01248916.1.010225-143
9.
MAUI LAND & PINEAPPLE COMPANY, INC.
EXECUTIVE SEVERANCE PLAN
Article 1. Purpose. This Maui Land & Pineapple
Company, Inc. Executive Severance Plan ("Plan") is intended to
advance the interests of Maui Land & Pineapple Company, Inc.
("Company") and certain of its subsidiaries by providing
severance benefits to eligible executive employees upon
termination of employment in order to ease their transition out
of the organization and facilitate their search for alternative
employment.
Article 2. Effective Date. This Plan shall become
effective as of March 5, 1998 ("Effective Date"), upon adoption
by the Board of Directors of the Company, and shall operate on
the basis of the calendar year ("Plan Year").
Article 3. Participating Employers. This Plan
provides for certain severance benefits for eligible executive
employees of the Company and any other related entity
designated by the Company ("Participating Employers").
Participants and beneficiaries may receive from the Plan
Administrator, upon written request, information as to whether
a particular employer is a Participating Employer, and if so,
the Participating Employer's address.
Article 4. Eligibility. Any individual employed by a
Participating Employer in a position of Vice President or
higher (or equivalent) and with a salary midpoint of 1040 or
higher (or equivalent) shall be eligible to participate in this
Plan ("Eligible Executive") upon and as of the date of written
notice of his/her designation and approval as an Eligible
Executive by the President and Chief Executive Officer of the
Company.
Article 5. Severance Benefits. In the event of an
"Involuntary Termination of Employment" with a Participating
Employer, an Eligible Executive shall be entitled to the
payment of a severance benefit amount ("Severance Benefit
Amount") equal to the Eligible Executive's "Monthly Base
Salary" multiplied by his/her "Years of Service".
For purposes of determining eligibility for a
Severance Benefit Amount, the term "Involuntary Termination of
Employment" shall mean, as determined by the Plan
Administrator, a termination of employment at the initiation of
the Participating Employer due to: (a) restructuring or
downsizing of operations of the Company or its subsidiaries;
(b) discontinuance of certain business activities of the
Company or its subsidiaries; (c) elimination of a position with
no comparable position (determined with reference to Section
6.d below) with the Company or its subsidiaries offered to the
Eligible Executive.
Also, for purposes of determining a Severance Benefit
Amount, the term "Monthly Base Salary" shall be determined as
of the date of termination of employment and shall mean the
monthly base salary of the Eligible Executive in accordance
with the payroll records and procedures of the Participating
Employer, and such term shall not include bonuses and other
supplementary compensation. Further, the term "Years of
Service" shall be determined as of the date of termination of
employment and shall mean the sum of each completed whole
calendar year of continuous service since the Eligible
Executive's most recent employment commencement date in which
the Eligible Executive works 1,000 hours of service or more,
and such term shall not include any partial Year of Service for
any prorated calendar year in which less than 1,000 hours of
service is performed. In determining Years of Service, service
shall be credited for service with any Participating Employer.
Notwithstanding the above portion of this Section 5,
the maximum Severance Benefit Amount shall be equal to (a) 12
times the Monthly Base Salary in the case of an Eligible
Executive whose salary midpoint is between 1040 to 2000,
inclusive (or equivalent) and (b) 18 times the Monthly Base
Salary in the case of an Eligible Executive whose salary
midpoint is 2001 or above (or equivalent). In addition, with
respect to any Eligible Executive, the minimum Severance
Benefit Amount shall be equal to 6 times the Eligible
Executive's Monthly Base Salary.
The Severance Benefit Amount shall be paid in cash as
a stream of income, less legally required deductions, paid on
the regular payroll schedule commencing as of the date of the
Eligible Executive's termination of employment. As such, the
Severance Benefit Amount shall be paid as a continuation of the
Eligible Executive's Monthly Base Salary, at the same payroll
times and amounts that would otherwise apply but for his/her
termination of employment, over the applicable number of months
("Severance Payment Period"). Upon the written request of an
Eligible Executive, the Plan Administrator may, at its sole and
complete discretion, authorize and provide for a different
optional form of benefit payment (e.g., lump sum
distribution).
Article 6. Exclusions. Notwithstanding any provision
herein to the contrary, an Eligible Executive shall not be
entitled to the payment of any Severance Benefit Amount in the
event of any of the following:
a. The Eligible Executive terminates
employment on a voluntary basis.
b. The Eligible Executive terminates
employment on a voluntary or involuntary basis for just
cause. For this purpose, a voluntary or involuntary
termination for just cause shall mean termination as a
result of willful, malicious conduct by the Eligible
Executive which is detrimental to the interests of the
Company or its subsidiaries, including theft,
embezzlement, conviction of a criminal act, disclosure of
trade secrets, gross dereliction of duty, or other grave
misconduct on the part of the Eligible Executive which is
substantially injurious to the Company or its
subsidiaries.
c. The Eligible Executive terminates
employment due to retirement and is eligible for normal
retirement benefits under the Maui Land & Pineapple
Company, Inc. Pension Plan for Non-Bargaining Unit
Employees ("Retirement Plan").
d. The Eligible Executive refuses to accept a
"comparable" position of employment with the Company or
its subsidiaries, under which there is no reduction of
his/her annual rate of base salary, and there is no
material reduction of his/her authorities, duties, or
responsibilities, and there is no geographic job
relocation in excess of 75 miles.
e. The Eligible Executive fails to agree to
and execute a general release and waiver of all employment-
related claims against the Company and its subsidiaries.
f. The Eligible Executive is reemployed with
the Company or its subsidiaries in a comparable (as
determined in accordance with the provisions of Section
6.d above) or higher level position within 90 days of
his/her termination of employment.
g. The Eligible Executive is a party to a Maui
Land & Pineapple Change-In-Control Severance Agreement and
is determined by the Compensation Committee of the Board
of Directors of the Company to be entitled to the payment
of severance benefits thereunder due to the occurrence of
a "change in control" within the meaning of such Agreement
and all applicable conditions for the payment of such
severance benefits are satisfied.
Article 7. Other Benefits.
a. Annual Incentive Plan. In the event that
an Eligible Executive is entitled to a Severance Benefit
Amount, the Eligible Executive shall be entitled to a
payout under the Maui Land & Pineapple Company, Inc.
Annual Incentive Plan in accordance with the terms and
conditions of such plan.
b. Welfare Benefits. In the event that an
Eligible Executive is entitled to a Severance Benefit
Amount, the Eligible Executive shall be entitled during
the Severance Payment Period to medical and dental
insurance benefits at the same coverage and normal
employee cost levels as he/she were subject as of the date
of termination of employment. In the event that
participation in the medical or dental insurance plans is
not possible under the terms of the plans or due to the
modification or elimination of the plans, the
Participating Employer shall provide substantially
identical benefits at the same level of coverage and
employee cost. However, the medical and dental insurance
benefits shall be discontinued prior to the end of the
Severance Payment Period in the event the Eligible
Executive receives substantially similar benefits from a
subsequent employer as determined by the Plan
Administrator. The Eligible Executive shall be
responsible for notifying the Plan Administrator of the
receipt of such similar benefits from any subsequent
employer.
c. Retirement Benefits. An Eligible
Executive's service and compensation during the Severance
Payment Period shall not be considered for purposes of
determining the Eligible Executive's benefits under the
Retirement Plan. However, in the case of an Eligible
Executive who is eligible for early retirement benefits
under the Retirement Plan or other employee benefit plan
as of his/her date of termination of employment, the
Severance Payment Period shall be treated as if it were a
period of employment exclusively for purposes of
postponing any benefit payment, and the Eligible Executive
shall be entitled to benefits due him/her as an early
retiree as of the expiration of the Severance Payment
Period.
An Eligible Executive who would become first
eligible for normal retirement benefits (either pension or
post-retirement welfare benefits) during the Severance
Payment Period shall be allowed to postpone the effective
date of his/her termination of employment and to continue
on active payroll, at the sole and complete discretion of
the Plan Administrator, either on a paid administrative
leave or specified work assignment, until his/her
retirement eligibility date. During this "bridge" period,
the Eligible Executive's current base salary and benefit
level as of his/her otherwise applicable employment
termination date shall continue and shall not be subject
to merit or pay increases. As of his/her retirement
eligibility date, the Eligible Executive's employment
shall be terminated, and his/her otherwise applicable
Severance Benefit Amount and Severance Benefit Period
shall be proportionately reduced by the bridge
compensation and period.
d. Automobile. In the event that an Eligible
Executive is entitled to a Severance Benefit Amount and is
furnished a company-owned vehicle for use as an employee,
he/she shall be allowed to purchase the assigned vehicle
for the current low Blue Book price, less $500. This
vehicle purchase option shall be available as of the date
on which the Eligible Executive terminates employment and
until the date of the agreement and execution of the
general release and waiver as described in Section 6.e.
If the Eligible Executive terminates employment and does
not exercise his/her option to purchase the vehicle,
he/she shall not be allowed to use the vehicle after such
termination and prior to his/her actual purchase of
the vehicle.
Article 8. Distribution Due to Death. In the event
that an Eligible Executive is entitled to the payment of a
Severance Benefit Amount and he/she dies before the completion
of the Severance Payment Period, the unpaid balance of any
Severance Benefit Amount as of the date of death shall be paid
in a single lump sum to his/her designated beneficiary as soon
as practicable following the date of death. The Eligible
Executive's designated beneficiary shall be designated or
changed by the Eligible Executive (without the consent of any
prior beneficiary) through written notice delivered to the
Company. If no such beneficiary is designated, or if no
designated beneficiary survives the Eligible Executive, the
amount payable due to the Eligible Executive's death shall be
payable to the Eligible Executive's estate. However, in the
event of death, Article 7 above shall not be applicable and the
other benefits described therein shall be forfeited and shall
not be provided to any person effective as of the date of death
(unless such other benefits are otherwise provided without
regard to the provisions of this Plan).
Article 9. Administration. The Plan shall be
administered by Maui Land & Pineapple Company, Inc., who shall
be the Plan Administrator for purposes of the requirements of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Plan Administrator shall have the exclusive
right, power, and authority, in its sole and absolute
discretion, to administer, apply, and interpret the Plan and
other Plan documents and to decide all matters arising in
connection with the operation or administration of the Plan.
Without limiting the generality of the above, the Plan
Administrator shall have the sole and absolute discretionary
authority: (a) to take all actions and make all decisions with
respect to the eligibility for, and the amount of, benefits
payable under the Plan; (b) to formulate, interpret, and apply
rules, regulations, and policies necessary to administer the
Plan in accordance with its terms; (c) to decide questions,
including legal or factual questions, relating to the
calculation and payment of benefits under the Plan; (d) to
resolve and clarify any ambiguities, inconsistencies, and
omissions arising under the Plan or other Plan documents; and
(e) except as otherwise provided herein, to process, and
approve or deny, benefit claims and rule on any benefit
exclusions. All determinations made by the Plan Administrator
with respect to any matter arising under the Plan and any other
Plan documents shall be final and binding on all parties.
Legal process may be served on the Plan Administrator.
The name and address of the Plan Administrator is:
Maui Land & Pineapple Company, Inc.
P.O. Box 187
Kahului, Maui, HI 96733-6687
1-(808) 877-3351
EIN: 99-0107542
Article 10. Amendment or Termination. The Company
reserves the right at any time and from time to time, in its
sole and absolute discretion, to terminate or amend in whole or
in part any or all of the provisions of the Plan, by action of
the Board of Directors of the Company or an authorized
committee thereof. The identity of the members of the Board of
Directors and such authorized committee may be obtained from
the Plan Administrator.
Article 11. Claims Procedure. A claim under this Plan
may be made by the claimant in writing within 60 days of the
date of termination of employment of the claimant.
If a claim is wholly or partially denied, the Plan
Administrator shall furnish the Eligible Executive notice in
writing of the decision not later than 90 days after the date
of the filing of the claim. If notice of denial of a claim is
not furnished within such 90-day period, the claim shall be
deemed denied.
A written denial of a claim for benefits shall
(i) specify the reason or reasons for the denial, (ii) refer to
any provisions of the Severance Plan on which the denial is
based, (iii) describe any additional material or information
necessary for the Eligible Executive to perfect his/her claim
with an explanation of why such material or information is
necessary, and (iv) explain the Plan's claim procedure.
Upon a denial of a claim, the Eligible Executive or
his/her duly authorized representative may request a review by
the Plan Administrator upon written application within 60 days
after receipt of the denial of the claim. The Eligible
Executive or his/her duly authorized representative may review
pertinent documents and submit issues and comments in writing.
The Plan Administrator shall make a decision
concerning the review of the claim promptly, but not later than
60 days after receipt of request for review unless special
circumstances require a longer period of time for review. If
an extension of time for review is required, written notice of
the extension will be furnished to the Eligible Executive and a
decision shall be rendered as soon as possible, but not later
than 120 days after receipt of the request for review.
The decision on review will be in writing and include
specific reasons for the decision and specific references to
the Severance Plan provisions on which the decision is based.
If the decision on review is not furnished within the time
specified above, the claim will be deemed denied on review.
Article 12. Incapacity. If the Plan Administrator
finds that any person to whom payment is payable under this
Plan is unable to care for his affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim
for such payment has been made by a duly appointed guardian,
committee, or other legal representative) may be paid to the
spouse, a child, a parent, or a brother or sister, or to any
person deemed by the Plan Administrator to have incurred
expense for such person otherwise entitled to payment.
Article 13. Funding. The amounts payable under this
Plan shall be paid in cash from the general funds of the
Company or Participating Employer, and an Eligible Executive
shall have no right, title, or interest whatsoever in or to
investments, if any, which the Company may make to aid it in
meeting its obligations under this Plan. Title to and
beneficial ownership of any such investments shall at all times
remain in the Company. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind. To the extent that
any person acquires a right to receive a payment under this
Plan, such right shall be no greater than the right of any
unsecured creditor.
Article 14. Legal Status. This Plan is intended to
constitute an employee welfare benefit plan under ERISA. As
sponsored by the Company and Participating Employer, the Plan
has been designated as Plan No. 508. Prior to the actual
payment of the benefits hereunder, there is no transfer of any
assets to an Eligible Executive or for the benefit of the
Eligible Executive under this Plan, and the Plan is intended to
confer no current benefit that would be immediately taxable to
the Eligible Executive under the constructive receipt rule or
economic benefit doctrine under the tax laws.
Article 15. Continued Service. Nothing contained in
this Plan shall be construed as conferring upon an Eligible
Executive the right to continue in the employment of the
Company or a Participating Employer in any capacity.
Article 16. Nonassignment. The interests of an
Eligible Executive hereunder may not be sold, transferred,
signed, pledged, or hypothecated. No Eligible Executive may
borrow against his interest in the Plan.
Article 17. Controlling Documents. This document
constitutes the actual Plan document and also serves as the
Summary Plan Description as required under ERISA.
Article 18. Enforceability and Controlling Law. If any
provision of this Plan is held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining
provisions shall continue in full force and effect. The
provisions of this Plan shall be construed, administered, and
enforced according to the laws of the State of Hawaii.
Article 19. Gender. Wherever any words are used under
the Plan in the masculine, feminine, or neuter gender, they
shall be construed as though they were also used in another
gender in all cases where they would so apply.
IN WITNESS WHEREOF, the Company has caused this Plan
to be executed by its duly authorized officers on this 26th
day of March, 1998.
MAUI LAND & PINEAPPLE COMPANY,
INC.
By /S/ GARY L. GIFFORD
Its PRESIDENT
By /S/ ADELE H. SUMIDA
Its SECRETARY
"Company"