Document:

HEI Exhibit 10.6(e)

 

RESTRICTED STOCK UNIT AGREEMENT

PURSUANT TO

THE 2010 EQUITY AND INCENTIVE PLAN

OF

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

This Restricted Stock Unit Agreement (“Agreement”) is made and entered into as of [Date] (the “Date of Grant”), by and between Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Company”), and [Name] (the “Employee”). Capitalized terms not defined herein shall have the meanings assigned to them in the 2010 Equity and Incentive Plan of Hawaiian Electric Industries, Inc., as amended (the “Plan”).

 

WHEREAS, the Compensation Committee of the Company’s Board of Directors or a subcommittee thereof (hereinafter referred to as the “Committee”), appointed to administer the Plan, has determined that it would be to the advantage and best interest of the Company and its shareholders to grant to the Employee restricted stock units pursuant to the Plan as an inducement to the Employee to remain in the service of the Company or its Subsidiaries and as a long-term incentive for sustained high levels of performance for the Company and its Subsidiaries; and

 

WHEREAS, the Committee has instructed the Company to issue said restricted stock units as authorized under the Plan, pursuant to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Number of Units.  The Company hereby grants to the Employee [number of units] restricted stock units (the “Restricted Stock Units”), subject to all of the terms and conditions of this Agreement and the Plan.

 

2.                                       Lapse of Restrictions; Settlement.  Subject to Section 4 below, the restrictions with respect to the Restricted Stock Units shall lapse in accordance with the schedule attached hereto as Exhibit A.  Upon the lapse of restrictions relating to a Restricted Stock Unit, the Company shall, no later than sixty (60) days following the date on which such restrictions lapse, issue to the Employee (or the Employee’s beneficiary designated on the form attached hereto as Exhibit B, as the case may be), net of any withholding for taxes in accordance with Section 8 below, one share of Common Stock (in either certificated or book entry form) in settlement of each Restricted Stock Unit with respect to which such restrictions have lapsed.

 

3.                                       Adjustments and Modifications.  In the event of a Change in Capitalization, an appropriate and proportionate equitable adjustment shall be made in accordance with Section 6 of the Plan in the number of Restricted Stock Units subject to this Agreement. The Company will make cash payments in settlement of any fractional shares at the time the shares of Common Stock are issued.  This Agreement may also be modified, in the discretion of the Committee, both with regard to the Vesting Schedule attached as Exhibit A hereto and termination, by leaves

 

 

of absence, changes from full to part time employment, partial disability or other changes in Employee’s status.

 

4.                                       Termination of Service.

 

(a)                                  If the Employee’s employment or service with the Company or any Subsidiary is terminated for any reason (including, but not limited to, voluntary termination by Employee and termination of Employee without Cause, including, but not limited to, termination due to elimination of Employee’s position) other than death, Disability or Retirement, the Employee shall forfeit any or all of the Restricted Stock Units for which the restrictions have not yet lapsed (the “Unvested Units”).

 

(b)                                 If the Employee’s employment or service with the Company or any Subsidiary is terminated by reason of death, Disability or Retirement, then (i) restrictions based on Performance Goals, if any, shall lapse based on actual performance during the full performance period and (ii) restrictions based on lapse of time shall be deemed to have lapsed pro-rata based on a ratio in which the numerator is the number of completed months from the Date of Grant to the date of termination and the denominator is the total number of months from the Date of Grant to the date the restrictions lapse in accordance with the schedule set forth in Exhibit A hereto, and the Employee shall forfeit all remaining Unvested Units.  As used in this Agreement, a “month” is a calendar month, and a “completed month” requires employment or service from the first day through the last day of the month.  However, in that calendar month in which the Restricted Stock Units are granted, a completed month only requires employment or service from the Date of Grant through the last day of that month.

 

(c)                                  Except as provided in Sections 4(a) and 4(b) hereof, the restrictions on Unvested Units shall otherwise terminate in accordance with the schedule for the lapse of the restrictions set forth in Exhibit A hereto.

 

5.                                       Notices.  All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery, facsimile or first class mail and shall be deemed to have been duly given upon hand delivery, or three days after mailing or 24 hours after transmission by facsimile.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary and any notice to be given to the Employee shall be addressed to him at the address given beneath his signature hereto.  By a notice given pursuant to this Section 5, either party may hereafter designate a different address for notices to be given to such party.  Any notice which is required to be given to the Employee shall, if the Employee is then deceased, be given to the Employee’s personal representative if such representative has previously informed the Company of his status and address by written notice under this Section 5.

 

6.                                       Rights as a Stockholder.  Subject to the restrictions set forth in the Plan and this Agreement, the Employee shall not have any of the rights or privileges of a stockholder of the Company with respect to the Restricted Stock Units granted pursuant to this Agreement unless and until shares of Common Stock have been issued and delivered to the Employee following the lapse of restrictions on such Restricted Stock Units.  Notwithstanding the foregoing, the Employee shall have the right to receive dividends with respect to the Restricted Stock Units,

 

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which dividends shall accumulate and be paid upon the delivery of the underlying shares of Common Stock in accordance with Section 2 hereof.  The dividends shall be calculated as follows:  on each date that a cash dividend is paid by the Company while the Restricted Stock Units are outstanding, the Employee shall be credited with an amount in cash equal to the aggregate dollar amount of the cash dividends that would have been paid on the Restricted Stock Units had the Restricted Stock Units been issued as shares of Common Stock on the date of the dividend. The amount of the cash dividends credited to the Employee pursuant to this Section 6 shall be subject to the same terms and conditions as are applicable to the Restricted Stock Units awarded hereunder (including without limitation as to time of vesting and payment) and may be reduced to satisfy any or all of the Employee’s tax liabilities owed in connection with the Restricted Stock Units granted pursuant to this Agreement.

 

7.                                       Protections Against Violations of Agreement.  No purported sale, assignment, mortgage, hypothecation, alienation, transfer, pledge, encumbrance, gift, transfer in trust or other disposition of, or creation of a security interest in or lien on, any of the Restricted Stock Units (or the underlying shares of Common Stock) by any holder thereof in violation of the provisions of this Agreement or the Plan will be valid, and the Company will not transfer any of such Restricted Stock Units on its books (or issue shares of Common Stock in settlement thereof), nor will any dividends be credited with respect thereto, unless and until there has been full compliance with such provisions to the satisfaction of the Company. The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce said provisions.

 

8.                                       Taxes.  Upon the lapse of restrictions with respect to the Restricted Stock Units (and/or any later settlement thereof), the Company shall withhold from the shares of Common Stock issued and cash dividends otherwise payable to the Employee an amount of taxes that the Company determines is the statutory minimum it is required to withhold under applicable tax laws with respect to the Restricted Stock Units and any cash dividends payable.  The amount withheld shall first be deducted from the cash dividends payable and, to the extent insufficient, then from the Common Stock that would otherwise be issued to the Employee.  The number of shares required to be withheld shall be based on the Fair Market Value of the Common Stock on the settlement date.  Any fractional share of Common Stock resulting from such withholding shall be paid in cash.

 

Upon the Employee’s attainment of Retirement eligibility before the lapse of restrictions, any employment taxes thereafter (but prior to the lapse of restrictions) payable by the Employee shall be satisfied by withholding from the Employee’s regular salary payable immediately following the date the employment tax obligation arises (and, to the extent insufficient, by cash payment by the Employee).

 

9.                                       Failure to Enforce Not a Waiver.  The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

 

10.                                 Governing Law.  This Agreement shall be governed by and construed according to the laws of the State of Hawaii without regard to its principles of conflict of laws.

 

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11.                                 Incorporation of Plan.  The Plan is hereby incorporated by reference and made a part hereof, and the Restricted Stock Units and this Agreement shall be subject to all terms and conditions of the Plan.

 

12.                                 Entire Agreement; Relationship to the Plan.  This Agreement and the Plan set forth the sole entire agreement and understanding between the parties as to the subject matter hereof, and merge with and supersede all prior and contemporaneous discussions, agreements and understandings of every and any nature between them with respect to the subject matter hereof.  Except to the extent provided in Section 3 or 15 hereof, and except to the extent that provisions hereof are by their terms subject to any subsequent amendment of the Plan, this Agreement may not be changed or modified, except by agreement in writing, signed by the Company and the Employee.  In the event of any conflict or inconsistency between this Agreement and the Plan as written on the Date of Grant, the Plan shall govern.

 

13.                                 Survival of Terms.  This Agreement shall apply to and bind the Employee, the Employee’s heirs, legatees, executors and administrators, the Company and the Company’s legal successors.

 

14.                                 Agreement Not a Contract for Services.  Neither the Plan, the granting of the Restricted Stock Units, this Agreement nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Employee has a right to continue to provide services as an officer, director, employee, consultant or advisor of the Company or any Subsidiary or Affiliate of the Company for any period of time or at any specific rate of compensation, or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are hereby expressly reserved, to discharge the Employee at any time for any reason whatsoever, with or without Cause.

 

15.                                 Authority of the Committee.  The Committee shall have full authority to interpret and construe the terms of the Plan and this Agreement. The determination of the Committee as to any such matter of interpretation or construction, including, without limitation, as to any adjustment or related matter under Section 3 hereof or any matter under Section 4 hereof, shall be final, binding and conclusive.

 

16.                                 Representations.  The Employee has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. The Employee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Employee understands that he or she (and not the Company) shall be responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement.

 

17.                                 Acceptance.  The Employee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Employee has read and understands the terms and provisions thereof, and accepts the Restricted Stock Units subject to all of the terms and conditions of the Plan and this Agreement. The Employee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement.

 

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18.                                 Committee Action.  Execution of this Agreement by the Chair or other member of the Committee signifies that this Agreement, the award of Restricted Stock Units made hereby and the conditions upon which the restrictions on the Restricted Stock Units shall lapse or be satisfied have been approved by the Committee either at a meeting of the Committee or by the unanimous written consent of its members.

 

19.                                 Section 409A.  To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A (“Section 409A”) of the Code.  This Agreement will be administered and interpreted in a manner consistent with this intent, and any provision that would cause this Agreement to fail to satisfy Section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Section 409A).  Notwithstanding anything contained herein to the contrary, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payments shall be due to the Employee under this Agreement which are payable upon the Employee’s termination of employment unless the Employee would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A.  To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Agreement during the six-month period immediately following the Employee’s termination of employment shall instead be paid on the first business day after the date that is six months following the Employee’s termination of employment (or upon the Employee’s death, if earlier).

 

20.                                 Severability.  If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; provided, however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed so as to foster the intent of this Agreement and the Plan and to avoid any such finding of invalidity, illegality or unenforceability.

 

21.                                 Headings.  Headings in this Agreement are used solely for the convenience of the parties and shall not be deemed to be a limitation upon or descriptive of the contents of any Section hereof.

 

22.                                 No Limit on Other Arrangements.

 

(a)                                  Nothing contained in this Agreement shall be construed to prevent the Company or any Subsidiary thereof from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of any type of equity-based award (subject to stockholder approval if such approval is required).

 

(b)                                 Nothing contained in this Agreement shall be construed to prevent the Company or any Subsidiary thereof from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Restricted Stock Units granted under this Agreement.  No employee, beneficiary or other person

 

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shall have any claim against the Company or any subsidiary thereof as a result of any such action.

 

23.                                 Signature in Counterparts.  This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the Date of Grant.

 

	
 
    	
HAWAIIAN ELECTRIC   INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Chair or Member of   the Compensation Committee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Senior Vice   President, General Counsel,
   Secretary & Chief Administrative Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Employee’s Name: [Name]
    
	
 
    	
 
    
	
 
    	
Employee’s Social   Security Number: [SSN]
    
	
 
    	
 
    
	
 
    	
Employee’s   Address:
    

 

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Exhibit A

 

VESTING SCHEDULE

 

Subject to Sections 10 and 12 of the Plan and Section 4 of the Agreement to which this Exhibit A is attached, the restrictions on the Restricted Stock Units granted pursuant to this Agreement shall lapse if:

 

Employee is continually employed by the Company or its Subsidiaries from the Date of Grant through [DATE][.][;and]

 

[The following Performance Goals are met:  PERFORMANCE GOALS.]

 

 

Exhibit B

 

BENEFICIARY DESIGNATION

 

This beneficiary designation is made in accordance with the Agreement to which this Exhibit B is attached, the Employee hereby makes an:

 

o  INITIAL DESIGNATION OF BENEFICIARY

 

OR

 

o  REVISED DESIGNATION OF BENEFICIARY

 

I hereby direct that, in the event of my death prior to delivery of the stock certificates contemplated to be delivered by the Agreement to which this Beneficiary Designation is attached, such stock certificates be issued in the name of and be delivered to, and any cash amounts payable in accordance with the Agreement be paid to:

 

	
Name
    	
Relationship
    
	
 
    	
 
    
	
Address
    	
 
    
	
 
    	
 
    
	
Social Security No.
    	
Date of Birth
    

 

This beneficiary designation revokes any and all other beneficiary designations under the Agreement made prior to the date of this designation.

 

By signing below, I acknowledge that I have read and understood the foregoing.

 

	
Signed by
    	
 
    	
 
    	
Date
    	
 
    
	
Employee
    	
 
    
	
 
    	
 
    
	
Receipt acknowledged
    	
 
    
	
Hawaiian Electric Industries, Inc.
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    	
DateHEI Exhibit 10.13

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

 

1990 Nonemployee Director Stock Plan

 

As Amended and Restated: May 6, 2008

 

1.    Purposes of the Plan

 

The purposes of this Hawaiian Electric Industries, Inc. 1990 Nonemployee Director Stock Plan are to provide participating directors with additional incentives to improve the Company’s performance by increasing the level of stock owned by such nonemployee directors to reinforce the participating directors’ role in enhancing shareholder value, and to provide an additional means of attracting and retaining such nonemployee directors through the issuance of Common Stock under the Plan as compensation to Nonemployee Directors. As amended and restated herein, this Plan incorporates all amendments effective on or before May 6, 2008, including provisions formerly memorialized in the Hawaiian Electric Industries, Inc. 1999 Nonemployee Company Director Stock Grant Plan, which is hereby superseded.

 

2.    Definitions

 

When used herein, the following terms shall have the respective meanings set forth below:

 

(a) “Annual Retainer” means the annual fee payable to all Nonemployee Company Directors and Nonemployee Participating Company Directors as provided in Section 6 below (exclusive of any expense reimbursements).

 

(b) “Annual Meeting of Shareholders” means the annual meeting of shareholders of the Company, or any Participating Company, at which directors of the Company or the Participating Company, as the case may be, are elected.

 

(c) “Board” means the Board of Directors of the Company.

 

(d) “Committee” means the Compensation Committee of the Board or such other committee appointed from time to time by the Board to administer the Plan in accordance with Section 4(a) hereof, including a Nonemployee Director Subcommittee (a subcommittee of nonemployee directors, “nonemployee director” as defined under Rule 16b-3(3)(i) of the Securities Exchange Act of 1934).

 

(e) “Common Stock” means the common stock, without par value, of the Company.

 

(f) “Company” means Hawaiian Electric Industries, Inc., a Hawaii corporation, and any successor corporation.

 

(g) “Employee” means any officer or employee of the Company or any of its direct or indirect subsidiaries or affiliates (whether or not such subsidiary or affiliate participates in the Plan).

 

 

(h) “Nonemployee Company Director” means any person who is elected or appointed to the Board of Directors of the Company and who is not an employee.

 

(i) “Nonemployee Participating Company Director” means any person who is elected or appointed to the Board of Directors of any one or more Participating Companies and who is not an Employee.

 

(j) “Participating Company” means any direct or indirect subsidiary or affiliate of the Company whose participation in the Plan has been approved by the Board.

 

(k) “Plan” means the Company’s 1990 Nonemployee Director Stock Plan, as amended and restated as set forth herein, as it may be further amended from time to time.

 

(l) “Stock Payment” means the grant of shares of Common Stock to Nonemployee Company Directors or Nonemployee Participating Company Directors for services rendered as a director of the Company or a Participating Company, as provided in Section 7 hereof.

 

3.    Shares of Common Stock Subject to the Plan

 

Subject to adjustment as provided in Section 9 below, the maximum aggregate number of shares of Common Stock that may be issued under the Plan, when taken together with any shares ever granted under the provisions of the Hawaiian Electric Industries, Inc. 1999 Nonemployee Company Director Stock Grant Plan, is 300,000 shares. The Common Stock to be issued under the Plan will be made available from authorized but unissued shares of Common Stock, and the Company shall set aside and reserve for issuance under the Plan said number of shares.

 

4.    Administration of the Plan

 

(a) The Plan will be administered by the Committee, which will consist of three or more Nonemployee Company Directors.  Members of the Committee need not be members of the Board. The Company shall pay all costs of administration of the Plan.

 

(b) Subject to the express provisions of the Plan, the Committee has and may exercise such powers and authority of the Board as may be necessary or appropriate for the Committee to carry out its functions under the Plan. Without limiting the generality of the foregoing, the Committee shall have full power and authority (i) to determine all questions of fact that may arise under the Plan, (ii) to interpret the Plan and to make all other determinations necessary or advisable for the administration of the Plan, and (iii) to prescribe, amend, and rescind rules and regulations relating to the Plan, including, without limitation, any rules which the Committee determines are necessary or appropriate to ensure that the Company, each Participating Company and the Plan will be able to comply with all applicable provisions of any federal, state or local law, including securities laws and laws relating to the withholding of tax. All interpretations, determinations, and actions by the Committee will be final, conclusive, and binding upon all parties. Any action of the Committee with respect to the administration of the Plan shall be taken pursuant to a majority vote at a meeting of the Committee (at which members may participate by telephone) or by the unanimous written consent of its members.

 

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(c) Neither the Company, nor any Participating Company, nor any representatives, employees or agents of the Company or any Participating Company, nor any member of the Board or the Committee or any designee thereof will be liable for any damages resulting from any action or determination made by the Board or the Committee with respect to the Plan or any transaction arising under the Plan or any omission in connection with the Plan in the absence of willful misconduct or gross negligence.

 

5.    Participation in the Plan

 

(a) All Nonemployee Company Directors and Nonemployee Participating Company Directors shall participate in the applicable provisions of the Plan, subject to the conditions and limitations of the Plan, so long as they remain eligible to participate in the Plan.

 

(b) Nonemployee Company Directors and Nonemployee Participating Company Directors shall be eligible for Annual Retainers pursuant to the terms of Section 6 of the Plan and for Stock Payments pursuant to the terms of Section 7 of the Plan.

 

6.    Determination of Nonemployee Directors’ Annual Retainers

 

The Committee shall meet annually to determine the Annual Retainer for all Nonemployee Directors, subject to approval by the Board. Unless there are material changes in the duties of a Nonemployee Company Director or a Nonemployee Participating Company Director during the course of any calendar year, the Annual Retainer shall not be determined more than once each calendar year. The Annual Retainer shall be paid to each Nonemployee Company Director and each Nonemployee Participating Company Director by the respective company for which the person serves as a director. The Annual Retainer shall be paid at such times and in such manner as may be determined by the Board or the Committee.

 

7.    Determination of Nonemployee Directors’ Stock Payments

 

(a) Each Nonemployee Company Director who serves in that capacity immediately following the date of the Annual Meeting of Shareholders of the Company shall receive, in addition to the Annual Retainer payable to such Nonemployee Company Director, a Stock Payment equal to one thousand eight hundred (1,800) shares of Common Stock for serving as a Nonemployee Company Director (two thousand (2,000) shares in the case of the first Stock Payment to a Nonemployee Company Director pursuant to this sentence). Each Nonemployee Participating Company Director (who is not also a director of the Company) who serves in that capacity immediately following the date of the Annual Meeting of Stockholders of one or more Participating Companies shall receive, in addition to the Annual Retainer payable to such Nonemployee Participating Company Director, a Stock Payment equal to one thousand (1,000) shares of Common Stock for serving as a Nonemployee Participating Company Director. Each Director who during any calendar year becomes a Nonemployee Company Director or Nonemployee Participating Company Director for the first time, other than at the Annual Meeting of Shareholders (whether by election or appointment as a director of the Company or a Participating Company), shall receive, in addition to any Annual Retainer payable, a Stock Payment equal to two thousand (2,000) shares of Common Stock (in the case of the Company) or

 

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one thousand (1,000) shares of Common Stock (in the case of a Participating Company), for serving as a Nonemployee Company Director or Nonemployee Participating Company Director, as the case may be.  Such Stock Payments shall be paid by the Company as soon as practicable following the date such director is first elected or appointed to the Board of Directors of the Company or the Board of Directors of a Participating Company, as the case may be.

 

(b) No Nonemployee Company Director or Nonemployee Participating Company Director shall be required to forfeit or otherwise return to the Company any shares of Common Stock issued to him or her as a Stock Payment pursuant to the Plan notwithstanding any change in status of such director which renders him or her ineligible to continue as a participant in the Plan.

 

8.    Shareholder Rights

 

(a) Nonemployee Company Directors and Nonemployee Participating Company Directors shall not be deemed for any purpose to be or have rights as shareholders of the Company with respect to any shares of Common Stock except as and when such shares are issued and then only from the date of issuance therefore. No adjustment shall be made for dividends or distributions or other rights for which the record date precedes the date of such issuance.

 

(b) Subject to the provisions of Section 8(a) above, Nonemployee Company Directors and Nonemployee Participating Company Directors will have all rights of a shareholder with respect to Common Stock issued, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto.

 

9.    Adjustment for Changes in Capitalization

 

If the outstanding shares of Common Stock of the Company are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of Common Stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, combination of shares, rights offering, distribution of assets or other distribution with respect to such shares of Common Stock or other securities or other change in the corporate structure or shares of Common Stock, the maximum number of shares and/or the kind of shares that may be issued under the Plan may be appropriately adjusted by the Committee. Any determination by the Committee as to any such adjustment will be final, binding, and conclusive. The maximum number of shares issuable under the Plan as a result of any such adjustment shall be rounded up to the nearest whole share.

 

10.    Continuation of Director or Other Status

 

Nothing in the Plan or in any instrument executed pursuant to the Plan or any action taken pursuant to the Plan shall be construed as creating or constituting evidence of any agreement or understanding, express or implied, that the Company or any other Participating Company, as the case may be, will retain a Nonemployee Company Director or Nonemployee Participating Company Director as a director or in any other capacity for any period of time or at a particular

 

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retainer or other rate of compensation, as conferring upon any director any legal or other right to continue as a director or in any other capacity, or as limiting, interfering with or otherwise affecting the right of the Company or a Participating Company to terminate a director in his or her capacity as a director or otherwise at any time for any reason, with or without cause, and without regard to the effect that such termination might have upon him or her as a participant under the Plan.

 

11.    Compliance with Government Regulations

 

Neither the Plan nor the Company shall be obligated to issue any shares of Common Stock pursuant to the Plan at any time unless and until all applicable requirements imposed by any federal and state securities and other laws, rules, and regulations, by any regulatory agencies or by any stock exchanges upon which the Common Stock may be listed have been fully met. As a condition precedent to any issuance of shares of Common Stock and delivery of notice of share ownership evidencing such shares pursuant to the Plan, the Board or the Committee may require a Nonemployee Company Director or Nonemployee Participating Company Director to take any such action and to make any such covenants, agreements and representations as the Board or the Committee, as the case may be, in its discretion deems necessary or advisable to ensure compliance with such requirements. The Company shall in no event be obligated to register the shares of Common Stock issued or issuable under the Plan pursuant to the Securities Act of 1933, as now or hereafter amended, or to qualify or register such shares under any securities laws of any state upon their issuance under the Plan or at any time thereafter, or to take any other action in order to cause the issuance and delivery of such shares under the Plan or any subsequent offer, sale or other transfer of such shares to comply with any such law, regulation or requirement. Nonemployee Company Directors and Nonemployee Participating Company Directors are responsible for complying with all applicable federal and state securities and other laws, rules and regulations in connection with any offer, sale or other transfer of the shares of Common Stock issued under the Plan or any interest therein including, without limitation, compliance with the registration requirements of the Securities Act of 1933, as amended (unless an exemption therefrom is available), or with the provisions of Rule 144 promulgated thereunder, if available, or any successor provisions.

 

12.    Nontransferability of Rights

 

No Nonemployee Company Director or Nonemployee Participating Company Director shall have the right to assign the right to receive any Stock Payment or any other right or interest under the Plan, contingent or otherwise, or to cause or permit any encumbrance, pledge or charge of any nature to be imposed on any such payment (prior to the issuance of notice of share ownership evidencing such Stock Payment) or any such right or interest.

 

13.    Amendment and Termination of Plan

 

(a) The Board will have the power in its discretion, to amend, suspend or terminate the Plan at any time. No such amendment will, without approval of the shareholders of the Company:

 

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(i)  Change the class of persons eligible to receive Stock Payments under the Plan or otherwise modify the requirements as to eligibility for participation in the Plan; or

 

(ii)  Increase the number of shares of Common Stock which may be issued under the Plan (except for adjustments as provided in Section 9 hereof).

 

(b) No amendment, suspension or termination of the Plan will, without the consent of the Nonemployee Company Director or Nonemployee Participating Company Director, alter, terminate, impair, or adversely affect any right or obligations under any Stock Payment previously granted under the Plan to such Participant, unless such amendment, suspension or termination is required by applicable law.

 

(c) Notwithstanding the foregoing, the Board may, without further action by the shareholders of the Company, amend the Plan or modify Stock Payments under the Plan (i) in response to changes in securities or other laws, or rules, regulations or regulatory interpretations thereof, applicable to the Plan, or (ii) to comply with stock exchange rules or requirements.

 

14.    Governing Law

 

The laws of the State of Hawaii shall govern and control the interpretation and application of the terms of the Plan.

 

15.    Effective Date and Duration of the Plan

 

The Plan, as amended and restated herein, will become effective as of May 6, 2008. Unless previously terminated by the Board, the Plan will terminate on May 6, 2018.

 

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