Maui Land & Pineapple Co. Inc. is granting a cash bonus of $1.05 million to David Cole, the Kahului-based company's president, chairman and chief executive officer, according to a filing at the U.S. Securities & Exchange Commission.

The company said the bonus was related to a change in Cole's stock-option agreement for tax purposes.

Maui Land & Pine in October amended the 2003 agreement made with Cole in 2003, raising his stock option exercise price on 133,333 shares to $27.60 from $19.70. The higher price corresponds to the fair market value of Maui Land & Pineapple's stock price on the day of the original agreement.

The company said Cole's bonus makes up for the loss in value because of the revised exercise price.

The company said the option agreement came about because of tax rules on options vesting after the end of 2004.

The Internal Revenue Service levies heavier taxes on options if they were granted with an exercise price that was lower than the market value on the date of the grant, the filing said.