MAUI LAND & PINEAPPLE COMPANY, INC.
STOCK OPTION AGREEMENT FOR DAVID COLE
Agreement dated October 6, 2003 between Maui Land
& Pineapple Company, Inc., a Hawaii
corporation ("Company"),
whose principal place of business is in the
State of Hawaii,
and David C. Cole ("Optionee").
1. Grant of
Option. The Company
hereby agrees to
grant to Optionee, effective as of October
15, 2003 ("Grant
Date"), the right and option ("Option") to
purchase from the
Company, for a price equal to the exercise
price as described
below ("Exercise Price"), up to 200,000
shares of Company
common stock ("Company Stock" or "Shares").
However, this
grant
shall be contingent upon the Company's
obtaining shareholder
approval of certain amendments to the
Company's Restated
Articles of Association as may be required
to increase
authorized Shares for implementation of
this grant.
Although
the Grant Date shall serve to determine
certain administrative
issues hereunder (e.g., term of Option,
excisable, etc.), the
actual grant date of this Option shall be
the date on which
shareholder approval is obtained as
described in the preceding
sentence and no Option shall be exercised
and no Option Shares
shall be issued until such approval date.
This grant of
Option
shall constitute a nonqualified stock
option which is not a
qualified stock option as defined in
Section 422 of the Internal
Revenue Code of 1996, as amended. This
grant of Option is made
pursuant to the terms of that certain
employment agreement by
and between the Company and Optionee
effective as of October 15,
2003 ("Employment Agreement").
2. Terms and
Conditions of Option.
a. Exercise
Price. The Exercise
Price shall
be $19.70 per Share, which is the fair
market value per Share as
of August 11, 2003.
b. Term of
Option. The term of
the Option over
which the Option may be exercised shall
commence on the Grant
Date and, subject to the provisions of
Section 3.b below, shall
terminate ten years thereafter.
The Option shall not
be
exercisable after the end of the term of
the Option.
c.
Exercisability of Option. As to the total
number of Shares with respect to which the
Option is granted,
the Option shall be exercisable as follows:
(i) one-third of
the Option in the aggregate shall be
exercisable on or after
the first anniversary of the Grant Date,
and (ii) an additional
one-twelfth of the Option in the aggregate
shall become
exercisable on the completion of each
quarter (i.e., three-month
period, which need not begin or end at the
beginning or end of
calendar months) between the first and
third anniversary of the
Grant Date.
In addition, the Option shall become fully exercisable
upon: (i) the termination by Company of
Optionee's employment
"without cause" (as described in Sections
8(d) and 8(f) of the
Employment Agreement) or (ii) except as
provided in
Section 8(g)(iii) of the Employment
Agreement, the Optionee's
resignation for "good reason" (as described
in Sections 8(d) and
8(g) of the Employment Agreement).
3. Additional
Terms and Conditions.
a. Exercise of
Option; Payments for Shares.
This Option may be exercised from time to
time with respect to
all or any portion of the number of Shares
with respect to which
the Option has become exercisable, in whole
or in part, by written
notice to the Corporate Secretary of the
Company or other
authorized personnel of the Company.
Any notice of exercise
of
the Option shall be accompanied by payment
of the full Exercise
Price for the Shares being purchased (i) by
delivery of a good
check payable to the order of the Company,
by delivery to the
Company of a number of Shares already owned
by Optionee having a
fair market value equal to such Exercise
Price or (iii) by
Optionee's requesting and agreeing in
writing to a customary
"net exercise" or "cashless exercise" with
the Company or (iv)
via a customary "same-day-sale" or margin
account exercise
arrangement (if consistent with applicable
margin rules) with
an SEC-registered broker dealer or (v) by a
combination of
these payment methods; and, in any case,
the Company shall
cooperate reasonably with such exercise and
designated method
of payment. The Option shall not be exercised
for any
fractional Shares and no fractional Shares
shall be issued
or delivered. The date of actual receipt by the
Company of
the notice of exercise shall be treated as
the date of
exercise of the Option for the Shares being
purchased. If
Optionee fails timely to pay for any Option
Shares specified
in the notice of exercise or fails promptly
to accept delivery
of the Option Shares, Company shall give
notice to Optionee of
such failure, demanding immediate cure and
stating that, absent
such curative action, the exercise will be
ineffective; and, if
such failure is not cured within thirty
(30) days thereafter,
the subject exercise shall be
ineffective.
b. Termination
of Option. Except as
otherwise
provided herein, the Option shall terminate
and shall not be
exercisable following Optionee's
termination of employment.
If Optionee's employment with the Company
or any of its
subsidiaries terminates, the Option shall
continue to be
exercisable, to the extent it is
exercisable on the date such
employment is terminated, for six months
after such termination,
but in no event after the tenth anniversary
of the Grant Date.
However, if Optionee's employment
terminates because of
Optionee's death (as described in Section
8(a) of the
Employment Agreement) or disability (as
described in Section 8(b)
of the Employment Agreement), the Option
shall continue to be
exercisable, to the extent it is
exercisable on the date such
employment is terminated, for twelve months
after such
termination, but in no event after the
tenth anniversary of the
Grant Date.
If the Company terminates Optionee's employment for
"cause" (as described in Sections 8(c) and
8(f) of the
Employment Agreement), the Option shall
immediately terminate at
such time.
For these purposes, the Optionee's employment shall
not be treated as terminated in the case of
a transfer of
employment within or between the Company
and its subsidiaries or
in the case of sick leave or other approved
leaves of absences.
c. Issuance of
Shares; Registration; Withholding
Taxes.
As soon as practicable after the exercise
of the Option and
payment therefore as provided above, the
Company shall cause to
be issued and delivered to Optionee, or for
Optionee's account,
a certificate or certificates for the
Option Shares purchased.
The Company may withhold with respect to
the payment of any
Option Shares any taxes required to be
withheld because of such
payment, including the withholding of
Shares otherwise payable
due to exercise of the Option. If, without limiting the
Company's obligations under Section 6
hereof or the rights of
Optionee thereunder, a registration (as
that term is defined
below) is not in effect for the issuance of
the Shares to
Optionee, the Company may require a
customary investment
representation from Optionee and may
include a legend on the
share certificate(s) as described in
Section 7, below. In
any
event, Optionee shall comply with any and
all legal requirements
relating to Optionee's resale or other
disposition of any Shares
acquired under this Agreement.
d.
Nontransferability of Options. The Option
and this Agreement shall not be assignable
or transferable by
Optionee other than by will or by the laws
of descent and
distribution, or to a family partnership or
other entity
customarily used for estate planning
purposes, provided that
the transferor agrees in writing in a form
provided by the
Company to be bound by all provisions of
this Agreement.
During Optionee's lifetime, the Option and
all rights of
Optionee under this Agreement may be
exercised only by Optionee
(or by his or her legal guardian or legal
representative or such
family partnership or similar entity).
If the Option is
exercised by such a partnership or similar
entity or after
Optionee's death, the Committee may require
evidence reasonably
satisfactory to it of the authority of the
person exercising the
Option to act in respect thereto.
Any delay in
furnishing such
evidence, however, shall not make any
otherwise valid exercise
invalid as untimely but shall only permit
the Company to delay
reasonably the delivery of the
certificate(s) for the subject
shares.
4. Share
Adjustments. The
number and kind of
securities issuable upon exercise of this
Option and the
Exercise Price shall be adjusted equitably
for any increase or
decrease in the number of issued shares of
common stock, or the
exchange of shares of common stock for
other securities, by
reason of a merger, reorganization,
recapitalization,
reclassification, stock split, stock
dividend, or other capital
adjustments so as to preserve, as nearly as
may be, but not
increase, the economic value and
consequences of this Option and
the exercise hereof. The adjustment required shall be
made by
the Committee, whose reasonable
determination shall be conclusive.
Except as otherwise provided in this
Section 4, no adjustments
shall be made for dividends, distributions,
or other rights
(whether ordinary or extraordinary, and
whether in cash,
securities or other property) for which the
record date is prior
to the date of exercise.
5. No Rights as Shareholder.
The execution and
delivery of this Option Agreement does not
confer upon Optionee
any rights as a shareholder as to any of
the Shares issuable
hereunder. Optionee shall be deemed, and
shall have the rights
of, a shareholder as to such Shares upon
and to the extent one or
more valid exercise of this Option.
6. Registration
of Option Shares.
a. Definitions.
As used in this
Section 6, the
following terms shall have the following
respective meanings:
(1) "1933 Act" means
the Securities Act of
1933, as amended.
(2) "1934 Act" means
the Securities Exchange
Act of 1934, as amended.
(3) "Form S-8" means
such form under the
1933 Act as in effect on the date hereof or
any registration form
under the 1933 Act subsequently adopted by
the Securities and
Exchange Commission ("SEC") which permits
the registration of the
issuance of securities offered
hereunder.
(4) The terms "register", "registered"
and
"registration" refer to a registration
effected by preparing and
filing a registration statement or similar
document in compliance
with the 1933 Act, and the effectiveness of
such registration
statement or document with the SEC.
b. Registration.
By no later than the
first
anniversity o
