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ALEXANDER & BALDWIN, INC.
EXECUTIVE STOCK OPTION
AGREEMENT
RECITALS
A. The
Corporation has implemented the Plan for the purpose of providing
eligible persons in the Corporation’s service with the
opportunity to participate in one or more cash or equity incentive
compensation programs designed to encourage them to continue their
service relationship with the Corporation.
B. Optionee is
to render valuable services to the Corporation (or any Parent or
Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with
the Corporation’s grant of an option to Optionee.
C. All
capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.
NOW, THEREFORE , it is
hereby agreed as follows:
1.
Grant of Option . The Corporation hereby grants to Optionee, as of the Grant
Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the option term specified in
Paragraph 2 at the Exercise Price.
2.
Option Term .
The term of this option shall commence on the Grant Date and
continue in effect until the close of business on the Expiration
Date, unless sooner terminated in accordance with Paragraph 5 or
6.
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3.
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Limited Transferability
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(a) Except
to the limited extent provided in Paragraph 3(b), this option shall
be neither transferable nor assignable by Optionee other than by
will or the laws of inheritance following Optionee’s death
and may be exercised, during Optionee’s lifetime, only by
Optionee. However, Optionee may designate one or more persons as
the beneficiary or beneficiaries of this option, and this option
shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the
Optionee’s death while holding this option. Such beneficiary
or beneficiaries shall take the transferred option subject to all
the terms and conditions of this Agreement, including (without
limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s
death.
(b) This
option may be assigned in whole or in part during Optionee’s
lifetime to a revocable living trust established for the exclusive
benefit of Optionee or Optionee and his or her spouse (the
“Trust”). The assigned portion shall be exercisable
only by the Trust, and the terms applicable to that assigned
portion shall be the same as those in effect for this option
immediately prior to such assignment.
4.
Dates of Exercise . This option shall become exercisable for the Option Shares in
one or more installments in accordance with the Exercise Schedule
set forth in the Grant Notice. As the option becomes exercisable
for such installments, those installments shall accumulate, and the
option shall remain exercisable for the accumulated installments
until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5.
Cessation of Service
. The option term specified in Paragraph 2 shall
terminate (and this option shall cease to be outstanding) prior to
the Expiration Date should any of the following provisions become
applicable:
(a) Except
as otherwise expressly provided in subparagraphs (b) through (e) of
this Paragraph 5, should Optionee cease to remain in Service for
any reason while this option is outstanding, then Optionee (or any
Trust to which this option is transferred pursuant to a permitted
transfer under Paragraph 3) shall have a three (3)-month period
measured from the date of such cessation of Service during which to
exercise this option for any or all of the Option Shares for which
this option is vested and exercisable at the time of
Optionee’s cessation of Service, but in no event shall this
option be exercisable at any time after the Expiration
Date.
(b) Should
Optionee’s Service terminate by reason of his or her death
while this option is outstanding, then this option, to the extent
not otherwise at that time vested and exercisable for all the
Option Shares, shall immediately vest and become exercisable for
all the Option Shares. Upon Optionee’s death (whether before
or after termination of Service) this option may be exercised, for
any or all of the Option Shares for which this option is vested and
exercisable at the time of Optionee’s cessation of Service
(including any Option Shares which vest on an accelerated basis
should such cessation of Service occur by reason of
Optionee’s death), by (i) the personal representative of
Optionee’s estate or (ii) the person or persons to whom the
option is transferred pursuant to Optionee’s will or the laws
of inheritance following Optionee’s death or (iii) any Trust
to which the option is transferred during Optionee’s lifetime
pursuant to a permitted transfer under Paragraph 3, as the case may
be. However, if Optionee dies while holding this option and has an
effective beneficiary designation in effect for this option at the
time of his or her death, then the designated beneficiary or
beneficiaries shall have the exclusive right to exercise this
option following Optionee’s death. Any such right to exercise
this option shall lapse, and this option shall cease to be
outstanding, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee’s death
or (ii) the Expiration Date. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise
been exercised.
(c) Should
Optionee cease Service by reason of Early Retirement, Normal
Retirement or Permanent Disability while this option is
outstanding, then Optionee (or any Trust to which this option is
transferred pursuant to a permitted transfer under Paragraph 3)
shall have a thirty-six (36)-month period measured from the date of
such cessation of Service during which to exercise this option for
(i) any or all Option Shares for which this option is vested and
exercisable at the time of such cessation of Service and (ii) any
additional Option Shares for which this option becomes vested and
exercisable during such thirty-six (36)-month
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period. In no event, however, shall this option be
exercisable at any time after the Expiration Date. To the extent
this option is not otherwise exercisable for all of the Option
Shares at the time of Optionee’s cessation of Service by
reason of Early Retirement, Normal Retirement or Permanent
Disability, this option shall, during the limited period of
post-Service exercisability following such cessation of Service,
continue to vest and become exercisable for one or more additional
Option Shares in accordance with the Exercise Schedule specified in
the Grant Notice or the special vesting acceleration provisions of
Paragraph 6, as if Optionee continued in Service throughout that
limited exercise period. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise
been exercised.
(d) The
applicable period of post-Service exercisability in effect pursuant
to the foregoing provisions of this Paragraph 5 shall automatically
be extended by an additional period of time equal in duration to
any interval within such post-Service exercise period during which
the exercise of this option or the immediate sale of the Option
Shares acquired under this option cannot be effected in compliance
with applicable federal and state securities laws, but in no event
shall such an extension result in the continuation of this option
beyond the Expiration Date.
(e) Should
Optionee's Service be terminated for Cause, or should Optionee
(i) engage in any post-Service activity, whether as an
Employee, consultant or advisor or in any other capacity, that is
competitive with the business operations of the Corporation (or any
Subsidiary or Parent) or (ii) engage in any other conduct,
while in Service or following cessation of Service, that is
materially detrimental to the business or affairs of the
Corporation (or any Subsidiary or Parent), as determined in the
sole discretion of the Plan Administrator, then this option,
whether or not vested and exercisable, shall terminate immediately
and cease to be outstanding.
(f) Except
as otherwise expressly provided in the preceding subparagraphs of
this Paragraph 5, during the limited period of post-Service
exercisability, this option may not be exercised in the aggregate
for more than the number of Option Shares for which this option is,
at the time of Optionee’s cessation of Service, vested and
exercisable pursuant to the Exercise Schedule specified in the
Grant Notice or the special vesting acceleration provisions of
Paragraph 6. Except as otherwise provided in this Paragraph 5 or
except to the extent (if any) specifically authorized by the Plan
Administrator pursuant to an express written agreement with the
Optionee, this option shall not vest or become exercisable for any
additional Option Shares, whether pursuant to the normal Exercise
Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6, following the
Optionee’s cessation of Service. Upon the expiration of such
limited exercise period or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise
been exercised.
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6.
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Special Acceleration of Option
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(a) This
option, to the extent outstanding at the time of an actual Change
in Control but not otherwise fully exercisable, shall automatically
accelerate so that this
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option shall, immediately prior to the effective
date of such Change in Control, become exercisable for all of the
Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully vested
shares of Common Stock. However, this option shall
not become
exercisable on such an accelerated basis, if and to the extent: (i)
this option is to be assumed by the successor corporation (or
parent thereof) or is otherwise to be continued in full force and
effect pursuant to the terms of the Change in Control transaction
or (ii) this option is to be replaced with a cash retention program
of the successor corporation which preserves the spread existing at
the time of the Change in Control on any Option Shares for which
this option is not otherwise at that time exercisable (the excess
of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent
payout of that spread in accordance with the same (or more
favorable) Exercise Schedule for those Option Shares as set forth
in the Grant Notice.
(b) Immediately
following the Change in Control, this option shall terminate and
cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued in
effect pursuant to the terms of the Change in Control
transaction.
(c) If this
option is assumed in connection with a Change in Control or
otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Change in Control,
to apply to the number and class of securities into which the
shares of Common Stock subject to this option would have been
converted in consummation of such Change in Control had those
shares actually been outstanding at the time. Appropriate
adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same. To the extent the
actual holders of the Corporation’s outstanding Common Stock
receive cash consideration for their Common Stock in consummation
of the Change in Control, the successor corporation may, in
connection with the assumption or continuation of this option but
subject to the Plan Administrator’s approval, substitute one
or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock
in such Change in Control, provided such common stock is readily
tradable on an established U.S. securities exchange or
market.
(d) Immediately upon
an Involuntary Termination of Optionee’s Service within
twenty-four (24) months following a Change in Control in which this
option is assumed or otherwise continued in effect, this option, to
the extent outstanding at the time but not otherwise fully
exercisable, shall automatically accelerate so that this option
shall become immediately exercisable for all the Option Shares at
the time subject to the option and may be exercised for any or all
of those Option Shares as fully vested shares. Should this option
be replaced with a cash retention plan in accordance with Paragraph
6(a), then the balance credited to Optionee under that plan at the
time of his or her Involuntary Termination shall immediately be
paid to Optionee in a lump sum, subject to the Corporation’s
collection of all applicable withholding taxes;
provided, however, that Optionee shall be entitled to such payment only if the
Optionee’s Involuntary Termination occurs within twenty-four
(24) months following the Change in Control.
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(e) This
Agreement shall not in any way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or
assets.
7.
Adjustment in Option Shares
. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, spin-off transaction,
extraordinary dividend or distribution or other change affecting
the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, or should
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