**Exhibit 10.7**

 

**MAUI LAND& PINEAPPLE COMPANY, INC.**2006EQUITY AND INCENTIVE AWARD PLANRESTRICTEDSTOCK AWARD GRANT NOTICE FOR ROB WEBBER

 

Maui Land & PineappleCompany, Inc., a Hawaii corporation (the “***Company***”), pursuantto the provisions of its 2006 Equity and Incentive Award Plan (the “***Plan***”), hereby grants to the holder listedbelow (“***Holder***”), thenumber of shares of the Company’s common stock, no par value (“***Stock***”), set forth below (the “***Shares***”). This Restricted Stockaward is subject to all of the terms and conditions as set forth herein and inthe Restricted Stock Award Agreement attached hereto as Exhibit A (the “***Restricted Stock Agreement***”) and thePlan, each of which are incorporated herein by reference. Unless otherwisedefined herein, the terms defined in the Plan shall have the same definedmeanings in this Restricted Stock Award Grant Notice (the “***GrantNotice***”). Shares that are released from Forfeiture Restrictionsin accordance with Sections 3.2 and 3.3 of the Restricted Stock Agreement arereferred to in this Grant Notice as ***“Released Shares.”***

 
| **Holder:**                            | ** ** | **Rob  Webber**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| **Grant Date:**                        | ** ** | **May  8, 2006**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| **Total Number of Restricted Shares:** | ** ** | **25,000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** **                             | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **Performance Vesting Criteria:**      |       | Subject  to the terms and conditions of the Plan, this Grant Notice and the Restricted  Stock Agreement, up to 5,000 Shares shall vest and become Released Shares  following each of the fiscal years ending December 31, 2006, 2007, 2008, 2009  and 2010 (the “Performance Period”); provided, that the performance criteria  for the applicable fiscal year is achieved, as determined in the sole and  complete discretion of the Committee. Specific performance criteria for  fiscal years 2008, 2009 and 2010 shall be established by the Committee prior  to the end of the first quarter of each fiscal year, as applicable. Specific  performance criteria and the vesting of Shares for fiscal years 2006 and 2007  is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                                   |       | For  each of the two fiscal years ending December 31, 2006 and 2007, a block of  20% of the aggregate Shares (i.e., 5,000 shares) shall be subject to vesting  based on achieving, during such year, a level of “Return on Equity” (“ROE”,  as described below) within a range of ROE from a threshold of 10% to a  maximum of 20%. The amount of the block that is vested for each of those  fiscal years shall be determined by multiplying the block of Shares (i.e.,  5,000 shares) by a fraction (not exceeding 1.0), the numerator of which is  the amount by which the ROE for the year exceeds the threshold ROE of 10%,  and the denominator of which is 10%. Thus, for example, assume that for the  year 2006 the ROE is determined to be 15%. Half of the 5,000 Shares for 2006  will become vested following the end of 2006 (i.e., based on a fraction of  (15% ROE minus 10% threshold ROE)/10%). Notwithstanding the foregoing, in the  event that Holder’s employment is terminated by reason of death or disability  that occurs on or after July 1 of any year in the Performance Period but no  later than the Announcement Date, as defined below, for that year, and is  therefore deemed to have occurred on the first business day after such  Announcement Date, then the number of Shares that otherwise would vest  pursuant to the above calculation shall be multiplied by a fraction (not  exceeding 1.0), the numerator of which is the number of days in the year of |

 

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|   |   | Holder’s  death or disability prior to such death or disability, and the denominator of  which is 365.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|   |   | Further,  the blocks of 5,000 shares for the fiscal years 2006 and 2007 shall be  subject to additional vesting based on a determination of the average ROE for  the two-year period ending at the end of the second fiscal year in the  Performance Period. Specifically, the additional Shares vested for a given  fiscal year shall be determined following the end of the second fiscal year  within the Performance Period and shall be equal to: (i) the vested amount of  the block of 5,000 Shares for the given fiscal year as determined by applying  the above fraction, except by substituting the average ROE for the two-year  period, in lieu of the ROE for the given fiscal year, minus (ii) the amount  of shares for the given fiscal year that has vested based on the ROE for that  year alone. Thus, for example, again assume that for the year 2006 the ROE is  determined to be 15%, and the 5,000 share block of Shares for 2006 becomes  50% vested following the end of 2006 (i.e., based on a fraction of (15% ROE  minus 10% threshold ROE)/10%). Thereafter, if the average ROE as of the end  of 2007 is determined to be 16%, then the 5,000 share block of Shares for  2006 shall be subject to an additional 10% vesting, equal to 60% vesting  based on the average ROE (i.e., fraction of (16% average ROE minus 10%  threshold ROE)/10%) minus 50% prior vesting based on ROE for 2006. In other  words, to the extent that the average ROE for the Performance Period  determined as of the end of 2007 exceeds the ROE for a particular fiscal year  within the Performance Period as calculated for that year alone, an  additional amount of the 5,000 share block of Shares for that fiscal year  shall become vested. |
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|   |   | Notwithstanding  the foregoing, in the event that Holder’s employment is terminated by reason  of death or disability that occurs on or after July 1 of any year in the  Performance Period but no later than the Announcement Date for that year and  is therefore deemed to have occurred on the first business day after such  Announcement Date, then the number of additional Shares that otherwise would  be released and vest pursuant to the above calculation shall be multiplied by  a fraction (not exceeding 1.0), the numerator of which is the number of days  in the year of Holder’s death or disability prior to such death or  disability, plus 365 times the number of previous years in the Performance  Period (if any), and the denominator of which is 365 times the number of  years in the Performance Period (through and including the year of Holder’s  death or disability).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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|   |   | For  purposes of this Agreement, Return on Equity or ROE shall mean the Company’s  net income after tax, exclusive of extraordinary items such as discontinued  operations, asset sales outside the ordinary course of business, and major  impairment losses, divided by beginning stockholders’ equity, all determined,  unless otherwise agreed by the Company and Holder, in accordance with  Generally Accepted Accounting Principals, as promulgated from time to time by  the Financial Accounting Standards Board (“GAAP”), consistently applied, and  any other financial or performance thresholds adopted by the Committee shall  be determined, unless otherwise agreed by the Company and Holder, in  accordance with GAAP, consistently applied.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|   |   | With  proper regard to GAAP, and sound accounting judgments and the agreements of  the Company and Holder, the Committee shall announce the extent of vesting of  the block of Shares for each year during the Performance Period as soon as                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

 

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|   |   | reasonable  possible after audited financial statements are available for such year and  again, if applicable, as soon as practicable after audited financial  statements become available for the following fiscal years (the “Announcement  Date”).                                                                                                                                                                                                                                                                       |
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|   |   | Any  Shares that do not become Released Shares after fiscal year 2007 as  calculated above, and any other Shares that do not become Released Shares at  such time as such Shares are eligible to become Released Shares as a result  of not achieving specified performance criteria shall be carried forward and  become eligible for vesting in the subsequent year of the Performance Period  subject to achievement of performance criteria adopted by the Committee with  respect to such Shares that have been carried forward. |
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|   |   | ***Notwithstanding the foregoing, subject to the Restricted Stock  Agreement, in no event, shall any Shares vest and become Released Shares  following Holder’s Termination of Employment.***                                                                                                                                                                                                                                                                                                                                    |

 

By his or her signature below, Holder agrees to bebound by the terms and conditions of the Plan, the Restricted Stock Agreementand this Grant Notice. Holder has reviewed the Restricted Stock Agreement, thePlan and this Grant Notice in their entirety, has had an opportunity to obtainthe advice of counsel prior to executing this Grant Notice and fullyunderstands all provisions of this Grant Notice, the Restricted Stock Agreementand the Plan. Holder hereby agrees to accept as binding, conclusive and finalall decisions or interpretations of the Board upon any questions arising under orrelating to the Plan, this Grant Notice or the Restricted Stock Agreement.

 
| **MAUI LAND & PINEAPPLE COMPANY, INC.:** | ** ** | **HOLDER: ROBERT I. WEBBER** |
|----------------------------------------------|------------|------------------------------|
| ** **                                   | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** |
| ** **                                   | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** |
| By:                                          |       |  /S/ DAVID C. COLE      |   | By: |   |  /S/ ROBERT I. WEBBER |
| Print  Name:                                 |       |  David C. Cole          |   | Print  Name: |   |  Robert I. Webber |
| Title:                                       |       | President  & CEO         |   |   |   |   |
| Address:                                     |       | P.O.  Box 187                |   | Address: |   |   |
|                                         |       | Kahului,  Maui, Hawaii 96733 |   |   |   |   |
|                                         |       |                         |   |   |   |   |
| Dated:                                       |       | August  4, 2006              |   |   |   |   |

 

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**RESTRICTED STOCK AWARDAGREEMENT**

 

Pursuant to the RestrictedStock Award Grant Notice (“***Grant Notice***”)******to which this Restricted StockAward Agreement (this “***Agreement***”) is******attached, Maui Land & PineappleCompany, Inc., a Hawaii corporation (the “***Company***”),******has granted to Holder the number ofshares of the Company’s common stock, no par value (“***Stock***”),set forth in the Grant Notice (the “***Shares***”),upon the terms and conditions set forth in the Company’s 2006 Equity andIncentive Award Plan (the “***Plan***”), theGrant Notice and this Agreement.

 

##### **ARTICLE IGENERAL**

##### ** **

###### 1.1           Defined Terms. Capitalizedterms not specifically defined herein shall have the meanings specified in theGrant Notice or, if not defined therein, the Plan.

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###### 1.2           Incorporation of Terms of Plan.The Shares are subject to the terms and conditions of the Plan which areincorporated herein by reference.

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##### **ARTICLE IIGRANT OF RESTRICTED STOCK**

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###### 2.1           Grant of Restricted Stock. Inconsideration of Holder’s past and/or continued service to the Company or itsSubsidiaries and for other good and valuable consideration, effective as of theGrant Date set forth in the Grant Notice (the “***Grant Date***”),******the Company hereby agrees to issue to Holder the Shares,******upon the terms andconditions set forth in the Plan, the Grant Notice and this Agreement.

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###### 2.2           Issuance of Shares. Theissuance of the Shares under this Agreement shall occur at the principal officeof the Company simultaneously with the execution of the Grant Notice by theparties or on such other date as the Company and Holder shall agree (the “***Issuance Date***”). Subjectto the provisions of Article IV, the Company shall issue the Shares (whichshall be issued in Holder’s name) on the Issuance Date.

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###### 2.3           Conditions to Issuance of StockCertificates. The Shares, or any portion thereof, may be either previouslyauthorized but unissued shares or issued shares which have then been reacquiredby the Company. Such Shares shall be fully paid and nonassessable. The Companyshall not be required to issue or deliver any Shares prior to fulfillment ofall of the following conditions:

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(a)         The admission of such Shares to listing on all stockexchanges on which the Stock is then listed;

 

(b)         The completion of any registration or other qualification ofsuch Shares under any state or federal law or under rulings or regulations ofthe Securities and Exchange Commission or of any other governmental regulatorybody, which the Board shall, in its absolute discretion, deem necessary oradvisable;

 

(c)         The obtaining of any approval or other clearance from anystate or federal governmental agency which the Board shall, in its absolutediscretion, determine to be necessary or advisable;

 

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(d)         The lapse of such reasonable period of time following theIssuance Date as the Board may from time to time establish for reasons ofadministrative convenience; and

 

(e)         The receipt by the Company of full payment for all amounts(if any) which, under federal, state or local tax law, the Company (or otheremployer corporation) is required to withhold upon issuance of such Shares.

 

###### 2.4           Rights as Stockholder. Exceptas otherwise provided herein, upon delivery of the Shares to the escrow agentpursuant to Article IV, Holder shall have all the rights of a stockholder withrespect to said Shares, subject to the restrictions herein, including the rightto vote the Shares and to receive all dividends or other distributions paid ormade with respect to the Shares; *provided, however,*thatany and all extraordinary cash dividends paid on such Shares and any and allshares of Stock, capital stock or other securities or property received by ordistributed to Holder with respect to the Shares as a result of any stockdividend, stock split, reverse stock split, recapitalization, combination,reclassification, or similar change in the capital structure of the Companyshall also be subject to the Forfeiture Restriction (as defined in Section 3.1)and the restrictions on transfer in Section 3.5 until such restrictions on theunderlying Shares lapse or are removed pursuant to this Agreement (or, if suchShares are no longer outstanding, until such time as such Shares would havebeen released from the Forfeiture Restriction pursuant to this Agreement). Inaddition, in the event of any merger, consolidation, share exchange orreorganization affecting the Shares, including, without limitation, a Change inControl, then any new, substituted or additional securities or other property(including money paid other than as a regular cash dividend) that is by reasonof any such transaction received with respect to, in exchange for or insubstitution of the Shares shall also be subject to the Forfeiture Restriction(as defined in Section 3.1) and the restrictions on transfer in Section 3.5until such restrictions on the underlying Shares lapse or are removed pursuantto this Agreement (or, if such Shares are no longer outstanding, until suchtime as such Shares would have been released from the Forfeiture Restrictionpursuant to this Agreement). Any such assets or other securities received by ordistributed to Holder with respect to, in exchange for or in substitution ofany Unreleased Shares (as defined in Section 3.3) shall be immediatelydelivered to the Company to be held in escrow pursuant to Section 4.1.

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##### **ARTICLE III**RESTRICTIONS ON SHARES

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###### 3.1           Forfeiture Restriction. Subjectto the provisions of Section 3.2 and 3.3, if Holder has a Termination ofEmployment for any or no reason, all of the Unreleased Shares (as defined inSection 3.4) shall be forfeited immediately and automatically transferred tothe Company without further action by the Company (the “Forfeiture Restriction”);provided, however, that for this purpose, (i) any termination of Holder’semployment by the Company or any of its subsidiaries that occurs on or afterthe fifth (5th) anniversary of the Grant Date, but not later thanthe date of the Committee’s announcement of vesting as to 2010 and anyadditional vesting as to the 5,000 share blocks for 2007, 2008, 2009 and 2010(the “Final Announcement Date”), shall be deemed to have occurred on the firstbusiness day after the Final Announcement Date, and (ii) any other terminationof Holder’s employment by reason of death or permanent and total disability thatoccurs on or after July 1 of any year during the Performance Period, but nolater than the Announcement Date for that year shall be deemed to have occurredon the first business day after such Announcement Date. Further, for thispurpose, Holder’s employment shall not be treated as terminated in the case ofa transfer of employment within the Company and its subsidiaries or in the caseof sick leave and other approved leaves of absence. Upon the occurrence of forfeitureunder this Section 3.1, the Company shall become the legal and beneficial ownerof the Shares being forfeited and all rights and interests therein or relating theretoand the Company shall have the right to retain and transfer to its own name thenumber of Shares being forfeited by Holder. In the event any of the

 

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###### Unreleased Shares are forfeited under thisSection 3.1, any cash, cash equivalents, assets or securities received by ordistributed to Holder with respect to, in exchange for or in substitution ofsuch Shares and held by the escrow agent pursuant to Section 4.1 and the JointEscrow Instructions shall be promptly transferred by the escrow agent to theCompany.

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###### 3.2           Release of Shares from ForfeitureRestriction. Shares shall be released from the Forfeiture Restriction asindicated in the Grant Notice effective as of the date Holder receives writtenthe written Notice of Release set forth in Section 3.6 below. Any of the Sharesreleased from the Forfeiture Restriction shall thereupon be released from therestrictions on transfer under Section 3.5. In the event any of the Shares arereleased from the Forfeiture Restriction, any dividends or other distributionspaid on such Shares and held by the escrow agent pursuant to Section 4.1 andthe Joint Escrow Instructions shall be promptly paid by the escrow agent toHolder.

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###### 3.3           Other Release of Shares fromForfeiture Restriction***.***NotwithstandingSection 3.2 above, all Unreleased Shares shall be released and vest on thethirtieth (30th) day following a Change in Control, unless Holder’s Terminationof Employment occurs prior to such date.

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###### 3.4           Unreleased Shares. Any of theShares which, from time to time, have not yet been released from the ForfeitureRestriction are referred to herein as *“**Unreleased Shares**.”* To the extent that there are any UnreleasedShares remaining after the Final Announcement Date, such Unreleased Sharesshall be forfeited and transferred to the Company as soon as practicablefollowing such Final Announcement Date.

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###### 3.5           Restrictions on Transfer. Unlessotherwise permitted by the Board pursuant to the Plan, no Unreleased Shares orany dividends or other distributions thereon or any interest or right thereinor part thereof, shall be liable for the debts, contracts or engagements ofHolder or his or her successors in interest or shall be subject to sale orother disposition by transfer, alienation, anticipation, pledge, encumbrance,assignment or any other means whether such sale or other disposition bevoluntary or involuntary or by operation of law by judgment, levy, attachment,garnishment or any other legal or equitable proceedings (including bankruptcy),except by will or by the laws of descent and distribution, or to a member ofHolder’s immediate family or, provided that the transferee agrees in writing,in a form provided by the Company to be bound by all provisions of thisAgreement, a trust or family partnership or any other entity customarily usedfor estate planning purposes. Any attempted sale or other disposition ofUnreleased Shares contrary to the foregoing restrictions on transfer shall be nulland void and of no effect.

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###### 3.6           Notice of Release. TheCommittee shall provide written notice to Holder of whether, and the extent towhich, any of the Shares became vested and released in accordance with Section3.2 above for each calendar year during the Performance Period or Section 3.3above. Such notice shall be provided as soon as administratively practicableafter audited financial statements are available for such calendar year and theCommittee has certified in writing the extent to which the applicableperformance goals set forth in the Grant Notice were achieved.

 

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##### **ARTICLE IVESCROW OF SHARES**

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###### 4.1           Escrow of Shares. To insurethe availability for delivery of Holder’s Unreleased Shares in the event offorfeiture of such Shares by Holder pursuant to Sections 3.1 or 3.4, Holderhereby appoints the Secretary of the Company, or any other person designated bythe Board as escrow agent, as his or her attorney-in-fact to assign andtransfer unto the Company, such Unreleased Shares, if any, forfeited by Holderpursuant to Sections 3.1 or 3.4 and any dividends or other distributionsthereon, and shall, upon execution of this Agreement, deliver and deposit withthe Secretary of the Company, or such other person designated by the Board, anyshare certificates representing the Unreleased Shares, together with the stockassignment duly endorsed in blank, attached as Exhibit B to the GrantNotice. The Unreleased Shares and stock assignment shall be held by theSecretary of the Company, or such other person designated by the Board, inescrow, pursuant to the Joint Escrow Instructions of the Company and Holderattached as Exhibit C to the Grant Notice, until the Unreleased Sharesare forfeited by Holder as provided in Sections 3.1 or 3.4, until suchUnreleased Shares are released from the Forfeiture Restriction, or until suchtime as this Agreement no longer is in effect. Upon release of the UnreleasedShares from the Forfeiture Restriction, the escrow agent shall deliver toHolder the certificate or certificates representing such Shares in the escrowagent’s possession belonging to Holder in accordance with the terms of theJoint Escrow Instructions attached as Exhibit C to the Grant Notice, andthe escrow agent shall be discharged of all further obligations hereunder; *provided, however,*that the escrow agent shall neverthelessretain such certificate or certificates as escrow agent if so required pursuantto other restrictions imposed pursuant to this Agreement. If the Shares areheld in book entry form, then such entry will reflect that the Shares aresubject to the restrictions of this Agreement. If any dividends or otherdistributions are paid on the Unreleased Shares held by the escrow agentpursuant to this Section 4.1 and the Joint Escrow Instructions, such dividendsor other distributions shall also be subject to the restrictions set forth inthis Agreement and held in escrow pending release of the Unreleased Shares withrespect to which such dividends or other distributions were paid from the ForfeitureRestriction.

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###### 4.2           Notice of Forfeited Shares; Transferof Forfeited Shares. The Committee shall provide written notice to Holderof whether any of the Shares were permanently forfeited for each calendar yearduring the Performance Period. Such notice shall be provided as soon asadministratively practicable after audited financial statements are availablefor such calendar year. Holder hereby authorizes and directs the Secretary ofthe Company, or such other person designated by the Board, to transfer theUnreleased Shares which have been forfeited by Holder immediately to theCompany.

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###### 4.3           No Liability for Actions inConnection with Escrow. The Company, or its designee, shall not be liablefor any act it may do or omit to do with respect to holding the Shares inescrow while acting in good faith and in the exercise of its judgment.

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##### **ARTICLE VOTHER PROVISIONS**

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###### 5.1           Adjustment for Stock Split. Inthe event of any stock dividend, stock split, reverse stock split,recapitalization, combination, reclassification, or similar change in thecapital structure of the Company, the Board shall make appropriate andequitable adjustments in the Unreleased Shares subject to the ForfeitureRestriction and the number of Shares, consistent with any adjustment underSection 11.3 of the Plan. The provisions of this Agreement shall apply, to thefull extent set forth herein with respect

 

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###### to the Shares, to any and all shares ofcapital stock or other securities, property or cash which may be issued inrespect of, in exchange for, or in substitution of the Shares, and shall beappropriately adjusted for any stock dividends, splits, reverse splits,combinations, recapitalizations and the like occurring after the date hereof.

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###### 5.2           Taxes. Holder has reviewedwith Holder’s own tax advisors the federal, state, local and foreign taxconsequences of this investment and the transactions contemplated by the GrantNotice and this Agreement. Holder is relying solely on such advisors and not onany statements or representations of the Company or any of its agents. Holderunderstands that Holder (and not the Company) shall be responsible for Holder’sown tax liability that may arise as a result of this investment or thetransactions contemplated by this Agreement. Holder understands that Holderwill recognize ordinary income for federal income tax purposes under Section 83of the Code as the restrictions applicable to the Unreleased Shares lapse. Inthis context, “restriction” includes the Forfeiture Restriction. Holderunderstands that Holder may elect to be taxed for federal income tax purposesat the time the Shares are issued rather than as and when the ForfeitureRestriction lapses by filing an election under Section 83(b) of the Code withthe Internal Revenue Service no later than thirty days following the date ofpurchase. A form of election under Section 83(b) of the Code is attached to theGrant Notice as Exhibit D.

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###### HOLDERACKNOWLEDGES THAT IT IS HOLDER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TOTIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER REQUESTS THECOMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HOLDER’S BEHALF.

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###### 5.3           Limitations Applicable to Section16 Persons. Notwithstanding any other provision of the Plan or thisAgreement, the Plan, the Shares and this Agreement shall be subject to anyadditional limitations set forth in any applicable exemptive rule under Section16 of the Exchange Act (including any amendment to Rule 16b-3 of the ExchangeAct) that are requirements for the application of such exemptive rule. To theextent permitted by applicable law, this Agreement shall be deemed amended tothe extent necessary to conform to such applicable exemptive rule.

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###### 5.4           Administration. The Boardshall have the power to interpret the Plan and this Agreement and to adopt suchrules for the administration, interpretation and application of the Plan as areconsistenttherewith and to interpret, amend or revoke any such rules. All actions takenand all interpretations and determinations made by the Board in good faith shall be binding, conclusiveand final upon Holder, the Company and all other interested persons. No memberof the Board shall bepersonally liable for any action, determination or interpretation made in goodfaith with respect to the Plan, this Agreement or the Shares.

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###### 5.5           Restrictive Legends andStop-Transfer Orders.

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(a)         Any share certificate(s) evidencing the Shares issuedhereunder shall be endorsed with the following legend and any other legend(s) thatmay be required by any applicable federal or state securities laws:

 

THESHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OFTHE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF ARESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, ACOPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

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(b)         Holder agrees that, in order to ensure compliance with therestrictions referred to herein, the Company may issue appropriate “stoptransfer” instructions to its transfer agent, if any, and that, if the Companytransfers its own securities, it may make appropriate notations to the sameeffect in its own records.

 

(c)         The Company shall not be required: (i) to transfer on itsbooks any Shares that have been sold or otherwise transferred in violation ofany of the provisions of this Agreement, or (ii) to treat as owner of such Sharesor to accord the right to vote or pay dividends to any purchaser or othertransferee to whom such Shares shall have been so transferred.

 

###### 5.6           Tax Withholding.

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(a)         The Company shall be entitled to require payment of any sumsrequired by federal, state or local tax law to be withheld with respect to thetransfer of the Shares or the lapse of the Forfeiture Restriction with respect tothe Shares, or any other taxable event related thereto. The Company may permit Holderto make such payment in one or more of the forms specified below:

 

(i)            by cash or checkmade payable to the Company;

 

(ii)           by the deduction ofsuch amount from other compensation payable to Holder;

 

(iii)          by tendering Shareswhich are not subject to the Forfeiture Restriction and which have a thencurrent Fair Market Value not greater than the amount necessary to satisfy theCompany’s withholding obligation based on the minimum statutory withholdingrates for federal, state and local income tax and payroll tax purposes; or

 

(iv)          in any combinationof the foregoing.

 

(b)           In the event Holder fails to providetimely payment of all sums required by the Company pursuant to Section 5.6(a),the Company shall have the right and option, but not obligation, to treat suchfailure as an election by Holder to provide all or any portion of such requiredpayment by means of tendering Shares in accordance with Section 5.6(a)(iii).

 

###### 5.7           Notices. Any notice to begiven under the terms of this Agreement to the Company shall be addressed tothe Company in care of the Secretary of the Company, and any notice to be givento Holder shall be addressed to Holder at the address given beneath Holder’ssignature on the Grant Notice. By a notice given pursuant to this Section 5.7,either party may hereafter designate a different address for notices to begiven to that party. Any notice shall be deemed duly given when sent via emailor when sent by certified mail (return receipt requested) and deposited (withpostage prepaid) in a post office or branch post office regularly maintained bythe United States Postal Service.

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###### 5.8           Titles. Titles are providedherein for convenience only and are not to serve as a basis for interpretationor construction of this Agreement.

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###### 5.9           Governing Law; Severability. ThisAgreement shall be administered, interpreted and enforced under the laws of theState of Hawaii without regard to conflicts of laws thereof. Should any provisionof this Agreement be determined by a court of law to be illegal orunenforceable, the other provisions shall nevertheless remain effective andshall remain enforceable.

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###### 5.10         Conformity to Securities Laws. Holderacknowledges that the Plan is intended to conform to the extent necessary withall provisions of the Securities Act and the Exchange Act and any

 

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###### and all regulations and rules promulgated bythe Securities and Exchange Commission thereunder, and state securities lawsand regulations. Notwithstanding anything herein to the contrary, the Planshall be administered, and the Shares are to be issued, only in such a manneras to conform to such laws, rules and regulations. To the extent permitted byapplicable law, the Plan and this Agreement shall be deemed amended to theextent necessary to conform to such laws, rules and regulations.

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###### 5.11         Amendments. This Agreement maynot be modified, amended or terminated except by an instrument in writing, signedby Holder and by a duly authorized representative of the Company.

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###### 5.12         Successors and Assigns. TheCompany may assign any of its rights under this Agreement to single or multipleassignees, and this Agreement shall inure to the benefit of the successors andassigns of the Company. Subject to the restrictions on transfer herein setforth, this Agreement shall be binding upon Holder and his or her heirs,executors, administrators, successors and assigns.

 

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