee, in its sole
discretion, in order to prevent dilution or enlargement of
Participants' rights under the Plan, shall substitute or adjust,
in an equitable manner, as applicable, the number and kind of
Shares that may be issued under the Plan, the number and kind of
Shares subject to outstanding Awards, the Option Price or Grant
Price applicable to outstanding Awards, the Award Limits, the
limit on issuing Awards other than Options granted with an Option
Price equal to at least the FMV of a Share on the date of grant
or Stock Appreciation Rights with a Grant Price equal to at least
the FMV of a Share on the date of grant, and other value
determinations applicable to outstanding Awards.
Appropriate adjustments may also be made by the Committee
in the terms of any Awards under the Plan to reflect such changes
or distributions and to modify any other terms of outstanding
Awards on an equitable basis, including modifications of
performance goals and changes in the length of Performance Periods.
The determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on Participants under the
Plan.
Subject to the provisions of Article XV and any applicable
law or regulatory requirement, without affecting the number of
Shares reserved or available hereunder, the Committee may authorize
the issuance, assumption, substitution, or conversion of Awards
under this Plan in connection with any merger, consolidation,
acquisition of property or stock, or reorganization, upon such
terms and conditions as it may deem appropriate. Additionally,
the Committee may amend the Plan, or adopt supplements to the
Plan, in such manner as it deems appropriate to provide for such
issuance, assumption, substitution, or conversion, all without
further action by the Company's shareholders
ARTICLE V.
ELIGIBILITY AND PARTICIPATION
Section 5.1 Eligibility. Individuals eligible to participate
in the Plan include all Employees, Directors and Independent
Contractors.
Section 5.2 Actual Participation. Subject to the provisions
of the Plan, the Committee may from time to time select from all
eligible Employees, Directors and Independent Contractors those
to whom Awards shall be granted and shall determine the nature
and amount of each Award.
ARTICLE VI.
STOCK OPTIONS
Section 6.1 Grant of Options. Subject to the terms and
provisions of the Plan, Options may be granted to Participants in
such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee, provided that
ISOs shall be granted only to Employees. In addition, ISOs may
not be granted following the ten- (10-) year anniversary of the
Board's adoption of the Plan, which is September 30, 2003.
Section 6.2 Award Agreement. Each Option grant shall be
evidenced by an Award Agreement that shall specify the Option
Price, the duration of the Option, the number of Shares to which
the Option pertains, the conditions upon which an Option shall
become vested and exercisable, and such other provisions as the
Committee shall determine which are not inconsistent with the
terms of the Plan. The Award Agreement also shall specify whether
the Option is intended to be an ISO or a NQSO.
Section 6.3 Option Price. The Option Price for each grant of
an Option under this Plan shall be determined by the Committee
and shall be specified in the Award Agreement. The Option Price
may include (but not be limited to) an Option Price based on one
hundred percent (100%) of the FMV of the Shares on the date of
grant, an Option Price that is either set at a discount or
premium to the FMV of the Shares on the date of grant, or is
indexed to the FMV of the Shares on the date of grant, with the
index determined by the Committee, in its discretion, however, if
the Option is an ISO the Option Price must be at least equal to
one hundred percent (100%) of the FMV of the Shares on the date
of grant.
Section 6.4 Duration of Options. Each Option granted to a
Participant shall expire at such time as the Committee shall
determine at the time of grant; provided, however, no Option
shall be exercisable later than the tenth (10th) anniversary date
of its grant.
Section 6.5 Exercise of Options. Options granted under this
Article VI shall be exercisable at such times and be subject to
such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or
for each Participant.
Section 6.6 Payment. Options granted under this Article VI
shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by
full payment for the Shares.
The Option Price upon exercise of any Option shall be payable
to the Company in full either: (a) in cash or its equivalent;
(b) by tendering (either by actual delivery or attestation)
previously acquired Shares having an aggregate FMV at the time of
exercise equal to the total Option Price (provided, however, if
the Company is accounting for the Options using APB Opinion 25, the
Shares that are tendered must have been held by the Participant
for at least six (6) months prior to their tender to satisfy the
Option Price or have been purchased on the open market); (c) by a
combination of (a) and (b); or (d) any other method approved by
the Committee in its sole discretion at the time of grant and as
set forth in the Award Agreement.
The Committee also may allow cashless exercise as permitted
under the Federal Reserve Board's Regulation T, subject to
applicable securities law restrictions, or by any other means which
the Committee determines to be consistent with the Plan's purpose
and applicable law.
Subject to Section 6.7 and any governing rules or regulations,
as soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the
Participant, Share certificates or evidence of book entry Shares,
in an appropriate amount based upon the number of Shares
purchased under the Option(s).
Unless otherwise determined by the Committee, all payments
under all of the methods indicated above shall be paid in United
States dollars.
Section 6.7 Restrictions on Share Transferability. The
Committee may impose such restrictions on any Shares acquired
pursuant to the exercise of an Option granted under this Article
VI as it may deem advisable, including, without limitation,
requiring the Participant to hold the Shares acquired pursuant to
exercise for a specified period of time, restrictions under
applicable federal securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed
and/or traded, and under any blue sky or state securities laws
applicable to such Shares.
Section 6.8 Termination of Employment. Each Participant's
Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option following
termination of the Participant's employment with the Company, its
Affiliates, and/or its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued
pursuant to this Article VI, and may reflect distinctions based
on the reasons for termination.
Section 6.9 Transferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all ISOs granted to a
Participant under this Article VI shall be exercisable during his
or her lifetime only by such Participant.
(b) Nonqualified Stock Options. Except as otherwise
provided in a Participant's Award Agreement, no NQSO granted
under this Article VI may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement, all
NQSOs granted to a Participant under this Article VI shall be
exercisable during his or her lifetime only by such Participant.
Section 6.10 Notification of Disqualifying Disposition. The
Participant will notify the Company upon the disposition of
Shares issued pursuant to the exercise of an ISO. The Company
will use such information to determine whether a disqualifying
disposition as described in Section 421(b) of the Code has
occurred.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
Section 7.1 Grant of SARs. Subject to the terms and
conditions of the Plan, SARs may be granted to Participants at
any time and from time to time as shall be determined by the
Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SARs.
Subject to the terms and conditions of the Plan, the
Committee shall have complete discretion in determining the
number of SARs granted to each Participant and, consistent with
the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The SAR Grant Price for each grant of a Freestanding SAR
shall be determined by the Committee and shall be specified in
the Award Agreement. The SAR Grant Price may include (but not be
limited to) a Grant Price based on one hundred percent (100%) of
the FMV of the Shares on the date of grant, a Grant Price that is
either set at a discount or premium to the FMV of the Shares on
the date of grant, or is indexed to the FMV of the Shares on the
date of grant, with the index determined by the Committee, in its
discretion. The Grant Price of Tandem SARs shall be equal to the
Option Price of the related Option.
Section 7.2 SAR Agreement. Each SAR Award shall be evidenced
by an Award Agreement that shall specify the Grant Price, the
term of the SAR, and such other provisions as the Committee shall
determine.
Section 7.3 Term of SAR. The term of an SAR granted under the
Plan shall be determined by the Committee, in its sole
discretion, and except as determined otherwise by the Committee
and specified in the SAR Award Agreement, no SAR shall be
exercisable later than the tenth (10th) anniversary date of its
grant.
Section 7.4 Exercise of Freestanding SARs. Freestanding SARs
may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes upon them.
Section 7.5 Exercise of Tandem SARs. Tandem SARs may be
exercised for all or part of the Shares subject to the related
Option upon the surrender of the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only
with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection with
an ISO: (a) the Tandem SAR will expire no later than the
expiration of the underlying ISO; (b) the value of the payout
with respect to the Tandem SAR may be for no more than one
hundred percent (100%) of the difference between the Option Price
of the underlying ISO and the FMV of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (c)
the Tandem SAR may be exercised only when the FMV of the Shares
subject to the ISO exceeds the Option Price of the ISO.
Section 7.6 Payment of SAR Amount. Upon the exercise of an
SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:
(a) The difference between the FMV of a Share on the date of
exercise over the Grant Price; by
(b) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, in some
combination thereof, or in any other manner approved by the
Committee at its sole discretion. The Committee's determination
regarding the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.
Section 7.7 Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have
the right to exercise the SAR following termination of the
Participant's employment with the Company, its Affiliates, and/or
its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be uniform
among all SARs issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
Section 7.8 Nontransferability of SARs. Except as otherwise
provided in a Participant's Award Agreement, no SAR granted under
the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise
provided in a Participant's Award Agreement, all SARs granted to
a Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant.
Section 7.9 Other Restrictions. The Committee shall impose
such other conditions and/or restrictions on any Shares received
upon exercise of a SAR granted pursuant to the Plan as it may
deem advisable. This includes, but is not limited to, requiring
the Participant to hold the Shares received upon exercise of an
SAR for a specified period of time.
Section 7.10 Substituting SARs. The Committee shall have the
ability to unilaterally substitute SARs for outstanding Options
granted to a Participant; provided that the terms of the
substituted SARs and economic benefit of such substituted SARs
are at least equivalent to the terms and economic benefit of the
Options.
ARTICLE VIII.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
Section 8.1 Grant of Restricted Stock or Restricted Stock
Units. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Shares of
Restricted Stock and/or Restricted Stock Units to Participants in
such amounts, as the Committee shall determine. Restricted Stock
Units shall be similar to Restricted Stock except that no Shares
are actually awarded to the Participant on the date of grant.
Section 8.2 Restricted Stock or Restricted Stock Unit
Agreement. Each Restricted Stock and/or Restricted Stock Unit
grant shall be evidenced by an Award Agreement that shall specify
the Period(s) of Restriction, the number of Shares of Restricted
Stock or the number of Restricted Stock Units granted, and such
other provisions as the Committee shall determine.
Section 8.3 Transferability. Except as provided in this
Article VIII, the Shares of Restricted Stock and/or Restricted
Stock Units granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of
the applicable Period of Restriction established by the Committee
and specified in the Award Agreement (and in the case of
Restricted Stock Units until the date of delivery or other
payment), or upon earlier satisfaction of any other conditions,
as specified by the Committee, in its sole discretion, and set
forth in the Award Agreement. All rights with respect to the
Restricted Stock and/or Restricted Stock Units granted to a
Participant under the Plan shall be available during his or her
lifetime only to such Participant.
Section 8.4 Other Restrictions. The Committee shall impose
such other conditions and/or restrictions on any Shares of
Restricted Stock or Restricted Stock Units granted pursuant to
the Plan as it may deem advisable including, without limitation,
a requirement that Participants pay a stipulated purchase price
for each Share of Restricted Stock or each Restricted Stock Unit,
restrictions based upon the achievement of specific performance
goals, time-based restrictions on vesting following the
attainment of the performance goals, time-based restrictions,
restrictions under applicable federal or state securities laws,
or any holding requirements or sale restrictions placed on the
Shares by the Company upon vesting of such Restricted Stock or
Restricted Stock Units.
To the extent deemed appropriate by the Committee, the
Company may retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as
all conditions and/or restrictions applicable to such Shares have
been satisfied or lapse.
Except as otherwise provided in this Article VIII, Shares of
Restricted Stock covered by each Restricted Stock Award shall
become freely transferable by the Participant after all
conditions and restrictions applicable to such Shares have been
satisfied or lapse, and Restricted Stock Units shall be paid in
cash, Shares, or a combination of cash and Shares as the
Committee, in its sole discretion shall determine.
Section 8.5 Certificate Legend. In addition to any legends
placed on certificates pursuant to Section 8.4 herein, each
certificate representing Shares of Restricted Stock granted
pursuant to the Plan may bear a legend such as the following:
The sale or other transfer of the shares
of stock represented by this certificate,
whether voluntary, involuntary, or by
operation of law, is subject to certain
restrictions on transfer as set forth in Maui
Land & Pineapple Company, Inc. 2003 Equity
and Incentive Compensation Plan, and in the
associated Restricted Stock Award Agreement.
A copy of the Plan and such Restricted Stock
Award Agreement may be obtained from Maui
Land & Pineapple Company, Inc.
Section 8.6 Voting Rights. To the extent permitted or
required by law, as determined by the Committee, Participants
holding Shares of Restricted Stock granted hereunder may be
granted the right to exercise full voting rights with respect to
those Shares during the Period of Restriction. A Participant
shall have no voting rights with respect to any Restricted Stock
Units granted hereunder.
Section 8.7 Dividends and Other Distributions. During the
Period of Restriction, Participants holding Shares of Restricted
Stock or Restricted Stock Units granted hereunder may, if the
Committee so determines, be credited with dividends paid with
respect to the underlying Shares or dividend equivalents while
they are so held in a manner determined by the Committee in its
sole discretion. The Committee may apply any restrictions to the
dividends or dividend equivalents that the Committee deems
appropriate. The Committee, in its sole discretion, may determine
the form of payment of dividends or dividend equivalents,
including cash, Shares, Restricted Stock, or Restricted Stock
Units.
Section 8.8 Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have
the right to retain Restricted Stock and/or Restricted Stock
Units following termination of the Participant's employment with
the Company, its Affiliates, and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into
with each Participant, need not be uniform among all Shares of
Restricted Stock or Restricted Stock Units issued pursuant to the
Plan, and may reflect distinctions based on the reasons for
termination.
Section 8.9 Section 83(b) Election. The Committee may provide
in an Award Agreement that the Award of Restricted Stock is
conditioned upon the Participant making or refraining from making
an election with respect to the Award under Section 83(b) of the
Code. If a Participant makes an election pursuant to Section 83(b)
of the Code concerning a Restricted Stock Award, the Participant
shall be required to file promptly a copy of such election with
the Company.
ARTICLE IX.
PERFORMANCE SHARES AND PERFORMANCE UNITS
Section 9.1 Grant of Performance Shares and Performance Units.
Subject to the terms of the Plan, Performance Shares and/or
Performance Units may be granted to Participants in such amounts
and upon such terms, and at any time and from time to time, as
shall be determined by the Committee.
Section 9.2 Value of Performance Shares and Performance Units.
Each Performance Share shall have an initial value equal to the
FMV of a Share on the date of grant. Each Performance Unit shall
have an initial value that is established by the Committee at the
time of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met,
will determine the value and/or number of Performance
Shares/Performance Units that will be paid out to the
Participant.
Section 9.3 Earning of Performance Shares and Performance
Units. Subject to the terms of this Plan, after the applicable
Performance Period has ended, the holder of Performance
Shares/Performance Units shall be entitled to receive payout on
the value and number of Performance Shares/Performance Units
earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding
performance goals have been achieved. Notwithstanding the
foregoing, the Company has the ability to require the Participant
to hold the Shares received pursuant to such Award for a
specified period of time.
Section 9.4 Form and Timing of Payment of Performance Shares
and Performance Units. Payment of earned Performance
Shares/Performance Units shall be as determined by the Committee
and as evidenced in the Award Agreement. Subject to the terms of
the Plan, the Committee, in its sole discretion, may pay earned
Performance Shares/Performance Units in the form of cash or in
Shares (or in a combination thereof) equal to the value of the
earned Performance Shares/Performance Units at the close of the
applicable Performance Period. Any Shares may be granted subject
to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout
of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
Section 9.5 Dividends and Other Distributions. At the
discretion of the Committee, Participants holding Performance
Shares may be entitled to receive dividend equivalents with
respect to dividends declared with respect to the Shares. Such
dividends may be subject to the accrual, forfeiture, or payout
restrictions as determined by the Committee in its sole
discretion.
Section 9.6 Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have
the right to retain Performance Shares and/or Performance Units
following termination of the Participant's employment with the
Company, its Affiliates, and/or its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Performance
Shares or Performance Units issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.
Section 9.7 Nontransferability. Except as otherwise provided
in a Participant's Award Agreement, Performance
Shares/Performance Units may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during
his or her lifetime only by such Participant.
ARTICLE X.
CASH-BASED AWARDS AND STOCK-BASED AWARDS
Section 10.1 Grant of Cash-Based Awards. Subject to the terms
of the Plan, Cash-Based Awards may be granted to Participants in
such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.
Section 10.2 Value of Cash-Based Awards. Each Cash-Based Award
shall have a value as may be determined by the Committee. The
Committee may establish performance goals in its discretion. If
the Committee exercises its discretion to establish performance
goals, the number and/or value of Cash-Based Awards that will be
paid out to the Participant will depend on the extent to which
the performance goals are met.
Section 10.3 Earning of Cash-Based Awards. Subject to the
terms of this Plan, the holder of Cash-Based Awards shall be
entitled to receive payout on the number and value of Cash-Based
Awards earned by the Participant, to be determined as a function
of the extent to which applicable performance goals, if any, have
been achieved.
Section 10.4 Form and Timing of Payment of Cash-Based Awards.
Payment of earned Cash-Based Awards shall be as determined by the
Committee and as evidenced in the Award Agreement. Subject to the
terms of the Plan, the Committee, in its sole discretion, may pay
earned Cash-Based Awards in the form of cash or in Shares (or in
a combination thereof) that have an aggregate FMV equal to the
value of the earned Cash-Based Awards. Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee.
The determination of the Committee with respect to the form of
payout of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.
Section 10.5 Stock-Based Awards. The Committee may grant other
types of equity-based or equity-related Awards (including the
grant or offer for sale of unrestricted Shares) in such amounts
and subject to such terms and conditions, as the Committee shall
determine. Such Awards may entail the transfer of actual Shares
to Participants, or payment in cash or otherwise of amounts based
on the value of Shares and may include, without limitation,
Awards designed to comply with or take advantage of the
applicable local laws of jurisdictions other than the United
States.
Section 10.6 Termination of Employment. Each Award Agreement
shall set forth the extent to which the Participant shall have
the right to receive Cash-Based Awards and Stock-Based Awards
following termination of the Participant's employment with the
Company, its Affiliates, and/or its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Cash-Based
Awards and Stock-Based Awards issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination.
Section 10.7 Nontransferability. Except as otherwise provided
in a Participant's Award Agreement, Cash-Based Awards and Stock-
Based Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise
provided in a Participant's Award Agreement, a Participant's
rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant.
ARTICLE XI.
PERFORMANCE MEASURES
Unless and until the Committee proposes for shareholder vote
and the shareholders approve a change in the general Performance
Measures set forth in this Article XI, the performance goals upon
which the payment or vesting of an Award to a Covered Employee
that is intended to qualify as Performance-Based Compensation
shall be limited to the following Performance Measures:
(a) Earnings per share (actual or targeted growth);
(b) Net income before or after taxes;
(c) Net income less total expenditures for additions to long-
lived assets as described in paragraph 28b of SFAS No. 131;
(d) Return measures (including, but not limited to, return on
average assets, or return on average equity or return on
beginning equity);
(e) Efficiency ratio;
(f) Full-time equivalency control;
(g) Stock price (including, but not limited to, growth measures
and total shareholder return);
(h) Expense targets;
(i) Margins; and
(j) Operating efficiency.
Any Performance Measures may be used to measure the
performance of the Company as a whole or any business unit of the
Company or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Measures as compared
to the performance of a group of comparator companies, or
published or special index that the Committee, in its sole
discretion, deems appropriate, or the Company may select
Performance Measure (g) above as compared to various stock market
indices. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified
in this Article XI.
The Committee may provide in any such Award that any
evaluation of performance may include or exclude any of the
following events that occurs during a Performance Period:
(a) asset write-downs; (b) litigation or claim judgments or
settlements; (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported
results; (d) any reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion
and analysis of financial condition and results of operations
appearing in the Company's annual report to shareholders for the
applicable year; (f) acquisitions or divestitures; and
(g) foreign exchange gains and losses. To the extent such
inclusions or exclusions affect Awards intended to satisfy the
requirements of Code Section 162(m), they shall be prescribed
in a form that meets such requirements.
Awards that are designed to qualify as Performance-Based
Compensation, and that are held by Covered Employees, may not be
adjusted upward. The Committee shall retain the discretion to
adjust such Awards downward.
In the event that applicable tax and/or securities laws
change to permit Committee discretion to alter the governing
Performance Measures without obtaining shareholder approval of
such changes, the Committee shall have sole discretion to make
such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is
advisable to grant Awards that shall not qualify as Performance-
Based Compensation, the Committee may make such grants without
satisfying the requirements of Code Section 162(m).
ARTICLE XII.
BENEFICIARY DESIGNATION
A Participant's "beneficiary" is the person or persons
entitled to receive payments or other benefits or exercise rights
that are available under the Plan in the event of the
Participant's death. A Participant may designate a beneficiary or
change a previous beneficiary designation at any time by using
forms and following procedures approved by the Committee for that
purpose. If no beneficiary designated by the Participant is
eligible to receive payments or other benefits or exercise rights
that are available under the Plan at the Participant's death the
beneficiary shall be the Participant's estate.
Notwithstanding the provisions above, the Committee may in
its discretion, after notifying the affected Participants, modify
the foregoing requirements, institute additional requirements for
beneficiary designations, or suspend the existing beneficiary
designations of living Participants or the process of determining
beneficiaries under this Article XII, or both. If the Committee
suspends the process of designating beneficiaries on forms and in
accordance with procedures it has approved pursuant to this
Article XII, the determination of who is a Participant's
beneficiary shall be made under the Participant's will and
applicable state law.
ARTICLE XIII.
DEFERRALS AND SHARE SETTLEMENTS
Notwithstanding any other provision under the Plan, the
Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant by virtue
of the exercise of an Option or SAR, or with respect to the lapse
or waiver of restrictions with respect to Restricted Stock or
Restricted Stock Units or the satisfaction of any requirements or
performance goals with respect to Performance Shares, Performance
Units, Cash-Based Awards, or Stock-Based Awards. If any such
deferral election is required or permitted, the Committee shall,
in its sole discretion, establish rules and procedures for such
payment deferrals.
ARTICLE XIV.
RIGHTS OF PARTICIPANTS
Section 14.1 Employment. Nothing in the Plan or an Award
Agreement shall interfere with or limit in any way the right of
the Company, its Affiliates, and/or its Subsidiaries to terminate
any Participant's employment or other service relationship at any
time, nor confer upon any Participant any right to continue in
the capacity in which he or she is employed or otherwise serves
the Company, its Affiliates, and/or its Subsidiaries.
Neither an Award nor any benefits arising under this Plan
shall constitute part of an employment contract with the Company,
its Affiliates, and/or its Subsidiaries and, accordingly, subject
to Articles III and XVI, this Plan and the benefits hereunder may
be terminated at any time in the sole and exclusive discretion of
the Committee without giving rise to liability on the part of the
Company, its Affiliates, and/or its Subsidiaries for severance
payments.
For purposes of the Plan, transfer of employment of a
Participant between the Company, its Affiliates, and/or its
Subsidiaries shall not be deemed a termination of employment.
Additionally, the Committee shall have the ability to stipulate
in a Participant's Award Agreement that a transfer to a company
that is spun-off from the Company shall not be deemed a
termination of employment with the Company for purposes of the
Plan until the Participant's employment is terminated with the
spun-off company.
Section 14.2 Participation. No Employee, Director or
Independent Contractor shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.
Section 14.3 Rights as a Shareholder. A Participant shall have
none of the rights of a shareholder with respect to Shares
covered by any Award until the Participant becomes the record
holder of such Shares.
ARTICLE XV.
CHANGE IN CONTROL
Upon the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules
and regulations of any governing governmental agencies or
national securities exchanges, or unless the Committee shall
determine otherwise in the Award Agreement:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable; additionally, if a Participant's
employment is involuntarily terminated for any other reason
except Cause within twelve (12) months following such Change in
Control, the Participant shall have until the earlier of:
(i) twelve (12) months following such termination date; or
(ii) the expiration of the Option or SAR term, to exercise any
such Option or SAR;
(b) Any Period of Restriction for Restricted Stock and
Restricted Stock Units granted hereunder that have not previously
vested shall end, and such Restricted Stock and Restricted Stock
Units shall become fully vested;
(c) The target payout opportunities attainable under all
outstanding Awards which are subject to achievement of any of the
Performance Measures specified in Article XI, or any other
performance conditions or restrictions that the Committee has
made the Award contingent upon, shall be deemed to have been
fully earned as of the effective date of the Change in Control.
(1) The vesting of all Awards denominated in Shares shall
be accelerated as of the effective date of the Change in Control,
and there shall be paid out to Participants a pro rata number of
Shares based upon an assumed achievement of all relevant targeted
performance goals and upon the length of time within the
Performance Period, if any, that has elapsed prior to the Change
in Control. The Committee has the authority to pay all or any
portion of the value of the Shares in cash.
(2) Awards denominated in cash shall be paid pro rata to
Participants with the proration determined as a function of the
length of time within the Performance Period, if any, that has
elapsed prior to the Change in Control, and based on an assumed
achievement of all relevant targeted performance goals.
(d) Subject to Article XVI, herein, the Committee shall have the
authority to make any modifications to the Awards as determined
by the Committee to be appropriate before the effective date of
the Change in Control.
ARTICLE XVI.
AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION
Section 16.1 Amendment, Modification, Suspension, and
Termination. The Committee or Board may, at any time and from
time to time, alter, amend, modify, suspend, or terminate the
Plan in whole or in part. Notwithstanding anything herein to the
contrary, without the prior approval of the Company's
shareholders, Options issued under the Plan will not be repriced,
replaced, or regranted through cancellation, or by lowering the
exercise price of a previously granted Option. No amendment of
the Plan shall be made without shareholder approval if and to the
extent that shareholder approval is required by law, regulation,
or stock exchange rule.
Section 16.2 Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The Committee may make
adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial
statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to
prevent unintended dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on
Participants under the Plan.
Section 16.3 Awards Previously Granted. Notwithstanding any
other provision of the Plan to the contrary, no termination,
amendment, suspension, or modification of the Plan shall
adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant
holding such Award.
ARTICLE XVII.
WITHHOLDING
Section 17.1 Tax Withholding. The Company shall have the power
and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal,
state, and local taxes, domestic or foreign (including the
Participant's FICA obligation), required by law or regulation to
be withheld with respect to any taxable event arising or as a
result of this Plan.
Section 17.2 Share Withholding. With respect to withholding
required upon the exercise of Options or SARs, upon the lapse of
restrictions on Restricted Stock or Restricted Stock Units, or
upon the achievement of performance goals related to Performance
Shares, or any other taxable event arising as a result of Awards
granted hereunder, Participants may elect, subject to the
approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold
Shares having a FMV of a Share on the date the tax is to be
determined equal to the tax that could be imposed on the
transaction, except that if the Company is using APB Opinion 25
to account for equity awards in its financial statements, the
amount of tax shall not exceed the minimum statutory total tax
that could be imposed on the transaction. All elections shall be
irrevocable, made in writing, and signed by the Participant, and
shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.
ARTICLE XVIII.
SUCCESSORS
All obligations of the Company under the Plan with respect
to Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or
assets of the Company.
ARTICLE XIX.
GENERAL PROVISIONS
Section 19.1 Forfeiture Events. The Committee may specify in
an Award Agreement that the Participant's rights, payments, and
benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of
certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall
include, but shall not be limited to, termination of employment
for Cause, violation of material Company, Affiliate, and/or
Subsidiary policies, breach of noncompetition, confidentiality,
or other restrictive covenants that may apply to the Participant,
or other conduct by the Participant that is detrimental to the
business or reputation of the Company, its Affiliates, and/or its
Subsidiaries.
Section 19.2 Legend. The certificates for Shares may include
any legend that the Committee deems appropriate to reflect any
restrictions on transfer of such Shares.
Section 19.3 Delivery of Title. The Company shall have no
obligation to issue or deliver evidence of title for Shares
issued under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the
Shares under any applicable national or foreign law or ruling of
any governmental body that the Company determines to be necessary
or advisable.
Section 19.4 Investment Representations. The Committee may
require each Participant receiving Shares pursuant to an Award
under this Plan to represent and warrant in writing that the
Participant is acquiring the Shares for investment and without
any present intention to sell or distribute such Shares.
Section 19.5 Employees Based Outside of the United States.
Notwithstanding any provision of the Plan to the contrary, in
order to comply with the laws in other countries in which the
Company, its Affiliates, and/or its Subsidiaries operate or have
Employees or Independent Contractors, the Committee, in its sole
discretion, shall have the power and authority to:
(a) Determine which Affiliates and Subsidiaries shall be covered
by the Plan;
(b) Determine which Employees and Independent Contractors
outside the United States are eligible to participate in the
Plan;
(c) Modify the terms and conditions of any Award granted to
Employees or Independent Contractors outside the United States to
comply with applicable foreign laws;
(d) Establish subplans and modify exercise procedures and other
terms and procedures, to the extent such actions may be necessary
or advisable. Any subplans and modifications to Plan terms and
procedures established under this Section 19.5 by the Committee
shall be attached to this Plan document as appendices; and
(e) Take any action, before or after an Award is made that it
deems advisable to obtain approval or comply with any necessary
local government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would
violate the Exchange Act, the Code, any securities law, or
governing statute or any other applicable law.
Section 19.6 Uncertificated Shares. To the extent that the
Plan provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may be effected
on a noncertificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.
Section 19.7 Unfunded Plan. Participants shall have no right,
title, or interest whatsoever in or to any investments that the
Company, its Affiliates, and/or its Subsidiaries may make to aid
it in meeting its obligations under the Plan. Nothing contained
in the Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company, its Affiliates,
and/or its Subsidiaries and any Participant, beneficiary, legal
representative, or any other person. To the extent that any
person acquires a right to receive payments from the Company, its
Affiliates, and/or its Subsidiaries under the Plan, such right
shall be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall
be paid from the general funds of the Company and no special or
separate fund shall be established and no segregation of assets
shall be made to assure payment of such amounts except as
expressly set forth in the Plan. The Plan is not intended to be
subject to ERISA.
Section 19.8 No Fractional Shares. No fractional Shares shall
be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, Awards, or other property
shall be issued or paid in lieu of fractional Shares or whether
such fractional Shares or any rights thereto shall be forfeited
or otherwise eliminated.
ARTICLE XX.
LEGAL CONSTRUCTION
Section 20.1 Gender and Number. Except where otherwise
indicated by the context, any masculine term used herein also
shall include the feminine, the plural shall include the
singular, and the singular shall include the plural.
Section 20.2 Severability. In the event any provision of the
Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
Section 20.3 Requirements of Law. The granting of Awards and
the issuance of Shares under the Plan shall be subject to all
applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may
be required. The Company shall receive the consideration required
by law for the issuance of Awards under the Plan.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by
the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been
obtained.
Section 20.4 Securities Law Compliance. The Company may use
reasonable endeavors to register Shares allotted pursuant to the
exercise of an Award with the United States Securities and
Exchange Commission or to effect compliance with the
registration, qualification, and listing requirements of any
national or foreign securities laws, stock exchange, or automated
quotation system. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions
of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan or action by the Committee fails
to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
Section 20.5 Governing Law. The Plan and each Award Agreement
shall be governed by the laws of the State of Hawaii, excluding
any conflicts or choice of law, rule or principle that might
otherwise refer construction or interpretation of the Plan to the
substantive law of another jurisdiction. Unless otherwise
provided in the Award Agreement, recipients of an Award under the
Plan are deemed to submit to the exclusive jurisdiction and venue
of the federal or state courts of Hawaii, to resolve any and all
issues that may arise out of or relate to the Plan or any related
Award Agreement.
APPENDIX C
PROXY
MAUI LAND & PINEAPPLE COMPANY, INC.
120 KANE STREET, P. O. BOX 187
KAHULUI, MAUI, HAWAII 96733-6687
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE SPECIAL MEETING TO BE HELD DECEMBER 11, 2003
The undersigned hereby makes, constitutes and appoints
DAVID C. COLE, PAUL J. MEYER and ADELE H. SUMIDA and each of them
as attorneys and proxies of the undersigned, with full power of
substitution, for and in the name of the undersigned to represent
the undersigned at the Special Meeting of Stockholders of Maui
Land & Pineapple Company, Inc. (the "Company") to be held at
9:00 a.m. on Thursday, December 11, 2003, in the Corporate Office
courtyard, 120 Kane Street, Kahului, Hawaii, and any
postponements or adjournments thereof, and to vote all shares of
the stock of the Company standing in the name of the undersigned
with all the powers the undersigned would possess if personally
present at such meeting. This Proxy may be revoked by the
undersigned at any time. The undersigned directs that this Proxy
be voted as follows:
1) To amend the Company's Articles of Association to authorize
an additional 800,000 shares of Common Stock and to increase
the size of the Board of Directors from not less than five
members, to not less than nine nor more than twelve members,
divided into three classes with staggered terms of three
years each.
____ FOR ____ AGAINST ____ ABSTAIN
2) To approve the Maui Land & Pineapple Company, Inc. Stock and
Incentive Compensation Plan of 2003. (The implementation of
this Proposal No. 2 also is conditioned upon shareholder
approval of Proposal No. 1.)
____ FOR ____ AGAINST ____ ABSTAIN
THIS PROXY WILL BE VOTED AS DIRECTED. IF THE PROXY IS
PROPERLY SIGNED AND RETURNED AND NO DIRECTIONS ARE GIVEN, THE
VOTE WILL BE IN FAVOR OF THE PROPOSAL ABOVE. DISCRETIONARY
AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER MATTERS THAT MAY
COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of
the Special Meeting and accompanying Proxy Statement.
Date:________________, 2003
Please sign EXACTLY as name(s) appears at left:
_______________________________________
_______________________________________
_______________________________________
If the proxy is signed by an attorney-in-fact, executor,
administrator, trustee or guardian, give full title. PLEASE
DATE, SIGN AND RETURN PROMPTLY.
APPENDIX D
The graphic image for shareholder return performance found in
this document has the following graph points:
MLP S&P S&P
600 Food
1997 100 100 100
1998 79 99 133
1999 153 111 97
2000 210 124 101
2001 213 132 147
2002 141 113 129