Document:

Exhibit 10-2

 

DEVELOPMENT
AND LICENSE AGREEMENT BETWEEN MARKET

FINDERS
BROKERAGE, INC. AND DANIEL DAUGHERTY

 

This
Development and License Agreement (“Agreement”) is made as of January 1, 2009 between Daniel Daugherty (“Licensor”),
an individual residing at 625 Mountain Drive, South Orange, NJ 07079; and Market Finders Brokerage, Inc (“Licensee”),
a New Jersey corporation with its principal place of business at 627 Inwood Lane, South Orange, NJ 07079.

 

	1.		Development,
                                                                                      Manufacturing and Marketing of Product Line.

 

1.1     Development
by Licensor. Licensor shall develop for Licensee a line of beef meat balls with sauce, Italian sausage with sauce and other
similar Italian meats with sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and
collectively the “Licensor Products”). Licensor shall work with Licensee to develop Licensor Products that are acceptable
to Licensee. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients
for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to this Development
and License Agreement. Upon acceptance of each Licensor Product, the parties shall prepare an Appendix hereto which shall include
a description of such Licensor Product, the Recipe for such Licensor Product, and the date of acceptance of such Licensor Product,
and shall be signed by each of the parties.

 

1.2     Other
Products Not Subject to Agreement. Licensor acknowledges that Licensee has been, is currently, and will be engaged in the
business of developing, manufacturing, distributing, marketing and selling hors d’oeuvres and other prepared food products
that have been, are being and/or will be developed other than by Licensor, the recipes for which are not substantially derived
from the Recipes (collectively, “Other Products”). Subject to the Section 1.5 below, such Other Products shall not
be subject to this Agreement and Licensor shall have no rights with respect to such Other Products.

 

1.3     Manufacturing
and Marketing by Licensee. Subject to Section 4.4 below, Licensee, at its sole expense, shall: purchase raw materials and
packaging; develop nutritional information; develop package design; manufacture and inventory the Products; provide all marketing
materials including samples, literature, and participation in trade shows; market, advertise, sell, ship and support the Products;
invoice customers and collect invoices.

 

1.4     Licensee
Improvements. Subsequent to the acceptance of a Product and the execution by the parties of an Appendix in accordance with
Section 1.1 above, Licensee may make such modifications and changes to Recipes as Licensee may determine to be necessary or appropriate
(“Licensee Improvements”). All rights, title and interest in any Licensee Improvements shall be the sole and exclusive
property of Licensee.

 

    	 

    	 

    

 

1.5     Licensee
Products. Licensee in its sole and absolute discretion may, at any time and from time to time, use the MamaMancini Marks (as
defined in Section 6.1, below) in connection with marketing and selling Other Products. If and to the extent that Licensee uses
the MamaMancini Marks in connection with marketing and selling Other Products, such Other Products shall be referred to as “Licensee
Products” for purposes of this Agreement. Licensee Products, together with Licensor Products, shall be referred to as “Products”
for purposes of this Agreement. Licensee in its sole and absolute discretion may, at any time and from time to time, cease using
the MamaMancini Marks in connection with marketing and selling any or all Other Products in which event such Other Products shall
cease to be “Licensee Products” or “Products” for purposes of this Agreement.

 

2.     Grant
of License. Licensor hereby irrevocably grants to Licensee and Licensee’s affiliates, (a) a worldwide, exclusive, license
during the Exclusive Term (as defined in Section 3.1 below); and (b) a worldwide, non-exclusive, perpetual license thereafter
during the Non-Exclusive Term (as defined in Section 3.2 below), to utilize the Recipes to manufacture or have manufactured the
Licensor Products, and to sell and distribute the Licensor Products in all channels of distribution (including, without limitation,
wholesale, internet, retail, distributor, club store, mass market, specialty catalogue, and food service including national chains,
and caterers, restaurants and hotels). Such License shall include the right to sublicense. In addition, Licensor hereby irrevocably
grants to Licensee the worldwide, non-exclusive, perpetual, right to use all know-how (if any) related thereto (the “Know-How”)
including without limitation sources of ingredients, pricing, standards and methods for quality control, and procedures for preparing,
finishing, packaging and storing Licensor Products. The licenses granted under this Agreement are specifically set forth herein,
and Licensor grants no licenses to Licensee by implication or estoppel.

 

3.     Exclusive
Term; Non-Exclusive Term; Agreement Year. The term of this agreement (the “Term”) shall consist of the Exclusive
Term (as defined in Section 3.1 below) and the Non-Exclusive Term (as defined in Section 3.2 below). The 12-month period beginning
on each January 1 and ending on each December 31 is referred to herein as an “Agreement Year.”

 

3.1     Exclusive
Term. The “Exclusive Term” begins on the date hereof (the “Effective Date”) and ends on the 50th anniversary
of the Effective Date, unless terminated or extended as provided herein. Licensor, at its option, may terminate the Exclusive
Term by notice in writing to Licensee, delivered between the 60th and the 90th day following the end of any Agreement Year if,
on or before the 60th day following the end of such Agreement Year, Licensee has not paid Licensor Royalties (as defined
in Section 4.1, below) with respect to such Agreement Year at least equal to the minimum royalty described in Section 4 below
(the “Minimum Royalty”) for such Agreement Year. Subject to the foregoing sentence, and provided Licensee has not
breached this Agreement and failed to cure such breach in accordance herewith, Licensee may extend the Exclusive Term for an additional
twenty five (25) years, by notice in writing to Licensor, delivered on or before the 50th anniversary of the Effective
Date.

 

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3.2     Non-Exclusive
Term. The “Non-Exclusive Term” begins upon expiration of the Exclusive Term and continues indefinitely thereafter,
until terminated by Licensor due to a material breach hereof by Licensee that remains uncured after notice and opportunity to
cure in accordance herewith, or until terminated by Licensee.

 

3.3     Right
to Terminate. Nothing contained in this paragraph shall be construed as limiting the right of either party to terminate this
Agreement pursuant to Section 10 below.

 

4.      Royalties
and Payments.

 

4.1     Royalties.
During the Exclusive Term and the Non-Exclusive Term, subject to Section 4.13, Licensee will pay Licensor a royalty (each, a Royalty”
and, collectively, the “Royalties”) equal to the royalty rate (the “Royalty Rate”), multiplied by Licensee’s
“Net Sales” (as hereinafter defined) of Products. As used herein, “Net Sales” means gross invoiced sales
of Products, directly or indirectly to unrelated third parties, less (a) discounts (including cash discounts), and retroactive
price reductions or allowances actually allowed or granted from the billed amount (collectively “Discounts”); (b)
credits, rebates, and allowances actually granted upon claims, rejections or returns, including recalls (voluntary or otherwise)
(collectively, “Credits”); (c) freight, postage, shipping and insurance charges; (d) taxes, duties or other governmental
charges levied on or measured by the billing amount, when included in billing, as adjusted for rebates and refunds; and (e) provisions
for uncollectible accounts determined in accordance with reasonable accounting methods, consistently applied.

 

4.2     Royalty
Rate. The Royalty Rate shall be: 6% of Net Sales up to $500,000 of Net Sales for each Agreement Year; 4% of Net Sales from
$500,000 up to $2,500,000 of Net Sales for each Agreement Year; 2% of Net Sales from $2,500,000 up to $20,000,000 of Net Sales
for each Agreement Year; and 1% of Net Sales in excess of $20,000,000 of Net Sales for each Agreement Year.

 

4.3     Minimum
Royalties During Exclusive Term. In order to continue the Exclusive Term (as provided in Section 3.1 above), Licensee shall
pay Licensor a Minimum Royalty with respect to the preceding Agreement Year as follows:

 

	 	 	Minimum Royalty to be
	 	 	Paid with Respect to
	Agreement
    Year	 	Such
    Agreement Year
	lst
    and 2nd	 	$	0.00	 
	3rd and 4th	 	$	50,000.00	 
	5th,
    6th and 7th	 	$	75,000.00	 
	8th and 9th	 	$	100,000.00	 
	10th
    and thereafter	 	 	$125,000.00	 

 

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4.4     Payment
of Royalties. The Royalty owed Licensor shall be calculated on a quarterly calendar basis and shall be payable no later than
60 days following the close of each calendar quarter with respect to the preceding calendar quarter, as long as Licensee continues
to sell Products. Licensee shall furnish to Licensor complete and accurate statements in a form reasonably acceptable to Licensor,
signed by an officer of Licensee, indicating the number of Products sold, the number of Discounts and Credits (if any), and Royalties
due for each calendar quarter.

 

4.5     Duty
to Pay Royalty and Right to Terminate Exclusive Term Complete Satisfaction of Licensee’s Duty. Licensee’s duty
to pay the Royalty hereunder and Licensor’s right to terminate the Exclusive Term if Licensee does not pay Licensor the
Minimum Royalty, shall constitute complete satisfaction of any duty, whether express or implied, which could be imposed upon Licensee
to commercially exploit the Products. Licensor accepts this duty and right in lieu of any best efforts obligation or other standard
of diligence on the part of Licensee.

 

4.6     Accrual
of Royalty Obligation. Royalty obligation shall accrue upon the sale of the Products regardless of the time of collection
by Licensee. For purposes of this Agreement, a Product shall be considered “sold” upon the date when such Product
is billed, invoiced, shipped, or paid for, whichever event occurs first. Licensee shall be entitled to a credit for any subsequent
Discounts and Credits.

 

4.7     Effect
of Acceptance. The receipt or acceptance by Licensor of any Royalty statement or Royalty payment shall not prevent Licensor
from subsequently challenging the validity or accuracy of such statement or payment.

 

4.8     Survival
of Royalty Obligation. Licensee’s obligations for the payment of a Royalty shall survive expiration or termination of
this Agreement and will continue for so long as Licensee continues to manufacture, sell or otherwise market the Products.

 

4.9     Form
of Payment. All payments due hereunder shall be made in United States currency drawn on a United States bank, unless otherwise
specified between the parties.

 

4.10   Taxes.
In addition to any other payments due under this Agreement, Licensee agrees to reimburse and hold Licensor harmless from any sales,
use, excise, import or export, value added or similar tax or duty, any other tax not based on Licensor’s net income, and
any governmental permit and license fees, customs fees and similar fees levied upon delivery of the deliverables and/or services
hereunder which Licensor may incur in respect of this Agreement, except when such relate to the sale of Products by Licensor hereunder.

 

4.11   Interest.
Late payments shall incur interest at the rate of one half percent (.5%) per month from the date such payments were originally
due.

 

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4.12   Licensor
Efforts to Market Products. Licensor may purchase Product from Licensee, for sale directly to individual consumers, but not
to any other channel of distribution (including, without limitation, wholesale, internet, retail, distributor, club store, mass
market, specialty catalogue, and food service including national chains, and caterers, restaurants and hotels). Licensee shall
sell such Products to Licensor at a price that results in a gross profit (after freight and commissions) to Licensee equal to
40% of the total sales price (but in no event below Licensee’s cost). Such sales shall be excluded from “Net Sales”
(as such term is used in Section 4.1 above) for purposes of calculating Royalties due hereunder.

 

4.13   Licensor
Efforts to Support Licensee. Licensor will, as requested by Licensee, undertake the marketing and sales of the Products including
sales presentations, in store demonstrations, and consumer trade publicity, on a as need basis. Licensor will, as requested by
Licensee, provide such services not fewer than 80 hours per month. If Licensor is unable or unwilling (including, without limitation,
due to Licensor’s retirement, disability, or death) to provide such services during any Agreement Year then, notwithstanding
Sections 4.1 and 4.2 above, Royalties for such Agreement Year shall be limited to $200,000. The limitation on Royalties set forth
in the preceding sentence shall be Licensee’s sole remedy for Licensor’s failure to comply with this Section 4.13.

 

4.14   Licensor
Family History. Licensor grants full exclusive use of his family history to Licensee for the purposes of marketing the licensed
Recipes during the Exclusive Term of this Agreement.

 

6.
     Books and Records. Licensee and its affiliates shall keep accurate and complete books and
records as they relate hereto for three (3) years after the close of each Agreement Year. Licensor shall have the right, upon
at least five (5) days written notice and no more than once per calendar year, to cause its independent certified public accountants
to inspect Licensee’s books and records and all other documents and material in the possession of or under the control of
Licensee with respect to the subject matter of this Agreement at the place or places where such records are normally retained
by Licensee. Licensor shall have free and full access thereto for such purposes and shall be permitted to make copies thereof
and extracts therefrom. Such examination shall be at Licensor’s sole cost and expense provided that, if in an audit of Licensee’s
or any such affiliate’s records determines that there is a shortfall of five percent (5%) or more in Royalties reported
for any Agreement Year, Licensee shall reimburse Licensor for the reasonable fees of Licensor’s certified public accountants
incurred in connection with such audit. Further, in the event that such inspection reveals a discrepancy in the amount of Royalty
owed Licensor from what was actually paid, Licensee shall pay such discrepancy, plus interest, calculated at the rate of one half
percent (.5 %) per month. Any information discovered in such an inspection may be used in any proceeding based on Licensee’s
failure to pay its actual Royalty obligation.

 

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6.     Trademark
Rights; Ownership of Recipes and Licensee Improvements.

 

6.1     MamaMancini
Mark. Licensee is and shall be the sole and exclusive owner of all rights, title and interest in and to the trademarks and
designs using the “MamaMancini” name (collectively, the “MamaMancini Marks”), and all goodwill associated
therewith. Licensor hereby acknowledges that Licensee is the owner of the MamaMancini Marks, for use in connection with marketing
and selling the Products.

 

6.2     Ownership
of Recipes and Licensee Improvements. Except as expressly provided in this Agreement: (a) Licensor shall retain all right,
title and interest in the original Recipes; and (b) Licensee shall retain all right, title and interest in any Licensee Improvements.

 

6.3     Cooperation.
The parties agree to execute any documents reasonably requested by the other party to effect any of the above provisions.

 

6.4     Validity
of MamaMancini Marks. Licensor acknowledges that, to Licensor’s knowledge, the MamaMancini Marks are unique and original
to Licensee and that Licensee is the owner thereof. Licensor shall not, at any time during or after the effective Term, dispute
or contest, directly or indirectly, Licensee’s exclusive right and title to the MamaMancini Marks or the validity thereof.
Licensee, however, makes no representation or warranty with respect to the validity of any trademark or copyright that may issue
or be granted therefrom.

 

6.5     Secondary
Meaning of MamaMancini Marks. Licensor acknowledges that the MamaMancini Marks have acquired secondary meaning.

 

6.6     Trademark
Notices; Infringement Litigation. Licensee will control absolutely all infringement litigation brought against third parties
involving or affecting the Mama Mancini Marks. Licensor shall cooperate with Licensee in connection with all such litigation and
will be compensated by Licensee for costs associated with such cooperation. Licensee shall have the sole and exclusive right,
in its discretion, to institute and prosecute lawsuits against third persons for infringement of the MamaMancini Marks. All sums
recovered in any such lawsuits, whether by judgment, settlement or otherwise, shall be retained solely by Licensee. Licensor agrees
to fully cooperate with Licensee in the prosecution of any such suit against a third party and shall execute all papers, testify
on all matters, and otherwise cooperate in every way necessary and desirable for the prosecution of any such lawsuit. The Licensee
shall reimburse the Licensor for any costs associated with such cooperation.

 

7.     Representations
and Warranties. Licensor represents and warrants that (a) Licensor has exclusive right, title and interest in and to the Recipes
and the Know-How, including the right to license the Recipes and the Know-How to Licensee in accordance with the terms and conditions
of this Agreement; and (b) to Licensor’s knowledge the Recipes and the Know-How do not, and will not, infringe any trademark
or other intellectual property right of any third party.

 

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8.     Product
Liability Insurance. Licensee will obtain and maintain at its own expense products liability and personal injury liability
(including bodily injury and death) insurance in an amount not less than $2,000,000. Licensor shall not have any liability for
any deductible.

 

9.     Product
Quality, Safety & Inspection. Licensee shall comply with all applicable laws, regulations and standards, and shall manufacture
the Products utilizing best practices in a USDA approved facility, following the Recipes. Licensor shall have the right to monitor
and inspect the quality of the Product, at reasonable times and on reasonable notice, and prior to the commencement of manufacture
and sale of the Products.

 

10.    Termination;
Notice of Default; Right to Cure. Either party may terminate this Agreement in the event that the other party materially breaches
its obligations hereunder and fails to cure such material breach within sixty (60) days following written notice from the non-breaching
party specifying the nature of the breach. The following termination rights are in addition to the termination rights provided
elsewhere in this Agreement:

 

10.1     Termination
by Licensee. Licensee shall have the right to terminate this Agreement at any time on sixty (60) days written notice to Licensor.
In such event, all moneys paid to Licensor shall be deemed non-refundable.

 

11.    Post
Termination Rights.

 

11.1     Inventory.
Not less than thirty (30) days prior to the expiration of this Agreement or immediately upon termination thereof, Licensee shall
provide Licensor with a complete schedule of all inventory of Products then on-hand (the “Inventory”).

 

11.2     Right
to Sell Inventory. Upon expiration or termination of this Agreement, except for reason of a breach of Licensee’s duty
to comply with the quality control requirements, Licensee shall be entitled, for an additional period of three (3) months and
on a nonexclusive basis, to continue to sell such Inventory. Such sales shall be made subject to all of the provisions of this
Agreement and to an accounting for and the payment of a Royalty thereon. Such accounting and payment shall be due and paid within
thirty (30) days after the close of the said three (3) month period.

 

11.3     Reversion
of Rights. Upon the expiration or termination of this Agreement, except as set forth in this Section 11, Licensee’s
rights under this Agreement to the Products and Recipes shall forthwith terminate and immediately revert to Licensor and Licensee
shall immediately discontinue all use of the Recipes, at no cost whatsoever to Licensor. Notwithstanding the foregoing, Licensor
shall not have any rights to the MamaMancini Marks or to the Licensee Improvements, of which Licensee shall remain the sole and
exclusive owner.

 

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12.     Non-Competition.
During the Exclusive Term, Licensor shall not, whether as an individual, sole proprietor, employee, consultant, or advisor or
in any other capacity, engage in any business activity in competition with Licensee (except as expressly permitted herein). As
used herein, “activity in competition with Licensee” shall specifically mean manufacturing, or selling any hors d’oeuvres
in any channels of distribution (including, without limitation, wholesale, internet, retail, distributor, club store, mass market,
specialty catalogue, and food service including national chains, and caterers, restaurants and hotels), or assisting any other
person or entity to do so, except as provided in Section 4.12 above.

 

13.    Miscellaneous.

 

13.1.     Notices.
Notices hereunder shall be in writing, and served personally, sent by overnight delivery service or by messenger, or mailed postage
prepaid, return receipt requested in the U.S. mail, in each case against signature. Notices shall be effective and deemed delivered
when served personally, when delivered by overnight delivery service or by messenger, or three (3) business days after being mailed.
Notices shall be addressed to the parties at the following address, or such other address as may be provided by notice in accordance
herewith:

 

If to Licensor:

 

Daniel Daugherty

625 Mountain Drive

South Orange, NJ 07079

 

with a duplicate copy of all notices to:

 

If to Licensee:

 

Carl Wolf

Market Finders Brokerage,
Inc.

627 Inwood Lane

South Orange, NJ 07079

Telephone: 973 762
7986 office; 973 985 0280 cell

Fax: 973 556 1256

Email: cwolflakota@aol.com

 

with a duplicate copy
of all notices to:

 

Steven B. Greenapple

Steiker, Fischer, Edwards
& Greenapple, PC

6 South Street

Suite 201

Morristown, New Jersey
07960

Telephone: (973) 540-9292

Fax: (973) 540-9295

Email: sgreenapple@sfeglaw.com

 

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13.2.     Relationship.
This Agreement does not create an agency, partnership, or joint venture relationship between Licensor and Licensee.

 

13.3.     Construction.
This Agreement shall be construed pursuant to the laws of the State of New Jersey applicable to agreements entered into and fully
performed therein. Each party hereto agrees that the State and federal courts located in the State of New Jersey shall have exclusive
jurisdiction over any dispute arising in connection with this Agreement or the transactions contemplated hereby. Each party hereby
(i) submits to the personal jurisdiction of such courts and agrees that service of process may be made upon it in the manner in
which notices are given under paragraph 14.1 hereof; and (ii) waives any claim of improper venue or forum non conveniens
with respect to such action. EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY SUIT ARISING IN CONNECTION WITH THIS AGREEMENT.

 

13.4.     Partial
Invalidity. The invalidity of any provision of this Agreement shall not impair or affect the validity of the remaining portions
hereof, and this Agreement shall be construed as if such invalid provision had not been included herein.

 

13.5.     Confidentiality;
Non-Hiring/Non-Solicitation. Licensor and Licensee are prohibited from making disclosure of the financial terms of this Agreement
to any third party without prior written consent, provided, however, that disclosure may be made: (i) to the extent necessary
to comply with governmental disclosure requirements; (ii) to any financial or legal representatives, owners, parents, and partners;
and (iii) as may be necessary and appropriate in connection with the performance and enforcement of this Agreement, with the prior
written consent of the other party hereto. Any party to whom disclosure is made hereunder will likewise be bound by the terms
of this paragraph. Licensor and Licensee each agree that they shall not, directly or indirectly, hire or solicit to hire, as employees,
consultants, independent contractors, or in any other capacity, the employees, consultants, independent contractors employed or
contracted by the other.

 

13.6.     Entire
Agreement; Modifications; Waiver. This Agreement, including any Appendix hereto, expresses the entire understanding of the
parties hereto and replaces any and all former agreements, understandings, representations or warranties relating to the subject
matter hereof. No modification, alteration or amendment of this Agreement shall be valid or binding unless in writing and signed
by the party to be charged with such modification, alteration or amendment. No waiver of any term or condition of this Agreement
shall be construed as a waiver of any other term or condition; nor shall any waiver of any default under this Agreement be construed
as a waiver of any other default. Any failure or delay by Licensor to enforce any of its rights under this Agreement shall not
be deemed a continuing waiver or modification hereof.

 

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13.7.     
Prevailing Party’s Attorneys’ Fees. If either party hereto brings an action to enforce the terms hereof or
to declare rights hereunder, or for the enforcement of any judgment, the prevailing party in such action shall be entitled to
an award of reasonable costs of litigation including, without limitation, reasonable attorneys’ fees and costs, in such
amount as may be determined by the Court having jurisdiction in such action.

 

13.8.     Agreement
Binding On Successors. The provisions of the Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their heirs, administrators, successors and assigns.

 

13.9.     Assignability.
The license granted hereunder is personal to Licensee and shall not be assigned by any act of Licensee or by operation of law
unless in connection with a transfer of substantially all of the assets of Licensee or with the consent of Licensor.

 

Licensor and Licensee
have executed this Agreement as of the day and date first set forth above.

 

MARKET FINDERS BROKERAGE, INC.

 

	By:	/s/
    Marion F Wolf	 
	 	Marion F. Wolf, President	 
	 	 	 
	DANIEL DAUGHERTY	 
	/s/
    DANIEL DAUGHERTY	 

 

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Appendix
to Development and License Agreement 

 

Description
of Product:

 

Recipe for Product:

 

Date of acceptance of
Product:

 

MARKET MARKET FINDERS
BROKERAGE, INC.

 

	By:	/s/
    Marion F. Wolf	 
	 	Marion F. Wolf, President	 
	 	 	 
	DANIEL DAUGHERTY	 
	/s
    /DANIEL DAUGHERTY	 

 

    	11exh10_1.htm

  

  

Executive

EXHIBIT B

ALEXANDER & BALDWIN, INC.

 

 

PERFORMANCE SHARE UNIT AWARD AGREEMENT

RECITALS

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

 

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

 

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

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1. Grant of Performance Share Units.  The Corporation hereby awards to Participant, as of the Award Date, Performance Share Units under the Plan.  Each Performance Share Unit which vests pursuant to the terms of this Agreement shall provide Participant with the right to receive one or more shares of Common Stock on the designated issuance date for those shares.  The number of shares of Common Stock subject to the awarded Performance Share Units and the applicable performance-vesting requirements for those shares shall be as set forth in the Award Notice.  The remaining terms and conditions shall be as set forth in this Agreement.

 

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

 

	
 

  

  

  

 

3. Vesting Requirements.  The actual number of Shares that may vest and become issuable pursuant to the Performance Share Units subject to the Award shall be determined pursuant to a two-step process:  (i) first there shall be calculated the maximum number of Shares in which Participant can vest based upon the level at which the Performance Goal specified on Schedule I to the Award Notice is actually attained and (ii) then the number of Shares resulting from the clause (i) calculation in which Participant shall actually vest shall be determined on the basis of his or her completion of the applicable Service-vesting provisions set forth below.  Accordingly, the vesting of the Shares shall be calculated as follows:

 

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

 

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

 

(i)           If Participant continues in Service through the completion of the two (2)-year Performance Period, Participant shall vest in all of the Performance-Qualified Shares. The Shares underlying those particular Performance-Qualified Shares shall be issued to Participant during the period beginning with the first business day of the first calendar year following the completion of the Performance Period and ending on March 15th of that year. 

 

(ii)           If Participant ceases Service during the Performance Period by reason of Early Retirement, Normal Retirement, death or Permanent Disability, then Participant shall, upon the completion of such Performance Period, vest in a portion of the Performance-Qualified Shares determined by multiplying (x) the maximum number of Performance-Qualified Shares in which Participant would have vested, based on the actual level of Performance Goal attainment for the Performance Period, had Participant completed the two (2)-year Service vesting requirement set forth in subparagraph (i) above by (y) a fraction, the numerator of which is the number of months of actual Service completed by Participant in such Performance Period (rounded to the closest whole month), and the denominator of which is twenty-four (24) months.  The Shares underlying the Performance-Qualified Shares in which Participant vests in accordance with this subparagraph (ii) shall be issued to Participant during the period beginning with the first business day of the first calendar year following the completion of the Performance Period and ending on March 15th of that year.

 

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

 

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

 

4. Stockholder Rights and Dividend Equivalents

 

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

 

(b) Notwithstanding the foregoing, should any dividend or other distribution payable other than in shares of Common Stock be declared and paid on the Corporation’s outstanding Common Stock in one or more calendar years during which one or more Performance Share Units remain subject to this Award (i.e., the underlying Shares are not otherwise issued and outstanding for purposes of entitlement to the dividend or distribution), then a special book account shall be established for Participant and credited with a phantom dividend equivalent to the actual dividend or distribution that would have been paid on the maximum number of shares of Common Stock that can qualify as Performance-Qualified Shares under this Award, had that number of Shares been issued and outstanding and entitled to that dividend or distribution.  To the extent one or more Shares subsequently vest hereunder upon the satisfaction of the applicable vesting requirements for those Shares, the phantom dividend equivalents credited to those particular Shares in the book account shall vest, and those vested dividend equivalents shall be distributed to Participant (in the same form the actual dividend or distribution was paid to the holders of the Common Stock entitled to that dividend or distribution or in such other form as the Plan Administrator deems appropriate under the circumstances) concurrently with the issuance of those vested Shares.    

 

(c) To the extent the maximum number of Shares that can qualify as Performance-Qualified Shares under this Award is not in fact earned by reason of the level at which the Performance Goal is actually attained, then the phantom dividend equivalents credited to those unearned shares shall be cancelled, and Participant shall cease to have any right or entitlement to receive any distributions or other amounts with respect to those cancelled dividend equivalents.

 

(d) Should Participant cease Service without vesting in one or more of the Performance-Qualified Shares subject to this Award (including any Performance-Qualified Shares which do not otherwise vest at that time after taking into account any applicable vesting acceleration provisions set forth in this Agreement), then the phantom dividend equivalents credited to those unvested Performance-Qualified Shares shall be cancelled, and Participant shall thereupon cease to have any further right or entitlement to those cancelled amounts.

 

(e) Each distribution under Paragraph 4(b) shall be subject to the Corporation’s collection of the Withholding Taxes applicable to that distribution.

 

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

 

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

 

(i) The Performance-Vesting requirements of this Agreement shall terminate, and the assumption or continuation of this Award shall be effected in accordance with Paragraph 5(b) below on the basis of the number of Shares that would have been issuable under this Award had there been Target Level Attainment of the Performance Goal. The Service-vesting and issuance provisions of Paragraph 3(b) shall continue in effect with respect to the assumed or continued Award.

 

(ii) If Participant ceases Service prior to the completion of the Performance Period by reason of Early Retirement, Normal Retirement, death or Disability, then Participant shall, upon the closing of the Change in Control or (if later) such cessation of Service, vest in that number of Shares determined by multiplying (x) the number of Performance-Qualified Shares that would have resulted had the Corporation achieved the Performance Goal at Target Level Attainment and Participant completed the two (2)-year Service vesting requirement of Paragraph 3(b) by (y) a fraction, the numerator of which is the number of months of actual Service completed by Participant in such Performance Period (rounded to the closest whole month), and the denominator of which is twenty-four (24) months.  The Shares (or other securities into which such Shares are converted in connection with the assumption of this Award) in which Participant so vests shall be issued to Participant on the earlier of (i) the date the Shares would have otherwise been issued pursuant to the provisions of Paragraph 3(b)(ii) in the absence of such Change in Control or, should such cessation of Service occur after such Change in Control but within twenty-four (24) months after the closing of a Qualifying Change in Control, (ii) the date of Participant’s Separation from Service due to such cessation of Service.

 

(iii) Any cash retention account established in replacement of this Award shall initially be credited with the fair market value (at the effective time of the Change in Control) of the number of Shares that would have been issuable under this Award had there been Target Level Attainment of the Performance Goal, and interest shall accrue on the outstanding balance of such account, for the period commencing with the closing date of the Change in Control and continuing through the date of the final payment of the account, including any deferred payment date under Paragraph 9, at a variable per annum rate, compounded semi-annually, equal to the prime rate of interest as in effect from time to time during such period, as determined on the basis of the prime rate quotations published in The Wall Street Journal.  The cash retention account shall vest and be paid out in accordance with the Service-vesting and issuance provisions of Paragraph 3(b) or (to the extent applicable) in accordance with the pro-rata Service-vesting and issuance provisions of Paragraph 5(a)(ii) above. The Participant’s interest in the account shall at all times be that of a general, unsecured creditor.

 

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

 

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

 

(c) Upon Participant’s Separation from Service due to an Involuntary Termination occurring within twenty-four (24) months after a Change in Control in which this Award is assumed or continued in effect, Participant shall immediately vest in that number of Shares (or other securities into which such Shares are converted in connection with the assumption of this Award) equal to the Performance-Qualified Shares that would have resulted had the Corporation achieved the Performance Goal at Target Level Attainment and Participant completed the two (2)-year Service vesting requirement of Paragraph 3(b), and that number of Shares (or other securities) shall be issued to Participant on the earlier of (i) the date those Shares would have otherwise been issued pursuant to the provisions of Paragraph 3(b) in the absence of such Change in Control or, should such cessation of Service occur within twenty-four (24) months after the closing of a Qualifying Change in Control, (ii) the date of Participant’s Separation from Service (if earlier) due to such cessation of Service. Should this Award be replaced with a cash retention account in accordance with Paragraph 5(a), then that account shall vest upon Participant’s Separation from Service due to the Involuntary Termination, provided and only if such Involuntary Termination occurs within twenty-four (24) months following the Change in Control. Such vested balance, together with all accrued interest thereon through the actual payment date, shall be distributed, as to each Share to which the cash retention account pertains, on the earlier of (x) the date that Share would have otherwise been issued pursuant to the Service-vesting and issuance provisions set forth in Paragraph 3(b) in the absence of such Change in Control or (y) the date of Participant’s Separation from Service, provided such Separation from Service occurs within twenty-four (24) months after a Qualifying Change in Control. Except for the number of Shares and the cash retention balance distributed in accordance with the foregoing provisions of this Paragraph 5(c), Participant shall have no further right or entitlement to any additional Shares or other cash amounts hereunder upon such Separation from Service.

 

(d) If the Award is not assumed by the successor entity or otherwise continued in effect or replaced with a cash retention account in accordance with Paragraph 5(a), then the following provisions shall apply in the event the Change in Control is effected prior to the completion of the Performance Period:

 

(i) If Participant continues in Service through the effective date of the Change in Control, then Participant shall, upon the closing of such Change in Control, vest in that number of Shares equal to the Performance-Qualified Shares that would have resulted had the Corporation achieved the Performance Goal at Target Level Attainment and Participant completed the two (2)-year Service vesting requirement of Paragraph 3(b). The Shares in which Participant so vests shall be converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of the Change in Control. Such consideration per Share shall be distributed to Participant on the earliest to occur of (x) the date the Share would have otherwise been issued pursuant to the Service-vesting and issuance provisions set forth in Paragraph 3(b) in the absence of such Change in Control, (y) the date of Participant’s Separation from Service, provided such Separation from Service occurs within twenty-four (24) months after a Qualifying Change in Control, or (z) the first date following a Qualifying Change in Control transaction on which the distribution can be made without contravention of any applicable provisions of Code Section 409A.

 

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

 

(iii) If Participant ceases Service prior to the effective date of the Change in Control by reason of Early Retirement, Normal Retirement, death or Disability then Participant shall, upon the closing of such Change in Control, vest in that number of  Shares determined by multiplying (x) the number of Performance-Qualified Shares that would have resulted had the Corporation achieved the Performance Goal at Target Level Attainment and Participant completed the two (2)-year Service vesting requirement of Paragraph 3(b) by (y) a fraction, the numerator of which is the number of months of actual Service completed by Participant in such Performance Period (rounded to the closest whole month), and the denominator of which is twenty-four (24) months. The Shares in which Participant so vests shall be  converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of the Change in Control. Such consideration per Share shall be distributed to Participant on the earlier of (A) the date the Share would have otherwise been issued pursuant to the provisions of Paragraph 3(b)(ii) in the absence of such Change in Control or (B) the first date following a Qualifying Change in Control transaction on which the distribution can be made without contravention of any applicable provisions of Code Section 409A.

 

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

 

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

 

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

 

8. Issuance of Vested Shares and Applicable Withholding Taxes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13. Construction.

 

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

 

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

 

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

 

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

 

15. Coverage under Recoupment Policy. If Participant is on the Award Date, or at any time thereafter becomes, either an executive officer of the Corporation subject to Section 16 of the 1934 Act, or a participant in the Corporation’s Performance Improvement Incentive Plan, then Participant shall be subject to the Alexander & Baldwin, Inc. Policy Regarding Recoupment of Certain Compensation, effective as of June 29, 2012 (the “Recoupment Policy”), the terms of which are hereby incorporated herein by reference and receipt of a copy of which Participant hereby acknowledges.  If Participant is subject to the Recoupment Policy, then any incentive compensation that is paid or granted to, or received by, Participant on or after June 29, 2012 (including any incentive compensation that is paid to, or received by, Participant on or after June 29, 2012 pursuant to an incentive compensation award made to Participant prior to June 29, 2012, whether by the Corporation or any predecessor entity) and during the three-year period preceding the date on which the Corporation is required to prepare an accounting restatement due to material non-compliance with any applicable financial reporting requirements under the federal securities laws shall be subject to recovery and recoupment pursuant to the terms of such policy.  For purposes of such Recoupment Policy, “incentive compensation” means any cash or equity-based award (e.g., stock award, restricted stock unit award, performance share unit award or stock option grant or shares of Common Stock issued thereunder) or any profit sharing payment or distribution that is based upon the achievement of financial performance metrics.  An additional copy of the Recoupment Policy is available upon request made to the Corporate Secretary at the Corporation’s principal offices.

 

 

 

	
 

  

  

  

APPENDIX A

 

 

DEFINITIONS

 

The following definitions shall be in effect under the Agreement:

 

A. Agreement shall mean this Performance Share Unit Award Agreement.

 

B. Award shall mean the award of performance share units made to Participant pursuant to the terms of this Agreement.

 

C. Award Date shall mean the date the Performance Share Units are awarded to Participant pursuant to the Agreement and shall be the date specified in the Award Notice.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

X. Performance-Qualified Shares shall mean the maximum number of Shares in which Participant can vest based on the level at which the Performance Goal for the Performance Period is attained and shall be calculated in accordance with the provisions of the Award Notice.  In no event shall the number of such Performance-Qualified Shares exceed one hundred fifty percent (150%) of the designated number of Performance Share Units set forth in the Performance Share Units section of the Award Notice.  Each Performance-Qualified Share that vests pursuant to the terms of the Award shall entitle Participant to receive one Share.

 

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

 

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

 

AA. Plan shall mean the Corporation’s 2012 Incentive Compensation Plan.

 

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

 

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

 

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

 

EE. Service shall mean Participant’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Participant shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for which Participant performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently continue to perform services for that entity. Service as an Employee shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that the following special provisions shall be in effect for any such leave:

 

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

 

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

 

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

 

(iv) Notwithstanding anything to the contrary in the provisions of this Service definition, Participant shall in all events be deemed to cease Service for purpose of this Award immediately upon Participant’s incurrence of a Separation from Service.

 

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

 

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

 

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

 

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

 

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

 

 

 

 

	
 

  

  

  

SCHEDULE I

 

ILLUSTRATION OF VESTING CALCULATIONS

 

The following examples are for illustration purposes only:

 

1. Participant receives an Award for 2,000 Shares at Target Level and Participant continues in Service until the completion of the two (2)-year Performance Period. If the Performance Goal is attained at the Target Level, Participant shall vest in all 2,000 Shares following the completion of the Performance Period. If the Performance Goal is attained at the Extraordinary Level, Participant shall vest in an additional 1,000 Shares for a total of 3,000 Shares following the completion of the Performance Period, provided he or she continues in Service through the completion of the Performance Period.

 

2. Participant receives an Award for 2,000 Shares at Target Level and Participant ceases Service due to Permanent Disability halfway through the Performance Period.  If the Performance Goal is attained at the Target Level, Participant shall vest in 1,000 Shares.   On the other hand, if the Performance Goal is attained at the Extraordinary Level, Participant shall vest in an additional 500 Shares for a total of 1,500 Shares.

 

3. Participant receives an Award for 2,000 Shares at Target Level and Participant continues in Service through the completion of the two (2)-year Performance Period.   If the Performance Goal is attained at a point halfway between the Threshold and Target Levels, Participant would vest in 1,350 Shares following the completion of the Performance Period.  On the other hand, if the Performance Goal is attained at a point halfway between the Target and Extraordinary Levels, Participant would vest in 2,500 Shares following the completion of the Performance Period.

 

4.  Participant receives an Award for 2,000 Shares at Target Level and Participant ceases Service due to Permanent Disability halfway through the Performance Period.  If the Performance Goal is attained at a point halfway between the Threshold and Target Levels, Participant would vest in 675 Shares following the completion of the Performance Period.  On the other hand, if the Performance Goal is attained at a point halfway between the Target and Extraordinary Levels, Participant would vest in 1,250 Shares following the completion of the Performance Period.

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