Document:

Exhibit

Exhibit 10.5

FORM OF ASB HAWAII, INC.
2016 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1. INTRODUCTON
1.1    Purpose. The purpose of the ASB Hawaii, Inc. 2016 Employee Stock Purchase Plan (the “Plan”) is to encourage a closer identification of interest between the Company and its employees, to stimulate the employees’ efforts for the Company, and to strengthen employees’ desire to remain with the Company by encouraging and assisting them to acquire a direct stake in the welfare of the Company through ownership of shares of its common stock.
1.2    Intention of Plan. The Company’s intention is that the Plan meet the requirements of Section 423 of the Internal Revenue Code of 1986 (the “Code”), and the Plan shall be interpreted consistently with this intention.
ARTICLE 2. DEFINITIONS
2.1    Definitions. Whenever the initial letters of the following terms are capitalized, the terms shall have the meanings shown.
(a)“Allocation Date” has the meaning assigned in Section 6.4(f).
(b)“Board” means the Board of Directors of the Company.
(c)“Code” means the Internal Revenue Code of 1986, as amended.
		
	(d)
	“Common Stock” means the Class A common stock of the Company, $0.01 par value, or of any successor corporation by merger, reorganization, consolidation, or otherwise.

		
	(e)
	“Company” means ASB Hawaii, Inc.

		
	(f)
	“Compensation” means, with respect to any Offering Period, a Participant’s wages subject to income tax withholding, as defined by Code Section 3401. The Plan Administrator may modify the definition of Compensation for one or more Offerings as deemed appropriate, provided that any such modification shall be consistent with Code Section 423.

		
	(g)
	“Effective Date” means the Distribution Date, as defined in the Separation and Distribution Agreement by and between Hawaiian Electric Industries, Inc. and ASB Hawaii, Inc.

		
	(h)
	“Eligible Employee” means an Employee of an Employer. Employees of a Subsidiary which is not a Participating Subsidiary are not Eligible Employees and shall be excluded from the Plan.

		
	(i)
	“Employee” means an individual carried as such on the payroll records of an Employer. “Employee” does not include independent contractors, leased employees, or other individuals not treated as employees for payroll purposes, notwithstanding any reclassification of such individuals as employees by Federal, State, or local authority.

		
	(j)
	“Employer” means the Company (for so long as it maintains the Plan) and any Participating Subsidiary. With respect to an Employee, Employer means the entity that is the direct Employer of the Employee.

		
	(k)
	“Exercise Date” means the last day of each Offering Period.

		
	(l)
	“Fair Market Value” per share of Common Stock on any date means the closing sale price per share during regular trading hours of Common Stock on such date on the principal securities market in which the Common Stock is then traded; or, if there were no trades on that date, the closing sale price during regular trading hours of the Common Stock on the first trading day prior to that date.

		
	(m)
	“Grant Date” means the first day of each Offering Period.

		
	(n)
	“Individual Brokerage Account” shall mean the account specified in Section 6.4(f) of the Plan.

		
	(o)
	“Offering” means an offering of Common Stock pursuant to this Plan.

		
	(p)
	“Offering Period” has the meaning assigned in Section 6.2 of the Plan.

		
	(q)
	“Participant” means an Eligible Employee who has enrolled in the Plan pursuant to Section 5.1 of the Plan.

		
	(r)
	“Participating Subsidiary” means a Subsidiary that is specifically authorized by resolution of the Board to extend the benefits of the Plan to its eligible Employees. The Participating Subsidiaries in the Plan as of the Effective Date are listed in Appendix A to the Plan.

		
	(s)
	“Plan” means the ASB Hawaii, Inc. 2016 Employee Stock Purchase Plan.

1

		
	(t)
	“Plan Administrator” means the committee or persons designated pursuant to Section 3.1 to administer the Plan.

		
	(u)
	“Purchase Price” has the meaning assigned in Section 6.4(d) of the Plan.

		
	(v)
	“Stock Purchase Contributions” means payroll deductions of Compensation during an Offering Period for the purpose of purchasing shares under the Plan.

		
	(w)
	“Subsidiary” means any subsidiary corporation of the Company (as determined in accordance with Code Section 424), whether now existing or subsequently established.

ARTICLE 3. ADMINISTRATION OF THE PLAN
3.1    Plan Administrator. The Plan shall be administered by the Compensation Committee of the Board or by such other committee of the members of the Board which the Board may designate as Plan Administrator of the Plan, provided, however, that only the Board shall have the authority to (i) increase the maximum number of shares available for issuance under the Plan or the maximum number of shares that may be purchased per Participant for any Offering Period (other than for adjustments under Section 6.8), (ii) modify the eligibility requirements under the Plan (except that the eligibility requirements for an Offering may be modified by the Plan Administrator in accordance with Section 4.2(a)), (iii) designate a Subsidiary as a Participating Subsidiary, or (iv) change the Purchase Price for any Offering Period.
3.2    Authority of Plan Administrator. The Plan Administrator shall have the discretion and authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to make all other determinations necessary or advisable for administering the Plan, and to take all actions necessary for operating the Plan, including authorizing, making, and setting the terms for Offerings. The Plan Administrator may correct any defect, supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent that it shall deem necessary or advisable, in its sole discretion, to carry it into effect. The determinations of the Plan Administrator shall be final and binding on all persons.
ARTICLE 4. ELIGIBILITY
4.1    Eligibility. Subject to Section 4.2, all Employees of the Company and of Participating Subsidiaries shall be Eligible Employees and shall have the right to participate in the Plan, provided, however, that only Eligible Employees in the employ of an Employer on the first day of an Offering Period shall have the right to participate in such Offering Period.
4.2    Exceptions.
		
	(a)
	Discretionary Exclusions. Notwithstanding Section 4.1, the Plan Administrator, in its sole discretion, may (but is not required to) exclude under the written terms of any Offering, otherwise Eligible Employees

		
	(i)
	whose customary employment is twenty (20) hours or less per week,

		
	(ii)
	whose customary employment is for not more than five (5) months in any calendar year,

		
	(iii)
	who have been employed less than two (2) years, or

		
	(iv)
	who are highly compensated employees (within the meaning of Section 414(q) of the Code).

		
	(b)
	5% Owners. Notwithstanding Section 4.1, any otherwise Eligible Employee who, immediately after a purchase right is granted, and applying the rules under Sections 423(b)(3) and 424(d) of the Code to determine stock ownership, owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary, shall not be entitled to participate in the Plan.

4.3    Loss of Eligibility.
		
	(a)
	An Eligible Employee shall lose eligibility to participate in this Plan, and shall cease to participate in it, if then a Participant, upon the earliest to occur of the following:

		
	(i)
	the Participant’s termination of employment from the Company or a Participating Subsidiary for any reason except transfer of employment between or among the Company and any Participating Subsidiary;

		
	(ii)
	the Company’s or the Participant’s Employer’s ceasing to maintain or participate in the Plan, as applicable;

2

		
	(iii)
	with respect to a Participant’s eligibility to participate in an Offering, the Participant’s failure to meet the requirements of that Offering, including any limits imposed under Section 4.2; or

		
	(iv)
	any other event which causes a Participant to no longer meet the requirements of Section 4.1.

		
	(b)
	An individual shall be considered employed while such individual is on sick leave or other approved leave, even if unpaid, that meets the requirements of Treasury Regulation Section 1.421-1(h)(2); provided, however, that if such period of leave is unpaid (except for differential wages as defined by Section 3401(h) of the Code), then such individual’s participation shall be deemed to terminate on the next Exercise Date. Any Stock Purchase Contributions remaining to the Participant’s credit after such next Exercise Date shall be refunded by the Plan or by an agent of the Plan to the former Participant as soon as administratively feasible. Where the period of an individual’s leave exceeds three months, and the individual’s right to reemployment is not guaranteed by statute or contract, for purposes of this Plan the employment relationship shall be deemed to have terminated on the first day immediately following such three-month period.

ARTICLE 5. PARTICIPATION AND STOCK PURCHASE CONTRIBUTIONS
5.1    Enrollment in the Plan.
		
	(a)
	Payroll Deduction Election. An Eligible Employee shall become a Participant in the Plan by electing to deduct Stock Purchase Contributions from his or her after-tax Compensation on or before the first day of an Offering Period or such other deadline as may be established by the Plan Administrator. Such Stock Purchase Contributions shall be credited to the Plan for his or her benefit and shall be applied in accordance with the terms of the Plan to the purchase of shares of the Company at the end of the Offering Period.

		
	(b)
	Form and Manner of Election. The form and manner of making a payroll deduction election for Stock Purchase Contributions shall be specified by the Plan Administrator and shall apply on a weekly, bi-weekly, semi-monthly, or monthly basis, as determined by the Plan Administrator, subject to any elections with respect to the timing of deductions made available by the Plan Administrator to the Participant.

		
	(c)
	Amount of Election and Commencement of Deductions. Each Stock Purchase Contribution shall be in an amount designated by the Participant. Such elections may be subject to a minimum amount specified by the Plan Administrator. Furthermore, such elections shall be subject to a maximum amount equal to the lesser of (i) of twenty percent (20%) of Compensation or (ii) the limits specified in Section 6.9. As soon as practicable after the start date of an Offering Period, the Company or the Participating Subsidiary with whom a Participant is employed, will commence to deduct Stock Purchase Contributions from the Participant’s Compensation.

		
	(d)
	Evergreen Election. Once a Participant has enrolled in the Plan and made a payroll deduction election with respect to an Offering Period, such election shall be deemed to apply automatically to all subsequent Offering Periods, until and unless such enrollment and payroll deduction authorization is modified, cancelled, or revoked in accordance with the Plan and/or procedures prescribed by the Plan Administrator.

5.2    Modification of Election. Stock Purchase Contributions shall continue in effect at the rate elected throughout the Participant’s participation in the Plan, except as provided in this Section 5.2.
		
	(a)
	Changing Rate of Stock Purchase Contributions. A Participant may change the amount of Stock Purchase Contributions effective upon the start of the next Offering Period by delivering notice in accordance with the procedures established by the Plan Administrator. A Participant may decrease the amount of Stock Purchase Contributions during an Offering Period up to one (1) time, by delivering notice in accordance with the procedures established by the Plan Administrator. Any such change will become effective as soon as administratively practicable after such notice is delivered.

		
	(b)
	Suspending Stock Purchase Contributions. A Participant may at any time suspend the Participant’s Stock Purchase Contributions under the Plan by delivering notice in accordance with procedures established by the Plan Administrator. Such suspension shall become effective as soon as administratively practicable during the then current Offering Period, or, to the extent consistent with the procedures established by the Plan Administrator, effective with the commencement of the first Offering Period to begin after such notice is delivered. Such a suspension will not result in a refund of previously accumulated Stock Purchase Contributions, unless the Participant affirmatively elects to withdraw the balance of the 

3

Participant’s Stock Purchase Contributions in the notice delivered pursuant to this Section 5.2(b), in which case the withdrawal will become effective as soon as administratively practicable and will result in a refund of the then outstanding balance of Stock Purchase Contributions attributable to such Participant.
5.3    Status of Stock Purchase Contributions. A Participant’s Stock Purchase Contributions shall not represent a separate fund, but shall have the status of a hypothetical account only, and shall be included in the general funds of the Participant’s Employer. No interest shall be paid or credited on Stock Purchase Contributions, and they may be used for any corporate purpose. With respect to Stock Purchase Contributions made by a Participant, the Participant shall have the status of an unsecured creditor.
ARTICLE 6. OFFERINGS
6.1    Amount of Stock Subject to Plan. The total number of shares of Common Stock which may be sold pursuant to the Plan, subject to adjustment as provided in Section 6.8, shall be no more than 200,000 shares. The shares sold under the Plan may be either authorized and unissued shares, treasury shares or shares acquired on the open market. If rights granted under the Plan terminate or expire for any reason without having been exercised in full, the shares not purchased hereunder pursuant to such rights shall be available again for purposes of the Plan.
6.2    Offering Periods.
		
	(a)
	Shares of Common Stock shall be offered for purchase under the Plan through a series of Offering Periods until the earlier of (i) the date maximum number of shares of Common Stock available for issuance under the Plan have been purchased or (ii) the Plan has been terminated.

		
	(b)
	Each Offering Period shall be not less than three (3) and not more than twenty-four (24) months in duration, as determined by the Plan Administrator prior to the start of the applicable Offering Period.

		
	(c)
	The Plan Administrator shall determine, in its discretion, the duration, frequency, and start and end dates of Offering Periods.

6.3    Terms of Offering Periods.
		
	(a)
	The terms and conditions of each Offering Period may vary, and two or more Offering Periods may run concurrently under the Plan, each with its own terms and conditions. In addition, special Offering Periods may be established with respect to entities that are acquired by the Company (or any Subsidiary of the Company) or under such other circumstances as the Plan Administrator deems appropriate.

		
	(b)
	In no event, shall the terms and conditions of any Offering Period contravene the express limitations and restrictions of the Plan, and the Participants in each separate Offering Period shall have equal rights and privileges under that Offering in accordance with the requirements of Section 423(b)(5) of the Code and the Treasury Regulations thereunder.

6.4    Allocation of Shares to Participant.
		
	(a)
	Grant Date. The right to purchase shares in an Offering Period shall be granted to each Participant, automatically, without further action by the Company, on the first day of the Offering Period, which shall be defined as the Grant Date.

		
	(b)
	Exercise Date. A Participant’s right to purchase shares shall be exercised automatically, without any further action by the Participant or the Employer, on the Exercise Date, which is the last day of the Offering Period, if the Participant has made Stock Purchase Contributions for the relevant Offering.

		
	(c)
	Number of Shares Purchased on Exercise Date.

		
	(i)
	The actual number of shares purchased for each Participant on the Exercise Date shall be the largest number of whole shares that is less than or equal to the number determined by dividing the Purchase Price for that Offering Period into the amount of Stock Purchase Contributions accumulated for such Participant by the Exercise Date.

		
	(ii)
	If the total of all shares to be purchased by all Participants on an Exercise Date as computed pursuant to (i), above, exceeds the number of shares then available under the Plan, then all such purchases shall be adjusted proportionately to eliminate such excess, and the authorized Stock Purchase Contributions of each Participant, to the extent in excess of the aggregate Purchase Price 

4

payable for shares of Common Stock prorated to such individual, shall be refunded by the Plan or by an agent of the Plan.
		
	(iii)
	Notwithstanding anything to the contrary in this Section 6.4(c), (A) no more than 3,000 shares of Common Stock, subject to adjustment pursuant to Section 6.8, may be purchased by a Participant under this Plan during a calendar year, and (B) the Plan Administrator shall have the discretion to limit the maximum number of shares of Common Stock which may be purchased by a Participant for an Offering Period.

		
	(d)
	Purchase Price on Exercise Date. The Purchase Price per share for Common Stock on the Exercise Date will be established by the Plan Administrator prior to the start of the Offering Period, but in no event shall such Purchase Price be less than eighty-five percent (85%) of the lesser of the Fair Market Value per share of Common Stock (i) on the Grant Date and (ii) the Exercise Date of the Offering Period.

		
	(e)
	Payment. Payment for shares of Common Stock purchased under the Plan shall be made on the Exercise Date solely by deduction from the Participant’s accumulated Stock Purchase Contributions. To the extent that the Participant’s Stock Purchase Contributions exceed the price of the shares allocated to the Participant by more than the Purchase Price for a share of Common Stock (or, if the Participant has elected to suspend Stock Purchase Contributions, by any amount), such excess shall be refunded as soon as administratively feasible after the Exercise Date. To the extent that any amount of a Participant’s Stock Purchase Contributions is not used to purchase shares and is not refunded, such amount shall be applied as a Stock Purchase Contribution for the next Offering for which the Participant is eligible to begin after the Exercise Date.

		
	(f)
	Delivery to Individual Brokerage Account; Two-Year Holding Period. As soon as practicable after the end of each Offering Period, the shares of Common Stock purchased for a Participant pursuant to the Plan shall be delivered directly to an individual account established for such Participant with a brokerage firm selected by the Company (the “Individual Brokerage Account”). The date of such delivery is the Allocation Date. Except as otherwise provided below, the deposited shares may not be transferred from the Individual Brokerage Account to another account held in the name of the Participant until the end of a two (2) year period measured from the applicable Grant Date.

		
	(g)
	Transfer or Sale of Shares. Any shares held for the required, two-year holding period may thereafter be transferred to other accounts or to other brokerage firms. The procedures of these paragraphs (f) and (g) shall not in any way limit when the employee may sell, assign, transfer, pledge or otherwise dispose of his or her shares but are designed solely to assure that any disposition of shares prior to the satisfaction of the required holding period is made through the Individual Brokerage Account. In addition, the Participant may request a distribution of shares from his or her Individual Broker Account prior to the satisfaction of the required holding period if the Participant wishes to make a gift of any shares held in that account. Shares may not be transferred from the Individual Brokerage Account for use as collateral for a loan, unless those shares have been held for the required holding period. These procedures shall apply to all shares purchased by a Participant, whether or not that Participant continues in employee status.

		
	(h)
	No Rights as Shareholder Until Allocation Date. No Participant shall, by reason of the Plan or any rights granted pursuant thereto, or by the fact that there are Stock Purchase Contributions attributable to a Participant sufficient to purchase shares which the Participant has elected to purchase, have any rights of a stockholder of the Company until shares of Common Stock have been delivered to such Participant on the Allocation Date in the manner provided in Section 6.4(f).

6.5    No Transferability. No rights to Stock Purchase Contributions credited to a Participant under the Plan, nor any rights to purchase shares of Common Stock granted under the Plan to any Employee may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any attempt to assign, transfer, pledge or otherwise dispose of such rights or amounts shall be without effect.
6.6    Termination of Employment. If a Participant ceases to be employed by the Company or by a Participating Subsidiary for any reason, all rights to purchase stock granted to the Participant with respect to the then current Offering Period hereunder shall immediately cease (unless otherwise directed by the Plan Administrator in its sole discretion). The balance of 

5

Stock Purchase Contributions attributable to such a former Participant at such a time shall be refunded, either by the Plan or by an agent of the Plan, to the former Participant as soon as administratively practicable (or in the case of death, to the person or persons to whom the former Participant’s rights hereunder shall pass).
6.7    Leave of Absence. If a Participant ceases to remain in active service by reason of an approved, unpaid leave of absence that meets the requirements of Treasury Regulation Section 1.421-1(h)(2), then the Stock Purchase Contributions authorized by the Participant and collected to date on his or her behalf for that Offering Period shall be held for the purchase of shares on his or her behalf on the next scheduled Exercise Date. Upon the Participant’s return to active service his or her authorized Stock Purchase Contributions shall automatically resume at the rate in effect at the time the leave began, unless the individual withdraws from the Plan or modifies the then existing election prior to his or her return to active service.
6.8    Adjustments for Changes in Capitalization. If the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any (i) stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, subdivision or similar transaction, (ii) a merger, reorganization or consolidation, (iii) a reclassification or change in par value, or (iv) other extraordinary or unusual event affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution to its stockholders (each, a “Corporate Transaction”) then, subject to any required action by the stockholders of the Company, the number and kind of shares of Common Stock available under the Plan or subject to any limit or maximum hereunder shall automatically be proportionately adjusted, with no action required on the part of the Plan Administrator or otherwise to the extent necessary to prevent dilution or enlargement of the rights of Participants under the Plan. Any adjustments to outstanding Awards shall be consistent with Code Section 424, to the extent applicable.
6.9    $25,000 Limitation on Share Purchases Per Calendar Year.
		
	(a)
	A Participant may not purchase more than $25,000 of shares of Common Stock in any calendar year, based on the Fair Market Value per share of Common Stock at Grant Date.

		
	(b)
	If the Participant’s Stock Purchase Contributions exceed such limitation, then the excess shall be refunded as soon as administratively feasible after the Exercise Date.

		
	(c)
	In the event of any conflict between this Section 6.9 and other provisions of the Plan, this Section 6.9 shall control.

ARTICLE 7. MISCELLANEOUS
7.1    Effective Date; Term of Plan. The Plan is effective as of the Effective Date, subject to the Plan being approved by the stockholders of the Company within twelve months after the date the Plan is adopted by the Board. The Plan shall terminate on the earlier of (i) the termination of the Plan pursuant to Section 7.2 and (ii) when no more shares are available for issuance under the Plan.
7.2    Termination and Amendment of the Plan. The Plan may be terminated at any time by the Board. At any time prior to the termination of the Plan, the Board may make such changes and additions to the Plan as it shall deem advisable; provided, however, that except as provided in Section 6.8 or 4.2 hereof, the Board may not, without approval of the Company’s stockholders, increase the maximum number of shares issuable under the Plan or modify the eligibility requirements for participation in the Plan. If the Plan is terminated during an Option Period any Stock Purchase Contributions made with respect to that Option Period will be refunded to the Participants as soon as administratively feasible.
7.3    Change of Control. If the Company or its stockholders enter into an agreement to dispose of all or substantially all of the assets or outstanding capital stock of the Company by means of a sale, merger, or reorganization in which the Company will not be the surviving corporation (other than a reorganization effected primarily to change the state in which the Company is incorporated, a merger or consolidation with a wholly-owned Subsidiary, or any other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings, regardless of whether the Company is the surviving corporation) or in the event the Company is liquidated, then all outstanding purchase rights under the Plan shall automatically be exercised immediately prior to the consummation of such sale, merger, reorganization, or liquidation (deemed the Exercise Date for the Offering Period in such case), by causing all Stock Purchase Contributions credited to each Participant to be applied to purchase as many shares of Common Stock as possible pursuant to the procedure set forth in Section 6.4, treating the day before the date of such triggering event as the Exercise Date. Any remaining Stock Purchase Contributions after the purchase of shares shall be refunded to the Participants as soon as administratively feasible.

6

7.4    No Constraint on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company, any Subsidiary or any other affiliate, from taking any corporate action (including, but not limited to, the Company’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets) which is deemed by it to be appropriate, or in its best interest, whether or not such action would have an adverse effect on this Plan or any purchase rights granted under the Plan. No Participant, Employee, beneficiary, or other person, shall have any claim against the Company, any Subsidiary, or any of its other affiliates, as a result of any such action.
7.5    Special Circumstances.
		
	(a)
	If at any time the Board shall determine, in its discretion, that the listing, registration and/or qualification of shares of Common Stock upon any securities exchange or under any applicable laws, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of such shares hereunder, the Company shall have no obligation to allow the grant, exercise or payment of any purchase right, or to issue or deliver evidence of title for shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board.

		
	(b)
	If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to a purchase right is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company or any Subsidiary, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act of 1933, as amended, or otherwise with respect to shares of Common Stock. In any such case, the right to purchase shares of Common Stock under the Plan shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Subsidiary.

		
	(c)
	The Board may require each person receiving shares of Common Stock in connection with any Purchase Right to represent and agree with the Company in writing that such person is acquiring such shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Board may prescribe. The Board, in its absolute discretion, may impose such restrictions on the ownership and transferability of the shares of Common Stock purchasable or otherwise receivable by any person under any Purchase Right as it deems appropriate.

7.6    Participants Deemed to Accept Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board in any case in accordance with the terms and conditions of the Plan.
7.7    Rights of Participants; Not an Employment Contract. No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable agreement or offering document. The liability of the Company and any Subsidiary under the Plan is limited to the obligations expressly set forth in the Plan, and no term or provision of the Plan may be construed to impose any further or additional duties, obligations, or costs on the Company, any Subsidiary or any other affiliate thereof, or the Board not expressly set forth in the Plan. The grant of a Purchase Right under the Plan shall not confer any rights upon the Employee holding such Purchase Right other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Purchase Right, or to all Purchase Rights, or as are expressly set forth in any applicable agreement, offering document or sub-plan evidencing such Purchase Right. Without limiting the generality of the foregoing, the Plan does not and shall not be deemed to constitute a contract of employment with any Employee. Terms of employment and the right of the Company or any of its Subsidiaries to terminate the employment of any Employee, with or without cause, shall depend entirely upon the terms of employment otherwise existing between any Employee and the Company or any of its Subsidiaries without regard to the Plan.
7.8    Construction; Headings. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural. The word, “Section,” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires. The headings and captions appearing herein are inserted only as a matter of convenience. They do not define, limit, construe, or describe the scope or intent of the provisions of the Plan.

7

7.9    Indemnification of Board and Plan Administrator. In addition to such other rights
of indemnification as they may have, the Board and Plan Administrator shall be indemnified by the Company against all costs and expenses reasonably incurred by them in connection with any action, suit, or proceeding to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any rights granted thereunder and against all amounts paid by them in settlement thereof or in satisfaction of a judgment in any such action, suit or proceeding, except a judgment based upon a finding of bad faith. Upon the institution of any such action, suit or proceeding, the Board and the Plan Administrator shall notify the Company in writing, giving the Company an opportunity at its own cost to defend the same before such Board or Plan Administrator undertakes to defend the same on their own behalf.
7.10    Section 16 Requirements. Any other provisions of the Plan notwithstanding, to the extent that any Employee participating in the Plan is subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, such Employee’s participation in the Plan shall be subject to, and such Employee shall be required to comply with, any and all additional restrictions and/or requirements imposed by the Plan Administrator, in its sole discretion, in order to insure that the exemption made available pursuant to Rule 16b-3 is available with respect to all transactions pursuant to the Plan effected by or on behalf of any such Employee.
7.11    Claims Procedures. No action may be commenced by an individual against the Company with respect to causes of action arising under the Plan unless the individual first makes a claim to the Plan Administrator with respect to such matters. The Plan Administrator shall respond to any such claim within sixty (60) days. If the Plan Administrator’s response is adverse to the individual, then no action may be commenced by the individual unless the individual first appeals such adverse decision. Such appeal shall be considered by a representative of the Company other than the person or persons who considered the individual’s original claim and other than a subordinate of such person or persons. The Company’s response to the individual’s appeal shall be made within sixty (60) days.
7.12    Administrative Costs. The Company shall bear all costs and expenses incurred in administering the Plan, including expenses of issuing shares of Common Stock pursuant to Purchase Rights granted hereunder.
7.13    Severability. If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
7.14    Governing Law. The Plan shall be governed by, and all questions arising hereunder shall be determined in accordance with, the laws of the State of Hawaii.

8Confidential March 28, 2016

 

 

March 28, 2016

 

Farrah Khan

Karrah Inc.

620-25 Knigsbridge Garden Circle

Mississauga, ON

 

Dear Mrs. Khan:

 

This Letter of Intent (the "LOI") is made and entered
into as of the 28 day of March, 2016 between Precious Investments Inc. (hereinafter “PNIK”) a company formed under
the laws of the State of Nevada (hereinafter referred to as "PNIK"), and Karrah Inc.(hereinafter referred to as "Karrah
"), an Ontario Corporation.

 

The purpose of this letter is to set forth certain understandings
between PNIK and KARRAH . All parties hereto shall be bound by their individual rights and obligations with respect to the matters
contained herein. The contemplated transactions between PNIK and Karrah is as follows:

 

PNIK desires to acquire all the ownership shares of KARRAH and KARRAH
wishes to have ownership shares of KARRAH acquired by PNIK, on terms and conditions to be set forth in a Acquisition of Shares
Agreement (“ASA”) (the "Exchange" or "Exchange Offer"), so that KARRAH will become a wholly owned
subsidiary of the PNIK.

 

		1.	Precious Investments Inc. is a fully registered and current reporting company with the US Securities
and Exchange Commission (the “SEC”). 

 

		2.	Karrah is a Manufacturer and wholesaler of fine jewelry. Wholesaler of fine pre-owned, vintage
watches. Buyer of liquidations, bankruptcies and estates. Karrah also operates an e-commerce jewelry/watches web site under the
domain name: www.fifthand.com 

 

		3.	KARRAH insiders will then exchange 100% of their ownership shares in KARRAH for a 36 month 6%
interest Promissory Note in the amount of US$1,500,000

 

		4.	Both parties will strive to have the Acquisition of Shares Agreement (“ASA”) executed
no later than April 15, 2016. It is understood that the Karrah must complete two years audit and interim statement within 71 days
to the ASA being executed.

 

		5.	Karrah shall provide an up to date balance sheet and debt schedule and current list of inventory
and customers immediately after ASA is executed.

 

		6.	No material adverse change may occur in business (loss of a major order/client), operations,
or financial condition of Karrah which shall include:

 

                                                       
i.           
a material adverse change in the financial condition or creditworthiness of Karrah or any
guarantor, 

 

                                                     
ii.           
a material adverse effect relating to Karrah ’s ability to perform its obligations or
 responsibilities under any loan documents, and

 

                                                   
iii.           
a material adverse change concerning the validity or enforceability of any loan documents.

 

		7.	Karrah will undergo two years audit and interim financial statement prepared by an SEC qualified
auditor which must be filed within 71 days of executing the ASA. The cost will be covered by Karrah and PNIK.

 

This Letter of Intent shall be governed by and construed in accordance
with the laws of the State of Nevada, without giving effect to the principles of conflicts of law thereof.

 

 

If the foregoing correctly states the general understanding that
has been reached between us, please so indicate by signing in the space provided and returning this letters to us.

 

 

/s/ Kashif Khan

Kashif Khan, COO

PNIK International Inc.

 

 

 

/s/ Farrah Khan

Farrah Khan, CEO

Karrah Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}]]