**Exhibit 10.5**

 

**EMPLOYMENTAGREEMENT**

** **

ThisEmployment Agreement (“Agreement”) is entered into as of May 1, 2006 (“EffectiveDate”) between Maui Land & Pineapple Company, Inc. (“Company”) and RobertI. Webber (“Executive”).

 

**RECITALS**

 

Company wishesto employ Executive and Executive wishes to accept such employment under theterms and conditions set forth in this Agreement.

 

**ITIS AGREED** as follows:

 

# 1.                                       **Employment**. Company hereby employs Executiveas its Chief Financial Officer and Senior Vice President of BusinessDevelopment.

#  

# 2.                                       **Term**. The term of employment under thisAgreement shall commence on the Effective Date and shall continue until April30, 2008, unless otherwise terminated earlier under Section 10. If neitherparty provides written notice of termination to the other within thirty (30)days of this Agreement’s original expiration date, or any extensions thereof,the term of this Agreement may be extended for successive additional yearperiods.

#  

# 3.                                       **Duties**.

#  

## (a)                                  Executiveshall report directly to the Chief Executive of the Company. In mattersrelating to financial controls and policy compliance, Executive shall report tothe Audit Committee of the Board of Directors.

##  

## (b)                                 Executiveshall:  (1) have primary responsibilityfor the Company’s financial planning, reporting, compliance, risk managementand controls; (2) overall responsibility for corporate and businessdevelopment, including working closely with business segment managers and theircolleagues to improve business performance and execute on new opportunities;and (3) work with the Company’s directors and fellow officers to initiate andmonitor policies and programs designed to improve the overall competitivefitness of the Company, as well as the quality of life for its employees andshareholders. However, it is understood by the parties that the specific dutiesand responsibilities of the Executive are subject to modification,supplementation, change or deletion by the Chief Executive Officer of theCompany and/or the Audit Committee of the Company’s Board of Directors.

##  

## (c)                                  Executiveshall devote his full-time efforts to the proper and faithful performance ofall duties customarily discharged by a Chief Financial Officer and Senior VicePresident of Business Development, consistent with Company policies anddirectives of the Company’s Chief Executive Officer and the Audit Committee ofthe Board of Directors. Executive shall provide services to any subsidiary oraffiliate of the Company without additional compensation and benefits beyondthose set forth in this Agreement. If requested, Executive shall serve on the

 

----

 

## Board(s) ofDirectors of Company and any affiliate or subsidiary. Executive agrees to usehis best efforts and comply with all fiduciary and professional standards inthe performance of his duties.

##  

## (d)                                 Duringthe term of this Agreement, the Executive shall provide services exclusively onbehalf of the Company and shall render services to no other person,organization or company except as may be approved in writing by the ChiefExecutive of the Company.

##  

# 4.                                       **Compensation**.

#  

## (a)                                  **Annual Base Salary**. During hisfirst year of employment with the Company, Executive shall be paid a basesalary of Three Hundred Thousand Dollars ($300,000.00). During his second yearof employment with the Company, Executive shall be paid a base salary of ThreeHundred Fifty Thousand Dollars ($350,000.00). Thereafter, Executive’s basesalary shall be negotiated on an annual basis with the Chief Executive of theCompany, and is subject to approval by the Compensation Committee of theCompany’s Board of Directors (Compensation Committee).

##  

## (b)                                 **Annual Incentive Pay**. Executive shall receive a $50,000 sign on bonus. During hisfirst year of employment with the Company, Executive shall receive an annual incentivepayment of Fifty Thousand Dollars ($50,000.00). Beginning the second year ofemployment and every year thereafter, the bonus shall be based upon theachievement of criteria and in amounts as set forth in a bonus plan establishedby the Compensation Committee. It is understood and agreed by the parties that,barring unforeseen business issues, Executive’s annual incentive payment shallbe a minimum of Fifty Thousand Dollars ($50,000.00).

##  

## (c)                                  **Payments and Withholdings.**Executive’s compensationhereunder shall be paid in accordance with the Company’s regular pay practices.All compensation shall be less applicable withholdings and deductions.

##  

# 5.                                       **Stock Options**.

#  

## (a)                                  Executiveshall be eligible to participate in the Company’s 2006 Equity and IncentiveCompensation Plan, with an initial stock option grant of 25,000 stock optionsto vest at a rate of 20% per year over a five year period. Executive’sparticipation shall be governed by the terms of the Plan and the related StockOption Agreement. All options shall vest upon a Change of Control.

##  

## (b)                                 Inaddition to participation in the Plan set forth in Section 5(a) above,Executive shall be eligible to receive 25,000 restricted shares, vesting over afive year period, and based upon performance metrics determined annually by theCompensation Committee of the Board. The terms and conditions of this programare set forth in the Restricted Stock Agreement. Provided that

 

2

----

 

## Executive’semployment is not terminated pursuant to a Change of Control transaction, allrestricted shares shall vest upon a Change of Control.

##  

# 6.                                       **Benefits**.

#  

## (a)                                  Executivemay participate in the following benefit plans and programs currently providedby the Company:  health care benefits(including medical, dental and vision coverage); group life insurance andAD&D coverage; travel accident insurance; temporary and long-termdisability insurance; retirement programs (including a defined benefit pensionplan and an “excess” supplemental plan with initial vesting period of fiveyears); a 401(k) plan and/or an executive deferred compensation plan; and suchother benefit plans generally available from time to time to other seniorexecutives. Executive’s participation in and benefits under any benefit plan orprogram shall be on the terms and subject to the conditions specified in suchplan or program.

##  

## (b)                                 Inaddition to the foregoing benefits, Executive shall also receive the followingindividual benefits:

##  

### (i)                                     Four(4) weeks of paid vacation per year, effective upon hire.

###  

### (ii)                                  Supplementalcash payments up to a maximum of Thirty-Six Thousand Dollars ($36,000) per yearto defray living and other expenses, including, without limitation, personaland family travel to the mainland, and private schooling costs. These supplementalcash payments will be subject to taxation.

###  

# 7.                                       **Reimbursement of Expenses**. The Company willreimburse Executive for the ordinary and necessary expenses incurred by him inthe performance of his duties under this Agreement in accordance with the Company’spolicies in effect from time to time, including, but not limited to membershipin professional organizations and participation in executive educationprograms, as approved by the Chief Executive Officer.

#  

# 8.                                       **Termination of Employment**.

#  

## (a)                                  **By the Company**: Notwithstanding any other provision of this Agreement, Executive’semployment under this Agreement may be terminated by the Company:

##  

### (i)                                     Upondeath of Employee;

###  

### (ii)                                  Wheneverthe Executive is not qualified — legally, physically, mentally or otherwise —to perform the duties assigned to him, with or without reasonableaccommodation;

###  

### (iii)                               Withoutcause, upon thirty (30) days notice to the other party; or

 

3

----

 

### (iv)                              Forgood cause, at any time, without prior notice. “Cause” shall consist of any ofthe following:

###  

#### (1)                                  theExecutive is convicted of, or has pleaded guilty or entered a plea of nolocontendere to, a felony (under the laws of the United States or any statethereof);

####  

#### (2)                                  fraudulentconduct by the Executive in connection with the business or other affairs ofthe Company or any related company or the theft, embezzlement, or othercriminal misappropriation of funds by the Executive from the Company or anyrelated company; or

####  

#### (3)                                  theExecutive’s gross negligence to comply with reasonable directives of the ChiefExecutive Officer and Board of Directors which are communicated to him inwriting, after reasonable written notice has been provided of suchnon-performance by the Chief Executive Officer and Board of Directors, and, ifsuch failure is curable, Executive has not cured such failure within areasonable period following such notice.

####  

## (b)                                 **By Executive.**Executive may terminate his employment underthis Agreement under the following circumstances:

##  

### (i)                                     Uponhis retirement;

###  

### (ii)                                  Withoutcause, upon thirty (30) days notice to the other party; or

###  

### (iii)                               Upona change in control of the Company. “Change in Control” means:

###  

#### (1)                                  asale or other disposition of all or substantially all of the assets of theCompany;

####  

#### (2)                                  amerger or consolidation in which the Company is not the surviving entity and inwhich the shareholders of the Company immediately prior to such consolidationor merger own less than fifty percent (50%) of the surviving entity’s votingpower immediately after the transaction;

####  

#### (3)                                  areverse merger or going private transaction in which the Company is thesurviving entity but the shares of the Company’s Common Stock outstandingimmediately preceding the merger are converted by virtue of the merger intoother property, whether in the form of securities, cash, or otherwise; or

####  

#### (4)                                  anyother capital reorganization in which more than fifty percent (50%) of theshares of the Company entitled to vote are exchanged.

 

4

----

 

## (c)                                  **Notice of Termination.**Any termination of this Agreement byeither party shall be communicated by written notice to the other party. Saidnotice shall state in reasonable detail the facts and circumstances deemed toprovide the basis for such termination.

##  

## (d)                                 **Payment Upon Termination.**

##  

### (i)                                     Upontermination of Executive’s employment pursuant to Sections 8.a.(i), (ii), (iii)or 8(b)(iii) above, Executive shall be entitled to receive one (1) year of his basesalary and any benefits vested as of the date of such termination. All stockoptions (but excluding unvested restricted shares), shall be considered vested.

###  

### (ii)                                  Upontermination of Executive’s employment pursuant to Sections 8(a)(iv) or8(b)(ii), Executive shall only be entitled to receive any base salary earned orbenefits vested as of the effective date of his termination, including anyvested options or restricted shares.

###  

### (iii)                               Inthe event Executive’s employment is terminated pursuant to Section 8(b)(i),Executive shall receive any base salary and incentive pay earned as of hisretirement date, as well as any benefits or stock options vested as of hisretirement date.

###  

# 9.                                       **Covenant Not to Compete; Confidentiality**

#  

## (a)                                  **Confidential Information**. During Executive’semployment with the Company and at all times after the termination of suchemployment, regardless of the reason for such termination, Executive shall holdall Confidential Information relating to the Company in strict confidence andshall not use, disclose or otherwise communicate the Confidential Informationto anyone other than the Company without the prior written consent of the Company.“Confidential Information” includes, without limitation, business, operationsand financial information (such as costs, profits and plans for futureexpansion or development, plans for rendering additional services, methods ofoperation and marketing concepts of Employer, as well as employment policiesand plans), trade secrets, and other proprietary business information of the Company.“Confidential Information” shall not include information which is or becomes inthe public domain through no action by Executive or information which isgenerally disclosed by the Company to third parties without restrictions onsuch third parties. Executive shall return all Confidential Information to theCompany upon termination of employment.

##  

## (b)                                 **Solicitation of Customers**. During hisemployment with the Company and for a period after the termination of Executive’semployment, regardless of the reason for the termination, equal to one (1) year(the “Non-Competition Period”), Executive shall not influence or attempt toinfluence, directly or indirectly, any customer of the Company to divert itsbusiness away from the Company.

 

5

----

 

## (c)                                  **Soliciting Employees**. Executive agrees thatduring his employment with the Company and during the Non-Competition Period,he will not directly or indirectly solicit any person who is then, or at anytime within six months prior thereto was, an employee of the Company to workfor any person or entity then in competition with the Company.

##  

## (d)                                 **Non-Competition**. During his employment withthe Company and during the Non-Competition Period, Executive shall not,directly or indirectly, in any capacity:

##  

### (i)                                     Engage,own or have any interest in; or

###  

### (ii)                                  Manage,operate, join, participate in, accept employment with, render advice to, orbecome interested in or be connected with;

###  

any person or entity that competes with thebusiness of the Company. Notwithstanding the foregoing, holding five percent(5%) or less of an interest in the equity, stock options or debt of anypublicly traded company, nor serving as a consultant to or member of the boardof directors of any entity approved by the Chief Executive Officer, shall notbe considered a violation of this Section 10.

 

## (e)                                  **Company Property.**All information obtained in the course ofExecutive’s work shall belong to Employer, and shall not be the subject ofpublication or use without the written consent of the Chief Executive, whetherduring or after the term of this Agreement. It is understood and agreed thatExecutive shall not be entitled to retain any of the files or records of theCompany at any time. Upon termination or demand by the Chief Executive,Executive shall promptly return all keys, equipment, books, records, files andother property belonging to the Company.

##  

## (f)                                    **Remedies**. If Executive commits a breach orthreatens to commit a breach of any of the provisions of this Section 10, the Companyshall have the right and remedy to have the provisions of this Section 10specifically enforced by any court having equity jurisdiction, it beingacknowledged and agreed that any such breach or threatened breach will causeirreparable injury to the Company and that money damages will not provide anadequate remedy to the Company. Such right and remedy shall be in addition to,and not in lieu of, any other rights and remedies available to the Companyunder law or equity.

##  

# 10.                                 **Arbitration**

#  

## (a)                                  Exceptas provided in Section 10 above, in the event of a dispute arising out of theterms and conditions of this Agreement, such dispute shall, absent settlementof the parties, be promptly resolved by final and binding arbitration in theState of Hawaii in accordance with the provisions of the Hawaii UniformArbitration Act, Haw. Rev. Stat. Chapter 658A, by a single arbitrator mutuallyagreed upon by the parties. The arbitrator shall be required to abide by theprovisions of this

 

6

----

 

## Agreement andthe arbitrator shall not modify or alter same. A judgment upon the award may beentered in any court having jurisdiction of the parties.

##  

## (b)                                 Inarbitrations under this Agreement, each party shall bear the costs, fees and expensesof presenting its own case, and one-half of the arbitrator’s fees andadministration expenses, unless otherwise ordered by the arbitrator for goodcause shown.

##  

# 11.                                 **Severability and Savings**. Each provision inthis Agreement is separate. If necessary to effectuate the purpose of aparticular provision, the Agreement shall survive the termination of Executive’semployment with the Company. If any provision of this Agreement, in whole or inpart, is held to be invalid or unenforceable, the parties agree that any suchprovision shall be deemed modified to make such provision enforceable to themaximum extent permitted by applicable law. As to any provision held to beinvalid or unenforceable, the remaining provisions of this Agreement shallremain in effect.

#  

# 12.                                 **Binding Effect**. This Agreement shall bebinding upon and shall inure to the benefit of Company and its successors andassigns. This Agreement shall be binding upon and inure to the benefit of Executive,his heirs and personal representatives. This Agreement is not assignable by Executive.

#  

# 13.                                 **Entire Agreement.**This Agreement embodiesthe entire agreement of the parties hereto respecting the matters within itsscope. This Agreement supersedes all prior agreements of the parties hereto onthe subject matter hereof. There are no representations, warranties, oragreements, whether express or implied, or oral or written, with respect to thesubject matter hereof, except as set forth in this Agreement.

#  

# 14.                                 **Miscellaneous**.

#  

## (a)                                  Noprovision of this Agreement may be modified, waived or discharged unless suchwaiver, modification or discharge is agreed to in writing and signed by the Companyand Executive. The waiver or nonenforcement by the Company of a breach by Executiveof any provision of this Agreement shall not be construed as a waiver of anysubsequent breach by Executive.

##  

## (b)                                 Anynotice under this Agreement must be in writing and delivered personally or byovernight courier, sent by facsimile transmission or mailed by registered orcertified mail to the parties at their respective addresses.

##  

## (c)                                  ThisAgreement shall be governed by the laws of the State of Hawaii.

##  

## (d)                                 ThisAgreement may be executed in counterparts, which together shall constitute oneAgreement.

##  

## (e)                                  Bytheir signatures below, the parties acknowledge that they have had sufficientopportunity to read and consider, and that they have carefully read andconsidered, each provision of this Agreement and that they are voluntarilysigning this Agreement.

 

7

----

 

This Agreement is executed this 4th day of August, 2006.

 

 
|   |                                        |                          | /S/ ROBERT I WEBBER |   |
|--------|---------------------------------------------|-------------------------------|---------------------|--------|
|   | **Robert I. Webber**                        |
|   |                                        | ** **                    |
|   |                                        |                          |
|   | **Maui Land & Pineapple Company, Inc.** |
|   |                                        | ** **                    |
|   |                                        |                          |
|   | By                                          |                          | /S/ DAVID C. COLE   |   |
|   |                                        | **David C. Cole**             |
|   | Its                                         | Chairman, President & CEO |
|        |                                             |                               |                     |        |  |

 

8

----