Exhibit 10.2

 

MATSON, INC.

 

PERFORMANCE SHARE AWARD AGREEMENT

 

RECITALS

 

A.            The Corporation has implemented the Plan for the purpose of
providing eligible persons in the Corporation’s service with the opportunity to
participate in one or more cash or equity incentive compensation programs
designed to encourage them to continue their service relationship with the
Corporation.

 

B.            Participant is to render valuable services to the Corporation (or
any Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation’s issuance of shares of Common Stock to Participant under the Stock
Issuance Program.

 

C.            All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix A.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.             Grant of Performance Shares.  The Corporation hereby awards to
Participant, as of the Award Date, Performance Shares under the Plan.  The
number of shares of Common Stock underlying the award and the applicable
performance vesting requirements for those shares are set forth in the Award
Notice.  The remaining terms and conditions governing the Award shall be as set
forth in this Agreement.

 

2.             Limited Transferability.  Prior to the actual issuance of the
Shares which vest hereunder, Participant may not transfer any interest in the
Performance Shares subject to the Award or the underlying Shares or pledge or
otherwise hedge the sale of those Performance Shares or Shares, including
(without limitation) any short sale or any acquisition or disposition of any put
or call option or other instrument tied to the value of those Shares.  However,
any Shares which vest hereunder but otherwise remain unissued at the time of
Participant’s death may be transferred pursuant to the provisions of
Participant’s will or the laws of inheritance or to Participant’s designated
beneficiary or beneficiaries of this Award. Participant may also direct the
Corporation to record the ownership of any Shares which in fact vest and become
issuable hereunder in the name of a revocable living trust established for the
exclusive benefit of Participant or Participant and his or her spouse.
Participant may make such a beneficiary designation or ownership directive at
any time by filing the appropriate form with the Plan Administrator or its
designee.

 

3.             Vesting Requirements.  The actual number of Shares that may vest
and become issuable pursuant to the Performance Shares shall be determined
pursuant to a two-step process:  (i) first there shall be calculated the maximum
number of Shares in which Participant

 

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can vest based upon the level at which the Performance Goal specified on
Schedule I to the Award Notice is actually attained as modified by the TSR
Modifier and (ii) then the number of the Performance-Qualified Shares resulting
from the clause (i) calculation in which Participant shall actually vest shall
be determined on the basis of his or her completion of the applicable Service
vesting provisions set forth below.  Accordingly, the vesting of the Shares
shall be calculated as follows:

 

(a)           Performance Vesting: Within sixty (60) days following the
completion of the Performance Period, the Plan Administrator shall determine the
applicable number of Performance-Qualified Shares in accordance with the
provisions of the Award Notice and Schedule I attached thereto.

 

(b)           Service Vesting:  The Performance-Qualified Shares so determined
represent the maximum number of Shares in which Participant can vest hereunder. 
The actual number of Shares in which Participant shall vest shall be determined
as follows:

 

(i)            If Participant continues in Service through the completion of the
three (3)-year Performance Period, Participant shall vest in all of the
Performance-Qualified Shares. The Shares underlying those particular
Performance-Qualified Shares shall be issued to Participant during the period
beginning with the first business day of the first calendar year following the
completion of the Performance Period and ending on March 15th of that year.

 

(ii)           If Participant ceases Service prior to the completion of the
Performance Period by reason of Early Retirement, Normal Retirement, death or
Permanent Disability, then Participant shall, upon the completion of such
Performance Period, vest in a portion of the Performance-Qualified Shares
determined by multiplying (x) the maximum number of Performance-Qualified Shares
in which Participant would have vested, based on the actual level of Performance
Goal attainment for the Performance Period, had Participant completed the three
(3)-year Service vesting requirement set forth in subparagraph (i) above by
(y) a fraction, the numerator of which is the number of months of actual Service
completed by Participant in such Performance Period (rounded to the closest
whole month), and the denominator of which is thirty-six (36) months.  The
Shares underlying the Performance-Qualified Shares in which Participant vests in
accordance with this subparagraph (ii) shall be issued to Participant during the
period beginning with the first business day of the first calendar year
following the completion of the Performance Period and ending on March 15th of
that year.

 

(iii)          If Participant’s Service ceases for any other reason prior to the
completion of the Performance Period, then Participant shall not vest in any of
the Performance-Qualified Shares and all of Participant’s right, title and
interest to the Shares subject to this Award shall cease.

 

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Schedule I attached to this Agreement sets forth examples illustrating the
calculation of the number of Shares in which the Participant may vest based upon
hypothetical levels of Performance Goal attainment and service vesting
requirements.

 

4.             Stockholder Rights.  The holder of this Award shall not have any
stockholder rights, including voting, dividend or liquidation rights, with
respect to the Shares subject to the Award until Participant becomes the record
holder of those Shares upon their actual issuance following the Corporation’s
collection of the applicable Withholding Taxes.

 

5.             Change in Control.  Notwithstanding Section 3 above, the
following provisions shall apply to the extent a Change in Control is
consummated prior to the completion of the applicable Performance Period and
shall have no force or effect in the event the closing of the Change in Control
occurs on or  after the completion of the Performance Period.

 

(a)           This Award may be assumed by the successor entity or otherwise
continued in full force and effect or may be replaced with a cash retention
account established by the successor entity.  In such event, the following
provisions shall be in effect:

 

(i)            The Performance-Vesting requirements of this Agreement shall
terminate, and the assumption or continuation of this Award shall be effected in
accordance with Paragraph 5(b) below on the basis of the number of Change in
Control Shares.  The Service-vesting and issuance provisions of Paragraph
3(b)(i) shall continue in effect with respect to the assumed or continued Award.

 

(ii)             If Participant ceases Service prior to completion of the
Performance Period by reason of Early Retirement, Normal Retirement, death or
Permanent Disability, then Participant shall, upon the closing of the Change in
Control or (if later) such cessation of Service, vest in that number of Shares
determined by multiplying (x) the number of Change in Control Shares by (y) a
fraction, the numerator of which is the number of months of actual Service
completed by Participant in such Performance Period (rounded to the closest
whole month), and the denominator of which is thirty-six (36) months.  The
Shares in which Participant so vests shall be issued to Participant on the
earlier of (i) the date the Shares would have otherwise been issued pursuant to
the provisions of Paragraph 3(b)(ii) in the absence of such Change in Control
or, should such cessation of Service occur after such Change in Control but
within twenty-four (24) months after the closing of a Qualifying Change in
Control, (ii) the date of Participant’s Separation from Service due to such
cessation of Service.

 

(iii)          Any cash retention account established in replacement of this
Award shall initially be credited with the fair market value (at the effective
time of the Change in Control) of the number of Change in Control Shares, and
interest shall accrue on the outstanding balance of such account, for the period
commencing with the closing date of the Change in Control and continuing through
the date of the final payment of the account, including any

 

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deferred payment date under Paragraph 9, at a variable per annum rate,
compounded semi-annually, equal to the prime rate of interest as in effect from
time to time during such period, as determined on the basis of the prime rate
quotations published in The Wall Street Journal.  The cash retention account
shall vest and be paid out in accordance with the Service vesting and issuance
provisions of Paragraph 3(b)(i) or (to the extent applicable) in accordance with
the pro-rata Service vesting and issuance provisions of Paragraph
5(a)(ii) above. The Participant’s interest in the account shall at all times be
that of a general, unsecured creditor.

 

(iv)          In the event of such assumption or continuation of this Award or
such replacement of the Award with a cash retention account, no accelerated
vesting of the Performance Shares subject to this Award or the underlying Shares
shall occur at the time of the Change in Control, and the Service-vesting
provisions of Paragraph 3(b) shall continue in full force and effect.

 

(b)           In the event this Award is assumed or otherwise continued in
effect in connection with such Change in Control, the securities subject to the
Award shall be adjusted immediately after the consummation of that Change in
Control so as to apply to the number and class of securities into which the
number of Change in Control Shares would have been converted in consummation of
that Change in Control had that number of Shares actually been issued and
outstanding at that time. To the extent the actual holders of the outstanding
Common Stock receive cash consideration for their Common Stock in consummation
of the Change in Control, the successor corporation (or parent entity) may, in
connection with the assumption or continuation of the Performance Shares subject
to the Award at that time, but subject to the Plan Administrator’s approval
prior to the Change in Control, substitute one or more shares of its own common
stock with a fair market value equivalent to the cash consideration paid per
share of Common Stock in the Change in Control transaction, provided such common
stock is readily tradable on an established U.S. securities exchange or market.

 

(c)           Upon Participant’s Separation from Service due to an Involuntary
Termination occurring within twenty-four (24) months after a Change in Control
in which this Award is assumed or continued in effect, Participant shall
immediately vest in that number of Shares equal to the Change in Control Shares,
and that number of Shares shall be issued to Participant on the earlier of
(i) the date those Shares would have otherwise been issued pursuant to the
provisions of Paragraph 3(b) in the absence of such Change in Control or, should
such cessation of Service occur within twenty-four (24) months after the closing
of a Qualifying Change in Control, (ii) the date of Participant’s Separation
from Service due to such cessation of Service.  Should this Award be replaced
with a cash retention account in accordance with Paragraph 5(a), then that
account shall vest upon Participant’s Separation from Service due to the
Involuntary Termination, provided and only if such Involuntary Termination
occurs within twenty-four (24) months following the Change in Control. Such
vested balance, together with all accrued interest thereon through the actual
payment date, shall be distributed, as to each Share to which the cash retention
account pertains, on the earlier of (x) each date that Share would have
otherwise been issued pursuant to the Service vesting and issuance provisions
set forth in

 

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Paragraph 3(b) in the absence of such Change in Control or (y) the date of
Participant’s Separation from Service, provided such Separation from Service
occurs within twenty-four (24) months after a Qualifying Change in Control. 
Except for the number of Shares and the cash retention balance distributed in
accordance with the foregoing provisions of this Paragraph 5(c), Participant
shall have no further right or entitlement to any additional Shares or other
cash amounts hereunder upon such Separation from Service.

 

(d)           If the Award is not assumed by the successor entity or otherwise
continued in effect or replaced with a cash retention account in accordance with
Paragraph 5(a), then the following provisions shall apply:

 

(i)              If Participant continues in Service through the effective date
of the Change in Control, then Participant shall, upon the closing of such
Change in Control, vest in that number of Shares equal to the Change in Control
Shares.  The Shares in which Participant so vests shall be converted into the
right to receive the same consideration per share of Common Stock payable to the
other stockholders of the Corporation in consummation of the Change in Control.
Such consideration per Share shall be distributed to Participant on the earliest
to occur of (x) the date the Share would have otherwise been issued pursuant to
the Service vesting and issuance provisions set forth in Paragraph 3(b)(i) in
the absence of such Change in Control, (y) the date of Participant’s Separation
from Service, provided such Separation from Service occurs within twenty-four
(24) months after a Qualifying Change in Control, or (z) the first date
following a Qualifying Change in Control transaction on which the distribution
can be made without contravention of any applicable provisions of Code
Section 409A.

 

(ii)             To the extent the consideration payable per share of Common
Stock in the Change in Control is in the form of cash, a fully-vested cash
retention account shall be established by the successor entity at the time of
such Change in Control for each Share that vests on an accelerated basis in
accordance with Section 5(d)(i) above.  Such account shall be credited with the
amount of the cash consideration payable for the Shares, and interest shall
accrue on the outstanding balance of that account, for the period commencing
with the closing date of the Change in Control and continuing through the date
of the final payment of the account, including any deferred payment date under
Paragraph 9, at a variable per annum rate, compounded semi-annually, equal to
the prime rate of interest as in effect from time to time during such period, as
determined on the basis of the prime rate quotations published in The Wall
Street Journal.  The cash retention account, together with all accrued interest
thereon through the actual payment date, shall be distributed, as to each Share
to which that cash retention accounts pertains, in accordance with the foregoing
distribution provisions of  Paragraph 5(d)(i) above.  Participant’s interest in
the account shall at all times be that of a general, unsecured creditor.

 

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(iii)            If Participant ceases Service prior to the effective date of
the Change in Control by reason of Early Retirement, Normal Retirement, death or
Permanent Disability then Participant shall, upon the closing of such Change in
Control, vest in that number of Shares determined by multiplying (x) the number
of Change in Control Shares by (y) a fraction, the numerator of which is the
number of months of actual Service completed by Participant in such Performance
Period (rounded to the closest whole month), and the denominator of which is
thirty-six (36) months. The Shares in which Participant so vests shall be 
converted into the right to receive the same consideration per share of Common
Stock payable to the other stockholders of the Corporation in consummation of
the Change in Control. Such consideration per Share shall be distributed to
Participant on the earlier of (A) the date the Share would have otherwise been
issued pursuant to the provisions of Paragraph 3(b)(ii) in the absence of such
Change in Control or (B) the first date following a Qualifying Change in Control
transaction on which the distribution can be made without contravention of any
applicable provisions of Code Section 409A.

 

(iv)            Except for the amount of consideration so calculated,
Participant shall have no further right or entitlement to any additional Shares
or consideration under this Award.

 

6.             Change in Control Benefits Agreement.  Notwithstanding anything
to the contrary in this Agreement, if Participant is, at the time of a change in
control or ownership of the Corporation (whether or not that transaction
constitutes a Change in Control hereunder), a party to a Change in Control
Benefits Agreement with the Corporation, then the provisions of that agreement
shall, to the extent applicable to this Award, govern Participant’s rights and
benefits with respect to the restricted stock units and underlying Shares
subject to this Agreement, and in the event of any conflict between the
provisions of that Change in Control Benefits Agreement and this Agreement, the
provisions of the Change in Control Benefits Agreement shall be controlling;
provided, however, that in the event there is any conflict between the issuance
or distribution provisions of this Agreement and the issuance or distribution
provisions of the Change in Control Benefits Agreement, the issuance and
distribution provisions of this Agreement shall be controlling.

 

7.             Adjustment in Shares.  Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, spin-off transaction, extraordinary
dividend or distribution or other change affecting the outstanding Common Stock
as a class without the Corporation’s receipt of consideration, or should the
value of outstanding shares of Common Stock be substantially reduced as a result
of a spin-off transaction or an extraordinary dividend or distribution, or
should there occur any merger, consolidation or other reorganization, then
equitable adjustments shall be made by the Plan Administrator to the total
number and/or class of securities issuable pursuant to this Award in order to
reflect such change and thereby prevent a dilution or enlargement of benefits
hereunder. In making such equitable adjustments, the Plan Administrator shall
take into account any amounts credited to Participant’s book account under
Paragraph 4(b) in connection with the transaction, and the determination of the
Plan Administrator shall be final, binding and conclusive.  In the event of any
Change in Control transaction, the adjustment provisions of Paragraph 5(b) shall
be controlling.

 

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8.             Issuance of Vested Shares and Applicable Withholding Taxes.

 

(a)           Any Shares to be issued to Participant in accordance with the
foregoing provisions of this Agreement shall be in the form of a book entry
evidencing ownership of those Shares. Actual certificates for the vested Shares
evidenced by book entry ownership shall be promptly delivered upon the request
of Participant or any other person having an interest at the time in those
Shares.

 

(b)           The Corporation shall collect the Withholding Taxes with respect
to each non-Share distribution by withholding a portion of that distribution
equal to the amount of the applicable Withholding Taxes, with the cash portion
of the distribution to be the first portion so withheld.

 

(c)           Unless Participant (i) otherwise makes satisfactory arrangements
with the Corporation’s Human Resources Department, on or before the expiration
of the designated notification period preceding the applicable issuance date of
the Shares, to pay the applicable Withholding Taxes through the delivery of  a
check payable to the Corporation in the amount of such Withholding Taxes and
(ii) in fact delivers such check to the Corporation not later than that issuance
date, the Corporation shall collect the Withholding Taxes applicable to the
Share issuance through the following automatic share withholding method:

 

·              On the applicable issuance date, the Corporation shall withhold,
from the vested Shares otherwise issuable to Participant at that time, a portion
of those Shares with a Fair Market Value (measured as of the issuance date)
equal to the applicable Withholding Taxes; provided, however, that the number
of  Shares which the Corporation shall be required to so withhold shall not
exceed in Fair Market Value the amount necessary to satisfy the Corporation’s
required tax withholding obligations using the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are
applicable to supplemental taxable income.

 

(d)           Notwithstanding the foregoing provisions of this Paragraph 8, the
employee portion of the federal, state and local employment taxes required to be
withheld by the Corporation in connection with the vesting of the Shares or any
other amounts hereunder (the “Employment Taxes”) shall in all events be
collected from the Participant no later than the last business day of the
calendar year in which the Shares or other amounts vest hereunder.  Accordingly,
to the extent the applicable issuance date for one or more vested Shares or the
distribution date for such other amounts is to occur in a year subsequent to the
calendar year in which those Shares or other amounts vest, the Participant
shall, on or before the last business day of the calendar year in which the
Shares or other amounts vest, deliver to the Corporation a check payable to its
order in the dollar amount equal to the Employment Taxes required to be withheld
with respect to those Shares or other amounts.  The provisions of this Paragraph
9(d) shall be applicable only to the extent necessary to comply with the
applicable tax withholding requirements of Code Section 3121(v).

 

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(e)           Except as otherwise provided in Paragraph 5 or this Paragraph 8,
the settlement of all restricted stock units which vest under the Award shall be
made solely in shares of Common Stock.  In no event, however, shall any
fractional shares be issued.  Accordingly, the total number of shares of Common
Stock to be issued at the time the Award vests shall, to the extent necessary,
be rounded down to the next whole share in order to avoid the issuance of a
fractional share.

 

9.             Code Section 409A.  Notwithstanding any provision to the contrary
in this Agreement, to the extent this Award may be deemed to create a deferred
compensation arrangement under Code Section 409A, then the following limitation
and provisions shall apply:

 

·              No Shares or other amounts which become issuable or distributable
under this Agreement upon Participant’s Separation from Service shall actually
be issued or distributed to Participant prior to the earlier of (i) the first
(1st) day of the seventh (7th) month following the date of such Separation from
Service or (ii) the date of Participant’s death, if Participant is deemed at the
time of such Separation from Service to be a specified employee under
Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A,
as determined by the Plan Administrator in accordance with consistent and
uniform standards applied to all other Code Section 409A arrangements of the
Corporation, and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2).  The deferred
Shares or other distributable amount shall be issued or distributed in a lump
sum on the first (1st) day of the seventh (7th) month following the date of
Participant’s Separation from Service or, if earlier, the first day of the month
immediately following the date the Corporation receives proof of Participant’s
death.

 

·              Participant’s right to receive each installment of Shares or
other installment distribution pursuant to the terms of this Agreement shall,
for purposes of Code Section 409A, be treated as a right to receive a series of
separate payments.

 

10.          Compliance with Laws and Regulations.  The issuance of shares of
Common Stock pursuant to the Award shall be subject to compliance by the
Corporation and Participant with all applicable requirements of law relating
thereto and with all applicable regulations of any Stock Exchange on which the
Common Stock may be listed for trading at the time of such issuance.

 

11.          Notices.  Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices.  Any notice required to
be given or delivered to Participant shall be in writing and addressed to
Participant at the address indicated below Participant’s signature line on the
Award Notice.  All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

 

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12.          Successors and Assigns.  Except to the extent otherwise provided in
this Agreement, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the Corporation and its successors and assigns and
Participant, Participant’s assigns, the legal representatives, heirs and
legatees of Participant’s estate and any beneficiaries of the Award designated
by Participant.

 

13.          Construction.

 

(a)           This Agreement and the Award evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms
of the Plan and any applicable Change in Control Benefits Agreement.  All
decisions of the Plan Administrator with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in the Award.

 

(b)           To the extent there is any ambiguity as to whether any provision
of this Agreement would otherwise contravene one or more applicable requirements
or limitations of Section 409A of the Internal Revenue Code and the Treasury
Regulations thereunder, such provision shall be interpreted and applied in a
manner that complies with the applicable requirements of Section 409A of the
Internal Revenue Code and the Treasury Regulations thereunder.

 

(c)           This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

 

14.          Governing Law.  The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of Hawaii without
resort to that State’s conflict-of-laws rules.

 

15.          Coverage under Recoupment Policy. If Participant is on the Award
Date, or at any time thereafter becomes, either an executive officer of the
Corporation subject to Section 16 of the 1934 Act, or a participant in the
Corporation’s Performance Improvement Incentive Plan, then Participant shall be
subject to the Matson, Inc. Policy Regarding Recoupment of Certain Compensation,
effective as of January 1, 2011 (the “Recoupment Policy”), the terms of which
are hereby incorporated herein by reference and receipt of a copy of which
Participant hereby acknowledges. If Participant is subject to the Recoupment
Policy, then any incentive compensation that is paid or granted to, or received
by, Participant on or after January 1, 2011 (including any incentive
compensation that is paid to, or received by, Participant on or after January 1,
2011 pursuant to an incentive compensation award made to Participant prior to
January 1, 2011, whether by the Corporation or any predecessor entity) and
during the three-year period preceding the date on which the Corporation is
required to prepare an accounting restatement due to material non-compliance
with any applicable financial reporting requirements under the federal
securities laws shall be subject to recovery and recoupment pursuant to the
terms of such policy.  For purposes of such Recoupment Policy, “incentive
compensation” means all cash or equity-based award (e.g., stock award,
restricted stock unit award, performance share award or stock option grant or
shares of Common Stock issued thereunder) or any profit sharing payment or
distribution that is based upon the achievement of financial performance
metrics.  An additional copy of the Recoupment Policy is available upon request
made to the Corporate Secretary at the Corporation’s principal offices.

 

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APPENDIX A

 

DEFINITIONS

 

The following definitions shall be in effect under the Agreement:

 

A.            Agreement shall mean this Performance Share Award Agreement.

 

B.            Award shall mean the award of Performance Shares made to
Participant pursuant to the terms of this Agreement.

 

C.            Award Date shall mean the date the Performance Shares are awarded
to Participant pursuant to the Agreement and shall be the date specified in
Paragraph 1 of the Award Notice.

 

D.            Award Notice shall mean the Notice of Award of Performance Shares
delivered to Participant in which there is set forth the basic terms of the
Performance Shares subject to this Agreement.

 

E.            Board shall mean the Corporation’s Board of Directors.

 

F.             Cause shall mean the commission of any act of fraud, embezzlement
or dishonesty by Participant, any unauthorized use or disclosure by Participant
of confidential information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by Participant adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner; provided, however, that in the event
Participant is, at the time the Corporation (or any Parent or Subsidiary)
purports to terminate Participant’s Employee status for Cause, a party to a
Change in Control Benefits Agreement applicable to the Award, the term Cause
shall have the meaning ascribed to that term in such Change in Control Benefits
Agreement.  The foregoing definition shall not in any way preclude or restrict
the right of the Corporation (or any Parent or Subsidiary) to discharge or
dismiss Participant or any other person in the Service of the Corporation (or
any Parent or Subsidiary) for any other acts or omissions, but such other acts
or omissions shall not be deemed, for purposes of the Plan and this Agreement,
to constitute grounds for termination for Cause.

 

G.            Change in Control shall mean a change of ownership or control of
the Corporation effected through any of the following transactions:

 

(i)            a merger, consolidation or other reorganization approved by the
Corporation’s stockholders, unless securities representing fifty percent (50%)
or more of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Corporation’s outstanding voting securities immediately
prior to such transaction,

 

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(ii)           a sale, transfer or other disposition of all or substantially all
of the Corporation’s assets,

 

(iii)          the closing of any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a “group” within
the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a
person that, prior to such transaction or series of related transactions,
directly or indirectly controls, is controlled by or is under common control
with, the Corporation) acquires directly or indirectly (whether as a result of a
single acquisition or by reason of one or more acquisitions within the twelve
(12)-month period ending with the most recent acquisition) beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or
convertible into or exercisable for securities possessing) thirty-five percent
(35%) or more of the total combined voting power of the Corporation’s securities
(as measured in terms of the power to vote with respect to the election of Board
members) outstanding immediately after the consummation of such transaction or
series of related transactions, whether such transaction involves a direct
issuance from the Corporation or the acquisition of outstanding securities held
by one or more of the Corporation’s existing stockholders, or

 

(iv)          a change in the composition of the Board over a period of twelve
(12) consecutive months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership, to be
comprised of individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (A) who were still in office at the time the Board
approved such election or nomination;

 

provided, however, that in the event Participant is a party to a Change in
Control Benefits Agreement applicable to the Award, the term Change in Control
shall have the meaning ascribed to that term in such Change in Control Benefits
Agreement.

 

H.            Change in Control Benefits Agreement shall mean any separate
agreement between Participant and the Corporation which provides Participant
with special vesting acceleration and/or other special benefits with respect to
one or more awards of restricted stock units made to Participant for shares of
Common Stock, including (to the extent applicable) the restricted stock units
evidenced by this Agreement, in the event of a change in control or ownership of
the Corporation (whether or not constituting a Change in Control hereunder).

 

I.             Change in Control Shares shall mean the number  of Shares
obtained by multiplying (i) the number of Performance-Qualified Shares issuable
under the Award at Target Level Attainment of the Performance Goal (without any
adjustment for the TSR Modifier) by (ii) the Vested Percentage.

 

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J.             Code shall mean the Internal Revenue Code of 1986, as amended.

 

K.            Common Stock shall mean shares of the Corporation’s common stock.

 

L.            Corporation shall mean Matson, Inc., a Hawaii corporation, and any
successor corporation to all or substantially all of the assets or voting stock
of Matson, Inc. which shall by appropriate action adopt the Plan.

 

M.           Early Retirement shall mean Participant’s retirement from Service,
with the prior approval of the Corporation (or the Parent or Subsidiary
employing Participant), on or after the attainment of age fifty-five (55) and
the completion of at least five (5) years of Service.

 

N.            Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

 

O.            Extraordinary Level Attainment shall mean the Corporation’s
achievement of the Performance Goal set forth in Schedule I to the Award Notice
at the level designated as Extraordinary Level attainment for that goal.

 

P.             Fair Market Value per share of Common Stock on any relevant date
shall be the closing selling price per share of Common Stock at the close of
regular hours trading (i.e., before after-hours trading beings) on date in
question on the Stock Exchange serving as the primary market for the Common
Stock, as such price is reported by the National Association of Securities
Dealers (if primarily traded on the Nasdaq Global Select Market) or as
officially quoted in the composite tape of transactions on any other Stock
Exchange on which the Common Stock is then primarily traded.  If there is no
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.

 

Q.            Good Reason shall mean the occurrence of any of the following
events effected without Participant’s consent: (A) a change in Participant’s
position with the Corporation (or any Parent or Subsidiary employing
Participant) which materially reduces Participant’s duties and responsibilities
or the level of management to which Participant reports, (B) a relocation of
Participant’s principal place of employment by more than fifty (50) miles, (C) a
reduction in Participant’s level of compensation, as measured in terms of base
salary, fringe benefits and target annual incentive payment, by more than ten
percent (10%) or (D) the failure by the Corporation to continue in effect any
stock option or other equity-based plan in which Participant is participating,
or in which Participant is entitled to participate, immediately prior to a
change in control of the Corporation, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect to such
plan; or the failure by the Corporation to continue Participant’s participation
therein (or in such substitute or alternative plan) on a substantially
equivalent basis, both in terms of the amount or timing of payment of benefits
provided and the level of Participant’s participation relative to other
participants, as existed immediately prior to the change in control of the
Corporation.

 

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However, in the event Participant is at the time of his or her cessation of
Employee status a party to a Change in Control Benefits Agreement applicable to
the Award evidenced by this Agreement, the term Good Reason shall have the
meaning ascribed to that term in such Change in Control Benefits Agreement.

 

R.            Involuntary Termination shall mean the Participant’s Separation
from Service by reason of:

 

(i)            Participant’s involuntary dismissal or discharge by the
Corporation for reasons other than for Cause, or

 

(ii)           Participant’s voluntary resignation for Good Reason.

 

S.             1934 Act shall mean the Securities Exchange Act of 1934, as
amended from time to time.

 

T.            Normal Retirement shall mean shall mean the cessation of Service
by reason of retirement at or after the attainment of age sixty-five (65).

 

U.            Participant shall mean the person to whom the Award is made
pursuant to the Agreement.

 

V.            Parent shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

W.           Performance Goal shall mean the performance goal specified on
Schedule I of the Award Notice.

 

X.            Performance Period shall mean the period specified on Schedule I
of the Award Notice over which the attainment of the Performance Goal is to be
measured.

 

Y.            Performance-Qualified Shares shall mean the maximum number of
Shares in which Participant can vest based on the level at which the Performance
Goal for the Performance Period is attained and shall be calculated in
accordance with the provisions of the Award Notice.  In no event shall the
number of such Performance-Qualified Shares exceed two hundred fifty percent
(250%) of the designated number of Performance Shares set forth in the
Performance Shares section of the Award Notice.  Each Performance-Qualified
Share that vests pursuant to the terms of the Award shall entitle Participant to
receive one Share.

 

Z.            Performance Shares shall mean the number of phantom shares of
Common Stock awarded under this Agreement that shall be applied to the
calculation of the maximum number of Performance-Qualified Shares (if any) based
on the level at which the Performance Goal is in fact attained over the
applicable Performance Period.

 

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AA.         Permanent Disability shall mean the inability of Participant to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.

 

BB.         Plan shall mean the Corporation’s 2007 Incentive Compensation Plan.

 

CC.         Plan Administrator shall mean either the Board or a committee of the
Board acting in its capacity as administrator of the Plan.

 

DD.         Qualifying Change in Control shall mean the date on which there
occurs a Change in Control that also qualifies as: (i) a change in the ownership
of the Corporation, as determined in accordance with 
Section 1.409A-3(i)((5)(v) of the Treasury Regulations, (ii) a change in the
effective control of the Corporation, as determined in accordance with 
Section 1.409A-3(i)((5)(vi) of the Treasury Regulations, or (iii) a change in
the ownership of a substantial portion of the assets of the Corporation, as
determined in accordance with  Section 1.409A-3(i)((5)(vii) of the Treasury
Regulations.

 

EE.          Separation from Service shall mean the Participant’s cessation of
Employee status by reason of his or her death, retirement or termination of
employment.  The Participant shall be deemed to have terminated employment for
such purpose at such time as the level of his or her bona fide services to be
performed as an Employee (or as a consultant or independent contractor)
permanently decreases to a level that is less than fifty percent (50%) of the
average level of services he or she rendered as an Employee during the
immediately preceding thirty-six (36) months of employment (or such shorter
period for which he or she may have rendered such services).  Solely for
purposes of determining when a Separation from Service occurs, Participant will
be deemed to continue in “Employee” status for so long as he or she remains in
the employ of one or more members of the Employer Group, subject to the control
and direction of the employer entity as to both the work to be performed and the
manner and method of performance. “Employer Group” means the Corporation and any
Parent or Subsidiary and any other corporation or business controlled by,
controlling or under common control with, the Corporation, as determined in
accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations
thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code
for purposes of determining the controlled group of corporations under
Section 414(b), the phrase “at least 50 percent” shall be used instead of “at
least 80 percent” each place the latter phrase appears in such sections and in
applying Section 1.414(c)-2 of the Treasury Regulations for purposes of
determining trades or businesses that are under common control for purposes of
Section 414(c), the phrase “at least 50 percent” shall be used instead of “at
least 80 percent” each place the latter phrase appears in Section  1.4.14(c)-2
of the Treasury Regulations.  Any such determination as to Separation from
Service, however, shall be made in accordance with the applicable standards of
the Treasury Regulations issued under Section 409A of the Code.

 

FF.          Service shall mean Participant’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. For purposes of this

 

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Agreement, Participant shall be deemed to cease Service immediately upon the
occurrence of the either of the following events: (i) Participant no longer
performs services in any of the foregoing capacities for the Corporation (or any
Parent or Subsidiary) or (ii) the entity for which Participant performs such
services ceases to remain a Parent or Subsidiary of the Corporation, even though
Participant may subsequently continue to perform services for that entity.
Service as an Employee shall not be deemed to cease during a period of military
leave, sick leave or other personal leave approved by the Corporation; provided,
however, that the following special provisions shall be in effect for any such
leave:

 

(i)            Should the period of such leave (other than a disability leave)
exceed six (6) months, then Participant shall be deemed to cease Service and to
incur a Separation from Service upon the expiration of the initial six (6)-month
period of that leave, unless Participant retains a right to re-employment under
applicable law or by contract with the Corporation (or any Parent or
Subsidiary).

 

(ii)           Should the period of a disability leave exceed twenty-nine (29)
months, then Participant shall be deemed to cease Service and to incur a
Separation from Service upon the expiration of the initial twenty-nine
(29)-month period of that leave, unless Participant retains a right to
re-employment under applicable law or by contract with the Corporation (or any
Parent or Subsidiary).   For such purpose, a disability leave shall be a leave
of absence due to any medically determinable physical or mental impairment that
can be expected to result in death or to last for a continuous period of not
less than six (6) months and causes Participant to be unable to perform the
duties of his or her position of employment with the Corporation (or any Parent
or Subsidiary) or any substantially similar position of employment.

 

(iii)          Except to the extent otherwise required by law or expressly
authorized by the Plan Administrator or by the Corporation’s written policy on
leaves of absence, no Service credit shall be given for vesting purposes for any
period Participant is on a leave of absence.

 

GG.         Shares shall mean the shares of Common Stock which may vest and
become issuable under the Award pursuant to the terms of this Agreement and the
Award Notice.

 

HH.        Stock Exchange shall mean the American Stock Exchange, the Nasdaq
Global or Global Select Market or the New York Stock Exchange.

 

II.            Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. The term Subsidiary shall also
include any wholly-owned limited liability company in such chain of subsidiaries
that is disregarded for U.S. federal income tax purposes.

 

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JJ.            Target Level Attainment shall mean the Corporation’s achievement
of the Performance Goal set forth in Schedule I to the Award Notice at the level
designated as Target Level attainment for that goal.

 

KK.        TSR Modifier shall mean the adjustment on the basis of the relative
total shareholder return that is applied to the number of Shares that may vest
based on attainment of the Performance Goal as set forth in Schedule I of the
Award Notice.

 

LL.          Vested Percentage shall mean (i) fifty percent (50%) if the Change
in Control is consummated during the first eighteen (18) months of the
Performance Period and (ii) one hundred percent (100%) if the Change in Control
is consummated after the first eighteen (18) months of the Performance Period,
but prior to the completion of the Performance Period.

 

MM.       Withholding Taxes shall mean the federal, state and local income taxes
and the employee portion of the federal, state and local employment taxes
required to be withheld by the Corporation in connection with the vesting and
issuance of the shares of Common Stock which vest under the Award and any
phantom dividend equivalents distributed with respect to those shares.

 

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SCHEDULE I

 

ILLUSTRATION OF VESTING CALCULATIONS

 

The following examples are for illustration purposes only:

 

1.     Participant receives an Award for 100 Shares at Target Level and
Participant continues in Service until the expiration of the requisite three
(3)-year Service vesting period. If the Performance Goal is attained at the
Target Level, Participant shall vest in 100 Shares following the completion of
the Performance Period.  The actual number of shares issuable to the Participant
will range from 75 to 125 based on the TSR Modifier.  If the Performance Goal is
attained at the Extraordinary Level, Participant shall vest in an additional 100
Shares for a total of 200 Shares following the completion of the Performance
Period.  The actual number of shares issuable to the Participant will range from
150 to 250 based on the TSR Modifier.

 

2.     Participant receives an Award for 100 Shares at Target Level and
Participant ceases Service due to Permanent Disability halfway through the
Performance Period.  If the Performance Goal is attained at the Target Level,
Participant shall vest in 50 of the Shares.  The actual number of shares
issuable to the Participant will range from 37 to 62 based on the TSR Modifier. 
On the other hand, if the Performance Goal is attained at the Extraordinary
Level, Participant shall vest in an additional 50 Shares for a total of 100
Shares.  The actual number of shares issuable to the Participant will range from
75 to 125 based on the TSR Modifier.

 

3.     Participant receives an Award for 100 Shares at Target Level and
Participant continues in Service through the completion of the three (3)-year
Service vesting period.  If the Performance Goal is attained at a point halfway
between the Threshold and Target Levels, Participant would vest in 62 of the
Shares following the completion of the Performance Period.  The actual number of
shares issuable to the Participant will range from 46 to 77 based on the TSR
Modifier.  On the other hand, if the Performance Goal is attained at a point
halfway between the Target and Extraordinary Levels, Participant would vest in
150 of the Shares following the completion of the Performance Period.  The
actual number of shares issuable to the Participant will range from 112 to 187
based on the TSR Modifier.

 

4.     Participant receives an Award for 100 Shares at Target Level and
Participant ceases Service due to Permanent Disability halfway through the
Performance Period.  If the Performance Goal is attained at a point halfway
between the Threshold and Target Levels, Participant would vest in 31 of the
Shares following the completion of the Performance Period.  The actual number of
shares issuable to the Participant will range from 23 to 38 based on the TSR
Modifier.  On the other hand, if the Performance Goal is attained at a point
halfway between the Target and Extraordinary Levels, Participant would vest in
75 of the Shares following the completion of the Performance Period.  The actual
number of shares issuable to the Participant will range from 56 to 93 based on
the TSR Modifier.

 

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