EXHIBIT A

ALEXANDER & BALDWIN, INC.
2007 INCENTIVE COMPENSATION PLAN
AS AMENDED AND RESTATED EFFECTIVE JANUARY 28, 2010
 

 
ARTICLE ONE
 
GENERAL PROVISIONS
 
I.  
PURPOSE OF THE PLAN

 
This 2007 Incentive Compensation Plan, as amended and restated, is intended to
promote the interests of Alexander & Baldwin, Inc., a Hawaii corporation, by
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.
 
Capitalized terms shall have the meanings assigned to such terms in the attached
Appendix.
 
II.  
STRUCTURE OF THE PLAN

 
A. The Plan shall be divided into a series of separate incentive compensation
programs:
 
- the Discretionary Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock or stock appreciation rights tied to the value of such Common
Stock,
 
- the Stock Issuance Program under which eligible persons may, at the discretion
of the Plan Administrator, be issued shares of Common Stock pursuant to
restricted stock awards, restricted stock units, performance shares or other
stock-based awards which vest upon the completion of a designated service period
or the attainment of pre-established performance milestones, or such shares of
Common Stock may be issued through direct purchase or as a bonus for services
rendered the Corporation (or any Parent or Subsidiary),
 
- the Incentive Bonus Program under which eligible persons may, at the
discretion of the Plan Administrator, be provided with incentive bonus
opportunities through performance unit awards and special cash incentive
programs tied to the attainment of pre-established performance milestones, and
 
- the Automatic Grant Program under which eligible non-employee Board members
will automatically receive equity awards at designated intervals over their
period of continued Board service.
 
B. The provisions of Articles One and Six shall apply to all incentive
compensation programs under the Plan and shall govern the interests of all
persons under the Plan.
 
III.  
ADMINISTRATION OF THE PLAN

 
A. The Compensation Committee (either acting directly or through a subcommittee
of two or more members of the Compensation Committee) shall have sole and
exclusive authority to administer the Discretionary Grant, Stock Issuance and
Incentive Bonus Programs with respect to Section 16 Insiders.  Administration of
the Discretionary Grant, Stock Issuance and Incentive Bonus Programs with
respect to all other persons eligible to participate in those programs may, at
the Board’s discretion, be vested in the Compensation Committee or a Secondary
Board Committee, or the Board may retain the power to administer those programs
with respect to all such persons.  However, all Awards to non-employee Board
members (other than pursuant to the Automatic Grant Program) shall be made by
the Compensation Committee (or subcommittee thereof) which shall at the time of
any such Award be comprised solely of independent directors, as determined in
accordance with the governance standards established by  the Stock Exchange on
which the Common Stock is at the time primarily traded (the “Independent
Directors”).  In addition, any Awards for members of the Compensation Committee
(other than pursuant to the Automatic Grant Program) must be authorized by a
disinterested majority of the Independent Directors.
 
B. Members of the Compensation Committee or any Secondary Board Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time.  The Board may also at any time terminate the functions
of any Secondary Board Committee and reassume all powers and authority
previously delegated to such committee.
 
C. Each Plan Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Discretionary Grant, Stock Issuance
and Incentive Bonus Programs and to make such determinations under, and issue
such interpretations of, the provisions of those programs and any outstanding
Awards thereunder as it may deem necessary or advisable.  Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest in the
Discretionary Grant, Stock Issuance and Incentive Bonus Programs under its
jurisdiction or any Award thereunder.
 
D. Service as a Plan Administrator by the members of the Compensation Committee
or the Secondary Board Committee shall constitute service as Board members, and
the members of each such committee shall accordingly be entitled to full
indemnification and reimbursement as Board members for their service on such
committee.  No member of the Compensation Committee or the Secondary Board
Committee shall be liable for any act or omission made in good faith with
respect to the Plan or any Award thereunder.

E. Administration of the Automatic Grant Program shall be self-executing in
accordance with the terms of that program, and no Plan Administrator shall
exercise any discretionary functions with respect to any Awards made under that
program, except that the Compensation Committee (or subcommittee thereof) shall
have the express authority to establish from time to time the applicable dollar
amount to be used to determine the specific number of shares of Common
Stock  for which the initial and annual Awards are to be made to the
non-employee Board members in accordance with the dollar value formula set forth
in Article Five.
 
IV.  
ELIGIBILITY

 
A. The persons eligible to participate in the Plan are as follows:
 
(i) Employees,
 
(ii) non-employee members of the Board or the board of directors of any Parent
or Subsidiary, and
 
(iii) consultants and other independent advisors who provide services to the
Corporation (or any Parent or Subsidiary).
 
B. The Plan Administrator shall have full authority to determine, (i) with
respect to Awards made under the Discretionary Grant Program, which eligible
persons are to receive such Awards, the time or times when those Awards are to
be made, the number of shares to be covered by each such Award, the time or
times when the Award is to become exercisable, the vesting schedule (if any)
applicable to the Award, the maximum term for which such Award is to remain
outstanding and the status of a granted option as either an Incentive Option or
a Non-Statutory Option; (ii) with respect to Awards under the Stock Issuance
Program, which eligible persons are to receive such Awards, the time or times
when the Awards are to be made, the number of shares subject to each such Award,
the vesting and issuance schedules applicable to the shares which are the
subject of such Award, the cash consideration (if any) payable for those shares
and the form (cash or shares of Common Stock) in which the Award is to be
settled; and (iii) with respect to Awards under the Incentive Bonus Program,
which eligible persons are to receive such Awards, the time or times when the
Awards are to be made, the performance objectives for each such Award, the
amounts payable at designated levels of attained performance, any applicable
service vesting requirements, the payout schedule for each such Award and the
form (cash or shares of Common Stock) in which the Award is to be settled.
 
C. The Plan Administrator shall have the absolute discretion to grant options or
stock appreciation rights in accordance with the Discretionary Grant Program, to
effect stock issuances and other stock-based awards in accordance with the Stock
Issuance Program and to grant incentive bonus awards in accordance with the
Incentive Bonus Program.
 
D. The individuals who shall be eligible to participate in the Automatic Grant
Program shall be limited to (i) those individuals who first become non-employee
Board members on or after the Plan Effective Date, whether through appointment
by the Board or election by the Corporation’s stockholders, and (ii) those
individuals who continue to serve as non-employee Board members on or after the
Plan Effective Date.  A non-employee Board member who has previously been in the
employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to
receive a grant under the Automatic Grant Program at the time he or she first
becomes a non-employee Board member, but shall be eligible to receive periodic
grants under the Automatic Grant Program while he or she continues to serve as a
non-employee Board member.
 
V.  
STOCK SUBJECT TO THE PLAN

 
A. The stock issuable under the Plan shall be shares of authorized but unissued
or reacquired Common Stock, including shares repurchased by the Corporation on
the open market.  The number of shares of Common Stock reserved for issuance
over the term of the Plan shall be limited to Four Million Four Hundred Fifteen
Thousand (4,415,000) shares.  Such share reserve includes an increase of Two
Million Two Hundred Thousand (2,200,0000) shares of Common Stock authorized by
the Board on January 28, 2010, subject to stockholder approval at the 2010
Annual Meeting.
 
B. The Plan shall serve as the successor to the Predecessor Plans, and no
further stock option grants or unvested share awards shall be made under the
Predecessor Plans on or after the Plan Effective Date.  However, all option
grants and unvested share awards outstanding under the Predecessor Plans on the
Plan Effective Date shall continue in full force and effect in accordance with
their terms, and no provision of this Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of those awards with
respect to their acquisition of shares of Common Stock thereunder.  To the
extent any options outstanding under the Predecessor Plans on the Plan Effective
Date expire or terminate unexercised or any unvested shares outstanding under
the Predecessor Plans on the Plan Effective Date are forfeited or repurchased by
the Corporation at the original issue price, the number of shares of Common
Stock subject to those expired or terminated options at the time of expiration
or termination and the number of such forfeited or repurchased shares shall be
added to the share reserve under this Plan and shall accordingly be available
for issuance hereunder, up to a maximum of an additional Seven Hundred Fifty
Thousand (750,000) shares.
 
C. The maximum number of shares of Common Stock that may be issued pursuant to
Incentive Options granted under Plan shall not exceed Four Million Four Hundred
Fifteen Thousand (4,415,000) shares, subject to stockholder approval at the 2010
Annual Meeting of the Two Million Two Hundred Thousand (2,200,0000) share
increase of Common Stock authorized by the Board on January 28, 2010.  In the
absence of such stockholder approval, the maximum number of shares of Common
Stock that may be issued pursuant to Incentive Options granted under Plan shall
be limited to Two Million Two Hundred Fifteen  Thousand (2,215,000) shares of
Common Stock.
 
D. Each person participating in the Plan shall be subject the following
limitations:
 
-
for Awards denominated in terms of shares of Common Stock (whether payable in
Common Stock, cash or a combination of both), the maximum number of shares of
Common Stock for which such Awards may be made to such person in any calendar
year shall not exceed Five Hundred Thousand (500,000) shares of Common Stock in
the aggregate, and

 
-
for Awards denominated in terms of cash dollars (whether payable in cash, Common
Stock or a combination of both), the maximum dollar amount for which such Awards
may be made to such person in any calendar year shall not exceed five million
dollars ($5,000,000.00), with such limitation to be measured at the time the
Award is made and not at the time the Award becomes payable.

 
E. Shares of Common Stock subject to outstanding Awards made under the Plan
shall be available for subsequent issuance under the Plan to the extent those
Awards expire or terminate for any reason prior to the issuance of the shares of
Common Stock subject to those Awards.  Unvested shares issued under the Plan and
subsequently forfeited or repurchased by the Corporation, at a price per share
not greater than the original issue price paid per share, pursuant to the
Corporation’s repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for subsequent reissuance.  Should the exercise price
of an option under the Plan be paid with shares of Common Stock, then the
authorized reserve of Common Stock under the Plan shall be reduced by the gross
number of shares for which that option is exercised, and not by the net number
of shares issued under the exercised stock option.  Upon the exercise of any
stock appreciation right under the Plan, the share reserve shall be reduced by
the gross number of shares as to which such right is exercised, and not by the
net number of shares actually issued by the Corporation upon such exercise. If
shares of Common Stock otherwise issuable under the Plan are withheld by the
Corporation in satisfaction of the withholding taxes incurred in connection with
the issuance, vesting or exercise of an Award or the issuance of Common Stock
thereunder, then the number of shares of Common Stock available for issuance
under the Plan shall be reduced on the basis of the gross number of shares
issued, vested or exercised under such Award, calculated in each instance prior
to any such share withholding.
 
F. 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 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 Company 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 (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number
and/or class of securities by which the share reserve under the Plan may
increase by reason of the expiration or termination of unexercised options or
the forfeiture or repurchase of shares under the Predecessor Plans, (iii) the
maximum number and/or class of securities that may be issued pursuant to
Incentive Options granted under the Plan, (iv) the maximum number and/or class
of securities for which any one person may be granted Common Stock-denominated
Awards under the Plan per calendar year, (v) the number and/or class of
securities and the exercise or base price per share in effect under each
outstanding Award under the Discretionary Grant Program, (vi) the number and/or
class of securities subject to each outstanding Award under the Stock Issuance
Program and the cash consideration (if any) payable per share, (vii) the number
and/or class of securities subject to each outstanding Award under the Automatic
Grant Program, (viii) the number and/or class of securities for which Awards may
subsequently be made to new and continuing non-employee Board members under the
Automatic Grant Program, (ix) the number and/or class of securities subject to
each outstanding Award under the Incentive Bonus Program denominated in shares
of Common Stock and (x) the number and/or class of securities subject to the
Corporation’s outstanding repurchase rights under the Plan and the repurchase
price payable per share.  The adjustments shall be made in such manner as the
Plan Administrator deems appropriate in order to prevent the dilution or
enlargement of benefits under the Plan and the outstanding Awards thereunder,
and such adjustments shall be final, binding and conclusive. In the event of a
Change in Control, however, the adjustments (if any) shall be made solely in
accordance with the applicable provisions of the Plan governing Change in
Control transactions.
 
G. Outstanding Awards granted pursuant to the Plan shall in no 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.
 

DB2/20196179.7                                                                      
 
 

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ARTICLE TWO
 

 
DISCRETIONARY GRANT PROGRAM
 
I.  
OPTION TERMS

 
Each option shall be evidenced by one or more documents in the form approved by
the Plan Administrator; provided, however, that each such document shall comply
with the terms specified below.  Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan applicable to such
options.
 
A. Exercise Price.
 
1. The exercise price per share shall be fixed by the Plan Administrator;
provided, however, that such exercise price shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the grant
date.
 
2. The exercise price shall become immediately due upon exercise of the option
and shall, subject to the provisions of the documents evidencing the option, be
payable in one or more of the forms specified below:
 
(i) cash or check made payable to the Corporation,
 
(ii) shares of Common Stock (whether delivered in the form of actual stock
certificates or through attestation of ownership) held for the requisite period
(if any) necessary to avoid any resulting charge to the Corporation’s earnings
for financial reporting purposes and valued at Fair Market Value on the Exercise
Date,
 
(iii) shares of Common Stock otherwise issuable under the option but withheld by
the Corporation in satisfaction of the exercise price, with such withheld shares
to be valued at Fair Market Value on the exercise date, and
 
(iv) to the extent the option is exercised for vested shares, through a special
sale and remittance procedure pursuant to which the Optionee shall concurrently
provide instructions to (a) a brokerage firm (reasonably satisfactory to the
Corporation for purposes of administering such procedure in compliance with the
Corporation’s pre-clearance/pre-notification policies) to effect the immediate
sale of the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all applicable
income and employment taxes required to be withheld by the Corporation by reason
of such exercise and (b) the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm on such settlement date in
order to complete the sale.
 
Except to the extent such sale and remittance procedure is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
 
B. Exercise and Term of Options.
 
1. Each option shall be exercisable at such time or times, during such period
and for such number of shares as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option.  However, no option shall
have a term in excess of ten (10) years measured from the option grant date.
 
2. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more Awards under the
Discretionary Grant Program so that those Awards shall vest and become
exercisable only after the achievement of pre-established corporate performance
objectives based on one or more Performance Goals and measured over the
performance period specified by the Plan Administrator at the time of the Award
 
3. Notwithstanding the foregoing, the following limitations shall apply with
respect to the vesting schedules established for the Awards made under the
Discretionary Grant Program, subject to the acceleration provisions in Paragraph
C.2 below and Section IV of this Article Two:
 
(i) for any such Award which is to vest on the basis of Service, the minimum
vesting period shall be three (3) years, with the rate of vesting over that
period to be determined by  the Plan Administrator; and
 
(ii)  for any such Award which is to vest on the basis of performance
objectives, the performance period shall have a duration of at least one year.
 
C. Effect of Termination of Service.
 
1. The following provisions shall govern the exercise of any options granted
pursuant to the Discretionary Grant Program that are outstanding at the time of
the Optionee’s cessation of Service or death:
 
(i) Any option outstanding at the time of the Optionee’s cessation of Service
for any reason shall remain exercisable for such period of time thereafter as
shall be determined by the Plan Administrator and set forth in the documents
evidencing the option, but no such option shall be exercisable after the
expiration of the option term.
 
(ii) Any option held by the Optionee at the time of the Optionee’s death and
exercisable in whole or in part at that time may be subsequently exercised by
the personal representative of the Optionee’s estate or by the person or persons
to whom the option is transferred pursuant to the Optionee’s will or the laws of
inheritance or by the Optionee’s designated beneficiary or beneficiaries of that
option.

(iii) Should the Optionee’s Service be terminated for Cause or should the
Optionee otherwise engage in conduct constituting grounds for a termination for
Cause while holding one or more outstanding options granted under this Article
Two, then all of those options shall terminate immediately and cease to be
outstanding.
 
(iv) During the applicable post-Service exercise period, the option may not be
exercised for more than the number of vested shares for which the option is at
the time exercisable; provided, however, that one or more options under the
Discretionary Grant Program may be structured so that those options continue to
vest in whole or part during the applicable post-Service exercise period. Upon
the expiration of the applicable exercise period or (if earlier) upon the
expiration of the option term, the option shall terminate and cease to be
outstanding for any shares for which the option has not been exercised.
 
2. The Plan Administrator shall have complete discretion, exercisable either at
the time an option is granted or at any time while the option remains
outstanding, to:
 
(i) extend the period of time for which the option is to remain exercisable
following the Optionee’s cessation of Service from the limited exercise period
otherwise in effect for that option to such greater period of time as the Plan
Administrator shall deem appropriate, but in no event beyond the expiration of
the option term,
 
(ii) include an automatic extension provision whereby the specified post-Service
exercise period in effect for any option granted under this Article Two shall
automatically be extended by an additional period of time equal in duration to
any interval within the specified post-Service exercise period during which the
exercise of that option or the immediate sale of the shares acquired under such
option could not be effected in compliance with applicable federal and state
securities laws, but in no event shall such an extension result in the
continuation of such option beyond the expiration date of the term of that
option, and/or
 
(iii) permit the option to be exercised, during the applicable post-Service
exercise period, not only with respect to the number of vested shares of Common
Stock for which such option is exercisable at the time of the Optionee’s
cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested had the Optionee continued
in Service.
 
D. Stockholder Rights.  The holder of an option shall have no stockholder rights
with respect to the shares subject to the option until such person shall have
exercised the option, paid the exercise price and become a holder of record of
the purchased shares.

E. Repurchase Rights. The Plan Administrator shall have the discretion to grant
options which are exercisable for unvested shares of Common Stock.  Should the
Optionee cease Service while such shares are unvested, the Corporation shall
have the right to repurchase any or all of those unvested shares at a price per
share equal to the lower of (i) the exercise price paid per share or (ii) the
Fair Market Value per share of Common Stock at the time of repurchase.  The
terms upon which such repurchase right shall be exercisable (including the
period and procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Plan Administrator and set forth
in the document evidencing such repurchase right.
 
F. Transferability of Options. The transferability of options granted under the
Plan shall be governed by the following provisions:
 
(i)           Incentive Options:   During the lifetime of the Optionee,
Incentive Options shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or the laws of inheritance
following the Optionee’s death.
 
(ii)           Non-Statutory Options.  Non-Statutory Options shall be subject to
the same limitation on transfer as Incentive Options, except that the Plan
Administrator may structure one or more Non-Statutory Options so that the option
may be assigned in whole or in part during the Optionee’s lifetime to one or
more Family Members of the Optionee or to a trust established exclusively for
the Optionee and/or such Family Members, to the extent such assignment is in
connection with the Optionee’s estate plan or pursuant to a domestic relations
order.  The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment.  The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.
 
(iii)           Beneficiary Designations.  Notwithstanding the foregoing, the
Optionee may designate one or more persons as the beneficiary or beneficiaries
of his or her outstanding options under this Article Two (whether Incentive
Options or Non-Statutory Options), and those options shall, in accordance with
such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee’s death while holding those options.  Such
beneficiary or beneficiaries shall take the transferred options subject to all
the terms and conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited time period
during which the option may be exercised following the Optionee’s death.
 
II.  
INCENTIVE OPTIONS

 
The terms specified below shall be applicable to all Incentive Options.  Except
as modified by the provisions of this Section II, all the provisions of Articles
One, Two and Six shall be applicable to Incentive Options.  Options which are
specifically designated as Non-Statutory Options when issued under the Plan
shall not be subject to the terms of this Section II.
 
A. Eligibility.  Incentive Options may only be granted to Employees.
 
B. Dollar Limitation.  The aggregate Fair Market Value of the shares of Common
Stock (determined as of the respective date or dates of grant) for which one or
more options granted to any Employee under the Plan (or any other option plan of
the Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000).
 
To the extent the Employee holds two (2) or more such options which become
exercisable for the first time in the same calendar year, then for purposes of
the foregoing limitations on the exercisability of those options as Incentive
Options, such options shall be deemed to become first exercisable in that
calendar year on the basis of the chronological order in which they were
granted, except to the extent otherwise provided under applicable law or
regulation.

C. 10% Stockholder.  If any Employee to whom an Incentive Option is granted is a
10% Stockholder, then the exercise price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per share of Common Stock on
the option grant date, and the option term shall not exceed five (5) years
measured from the option grant date.
 
III.  
STOCK APPRECIATION RIGHTS

 
A. Authority.  The Plan Administrator shall have full power and authority,
exercisable in its sole discretion, to grant stock appreciation rights in
accordance with this Section III to selected Optionees or other individuals
eligible to receive option grants under the Discretionary Grant Program.
 
B. Types.  Two types of stock appreciation rights shall be authorized for
issuance under this Section III: (i) tandem stock appreciation rights (“Tandem
Rights”) and (ii) stand-alone stock appreciation rights (“Stand-alone Rights”).
 
C. Tandem Rights.  The following terms and conditions shall govern the grant and
exercise of Tandem Rights.
 
1. One or more Optionees may be granted a Tandem Right, exercisable upon such
terms and conditions as the Plan Administrator may establish, to elect between
the exercise of the underlying option for shares of Common Stock or the
surrender of that option in exchange for a distribution from the Corporation in
an amount equal to the excess of (i) the Fair Market Value (on the option
surrender date) of the number of shares in which the Optionee is at the time
vested under the surrendered option (or surrendered portion thereof) over
(ii) the aggregate exercise price payable for such vested shares.
 
2. Any distribution to which the Optionee becomes entitled upon the exercise of
a Tandem Right may be made in (i) shares of Common Stock valued at Fair Market
Value on the option surrender date, (ii)  cash or (iii) a combination of cash
and shares of  Common Stock, as specified in the applicable Award agreement.
 
D. Stand-Alone Rights.  The following terms and conditions shall govern the
grant and exercise of Stand-alone Rights:
 
1. One or more individuals eligible to participate in the Discretionary Grant
Program may be granted a Stand-alone Right not tied to any underlying option
under this Discretionary Grant Program.  The Stand-alone Right shall relate to a
specified number of shares of Common Stock and shall be exercisable upon such
terms and conditions as the Plan Administrator may establish.  In no event,
however, may the Stand-alone Right have a maximum term in excess of ten (10)
years measured from the grant date.  The provisions and limitations of
Paragraphs B.2 and B.3 of Section I of this Article Two shall also be applicable
to any Stand-Alone Right awarded under the Plan.
 
2. Upon exercise of the Stand-alone Right, the holder shall be entitled to
receive a distribution from the Corporation in an amount equal to the excess of
(i) the aggregate Fair Market Value (on the exercise date) of the shares of
Common Stock underlying the exercised right over (ii) the aggregate base price
in effect for those shares.
 
3. The number of shares of Common Stock underlying each Stand-alone Right and
the base price in effect for those shares shall be determined by the Plan
Administrator in its sole discretion at the time the Stand-alone Right is
granted.  In no event, however, may the base price per share be less than the
Fair Market Value per underlying share of Common Stock on the grant date.
 
4. Stand-alone Rights shall be subject to the same transferability restrictions
applicable to Non-Statutory Options and may not be transferred during the
holder’s lifetime, except if such assignment is in connection with the holder’s
estate plan and is to one or more Family Members of the holder or to a trust
established for the holder and/or one or more such Family Members or pursuant to
a domestic relations order covering the Stand-alone Right as marital
property.  In addition, one or more beneficiaries may be designated for an
outstanding Stand-alone Right in accordance with substantially the same terms
and provisions as set forth in Section I.F of this Article Two.
 
5. The distribution with respect to an exercised Stand-alone Right may be made
in (i) shares of Common Stock valued at Fair Market Value on the exercise date,
(ii) cash or (iii) a combination of cash and shares of Common Stock, as
specified in the applicable Award agreement.
 
6. The holder of a Stand-alone Right shall have no stockholder rights with
respect to the shares subject to the Stand-alone Right unless and until such
person shall have exercised the Stand-alone Right and become a holder of record
of the shares of Common Stock issued upon the exercise of such Stand-alone
Right.
 
E. Post-Service Exercise.  The provisions governing the exercise of Tandem and
Stand-alone Rights following the cessation of the recipient’s Service shall be
substantially the same as those set forth in Section I.C.1 of this Article Two
for the options granted under the Discretionary Grant Program, and the Plan
Administrator’s discretionary authority under Section I.C.2 of this Article Two
shall also extend to any outstanding Tandem or Stand-alone Appreciation Rights.
 
IV.  
CHANGE IN CONTROL

 
A. In the event of an actual Change in Control transaction, each outstanding
Award under the Discretionary Grant Program shall automatically accelerate so
that each such Award shall, immediately prior to the effective date of that
Change in Control, become exercisable as to all the shares of Common Stock at
the time subject to such Award and may be exercised as to any or all of those
shares as fully vested shares of Common Stock.  However, an outstanding Award
under the Discretionary Grant Program shall not become exercisable on such an
accelerated basis if and to the extent: (i) such Award is to be assumed by the
successor corporation (or parent thereof) or is otherwise to continue in full
force and effect pursuant to the terms of the Change in Control transaction or
(ii) such Award is to be replaced with a cash incentive program of the successor
corporation which preserves the spread existing at the time of the Change in
Control on any shares as to which the Award is not otherwise at that time
exercisable and provides for subsequent vesting and payout of that spread in
accordance with the same exercise/vesting schedule in effect for that Award or
(iii) the acceleration of such Award is subject to other limitations imposed by
the Plan Administrator.  Notwithstanding the foregoing, any Award outstanding
under the Discretionary Grant Program on the date of such Change in Control
shall be subject to cancellation and termination, without cash payment or other
consideration due the Award holder, if the Fair Market Value per share of Common
Stock on the date of such Change in Control (or any earlier date specified in
the definitive agreement for the Change in Control transaction) is less than the
per share exercise or base price in effect for such Award.
 
B. All outstanding repurchase rights under the Discretionary Grant Program shall
automatically terminate, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, immediately prior to the
effective date of an actual Change in Control transaction, except to the extent:
(i) those repurchase rights are to be assigned to the successor corporation (or
parent thereof) or are otherwise to continue in full force and effect pursuant
to the terms of the Change in Control transaction or (ii) such accelerated
vesting is precluded by other limitations imposed by the Plan Administrator.
 
C. Immediately following the consummation of the Change in Control, all
outstanding Awards under the Discretionary Grant Program shall terminate and
cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or are otherwise continued in full force and
effect pursuant to the terms of the Change in Control transaction.
 
D. Each Award which is assumed in connection with a Change in Control or
otherwise continued in effect shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities into
which the shares of Common Stock subject to that Award would have been converted
in consummation of such Change in Control had those shares actually been
outstanding at that time.  Appropriate adjustments to reflect such Change in
Control shall also be made to (i) the exercise or base  price per share in
effect under each outstanding Award, provided the aggregate exercise or base
price in effect for such securities shall remain the same, (ii) the maximum
number and/or class of securities available for issuance over the remaining term
of the Plan (iii) the maximum number and/or class of securities by which the
share reserve under the Plan may increase by reason of the expiration or
termination of unexercised options or the forfeiture or repurchase of shares
under the Predecessor Plan, (iv) the maximum number and/or class of securities
that may be issued pursuant to Incentive Options granted under the Plan, (v) the
maximum number and/or class of securities for which any one person may be
granted Common Stock-denominated Awards under the Plan per calendar year, (vi)
the number and/or class of securities and the exercise or base price per share
in effect under each outstanding Award under the Discretionary Grant Program,
(vii) the number and/or class of securities subject to each outstanding Award
under the Stock Issuance Program and the cash consideration (if any) payable per
share, (viii) the number and/or class of securities subject to each outstanding
Award under the Incentive Bonus Program denominated in shares of Common Stock,
(ix) the number and/or class of securities subject to each outstanding Award
under the Automatic Grant Program, (x) the number and/or class of securities for
which Awards may subsequently be made to new and continuing non-employee Board
members under the Automatic Grant Program and (xi) the number and/or class of
securities subject to the Corporation’s outstanding repurchase rights under the
Plan and the repurchase price payable per share. To the extent the actual
holders of the Corporation’s outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Change in Control, the successor
corporation may, in connection with the assumption or continuation of the
outstanding Awards under the Discretionary Grant Program, substitute, for the
securities underlying those assumed rights, 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 such Change in Control transaction, provided such
common stock is readily traded on an established U.S. securities exchange or
market.
 
E. The Plan Administrator shall have the discretionary authority to structure
one or more outstanding Awards under the Discretionary Grant Program so that
those Awards shall, immediately prior to the effective date of an actual Change
in Control transaction, become exercisable as to all the shares of Common Stock
at the time subject to those Awards and may be exercised as to any or all of
those shares as fully vested shares of Common Stock, whether or not those Awards
are to be assumed in the Change in Control transaction or otherwise continued in
effect.  In addition, the Plan Administrator shall have the discretionary
authority to structure one or more of the Corporation’s repurchase rights under
the Discretionary Grant Program so that those rights shall terminate immediately
prior to the effective date of an actual Change in Control transaction, and the
shares subject to those terminated rights shall thereupon vest in full.
 
F. The Plan Administrator shall have full power and authority to structure one
or more outstanding Awards under the Discretionary Grant Program so that those
Awards shall become exercisable as to all the shares of Common Stock at the time
subject to those Awards in the event the Optionee’s Service is subsequently
terminated by reason of an Involuntary Termination within a designated period
following the effective date of any Change in Control transaction in which those
Awards do not otherwise fully accelerate.  In addition, the Plan Administrator
may structure one or more of the Corporation’s repurchase rights so that those
rights shall immediately terminate with respect to any shares held by the
Optionee at the time of such Involuntary Termination, and the shares subject to
those terminated repurchase rights shall accordingly vest in full at that time.

G. The portion of any Incentive Option accelerated in connection with a Change
in Control shall remain exercisable as an Incentive Option only to the extent
the applicable One Hundred Thousand Dollar ($100,000) limitation is not
exceeded.  To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-statutory Option under the
Federal tax laws.
 
V.  
PROHIBITION ON REPRICING PROGRAMS

 
The Plan Administrator shall not (i) implement any cancellation/regrant program
pursuant to which outstanding options or stock appreciation rights under the
Plan are cancelled and new options or stock appreciation rights are granted in
replacement with a lower exercise price per share, (ii) cancel outstanding
options or stock appreciation rights under the Plan with exercise or base prices
per share in excess of the then current Fair Market Value per share of Common
Stock for consideration payable in cash, equity securities of the Corporation or
in the form of any other Award under the Plan, except in connection with a
Change in Control transaction, or (iii) otherwise directly reduce the exercise
price in effect for outstanding options or stock appreciation rights under the
Plan, without in each such instance obtaining stockholder approval.

DB2/20196179.7                                                                      
 
 

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ARTICLE THREE
 

 
STOCK ISSUANCE PROGRAM
 
I.  
STOCK ISSUANCE TERMS

 
Shares of Common Stock may be issued under the Stock Issuance Program, either as
vested or unvested shares, through direct and immediate issuances.  Each such
stock issuance shall be evidenced by a Stock Issuance Agreement which complies
with the terms specified below.  Shares of Common Stock may also be issued under
the Stock Issuance Program pursuant to performance shares or restricted stock
units which entitle the recipients to receive the shares underlying those Awards
upon the attainment of designated performance goals or the satisfaction of
specified Service requirements or upon the expiration of a designated time
period following the vesting of those Awards.
 
A. Issue Price.
 
1. The issue price per share shall be fixed by the Plan Administrator, but shall
not be less than one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the Award date.
 
2. Shares of Common Stock may be issued under the Stock Issuance Program for any
of the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
 
(i) cash or check made payable to the Corporation,
 
(ii) past services rendered to the Corporation (or any Parent or Subsidiary); or
 
(iii) any other valid consideration under the State in which the Corporation is
at the time incorporated.
 
B. Vesting Provisions.
 
1. Shares of Common Stock issued under the Stock Issuance Program may, in the
discretion of the Plan Administrator, be fully and immediately vested upon
issuance as a bonus for Service rendered or may vest in one or more installments
over the Participant’s period of Service or upon the attainment of specified
performance objectives.  The elements of the vesting schedule applicable to any
unvested shares of Common Stock issued under the Stock Issuance Program shall be
determined by the Plan Administrator and incorporated into the Stock Issuance
Agreement.  Shares of Common Stock may also be issued under the Stock Issuance
Program pursuant to performance shares or restricted stock units which entitle
the recipients to receive the shares underlying those Awards upon the attainment
of designated performance goals or the satisfaction of specified Service
requirements or upon the expiration of a designated time period following the
vesting of those Awards, including (without limitation) a deferred distribution
date following the termination of the Participant’s Service. Notwithstanding the
foregoing, the following limitations shall apply with respect to the vesting
schedules established for the Awards made under the Stock Issuance Program,
subject to the acceleration provisions in Paragraphs B.6 and B.7 below and
Section II of this Article Three:
 
(i) for any such Award which is to vest on the basis of Service, the minimum
vesting period shall be three (3) years, with the rate of vesting over that
period to be determined by  the Plan Administrator; and
 
(ii)  for any such Award which is to vest on the basis of performance
objectives, the performance period shall have a duration of at least one year.
 
The foregoing minimum vesting requirements shall not be applicable to any Awards
made under the Stock Issuance Program to an individual who is at the time of
such Award serving solely in the capacity of a non-employee Board member;
provided, however, that any Award made under the Stock Issuance Program to such
non-employee Board member must have a minimum vesting period of at least one
year, with not greater than monthly pro-rated vesting over that period.
 
2. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more Awards under the
Stock Issuance Program so that the shares of Common Stock subject to those
Awards shall vest (or vest and become issuable) upon the achievement of
pre-established corporate performance objectives based on one or more
Performance Goals and measured over the performance period specified by the Plan
Administrator at the time of the Award.
 
3. Any new, substituted or additional securities or other property (including
money paid other than as a regular cash dividend) which the Participant may have
the right to receive with respect to the Participant’s unvested shares of Common
Stock by reason of any stock dividend, stock split, 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 shall be issued
subject to (i) the same vesting requirements applicable to the Participant’s
unvested shares of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.  Equitable adjustments to reflect each
such transaction shall also be made by the Plan Administrator to the repurchase
price payable per share by the Corporation for any unvested securities subject
to its existing repurchase rights under the Plan; provided the aggregate
repurchase price shall in each instance remain the same.
 
4. The Participant shall have full stockholder rights with respect to any shares
of Common Stock issued to the Participant under the Stock Issuance Program,
whether or not the Participant’s interest in those shares is
vested.  Accordingly, the Participant shall have the right to vote such shares
and to receive any dividends paid on such shares, subject to any applicable
vesting requirements, including (without limitation) the requirement that any
dividends paid on  shares subject to performance-vesting conditions shall be
held in escrow by the Corporation and shall not vest or actually be paid to the
Award holder prior to the time those shares vest. The Participant shall not have
any stockholder rights with respect to the shares of Common Stock subject to a
performance share or restricted stock unit Award until that Award vests and the
shares of Common Stock are actually issued thereunder.  However,
dividend-equivalent units may be paid or credited, either in cash or in actual
or phantom shares of Common Stock, on outstanding performance share or
restricted stock unit Awards, subject to such terms and conditions as the Plan
Administrator may deem appropriate; provided, however, that no such
dividend-equivalent units relating to Awards subject to performance-vesting
conditions shall vest or otherwise become payable prior to the time the
underlying Award (or portion thereof to which such dividend-equivalents units
relate) vests upon the attainment of the applicable performance goals and shall
accordingly be subject to cancellation and forfeiture to the same extent as the
underlying Award.
 
5. Should the Participant cease to remain in Service while holding one or more
unvested shares of Common Stock issued under the Stock Issuance Program or
should the performance objectives not be attained with respect to one or more
such unvested shares of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the Participant shall have
no further stockholder rights with respect to those shares.  To the extent the
surrendered shares were previously issued to the Participant for consideration
paid in cash or cash equivalent, the Corporation shall repay to the Participant
the lower of (i) the cash consideration paid for the surrendered shares or (ii)
the Fair Market Value of those shares at the time of cancellation.
 
6. The Plan Administrator may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock which would
otherwise occur upon the cessation of the Participant’s Service or the
non-attainment of the performance objectives applicable to those shares, but
only to the extent such waiver is effected in connection with (i) the
Participant’s cessation of Service by reason of death, Permanent Disability,
Retirement or Involuntary Termination or (ii) the consummation of a Change in
Control transaction.  Any such waiver shall result in the immediate vesting of
the Participant’s interest in the shares of Common Stock as to which the waiver
applies. However, no vesting requirements tied to the attainment of performance
objectives may be waived with respect to shares which were intended at the time
of issuance to qualify as performance-based compensation under Code Section
162(m), except in the event of the Participant’s cessation of Service by reason
of death or Permanent Disability or as otherwise provided in Section II of this
Article Three.
 
7. Outstanding performance shares or restricted stock units under the Stock
Issuance Program shall automatically terminate, and no shares of Common Stock
shall actually be issued in satisfaction of those Awards, if the performance
goals or Service requirements established for those Awards are not attained or
satisfied.  The Plan Administrator, however, shall have the discretionary
authority to issue vested shares of Common Stock under one or more outstanding
Awards of performance shares or restricted stock units as to which the
designated performance goals or Service requirements have not been attained or
satisfied, but only in connection with (i) the Participant’s cessation of
Service by reason of death, Permanent Disability, Retirement or Involuntary
Termination or (ii) the consummation of a Change in Control
transaction.  However, no vesting requirements tied to the attainment of
performance goals may be waived with respect to Awards which were intended, at
the time those Awards were made, to qualify as performance-based compensation
under Code Section 162(m), except in the event of the Participant’s death or
Permanent Disability or as otherwise provided in Section II of this Article
Three.
 
8. The following additional requirements shall be in effect for any performance
shares awarded under this Article Three:
 
(i) At the end of the performance period, the Plan Administrator shall determine
the actual level of attainment for each performance objective and the extent to
which the performance shares awarded for that period are to vest and become
payable based on the attained performance levels.
 
(ii) The performance shares which so vest shall be paid as soon as practicable
following the end of the performance period, unless such payment is to be
deferred for the period specified by the Plan Administrator at the time the
performance shares are awarded or the period selected by the Participant in
accordance with the applicable requirements of Code Section 409A.
 
(iii) Performance shares may be paid in (i) cash, (ii) shares of Common Stock or
(iii) any combination of cash and shares of Common Stock, as determined by the
Plan Administrator in its sole discretion.
 
(iv) Performance shares may also be structured so that the shares are
convertible into shares of Common Stock, but the rate at which each performance
share is to so convert shall be based on the attained level of performance for
each applicable performance objective.
 
II.  
CHANGE IN CONTROL

 
A. Each Award outstanding under the Stock Issuance Program on the effective date
of an actual Change in Control transaction may be (i) assumed by the successor
corporation (or parent thereof) or otherwise continued in full force and effect
pursuant to the terms of the Change in Control transaction or (ii) replaced with
a cash incentive program of the successor corporation which preserves the Fair
Market Value of the underlying shares of Common Stock at the time of the Change
in Control and provides for the subsequent vesting and payment of that value in
accordance with the same vesting schedule in effect for those shares at the time
of such Change in Control.  To the extent any such Award is subject to
performance vesting upon the attainment of one or more specified performance
goals, then upon the assumption, continuation or replacement of that Award, the
performance vesting condition shall automatically be cancelled, and such Award
shall thereupon be converted into a Service-vesting Award that will vest upon
the completion of a Service period co-terminous with the portion of the
performance period remaining at the time of the Change in Control. However, to
the extent any Award outstanding under the Stock Issuance Program on the
effective date of such Change in Control Transaction is not to be so assumed,
continued or replaced, that Award shall vest in full immediately prior to the
effective date of the actual Change in Control transaction, and the shares of
Common Stock underlying the portion of the Award that vests on such accelerated
basis shall be issued in accordance with the applicable Award Agreement, unless
such accelerated vesting is precluded by other limitations imposed in the Stock
Issuance Agreement.
 
B. Each outstanding Award under the Stock Issuance Program which is assumed in
connection with a Change in Control or otherwise continued in effect 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 shares of Common
Stock subject to that Award immediately prior to the Change in Control would
have been converted in consummation of such Change in Control had those shares
actually been outstanding at that time, and appropriate adjustments shall also
be made to the cash consideration (if any) payable per share
thereunder, provided the aggregate amount of such consideration shall remain the
same.  To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the
assumption or continuation of the outstanding Awards, 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 such Change in Control
transaction, provided such common stock is readily traded on an established U.S.
securities exchange or market.
 
C. The Plan Administrator shall have the discretionary authority to structure
one or more unvested Awards under the Stock Issuance Program so that the shares
of Common Stock subject to those Awards shall automatically vest (or vest and
become issuable) in whole or in part immediately prior to the effective date of
an actual Change in Control transaction or upon the subsequent termination of
the Participant’s Service by reason of an Involuntary Termination within a
designated period following the effective date of that Change in Control
transaction. The Plan Administrator’s authority under this Section II.C shall
also extend to any Awards intended to qualify as performance-based compensation
under Code Section 162(m), even though the automatic vesting of those Awards
pursuant to this Section II.C may result in their loss of performance-based
status under Code Section 162(m).
 

DB2/20196179.7                                                                      
 
 

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ARTICLE FOUR
 

 
INCENTIVE BONUS PROGRAM
 
I.  
INCENTIVE BONUS TERMS

 
The Plan Administrator shall have full power and authority to implement one or
more of the following incentive bonus programs under the Plan:
 
(i)            cash bonus awards (“Cash Awards”),
 
(ii)           performance unit awards (“Performance Unit Awards”), and
 
(iii)          dividend equivalent rights (“DER Awards”)
 
A. Cash Awards.  The Plan Administrator shall have the discretionary authority
under the Plan to make Cash Awards which are to vest in one or more installments
over the Participant’s continued Service with the Corporation or upon the
attainment of specified performance goals.  Each such Cash Award shall be
evidenced by one or more documents in the form approved by the Plan
Administrator; provided however, that each such document shall comply with the
terms specified below.
 
1. The elements of the vesting schedule applicable to each Cash Award shall be
determined by the Plan Administrator and incorporated into the Incentive Bonus
Award Agreement.
 
2. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more Cash Awards so
that those Awards shall vest upon the achievement of pre-established corporate
performance objectives based upon one or more Performance Goals.
 
3. Should the Participant cease to remain in Service while holding one or more
unvested Cash Awards or should the performance objectives not be attained with
respect to one or more such Cash Awards, then those Awards shall be immediately
terminate, and the Participant shall not be entitled to any cash payment or
other consideration with respect to those terminated Awards.
 
4. Outstanding Cash Awards shall automatically terminate, and no cash payment or
other consideration shall be due the holders of those Awards, if the performance
goals or Service requirements established for the Awards are not attained or
satisfied. The Plan Administrator may in its discretion waive the cancellation
and termination of one or more unvested Cash Awards which would otherwise occur
upon the cessation of the Participant’s Service or the non-attainment of the
performance objectives applicable to those Awards.  Any such waiver shall result
in the immediate vesting of the Participant’s interest in the Cash Award as to
which the waiver applies.  Such wavier may be effected at any time, whether
before or after the Participant’s cessation of Service or the attainment or
non-attainment of the applicable performance objectives.  However, no vesting
requirements tied to the attainment of performance goals may be waived with
respect to awards which were intended, at the time those awards were granted, to
qualify as performance-based compensation under Code Section 162(m), except in
the event of the Participant’s death or Permanent Disability or as otherwise
provided in Section II of this Article Four.
 
5. Cash Awards which become due and payable following the attainment of the
applicable performance goals or satisfaction of the applicable Service
requirement (or the waiver of such goals or Service requirement) may be paid in
(i) cash, (ii) shares of Common Stock valued at Fair Market Value on the payment
date or (iii) a combination of cash and shares of Common Stock as the Plan
Administrator shall determine.
 
B. Performance Unit Awards.  The Plan Administrator shall have the discretionary
authority to make Performance Unit Awards in accordance with the terms of this
Article Four.  Each such Performance Unit Award shall be evidenced by one or
more documents in the form approved by the Plan Administrator; provided however,
that each such document shall comply with the terms specified below.
 
1. A Performance Unit shall represent a participating interest in a special
bonus pool tied to the attainment of pre-established corporate performance
objectives based on one or more Performance Goals. The amount of the bonus pool
may vary with the level at which the applicable performance objectives are
attained, and the value of each Performance Unit which becomes due and payable
upon the attained level of performance shall be determined by dividing the
amount of the resulting bonus pool (if any) by the total number of Performance
Units issued and outstanding at the completion of the applicable performance
period.
 
2. Performance Units may also be structured to include a Service requirement
which the Participant must satisfy following the completion of the performance
period in order to vest in the Performance Units awarded with respect to that
performance period.
 
3. Performance Units which become due and payable following the attainment of
the applicable performance objectives and the satisfaction of any applicable
Service requirement may be paid in (i) cash, (ii) shares of Common Stock valued
at Fair Market Value on the payment date or (iii) a combination of cash and
shares of Common Stock as the Plan Administrator shall determine.
 
C. DER Awards.  The Plan Administrator shall have the discretionary authority to
make DER Awards in accordance with the terms of this Article Four.  Each such
DER Award shall be evidenced by one or more documents in the form approved by
the Plan Administrator; provided however, that each such document shall comply
with the terms specified below.
 
1. The DER Awards may be made as stand-alone awards or in tandem with other
Awards made under the Plan.  The term of each such DER Award shall be
established by the Plan Administrator at the time of grant, but no DER Award
shall have a term in excess of ten (10) years.
 
2. Each DER shall represent the right to receive the economic equivalent of each
dividend or distribution, whether in cash, securities or other property (other
than shares of Common Stock), which is made per issued and outstanding share of
Common Stock during the term the DER remains outstanding. A special account on
the books of the Corporation shall be maintained for each Participant to whom a
DER Award is made, and that account shall be credited per DER with each such
dividend or distribution made per issued and outstanding share of Common Stock
during the term of that DER remains outstanding.
 
3. Payment of the amounts credited to such book account may be made to the
Participant either concurrently with the actual dividend or distribution made
per issued and outstanding share of Common Stock or may be deferred for a period
specified by the Plan Administrator at the time the DER Award is made or
selected by the Participant in accordance with the requirements of Code Section
409A.  In no event, however, shall any DER Award made with respect to an Award
subject to performance-vesting conditions under the Stock Issuance or Incentive
Bonus Program vest or become payable prior to the vesting of that Award (or the
portion thereof to which the DER Award relates) upon the attainment of the
applicable performance goals and shall accordingly be subject to cancellation
and forfeiture to the same extent as the underlying Award.
 
4. Payment may be paid in (i) cash, (ii) shares of Common Stock or (iii) a
combination of cash and shares of Common Stock as the Plan Administrator shall
determine  If payment is to be made in the form of Common Stock, the number of
shares of Common Stock into which the cash dividend or distribution amounts are
to be converted for purposes of the Participant’s book account may be based on
the Fair Market Value per share of Common Stock on the date of conversion, a
prior date or an average of the Fair Market Value per share of Common Stock over
a designated period, as the Plan Administrator shall determine in its sole
discretion.
 
5. The Plan Administrator shall also have the discretionary authority,
consistent with Code Section 162(m), to structure one or more DER Awards so that
those Awards shall vest only after the achievement of pre-established corporate
performance objectives based upon one or more Performance Goals.
 
II.  
CHANGE IN CONTROL

 
A. The Plan Administrator shall have the discretionary authority to structure
one or more Awards under the Incentive Bonus Program so that those Awards shall
automatically vest in whole or in part immediately prior to the effective date
of an actual Change in Control transaction or upon the subsequent termination of
the Participant’s Service by reason of an Involuntary Termination within a
designated period following the effective date of such Change in Control. To the
extent any such Award is, at the time of such Change in Control, subject to
performance vesting upon the attainment of one or more specified performance
goals, then the performance vesting condition shall automatically be cancelled
on the effective date of such Change in Control, and such Award shall thereupon
be converted into a Service-vesting Award that will vest upon the completion of
a Service period co-terminous with the portion of the performance period
remaining at the time of the Change in Control.
 
B. The Plan Administrator’s authority under Section II.A  shall also extend to
any performance bonus awards intended to qualify as performance-based
compensation under Code Section 162(m), even though the automatic vesting of
those awards pursuant to such Paragraph A may result in their loss of
performance-based status under Code Section 162(m).
 

DB2/20196179.7                                                                      
 
 

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ARTICLE FIVE
 

 
AUTOMATIC GRANT PROGRAM
 
I.  
AWARD TERMS

 
A. Automatic Grants.  The Automatic Grant Program shall, as of the Plan
Effective Date, supersede and replace the Corporation’s 1998 Non-Employee
Director Stock Option Plan and the Non-Employee Director Stock Retainer Plan.
The Awards for the non-employee Board members at the 2007 Annual Meeting shall
be made pursuant to the Automatic Grant Program in effect under this Article
Five, and no further option grants or stock issuances shall be made to the
non-employee Board members under the 1998 Non-Employee Director Stock Option
Plan or the Non-Employee Director Stock Retainer Plan on or after the 2007
Annual Meeting, if this Plan is approved by the stockholders at such
meeting.  The Awards to be made pursuant to the Automatic Grant Program shall be
as follows:
 
1. Each individual who is first elected or appointed as a non-employee Board
member at any time on or after the date of the 2007 Annual Meeting shall
automatically be granted, on the date of such initial election or appointment,
an Award in the  form of restricted stock units covering that number of shares
of Common Stock (rounded up to the next whole share) determined by dividing the
Applicable Dollar Amount by the Fair Market Value per share on such date,
provided that individual has not been in the employ of the Corporation or any
Parent or Subsidiary during the preceding twelve (12) months (the “Initial
Grant”). The Applicable Dollar Amount shall be determined by the Plan
Administrator at the time of each such grant, but in no event shall such amount
exceed Three Hundred Thousand Dollars ($300,000.00) per non-employee Board
member.
 
2. On the date of each annual stockholders meeting, beginning with the 2007
Annual Meeting, each individual who is to continue to serve as a non-employee
Board member, whether or not that individual is standing for re-election to the
Board at that particular annual meeting, shall automatically be granted an Award
in the form of restricted stock units covering that number of shares of Common
Stock (rounded up to the next whole share) determined by dividing the Applicable
Annual Amount by the Fair Market Value per share on such date (the “Annual
Grant”), provided that such individual has served as a non-employee Board member
for a period of at least six (6) months.  There shall be no limit on the number
of such Annual Grants any one continuing non-employee Board member may receive
over his or her period of Board service, and non-employee Board members who have
previously been in the employ of the Corporation (or any Parent or Subsidiary)
shall be eligible to receive one or more such Annual Grants over their period of
continued Board service.  The Applicable Annual Amount shall be determined by
the Plan Administrator on or before the date of the annual stockholders meeting
at which those Annual Grants are to be made, but in no event shall exceed Three
Hundred Thousand Dollars ($300,000.00).
 
 3. Each restricted unit awarded under this Article Five shall entitle the
non-employee Board member to one share of Common Stock on the applicable
issuance date following the vesting of that unit.

B. Vesting of Awards and Issuance of Shares.   Each Initial and Annual Grant
made under this Article Five shall vest in a series of in three (3) successive
equal annual installments upon the non-employee Board member’s completion of
each year of Board service over the three (3)-year period measured from the
Award date; provided, however, that should such non-employee Board member cease
Board service by reason of (i) death or Permanent Disability or (ii) retirement
at or after age seventy two (72), then each Initial and Annual Grant made to
such individual under this Article Five and outstanding at the time of such
cessation of Board service shall immediately vest in full.  The shares of Common
Stock underlying each Initial or Annual Grant which vests in accordance with the
foregoing vesting provisions shall be issued as they vest; provided, however,
that the Plan Administrator may allow one or more non-employee Board members to
defer, in accordance with the applicable requirements of Code Section 409A and
the regulations thereunder, the issuance of the shares beyond the vesting date
to a designated date or until cessation of Board service or  an earlier Change
in Control.
 
C. Dividend Equivalent Rights.  Each restricted stock unit shall include a
dividend equivalent right pursuant to which a book account shall be established
for the non-employee Board member and credited from time to time with each
dividend or distribution, whether in cash, securities or other property (other
than shares of Common Stock) which is made per issued and outstanding share of
Common Stock during the period the share of Common Stock underlying that
restricted stock unit remains unissued.  The amount credited to the book account
with respect to such restricted stock unit shall be paid to the non-employee
Board member concurrently with the issuance of the share of Common Stock
underlying that unit, subject to the Corporation’s collection of any applicable
withholding taxes.
 
II.  
CHANGE IN CONTROL

 
Should the non-employee Board member continue in Board service until the
effective date of an actual Change in Control transaction, then the shares of
Common Stock subject to each outstanding Initial and Annual Award made to such
Board member shall, immediately prior to the effective date of that Change in
Control transaction, vest in full and shall be issued to him or her as soon as
administratively practicable thereafter, but in no event more than fifteen (15)
business days after such effective date, except to the extent such issuance is
subject to a deferred distribution date under Code Section 409A, or shall
otherwise be converted into the right to receive the same consideration per
share of Common Stock payable to the other stockholders in the Change in Control
and distributed at the same time as such stockholder payments, subject to any
applicable deferred distribution date under Code Section 409A.
 

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ARTICLE SIX
 

 
MISCELLANEOUS
 
I.  
DEFERRED COMPENSATION

 
A. The Plan Administrator may, in its sole discretion,  structure one or more
Awards under the Stock Issuance or Incentive Bonus Programs so that the
Participants may be provided with an election to defer the compensation
associated with those Awards for federal income tax purposes.  Any such deferral
opportunity shall comply with all applicable requirements of Code Section 409A.
 
B. The Plan Administrator may implement a non-employee Board member retainer fee
deferral program under the Plan that allows the non-employee Board members the
opportunity to elect, prior to the start of each calendar year, to convert the
Board and Board committee retainer fees to be earned for that year into
restricted stock units under the Stock Issuance Program that will defer the
issuance of the shares of Common Stock that vest under those restricted stock
units to a permissible date or event under Code Section 409A.  If such program
is implemented, the Plan Administrator shall have the authority to establish
such rules and procedures as it deems appropriate for the filing of such
deferral elections and the designation of the permissible distribution events
under Code Section 409A.
 
C. To the extent the Corporation maintains one or more separate non-qualified
deferred compensation arrangements which allow the participants the opportunity
to make notional investments of  their deferred account balances in shares of
Common Stock, the Plan Administrator may authorize the share reserve under the
Plan to serve as the source of  any  shares of Common Stock that become payable
under those deferred compensation arrangements.  In such event, the share
reserve under the Plan shall be reduced on a share-for-one share basis for each
share of Common Stock issued under the Plan in settlement of the deferred
compensation owed under those separate arrangements.
 
D. To the extent there is any ambiguity as to whether any provision of any Award
made under the Plan that is deemed to constitute a deferred compensation
arrangement under Code Section 409A would otherwise contravene one or more
requirements or limitations of such Code Section 409A and the Treasury
Regulations thereunder, such provision shall be interpreted and applied in a
manner that complies with the applicable requirements of Code Section 409A and
the Treasury Regulations thereunder.
 
II.  
TAX WITHHOLDING

 
A. The Corporation’s obligation to deliver shares of Common Stock upon the
exercise, issuance or vesting of an Award under the Plan shall be subject to the
satisfaction of all applicable income and employment tax withholding
requirements.

B. The Plan Administrator may, in its discretion, structure one or more Awards
so that shares of Common Stock may be used as follows to satisfy all or part of
the Withholding Taxes to which such holders of those Awards may become subject
in connection with the issuance, exercise, vesting or settlement of those
Awards:
 
1. Stock Withholding:  The Corporation may be provided with the right to
withhold, from the shares of Common Stock otherwise issuable upon the issuance,
exercise or vesting of such Award or the issuance of shares of Common Stock
thereunder, a portion of those shares with an aggregate Fair Market Value equal
to the percentage of the Withholding Taxes (not to exceed one hundred percent
(100%)) designated by such individual.  The shares of Common Stock so withheld
shall reduce the number of shares of Common Stock authorized for issuance under
the Plan.
 
2. Stock Delivery:  The Award holder may be provided with the right to deliver
to the Corporation, at the time of the issuance, exercise or vesting of such
Award or the issuance of shares of Common Stock thereunder, one or more shares
of Common Stock previously acquired by such individual (other than in connection
with the exercise, share issuance or share vesting triggering the Withholding
Taxes) with an aggregate Fair Market Value equal to the percentage of the
Withholding Taxes (not to exceed one hundred percent (100%)) designated by the
individual.  The shares of Common Stock so delivered shall neither reduce the
number of shares of Common Stock authorized for issuance under the Plan nor be
added to the number of shares of Common Stock authorized for issuance under the
Plan.
 
III.  
SHARE ESCROW/LEGENDS

 
Unvested shares may, in the Plan Administrator’s discretion, be held in escrow
by the Corporation until the Participant’s interest in such shares vests or may
be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
 
IV.  
EFFECTIVE DATE AND TERM OF THE PLAN

 
A. The Plan shall become effective on the Plan Effective Date.
 
B. The Plan was amended on January 28. 2010 to increase the number of shares of
Common Stock authorized for issuance under the Plan by an additional Two Million
Two Hundred Thousand (2,200,000) shares. However, such share increase is subject
to stockholder approval at the 2010 Annual Meeting, and no Awards may be made
under the Plan on the basis of that share increase unless and until such
stockholder approval is obtained.  Should such stockholder approval not be
obtained at the 2010 Annual Meeting, then the authorized share increase shall
not be implemented.
 
C. The Plan shall serve as the successor to each of the Predecessor Plans, and
no further option grants or unvested share issuances shall be made under the
Predecessor Plans. The implementation of the Plan shall not affect the option
grants and unvested share awards that were outstanding under the Predecessor
Plans at the time the Plan was approved by the stockholders at the 2007 Annual
Meeting, and those option grants and unvested share awards shall continue in
full force and effect in accordance with their terms.  However, should any
of those options expire or terminate unexercised or those unvested shares be
forfeited or repurchased by the Corporation at the original issue price, the
shares of Common Stock subject to those options at the time of expiration or
termination and those forfeited or repurchased shares shall be added to the
share reserve of this Plan, up to the maximum number of additional shares
permissible hereunder.
 
D. The Plan shall terminate upon the earliest to occur of (i) April 26, 2017,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued as fully vested shares or (iii) the termination of all
outstanding Awards in connection with a Change in Control.  Should the Plan
terminate on April 26, 2017, then all Awards outstanding at that time shall
continue to have force and effect in accordance with the provisions of the
documents evidencing those Awards.
 
V.  
AMENDMENT OF THE PLAN

 
A. The Board shall have complete and exclusive power and authority to amend or
modify the Plan in any or all respects; provided, however, that stockholder
approval shall be required for any amendment to the Plan which materially
increases the number of shares of Common Stock authorized for issuance under the
Plan (other than pursuant to Section V.F of Article One), materially increases
the benefits accruing to Optionees or Participants, materially expands the class
of individuals eligible to participate in the Plan, expands the types of awards
which may be made under the Plan or extends the term of the Plan or to the
extent such stockholder approval may otherwise required under applicable law or
regulation or pursuant to the listing standards of the Stock Exchange on which
the Common Stock is at the time primarily traded. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
Awards at the time outstanding under the Plan unless the Optionee or the
Participant consents to such amendment or modification.
 
B. The Compensation Committee shall have the discretionary authority to adopt
and implement from time to time such addenda or subplans to the Plan as it may
deem necessary in order to bring the Plan into compliance with applicable laws
and regulations of any foreign jurisdictions in which grants or awards are to be
made under the Plan and/or to obtain favorable tax treatment in those foreign
jurisdictions for the individuals to whom the grants or awards are made.
 
C.  Except as otherwise provided in Section IV.B of this Article Six, Awards may
be made under the Plan that involve shares of Common Stock in excess of the
number of shares then available for issuance under the Plan, provided no shares
shall actually be issued pursuant to those Awards until the number of shares of
Common Stock available for issuance under the Plan is sufficiently increased by
stockholder approval of an amendment of the Plan authorizing such increase.  If
such stockholder approval is not obtained within twelve (12) months after the
date the first excess Award is made, then all Awards granted on the basis of
such excess shares shall terminate and cease to be outstanding.
 
VI.  
USE OF PROCEEDS

 
Any cash proceeds received by the Corporation from the sale of shares of Common
Stock under the Plan shall be used for general corporate purposes.
 
VII.  
REGULATORY APPROVALS

 
A. The implementation of the Plan, the granting of any Award under the Plan and
the issuance of any shares of Common Stock in connection with the issuance,
exercise or vesting of any Award under the Plan shall be subject to the
Corporation’s procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the Awards made under the Plan
and the shares of Common Stock issuable pursuant to those Awards.
 
B. No shares of Common Stock or other assets shall be issued or delivered under
the Plan unless and until there shall have been compliance with all applicable
requirements of applicable securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing requirements of any
Stock Exchange  on which Common Stock is then listed for trading.
 
VIII.  
NO EMPLOYMENT/SERVICE RIGHTS

 
Nothing in the Plan shall confer upon the Optionee or the Participant any right
to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without cause.
 

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APPENDIX
 
 
The following definitions shall be in effect under the Plan:
 
A. 2007 Annual Meeting shall mean the 2007 annual meeting of the Corporation’s
stockholders.
 
B. 2010 Annual Meeting shall mean the 2010 annual meeting of the Corporation’s
stockholders.
 
C. Automatic Grant Program shall mean the automatic grant program in effect for
non-employee Board members under Article Five of the Plan.
 
D. Award shall mean any of the following awards authorized for issuance or grant
under the Plan: stock options, stock appreciation rights, direct stock
issuances, restricted stock or restricted stock unit awards, performance shares,
performance units, dividend-equivalent rights and cash incentive awards.
 
E. Award Agreement shall mean the agreement(s) between the Corporation and the
Optionee or Participant evidencing a particular Award made to that individual
under the Plan, as such agreement(s) may be in effect from time to time
 
F. Board shall mean the Corporation’s Board of Directors.
 
G. Cause shall, with respect to each Award made under the Plan, be defined in
accordance with the following provisions:
 
-           Cause shall have the meaning assigned to such term in the Award
Agreement for the particular Award or in any other agreement incorporated by
reference into the Award Agreement for purposes of defining such term.
 
-           In the absence of any other Cause definition in the Award Agreement
for a particular Award (or in any other agreement incorporated by reference into
the Award Agreement), an individual’s termination of Service shall be deemed to
be for Cause if such termination occurs by reason his or her commission of any
act of fraud, embezzlement or dishonesty, any unauthorized use or disclosure by
such person of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner.
 
H. Change in Control shall, with respect to each Award made under the Plan, be
defined in accordance with the following provisions:
 
-           Change in Control shall have the meaning assigned to such term in
the Award Agreement for the particular Award or in any other agreement
incorporated by reference into the Award Agreement for purposes of defining such
term.

-           In the absence of any other Change in Control definition in the
Award Agreement (or in any other agreement incorporated by reference into the
Award Agreement), Change in Control shall mean a change in 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 more than fifty
percent (50%) 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,
 
(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%) 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.
 
I. Code shall mean the Internal Revenue Code of 1986, as amended.
 
J. Common Stock shall mean the Corporation’s common stock.
 
K. Compensation Committee shall mean the Compensation Committee of the Board
comprised of two (2) or more non-employee Board members.
 
L. Corporation shall mean Alexander & Baldwin, Inc., a Hawaii corporation, and
any corporate successor to all or substantially all of the assets or voting
stock of Alexander & Baldwin, Inc. which has by appropriate action assumed the
Plan.
 
M. Discretionary Grant Program shall mean the discretionary grant program in
effect under Article Two of the Plan pursuant to which stock options and stock
appreciation rights may be granted to one or more eligible individuals.
 
N. Employee shall mean an individual who is in the employ of the Corporation (or
any Parent or Subsidiary, whether now existing or subsequently established),
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. Exercise Date shall mean the date on which the Corporation shall have
received written notice of the option exercise.
 
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 begins) on date on 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. Family Member means, with respect to a particular Optionee or Participant,
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law.
 
R. Good Reason shall, with respect to each Award made under the Plan, be defined
in accordance with the following provisions:
 
-           Good Reason shall have the meaning assigned to such term in the
Award Agreement for the particular Award or in any other agreement incorporated
by reference into the Award Agreement for purposes of defining such term.
 
-           In the absence of any other Good Reason definition in the Award
Agreement (or in any other agreement incorporated by reference into the Award
Agreement), Good Reason shall mean an individual’s voluntary resignation
following the occurrence of any of the following events effected without such
individual’s consent: (A) a change in his or her position with the Corporation
(or any Parent or Subsidiary) which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B) a
reduction in his or her level of compensation (including base salary, fringe
benefits and target bonus under any corporate-performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a relocation of
such individual’s place of employment by more than fifty (50) miles or (D) the
failure by the Corporation to continue in effect any stock option or other
equity-based plan in which such individual is participating, or in which such
individual 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 such individual’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 such individual’s participation relative to other participants, as
existed immediately prior to the change in control of the Corporation.
 
S. Incentive Bonus Program shall mean the incentive bonus program in effect
under Article Four of the Plan.
 
T. Incentive Option shall mean an option which satisfies the requirements of
Code Section 422.
 
U. Involuntary Termination shall mean the termination of the Service of any
individual which occurs by reason of:
 
(i) such individual’s involuntary dismissal or discharge by the Corporation (or
any Parent or Subsidiary) for reasons other than for Cause, or
 
(ii) such individual’s voluntary resignation for Good Reason.
 
V. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.
 
W. Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.
 
X. Optionee shall mean any person to whom an option is granted under the
Discretionary Grant or Automatic Grant Program.
 
Y. 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.
 
Z. Participant shall mean any person who is issued (i) shares of Common Stock,
restricted stock units, performance shares, performance units or other
stock-based awards under the Stock Issuance Program or (ii) an incentive bonus
award under the Incentive Bonus Program.
 
AA. Permanent Disability or Permanently Disabled shall mean the inability of the
Optionee or the 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.  However, solely for purposes of the Automatic Grant Program, Permanent
Disability or Permanently Disabled shall mean the inability of the non-employee
Board member to perform his or her usual duties as a Board member 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. Performance Goals shall mean any of the following performance criteria upon
which the vesting of one or more Awards under the Plan may be based: (i) cash
flow; (ii) earnings  (including gross margin, earnings before interest and
taxes, earnings before taxes, earnings before interest, taxes, depreciation,
amortization and charges for stock-based compensation, earnings before interest,
taxes, depreciation and amortization, and net earnings); (iii) earnings per
share; (iv) growth in earnings or earnings per share; (v) stock price;
(vi) return on equity or average stockholder equity; (vii) total stockholder
return or growth in total stockholder return either directly or in relation to a
comparative group; (viii) return on capital; (ix) return on assets or net
assets; (x) invested capital, required rate of return on capital or return on
invested capital; (xi) revenue, growth in revenue or return on sales;
(xii) income or net income; (xiii) operating income, net operating income or net
operating income after tax; (xiv) operating profit or net operating profit;
(xv) operating margin; (xvi) return on operating revenue or return on operating
profit; (xvii) collections and recoveries, (xviii) property purchases, sales,
investments and construction goals, (xix) application approvals, (xx) litigation
and regulatory resolution goals, (xxi) occupancy or occupancy rates, (xxii)
leases, contracts or financings, including renewals, (xxiii) overhead, savings,
G&A and other expense control goals, (xxiv) budget comparisons, (xxv) growth in
stockholder value relative to the growth of the S&P 400 or S&P 400 Index, the
S&P Global Industry Classification Standards ("GICS") or GICS Index, or another
peer group or peer group index; (xxvi) credit rating; (xxvii) development and
implementation of strategic plans and/or organizational restructuring goals;
(xxviii) development and implementation of risk and crisis management programs;
(xxix) improvement in workforce diversity; (xxx) net cost per ton, (xxxi) price
per container or average price of container); (xxxii) voyage days or vessel
scheduling; (xxxiii) lift volume per container, volume per container, number of
units or size of units; (xxxiv) compliance requirements and compliance relief;
(xxxv) safety goals; (xxxvi) productivity goals; (xxxvii) workforce management
and succession planning goals; (xxxviii) economic value added (including typical
adjustments consistently applied from generally accepted accounting principles
required to determine economic value added performance measures); (xxxix)
measures of  customer satisfaction, employee satisfaction or staff development;
(xl) development or marketing collaborations, formations of joint ventures or
partnerships or the completion of other similar transactions intended to enhance
the Corporation’s revenue or profitability or enhance its customer base; (xli)
merger and acquisitions; and (xlii) other similar criteria consistent with the
foregoing. In addition, such performance criteria may be based upon the
attainment of specified levels of the Corporation’s performance under one or
more of the measures described above relative to the performance of other
entities and may also be based on the performance of any of the Corporation’s
business units or divisions or any Parent or Subsidiary.  Each applicable
Performance Goal may include a minimum threshold level of performance below
which no Award will be earned, levels of performance at which specified portions
of an Award will be earned and a maximum level of performance at which an Award
will be fully earned. Each applicable performance goal may be structured at the
time of the Award to provide for appropriate adjustment for one or more of the
following items: (A) asset impairments or write-downs; (B) litigation judgments
or claim settlements; (C) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results;
(D) accruals for reorganization and restructuring programs; (E) any
extraordinary nonrecurring items; (F) the operations of any business acquired by
the Corporation; (G) the divestiture of one or more business operations or the
assets thereof; and (H) any other adjustment consistent with the operation of
the Plan.
 
CC. Plan shall mean the Corporation’s 2007 Incentive Compensation Plan, as
amended and restated in this document.
 
DD. Plan Administrator shall mean the particular entity, whether the
Compensation Committee (or subcommittee thereof), the Board or the Secondary
Board Committee, which is authorized to administer the Discretionary Grant and
Stock Issuance Programs with respect to one or more classes of eligible persons,
to the extent such entity is carrying out its administrative functions under the
Plan with respect to the persons under its jurisdiction.
 
EE. Plan Effective Date shall mean the April 26, 2007 date on which the Plan was
approved by the stockholders at the 2007 Annual Meeting.
 
FF. Predecessor Plans shall mean (i) the Corporation’s 1998 Stock Option/Stock
Incentive Plan, (ii) the Corporation’s 1998 Non-Employee Director Stock Option
Plan, (iii) the Restricted Stock Bonus Plan and (iv) the Non-Employee Director
Stock Retainer Plan, as each such plan is in effect immediately prior to the
2007 Annual Meeting.
 
GG. Retirement shall mean (i) the Participant’s termination of Service on or
after attainment of age sixty-five (65) or (ii) the Participant’s early
retirement, with the prior approval of the Corporation (or Parent or Subsidiary
employing Participant), on or after attainment of age fifty-five (55) and
completion of at least five (5) years of Service.
 
HH. Secondary Board Committee shall mean a committee of one or more Board
members appointed by the Board to administer the Plan with respect to eligible
persons other than Section 16 Insiders.
 
II. Section 16 Insider shall mean an officer or director of the Corporation
subject to the short-swing profit liabilities of Section 16 of the 1934 Act.
 
JJ. Service shall mean the performance of services for the Corporation (or any
Parent or Subsidiary, whether now existing or subsequently established) by a
person in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the extent otherwise
specifically provided in the documents evidencing the option grant or stock
issuance.  For purposes of the Plan, an Optionee or Participant shall be deemed
to cease Service immediately upon the occurrence of the either of the following
events: (i) the Optionee or Participant no longer performs services in any of
the foregoing capacities for the Corporation or any Parent or Subsidiary or (ii)
the entity for which the Optionee or Participant is performing such services
ceases to remain a Parent or Subsidiary of the Corporation, even though the
Optionee or Participant may subsequently continue to perform services for that
entity.  Service shall not be deemed to cease during a period of military leave,
sick leave or other personal leave approved by the Corporation; provided,
however, that should such leave of absence exceed three (3) months, then for
purposes of determining the period within which an Incentive  Option  may be
exercised as such under the federal tax laws, the Optionee’s Service shall be
deemed to cease on the first day immediately following the expiration of such
three (3)-month period, unless Optionee is provided with the right to return to
Service following such leave either by statute or by written contract.  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 the Optionee
or Participant is on a leave of absence.
 
KK. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global
Market or the New York Stock Exchange.
 
LL. Stock Issuance Agreement shall mean the agreement entered into by the
Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
 
MM. Stock Issuance Program shall mean the stock issuance program in effect under
Article Three of the Plan.
 
NN. 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.
 
OO. 10% Stockholder shall mean the owner of stock (as determined under Code
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).
 
PP. Withholding Taxes shall mean the applicable federal and state income and
employment withholding taxes to which the holder of an Award under the Plan may
become subject in connection with the issuance, exercise or vesting of that
Award or the issuance of shares of Common Stock thereunder.
 

 
 
 

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