-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TmmehWE4WZr7yi06NAAoKewx//6Z14QCid9H7wLUW29UcyS0O2IqSH1V/lZ+4iFM azZT2VSz4vNbNyKIUJkqng== 0001047469-09-005114.txt : 20090506 0001047469-09-005114.hdr.sgml : 20090506 20090506144924 ACCESSION NUMBER: 0001047469-09-005114 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20090331 FILED AS OF DATE: 20090506 DATE AS OF CHANGE: 20090506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAUI LAND & PINEAPPLE CO INC CENTRAL INDEX KEY: 0000063330 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 990107542 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06510 FILM NUMBER: 09800986 BUSINESS ADDRESS: STREET 1: PO BOX 187 STREET 2: 120 KANE ST CITY: KAHULUI MAUI STATE: HI ZIP: 96733 BUSINESS PHONE: 8088773351 MAIL ADDRESS: STREET 1: PO BOX 187 CITY: KAHULUI STATE: HI ZIP: 96733 10-Q 1 a2192797z10-q.htm 10-Q

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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)    

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended MARCH 31, 2009

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-06510

MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)

HAWAII   99-0107542
(State or other jurisdiction
of incorporation or organization)
  (IRS Employer
Identification No.)

161 SOUTH WAKEA AVENUE, P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687
(Address of principal executive offices)

Registrant's telephone number, including area code: (808) 877-3351

NONE
(Former name, former address and former fiscal year, if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o    No o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer ý   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No ý

         Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 
  Class    
  Outstanding at May 1, 2009    
    Common Stock, no par value       8,157,988 shares    


Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES


TABLE OF CONTENTS

 
  Page

PART I. FINANCIAL INFORMATION

  3

Item 1. Financial Statements (unaudited)

 
3

Condensed Consolidated Statements of Operations,
Three Months Ended March 31, 2009 and 2008

 
3

Condensed Consolidated Balance Sheets, March 31, 2009 and December 31, 2008

 
4

Condensed Consolidated Statements of Stockholders' Equity,
Three Months Ended March 31, 2009 and 2008

 
5

Condensed Consolidated Statements of Cash Flows,
Three Months Ended March 31, 2009 and 2008

 
6

Notes to Condensed Consolidated Financial Statements

 
7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

 
17

Forward-Looking Statements and Risks

 
27

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 
28

Item 4. Controls and Procedures

 
28

PART II. OTHER INFORMATION

 
29

Item 1A. Risk Factors

 
29

Item 5. Other Information

 
29

Item 6. Exhibits

 
30

Signature

 
31

2


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PART I FINANCIAL INFORMATION

Item 1.    Financial Statements


MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 
  Three Months Ended  
 
  3/31/09   3/31/08  
 
  (in thousands except
share amounts)

 

Operating Revenues

             
 

Product revenues

  $ 8,248   $ 15,272  
 

Service revenues

    7,349     10,097  
           

Total Operating Revenues

    15,597     25,369  
           

Operating Costs and Expenses

             
 

Cost of product revenues

    5,998     10,168  
 

Cost of service revenues

    9,938     9,964  
 

Shipping and marketing

    2,234     3,806  
 

General and administrative

    7,842     10,170  
           

Total Operating Costs and Expenses

    26,012     34,108  
           

Operating Loss

    (10,415 )   (8,739 )

Equity in income (losses) of affiliates

    (1,130 )   9,375  

Interest expense

    (1,476 )   (1,481 )

Interest income

    183     244  
           

Loss Before Income Taxes

    (12,838 )   (601 )

Income Tax Expense (Benefit)

    385     (187 )
           

Net Loss

  $ (13,223 ) $ (414 )
           

Loss Per Common Share

             
 

Basic

  $ (1.65 ) $ (0.05 )
 

Diluted

  $ (1.65 ) $ (0.05 )

See accompanying Notes to Condensed Consolidated Financial Statements.

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 
  3/31/09   12/31/08  
 
  (in thousands)
 

ASSETS

             

Current Assets

             
 

Cash and cash equivalents

  $ 3,059   $ 13,668  
 

Accounts and notes receivable

    6,064     5,509  
 

Refundable income taxes

    4,662     4,662  
 

Inventories

    10,461     9,737  
 

Real estate held for sale

    19,357     18,963  
 

Other current assets

    1,282     600  
           
   

Total current assets

    44,885     53,139  
           

Property

    210,461     212,242  
 

Accumulated depreciation

    (98,036 )   (96,002 )
           

Property—net

    112,425     116,240  
           

Investments in affiliates

    40,473     41,683  

Other assets

    33,794     37,138  
           

Total

  $ 231,577   $ 248,200  
           

LIABILITIES AND STOCKHOLDERS' EQUITY

             

Current Liabilities

             
 

Current portion of long-term debt and capital lease obligations

  $ 56,078   $ 46,050  
 

Trade accounts payable

    7,151     8,183  
 

Other current liabilities

    12,869     13,351  
           
   

Total current liabilities

    76,098     67,584  
           

Non-Current Liabilities

             
 

Long-term debt and capital lease obligations

    33,883     90,941  
 

Accrued retirement benefits

    41,361     43,798  
 

PGC obligation (Note 9)

    48,134      
 

Other non-current liabilities

    13,423     14,189  
           
   

Total non-current liabilities

    136,801     148,928  
           

Commitments and Contingencies (Note 16)

             

Stockholders' Equity

             
 

Common stock, no par value—23,000,000 shares authorized, 8,023,943 and 8,021,248 issued and outstanding

    34,868     34,791  
 

Additional paid-in capital

    8,499     8,363  
 

Retained earnings (Accumulated deficit)

    (6,665 )   6,558  
 

Accumulated other comprehensive loss

    (18,024 )   (18,024 )
           
   

Stockholders' Equity

    18,678     31,688  
           

Total

  $ 231,577   $ 248,200  
           

See accompanying Notes to Condensed Consolidated Financial Statements.

4


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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

For the Three Months Ended March 31, 2009 and 2008

 
  Common Stock    
  Retained
Earnings
(Accumulated
Deficit)
  Accumulated
Other
Comprehensive
Loss
   
 
 
  Additional
Paid in
Capital
   
 
 
  Shares   Amount   Total  
 
  (in thousands)
 

Balance, January 1, 2009

    8,021   $ 34,791   $ 8,363   $ 6,558   $ (18,024 ) $ 31,688  

Stock compensation expense

                213                 213  

Vested restricted stock issued

    3     77     (77 )                

Net loss

                      (13,223 )         (13,223 )
                           

Balance, March 31, 2009

    8,024   $ 34,868   $ 8,499   $ (6,665 ) $ (18,024 ) $ 18,678  
                           

Balance, January 1, 2008

    7,959   $ 34,168   $ 6,769   $ 90,576   $ (1,246 ) $ 130,267  

Cumulative impact of adoption of EITF No. 06-8, net of tax

                      (4,622 )         (4,622 )

Stock option exercises

    1     14                       14  

Stock compensation expense

                638                 638  

Vested restricted stock issued

    2     74     (74 )                

Shares cancelled to pay tax liability

    (4 )   (105 )                     (105 )

Net loss

                      (414 )         (414 )
                           

Balance, March 31, 2008

    7,958   $ 34,151   $ 7,333   $ 85,540   $ (1,246 ) $ 125,778  
                           

See accompanying Notes to Condensed Consolidated Financial Statements.

5


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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 
  Three Months Ended  
 
  3/31/09   3/31/08  
 
  (in thousands)
 

Net Cash Used in Operating Activities

  $ (9,896 ) $ (15,368 )
           

Investing Activities

             
 

Purchases of property

    (241 )   (4,614 )
 

Contributions to affiliates

        (7,756 )
 

Other

    (497 )   (2,941 )
           

Net Cash Used in Investing Activities

    (738 )   (15,311 )
           

Financing Activities

             
 

Payments of long-term debt and capital lease obligations

    (48,115 )   (2,506 )
 

Proceeds from long-term debt

        34,000  
 

Stock compensation exercises

        14  
 

Debt issuance cost and other

    (380 )    
 

Net proceeds from PGC sale (Note 9)

    48,520      
           

Net Cash Provided by Financing Activities

    25     31,508  
           

Net Increase (Decrease) in Cash and Cash Equivalents

    (10,609 )   829  

Cash and Cash Equivalents at Beginning of Period

    13,668     1,991  
           

Cash and Cash Equivalents at End of Period

  $ 3,059   $ 2,820  
           

        Supplemental Disclosures of Cash Flow Information—Interest (net of amounts capitalized) of $2,312,000 and $861,000 was paid during the three months ended March 31, 2009 and 2008, respectively. Income taxes of $(291,000) and $10,000 were (refunded) paid during the three months ended March 31, 2009 and 2008, respectively.

        Supplemental Non-Cash Investing and Financing Activities—

    Property acquired under capital leases was $322,000 and $25,000 during the three months ended March 31, 2009 and 2008, respectively.

    Amounts included in trade accounts payable for additions to property and for other investing and financing activities totaled $1,419,000 and $3,315,000 at March 31, 2009 and 2008, respectively.

    Net cash sales proceeds of $2.5 million were deposited directly with a qualified exchange intermediary for reinvestment on a tax-deferred basis during the three months ended March 31, 2008 and was included in other noncurrent assets on the consolidated balance sheet at March 31, 2008.

    See accompanying Notes to Condensed Consolidated Financial Statements.

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.
The accompanying unaudited condensed consolidated financial statements have been prepared by Maui Land & Pineapple Company, Inc. (together with its subsidiaries, the "Company") in accordance with generally accepted accounting principles for interim financial information that are consistent in all material respects with those applied in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and pursuant to the instructions to Form 10-Q and Article 10 promulgated by Regulation S-X of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and notes to financial statements required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the financial position, results of operations and cash flows for the interim periods ended March 31, 2009 and 2008. The financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 2008.

    LIQUIDITY

            The Company incurred a net loss of $13.2 million and had negative cash flows from operations of $9.9 million for the three months ended March 31, 2009. At March 31, 2009, the Company had amounts outstanding under borrowing agreements of approximately $98 million; and approximately $14.5 million available under existing lines of credit and $3.1 million in cash and cash equivalents. In March 2010, $55 million of borrowings under the Company's two available lines of credit is scheduled to mature. The lines of credit have financial covenants requiring a minimum of $10 million in liquidity and a limitation on new indebtedness. Failure to satisfy any of the covenants or to otherwise default under either of the credit agreements could result in the outstanding borrowings becoming immediately due, which could result in a default under the other credit agreement as well as the $40 million senior secured convertible notes. Default under the convertible notes could require the Company to redeem the notes at 115% of the outstanding amount of principal and accrued interest. The Company is obligated to purchase the spa, beach club improvements and the sundry store from Kapalua Bay Holdings ("Bay Holdings") at actual construction cost upon completion in 2009, which is estimated to be approximately $35 million. The Company is currently negotiating the terms of the purchase of the improvements with the members of Bay Holdings, and expects that it will fund most of the purchase at a later date. At March 31, 2009, these matters gave rise to significant uncertainty as to the Company's ability to continue as a going concern.

            In response to these matters, the Company has undertaken several financial and strategic initiatives to restructure the terms of its credit agreements and generate cash flow from a variety of sources, including the sale of several real estate assets. In March 2009, the Company sold the Plantation Golf Course (PGC) for $50 million (see Note 9) and $45 million of the sales proceeds were applied to partially repay outstanding borrowings that were collateralized by the PGC. The Company is currently in discussions with both lenders to further restructure its line of credit and revolving loan agreements to extend the maturity dates beyond March 2010, and to increase the amounts available under the line of credit agreement based, in part, on a re-appraisal of the properties securing the line of credit and by providing additional properties as collateral under the agreement. In addition, the Company has taken several other actions to reduce cash outflows including reducing its headcount by about 100 personnel in March 2009, as well as other measures to reduce operating expenses. The Company is actively in the process of attempting to sell several

7


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    selected real estate assets to provide additional liquidity and to further reduce debt, although the timing and amount of such sales are uncertain. As a result of these actions and together with its initiatives to generate liquidity, the Company believes (although no assurances can be given), it will be successful in restructuring its borrowing agreements, continue to be in compliance with its covenants under its borrowing arrangements, and will continue operating as a going concern.

2.
The Company's reports for interim periods utilize numerous estimates of production cost, general and administrative expenses, and other costs for the full year. Future actual amounts may differ from the estimates. Amounts in the interim reports are not necessarily indicative of results for the full year.

3.
Net loss was equal to comprehensive loss for the interim periods ended March 31, 2009 and 2008.

4.
The effective tax rate for 2009 reflects the recognition of expected federal alternative minimum tax liabilities and interim period tax benefits and additions to the tax valuation allowance. The effective tax rate for 2008 differs from the statutory federal rate primarily because of the state tax provision and state tax credits.

5.
Accounts and notes receivable are reflected net of allowance for doubtful accounts of $770,000 and $658,000 at March 31, 2009 and December 31, 2008, respectively.

6.
Inventories as of March 31, 2009 and December 31, 2008 were as follows:
 
  3/31/09   12/31/08  
 
  (in thousands)
 

Pineapple products—finished goods

  $ 1,410   $ 807  

Real estate

    4,060     3,254  

Merchandise, materials and supplies

    4,991     5,676  
           

Total Inventories

  $ 10,461   $ 9,737  
           

            Effective January 1, 2008, the Company changed its method of accounting for pineapple juice inventory from the Last-In, First-Out (LIFO) method to the First-In, First-Out (FIFO) method, which is the method used for fresh pineapple fruit inventory. The Company did not apply the accounting change to its previous inventories of processed solid-pack pineapple products, as the Company ceased all processing and canning of solid-pack pineapple products in 2007 and had no inventory as of January 1, 2008. The Company expects that a single method of accounting for both fresh fruit and processed juice will improve the clarity of the Company's financial results by more clearly reflecting periodic income. The Company believes the FIFO method is preferable to the LIFO method because it 1) provides better matching of inventory costs to revenues, 2) eliminates the non-cash earnings that have resulted from past LIFO liquidations and from future liquidations that are likely to occur, 3) better reflects the physical flow of inventories, and 4) more closely reflects the current cost of inventories on the Company's consolidated balance sheet. The Company had previously recorded the cumulative effect of the change of its method of accounting for these juice inventories as a credit to retained earnings of $326,000 (net of income taxes of $191,000) as of January 1, 2008. Subsequently in 2008, the Company determined that because the effect of the accounting change would not have been material to its previously issued consolidated financial statements that the adjustment should have been recorded as an adjustment in the statement of operations in 2008. Accordingly, the amounts previously reported for the three months ended March 31, 2008 for cost of product revenues, total operating costs and expenses, operating loss, loss before income taxes, income tax benefit, net loss, and basic and diluted loss per share have been corrected from $10,685,000, $34,625,000, $(9,256,000), $(1,118,000), $(378,000), $(740,000), and $(.09) for basic and diluted per share amounts that were previously reported, to

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    $10,168,000, $34,108,000, $(8,739,000), $(601,000), $(187,000), $(414,000), and $(.05) for basic and diluted per share amounts.

7.
Average Common Shares Outstanding Used to Compute Earnings Per Share
 
  Three Months Ended
March 31,
 
 
  2009   2008  

Basic

    8,020,454     7,959,217  

Diluted

    8,020,454     7,959,217  

            For the three months ended March 31, 2009 and 2008, potentially dilutive common shares of 1,333,540, and 40,450, respectively, from non-qualified stock options to purchase common stock, non-vested restricted stock and common stock issuable upon assumed conversion of convertible debt are not included in the number of diluted common shares because to do so would have an antidilutive effect on the loss per share amounts (i.e., decrease loss per common share).

8.
Recently Issued Accounting Pronouncements

            On January 1, 2009, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. FASB Statement No. 161 requires enhanced disclosures about (i) how and why derivative instruments are used; (ii) how derivative instruments and related hedged items are accounted for under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities as amended; and (iii) how derivative instruments and related hedged items affect the Company's financial position, results of operations, and cash flows. See Note 14.

            In April 2009, the FASB issued FASB Staff Position (FSP) No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, which provides guidance on determining fair value when market activity has decreased. FSP No. 157-4 provides guidance on (1) estimating the fair value of an asset or liability (financing and nonfinancial) when the volume and level of activity for the asset and liability have significantly decreased and (2) identifying transactions that are not orderly. FSP No. 157-4 is effective for interim and annual periods ending after June 15, 2009. The Company is currently evaluating the potential impact, if any, that the FSP FAS 157-4 will have on the Company's financial condition and results of operation.

            In April 2009, FASB also issued FSP No. 107-1 and APB 28-1, expands the fair value disclosures required for all financial instruments within the scope of FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to interim periods for publicly traded entities. The FSP also requires entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments in financial statements on an interim basis and to highlight any changes of the methods and significant assumptions from prior periods. The Company will include the required disclosures beginning with its Form 10-Q for the quarter ended June 30, 2009.

9.
Plantation Golf Course Sale

            On March 27, 2009, the Company sold the land, improvements, structures and fixtures comprising the Plantation Golf Course (PGC) for $50 million in cash. Concurrent with the closing of the sale, the Company entered into an agreement (Ground Lease) to leaseback the PGC for an initial period of two years for an annual net rental payment of $4 million, payable monthly in advance. Concurrent with the closing of the sale, the Company also entered into an agreement to leaseback the portion of the Plantation Clubhouse comprising the retail shop for a period of five years, which will commence when the Ground Lease expires or is otherwise terminated. The Ground Lease requires the Company at its own cost and expense, to replace the irrigation system

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    at the PGC, subject to a cap of $5 million. Because of the Company's continuing involvement associated with the obligation to replace the irrigation system, the sale and leaseback of the PGC has been accounted for as a financing transaction and, accordingly, the net proceeds received have been recorded as a non-current liability on the consolidated balance sheet and no gain will be recognized until the irrigation system replacement project has been completed. In consideration for the release of the PGC from the collateral for the Company's $90 million revolving line of credit with Wells Fargo Bank and certain other lenders, upon closing of the sale, $45 million of the net proceeds were used to partially re-pay borrowings under this line and the credit limit available under this facility was reduced to $45 million.

10.
Investments in Affiliates

    KAPALUA BAY HOLDINGS

            The Company's equity in the income (losses) of Kapalua Bay Holdings, LLC (Bay Holdings) was $(1.1) million and $9.4 million for the three months ended March 31, 2009 and 2008, respectively. In 2007, Bay Holdings began to recognize revenues and profit from binding sales contracts on the whole and fractional ownership condominiums on the percentage-of-completion method. As Bay Holdings recognizes revenues, the Company recognizes a proportionate amount of the unrealized appreciation of the fair value of the land and other non-monetary contributions and other deferred costs related to the joint venture. In the first quarter of 2009, because of the continued negative economic climate and expected defaults, Bay Holdings further increased its reserves for defaults, and the Company accordingly adjusted the amounts of appreciation in the fair value of the land that had been recognized. Included in the Company's equity in income (losses) of Bay Holdings are the recognition of unrealized appreciation of the fair value of land, other non-monetary contributions and costs totaling income (losses) of $(348,000) and $1.4 million for the three months ended March 31, 2009 and 2008, respectively.

            As of January 1, 2008, Bay Holdings adopted EITF 06-8. The cumulative effect of adopting EITF 06-8 of $12.5 million was recorded as a reduction to Bay Holdings' January 1, 2008 retained earnings, and the Company recorded its proportionate share of this adjustment of $4,622,000 (net of income tax effect) to its opening retained earnings for 2008.

            Upon formation of Bay Holdings in 2004, the Company's non-monetary contributions to Bay Holdings, including a 21-acre land parcel, were valued at $25 million by the members through arms-length negotiations. The land contribution was recorded by the Company in its investment carrying value in Bay Holdings at historical cost, which was nominal, and Bay Holdings recorded the contribution at its fair value of $25 million. At March 31, 2009, the six residential buildings in the project were approximately 96% to 100% complete, and closings of the sold units are expected to begin at the end of May 2009. Through March 31, 2009, the Company has made cash contributions to Bay Holdings of $53.2 million and an uncollateralized loan of $3.6 million which incurs interest at 16%.

            In July 2006, Bay Holdings entered into a syndicated construction loan agreement with Lehman Brothers Holdings Inc. (Lehman) for the lesser of $370 million or 61.6% of the total projected cost of the project. Lehman's commitment under the loan agreement was approximately 78% of the total. The loan is collateralized by the project assets, including the fee simple interest in the land owned by Bay Holdings, the adjacent spa parcel owned by the Company, and all of the sales contracts. On September 15, 2008 Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court, and on February 11, 2009, Bay Holdings, Lehman, other lenders under the loan agreement, Swedbank and MH Kapalua Venture, LLC, an affiliate of Marriott, entered into an Amended and Restated Construction Loan Agreement. Pursuant to the amended loan agreement, the aggregate amount that Bay Holdings may borrow, including amounts previously funded under the loan agreement is approximately

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    $354.5 million. The Company believes that this amount will be sufficient to fund the full development and completion of the project.

            Summarized operating information for Bay Holdings is as follows:

 
  Three Months Ended
March 31,
 
 
  2009   2008  
 
  (in thousands)
 

Revenues

  $ 21,738   $ 58,094  

Expenses

    23,272     42,444  
           

Net Income (Loss)

  $ (1,534 ) $ 15,650  
           

            A reconciliation of the Company's equity in income (losses) of affiliates is as follows:

 
  Three Months Ended March 31,  
 
  2009   2008  
 
  (in thousands)
 

51% of Bay Holdings net income (loss)

  $ (782 ) $ 7,982  

Recognition of unrealized appreciation of the fair value of land contribution and other

    (348 )   1,393  
           

Equity in income (losses) of affiliate

  $ (1,130 ) $ 9,375  
           

    RITZ-CARLTON, KAPALUA HOTEL JV

            In March 2007, the Company sold the land underlying the Ritz-Carlton, Kapalua hotel to W2005 Kapalua/Gengate Hotel Holdings, L.L.C., (the "Hotel JV") that owned the hotel and was the lessee under the long-term ground lease with the Company. Approximately 49 acres, with a nominal cost basis, were sold for $25 million in cash at closing and for a 21.4% interest in the Hotel JV. At March 31, 2009, the Company's percentage interest in the Hotel JV was 15.9% reflecting dilution as a result of cash calls in which the Company chose not to participate.

            The Company's carrying value of its interest in the Hotel JV is $0 and, accordingly, the Company is not recording its share of the equity in losses in the Hotel JV because the Company is neither guaranteeing the obligations of the Hotel JV nor is it committed or expected to fund future obligations or losses of the Hotel JV.

            The Hotel JV has a loan agreement with Lehman totaling approximately $260.2 million that is collateralized by a first priority interest in the equity of the Hotel JV. The loan was principally for the purpose of acquiring the land from the Company, repaying existing debt, and completing a room conversion project and comprehensive refurbishment of the hotel. The Company is not liable for the repayment of the loan, but is liable for any loss suffered by the lenders as a result of the Company's fraudulent acts, misrepresentation or certain other triggering events, up to 10.71% of the then outstanding loan balances. The Company has recognized a liability of $93,000, representing the estimated fair value of its obligations under these provisions. In April 2009, the Hotel JV was notified that the loan is in default because two monthly payments had not been made. The Hotel JV is working on options to restructure the loan with Lehman.

11.
Debt Modifications

            In conjunction with the PGC sale (see Note 9), the Company amended its line of credit agreement with Wells Fargo. The agreement was amended to eliminate all financial covenants except for a minimum liquidity requirement and limitations on new indebtedness, to extend the

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    maturity date to March 2010 (previously November 2009), require the reappraisal of the properties collateralizing the facility and reduce the available credit or addition of collateral to maintain a 50% loan commitment to collateral value, eliminate the restriction on the lenders' recourse to recover against the Company, and increase interest rates on loan draws by 275 basis points. The Company also amended its revolving loan agreement with American AgCredit in March 2009 to suspend financial covenants through 2009, add financial covenants for a minimum liquidity requirement and limitations on additional indebtedness, require the reappraisal of all collateral and a permanent pay down if the collateral value is less than 50% of the loan commitment, and increase the interest rate on loan draws by 60 to 110 basis points. In return for the suspension of the covenants, the maturity date of the revolving loan was accelerated to March 2010 from June 2011. The Company incurred issuance costs of approximately $380,000 that were deferred and will be amortized over the remaining term of the debt. The Company considered whether such modifications should be accounted for as a troubled debt restructuring or extinguishment of debt as defined in Emerging Issues Task Force (EITF) Issue No. 02-4, Determining Whether a Debtor's Modification or Exchange of Debt Instruments is within the Scope of FASB Statement No. 15, or EITF No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt Instruments, and concluded that the modifications did not meet the criteria to be accounted for as a troubled debt restructuring or an extinguishment of debt. However, as the modifications resulted in a reduction in the borrowing capacity under the available lines of credit, approximately $106,000 of previously deferred issuance costs was expensed during the three-months ended March 31, 2009 in accordance with EITF No. 98-14, Debtor's Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements.

            The Company is currently in discussions with both lenders to further restructure its line of credit and revolving loan agreements to extend the maturity dates beyond 2010, and to increase the amounts available under the line of credit agreement based, in part, on a re-appraisal of the properties securing the line of credit and by providing additional properties as collateral under the agreement.

12.
Stock-Based Compensation

            The total compensation expense recognized for stock-based compensation was $213,000 and $638,000 for the three months ended March 31, 2009 and 2008, respectively. The total tax benefit (expense) related thereto was $(6,000) and $230,000 for the three months ended March 31, 2009 and 2008, respectively. Recognized stock compensation was reduced for estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates of approximately 4.7% and 5.2%, as of March 31, 2009 and 2008, respectively. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances.

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    Stock Options

            A summary of stock option award activity as of and for the three months ended March 31, 2009 is presented below:

 
  Shares   Weighted
Average
Exercise
Price
  Weighted
Average
Grant-Date
Fair Value
  Weighted
Average
Remaining
Contractual
Term (years)
  Aggregate
Intrinsic
Value
$(000)(1)
 

Outstanding at December 31, 2008

    901,833   $ 29.20                    

Granted

    25,000   $ 5.20   $ 2.48              

Exercised

      $                    

Forfeited or Cancelled

    (27,200 ) $ 34.13   $ 14.04              
                               

Outstanding at March 31, 2009

    899,633   $ 28.38   $ 11.69     3.9   $ 82  
                               

Exercisable at March 31, 2009

    597,633   $ 32.53   $ 13.34     1.7   $  
                               

Expected to Vest at March 31, 2009(2)

    227,496   $ 20.18   $ 8.41     8.4   $ 62  
                               

    (1)
    For in-the-money options

    (2)
    Options expected to vest reflect estimated forfeitures

            Additional stock option information for the three months ended March 31, 2009 and 2008 is as follows:

 
  2009   2008  

Weighted Average Grant-Date Fair Value For Options Granted During the Period

  $ 2.48     n/a  

Intrinsic Value of Options Exercised $(000)

      $ 4  

Cash Received From Option Exercises $(000)

      $ 14  

Tax Benefit From Option Exercises $(000)

         

Fair Value of Shares Vested During the Period $(000)

  $ 254   $ 559  

            For the three months ended March 31, 2009, the fair value of the Company's stock options awarded was estimated using the Black-Scholes option pricing model and the following weighted average assumptions:

 
  2009  

Expected Life of Options in Years

    6.5  

Expected Volatility

    44.6 %

Risk-free interest rate

    2.6 %

Expected dividend yield

     

            As of March 31, 2009, there was $2,773,000 of total unrecognized compensation for awards granted under the stock option plans that is expected to be recognized over a weighted average period of 2.0 years.

    Restricted Stock

            In the three months ended March 31, 2009, 20,250 shares of restricted stock that vest as service requirements are met were granted to certain directors. In the first three months of 2009, 3,500 shares of restricted stock vested as directors' service requirements were met. The weighted

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    average grant-date fair value of restricted stock granted during the three months ended March 31, 2009 and 2008 was $5.30 and $27.35 per share, respectively.

            A summary of the activity for restricted stock awards as of and for the three months ended March 31, 2009 is presented below:

 
  Shares   Weighted Average Grant-Date Fair Value  

Nonvested balance at December 31, 2008

    121,295   $ 26.70  

Granted

    20,250   $ 5.30  

Vested

    (3,500 ) $ 22.36  

Forfeited or Cancelled

    (19,000 ) $ 31.82  
             

Nonvested balance at March 31, 2009

    119,045   $ 22.11  
             
13.
Components of Net Periodic Benefit Cost

            The net periodic benefit costs for pension and other post-retirement benefits for the three months ended March 31, 2009 and 2008 were as follows:

 
  Pension Benefits   Other Benefits  
 
  2009   2008   2009   2008  
 
  (in thousands)
 

Service cost

  $ 378   $ 475   $ 54   $ 79  

Interest cost

    905     856     200     212  

Expected return on plan assets

    (622 )   (944 )        

Amortization of prior service cost

    11     13          

Amortization of transition obligation

    4     5          

Amortization of actuarial loss (gain)

    484     56     (120 )   (96 )
                   

Net expense

  $ 1,160   $ 461   $ 134   $ 195  
                   

            During 2009, the Company expects to contribute $1.9 million to $2.5 million to its defined benefit pension plans and $835,000 to its other post-retirement benefit plans. To date in 2009, the Company has made all required minimum contributions to its defined benefit pension plans, which totaled $723,000.

14.
Derivative Instruments

            In its ongoing business operations, the Company's primary market risk exposure with regard to financial instruments is due to changes in interest rates. The Company manages this risk by monitoring interest rates and future cash requirements and evaluating opportunities to refinance borrowings at various maturities and interest rates. The Company also utilizes interest rate swaps or other derivatives to reduce risks associated with changes in interest rates. FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. Changes in the fair value will be recognized in interest expense.

            The Company adopted SFAS No. 157, Fair Value Measurements, on January 1, 2008 for its financial assets and liabilities and on January 1, 2009 for its nonfinancial assets and liabilities, and there was no material impact to the consolidated financial statements. SFAS No. 157 applies to all assets and liabilities that are being measured and reported on a fair value basis. SFAS No. 157 requires new disclosure that establishes a framework for measuring fair value in GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the

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    financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

              Level 1: Quoted market prices in active markets for identical assets or liabilities.

              Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

              Level 3: Unobservable inputs that are not corroborated by market data.

            In July 2008, the Company issued $40 million in senior secured notes that are convertible into the Company's common stock. The conversion features related to the notes gave rise to a derivative liability recorded at fair value at the end of each reporting period.

            In January 2008, the Company entered into interest rate swap agreements to reduce future cash flow variability for approximately two years on $55 million of variable rate debt. The effect of the agreements is to convert variable-rate interest, which was previously tied to 1-, 2-, 3- and 6-month LIBOR terms, to an average fixed-rate interest of approximately 2.9%, before applicable interest rate spreads. The transactions were not designated as hedges under FASB Statement No. 13, and, accordingly, the gains and losses resulting from the change in fair value from these interest rate swaps are recognized currently in interest expense.

            Information regarding assets and liabilities measured at fair value on a recurring basis is as follows:

 
   
  Fair Value(1) of Derivative Liabilities as of  
Derivatives Not Designated as Hedging Instruments Under FASB Statement No. 133:
 
Balance Sheet Location
  3/31/09   12/31/08  
 
   
  (in thousands)
 

Interest rate swap agreements

  Other current liabilities   $ 930   $ 1,160  

Derivative liability related to convertible debt

  Other current liabilities     1,310     2,689  

    (1)
    Fair value measurements derived using significant other inputs (Level 2).
 
   
  Amount of Gain (Loss) Recognized on Derivative Liabilities  
 
   
  Three Months Ended  
 
  Location of Gain (Loss)
Recognized in
Statement of Operations
 
Derivatives Not Designated as Hedging Instruments Under FASB Statement No. 133:
  3/31/09   3/31/08  
 
   
  (in thousands)
 

Interest rate swap agreements

  Interest expense   $ 230   $ (521 )

Derivative liability related to convertible debt

  Interest expense     1,379      

            The Company had no assets or liabilities carried at fair value on a nonrecurring basis at March 31, 2009.

15.
Income Taxes

            The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interest accrued related to unrecognized tax benefits is recognized as interest expense and penalties are recognized in general and administrative expense in the Company's consolidated

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    statement of operations; and such amounts are included in income taxes payable on the Company's consolidated balance sheet.

            At March 31, 2009, the Company had a liability of $945,000 for unrecognized tax benefits and interest thereon of $1.1 million. At March 31, 2009, $13.3 million of unrecognized tax benefits represented taxes on revenues for which the timing of the taxability is uncertain and the liability for such taxes has been recognized as deferred tax liabilities. The acceleration of the recognition of such income would not affect the estimated annual effective tax rate, but would accelerate the payment of income taxes to earlier periods and would result in additional interest expense.

16.
Operating Segment Information
 
  Three Months Ended March 31,  
 
  2009   2008  
 
  (in thousands)
 

Revenues

             
 

Community Development

  $ 1,977   $ 4,598  
 

Resort

    8,620     11,691  
 

Agriculture

    4,889     8,461  
 

Other

    111     619  
           

Total Operating Revenues

  $ 15,597   $ 25,369  
           

Segment Profit (Loss)(1)

             
 

Community Development

  $ (3,225 ) $ 8,081  
 

Resort

    (4,157 )   (2,276 )
 

Agriculture

    (3,545 )   (5,130 )
 

Other

    (618 )   (39 )
           

Total Segment Profit (Loss)

    (11,545 )   636  

Interest Expense

    (1,476 )   (1,481 )

Interest Income

    183     244  

Income Tax (Expense) Benefit

    (385 )   187  
           

Net Loss

  $ (13,223 ) $ (414 )
           

    (1)
    Segment Profit (Loss) for the Community Development segment includes equity in income (losses) from Kapalua Bay Holdings, LLC (see Note 10).

17.
Commitments and Contingencies

            Pursuant to a 1999 settlement agreement with the County of Maui, the Company and several chemical manufacturers have agreed that until December 1, 2039, they will pay for 90% of the capital cost to install filtration systems in any future water wells if the presence of a nematocide, commonly known as DBCP exceeds specified levels, and for the ongoing maintenance and operating cost for filtration systems on existing and future wells. The Company is presently not aware of any plans by the County of Maui to install other filtration systems or to drill any water wells in areas affected by agricultural chemicals. Accordingly, a reserve for costs relating to any future wells has not been recorded because the Company is not able to reasonably estimate the amount of the liability (if any).

            There are various other claims and legal actions pending against the Company. In the opinion of management, after consultation with legal counsel, the resolution of these other matters is not expected to have a material adverse effect on the Company's condensed consolidated financial statements.

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            The Company, as an investor in various affiliates (partnerships, limited liability companies), may under specific circumstances be called upon to make additional capital contributions.

            In connection with the PGC sale and leaseback, the Company is obligated to replace the irrigation system prior to the end of the two-year leaseback term. The replacement costs are capped at $5 million under the terms of the agreement. See Note 9.

            The Company is obligated to purchase the spa, beach club improvements and the sundry store from Bay Holdings at actual construction cost upon completion in 2009, which is estimated to be approximately $35 million. The Company is currently negotiating the terms of the purchase of the improvements with the members of Bay Holdings, and the Company expects to fund most of the purchase at a later date.

            The Company has a contractual obligation to the Ladies Professional Golf Association to sponsor an annual golf tournament for five years beginning in October 2008. The cost of such a tournament, including the production and the purse is significant and the Company is currently seeking a title sponsor to defray part of the cost. Commitments for the purse, sanction fees and scoring system are approximately $7.4 million for 2009 through 2012.

            At March 31, 2009, the Company had commitments under other signed contracts totaling $2.9 million, which primarily relate to real estate development projects.

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2008 and the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Depending upon the context, the terms the "Company," "we," "our," and "us," refers to either Maui Land & Pineapple Company, Inc. alone, or the Company and its subsidiaries.

Overview of the Company

        Maui Land & Pineapple Company, Inc. is a Hawaii corporation and the successor to a business organized in 1909. We operate as a landholding and operating parent company for our principal subsidiaries, including Maui Pineapple Company, Ltd., a producer and marketer of Maui-grown pineapple, and Kapalua Land Company, Ltd., the operator of Kapalua Resort, a master-planned community in West Maui. Our reportable operating segments are Agriculture, Resort and Community Development.

    Agriculture

        The Agriculture segment primarily includes growing, packing, and marketing of fresh pineapple. Our pineapple is sold under the brand names Maui Gold® and Hawaiian Gold™. We also grow and market fresh organic pineapple. Prior to 2008, a portion of our business included processing (canning) pineapple; however, we ceased substantially all canning and processing of solid-pack product in June 2007.

        The fresh fruit market is a year-round business, which requires consistency of supply. Over the past several years, we have made significant progress in changing our agronomic practices and planting schedules to produce a more consistent and predictable supply of fruit throughout the year. In addition, we have made significant progress in implementing improved crop maintenance and agronomic practices that we believe will improve our plant yields (tons of fruit per acre) and fruit quality.

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    Resort

        The Kapalua Resort is part of approximately 22,000 contiguous acres owned by us in West Maui, most of which remains as open space. The Kapalua Resort borders the ocean with five white sand beaches and includes The Ritz-Carlton, Kapalua hotel, the Ritz-Carlton Club and Residences at Kapalua Bay, eight residential subdivisions, two championship golf courses (The Bay and The Plantation), a ten-court tennis facility, the first phase of commercial space in the central area of the Kapalua Resort, several restaurants, and over 800 condominiums, single-family homes and residential lots. We operate Kapalua Resort's two golf courses, the tennis facility, several retail shops, the Kapalua Villas, a vacation rental program, and provide certain services to the Kapalua Resort. We currently have approximately 204 units in our Kapalua Villas vacation rental program. Our Resort operations also include a Mountain Outpost, which is comprised of zip-lines stretching over scenic ravines in the West Maui mountains, a high ropes challenge course, a climbing wall and other activities.

    Community Development

        The Community Development segment includes our real estate entitlement, development, construction, sales, leasing, and conservation activities. Our projects are focused primarily on the luxury real estate market in and surrounding the Kapalua Resort and affordable and moderately priced residential and mixed use projects in West Maui and Upcountry Maui. This segment also includes the operations of Kapalua Realty Company, our general brokerage real estate company located within the Resort, and Kapalua Water Company and Kapalua Waste Treatment Company our Public Utilities Commission-regulated water and sewage operations that service the Kapalua Resort and adjacent communities.

        The Community Development segment also includes our 51% equity interest in Bay Holdings, the limited liability company that purchased the Kapalua Bay Hotel in August 2004 (see Note 10 to condensed consolidated financial statements). Bay Holdings demolished the Kapalua Bay Hotel and the adjacent shops in order to develop new whole and fractional residential units, an ocean-side spa, and a beach club at that location. As of March 31, 2009, the project was about 96% complete.

        We have approximately 1,800 acres of land in Maui that are at various stages in the land entitlement process. We must obtain appropriate entitlements for land that we intend to develop or use for construction. Securing proper land entitlement is a process that requires obtaining county, state and federal approvals, which can take several years to complete, if at all, and entails a variety of risks.

        In the latter part of 2008, we concluded that we should delay the start of construction of new development projects because of the global recession, the uncertainty in the national and local economies, the continuing turmoil in the financial and credit markets, and our cash flow constraints. However, we have continued to engage in planning, permitting and entitlement activities for our development projects, and we intend to proceed with construction and sales of the following projects, among others, when internal and external factors permit:

    Kapalua Mauka:  As presently planned, this project is comprised of 690 single and multi-family residential units and commercial components, five acres of commercial space and up to 27 holes of golf on a total of 925 acres.

    The Village at Kapalua:  This is the commercial component of the central area of the Kapalua Resort. It is planned to be built in two phases and will add approximately 30,000 square feet of new retail space to the Kapalua Resort. The Village will also include apartments, condominiums and other resort-related facilities. The first phase of the commercial component opened in October 2006.

    Pulelehua:  This project is designed to be a new traditional community for working families in West Maui. It encompasses 312 acres and is currently planned to include 13 acres for an

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      elementary school, 882 dwelling units, 91 acres of usable open space, and a traditional village center with a mix of residential and neighborhood-serving commercial uses. We are currently in the process of securing a hearing for the project with the Maui County Council Land Use Committee.

    Hali'imaile Town:  This project is contemplated to be a new town in Upcountry Maui, a holistic traditional community with agriculture, education, and sustainability as core design elements. Community design workshops were held to involve the Maui community in determining the vision for this community. The public approval process for any plan to develop this area is expected to take several years and will be subject to urban growth boundary determination by the County of Maui as it updates the County General Plan over the next two years.

Current Developments

        In the first quarter of 2009, all of our operations continued to be negatively affected by the global recession, and a significant amount of management's efforts were directed toward various initiatives to improve our liquidity. In the first quarter of 2009, we incurred a net loss of $13.2 million and had negative cash flows from operations of $9.9 million. In March 2009, we consummated the $50 million sale and leaseback transaction of the Plantation Golf Course (Note 9 to condensed consolidated financial statements) and applied $45 million of the sales proceeds to partially repay outstanding borrowings that were partially collateralized by the golf course. We amended our two revolving lines of credit to suspend or eliminate certain financial covenants for 2009 and to change the maturities of these lines to March 2010, one of which was previously due in November 2009 (Note 1 to condensed consolidated financial statements).

        In March 2009, in an effort to reduce our costs, we eliminated approximately 100 employees from our workforce, primarily in the Resort and Community Development segments and in corporate services. We are currently in discussions with the lenders to restructure our revolving line of credit agreements to extend the maturities beyond March 2010 and to increase the amount of available credit. We are actively in the process of attempting to sell several real estate assets and to continue to reduce the net cash outflows from operations which will be critical to providing additional liquidity and to further reducing debt.

        In February 2009, Bay Holdings entered into an amended and restated construction loan for completion of the Kapalua Bay project, after the default by Lehman Brothers Holdings, Inc. on the original construction loan in September 2008 (Note 10 to condensed consolidated financial statements).

Critical Accounting Policies and Estimates

        The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of accounting estimates. Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the consolidated financial statements and thus actual results could differ from the amounts reported and disclosed herein. Our critical accounting policies that require the use of estimates and assumptions were discussed in detail in our most recently filed Form 10-K. There have been no significant changes in our critical accounting policies during 2009.

        There are no accounting pronouncements or interpretations that have been issued but not yet applied by us that we believe will have a material impact on our consolidated financial statements.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2009 compared to Three Months Ended March 31, 2008

CONSOLIDATED

 
  Three Months Ended March 31,  
 
  2009   2008   change  
 
  (in millions, except share amounts)
 

Consolidated Revenues

  $ 15.6   $ 25.4   $ (9.8 )

Net Loss

  $ (13.2 ) $ (0.4 ) $ (12.8 )

Basic Loss Per Common Share

  $ (1.65 ) $ (0.05 ) $ (1.60 )

        We reported a net loss of $13.2 million ($1.65 per share) for the first quarter of 2009 compared to $414,000 ($.05 per share) for the first quarter of 2008. Consolidated revenues for the first quarter of 2009 were $15.6 million compared to $25.4 million for the first quarter of 2008. The increased loss was primarily due to our equity in losses of Bay Holdings of $1.1 million for the first quarter of 2009 compared to income of $9.4 million for the first quarter of 2008. All of our business segments produced lower revenues in the first quarter of 2009. The continuing national and worldwide economic uncertainty and high transportation costs resulted in reduced visitor counts to Maui and to the State of Hawaii, which negatively affected our Resort segment, and also resulted in slower sales of, and increased potential default rates, on the residential units at Kapalua Bay, which negatively affected our Community Development segment. In our Agriculture segment we reduced the size of our fresh pineapple operations as we continued to restructure these operations.

    General and Administrative

        Consolidated general and administrative expenses of $7.8 million for the first quarter of 2009 were approximately 23% lower than the first quarter of 2008.

        The major components of the difference in general and administrative expenses were as follows:

 
  Three Months Ended March 31,  
 
  2009   2008   change  
 
  (in millions)
 

Salaries and wages

  $ 1.5   $ 2.4   $ (0.9 )

Employee incentives and stock compensation

    0.2     0.7     (0.5 )

Employee severance expense

    0.7         0.7  

Pension and other post retirement expense

    1.3     0.7     0.6  

Professional services

    1.0     1.3     (0.3 )

Loss on asset disposals

    0.6     1.2     (0.6 )

Depreciation expense

    1.1     0.5     0.6  

Other

    1.4     3.4     (2.0 )
               

Total

  $ 7.8   $ 10.2   $ (2.4 )
               

        The decrease in salaries, wages, employee incentives and stock compensation, and the increase in employee severance expense reflect staffing reductions in all operating segments and in corporate services, and a 10% wage rate reduction that was implemented during the first quarter of 2009 that affected nearly all employees.

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        Increased pension and other post retirement expense reflects the decrease in value of the assets in our defined benefit pension plans combined with a reduction in the discount rate as of January 1, 2009 compared to January 1, 2008.

        Continued restructuring of our Agriculture segment operations were responsible for (1) the increase in depreciation expense in 2009, which reflects a reduction in the estimated useful lives of certain Agriculture segments assets, and (2) most of the loss on asset disposals in the first three months of 2009 and 2008.

        Other includes insurance, pensions and other fringe benefits, charitable contributions, etc.

        General and administrative expenses are incurred at the corporate level and at the operating segment level. All general and administrative expenses incurred at the corporate level are allocated to our operating segments. Such allocations are made on the basis of our management's evaluation of service provided to the operating segments.

    Interest Expense

        Interest expense was $1.5 million for both the first quarter of 2009 and 2008. Interest of $18,000 and $200,000 in the first quarter of 2009 and 2008, respectively, was capitalized to construction projects. Included in interest expense is a credit of $230,000 and charge of $521,000 for 2009 and 2008, respectively, representing the change in fair value of certain interest rate swap agreements. Also included in interest expense for the first quarter of 2009 is a net credit of $1.4 million representing the change in the estimated fair value of the derivative liability that was bifurcated from our $40 million convertible notes, less interest accretion of $762,000 on the carrying value of the notes. In 2009, the increase in interest expense from higher average borrowings was partially offset by lower average interest rates. Our effective interest rate on borrowings was 4.9% in the first quarter of 2009 compared to 5.6% in the first quarter of 2008.

AGRICULTURE

 
  Three Months Ended March 31,  
 
  2009   2008   change  
 
  (in millions)
 

Revenues

  $ 4.9   $ 8.5   $ (3.6 )
 

% of consolidated revenues

    31 %   33 %      

Operating Loss

  $ (3.5 ) $ (5.1 ) $ 1.6  

        Revenues for the Agriculture segment decreased by 42%, or $3.6 million, from $8.5 million for the first quarter of 2008 to $4.9 million for the first quarter of 2009, primarily due to a reduction in fresh fruit sales volume. In the first quarter of 2008, pineapple juice sales represented approximately 11% of the Agriculture segment revenues. The Agriculture segment produced an operating loss of $3.5 million for the first quarter of 2009 compared to an operating loss of $5.1 million for the first quarter of 2008.

    Fresh Pineapple Operations

        The volume of fresh pineapple case sales was lower by 45% for the first quarter of 2009; revenue per case sold was higher by 9% in 2009 compared to the first quarter of 2008. Lower case sales volume in the first quarter of 2009 was due to lower production volume. Higher average pricing reflects the sale of only prime sized fruit to selective customers.

        The Agriculture segment cost of sales was lower by approximately 42% in the first quarter of 2009 compared to the first quarter of 2008, largely as a result of the lower sales volume of fresh and

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processed product, partially offset by increased per unit cost of sales as a result of lower production volumes.

        Shipping and marketing cost decreased by 61% in the first quarter of 2009 compared to the first quarter of 2008 because of lower volume of sales partially offset by higher average per unit shipping cost. The average shipping cost was higher in 2009 because a greater percentage of products to the mainland United States were sent by air freight, which is more costly than ocean freight.

RESORT

 
  Three Months Ended March 31,  
 
  2009   2008   change  
 
  (in millions)
 

Revenues

  $ 8.6   $ 11.7   $ (3.1 )
 

% of consolidated revenues

    55 %   46 %      

Operating Loss

  $ (4.2 ) $ (2.3 ) $ (1.9 )

        Resort segment revenues decreased from $11.7 million in the first quarter of 2008 to $8.6 million for the first quarter of 2009, or 26%, reflecting lower revenues from our primary Resort operations, golf, retail and villas. The Resort segment reported an operating loss of $4.2 million for the first quarter of 2009 compared to an operating loss of $2.3 million for the first quarter of 2008. A reduction in visitor arrivals and occupancy at the Resort, resulting from the national and global economic recession, reduced airline passenger capacity to Hawaii caused by airline closures, and the continuing high cost of energy was primarily responsible for the increased Resort operating loss in the first quarter of 2009.

    Golf, Retail and Villas

        Revenues from golf operations decrease by approximately 28% in the first quarter of 2009 compared to the first quarter of 2008 as a result of a 26% decrease in paid rounds of golf and a 6% decrease in average green and cart fees. Resort retail sales for the first quarter of 2009 were approximately 12% lower than the first quarter of 2008, primarily reflecting lower sales at our golf outlets.

        Revenues from the Kapalua Villas were 50% less in the first quarter of 2009 compared to the first quarter of 2008, reflecting a 46% decrease in occupied rooms and a 8% lower average room rate. Rooms available in the first quarter of 2009 were 11% lower in the first quarter of 2009 as units were under renovation in our Kapalua Gold program to upgrade and standardize the units in our rental program.

COMMUNITY DEVELOPMENT

 
  Three Months Ended March 31,  
 
  2009   2008   change  
 
  (in millions)
 

Revenues

  $ 2.0   $ 4.6   $ (2.6 )
 

% of consolidated revenues

    13 %   18 %      

Operating Profit (Loss)

  $ (3.2 ) $ 8.1   $ (11.3 )

        The Community Development segment reported an operating loss of $3.2 million for the first quarter of 2009 compared to an operating profit of $8.1 million for the first quarter of 2008. Revenues from this operating segment were $2.0 million for the first quarter of 2009 compared to $4.6 million for the first quarter of 2008. Lower results in the first quarter of 2009 reflect the absence of real estate

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sales, resulting from the economic recession, tight credit markets, reduced demand for real estate, and declining consumer confidence, and losses from our investment in Bay Holdings.

        Operating profit (loss) includes our equity in the income (losses) of Bay Holdings, which was $(1.1) million in the first quarter of 2009 compared to $9.4 million in the first quarter of 2008. Revenues and profit from sale of the whole and fractional residential condominiums are being recognized on the percentage-of-completion method. The percentage of completion of the six residential buildings in this project ranged from 96% to 100% as of the end of March 2009 and the closings of the sold units are expected to begin in May 2009. In connection with profit recognition under the percentage-of-completion method, we began to recognize a proportionate amount of the unrealized appreciation of the fair value of the land and other non-monetary contributions to Bay Holdings and other deferred costs related to the joint venture (see Note 10 to condensed consolidated financial statements).

    Real Estate Sales

        In the first quarter of 2008, we sold approximately 52 acres of Upcountry Maui land that were considered non-core to our operations and recognized revenues of approximately $2.6 million and pre-tax profit of approximately $2.4 million.

LIQUIDITY AND CAPITAL RESOURCES

    Debt Position

        At March 31, 2009, our total debt, including capital leases, was $90.0 million, compared to $137.0 million at December 31, 2008. The decrease in outstanding debt in the first three months of 2009 was due to proceeds from the sale of the PGC in March 2009 being applied to partially repay our revolving line of credit with Wells Fargo and certain other lenders (Note 9 to condensed consolidated financial statements). At March 31, 2009, we had $3.1 million in cash and cash equivalents and $14.5 million in unused available lines of credit. In March 2010, $55 million of borrowings under our two available lines of credit is scheduled to mature. The lines of credit have financial covenants requiring a minimum of $10 million in liquidity and a limitation on new indebtedness. Failure to satisfy any of the covenants or to otherwise default under either of the credit agreements could result in the outstanding borrowings becoming immediately due, which could result in a default under the other credit agreement as well as the $40 million senior secured convertible notes. Default under the convertible notes could require us to redeem the notes at 115% of the outstanding amount of principal and accrued interest. We are obligated to purchase the spa, beach club improvements and the sundry store from Kapalua Bay Holdings ("Bay Holdings") at actual construction cost upon completion in 2009, which is estimated to be approximately $35 million. We are currently negotiating the terms of the purchase of the improvements with the members of Bay Holdings, and expect that we will fund most of the purchase at a later date. At March 31, 2009, these matters gave rise to significant uncertainty as to our ability to continue as a going concern.

        In response to these matters, we have undertaken several financial and strategic initiatives to restructure the terms of its credit agreements and generate cash flow from a variety of sources, including the sale of several real estate assets. In March 2009, we sold the Plantation Golf Course (PGC) for $50 million (see Note 9) and $45 million of the sales proceeds were applied to partially repay outstanding borrowings that were partially collateralized by the PGC. We are currently in discussions with both lenders to further restructure its line of credit and revolving loan agreements to extend the maturity dates beyond March 2010, and to increase the amounts available under the line of credit agreement based, in part, on a re-appraisal of the properties securing the line of credit and by providing additional properties as collateral under the agreement. In addition, the Company has taken several other actions to reduce cash outflows including reducing its headcount by about 100 personnel

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in March 2009, as well as other measures to reduce operating expenses. We are also actively in the process of attempting to sell several selected real estate assets to provide additional liquidity and to further reduce debt, although the timing and amount of such sales are uncertain. As a result of these actions and together with its initiatives to generate liquidity, we believe (although no assurances can be given) that we will be successful in restructuring our borrowing agreements, continue to be in compliance with the covenants under our borrowing arrangements, and will continue operating as a going concern.

    Amended Construction Loan Agreement Following Lehman Bankruptcy

        In July 2006, Kapalua Bay Holdings, LLC, or Bay Holdings, in which we have a 51% interest, entered into a syndicated construction loan agreement with Lehman Brothers Holdings Inc. ("Lehman"), for the lesser of $370 million or 61.6% of the total projected cost of the project. Lehman's commitment under the loan agreement was approximately 78% of the total. On September 15, 2008, Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court. In February 2009, Bay Holdings entered into an amended and restated construction loan agreement with Lehman, Swedbank, MH Kapalua Venture, LLC, an affiliate of Marriott, and certain other syndicate lenders, pursuant to which Bay Holdings may borrow an aggregate of approximately $354.5 million, including amounts previously funded under the loan agreement (see Note 10 to condensed consolidated financial statements). We believe that this amount will be sufficient to fund the full development of the Residences at Kapalua Bay project.

    Revolving Line of Credit with American AgCredit, FLCA

        In March 2009, we executed two amendments of our revolving line of credit agreement with American AgCredit, FLCA. The amendments eliminated certain financial covenants as of and for the year ended December 31, 2008; suspended certain financial covenants for 2009; added financial covenants for 2009 for the maintenance of minimum liquidity of $10 million and restrictions on new indebtedness; and increased the interest rate on loan draws by 60 to 110 basis points. The amendments also accelerated the maturity of the loan from June 2011 to March 2010 and currently require the reappraisal of all collateral and a permanent pay down if the collateral value is less than 50% of the loan commitment. As of March 31, 2009, this $25 million line of credit was fully drawn.

    Revolving Line of Credit with Wells Fargo and Certain Other Lenders

        Also in March 2009, we executed two amendments of our revolving line of credit agreement with Wells Fargo Bank and certain other lenders, to be in compliance with the financial covenants as of December 31, 2008. The amendments also eliminated all financial covenants except for the maintenance of a minimum liquidity of $10 million and limitations on additional indebtedness; extended the maturity of the facility to March 2010 from November 2009; requires the reappraisal of the properties collateralizing the facility and the reduction of the available credit or addition of collateral to maintain a 50% loan commitment to collateral value; eliminated the restriction on the lenders' recourse to recover against us; and increased the interest rate on loan draws by 275 basis points. In connection with the sale of PGC, we applied $45 million of proceeds against outstanding borrowings under this line of credit, which was partially collateralized by the PGC, and the available credit was reduced from $90 million to $45 million. As of March 31, 2009, we had $30 million outstanding and $14.5 million available under this line.

    Private Placement of Convertible Notes

        On July 28, 2008, we issued $40 million in aggregate principal amount of convertible notes, bearing 5.875% interest per annum payable quarterly in cash in arrears beginning October 15, 2008. The convertible notes mature on July 15, 2013, subject to earlier conversion or redemption under certain conditions as specified in the notes. As of March 31, 2009, we had $40.5 million in principal and accrued but unpaid interest outstanding under the convertible notes.

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        As of March 31, 2009, we were in compliance with all of the covenants under our outstanding debt arrangements.

    Operating Cash Flows

        In the first three months of 2009, consolidated net cash used in operating activities was $9.9 million compared to net cash used in operating activities of $15.4 million for the first three months of 2008. By operating segment, these cash flows were approximately as follows:

 
  Three Months Ended
March 31,
 
 
  2009   2008  
 
  (in millions)
 

Agriculture

  $ (2.2 ) $ (4.2 )

Resort

    (4.4 )   (3.5 )

Community Development

    (1.3 )   (6.8 )

Interest, taxes and other

    (2.0 )   (0.9 )
           

Total

  $ (9.9 ) $ (15.4 )
           

        The reduction in cash used in operating activities in the first three months of 2009 compared to 2008 primarily reflect cost reduction measures that we began implementing in the later part of 2008 and in the first quarter of 2009. The first three months of 2009 and 2008 did not include any sale of any new real estate product and there was no construction of real estate inventories in 2009 or 2008.

    Future Cash Inflows and Outflows

        In order to meet liquidity covenants required by our borrowing agreements, and to supplement negative cash flows from operations, our plans for 2009 include the sales of certain operating and non-operating real estate assets combined with the leaseback of properties as necessary. While there is significant uncertainty, we believe that the cash inflows generated from real estate sales, supplemented with our initiatives to reduce cash outflows from operations, will be sufficient to fund operations for at least the next 12 months.

        In 2009, capital expenditures and expenditures for deferred development cost have been reduced, except for expenditures that are expected to have a commensurate return within a relatively short period or are necessary to maintain our operations and standards of quality at the Kapalua Resort. Capital expenditures planned for 2009 total $4.7 million and include $2.7 million for the replacement of equipment, $1.2 million to remodel certain property and $0.8 million for new equipment and facilities. We will seek project specific financing for some of the capital projects where deemed feasible.

        In connection with the PGC sale and leaseback, we are obligated to replace the irrigation system prior to the end of the two-year leaseback term. The replacement costs are capped at $5 million under the terms of the agreement.

        We are also obligated to purchase the spa, beach club improvements and the sundry store from Bay Holdings upon completion in 2009 at actual construction cost, which is estimated to be approximately $35 million. We are negotiating the terms of the purchase of the improvements with the members of Bay Holdings, and expect to fund most of the purchase at a later date.

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CONTRACTUAL OBLIGATIONS

        The following summarizes our contractual obligations as of March 31, 2009 (in thousands):

 
   
  Payment due by period (years)  
Contractual Obligations
  Total   Less Than 1   1 - 3   4 - 5   After 5  

Long-term debt(1)

  $ 95,000   $ 55,000   $   $ 40,000   $  

Capital lease obligations (including interest)

    3,469     1,274     1,444     525     226  

Interest on long-term debt(2)(7)

    18,138     8,140     6,963     3,035      

Operating leases(3)

    2,189     586     1,168     390     45  

Purchase commitments(3)

    10,228     2,537     3,919     3,772      

Other long-term liabilities(4)(5)(6)(7)

    7,297     2,306     2,866     1,061     1,064  
                       
 

Total

  $ 136,321   $ 69,843   $ 16,360   $ 48,783   $ 1,335  
                       

(1)
Long-term debt as presented above includes convertible notes of $40 million due in July 2013. These notes are included in our March 31, 2009 balance sheet as long-term debt of $31,922,000 and other current liabilities (derivative liability) of $1,310,000. The purchasers of the notes have the right to require redemption on the third anniversary of purchase, but the notes have a stated five year maturity.

(2)
Future interest payments on long term debt were calculated assuming that future interest rates equal the rates at March 31, 2009.

(3)
These operating leases and purchase commitments are not reflected on the consolidated balance sheets under accounting principles generally accepted in the United States of America.

(4)
Amounts consist primarily of payments due under our deferred compensation plan, unfunded pension payments and severance plans. Where pension payments were for lifetime, payments were estimated for five additional years.

(5)
We adopted FIN 48 on January 1, 2007, and have not provided a detailed estimate of the timing of payments amounting to $945,000 due to the uncertainty of when the related tax settlements are due (see Note 14 to condensed consolidated financial statements).

(6)
We have an obligation to purchase the spa, beach club improvements and the sundry store from Bay Holdings at actual construction cost, which is currently estimated to be approximately $35 million. Terms of the purchase are currently being negotiated between the members and the obligation is not included in the table above because the timing and amount of the payment is uncertain.

(7)
In connection with the sale of the PGC, we entered into an agreement to leaseback the PGC for two years for an annual net rental payment of $4 million. The agreement also requires us to replace the irrigation system at the PGC, subject to a cap of $5 million, prior to the end of the two year lease term. Because our obligation to replace the irrigation system is considered continuing involvement, the sale and leaseback has been accounted for as a financing transaction, and, accordingly, a portion of each monthly rental payment is charged to interest expense. The portion of the rental payments which will represent a reduction of the noncurrent obligation is included in this line in the table above. The interest component has been included in Interest on Long-Term Debt in the table above. The obligation to replace the irrigation system is not included in the table above because the timing and amount of the payment is uncertain.

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FORWARD-LOOKING STATEMENTS AND RISKS

        This and other reports filed by us with the Securities and Exchange Commission, or SEC, contain forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They contain words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or the negative or other variations thereof or comparable terminology. Actual results could differ materially from those projected in forward-looking statements as a result of the following factors, among others.

    our ability to comply with the terms of our indebtedness and to extend the maturity dates of, or refinance, portions as they become due;

    general economic factors, including the current economic recession, tightening credit markets, declining demand for real estate, and increased fuel and travel costs;

    the satisfaction of certain closing conditions set forth in the amended construction loan agreement and certain related agreements relating to the construction of the Residences at Kapalua Bay project;

    the ability and willingness of our lenders to comply with the terms of their lending agreements with us;

    timing and success of sales and construction at the Residences at Kapalua Bay project;

    timing and success of the Kapalua Resort initiatives to enhance and improve the resort and the Kapalua Villas;

    increased fuel and travel costs, and reductions in airline passenger capacity;

    dependence on third parties and actual or potential lack of control over joint venture relationships;

    recoverability from operations of real estate development deferred costs;

    timing of approvals and conditions of future real estate entitlement applications;

    impact of current and future local, state and national government regulations, including Maui County affordable housing legislation;

    future cost of compliance with environmental laws;

    effects of weather conditions and natural disasters;

    compliance with financial and other covenants contained in our third party lending arrangements; and

    availability of capital on terms favorable to us, or at all.

        Such risks and uncertainties also include those risks and uncertainties discussed in the sections entitled "Business," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2008, as amended, and the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in this Quarterly Report on Form 10-Q, as well as other factors described from time to time in our reports filed with the SEC.

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Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this report, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this report. Thus, you should not place undue reliance on any forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Further, any forward-looking statements speak only as of the date made and, except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this report.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        Our primary market risk exposure with regard to financial instruments is to changes in interest rates. We attempt to manage this risk by monitoring interest rates and future cash requirements, and evaluating opportunities to refinance borrowings at various maturities and interest rates. At March 31, 2009, all of our borrowings carried interest at fixed rates, which includes $55 million of variable rate that is converted to fixed rate debt by interest rate swap agreements. In January 2008, we entered into interest rate swap agreements for approximately two years on $55.0 million of variable rate debt. We completed the swap agreements in order to reduce the variability in cash flows attributable to interest rate risk caused by changes in short-term LIBOR rates. The effect of the swaps is to convert variable-rate interest expense, which was previously tied to 1-, 2-, 3- and 6-month LIBOR terms, to an average fixed rate interest of approximately 2.9%, before applicable interest rate spreads. The estimated fair value of these derivative instruments was a liability of approximately $930,000 as of March 31, 2009.

Item 4.    Controls and Procedures

        We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

        In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

        As required by Rule 13a-15(b) and 15d-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter covered by this report. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms. There has been no change in our internal control over financial reporting during the three months ended March 31, 2009 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1A.    Risk Factors

        Potential risks and uncertainties include, among other things, those factors discussed in the sections entitled "Business", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2008 and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q. Readers should carefully review those risks, as well as additional risks described in other documents we file from time to time with the SEC. We undertake no obligation to publicly release the results of any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

Item 5.    Other Information

        On May 4, 2009, the Company and Warren H. Haruki, Executive Chairman, entered into a Stock Option Notice and Agreement for the grant of 25,000 options to purchase our common stock at $5.20 per share, which was the closing price of MLP common stock as reported on the New York Stock Exchange (NYSE), on March 9, 2009, the date the grant was approved by our Board of Directors. On May 4, 2009, the Company and Warren H. Haruki also entered into a Restricted Share Agreement for 20,000 shares of restricted stock that will vest quarterly over a five year period. The foregoing summary of the Stock Option Notice and Agreement and the Restricted Share Agreement is not complete and is qualified in its entirety by reference to the agreements filed herewith as Exhibits 10.1 and 10.2, respectively.

        On May 4, 2009, the Company and John P. Durkin, Chief Financial Officer, entered into a Stock Option Notice and Agreement for the grant of 20,000 options to purchase MLP common stock at $7.78 per share, which was the closing price of our common stock as reported on the NYSE on April 15, 2009, the date that Mr. Durkin's employment with us commenced. On May 4, 2009, the Company and John P. Durkin also entered into a Restricted Share Agreement for 15,000 shares of restricted stock that will vest ratably over a 5-year period based on performance criteria to be set by the Company's Compensation Committee of the Board of Directors. The foregoing summary of the Stock Option Notice and Agreement and the Restricted Share Agreement is not complete and is qualified in its entirety by reference to the agreements filed herewith as Exhibits 10.3 and 10.4, respectively.

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Item 6.    Exhibits

(10)       Material Contracts

 

 

10.1

 

Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.

 

 

10.2

 

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.

 

 

10.3

 

Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.

 

 

10.4

 

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.

(31)

 

 

 

Rule 13a—14(a) Certifications

 

 

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.

 

 

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.

(32)

 

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.

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SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    MAUI LAND & PINEAPPLE COMPANY, INC.

May 5, 2009

Date

 

 

 

/s/ JOHN P. DURKIN

John P. Durkin
Chief Financial Officer
(Principal Financial Officer)

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EXHIBIT INDEX

Exhibit Number
  Description
  10.1   Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.(1)

 

10.2

 

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.(1)

 

10.3

 

Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.(1)

 

10.4

 

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.(1)

 

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(d)/15d-14(a) of the Securities Exchange Act of 1934.(1)

 

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(d)/15d-14(a) of the Securities Exchange Act of 1934.(1)

 

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.(2)

(1)
Filed herewith.

(2)
Furnished herewith and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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EX-10.1 2 a2192797zex-10_1.htm EXHIBIT 10.1

Exhibit 10.1

 

MAUI LAND & PINEAPPLE COMPANY, INC.

 

2006 EQUITY AND INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE

 

Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), pursuant to its 2006 Equity and Incentive Award Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of the Company’s common stock, no par value (“Stock”), set forth below (the “Option”).  This Option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice.

 

Participant:

 

Warren H. Haruki

 

 

 

Grant Date:

 

March 9, 2009

 

 

 

Exercise Price per Share:

 

$5.20

 

 

 

Total Number of Shares Subject to the Option:

 

25,000

 

 

 

Expiration Date:

 

March 9, 2019

 

 

 

Type of Option:

Non-Qualified Stock Option

 

 

Vesting Schedule:

Subject to the terms and conditions of the Plan, this Grant Notice and the Stock Option Agreement, this Option shall vest and become exercisable as to:

 

 

 

(i)

20% of the total number of shares of Stock subject to the Option on March 9, 2010.,

 

(ii)

20% of the total number of shares of Stock subject to the Option on March 9, 2011,

 

(iii)

20% of the total number of shares of Stock subject to the Option on March 9, 2012,

 

(iv)

20% of the total number of shares of Stock subject to the Option on March 9, 2013, and

 

(v)

20% of the total number of shares of Stock subject to the Option on March 9, 2014.

 

 

 

 

In no event, however, shall this Option vest and become exercisable for any additional shares of Stock following Participant’s Termination of Executive Directorship.

 

 

 

Notwithstanding the vesting schedule stated above, in the event of a Change-In-Control as defined in Section 1.6 of the Plan, all Options shall immediately vest.

 

Remainder of page intentionally left blank.

 



 

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice.  Participant has reviewed the Stock Option 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 Stock Option Agreement and the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under or relating to the Plan, this Grant Notice or the Stock Option Agreement.

 

 

MAUI LAND & PINEAPPLE COMPANY, INC.:

PARTICIPANT:

 

 

By:

/S/ WALTER A. DODS JR.

 

By:

/S/ WARREN H. HARUKI

Print Name:

Walter A. Dods Jr.

 

Print Name:

Warren H. Haruki

Title:

Chairman, Compensation Committee

 

 

 

Address:

P.O. Box 187

 

Address:

 

 

Kahului, Maui, Hawaii 96733

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

 

May 4, 2009

 

 

 

 

 

Attachments:    Stock Option Agreement (Exhibit A)

Form of Exercise Notice (Exhibit B)

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (Exhibit C)

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan Prospectus (Exhibit D)

 



 

EXHIBIT A

 

TO STOCK OPTION GRANT NOTICE

 

STOCK OPTION AGREEMENT

 

Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), has granted to Participant an option under the Company’s 2006 Equity and Incentive Award Plan (the “Plan”) to purchase the number of shares of the Company’s common stock, no par value (“Stock”), indicated in the Grant Notice.

 

ARTICLE I

GENERAL
 
1.1           Defined Terms.  Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise.  Capitalized terms not specifically defined herein shall have the meanings specified in the Grant Notice or, if not defined therein, the Plan.
 

Cause” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by Participant that adversely affects the Company or any Subsidiary, (ii) any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company or any Subsidiary that adversely affects the Company or any Subsidiary, (iii) any willful and continued failure by Participant to substantially perform his or her duties with the Company or any Subsidiary (other than any such failure resulting from Participant’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Board, which demand specifically identifies the manner in which the Board believes that Participant has not substantially performed such duties, or (iv) any willful and continued failure by Participant to substantially follow and comply with the specific and lawful directives of the Board, as reasonably determined by the Board (other than any such failure resulting from Participant’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Board, which demand specifically identifies the manner in which the Board believes that Participant has not substantially performed such directives.  The foregoing definition shall not in any way preclude or restrict the right of the Company (or any Subsidiary) to discharge or dismiss Participant or any other person in the service of the Company (or any Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of this Agreement, to constitute grounds for termination for Cause.

 

1.2           Incorporation of Terms of Plan.  The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference.
 
ARTICLE II

GRANT OF OPTION
 
2.1           Grant of Option.  In consideration of Participant’s past and/or continued employment with or service to the Company or a Parent or Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this

 



 

Agreement.  Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.
 
2.2           Exercise Price.  The exercise price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the exercise price per share of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the Grant Date.  Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the exercise price per share of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date.
 
2.3           Consideration to the Company; No Employment Rights.  In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Parent or Subsidiary.  Nothing in the Plan or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Parent or Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Parents and Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company, a Parent or a Subsidiary and Participant.
 
ARTICLE III

PERIOD OF EXERCISABILITY
 
3.1           Commencement of Exercisability.
 

(a)           Subject to Sections 3.2, 3.3, and 5.8, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

 

(b)           No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Participant.

 

3.2           Duration of Exercisability.  The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative.  Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3.
 
3.3           Expiration of Option.  The Option may not be exercised to any extent by anyone after the first to occur of the following events:
 

(a)                                  The expiration of ten years from the Grant Date;

 

(b)           If this Option is designated as an Incentive Stock Option and Participant owned (within the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five years from the Grant Date;

 

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(c)           The expiration of six months following the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy, unless such termination occurs by reason of Participant’s death or Disability or Participant’s discharge for Cause;

 

(d)           The expiration of twelve months following the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy by reason of Participant’s death or Disability; or

 

(e)           The date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy by the Company or any Parent or Subsidiary by reason of Participant’s discharge for Cause.

 

Participant acknowledges that an Incentive Stock Option exercised more than three months after Participant’s Termination of Employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option.

 

3.4           Special Tax Consequences.  Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code.  Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder.

 

ARTICLE IV

EXERCISE OF OPTION
 
4.1           Person Eligible to Exercise.  Except as provided in Section 5.2, during the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
 
4.2           Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3.
 
4.3           Manner of Exercise.  The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3:
 

(a)           An Exercise Notice in writing signed by Participant or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator.  Such notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or such other form as is prescribed by the Administrator);

 

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(b)           The receipt by the Company of full payment for the shares with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4;

 

(c)           A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Participant or the other person then entitled to exercise such Option or portion thereof, stating that the shares of Stock are being acquired for Participant’s own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder and any other applicable law, and that Participant or other person then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above.  The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations and any other applicable law.  Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, and may issue stop-transfer orders covering such shares.  Share certificates evidencing Stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein.  The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and

 

(d)           In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option.

 

4.4           Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Participant:
 

(a)           cash;

 

(b)           check;

 

(c)           to the extent permitted under applicable laws, delivery of a notice that the Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale;

 

(d)           with the consent of the Administrator, through the delivery of shares of Stock which have been owned by the Participant for at least six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Option or exercised portion thereof; or

 

(e)           any combination of the consideration provided in the foregoing.

 

4.5           Conditions to Issuance of Stock Certificates.  The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or

 

A-4


 

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 of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:
 

(a)           The admission of such shares to listing on all stock exchanges on which such 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 Administrator 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 Administrator shall, in its absolute discretion, determine to be necessary or advisable;

 

(d)           The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; and

 

(e)           The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience.

 

4.6           Rights as Stockholder.  The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares are issued, except as provided in Section 11.3 of the Plan.
 
ARTICLE V

OTHER PROVISIONS
 
5.1           Administration.  The Administrator 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 Administrator in good faith shall be binding, conclusive and final upon Participant, the Company and all other interested persons.  No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.
 
5.2           Option Not Transferable.
 

(a)           Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution.  Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by

 

A-5



 

operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

(b)           Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 11.1(b) of the Plan.

 

(c)           Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  Subject to such conditions and procedures as the Administrator may require, a Permitted Transferee may exercise the Option or any portion thereof during Participant’s lifetime.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

 

5.3           Restrictive Legends and Stop-Transfer Orders.
 

(a)           The share certificate or certificates evidencing the shares of Stock purchased hereunder shall be endorsed with any legends that may be required by state or federal securities laws.

 

(b)           Participant 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 of Stock 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 of Stock 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.

 

5.4           Shares to Be Reserved.  The Company shall at all times during the term of the Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy the requirements of this Agreement.
 
5.5           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 at the address given beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to Participant shall be addressed to Participant at the address given beneath Participant’s signature on the Grant Notice.  By a notice given pursuant to this Section 5.5, either party may thereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.5.  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.
 
5.6           Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

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5.7           Governing Law; Severability.  This Agreement shall be administered, interpreted and enforced under the laws of the State of Hawaii, without regard to the conflicts of law principles 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.
 
5.8           Conformity to Securities Laws.  Participant 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 Option is granted and may be exercised, 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.
 
5.9           Amendments.  This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Participant or such other person as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company.
 
5.10         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 in Section 5.2, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.
 

5.13         Notification of Disposition.  If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares or (b) within one year after the transfer of such shares to him.  Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

 

5.14         Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option 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.
 

5.15         Entire Agreement.  The Plan and this Agreement (including all Exhibits hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

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EXHIBIT B

 

TO STOCK OPTION GRANT NOTICE

 

FORM OF EXERCISE NOTICE

 

Effective as of today,                                        , 20      , the undersigned (Participant”) hereby elects to exercise Participant’s option to purchase the number of shares of common stock specified below (the “Shares”) of Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), under and pursuant to the Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (the “Plan”), the Stock Option Grant Notice dated as of           , 20     and the Stock Option Agreement attached thereto (the “Option Agreement”).  Capitalized terms used herein without definition shall have the meanings given in the Plan and, if not defined in the Plan, the Option Agreement.

 

Grant Date:

 

 

 

 

 

Number of Shares as to which Option is Exercised:

 

 

 

 

 

Exercise Price per Share:

 

$

 

 

 

 

 

Total Exercise Price:

 

$

 

 

 

 

Certificate to be issued in name of:

 

 

 

 

 

Payment delivered herewith:

 

$                                                    (Representing the full exercise price for the Shares, as well as any applicable withholding tax)
Form of Payment:                       

 

 

(Please specify)

 

 

 

Type of Option:

 

o Incentive Stock Option                  o Non-Qualified Stock Option

 

Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement.  Participant agrees to abide by and be bound by their terms and conditions.  Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition of the Shares.  Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan and the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

ACCEPTED BY:
MAUI LAND & PINEAPPLE COMPANY, INC.

 

SUBMITTED BY:

 

 

 

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

 

Address:

 

 

 

 

 

 



 

EXHIBIT C

 

TO STOCK OPTION GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.
2006 EQUITY AND INCENTIVE AWARD PLAN

 



 

EXHIBIT D

 

TO STOCK OPTION GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.
2006 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

 



EX-10.2 3 a2192797zex-10_2.htm EXHIBIT 10.2

Exhibit 10.2

 

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 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”).

 

Holder:

 

Warren H. Haruki

 

 

 

Grant Date:

 

March 9, 2009

 

 

 

Total Number of Shares of Restricted Stock:

 

20,000

 

 

 

Vesting Schedule:

 

Subject to the terms and conditions of the Plan, this Grant Notice and the Restricted Stock Agreement, the Company’s Forfeiture Restriction (as defined in the Restricted Stock Agreement) shall lapse as to 1,000 Shares on the last business day of each calendar quarter beginning on March 31, 2009 and ending on December 31, 2013.

 

Notwithstanding the above, the Forfeiture Restriction shall terminate and all Restricted Shares shall vest immediately upon a Change in Control as defined in Section 1.6 of the Plan.

 

In no event, however, shall the Forfeiture Restriction (as defined in the Restricted Stock Agreement) lapse as to any additional Shares following Holder’s Termination of Executive Directorship.

 

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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 Administrator 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/ WALTER A. DODS JR.

 

By:

/S/ WARREN H. HARUKI

Print Name:

Walter A. Dods Jr.

 

Print Name:

Warren H. Haruki

Title:

Chairman, Compensation Committee

 

 

Address:

P.O. Box 187

 

Address:

 

 

Kahului, Maui, Hawaii 96733

 

 

 

 

 

 

 

 

Date:

May 4, 2009

 

 

 

Attachments:

Restricted Stock Award Agreement (Exhibit A)

 

Form of Internal Revenue Code Section 83(b) Election and Instructions (Exhibit B)

 

 

· Election under Internal Revenue Code Section 83(b) (Attachment 1 to Exhibit B)

 

 

· Sample Cover Letter to Internal Revenue Service (Attachment 2 to Exhibit B)

 

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (Exhibit C)

 

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan Prospectus (Exhibit D

 

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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.
 
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 employment with or 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 Administrator 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 Administrator 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 Administrator may from time to time establish for reasons of administrative convenience; and

 

(e)         The receipt by the Company of full payment for all amounts 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 3.4 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 3.4 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, if Holder has a Termination of Employment, Termination of Consultancy, or Termination of Directorship, as applicable, for any or no reason, all of the Unreleased Shares (as defined in Section 3.3) shall thereupon be forfeited immediately and without any further action by the Company (the “Forfeiture Restriction”).  Upon the occurrence of such a forfeiture, 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.
 
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3.2           Release of Shares from Forfeiture Restriction.  The Shares shall be released from the Forfeiture Restriction as indicated in the Grant Notice.  Any of the Shares released from the Forfeiture Restriction shall thereupon be released from the restrictions on transfer under Section 3.4.  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           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.”
 
3.4           Restrictions on Transfer.  Unless otherwise permitted by the Administrator 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), and any attempted sale or other disposition thereof shall be null and void and of no effect.
 
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 Section 3.1, Holder hereby appoints the Secretary of the Company, or any other person designated by the Administrator 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 Section 3.1 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 Administrator, any share certificates representing the Unreleased Shares, together with the stock assignment duly endorsed in blank, attached as Exhibit C 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 Administrator, in escrow, pursuant to the Joint Escrow Instructions of the Company and Holder attached as Exhibit D to the Grant Notice, until the Unreleased Shares are forfeited by Holder as provided in Section 3.1, 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 D 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           Transfer of Forfeited Shares.  Holder hereby authorizes and directs the Secretary of the Company, or such other person designated by the Administrator, to transfer the Unreleased Shares which have been forfeited by Holder to the Company.
 
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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 Administrator 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 E.
 
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, if Holder is subject to Section 16 of the Exchange Act, 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 Administrator 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 Administrator in good faith shall be binding, conclusive and final upon Holder, the Company and all other interested persons.  No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan,
 
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this Agreement or the Shares.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.
 
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.

 

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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 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         No Employment Rights.  If Holder is an employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder.
 
5.13         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.
 
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EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

FORM OF 83(B) ELECTION AND INSTRUCTIONS

 

These instructions are provided to assist you if you choose to make an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the shares of common stock, no par value, of Maui Land & Pineapple Company, Inc. transferred to you.  Please consult with your personal tax advisor as to whether an election of this nature will be in your best interests in light of your personal tax situation.

 

The executed original of the Section 83(b) election must be filed with the Internal Revenue Service not later than 30 days after the date the shares were transferred to youPLEASE NOTE:  There is no remedy for failure to file on time.  The steps outlined below should be followed to ensure the election is mailed and filed correctly and in a timely manner.  ALSO, PLEASE NOTE:  If you make the Section 83(b) election, the election is irrevocable.

 

1.                                       Complete Section 83(b) election form (attached as Attachment 1) and make four (4) copies of the signed election form.  (Your spouse, if any, should sign the Section 83(b) election form as well.)

 

2.                                       Prepare the cover letter to the Internal Revenue Service (sample letter attached as Attachment 2).

 

3.                                       Send the cover letter with the originally executed Section 83(b) election form and one (1) copy via certified mail, return receipt requested to the Internal Revenue Service at the address of the Internal Revenue Service where you file your personal tax returns.  We suggest that you have the package date-stamped at the post office.  The post office will provide you with a white certified receipt that includes a dated postmark.  Enclose a self-addressed, stamped envelope so that the Internal Revenue Service may return a date-stamped copy to you.  However, your postmarked receipt is your proof of having timely filed the Section 83(b) election if you do not receive confirmation from the Internal Revenue Service.

 

4.                                       One (1) copy must be sent to Maui Land & Pineapple Company, Inc. for its records and one (1) copy must be attached to your federal income tax return for the applicable calendar year.

 

5.                                       Retain the Internal Revenue Service file stamped copy (when returned) for your records.

 

Please consult your personal tax advisor for the address of the office of the Internal Revenue Service to which you should mail your election form.

 



 

ATTACHMENT 1 TO EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

 

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of shares (the “Shares”) of common stock, no par value, of Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”).

 

1.                                       The name, address and taxpayer identification number of the undersigned taxpayer are:

 

 

 

 

SSN:                               

 

The name, address and taxpayer identification number of the taxpayer’s spouse are (complete if applicable):

 

 

 

 

SSN:                                

 

2.                                       Description of the property with respect to which the election is being made:

 

                                 shares of common stock, no par value, of the Company.

 

3.                                       The date on which the property was transferred was                               , 20      .

 

4.                                       The taxable year to which this election relates is calendar year 20      .

 

5.                                       Nature of restrictions to which the property is subject:

 

The Shares may not be transferred and are subject to forfeiture if taxpayer’s employment or service with the Company and its subsidiaries terminates for any reason.  The forfeiture restriction applicable to the Shares will lapse in a series of five cumulative installments of 20% each on                                     , 20      ,                                     , 20      ,                                     , 20      ,                                     , 20       and                                     , 20      .

 

6.                                       The fair market value at the time of transfer (determined without regard to any lapse restrictions, as defined in Treasury Regulation Section 1.83-3(a)) of the Shares was              per Share.

 

7.                                       No amount was paid by the taxpayer for the Shares.

 

8.                                       A copy of this statement has been furnished to the Company.

 

Dated:                 , 20      Taxpayer Signature

 

 

 

The undersigned spouse of Taxpayer joins in this election.  (Complete if applicable).

 

Dated:                 , 20      Spouse’s Signature

 

 

 



 

ATTACHMENT 2 TO EXHIBIT B
TO RESTRICTED STOCK AWARD GRANT NOTICE

 

SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE

 

[Date]

 

VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED

 

Internal Revenue Service

[Address where taxpayer files returns]

 

Re:

Election under Section 83(b) of the Internal Revenue Code of 1986

 

Taxpayer:                                                           

 

Taxpayer’s Social Security Number:                                                             

 

Taxpayer’s Spouse:                                                                                       

 

Taxpayer’s Spouse’s Social Security Number:                                               

 

 

Ladies and Gentlemen:

 

Enclosed please find an original and one copy of an Election under Section 83(b) of the Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above.  Please acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and returning it to me in the self-addressed stamped envelope provided herewith.

 

 

Very truly yours,

 

 

 

 

 

 

 

 

Enclosures

cc:           Maui Land & Pineapple Company, Inc.

 

D-1



 

EXHIBIT C

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.

 

2006 EQUITY AND INCENTIVE AWARD PLAN

 



 

EXHIBIT D

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

MAUI LAND & PINEAPPLE, INC.

 

2006 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

 



EX-10.3 4 a2192797zex-10_3.htm EXHIBIT 10.3

Exhibit 10.3

MAUI LAND & PINEAPPLE COMPANY, INC.

 

2006 EQUITY AND INCENTIVE AWARD PLAN

 

STOCK OPTION GRANT NOTICE

 

Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), pursuant to its 2006 Equity and Incentive Award Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares of the Company’s common stock, no par value (“Stock”), set forth below (the “Option”).  This Option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice.

 

Participant:

John P. Durkin

 

 

Grant Date:

April 15, 2009

 

 

Exercise Price per Share:

$7.78

 

 

Total Number of Shares Subject to the Option:

20,000

 

 

Expiration Date:

April 15, 2019

 

Type of Option:

Non-Qualified Stock Option

 

 

Vesting Schedule:

Subject to the terms and conditions of the Plan, this Grant Notice and the Stock Option Agreement, this Option shall vest and become exercisable as to:

 

 

 

(i)                               20% of the total number of shares of Stock subject to the Option on April 15, 2010.,

(ii)                            20% of the total number of shares of Stock subject to the Option on April 15, 2011,

(iii)                         20% of the total number of shares of Stock subject to the Option on April 15, 2012,

(iv)                        20% of the total number of shares of Stock subject to the Option on April 15, 2013, and

(v)                           20% of the total number of shares of Stock subject to the Option on April 15, 2014.

 

 

In no event, however, shall this Option vest and become exercisable for any additional shares of Stock following Participant’s Termination of Employment.

 

Notwithstanding the vesting schedule stated above, in the event of a Change-In-Control as defined in Section 1.6 of the Plan, all Options shall immediately vest.

 

Remainder of page intentionally left blank.

 



 

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice.  Participant has reviewed the Stock Option 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 Stock Option Agreement and the Plan.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under or relating to the Plan, this Grant Notice or the Stock Option Agreement.

 

 

MAUI LAND & PINEAPPLE COMPANY, INC.:

PARTICIPANT:

 

 

 

By:

/S/ WARREN H. HARUKI

 

By:

/S/ JOHN P. DURKIN

Print Name:

Warren H. Haruki

 

Print Name:

John P. Durkin

Title:

Executive Chairman

 

 

 

Address:

P.O. Box 187

 

Address:

 

 

Kahului, Maui, Hawaii 96733

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

May 4, 2009

 

 

 

 

 

Attachments:

Stock Option Agreement (Exhibit A)

 

Form of Exercise Notice (Exhibit B)

 

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (Exhibit C)

 

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan Prospectus (Exhibit D)

 



 

EXHIBIT A

 

TO STOCK OPTION GRANT NOTICE

 

STOCK OPTION AGREEMENT

 

Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), has granted to Participant an option under the Company’s 2006 Equity and Incentive Award Plan (the “Plan”) to purchase the number of shares of the Company’s common stock, no par value (“Stock”), indicated in the Grant Notice.

 

ARTICLE I
 
GENERAL
 
1.1                                 Defined Terms.  Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise.  Capitalized terms not specifically defined herein shall have the meanings specified in the Grant Notice or, if not defined therein, the Plan.
 

Cause” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by Participant that adversely affects the Company or any Subsidiary, (ii) any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company or any Subsidiary that adversely affects the Company or any Subsidiary, (iii) any willful and continued failure by Participant to substantially perform his or her duties with the Company or any  Subsidiary (other than any such failure resulting from Participant’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Board, which demand specifically identifies the manner in which the Board believes that Participant has not substantially performed such duties, or (iv) any willful and continued failure by Participant to substantially follow and comply with the specific and lawful directives of the Board, as reasonably determined by the Board (other than any such failure resulting from Participant’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Participant by the Board, which demand specifically identifies the manner in which the Board believes that Participant has not substantially performed such directives.  The foregoing definition shall not in any way preclude or restrict the right of the Company (or any Subsidiary) to discharge or dismiss Participant or any other person in the service of the Company (or any Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of this Agreement, to constitute grounds for termination for Cause.

 

1.2                                 Incorporation of Terms of Plan.  The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference.
 
ARTICLE II
 
GRANT OF OPTION
 
2.1                                 Grant of Option.  In consideration of Participant’s past and/or continued employment with or service to the Company or a Parent or Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this

 



 

Agreement.  Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.
 
2.2                                 Exercise Price.  The exercise price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the exercise price per share of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the Grant Date.  Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the exercise price per share of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date.
 
2.3                                 Consideration to the Company; No Employment Rights.  In consideration of the grant of the Option by the Company, Participant agrees to render faithful and efficient services to the Company or any Parent or Subsidiary.  Nothing in the Plan or this Agreement shall confer upon Participant any right to continue in the employ or service of the Company or any Parent or Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Parents and Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company, a Parent or a Subsidiary and Participant.
 
ARTICLE III
 
PERIOD OF EXERCISABILITY
 
3.1                                 Commencement of Exercisability.
 

(a)                                  Subject to Sections 3.2, 3.3, and 5.8, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.

 

(b)                                 No portion of the Option which has not become vested and exercisable at the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Participant.

 

3.2                                 Duration of Exercisability.  The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative.  Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3.
 
3.3                                 Expiration of Option.  The Option may not be exercised to any extent by anyone after the first to occur of the following events:
 

(a)                                  The expiration of ten years from the Grant Date;

 

(b)                                 If this Option is designated as an Incentive Stock Option and Participant owned (within the meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five years from the Grant Date;

 

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(c)                                  The expiration of six months following the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy, unless such termination occurs by reason of Participant’s death or Disability or Participant’s discharge for Cause;

 

(d)                                 The expiration of twelve months following the date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy by reason of Participant’s death or Disability; or

 

(e)                                  The date of Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy by the Company or any Parent or Subsidiary by reason of Participant’s discharge for Cause.

 

Participant acknowledges that an Incentive Stock Option exercised more than three months after Participant’s Termination of Employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option.

 

3.4                                 Special Tax Consequences.  Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code.  Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder.

 

ARTICLE IV
 
EXERCISE OF OPTION
 
4.1                                 Person Eligible to Exercise.  Except as provided in Section 5.2, during the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
 
4.2                                 Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3.
 
4.3                                 Manner of Exercise.  The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or the Secretary’s office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3:
 

(a)                                  An Exercise Notice in writing signed by Participant or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator.  Such notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or such other form as is prescribed by the Administrator);

 

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(b)                                 The receipt by the Company of full payment for the shares with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4;

 

(c)                                  A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Participant or the other person then entitled to exercise such Option or portion thereof, stating that the shares of Stock are being acquired for Participant’s own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder and any other applicable law, and that Participant or other person then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above.  The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations and any other applicable law.  Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, and may issue stop-transfer orders covering such shares.  Share certificates evidencing Stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein.  The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and

 

(d)                                 In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise the Option.

 

4.4                                 Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Participant:
 

(a)                                  cash;

 

(b)                                 check;

 

(c)                                  to the extent permitted under applicable laws, delivery of a notice that the Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale;

 

(d)                                 with the consent of the Administrator, through the delivery of shares of Stock which have been owned by the Participant for at least six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Option or exercised portion thereof; or

 

(e)                                  any combination of the consideration provided in the foregoing.

 

4.5                                 Conditions to Issuance of Stock Certificates.  The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or

 

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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 of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:
 

(a)                                  The admission of such shares to listing on all stock exchanges on which such 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 Administrator 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 Administrator shall, in its absolute discretion, determine to be necessary or advisable;

 

(d)                                 The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; and

 

(e)                                  The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience.

 

4.6                                 Rights as Stockholder.  The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares are issued, except as provided in Section 11.3 of the Plan.
 
ARTICLE V

OTHER PROVISIONS
 
5.1                                 Administration.  The Administrator 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 Administrator in good faith shall be binding, conclusive and final upon Participant, the Company and all other interested persons.  No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.
 
5.2                                 Option Not Transferable.
 

(a)                                  Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution.  Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by

 

A-5



 

operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

 

(b)                                 Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 11.1(b) of the Plan.

 

(c)                                  Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the lifetime of Participant, only Participant may exercise the Option or any portion thereof.  Subject to such conditions and procedures as the Administrator may require, a Permitted Transferee may exercise the Option or any portion thereof during Participant’s lifetime.  After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

 

5.3                                 Restrictive Legends and Stop-Transfer Orders.
 

(a)                                  The share certificate or certificates evidencing the shares of Stock purchased hereunder shall be endorsed with any legends that may be required by state or federal securities laws.

 

(b)                                 Participant 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 of Stock 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 of Stock 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.

 

5.4                                 Shares to Be Reserved.  The Company shall at all times during the term of the Option reserve and keep available such number of shares of Stock as will be sufficient to satisfy the requirements of this Agreement.
 
5.5                                 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 at the address given beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to Participant shall be addressed to Participant at the address given beneath Participant’s signature on the Grant Notice.  By a notice given pursuant to this Section 5.5, either party may thereafter designate a different address for notices to be given to that party.  Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.5.  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.
 
5.6                                 Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
 
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5.7                                 Governing Law; Severability.  This Agreement shall be administered, interpreted and enforced under the laws of the State of Hawaii, without regard to the conflicts of law principles 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.
 
5.8                                 Conformity to Securities Laws.  Participant 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 Option is granted and may be exercised, 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.
 
5.9                                 Amendments.  This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Participant or such other person as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company.
 
5.10                           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 in Section 5.2, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.
 

5.13                           Notification of Disposition.  If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares or (b) within one year after the transfer of such shares to him.  Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

 

5.14                           Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option 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.
 
5.15                           Entire Agreement.  The Plan and this Agreement (including all Exhibits hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

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EXHIBIT B

 

TO STOCK OPTION GRANT NOTICE

 

FORM OF EXERCISE NOTICE

 

Effective as of today,                                        , 20      , the undersigned (Participant”) hereby elects to exercise Participant’s option to purchase the number of shares of common stock specified below (the “Shares”) of Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”), under and pursuant to the Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (the “Plan”), the Stock Option Grant Notice dated as of            , 20       and the Stock Option Agreement attached thereto (the “Option Agreement”).  Capitalized terms used herein without definition shall have the meanings given in the Plan and, if not defined in the Plan, the Option Agreement.

 

Grant Date:

 

 

 

 

 

Number of Shares as to which Option is Exercised:

 

 

 

 

 

Exercise Price per Share:

 

$

 

 

 

 

Total Exercise Price:

 

$

 

 

 

 

Certificate to be issued in name of:

 

 

 

 

 

Payment delivered herewith:

 

$

 

(Representing the full exercise price for

 

 

the Shares, as well as any applicable withholding tax)

 

 

Form of Payment:

 

 

 

 

(Please specify)

 

 

 

Type of Option:

 

o  Incentive Stock Option    o  Non-Qualified Stock Option

 

Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement.  Participant agrees to abide by and be bound by their terms and conditions.  Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or disposition of the Shares.  Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.  The Plan and Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan and the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

 

ACCEPTED BY:
MAUI LAND & PINEAPPLE COMPANY, INC.

 

SUBMITTED BY:

 

 

 

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

 

Address:

 

 

 

 

 

 



 

EXHIBIT C

 

TO STOCK OPTION GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.
2006 EQUITY AND INCENTIVE AWARD PLAN

 



 

EXHIBIT D

 

TO STOCK OPTION GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.
2006 EQUITY AND INCENTIVE AWARD PLAN PROSPECTUS

 



EX-10.4 5 a2192797zex-10_4.htm EXHIBIT 10.4

Exhibit 10.4

 

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:

John P. Durkin

 

 

Grant Date:

April 15, 2009

 

 

Total Number of Restricted Shares:

15,000

 

 

Performance Vesting Criteria:

Subject to the terms and conditions of the Plan, this Grant Notice and the Restricted Stock Agreement, up to 3,000 Shares shall vest and become Released Shares following each of the fiscal years ending December 31, 2009, 2010, 2011, 2012 and 2013 (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 each fiscal year shall be established by the Committee prior to the end of the first quarter of fiscal year 2010, 2011, 2012, and 2013, as applicable. Specific performance criteria for fiscal year 2009 shall be established by the Committee as soon as practicable.

Any Shares that do not become Released Shares after fiscal year 2009 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.

Notwithstanding the foregoing, all Shares shall become Released Shares and shall vest immediately upon a Change in Control as defined in Section 1.6 of the Plan.

 

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

 

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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/ WARREN H. HARUKI

 

By:

/S/ JOHN P. DURKIN

Print Name:

Warren H. Haruki

 

Print Name:

John P. Durkin

Title:

Executive Chairman

 

 

 

Address:

P.O. Box 187

 

Address:

 

 

Kahului, Maui, Hawaii 96733

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

May 4, 2009

 

 

 

 

Attachments:            The following Exhibits listed below have been previously distributed to the Holder. Additional copies are available upon request from the Holder.

Restricted Stock Award Agreement (Exhibit A)

Form of Internal Revenue Code Section 83(b) Election and Instructions (Exhibit B)

·  Election under Internal Revenue Code Section 83(b) (Attachment 1 to Exhibit B)

·  Sample Cover Letter to Internal Revenue Service (Attachment 2 to Exhibit B)

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (Exhibit C)

 

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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.
 
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;

 

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(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 3.4 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 3.4 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, if Holder has a Termination of Employment for any or no reason, all of the Unreleased Shares (as defined in Section 3.3) 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 such a forfeiture, the Company shall become the legal and beneficial owner of the Shares
 
A-4


 
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.  The 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 3.5 below.  Any of the Shares released from the Forfeiture Restriction shall thereupon be released from the restrictions on transfer under Section 3.4.  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                                 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.”
 
3.4                                 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), and any attempted sale or other disposition thereof shall be null and void and of no effect.
 
3.5                                 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.  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 Section 3.1, 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 Section 3.1 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 Section 3.1, 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
 
A-5


 
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 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.
 
A-6


 
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.
 
As additional consideration for Holder’s past and/or continued service to the Company or its Subsidiaries, in the event that the Company achieves the Maximum NOI for the Company’s pineapple operations in fiscal year 2006, as set forth and defined in the Restricted Share Agreement dated June 30, 2004 (the “2004 Agreement”) between the Company and Holder, the Company shall pay to Holder a cash bonus equal to Holder’s federal and state income and payroll taxes directly resulting from the vesting of shares under the 2004 Agreement for the fiscal year 2006, grossed up for taxes resulting from such cash bonus.
 
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.

 

(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.

 

A-7


 
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 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.
 
A-8


 
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-9



 

EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

FORM OF 83(B) ELECTION AND INSTRUCTIONS

 

These instructions are provided to assist you if you choose to make an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the shares of common stock, no par value, of Maui Land & Pineapple Company, Inc. transferred to you.  Please consult with your personal tax advisor as to whether an election of this nature will be in your best interests in light of your personal tax situation.

 

The executed original of the Section 83(b) election must be filed with the Internal Revenue Service not later than 30 days after the date the shares were transferred to youPLEASE NOTE:  There is no remedy for failure to file on time.  The steps outlined below should be followed to ensure the election is mailed and filed correctly and in a timely manner.  ALSO, PLEASE NOTE:  If you make the Section 83(b) election, the election is irrevocable.

 

1.                                       Complete Section 83(b) election form (attached as Attachment 1) and make four (4) copies of the signed election form.  (Your spouse, if any, should sign the Section 83(b) election form as well.)

 

2.                                       Prepare the cover letter to the Internal Revenue Service (sample letter attached as Attachment 2).

 

3.                                       Send the cover letter with the originally executed Section 83(b) election form and one (1) copy via certified mail, return receipt requested to the Internal Revenue Service at the address of the Internal Revenue Service where you file your personal tax returns.  We suggest that you have the package date-stamped at the post office.  The post office will provide you with a white certified receipt that includes a dated postmark.  Enclose a self-addressed, stamped envelope so that the Internal Revenue Service may return a date-stamped copy to you.  However, your postmarked receipt is your proof of having timely filed the Section 83(b) election if you do not receive confirmation from the Internal Revenue Service.

 

4.                                       One (1) copy must be sent to Maui Land & Pineapple Company, Inc. for its records and one (1) copy must be attached to your federal income tax return for the applicable calendar year.

 

5.                                       Retain the Internal Revenue Service file stamped copy (when returned) for your records.

 

Please consult your personal tax advisor for the address of the office of the Internal Revenue Service to which you should mail your election form.

 

B-1



 

ATTACHMENT 1 TO EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

 

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of shares (the “Shares”) of common stock, no par value, of Maui Land & Pineapple Company, Inc., a Hawaii corporation (the “Company”).

 

1.                                       The name, address and taxpayer identification number of the undersigned taxpayer are:

 

 

 

SSN:

 

The name, address and taxpayer identification number of the taxpayer’s spouse are (complete if applicable):

 

 

 

SSN:

 

2.                                       Description of the property with respect to which the election is being made:

 

      shares of common stock, no par value, of the Company.

 

3.                                       The date on which the property was transferred was                  , 20        .

 

4.                                       The taxable year to which this election relates is calendar year 20       .

 

5.                                       Nature of restrictions to which the property is subject:

 

The Shares may not be transferred and are subject to forfeiture if taxpayer’s service as a member of the Board of Directors of the Company terminates for any reason.  The forfeiture restriction will lapse with respect to 250 Shares on the last business day of each calendar quarter following the date of grant.

 

6.                                       The fair market value at the time of transfer (determined without regard to any lapse restrictions, as defined in Treasury Regulation Section 1.83-3(a)) of the Shares was       per Share.

 

7.                                       No amount was paid by the taxpayer for the Shares.

 

8.                                       A copy of this statement has been furnished to the Company.

 

Dated:       , 20    Taxpayer Signature

 

 

 

The undersigned spouse of Taxpayer joins in this election.  (Complete if applicable).

 

Dated:       , 20    Spouse’s Signature

 

 

 

B-2



 

ATTACHMENT 2 TO EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE

 

[Date]

 

VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED

 

Internal Revenue Service

[Address where taxpayer files returns]

 

 

Re:

Election under Section 83(b) of the Internal Revenue Code of 1986

 

 

 

Taxpayer:

 

 

 

 

Taxpayer’s Social Security Number:

 

 

 

 

Taxpayer’s Spouse:

 

 

 

 

Taxpayer’s Spouse’s Social Security Number:

 

 

 

 

Ladies and Gentlemen:

 

Enclosed please find an original and one copy of an Election under Section 83(b) of the Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above.  Please acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and returning it to me in the self-addressed stamped envelope provided herewith.

 

 

Very truly yours,

 

 

 

 

 

 

 

 

Enclosures

cc:                                 Maui Land & Pineapple Company, Inc.

 

B-3



 

EXHIBIT C

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

MAUI LAND & PINEAPPLE COMPANY, INC.
2006 EQUITY AND INCENTIVE AWARD PLAN

 



EX-31.1 6 a2192797zex-31_1.htm EXHIBIT 31.1
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Exhibit 31.1

CERTIFICATION

I, Robert I. Webber, certify that:

    1.
    I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

    2.
    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

    3.
    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

    4.
    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

    (a)
    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

    (b)
    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

    (c)
    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

    (d)
    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

    5.
    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

    (a)
    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

    (b)
    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2009

 

 

 

 

 

 

/s/ ROBERT I. WEBBER

    Name:   Robert I. Webber
    Title:   President & Chief Executive Officer
(Principal Executive Officer)



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EX-31.2 7 a2192797zex-31_2.htm EXHIBIT 31.2
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Exhibit 31.2

CERTIFICATION

I, John P. Durkin, certify that:

    1.
    I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

    2.
    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

    3.
    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

    4.
    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

    (a)
    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

    (b)
    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

    (c)
    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

    (d)
    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

    5.
    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

    (a)
    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

    (b)
    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2009

 

 

 

 

 

 

/s/ JOHN P. DURKIN

    Name:   John P. Durkin
    Title:   Chief Financial
(Principal Financial Officer)



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EX-32.1 8 a2192797zex-32_1.htm EXHIBIT 32.1
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Exhibit 32.1

        The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

        In connection with the Quarterly Report of Maui Land & Pineapple Company, Inc. (the "Company") on Form 10-Q for the quarter ended March 31, 2009 as filed with the Securities and Exchange Commission (the "Report"), we, Robert I. Webber and John P. Durkin, respectively, the President & Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

    (1)
    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

    (2)
    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ ROBERT I. WEBBER

   
Robert I. Webber
President & Chief Executive Officer
    (Principal Executive Officer)
   

Date: May 5, 2009

 

 

/s/ JOHN P. DURKIN


 

 
John P. Durkin
Chief Financial Officer
    (Principal Financial Officer)
   

Date: May 5, 2009

 

 

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.




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