AMENDED AND RESTATED
MAUI LAND & PINEAPPLE COMPANY, INC.
CHANGE-IN-CONTROL SEVERANCE AGREEMENT
(Vice Presidents)
Xxxxx X. Xxxxxxxxx, Vice President/Retail Property
ARTICLE I. ESTABLISHMENT AND PURPOSE.
1.1 Effective Date. This Amended and Restated Change-in-
Control Severance Agreement (the "Agreement") is made and
entered into and is effective as of the 16th day of March, 1999
("Effective Date"), by and between Maui Land & Pineapple
Company, Inc. ("ML&P"), a Hawaii corporation, and Xxxxx X.
Xxxxxxxxx ("Executive"). This Agreement shall supersede and
replace any prior severance agreement entered into between ML&P
and the Executive.
1.2 Term of the Agreement.
a. The Agreement shall commence as of the Effective Date
written above, and shall continue until terminated in
accordance with this paragraph 1.2. This Agreement may be
terminated by the Board of Directors of ML&P (the "Board") upon
one hundred eighty (180) days advance written notice to the
Executive; provided, however, that the Board may not terminate
this Agreement (i) after the occurrence of a Change in Control
or (ii) during the respective periods set forth in Section
1.2.c or 1.2.d below.
b. In the event that a Change in Control, as defined in
Section 2.1 herein, occurs during the term of this Agreement,
this Agreement shall remain irrevocably in effect for the
greater of twenty-four (24) months from the date of such Change
in Control, or until all benefits have been paid to the
Executive hereunder.
c. In the event that the Board has knowledge that a third
party has taken steps reasonably calculated to effect a Change
in Control, including, but not limited to the commencement of a
tender offer for the voting stock of ML&P, or the circulation
of a proxy to ML&P's shareholders, then the Board shall not be
permitted thereafter to exercise the termination right provided
by Section 1.2.a unless and until the Board, in good faith, has
determined that such third party has fully abandoned or
terminated its effort to effect a Change in Control.
d. In the event that the Board approves in principle one or
more transactions the implementation of which would result in a
Change in Control, then the Board shall not be permitted
thereafter to exercise the termination right provided by
Section 1.2.a unless and until the Board, in good faith, has
determined to fully abandon and terminate all efforts by ML&P
or its Subsidiaries to implement such transactions.
1.3 Purpose of the Agreement. The purpose of this
Agreement is to advance the interests of ML&P and its
Subsidiaries by assuring that ML&P and its Subsidiaries shall
have the continued employment and dedication of the Executive
and the availability of his advice and counsel in the event
that an acquisition or Change in Control occurs. This
Agreement shall also assure the Executive of equitable
treatment during the period of uncertainty that surrounds an
acquisition or Change in Control, and allow the Executive to
act at all times in the best interest of ML&P and its
shareholders.
1.4 Contractual Right to Benefits. This Agreement
establishes and vests in the Executive a contractual right to
the benefits which he or she is entitled hereunder, enforceable
by the Executive against ML&P or any Successor Employer that
assumes this Agreement. However, nothing herein shall require
ML&P or any such Successor Employer to segregate, earmark, or
otherwise set aside any funds or other assets to provide for
any payments hereunder.
1.5 Legal Status. This Agreement shall be considered an
unfunded agreement to provide welfare benefits to a select
group of management or highly compensated employees and is
therefore intended to be a "top-hat" plan exempt from the
requirements of the provisions of Parts 2, 3 and 4 of Title I
of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
ARTICLE II. DEFINITIONS AND CONSTRUCTION.
2.1 Definitions. Whenever used in this Agreement, the
following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is
capitalized.
a. "Base Salary" means Executive's annualized salary, which
includes all regular basic wages before reduction for any
amounts deferred on a tax-qualified or nonqualified basis,
payable in cash to Executive for services rendered during the
Year. Base Salary shall exclude bonuses, incentive
compensation, special fees or awards, commissions, allowances,
or any other form of premium or incentive pay, or amounts
properly designated by Employer as payment toward or
reimbursement of expenses.
b. "Beneficial Owner" shall have the meaning ascribed to such
terms in Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
c. "Beneficiary" with respect to Executive means the persons
or entities designated or deemed designated by the Executive
pursuant to Section 8.2 herein.
d. "Board" means the Board of Directors of ML&P.
e. "Change in Control" means one or more of the following
occurrences with respect to ML&P or a Subsidiary:
(1) Any Person, including a "group" as defined in Section 13
(d)(3) of the Exchange Act, who is not at the date of this
Agreement the beneficial owner of shares of the given entity
having 25% or more of the total number of votes that may be
cast for the election of Directors of such entity, becomes the
beneficial owner (including acquisition of beneficial ownership
resulting from formation of a "group") of shares of such entity
having 25% or more of such voting power;
(2) Any Person, including a "group" as defined in
Section 13(d)(3) of the Exchange Act, who is not at the date of
this Agreement the beneficial owner of shares of a given entity
having 50% or more of the total number of votes that may be
cast for the election of Directors of such entity, becomes the
beneficial owner (including acquisition of beneficial ownership
resulting from formation of a "group") of shares of such entity
having 50% or more of such voting power;
(3) As the result of, or in connection with any cash tender or
exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the
foregoing transactions, the Persons who were Directors of the
given entity before the transaction shall cease to constitute a
majority of the Board of Directors of such entity or any
successor to such entity;
(4) A merger or consolidation of the given entity in which the
surviving entity is neither ML&P nor a direct or indirect
wholly owned subsidiary of ML&P; or
(5) The sale, transfer, or other disposition of all or
substantially all of the assets of the given entity (and for
this purpose, the term "substantially all" shall mean assets
having a fair market value, whether or not realized in the
transaction, that is 50% or more of the aggregate fair market
value of all assets of such entity); and, in addition, in the
case of a Subsidiary, the sale, transfer or other disposition
(other than to an entity that is before and following such
transaction a direct or indirect wholly owned subsidiary of
M&LP) of securities that immediately prior to such transaction
constituted 50% or more of such Subsidiary's outstanding voting
securities.
(6) A spin-off, split-off, split-up or similar divisive
reorganization affecting ML&P and/or its Subsidiaries.
f. "Committee" means the Compensation Committee of the Board
of Directors of ML&P or any other committee appointed by the
Board to administer this Agreement; provided that following a
Change in Control "Committee" shall mean the Persons who
constituted the Committee immediately prior to the Change in
Control.
g. "Disability" means a physical or mental condition which
renders Executive unable to discharge his normal work
responsibility with Employer and which, in the opinion of a
licensed physician selected by the Executive, subject to
reasonable approval by the Committee based upon sufficient
medical evidence, can be reasonably expected to continue for a
period of at least one full calendar year. If Executive fails
to select a physician within ten (10) business days of a
written request made by Employer, then Employer may select a
physician for purposes of this paragraph.
h. "Effective Date" has the meaning set forth in Section 1.1.
i. "Effective Date of Termination" means the date on which a
Qualifying Termination occurs.
j. "Employer" means ML&P, or any Successor Employer that has
assumed this Agreement pursuant to Section 8.1.a.
k. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, or any successor act
thereto.
l. "Expiration Date" means the date the Agreement terminates,
as provided in Section 1.2 herein.
m. "Just Cause" means the basis for a termination of
Executive's employment for which no Severance Benefits are
payable hereunder, as provided in Article IV herein.
n. "ML&P" means Maui Land & Pineapple Company, Inc., a Hawaii
corporation.
o. "Normal Retirement Date" shall mean the date on which the
Executive attains age 65.
p. "Person" shall have the meaning ascribed to such terms in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined and used in
Section 13(d) and Regulation 13D thereunder; provided that for
purposes of Section 2.1(e) "Person" shall not include any
entity that is a direct or indirect wholly owned subsidiary of
ML&P.
q. "Qualifying Termination" means a termination of the
Executive's employment as described in Section 3.2 herein.
r. "Severancee Benefit" means the payment of severance
compensation as provided in Article III herein.
s. "Subsidiaries" means Maui Pineapple Company, Ltd. and
Kapalua Land Company, Ltd. However, if the Executive is at the
date of this Agreement the Vice President Retail Property for
ML&P, the terms "Subsidiaries" or "Subsidiary" shall mean and
be limited to Kaahumanu Center Associates ("KCA").
t. "Successor Employer" means an entity that becomes
Executive's employer in connection with a Change in Control and
which following such Change in Control does not control, and is
not controlled by or under common control with, ML&P.
u. "Year" means the consecutive 12-month period beginning
each January 1 and ending December 31.
2.2 Gender and Number. Except where otherwise indicated
by the context, any masculine term used herein also shall
include the feminine, the plural shall include the singular,
and the singular shall include the plural.
2.3 Severability. In the event any provision of the
Agreement shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts
of the Agreement, and the Agreement shall be construed and
enforced as if the illegal or invalid provision had not been
included.
2.4 Modification. No express provisions of this
Agreement may be modified, waived, or discharged unless such
modification, waiver, or discharge is agreed to by the
Executive in writing and approved by Employer's board
of directors.
2.5 Applicable Law. To the extent not preempted by the
laws of the United States, the laws of the State of Hawaii
shall be the controlling law in all matters relating to the
Agreement without regard to the conflicts of law principles in
such laws.
ARTICLE III. SEVERANCE BENEFITS.
3.1 Right to Severance Benefits. The Executive shall be
entitled to receive Severance Benefits as described in Section
3.4 herein, if there has been a Change in Control as defined in
Section 2.1(e) herein, and if, within twenty-four (24) months
thereafter, the Executive's employment shall end for any reason
specified in Section 3.2 herein as being a Qualifying
Termination. The Executive shall not be entitled to receive
Severance Benefits if the Executive's employment is
involuntarily terminated for Just Cause, as provided under
Article IV herein, or if the Executive's employment terminates
due to death or Disability.
3.2 Qualifying Termination. The occurrence of any one or
more of the following events within twenty-four (24) calendar
months after a Change in Control shall entitle the Executive to
the payment of Severance Benefits, as provided under Section
3.4 herein:
a. Involuntary termination of the Executive's employment
without Just Cause (as defined in Article IV herein) (other
than a merely technical termination arising from a good faith
reassignment in connection with a Change in Control of officers
and employees of ML&P and/or its Subsidiaries and following
which Executive remains an employee of (i) ML&P or a Subsidiary
that continues thereafter to be wholly owned by ML&P [or in the
case Executive as of the date of this Agreement is the Vice
President Retail Property for ML&P, if following such
reassignment the Executive remains an employee (x) of ML&P or
(y) of Maui Pineapple Company, Ltd. or Kapalua Land Company,
Ltd. (provided such employer continues following such Change in
Control be wholly owned by ML&P) or (z) of KCA (provided ML&P
remains the sole general partner of KCA following such Change
In Control] or (ii) a Successor Employer that has assumed
ML&P's obligations under this Agreement in accordance with
Section 8.1.a); or
b. The Executive's voluntary employment termination for Good
Reason (as defined by Section 3.3 herein).
3.3 Definition of Good Reason. "Good Reason" means,
without the Executive's express written consent, the occurrence
after a Change in Control of any one or more of the following:
a. The assignment of the Executive to duties
materially inconsistent with the Executive's
authorities, duties, responsibilities, and status
(including offices, titles and reporting
requirements) as an executive and/or officer of
Employer, or a material reduction of the
Executive's authorities, duties, or
responsibilities from those in effect as of ninety
(90) days prior to the Change in Control, other
than an act that is remedied promptly after
Employer's receipt of notice thereof given by the
Executive (provided, however, that "Good Reason"
shall not include the events described in the
preceding portions of this paragraph (a) if the
changes described therein have been approved by a
majority of the Board of ML&P and also by a number
of such directors who comprised at least a
majority of the Board of ML&P 90 days prior to the
Change In Control);
b. Employer requiring the Executive to be based at a
location in excess of seventy-five (75) miles from
the location of the Executive's principal job
location or office immediately prior to the Change
in Control, except for required travel on company
business to an extent substantially consistent
with the Executive's then present business travel
obligations;
c. A more than ten percent (10%) reduction of the Executive's
annual rate of Base Salary in effect as of ninety (90) days
prior to the Change in Control;
d. The failure to continue in effect any of ML&P's or its
Subsidiaries' annual incentive compensation plans, or employee
benefit or retirement plans, policies, practices, or similar
compensatory arrangements in which the Executive participated
as of the 180th day preceding the Change in Control (unless
such failure to continue the plan, policy, practice or
arrangement pertains generally to all plan participants) or the
failure to continue the Executive's participation therein on
substantially the same basis, both in terms of the amount of
benefits provided and the level of the Executive's
participation relative to other participants; provided,
however, that this Section 3.3.d shall not apply in the case of
a Change in Control described in Section 2.1.e (6) if:
(a) Executive's employer thereafter is ML&P or a wholly owned
Subsidiary thereof (or, if the Executive is Vice President
Retail Property of ML&P, such employer is KCA and ML&P remains
the sole general partner of KCA), or a Successor Employer that
has in accordance with Section 8.1 expressly assumed this
Agreement; (b) a failure to continue the plan, policy, practice
or arrangement or Executive's participation therein pertains
generally to all participants employed by such employer; and
(c) the aggregate annualized value to Executive of benefits
provided under all of such employer's incentive compensation
plans, other employee benefit or retirement plans, policies,
practices, or similar compensatory arrangements (excluding any
costs incurred in connection with this Agreement) is at least
90% of the value to Executive of benefits so provided by ML&P
and its Subsidiaries for the last Year ended prior to the
Change in Control.
e. The failure of ML&P to obtain an agreement from any
Successor Employer (as contemplated by Article VIII) to assume
this Agreement and to perform ML&P's obligations to Executive
hereunder.
f. A material breach of obligations to Executive under this
Agreement by ML&P, or by a Successor Employer that has assumed
this Agreement, if such breach has not been cured to the
reasonable satisfaction of Executive within thirty (30) days
following delivery of written notice thereof by Executive to
the breaching party.
3.4 Description of Severance Benefits. In the event that
Executive becomes entitled to receive Severance Benefits, as
provided in Section 3.1 herein, ML&P shall pay to the Executive
and provide him with the following:
a. An amount equal to 2.00 times the Executive's annual rate
of Base Salary in effect upon the Effective Date of Termination
(or, if greater, 2.00 times the Executive's annual rate of Base
Salary in effect ninety (90) days prior to the Change in
Control); and
b. A payout under the ML&P Annual Incentive Plan, or any
similar plan Employer maintains, or is obligated by Section
3.3.d to provide, in accordance with the terms of such plan;
and
c. A continuation of all welfare benefits at normal employee
cost including medical and dental insurance, long-term
disability, group term life insurance, and accidental death &
dismemberment insurance for two (2) full years from the
Effective Date of Termination or until the Executive reaches
his Normal Retirement Date, whichever occurs earlier. In the
event that participation in any one or more of the welfare
benefits is not possible under the terms of the governing
welfare benefit provisions or due to the modification or
elimination of the welfare benefits, Employer shall provide
substantially identical welfare benefits at the normal employee
cost of the affected welfare benefits. However, these benefits
shall be discontinued prior to the end of the two (2) years in
the event the Executive receives substantially similar benefits
from a subsequent employer, as determined by the Committee.
The right of the Executive and his spouse and other dependents
to continued group health coverage under Section 4980B of the
Internal Revenue Code of 1986, as amended ("Code"), shall
commence at the end of the applicable Severance Benefits
period. Unless otherwise provided under this Agreement, the
applicable Severance Benefits period shall be treated as if it
were a period of employment with ML&P or its Subsidiaries (or,
if Executive so elects, with any Successor Employer) for
purposes of determining rights and benefits under any
retirement plan or other plan or program and shall be treated
as a period of covered employment under such plan or other plan
or program if the Executive was in covered employment
immediately prior to the Change in Control, provided that, if
such treatment is not possible under the terms of such plan or
other plan or program, Employer shall directly provide
substantially identical benefits attributable to the crediting
of the Severance Benefits period.
3.5 Reduction of Severance Benefits. In the event there
are fewer than twenty-four (24) whole or partial months
remaining from the Executive's Effective Date of Termination
until the Executive's Normal Retirement Date, then the amounts
provided for under Section 3.4.a above shall be reduced by a
fraction, the numerator of which shall be the number of whole
or partial months remaining until the Executive's Normal
Retirement Date, and the denominator of which shall be
twenty-four (24).
3.6 Special Retirement Benefits. The Executive shall
receive special retirement benefits as provided below, so that
the total retirement benefits that the Executive receives will
equal the retirement benefits that the Executive would have
received under the Maui Land & Pineapple Company, Inc. Pension
Plan for Non-Bargaining Unit Employees ("Retirement Plan"),
Supplemental Executive Retirement Plan, and Executive
Supplemental Insurance Plan/Executive Deferred Compensation
Plan (collectively, "Plans"), under the terms thereof that
existed ninety (90) days prior to the Change in Control, had
the Executive continued in the employ of ML&P and its
Subsidiaries for two (2) years following the Executive's
Effective Date of Termination (or until his Normal Retirement
Date, whichever is earlier) but without regard to any ancillary
benefits. The amount of special retirement benefits payable
hereunder to the Executive or his beneficiaries shall equal the
excess of the amount specified in (a) over the amount specified
in (b) below.
a. The total retirement benefits on an actuarial equivalent
single-life basis would be paid to the Executive if the two (2)
years (or the period to his Normal Retirement Date, if less)
following the Executive's Effective Date of Termination are
added to his credited service under the Plans.
b. The total retirement benefits actually paid on an
actuarial equivalent single-life basis to the Executive.
Such special retirement benefits shall be paid at
the same time and in the same form (e.g., actuarial
equivalent single-life or contingent annuitant basis) as
was required with respect to the Executive's retirement
benefits under the Plans. The special retirement benefits
shall be paid by the Plans or, if the terms of such Plans
do not provide for such benefits, the special retirement
benefits shall be paid directly by Employer. The
actuarial equivalent of special retirement benefits shall
be determined in accordance with the factors provided
under the Retirement Plan.
3.7 Outplacement Services. In the event that the
Executive becomes entitled to receive Severance Benefits as
provided in Section 3.1 herein, the Executive shall be
entitled, at the expense of Employer, to receive standard
outplacement services as selected by the Executive, for a
period of up to twenty-four (24) months from the Effective Date
of Termination. However, such services shall not exceed a
maximum annual benefit of ten percent (10%) of the Executive's
annual rate of Base Salary in effect ninety (90) days prior to
the Change in Control.
3.8 Incentive Compensation. In the event that the
Executive becomes entitled to receive Severance Benefits as
provided in Section 3.1 herein, any deferred awards previously
granted to the Executive under ML&P's or its Subsidiaries' or
any Successor Employer's incentive compensation plans and not
previously paid to the Executive shall immediately vest on the
date of the Executive's Effective Date of Termination and shall
be paid no later than ninety (90) calendar days following that
date, and be included as compensation in the month paid.
ARTICLE IV. DISQUALIFICATION FROM RECEIPT OF BENEFITS.
No Severance Benefits shall be payable to the
Executive under this Agreement in the event the Executive is
terminated by Employer for Just Cause. For this purpose, Just
Cause shall mean willful, malicious conduct by the Executive
which is detrimental to the best interests of Employer,
including theft, embezzlement, the conviction of a criminal
act, disclosure of trade secrets, a gross dereliction of duty,
or other grave misconduct on the part of the Executive which is
substantially injurious to Employer. Just Cause also shall
include a material breach by the Executive of any of his
covenants under this Agreement, if such breach has not been
cured to the reasonable satisfaction of Employer within thirty
(30) days following written notice thereof by Employer to the
Executive.
ARTICLE V. FORM AND TIMING OF SEVERANCE BENEFITS.
5.1 Form and Timing of Severance Benefits. The
Severance Benefits described in Sections 3.4.a, 3.4.b and 3.8
herein shall be paid in cash to the Executive in a single lump
sum as soon as practicable following the Executive's Effective
Date of Termination, but in no event beyond ninety (90)
calendar days from such date.
The Severance Benefits described in Section 3.4.c
herein shall be provided to the Executive immediately upon the
Executive's Effective Date of Termination and shall continue to
be provided for two (2) full calendar years from the
Executive's Effective Date of Termination or until the
Executive reaches his Normal Retirement date, whichever occurs
earlier. However, the Severance Benefits described in Section
3.4.c herein shall be discontinued prior to the end of the two
(2) year period immediately upon the Executive receiving
substantially similar benefits from a subsequent employer, as
determined by the Committee.
5.2 Withholding of Taxes. Employer shall withhold
from any amounts payable under this Agreement all Federal,
state, city or other taxes as legally shall be required.
ARTICLE VI. PARACHUTE PAYMENTS.
6.1 Determination of Alternative Severance Benefit Limit.
Notwithstanding any other provision of this Agreement, if any
portion of the Severance Benefits or any other payment under
this Agreement, or under any other agreement with, or plan of,
Employer (in the aggregate "Total Payments") would constitute
an "excess parachute payment," then the payments to be made to
the Executive under this Agreement shall be reduced such that
the value of the aggregate Total Payments that the Executive is
entitled to receive shall be one dollar ($1) less than the
maximum amount which the Executive may receive without becoming
subject to the tax imposed by Section 4999 of the Code, or
which Employer may pay without loss of deduction under Section
280G(a) of the Code. However, such reduction in Severance
Benefits shall apply if, and only if, the resulting Severance
Benefits with such reduction is greater in value to the
Executive than the value of the Severance Benefits without a
reduction, net of any tax imposed on the Executive pursuant to
Section 4999 of the Code. For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall
have the meanings assigned to such terms in Section 280G of the
Code, and such "parachute payments" shall be valued as provided
therein.
6.2 Procedure for Establishing Alternative Limitation.
Within fifteen (15) calendar days following delivery of the
notice of Qualifying Termination or notice by Employer to the
Executive of its belief that there is a payment or benefit due
the Executive which will result in an "excess parachute
payment" as defined in Section 280G of the Code, the Executive
and such Employer, at Employer's expense, shall obtain the
opinion of such Employer's principal outside law firm,
accounting firm, and/or compensation and benefits consulting
firm, which sets forth: (a) the amount of the Executive's
"annualized includible compensation for the base period" (as
defined in Section 280G(d)(1) of the Code); (b) the present
value of the Total Payments; and (c) the amount and present
value of any "excess parachute payment."
In the event that such opinion determines that there
would be an "excess parachute payment," such that a reduction
in the Severance Benefits would result in a greater net benefit
to the Executive (as provided in Section 6.1 herein), then the
Severance Benefits hereunder or any other payment determined
under the opinion to be includible in Total Payments shall be
reduced or eliminated so that, on the basis of calculations set
forth in such opinion, there will be no "excess
parachute payment". The reduction or elimination of specific
payments shall apply to such type and amount of specific
payments as may be designated by the Executive in writing
delivered to Employer within ten (10) calendar days of receipt
of the opinion, or if the Executive fails to so notify such
Employer, as may be reasonably determined by it.
The provisions of this Section 6.2, including the
calculations, notices, and opinion provided herein, shall be
based upon the conclusive presumption that the following
amounts are reasonable: (a) the compensation and benefits
provided for in Article III herein; and (b) any other
compensation earned prior to the Effective Date of Termination
by the Executive pursuant to ML&P's and any Successor
Employer's compensation programs (if such payments would have
been made in the future in any event, even though the timing of
such payment is triggered by the Change in Control).
6.3 Subsequent Imposition of Excise Tax. If,
notwithstanding compliance with the provisions of Sections 6.1
and 6.2 herein, it is ultimately determined by a court or
pursuant to a final determination by the Internal Revenue
Service that any portion of the Total Payments is considered to
be a "parachute payment", subject to excise tax under Section
4999 of the Code, which was not contemplated to be a "parachute
payment" at the time of payment (so as to accurately determine
whether a limitation should have been applied to the Total
Payments to maximize the net benefit to the Executive, as
provided in Sections 6.1 and 6.2 herein), the Executive shall
be entitled to receive a lump sum cash payment sufficient to
place the Executive in the same net after-tax position,
computed by using the "Special Tax Rate" as such term is
defined below, that the Executive would have been in had such
payment not been subject to such excise tax, and had the
Executive not incurred any interest charges or penalties with
respect to the imposition of such excise tax. For purposes of
this Agreement, the "Special Tax Rate" shall be the highest
effective Federal and state marginal tax rates applicable to
the Executive in the year in which the payment contemplated
under this Section 6.3 is made.
ARTICLE VII. OTHER RIGHTS AND BENEFITS NOT AFFECTED.
7.1 Other Benefits. Neither the provisions of this
Agreement nor the Severance Benefits provided for hereunder
shall reduce any amounts otherwise payable, or in any way
diminish the Executive's rights as an employee of ML&P or its
Subsidiaries or a Successor Employer, whether existing now or
hereafter, under any benefit, incentive, retirement, stock
option, stock bonus, stock purchase plan, or any employment
agreement, or other plan or arrangement.
7.2 Employment Status. This Agreement does not
constitute a contract of employment or impose on ML&P or its
Subsidiaries or any Successor Employer any obligation to retain
the Executive as an employee, to change the status of the
Executive's employment, or to change such entity's policies
regarding termination of employment.
ARTICLE VIII. SUCCESSORS.
8.1 Successors.
a. This Agreement shall be binding upon ML&P,
any Successor Employer that has assumed this
Agreement, and their respective successors and
assigns. ML&P shall require any Successor Employer
to expressly assume and agree to perform this
Agreement and all of ML&P's obligations hereunder.
Failure of ML&P to obtain such assumption and
agreement prior to the effectiveness of any Change in
Control that results in a transfer of Executive's
employment to a Successor Employer shall constitute
Good Reason for voluntary termination of employment
by Executive, pursuant to Sections 3.2 and 3.3
hereof.
b. If in connection with and prior to the
effectiveness of a Change in Control a Successor
Employer has assumed this Agreement in accordance
with Section 8.1.a, then following such Change in
Control neither ML&P, nor any successor to it that
does not directly or indirectly control and is not
directly or indirectly controlled by or under common
control with, such Successor Employer, shall have any
further liability or obligation hereunder. For
purposes of the foregoing and the definition of
"Successor Employer" in Section 2.1, "control"
(including the terms controlling, controlled by and
under common control with) shall have the meaning set
forth in Rule 405 under the Securities Act of 1933
(17 CFR 230.405).
c. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or
legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and
legatees. If Executive should die while any amount
would still be payable to him hereunder had he
continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the
terms of this Agreement, to the Executive's devisee,
legatee, or other designee, or if there is no such
designee, to the Executive's estate.
8.2 Beneficiaries. In the event of the death of the
Executive, all unpaid amounts payable to the Executive under
this Agreement shall be paid to his or her Beneficiary. The
Executive's spouse and other dependents shall continue to be
covered by all applicable welfare benefits during the remainder
of the Severance Benefits period, if any, pursuant to
Section 3.4.c (unless payments at death are specified by the
applicable welfare benefits provisions). The Beneficiary of
the Executive's Severance Benefits under this Agreement shall
be designated by the Executive in the form of a signed writing
acceptable to the Committee. The Executive may make or change
such designation at any time.
ARTICLE IX. ADMINISTRATION.
9.1 Administration. The Compensation Committee shall
administer this Agreement. The Committee is authorized, prior
to occurrence of a Change in Control, to interpret this
Agreement, to prescribe and rescind rules and regulations, to
provide conditions and assurances deemed necessary and
advisable, to protect the interest of ML&P or its Subsidiaries,
and to make all other determinations necessary or advisable for
the Agreement's administration. In fulfilling its
administrative duties hereunder, the Committee may rely on
outside counsel, independent accountants, or other consultants
to render advice or assistance.
9.2 Indemnification and Exculpation. The members of the
Board, its agents and officers, directors and employees of ML&P
and its Subsidiaries shall be indemnified and held harmless by
ML&P and its Subsidiaries against and from any and all loss,
cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting
from any claim, action, suit or proceeding to which they may be
a party or in which they may be involved by reason of any
action taken or failure to act under this Agreement and against
and from any and all amounts paid by them in settlement (with
ML&P's written approval) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding. The foregoing
provision shall not be applicable to any person if the loss,
cost, liability or expense is due to such person's gross
negligence or willful misconduct.
9.3 Legal Fees. ML&P (or, if applicable, any Successor
Employer that has assumed the Agreement) shall pay all
reasonable legal fees, costs of litigation and other expenses
incurred in good faith by the Executive as a result of its
refusal to provide the Severance Benefits which it is obligated
to provide to Executive under this Agreement, or as a result of
ML&P or such Successor Employer contesting the validity,
enforceability or interpretation of the Agreement; provided,
however, that such payments shall not exceed the amount
permitted by law.
IN WITNESS WHEREOF, ML&P has caused this Agreement to
be executed as of the day and year first above written.
MAUI LAND & PINEAPPLE COMPANY, INC.
By /S/ XXXX X. XXXXXXX
Its President
/S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx, "Executive"
ATTEST:
/S/ J. XXXXX XXXXXX
