Skip to main content
Find a Lawyer

1998 Non-Employee Director Stock Option Plan - Alexander & Baldwin Inc.

                           ALEXANDER & BALDWIN, INC.
                           -------------------------

                  1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
                  --------------------------------------------




                                  ARTICLE ONE

                               GENERAL PROVISIONS
                               ------------------


I.    PURPOSE OF THE PLAN
      -------------------

          This 1998 Non-Employee Director Stock Option Plan (the 'Plan') is
intended to promote the interests of Alexander & Baldwin, Inc., a Hawaii
corporation (the 'Corporation'), by offering non-employee members of the Board
of Directors the opportunity to participate in a special stock option program
designed to provide them with significant incentives to remain in the service
of the Corporation.

II.   ELIGIBILITY
      -----------
      
          Each non-employee member of the Corporation's Board of Directors (the
'Board') shall be eligible to receive automatic option grants pursuant to the
provisions of Article Two below.

III.  STOCK SUBJECT TO THE PLAN
      -------------------------

          A.   The stock issuable under the Plan shall be shares of the
Corporation's common stock, without par value ('Common Stock').  Such shares
may be made available from authorized but unissued shares of Common Stock or
shares of Common Stock reacquired by the Corporation and held as Treasury
shares.  The aggregate number of issuable shares shall not exceed 130,000
shares, subject to adjustment from time to time in accordance with sub-
paragraph D. below.

          B.   Should any option expire or terminate for any reason prior to
exercise in full, the shares subject to the portion of the option not so
exercised shall be available for subsequent option grants under this Plan.  All
share issuances under the Plan shall reduce on a share-for-share basis the
number of shares of Common Stock available for subsequent issuance under the
Plan.  Should the exercise price of an outstanding option under this Plan be
paid with shares of Common Stock or should shares of Common Stock otherwise
issuable under the Plan be withheld by the Corporation in satisfaction of any
applicable withholding taxes incurred in connection with the exercise of an
option, then the number of shares available for subsequent issuance under the
Plan shall be reduced only by the net number of shares issued to the holder of
such option.

          C.   Should the total number of shares at the time available for
grant under the Plan not be sufficient for the automatic grants to be made at
that particular time to the non-employee Board members, then the available
shares shall be allocated proportionately among all the automatic grants to be
made at that time.

          D.   In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, combination of
shares or other change affecting the outstanding Common Stock as a class with-
out receipt of consideration, then appropriate adjustments will be made to
(i) the aggregate number and/or class of shares issuable under the Plan,
(ii) the number and/or class of shares for which options subsequently are to be
granted to each non-employee Board member in accordance with the provisions of
Article Two below, and (iii) the number and/or class of shares and the exercise
price per share of the stock subject to outstanding options in order to prevent
the dilution or enlargement of benefits thereunder.

IV.   VALUATION
      ---------

          For all valuation purposes under the Plan, the Fair Market Value per
share of Common Stock on any relevant date shall be the mean between the
highest and lowest selling prices per share of Common Stock on such date, as
quoted on the Nasdaq National Market (or any successor system).  Should the
Common Stock become traded on a national securities exchange, then the Fair
Market Value per share shall be the mean between the highest and lowest selling
prices on such exchange on the date in question, as such prices are quoted on
the composite tape of transactions on such exchange.  If there is no reported
sale of Common Stock on the Nasdaq National Market (or national securities
exchange) on the date in question, then the Fair Market Value shall be the mean
between the highest and lowest selling prices on the Nasdaq National Market (or
such securities exchange) on the last preceding date for which such quotation
exists.

V.    SUBSIDIARIES
      ------------

          A corporation shall be deemed to be a Subsidiary of the Corporation
if it is one of the corporations (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each such
corporation (other than the last corporation in the unbroken chain) owns, at
the time of determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.  For purposes of the Change in Control provisions
of the Plan, the term 'Subsidiary' shall also include any partnership, joint
venture or other business entity of which the Corporation owns, directly or
indirectly through another subsidiary corporation, more than a fifty percent
(50%) interest in voting power, capital or profits.


                                  ARTICLE TWO

                                AUTOMATIC GRANTS
                                ----------------


I.    GRANT DATES
      -----------

          Commencing with the 1999 Annual Shareholders Meeting and continuing
in effect for each subsequent Annual Shareholders Meeting, each individual who
is at the time elected as a non-employee Board member shall automatically be
granted, on the date of each such Annual Meeting, a non-qualified stock option
to purchase 3,000 shares of Common Stock.

II.   TERMS AND CONDITIONS OF GRANT
      -----------------------------

          A.   Each option granted in accordance with the automatic grant
provisions of the Plan shall be evidenced by a non-qualified stock option
agreement.  Accordingly, each such automatic grant shall be subject to the
following terms and conditions:

      1.  Option Price.
          ------------

          The option price per share shall be equal to the Fair Market Value
      per share of Common Stock on the grant date.

      2.  Term and Exercisability of Options.
          ----------------------------------

          a.   Each option granted under this Article Two Program shall become
      exercisable in three (3) successive equal annual installments upon
      optionee's completion of each year of Board service over a three (3)-year
      period measured from the grant date; provided, however, that (i) each 
      option held by the optionee at the time of his/her death, but not other-
      wise fully exercisable, shall automatically accelerate as described in
      paragraph 5.b. below, and (ii) each option held by the optionee at the
      time of his/her (a) disability, (b) retirement at or after age
      seventy-two (72), or (c) termination with five (5) or more years of Board
      service, but not otherwise fully exercisable, shall continue to become
      exercisable as described in paragraph 5.c. below.  As the option becomes
      exercisable for one or more option shares, the option shall remain
      exercisable for those shares until the expiration or sooner termination
      of the option term.
      
          b.   Each granted option shall have a maximum term of ten (10) years
      measured from the automatic grant date.

      3.  Exercise of Option.
          ------------------

          Upon exercise of the option, the option price for the purchased 
      shares shall, subject to the provisions of the documents evidencing the
      option, become immediately payable in one or more of the forms specified
      below:

          (i)   cash or cash equivalents (such as a personal check payable to
      the Corporation's order); or

          (ii)  shares of Common Stock held by the optionee for the requisite
      period necessary to avoid a charge to the Corporation's reported earnings
      and valued at Fair Market Value on the date of exercise.

      4.  Non-Transferability.
          -------------------

          During the lifetime of the optionee, the option shall be exercisable
      only by the optionee and shall not be assignable or transferable by the
      optionee otherwise than by will or by the laws of descent and distri-
      bution following the optionee's death.

      5.  Effect of Termination of Board Membership.
          -----------------------------------------

          a.   Should an optionee cease to be a member of the Board for any
      reason (other than by reason of death, disability, retirement at or after
      age seventy-two (72), or termination with five (5) or more years of Board
      service) while holding one or more automatic grants under the Plan, then
      each such grant shall remain exercisable, for the number of option shares
      for which the grant is exercisable at the time of such cessation of Board
      service, for a six (6)-month period following the date of such cessation
      of Board service.

          b.   Should an optionee cease to be a member of the Board by reason
      of death, then each automatic grant at the time held by such optionee
      shall automatically accelerate and shall become immediately exercisable
      for all of the shares at the time subject to that option.  Each such
      grant may be subsequently exercised by the personal representative of
      the optionee's estate or by the person or persons to whom the option is
      transferred pursuant to the optionee's will or in accordance with the
      laws of descent and distribution.  Any such exercise must, however, occur
      within twelve (12) months after the date of the optionee's death.

          c.   Should an optionee cease to be a Board member by reason of
      (i) disability, (ii) retirement at or after age seventy-two (72), or
      (iii) termination with five (5) or more years of Board service, then each
      automatic grant at the time held by such optionee shall remain
      exercisable and continue to become exercisable for a thirty-six
      (36)-month period measured from the date of such cessation of Board
      service.

          d.   For all relevant purposes under this Article Two Program,
      disability shall mean the optionee's inability, by reason of any physical
      or mental injury or illness expected to result in death or to be of
      continuous duration of twelve (12) consecutive months or more, to perform
      his/her normal and usual duties as a Board member.

          e.   In no event shall any option remain exercisable after the
      specified expiration date of the ten (10)-year option term.  Upon the
      expiration of the applicable exercise period specified in subparagraphs
      a., b. and c. above or (if earlier) upon the expiration of the ten
      (10)-year option term, the option shall terminate and cease to be
      exercisable.

      6.  Shareholder Rights.
          ------------------

          An option holder shall have none of the rights of a shareholder with
      respect to any shares covered by the automatic grant until such
      individual shall have exercised the option, paid the option price and
      been issued a stock certificate for the purchased shares.

III.  CHANGE IN CONTROL
      -----------------

          A.   Each option outstanding at the time of a Change in Control, as
defined below, but not otherwise fully exercisable shall automatically
accelerate so that each such option shall, immediately prior to the effective
date of the Change in Control, become exercisable for all of the shares of
Common Stock at the time subject to that option and may be exercised for any or
all of those shares as fully-vested shares of Common Stock.  A Change in
Control shall mean:

          (i)   a merger or consolidation approved by the Corporation's
      stockholders in which securities possessing 35% or more of the total
      combined voting power of the Corporation's outstanding securities are
      transferred to a person or persons different from the persons holding
      those securities immediately prior to such transaction,

          (ii)  any approval by the stockholders of the Corporation of a plan
      of complete liquidation or dissolution of the Corporation, or any
      sale, transfer or other disposition of all or substantially all of the
      Corporation's assets, other than a sale, transfer or other disposition
      by the Corporation of all or substantially all of the Corporation's
      assets to an entity, at least 75% of the combined voting power of the
      voting securities of which are owned by stockholders of the Corporation
      in substantially the same proportions as their ownership of the
      Corporation immediately prior to such sale, or

          (iii) any other change in control of a nature required to be reported
      in response to Item 6(e) of Schedule 14A of Regulation 14A under the
      1934 Act, whether or not the Corporation is at the time required to
      comply with such Regulation 14A, provided that, without limitation, a
      change in control shall in all events be deemed to have occurred if
      (a) any person (as defined in Rule 13d-3 of the 1934 Act) becomes the
      beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act) of
      securities possessing 35% or more of the total combined voting power
      of the Corporation's outstanding securities, or (b) there is a change
      in the composition of the Board over a period of twenty-four (24)
      consecutive months or less such that a majority of the Board members
      ceases to consist of individuals who either (I) have served
      continuously as Board members since the beginning of such period or
      (II) have been elected or nominated for election as Board members
      during such period by a vote of at least two-thirds of the Board
      members described in clause (I) who were still in office at the time 
      the Board approved such election or nomination, other than, in the
      case of either (I) or (II) above, a Board member whose initial
      assumption of office is in connection with an actual or threatened
      election contest relating to the election of directors of the
      Corporation.

          B.   The outstanding options shall in no way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.


                                 ARTICLE THREE

                            MISCELLANEOUS PROVISIONS
                            ------------------------


I.    AMENDMENT OF THE PLAN
      ---------------------

          The Plan may be amended at any time by the Board, subject to any
shareholder approval required under applicable law or regulation.

II.   EFFECTIVE DATE AND TERM OF PLAN
      -------------------------------

          A.   The Plan shall become effective on the date of its adoption by
the Board; provided, however, that no automatic grants shall be made under the
           --------
Plan until the Plan shall have been approved by the shareholders at the 1998
Annual Meeting.

          B.   The Plan shall terminate upon the earliest to occur of (i) the
                                                 --------
tenth anniversary of the date of its initial adoption by the Board, (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise of the automatic grants made hereunder or
(iii) the date on which all outstanding options are terminated in connection
with the Change in Control provisions of the Plan.  If the date of termination
is determined under clause (i) above, then any option grants outstanding on
such date shall not be affected by the termination of the Plan and shall
continue to have force and effect in accordance with the provisions of the
instruments evidencing such grants or issuances.

III.  CASH PROCEEDS
      -------------

          All cash proceeds received by the Corporation from the sale of
shares pursuant to the automatic grants made under the Plan shall be used for
general corporate purposes.

IV.   REGULATORY APPROVALS
      --------------------

          The implementation of the Plan, the granting of any option
hereunder, and the issuance of Common Stock upon the exercise of any such
option shall be subject to the Corporation's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the Common Stock issued pursuant to it.

V.    NO IMPAIRMENT OF RIGHTS
      -----------------------

          Nothing in this Plan or any automatic grant made pursuant to the
Plan shall be construed or interpreted so as to affect adversely or otherwise
impair the Corporation's right to remove any optionee from service on the Board
at any time in accordance with the provisions of applicable law.

          IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused this Plan
to be executed by its duly authorized officers effective this 23rd day of
April, 1998.

                                ALEXANDER & BALDWIN, INC.
                                
                                By /s/ Miles B. King
                                   Its Vice President
                                   
                                   
                                By /s/ Alyson J. Nakamura
                                   Its Assistant Secretary

Was this helpful?

Copied to clipboard