Document:

Exhibit 10.7

 

MAUI LAND
& PINEAPPLE COMPANY, INC.
2006
EQUITY AND INCENTIVE AWARD PLAN
RESTRICTED
STOCK AWARD GRANT NOTICE FOR ROB WEBBER

 

Maui Land & Pineapple
Company, Inc., a Hawaii corporation (the “Company”), pursuant
to the provisions of its 2006 Equity and Incentive Award Plan (the “Plan”), hereby grants to the holder listed
below (“Holder”), the
number of shares of the Company’s common stock, no par value (“Stock”), set forth below (the “Shares”). This Restricted Stock
award is subject to all of the terms and conditions as set forth herein and in
the Restricted Stock Award Agreement attached hereto as Exhibit A (the “Restricted Stock Agreement”) and the
Plan, each of which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Restricted Stock Award Grant Notice (the “Grant
Notice”). Shares that are released from Forfeiture Restrictions
in accordance with Sections 3.2 and 3.3 of the Restricted Stock Agreement are
referred to in this Grant Notice as “Released Shares.”

 

	
  Holder:

  	
   

  	
  Rob
  Webber

  
	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
  May
  8, 2006

  
	
   

  	
   

  	
   

  
	
  Total Number of Restricted Shares:

  	
   

  	
  25,000

  
	
   

  	
   

  	
   

  
	
  Performance Vesting Criteria:

  	
   

  	
  Subject
  to the terms and conditions of the Plan, this Grant Notice and the Restricted
  Stock Agreement, up to 5,000 Shares shall vest and become Released Shares
  following each of the fiscal years ending December 31, 2006, 2007, 2008, 2009
  and 2010 (the “Performance Period”); provided, that the performance criteria
  for the applicable fiscal year is achieved, as determined in the sole and
  complete discretion of the Committee. Specific performance criteria for
  fiscal years 2008, 2009 and 2010 shall be established by the Committee prior
  to the end of the first quarter of each fiscal year, as applicable. Specific
  performance criteria and the vesting of Shares for fiscal years 2006 and 2007
  is as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  each of the two fiscal years ending December 31, 2006 and 2007, a block of
  20% of the aggregate Shares (i.e., 5,000 shares) shall be subject to vesting
  based on achieving, during such year, a level of “Return on Equity” (“ROE”,
  as described below) within a range of ROE from a threshold of 10% to a
  maximum of 20%. The amount of the block that is vested for each of those
  fiscal years shall be determined by multiplying the block of Shares (i.e.,
  5,000 shares) by a fraction (not exceeding 1.0), the numerator of which is
  the amount by which the ROE for the year exceeds the threshold ROE of 10%,
  and the denominator of which is 10%. Thus, for example, assume that for the
  year 2006 the ROE is determined to be 15%. Half of the 5,000 Shares for 2006
  will become vested following the end of 2006 (i.e., based on a fraction of
  (15% ROE minus 10% threshold ROE)/10%). Notwithstanding the foregoing, in the
  event that Holder’s employment is terminated by reason of death or disability
  that occurs on or after July 1 of any year in the Performance Period but no
  later than the Announcement Date, as defined below, for that year, and is
  therefore deemed to have occurred on the first business day after such
  Announcement Date, then the number of Shares that otherwise would vest
  pursuant to the above calculation shall be multiplied by a fraction (not
  exceeding 1.0), the numerator of which is the number of days in the year of

  

 

 

	
   

  	
   

  	
  Holder’s
  death or disability prior to such death or disability, and the denominator of
  which is 365.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Further,
  the blocks of 5,000 shares for the fiscal years 2006 and 2007 shall be
  subject to additional vesting based on a determination of the average ROE for
  the two-year period ending at the end of the second fiscal year in the
  Performance Period. Specifically, the additional Shares vested for a given
  fiscal year shall be determined following the end of the second fiscal year
  within the Performance Period and shall be equal to: (i) the vested amount of
  the block of 5,000 Shares for the given fiscal year as determined by applying
  the above fraction, except by substituting the average ROE for the two-year
  period, in lieu of the ROE for the given fiscal year, minus (ii) the amount
  of shares for the given fiscal year that has vested based on the ROE for that
  year alone. Thus, for example, again assume that for the year 2006 the ROE is
  determined to be 15%, and the 5,000 share block of Shares for 2006 becomes
  50% vested following the end of 2006 (i.e., based on a fraction of (15% ROE
  minus 10% threshold ROE)/10%). Thereafter, if the average ROE as of the end
  of 2007 is determined to be 16%, then the 5,000 share block of Shares for
  2006 shall be subject to an additional 10% vesting, equal to 60% vesting
  based on the average ROE (i.e., fraction of (16% average ROE minus 10%
  threshold ROE)/10%) minus 50% prior vesting based on ROE for 2006. In other
  words, to the extent that the average ROE for the Performance Period
  determined as of the end of 2007 exceeds the ROE for a particular fiscal year
  within the Performance Period as calculated for that year alone, an
  additional amount of the 5,000 share block of Shares for that fiscal year
  shall become vested.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding
  the foregoing, in the event that Holder’s employment is terminated by reason
  of death or disability that occurs on or after July 1 of any year in the
  Performance Period but no later than the Announcement Date for that year and
  is therefore deemed to have occurred on the first business day after such
  Announcement Date, then the number of additional Shares that otherwise would
  be released and vest pursuant to the above calculation shall be multiplied by
  a fraction (not exceeding 1.0), the numerator of which is the number of days
  in the year of Holder’s death or disability prior to such death or
  disability, plus 365 times the number of previous years in the Performance
  Period (if any), and the denominator of which is 365 times the number of
  years in the Performance Period (through and including the year of Holder’s
  death or disability).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  purposes of this Agreement, Return on Equity or ROE shall mean the Company’s
  net income after tax, exclusive of extraordinary items such as discontinued
  operations, asset sales outside the ordinary course of business, and major
  impairment losses, divided by beginning stockholders’ equity, all determined,
  unless otherwise agreed by the Company and Holder, in accordance with
  Generally Accepted Accounting Principals, as promulgated from time to time by
  the Financial Accounting Standards Board (“GAAP”), consistently applied, and
  any other financial or performance thresholds adopted by the Committee shall
  be determined, unless otherwise agreed by the Company and Holder, in
  accordance with GAAP, consistently applied.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  proper regard to GAAP, and sound accounting judgments and the agreements of
  the Company and Holder, the Committee shall announce the extent of vesting of
  the block of Shares for each year during the Performance Period as soon as

  

 

2

 

	
   

  	
   

  	
  reasonable
  possible after audited financial statements are available for such year and
  again, if applicable, as soon as practicable after audited financial
  statements become available for the following fiscal years (the “Announcement
  Date”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any
  Shares that do not become Released Shares after fiscal year 2007 as
  calculated above, and any other Shares that do not become Released Shares at
  such time as such Shares are eligible to become Released Shares as a result
  of not achieving specified performance criteria shall be carried forward and
  become eligible for vesting in the subsequent year of the Performance Period
  subject to achievement of performance criteria adopted by the Committee with
  respect to such Shares that have been carried forward.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding the foregoing, subject to the Restricted Stock
  Agreement, in no event, shall any Shares vest and become Released Shares
  following Holder’s Termination of Employment.

  

 

By his or her signature below, Holder agrees to be
bound by the terms and conditions of the Plan, the Restricted Stock Agreement
and this Grant Notice. Holder has reviewed the Restricted Stock Agreement, the
Plan and this Grant Notice in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Grant Notice and fully
understands all provisions of this Grant Notice, the Restricted Stock Agreement
and the Plan. Holder hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Board upon any questions arising under or
relating to the Plan, this Grant Notice or the Restricted Stock Agreement.

 

	
  MAUI LAND & PINEAPPLE COMPANY, INC.:

  	
   

  	
  HOLDER: ROBERT I. WEBBER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   /S/ DAVID C. COLE

  	
   

  	
  By:

  	
   

  	
   /S/ ROBERT I. WEBBER

  
	
  Print
  Name:

  	
   

  	
   David C. Cole

  	
   

  	
  Print
  Name:

  	
   

  	
   Robert I. Webber

  
	
  Title:

  	
   

  	
  President
  & CEO

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  P.O.
  Box 187

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
  Kahului,
  Maui, Hawaii 96733

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  August
  4, 2006

  	
   

  	
   

  	
   

  	
   

  

 

3

 

RESTRICTED STOCK AWARD
AGREEMENT

 

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

 

ARTICLE I

GENERAL

 

1.1           Defined Terms. Capitalized
terms not specifically defined herein shall have the meanings specified in the
Grant Notice or, if not defined therein, the Plan.

 

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

 

ARTICLE II

GRANT OF RESTRICTED STOCK

 

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

 

2.2           Issuance of Shares. The
issuance of the Shares under this Agreement shall occur at the principal office
of the Company simultaneously with the execution of the Grant Notice by the
parties or on such other date as the Company and Holder shall agree (the “Issuance Date”). Subject
to the provisions of Article IV, the Company shall issue the Shares (which
shall be issued in Holder’s name) on the Issuance Date.

 

2.3           Conditions to Issuance of Stock
Certificates. The Shares, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have then been reacquired
by the Company. Such Shares shall be fully paid and nonassessable. The Company
shall not be required to issue or deliver any Shares prior to fulfillment of
all of the following conditions:

 

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

 

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

 

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

 

1

 

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

 

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

 

2.4           Rights as Stockholder. Except
as otherwise provided herein, upon delivery of the Shares to the escrow agent
pursuant to Article IV, Holder shall have all the rights of a stockholder with
respect to said Shares, subject to the restrictions herein, including the right
to vote the Shares and to receive all dividends or other distributions paid or
made with respect to the Shares; provided, however, that
any and all extraordinary cash dividends paid on such Shares and any and all
shares of Stock, capital stock or other securities or property received by or
distributed to Holder with respect to the Shares as a result of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company
shall also be subject to the Forfeiture Restriction (as defined in Section 3.1)
and the restrictions on transfer in Section 3.5 until such restrictions on the
underlying Shares lapse or are removed pursuant to this Agreement (or, if such
Shares are no longer outstanding, until such time as such Shares would have
been released from the Forfeiture Restriction pursuant to this Agreement). In
addition, in the event of any merger, consolidation, share exchange or
reorganization affecting the Shares, including, without limitation, a Change in
Control, then any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) that is by reason
of any such transaction received with respect to, in exchange for or in
substitution of the Shares shall also be subject to the Forfeiture Restriction
(as defined in Section 3.1) and the restrictions on transfer in Section 3.5
until such restrictions on the underlying Shares lapse or are removed pursuant
to this Agreement (or, if such Shares are no longer outstanding, until such
time as such Shares would have been released from the Forfeiture Restriction
pursuant to this Agreement). Any such assets or other securities received by or
distributed to Holder with respect to, in exchange for or in substitution of
any Unreleased Shares (as defined in Section 3.3) shall be immediately
delivered to the Company to be held in escrow pursuant to Section 4.1.

 

ARTICLE III

RESTRICTIONS ON SHARES

 

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

 

2

 

Unreleased Shares are forfeited under this
Section 3.1, any cash, cash equivalents, assets or securities received by or
distributed to Holder with respect to, in exchange for or in substitution of
such Shares and held by the escrow agent pursuant to Section 4.1 and the Joint
Escrow Instructions shall be promptly transferred by the escrow agent to the
Company.

 

3.2           Release of Shares from Forfeiture
Restriction. Shares shall be released from the Forfeiture Restriction as
indicated in the Grant Notice effective as of the date Holder receives written
the written Notice of Release set forth in Section 3.6 below. Any of the Shares
released from the Forfeiture Restriction shall thereupon be released from the
restrictions on transfer under Section 3.5. In the event any of the Shares are
released from the Forfeiture Restriction, any dividends or other distributions
paid on such Shares and held by the escrow agent pursuant to Section 4.1 and
the Joint Escrow Instructions shall be promptly paid by the escrow agent to
Holder.

 

3.3           Other Release of Shares from
Forfeiture Restriction. Notwithstanding
Section 3.2 above, all Unreleased Shares shall be released and vest on the
thirtieth (30th) day following a Change in Control, unless Holder’s Termination
of Employment occurs prior to such date.

 

3.4           Unreleased Shares. Any of the
Shares which, from time to time, have not yet been released from the Forfeiture
Restriction are referred to herein as “Unreleased Shares.”  To the extent that there are any Unreleased
Shares remaining after the Final Announcement Date, such Unreleased Shares
shall be forfeited and transferred to the Company as soon as practicable
following such Final Announcement Date.

 

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

 

3.6           Notice of Release. The
Committee shall provide written notice to Holder of whether, and the extent to
which, any of the Shares became vested and released in accordance with Section
3.2 above for each calendar year during the Performance Period or Section 3.3
above. Such notice shall be provided as soon as administratively practicable
after audited financial statements are available for such calendar year and the
Committee has certified in writing the extent to which the applicable
performance goals set forth in the Grant Notice were achieved.

 

3

 

ARTICLE IV

ESCROW OF SHARES

 

4.1           Escrow of Shares. To insure
the availability for delivery of Holder’s Unreleased Shares in the event of
forfeiture of such Shares by Holder pursuant to Sections 3.1 or 3.4, Holder
hereby appoints the Secretary of the Company, or any other person designated by
the Board as escrow agent, as his or her attorney-in-fact to assign and
transfer unto the Company, such Unreleased Shares, if any, forfeited by Holder
pursuant to Sections 3.1 or 3.4 and any dividends or other distributions
thereon, and shall, upon execution of this Agreement, deliver and deposit with
the Secretary of the Company, or such other person designated by the Board, any
share certificates representing the Unreleased Shares, together with the stock
assignment duly endorsed in blank, attached as Exhibit B to the Grant
Notice. The Unreleased Shares and stock assignment shall be held by the
Secretary of the Company, or such other person designated by the Board, in
escrow, pursuant to the Joint Escrow Instructions of the Company and Holder
attached as Exhibit C to the Grant Notice, until the Unreleased Shares
are forfeited by Holder as provided in Sections 3.1 or 3.4, until such
Unreleased Shares are released from the Forfeiture Restriction, or until such
time as this Agreement no longer is in effect. Upon release of the Unreleased
Shares from the Forfeiture Restriction, the escrow agent shall deliver to
Holder the certificate or certificates representing such Shares in the escrow
agent’s possession belonging to Holder in accordance with the terms of the
Joint Escrow Instructions attached as Exhibit C to the Grant Notice, and
the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless
retain such certificate or certificates as escrow agent if so required pursuant
to other restrictions imposed pursuant to this Agreement. If the Shares are
held in book entry form, then such entry will reflect that the Shares are
subject to the restrictions of this Agreement. If any dividends or other
distributions are paid on the Unreleased Shares held by the escrow agent
pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends
or other distributions shall also be subject to the restrictions set forth in
this Agreement and held in escrow pending release of the Unreleased Shares with
respect to which such dividends or other distributions were paid from the Forfeiture
Restriction.

 

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

 

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

 

ARTICLE V

OTHER PROVISIONS

 

5.1           Adjustment for Stock Split. In
the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, the Board shall make appropriate and
equitable adjustments in the Unreleased Shares subject to the Forfeiture
Restriction and the number of Shares, consistent with any adjustment under
Section 11.3 of the Plan. The provisions of this Agreement shall apply, to the
full extent set forth herein with respect

 

4

 

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

 

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

 

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

 

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

 

5.4           Administration. The Board
shall have the power to interpret the Plan and this Agreement and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Board in good faith shall be binding, conclusive
and final upon Holder, the Company and all other interested persons. No member
of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, this Agreement or the Shares.

 

5.5           Restrictive Legends and
Stop-Transfer Orders.

 

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

 

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

 

5

 

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

 

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

 

5.6           Tax Withholding.

 

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

 

(i)            by cash or check
made payable to the Company;

 

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

 

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

 

(iv)          in any combination
of the foregoing.

 

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

 

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

 

5.8           Titles. Titles are provided
herein for convenience only and are not to serve as a basis for interpretation
or construction of this Agreement.

 

5.9           Governing Law; Severability. This
Agreement shall be administered, interpreted and enforced under the laws of the
State of Hawaii without regard to conflicts of laws thereof. Should any provision
of this Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

 

5.10         Conformity to Securities Laws. Holder
acknowledges that the Plan is intended to conform to the extent necessary with
all provisions of the Securities Act and the Exchange Act and any

 

6

 

and all regulations and rules promulgated by
the Securities and Exchange Commission thereunder, and state securities laws
and regulations. Notwithstanding anything herein to the contrary, the Plan
shall be administered, and the Shares are to be issued, only in such a manner
as to conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.

 

5.11         Amendments. This Agreement may
not be modified, amended or terminated except by an instrument in writing, signed
by Holder and by a duly authorized representative of the Company.

 

5.12         Successors and Assigns. The
Company may assign any of its rights under this Agreement to single or multiple
assignees, and this Agreement shall inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Agreement shall be binding upon Holder and his or her heirs,
executors, administrators, successors and assigns.

 

7Exhibit 10.8

 

MAUI LAND
& PINEAPPLE COMPANY, INC.
2006
EQUITY AND INCENTIVE AWARD PLAN
RESTRICTED
STOCK AWARD GRANT NOTICE

 

Maui Land & Pineapple
Company, Inc., a Hawaii corporation (the “Company”), pursuant
to the provisions of its 2006 Equity and Incentive Award Plan (the “Plan”), hereby grants to the holder listed
below (“Holder”), the
number of shares of the Company’s common stock, no par value (“Stock”), set forth below (the “Shares”). This Restricted Stock
award is subject to all of the terms and conditions as set forth herein and in
the Restricted Stock Award Agreement attached hereto as Exhibit A (the “Restricted Stock Agreement”) and the
Plan, each of which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Restricted Stock Award Grant Notice (the “Grant
Notice”). Shares that are released from Forfeiture Restrictions
in accordance with Sections 3.2 and 3.3 of the Restricted Stock Agreement are
referred to in this Grant Notice as “Released Shares.”

 

	
  Holder:

  	
   

  	
  Fred
  W. Rickert

  
	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
  May
  8, 2006

  
	
   

  	
   

  	
   

  
	
  Total Number of Restricted Shares:

  	
   

  	
  6,000

  
	
   

  	
   

  	
   

  
	
  Performance Vesting Criteria:

  	
   

  	
  Subject
  to the terms and conditions of the Plan, this Grant Notice and the Restricted
  Stock Agreement, up to all of the Shares shall vest and become Released
  Shares following the fiscal year ending December 31, 2008 (the “Performance
  Period”); provided, that the performance criteria for the 2008 fiscal year is
  achieved, as determined in the sole and complete discretion of the Committee.
  Specific performance criteria for fiscal year 2008 shall be established by
  the Committee prior to the end of the first quarter of such fiscal year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For
  purposes of this Agreement, financial and performance thresholds adopted by
  the Committee shall be determined, unless otherwise agreed by the Company and
  Holder, in accordance with consistently applied Generally Accepted Accounting
  Principals, as promulgated from time to time by the Financial Accounting
  Standards Board (“GAAP”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  proper regard to GAAP, and sound accounting judgments and the agreements of
  the Company and Holder, the Committee shall announce the extent of vesting of
  the Shares for the Performance Period as soon as reasonably practicable after
  audited financial statements are available for such year (the “Announcement
  Date”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding the foregoing, subject to the Restricted Stock
  Agreement, in no event, shall any Shares vest and become Released Shares following
  Holder’s Termination of Employment.

  

 

 

By his or her signature below, Holder agrees to be
bound by the terms and conditions of the Plan, the Restricted Stock Agreement
and this Grant Notice. Holder has reviewed the Restricted Stock Agreement, the
Plan and this Grant Notice in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Grant Notice and fully
understands all provisions of this Grant Notice, the Restricted Stock Agreement
and the Plan. Holder hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Board upon any questions arising under
or relating to the Plan, this Grant Notice or the Restricted Stock Agreement.

 

	
  MAUI LAND & PINEAPPLE COMPANY, INC.:

  	
   

  	
  HOLDER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   /S/ DAVID C. COLE

  	
   

  	
  By:

  	
   

  	
   /S/ FRED W. RICKERT

  
	
  Print
  Name:

  	
   

  	
   David C. Cole

  	
   

  	
  Print
  Name:

  	
   

  	
   Fred W. Rickert

  
	
  Title:

  	
   

  	
  Chairman,
  President & CEO

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  P.O.
  Box 187

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
  Kahului,
  Maui, Hawaii 96733

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  August
  4, 2006

  	
   

  	
   

  	
   

  	
   

  

 

2

 

EXHIBIT A

 

TO RESTRICTED STOCK AWARD
GRANT NOTICE

 

RESTRICTED STOCK AWARD
AGREEMENT

 

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

 

ARTICLE I

GENERAL

 

1.1           Defined Terms. Capitalized
terms not specifically defined herein shall have the meanings specified in the
Grant Notice or, if not defined therein, the Plan.

 

“Cause”
means a termination of Holder’s employment by Company for any of the following
reasons:

 

(a)           Holder’s failure or refusal to comply
with any lawful and reasonable Board of Director’s policy or directive which
failure or refusal continues uncured for fifteen (15) days after receipt by
Holder of written notice from the Company identifying such failure or refusal
with reasonable specificity and demanding immediate cure thereof;

 

(b)           Holder’s material and intentional or
grossly negligent breach of Holder’s fiduciary duty of care to the Company or
Holder’s willful or grossly negligent breach of Holder’s fiduciary duty of
loyalty to the Company, which, in either case, results in material injury to
the Company or any of its shareholders;

 

(c)           Holder’s conviction or entry of a
plea of guilty or no contest to any crime for which imprisonment is a
possibility or that results in a monetary fine or penalty payment by Company;
or

 

(d)           Any violation of a law or regulation
carried out by or at the direction of Holder acting knowingly that results in
payment by the Company of a fine, penalty or forfeiture in excess of Fifty
Thousand dollars ($50,000.00) or a civil damages judgment of One Million
dollars ($1,000,000.00) or more.

 

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

 

ARTICLE II

GRANT OF RESTRICTED STOCK

 

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

 

A-1

 

2.2           Issuance of Shares. The
issuance of the Shares under this Agreement shall occur at the principal office
of the Company simultaneously with the execution of the Grant Notice by the
parties or on such other date as the Company and Holder shall agree (the “Issuance Date”). Subject
to the provisions of Article IV, the Company shall issue the Shares (which
shall be issued in Holder’s name) on the Issuance Date.

 

2.3           Conditions to Issuance of Stock
Certificates. The Shares, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have then been reacquired
by the Company. Such Shares shall be fully paid and nonassessable. The Company
shall not be required to issue or deliver any Shares prior to fulfillment of
all of the following conditions:

 

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

 

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

 

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

 

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

 

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

 

2.4           Rights as Stockholder. Except
as otherwise provided herein, upon delivery of the Shares to the escrow agent
pursuant to Article IV, Holder shall have all the rights of a stockholder with
respect to said Shares, subject to the restrictions herein, including the right
to vote the Shares and to receive all dividends or other distributions paid or
made with respect to the Shares; provided, however, that
any and all extraordinary cash dividends paid on such Shares and any and all
shares of Stock, capital stock or other securities or property received by or
distributed to Holder with respect to the Shares as a result of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company
shall also be subject to the Forfeiture Restriction (as defined in Section 3.1)
and the restrictions on transfer in Section 3.5 until such restrictions on the
underlying Shares lapse or are removed pursuant to this Agreement (or, if such
Shares are no longer outstanding, until such time as such Shares would have
been released from the Forfeiture Restriction pursuant to this Agreement). In
addition, in the event of any merger, consolidation, share exchange or
reorganization affecting the Shares, including, without limitation, a Change in
Control, then any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) that is by reason
of any such transaction received with respect to, in exchange for or in
substitution of the Shares shall also be subject to the Forfeiture Restriction
(as defined in Section 3.1) and the restrictions on transfer in Section 3.5
until such restrictions on the underlying Shares lapse or are removed pursuant
to this Agreement (or, if such Shares are no longer outstanding, until such
time as such Shares would have been released from the Forfeiture Restriction
pursuant to this Agreement). Any such assets or other securities received by or
distributed to Holder with respect to, in exchange for or in

 

A-2

 

substitution of any Unreleased
Shares (as defined in Section 3.3) shall be immediately delivered to the
Company to be held in escrow pursuant to Section 4.1.

 

ARTICLE III

RESTRICTIONS ON SHARES

 

3.1           Forfeiture Restriction. Subject
to the provisions of Section 3.2 and 3.3, if Holder has a Termination of
Employment for any or no reason, all of the Unreleased Shares (as defined in
Section 3.4) shall be forfeited immediately and automatically transferred to
the Company without further action by the Company (the “Forfeiture Restriction”);
provided, however, that for this purpose, (i) any termination of Holder’s
employment by the Company or any of its subsidiaries that occurs on or after
the Performance Period, but not later than the date the Announcement Date, shall
be deemed to have occurred on the first business day after the Announcement
Date, and (ii) any other termination of Holder’s employment by reason of death
or permanent and total disability that occurs on or after July 1 of any year
during the Performance Period, but no later than the Announcement Date for that
year shall be deemed to have occurred on the first business day after such
Announcement Date. Further, for this purpose, Holder’s employment shall not be
treated as terminated in the case of a transfer of employment within the
Company and its subsidiaries or in the case of sick leave and other approved
leaves of absence. Upon the occurrence of forfeiture under this Section 3.1,
the Company shall become the legal and beneficial owner of the Shares being
forfeited and all rights and interests therein or relating thereto and the
Company shall have the right to retain and transfer to its own name the number
of Shares being forfeited by Holder. In the event any of the Unreleased Shares
are forfeited under this Section 3.1, any cash, cash equivalents, assets or
securities received by or distributed to Holder with respect to, in exchange
for or in substitution of such Shares and held by the escrow agent pursuant to
Section 4.1 and the Joint Escrow Instructions shall be promptly transferred by
the escrow agent to the Company.

 

3.2           Release of Shares from Forfeiture
Restriction. Shares shall be released from the Forfeiture Restriction as
indicated in the Grant Notice effective as of the date Holder receives written
the written Notice of Release set forth in Section 3.6 below. Any of the Shares
released from the Forfeiture Restriction shall thereupon be released from the
restrictions on transfer under Section 3.5. In the event any of the Shares are
released from the Forfeiture Restriction, any dividends or other distributions
paid on such Shares and held by the escrow agent pursuant to Section 4.1 and
the Joint Escrow Instructions shall be promptly paid by the escrow agent to
Holder.

 

3.3           Other Release of Shares from
Forfeiture Restriction. Notwithstanding
Section 3.2 above, all Unreleased Shares shall be released and vest immediately
upon termination of Holder’s employment without Cause within 180 days after a
Change in Control and on or before the Announcement Date or Holder’s voluntary
resignation of employment within 180 days after a Change in Control and on or
before the Announcement Date.

 

3.4           Unreleased Shares. Any of the
Shares which, from time to time, have not yet been released from the Forfeiture
Restriction are referred to herein as “Unreleased Shares.”  To the extent that there are any Unreleased
Shares remaining after the Announcement Date, such Unreleased Shares shall be
forfeited and transferred to the Company as soon as practicable following such
Announcement Date.

 

3.5           Restrictions on Transfer. Unless
otherwise permitted by the Board pursuant to the Plan, no Unreleased Shares or
any dividends or other distributions thereon or any interest or right therein
or part thereof, shall be liable for the debts, contracts or engagements of
Holder or his or her successors in interest or shall be subject to sale or
other disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such sale or other disposition be
voluntary or

 

A-3

 

involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), except by will or by the laws of descent and
distribution, or to a member of Holder’s immediate family or, provided that the
transferee agrees in writing, in a form provided by the Company to be bound by
all provisions of this Agreement, a trust or family partnership or any other
entity customarily used for estate planning purposes. Any attempted sale or
other disposition of Unreleased Shares contrary to the foregoing restrictions
on transfer shall be null and void and of no effect.

 

3.6           Notice of Release. The
Committee shall provide written notice to Holder of whether, and the extent to
which, any of the Shares became vested and released in accordance with Section
3.2 above for each calendar year during the Performance Period or Section 3.3
above. Such notice shall be provided as soon as administratively practicable
after audited financial statements are available for such calendar year and the
Committee has certified in writing the extent to which the applicable
performance goals set forth in the Grant Notice were achieved.

 

ARTICLE IV

ESCROW OF SHARES

 

4.1           Escrow of Shares. To insure
the availability for delivery of Holder’s Unreleased Shares in the event of
forfeiture of such Shares by Holder pursuant to Sections 3.1 or 3.4, Holder
hereby appoints the Secretary of the Company, or any other person designated by
the Board as escrow agent, as his or her attorney-in-fact to assign and
transfer unto the Company, such Unreleased Shares, if any, forfeited by Holder
pursuant to Sections 3.1 or 3.4 and any dividends or other distributions
thereon, and shall, upon execution of this Agreement, deliver and deposit with
the Secretary of the Company, or such other person designated by the Board, any
share certificates representing the Unreleased Shares, together with the stock
assignment duly endorsed in blank, attached as Exhibit B to the Grant
Notice. The Unreleased Shares and stock assignment shall be held by the
Secretary of the Company, or such other person designated by the Board, in
escrow, pursuant to the Joint Escrow Instructions of the Company and Holder
attached as Exhibit C to the Grant Notice, until the Unreleased Shares
are forfeited by Holder as provided in Sections 3.1 or 3.4, until such
Unreleased Shares are released from the Forfeiture Restriction, or until such
time as this Agreement no longer is in effect. Upon release of the Unreleased
Shares from the Forfeiture Restriction, the escrow agent shall deliver to
Holder the certificate or certificates representing such Shares in the escrow
agent’s possession belonging to Holder in accordance with the terms of the
Joint Escrow Instructions attached as Exhibit C to the Grant Notice, and
the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless
retain such certificate or certificates as escrow agent if so required pursuant
to other restrictions imposed pursuant to this Agreement. If the Shares are
held in book entry form, then such entry will reflect that the Shares are
subject to the restrictions of this Agreement. If any dividends or other
distributions are paid on the Unreleased Shares held by the escrow agent
pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends
or other distributions shall also be subject to the restrictions set forth in
this Agreement and held in escrow pending release of the Unreleased Shares with
respect to which such dividends or other distributions were paid from the
Forfeiture Restriction.

 

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

 

A-4

 

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

 

ARTICLE V

OTHER PROVISIONS

 

5.1           Adjustment for Stock Split. In
the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, the Board shall make appropriate and
equitable adjustments in the Unreleased Shares subject to the Forfeiture
Restriction and the number of Shares, consistent with any adjustment under
Section 11.3 of the Plan. The provisions of this Agreement shall apply, to the
full extent set forth herein with respect to the Shares, to any and all shares
of capital stock or other securities, property or cash which may be issued in
respect of, in exchange for, or in substitution of the Shares, and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof.

 

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

 

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

 

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

 

5.4           Administration. The Board
shall have the power to interpret the Plan and this Agreement and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent
therewith and to interpret, amend or revoke any such rules. All actions taken
and all interpretations and determinations made by the Board in good faith shall be binding, conclusive
and final upon Holder, the Company and all other interested persons. No member
of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, this Agreement or the Shares.

 

A-5

 

5.5           Restrictive Legends and
Stop-Transfer Orders.

 

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

 

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

 

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

 

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

 

5.6           Tax Withholding.

 

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

 

(i)            by cash or check
made payable to the Company;

 

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

 

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

 

(iv)          in any combination
of the foregoing.

 

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

 

5.7           Notices. Any notice to be
given under the terms of this Agreement to the Company shall be addressed to
the Company in care of the Secretary of the Company, and any notice to be given
to Holder shall be addressed to Holder at the address given beneath Holder’s
signature on the Grant Notice. By a notice given pursuant to this Section 5.7,
either party may hereafter designate a different address for notices to be
given to that party. Any notice shall be deemed duly given when sent via email
or when sent

 

A-6

 

by certified mail (return receipt requested)
and deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

 

5.8           Titles. Titles are provided
herein for convenience only and are not to serve as a basis for interpretation
or construction of this Agreement.

 

5.9           Governing Law; Severability. This
Agreement shall be administered, interpreted and enforced under the laws of the
State of Hawaii without regard to conflicts of laws thereof. Should any
provision of this Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

 

5.10         Conformity to Securities Laws. Holder
acknowledges that the Plan is intended to conform to the extent necessary with
all provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, and state securities laws and regulations. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the Shares are to
be issued, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this Agreement
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

 

5.11         Amendments. This Agreement may
not be modified, amended or terminated except by an instrument in writing,
signed by Holder and by a duly authorized representative of the Company.

 

5.12         Successors and Assigns. The
Company may assign any of its rights under this Agreement to single or multiple
assignees, and this Agreement shall inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Agreement shall be binding upon Holder and his or her heirs,
executors, administrators, successors and assigns.

 

A-7

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