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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 7, 2005
ALEXANDER & BALDWIN, INC.
(Exact name of registrant as specified in its charter)
Hawaii 0-565 99-0032630
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
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incorporation) Identification No.)
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822 Bishop Street, P. O. Box 3440
Honolulu, Hawaii 96801
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(Address of principal executive office and zip code)
(808) 525-6611
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.):
_
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
_
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
_
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
_
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
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On December 7, 2005, the Compensation Committee of the Alexander &
Baldwin, Inc. ("A&B") Board of Directors approved Amendment No. 4 to the
Alexander & Baldwin, Inc. Deferred Compensation Plan (the "Plan"). This
amendment is attached hereto as Exhibit 10.1. In connection with Internal
Revenue Code section 409A, as enacted by the American Jobs Creation Act of 2004,
and pursuant to Internal Revenue Service guidance, the Plan was amended to allow
the whole or partial rescission by participants in the Three-Year Performance
Improvement Incentive Plan (the "Three-Year PIIP") of any outstanding elections
to defer payment of awards under the One-Year Performance Improvement Incentive
Plan and the Three-Year PIIP (collectively, the "PIIP") made before January 1,
2005, where the amount deferred would become subject to Code section 409A.
Accordingly, any participant whose deferred PIIP award under an outstanding
deferral election is earned or vested after 2004 has until December 31, 2005 to
rescind such election. This opportunity to rescind affects three participants.
The amount affected by such rescission will be paid to the participant at the
time when awards pursuant to the particular performance cycle under the PIIP
normally are paid and shall be included in the participant's taxable income in
the year of payment.
On December 7, 2005, the Compensation Committee also approved Amendment
No. 3 to the Alexander & Baldwin, Inc. One-Year Performance Improvement
Incentive Plan (the "One-Year PIIP Plan"), effective as of January 1, 2006. The
amendment, attached hereto as Exhibit 10.2, to the One-Year PIIP Plan redefines
an eligible participant based on the terminology of the Company's new job
evaluation program. The number of eligible participants will remain generally
the same.
On December 8, 2005, the A&B Board of Directors approved the Alexander
& Baldwin, Inc. Executive Severance Plan (the "Severance Plan"), effective
January 1, 2006. The purpose of the Severance Plan is to retain key employees
and to encourage such employees to use their best business judgment in managing
the affairs of A&B. The Severance Plan applies to A&B's senior executives, as
provided by the Severance Plan, including the named executive officers. If A&B
terminates the participant's employment involuntarily and without cause or
because of a layoff, as defined by the Severance Plan, A&B shall pay certain
severance benefits to the participant, including (1) an amount equal to up to
twelve months of the participant's base salary, to be paid equally over a year,
and (2) a pro rated share of the participant's award opportunity under certain
performance bonus plans of A&B. The foregoing description of the Severance Plan
is qualified in its entirety by the terms of the Severance Plan, which is
attached hereto as Exhibit 10.3.
Item 9.01. Financial Statements and Exhibits
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(d) Exhibits
10.1 Amendment No. 4 to the Alexander & Baldwin, Inc. Deferred
Compensation Plan, dated December 7, 2005.
10.2 Amendment No. 3 to the Alexander & Baldwin, Inc. One-Year
Performance Improvement Incentive Plan, dated
December 7, 2005.
10.3 Alexander & Baldwin, Inc. Executive Severance Plan,
effective January 1, 2006.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: December 8, 2005
ALEXANDER & BALDWIN, INC.
/s/ Christopher J. Benjamin
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Christopher J. Benjamin
Senior Vice President and
Chief Financial Officer
ALEXANDER & BALDWIN, INC.
EXECUTIVE SEVERANCE PLAN
INTRODUCTION
The purpose of the Alexander & Baldwin, Inc. Executive
Severance Plan (the "Plan") is to retain key employees and to encourage such
employees to use their best business judgment in managing the affairs of
Alexander & Baldwin, Inc. and its divisions and subsidiaries (collectively, the
"Company"). Therefore, the Company is willing to provide the severance benefits
described below to protect these employees if involuntarily terminated without
cause or laid off from employment as part of a job elimination/restructuring or
reduction in force. It is further intended that this Plan will complement other
compensation program components to assure a sound basis upon which the Company
will retain key employees.
Article 1
Definitions and Exclusions
Whenever used in this Plan, the following words and phrases
shall have the meanings set forth below. When the defined meaning is intended,
the term is capitalized:
1.1 "Base Salary" means the total amount of base salary
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payable to the participant at the salary rate in effect on the last day of the
participant's employment with the Company. Base Salary does not include bonuses,
reimbursed expenses, credits or benefits under any plan of deferred compensation
to which the Company contributes, or any additional cash compensation or
compensation payable in a form other than cash.
1.2 "Cause" means termination from employment with the
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Company upon:
1.2(a) the willful and continued failure by the participant
substantially to perform the participant's duties with the Company (other than
any such failure resulting from the participant's incapacity due to physical or
mental Disability). For the purposes of this subparagraph and subparagraph
1.2(b), no act, or failure to act, on the participant's part shall be considered
"willful" unless done, or omitted to be done, by the participant not in good
faith and without reasonable belief by the participant that his/her action or
omission was in the best interest of the Company; or
1.2(b) the willful engaging by the participant in conduct
that is demonstrably and materially injurious to the Company, monetarily or
otherwise.
1.3 "Disability" means the participant's suffering a
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sickness, accident or injury that has been determined by the carrier of any
individual or group disability insurance policy covering the participant, or by
the Social Security Administration, to be a disability rendering the participant
totally and permanently disabled. The participant must submit proof to the Plan
Administrator of the carrier's or Social Security Administration's determination
upon the request of the Plan Administrator.
1.4 "Layoff" means the elimination of a job due to
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economic reasons, whether or not as part of job elimination or restructuring,
or as a reduction-in-force affecting one or more positions. Layoff does not
include resignation from employment or termination by reason of death,
Disability, or discharge for Cause. A participant is not considered to have been
laid off, andwill not be entitled to severance benefits described in Article 3,
if the Plan Administrator determines, in its discretion, that either the Company
or a purchaser or other successor has offered comparable employment to the
participant to commence after the participant's termination, whether or not the
participant accepts the position offered.
Article 2
Eligibility for Benefits
2.1 Eligibility. To be eligible for Plan benefits,
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employees must serve in a job categorized as Alexander & Baldwin, Inc. Chief
Executive Officer, Band A, or Band B under the Company's job evaluation program.
Exceptions (additions or deletions) to the eligibility requirements can be made
only by the Alexander & Baldwin, Inc. Chief Executive Officer, with the approval
of the Compensation Committee of the Board of Directors.
2.2 Benefits. Except as provided in Section 2.3, if the
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Company terminates the participant's employment involuntarily and without Cause
or because of a Layoff, the Company shall pay to the participant the severance
benefits described in Section 3.1. A participant receiving benefits under this
Agreement shall not be eligible for benefits under Alexander & Baldwin Human
Resources Policy No. 1.08, Matson Navigation Company (and its wholly owned
subsidiaries) Personnel Policy Bulletin No. 1.08, or any other or successor
separation policy or policies.
2.3 Change in Control. In the event of a "change in
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control of the Company," meaning a "Change in Control Event," as defined in
Internal Revenue Service Notice 2005-1 or any successor guidance issued by the
Internal Revenue Service, the terms of the Company's agreement with any
participant concerning a change in control of the Company, and not this Plan,
shall govern.
2.4 Plan Administration. Alexander & Baldwin, Inc. shall
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serve as the Plan Administrator. The Plan Administrator is responsible for the
general administration and management of this Plan and shall have all powers and
duties necessary to fulfill its responsibilities, including, but not limited to,
the discretion to interpret and apply this Plan and to determine all questions
relating to eligibility for benefits. This Plan shall be interpreted in
accordance with its terms and their intended meanings. However, the Plan
Administrator and all plan fiduciaries shall have the discretion to interpret or
construe ambiguous, unclear, or implied (but omitted) terms in any fashion they
deem to be appropriate in their sole discretion, and to make any findings of
fact needed in the administration of this Plan. The validity of any such
interpretation, construction, decision, or finding of fact shall not be given de
novo review if challenged in court, by arbitration, or in any other forum, and
shall be upheld unless clearly arbitrary or capricious.
Article 3
Severance Benefits
3.1 Type and Amount of Benefits. If severance benefits
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become payable under this Plan, benefits shall consist of the following:
3.1(a) Monetary Payments/Reimbursement. The participant
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shall receive an amount equal to six (6) months of the participant's Base
Salary, one-twelfth of which shall be payable monthly for a period of one year,
beginning in the first month following the date of the participant's
termination. Should the participant execute (and not revoke) a release agreement
prepared by the Plan Administrator, the participant shall receive additional
amounts as follows: (i) an amount equal to six (6) months of the participant's
Base Salary, one-twelfth of which shall be payable monthly for a period of one
year, beginning in the first month following the date of the participant's
termination; (ii) reimbursement for individual outplacement counseling services
in an amount not to exceed ten thousand dollars ($10,000.00); and, (iii) a pro
rated share of the award opportunity at "Target" under the Alexander & Baldwin,
Inc. One-Year Performance Improvement Incentive Plan and the Alexander &
Baldwin, Inc. Three-Year Performance Improvement Incentive Plan, as applicable,
that otherwise would have been payable to the participant had the participant
remained employed until the end of the applicable performance period(s) of such
plans. The payment under this subsection 3.1(a)(ii) and (iii) shall be payable
upon the expiration of the seven-day revocation period contained in the release
agreement prepared by the Plan Administrator and executed by the participant.
3.1(b) Benefits. For the period that separation payments
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continue under subparagraph 3.1(a) above, or until the participant becomes
employed with another employer offering any such benefits (whichever is
earlier), Group Life Insurance and Accidental Death & Dismemberment Insurance
shall continue as they were in effect for the participant on the date of the
participant's termination of employment.
3.1(b)(i) Group Medical, Dental, Drug and Vision Coverage. For
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a maximum period of twelve (12) months following termination, or until the
participant becomes employed with another employer offering any such benefits
(whichever is earlier), the Company shall reimburse the participant for the
amount of the premiums payable by the participant for post-termination
continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended ("COBRA"). Payment of premiums for COBRA coverage beyond twelve (12)
months following termination is the sole responsibility of the participant.
3.2 Death Benefits. If the participant dies during the
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severance benefit period, the severance benefits as described in this Article 3
that have not yet been paid shall be paid to the participant's designated
beneficiary.
3.3 Compensation Committee Discretion. The severance
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benefits as described in this Article 3 may be increased or decreased by the
Compensation Committee in its absolute discretion. Such adjustments may be
applied selectively with respect to one or more individual participants.
Article 4
Employment Status
4.1 Right to Terminate Employment. This Plan shall not be
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deemed to constitute an employment contract between the Company and the
participant. Nothing contained herein shall give the participant the right to be
retained in the employ of the Company or to interfere with the right of the
Company to discharge the participant at any time, nor shall it give the Company
the right to require the participant to remain in its employ or to interfere
with the participant's right to terminate employment at any time.
4.2 Status During Benefit Period. Commencing upon the
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date of the participant's termination from employment, the participant shall
cease to be an employee of the Company for any purpose. The payment of severance
benefits under this Plan shall be payments to a former employee.
Article 5
Claims and Review Procedures
5.1 Claims Procedure. Any individual ("claimant") who
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has not received benefits under the Plan that he or she believes should be paid
shall make a claim for such benefits as follows:
5.1(a) Initiation - Written Claim. The claimant initiates a
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claim by submitting to the Plan Administrator a written claim for the benefits.
5.1 (b) Timing of Plan Administrator Response. The Plan
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Administrator shall respond to such claimant within 90 days after receiving the
claim. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional 90 days by notifying the claimant in writing,
prior to the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the date by which the Plan
Administrator expects to render its decision.
5.1(c) Notice of Decision. If the Plan Administrator denies
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part or all of the claim, the Plan Administrator shall notify the claimant in
writing of such denial. The Plan Administrator shall write the notification in
a manner calculated to be understood by the claimant. The notification shall set
forth:
5.1(c)(i) The specific reason for the denial,
5.1(c)(ii) A reference to the specific provisions of the
Plan on which the denial is based,
5.1(c)(iii) A description of any additional information or
material necessary for the claimant to perfect the claim and an explanation of
why it is needed,
5.1(c)(iv) An explanation of the Plan's review procedures and
the time limits applicable to such procedures, and
5.1(c)(v) A statement of the claimant's right to bring a
civil action under the Employee Retirement Income Security Act of 1974 (ERISA)
Section 502(a) following an adverse benefit determination on review.
5.2 Review Procedure. If the Plan Administrator denies
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part or all of the claim, the claimant shall have the opportunity for a full and
fair review by the Plan Administrator of the denial, as follows:
5.2(a) Initiation - Written Request. To initiate the review,
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the claimant, within 60 days after receiving the Plan Administrator's notice of
denial, must file with the Plan Administrator a written request for review.
5.2(b) Additional Submissions - Information Access. The
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claimant shall then have the opportunity to submit written comments, documents,
records and other information relating to the claim. The Plan Administrator
shall also provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the claimant's claim for
benefits.
5.2(c) Timing of Plan Administrator Response. The Plan
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Administrator shall respond to the claimant's request for review within 60 days
after receiving the request. If the Plan Administrator determines that special
circumstances require additional time for processing the request, the Plan
Administrator can extend the response period by an additional 60 days by
notifying the claimant in writing, prior to the end of the initial 60-day
period, that an additional period is required. The notice of extension must set
forth the date by which the Plan Administrator expects to render its decision.
5.2(d) Notice of Decision. If the Plan Administrator affirms
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the denial of part or all of the claim, the Plan Administrator shall notify the
claimant in writing of such denial. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth the specific reason for the denial and a reference
to the specific provisions of the Plan on which the denial is based.
5.3 Authority. In determining whether to approve or deny
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any claim or any appeal from a denied claim, the Plan Administrator shall
exercise its discretionary authority to interpret the Plan and the facts
presented with respect to the claim, and its discretionary authority to
determine eligibility for benefits under the Plan. Any approval or denial shall
be final and conclusive upon all persons.
Article 6
General Provisions
Nothing herein contained shall be construed to limit or affect
in any manner or degree the normal and usual powers of management, exercised by
the officers and the Board of Directors or committees thereof, to change the
duties or the character of employment of any employee of the Company or to
terminate a participant's employment with the Company at any time, all of which
rights and powers are hereby expressly reserved.
It is intended that the Plan shall continue from year to year,
subject to an annual review by the Board of Directors. However, the Board of
Directors reserves the right to modify, amend or terminate the Plan at any time;
provided, that no amendment or termination shall affect the rights of
participants to receive Plan benefits finally determined by the Plan
Administrator but unpaid at the time of such termination or amendment.
Article 7
Miscellaneous
7.1 Nonalienation. No benefit payable at any time under
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this Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, or encumbrance of any kind.
7.2 Tax Withholding. The Company shall withhold any
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applicable income or employment taxes that are required to be withheld from the
severance benefits payable under this Plan.
7.3 Applicable Law. This Plan is a welfare plan subject
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to ERISA and it shall be interpreted, administered, and enforced in accordance
with that law.
IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused this
Plan to be executed by its duly authorized officers effective as of the 1st day
of January, 2006.
ALEXANDER & BALDWIN, INC.
By /s/ Ruthann S. Yamanaka
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Its Vice President
By /s/ Alyson J. Nakamura
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Its Secretary
ALEXANDER & BALDWIN, INC.
ONE-YEAR PERFORMANCE IMPROVEMENT INCENTIVE PLAN
AMENDMENT NO. 3
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The Alexander & Baldwin, Inc. One-Year Performance Improvement
Incentive Plan, as restated effective October 22, 1992 (the "Plan"), is hereby
amended, effective as of January 1, 2006, as follows:
1. Section III.A of the Plan is hereby amended by replacing it in its
entirety with the following:
"Employees must have served in an eligible assignment for the full Plan
Year to be eligible for an award. A Plan Year is a calendar year. An
eligible assignment is a job categorized as the A&B CEO, Band A, or
Band B under the Company's job evaluation program."
2. Section V.A of the Plan is hereby amended by replacing it in its
entirety with the following:
"Each participant's maximum award under this Plan will be established
to reflect the impact of the participant's position upon the Company
results determined on the basis of the Company's job evaluation
program."
3. Except as modified by this Amendment, all terms and provisions of
the Plan shall continue in full force and effect.
IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused this
Amendment to be executed on its behalf by its duly authorized officers on
this 7th day of December, 2005.
ALEXANDER & BALDWIN, INC.
By /s/ Ruthann S. Yamanaka
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Its Vice President
By /s/ Alyson J. Nakamura
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Its Secretary
ALEXANDER & BALDWIN, INC. DEFERRED COMPENSATION PLAN
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Amendment No. 4
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The Alexander & Baldwin, Inc. Deferred Compensation Plan, effective
August 25, 1994 (the "Plan") is hereby amended, effective as of January 1, 2005,
as follows:
1. The Plan provides participants in the Company's Three-Year
Performance Improvement Incentive Plan (the "Three-Year PIIP") the opportunity
to defer payment of the awards made to them under the Three-Year PIIP. Certain
Three-Year PIIP awards that would be deferred pursuant to outstanding deferral
elections made before January 1, 2005, would become subject to the restrictions
of Internal Revenue Code section 409A, as enacted by the American Jobs Creation
Act of 2004, because Code section 409A applies to deferred compensation that is
earned or vested after 2004. The Internal Revenue Service has provided guidance
in IRS Notice 2005-1 and proposed regulations under Code section 409A, that
allows the whole or partial rescission of an outstanding deferral election where
the amount deferred would become subject to Code section 409A, if (1) the Plan
is amended to provide for such rescission and the rescission is made on or
before December 31, 2005, and (2) the amount affected by the rescission is paid
to the participant and included in taxable income in the taxable year in which
it is earned and vested. Accordingly, the Plan is hereby amended to provide that
any participant whose deferred Three-Year PIIP award under an outstanding
deferral election would become subject to Code section 409A because the award is
earned or vested after 2004 may rescind such election, in whole or in part, by
filing a form prescribed by the Plan Administrator in accordance with procedures
established by the Plan Administrator. Any such rescission must be filed with
the Plan Administrator on or before December 31, 2005. The amount affected by
the rescission will be paid to the participant at the time when awards pursuant
to the particular performance cycle under the Three-Year PIIP normally are paid
and shall be included in the participant's taxable income in the year of
payment.
2. Except as modified by this Amendment No. 4, all terms and provisions
of the Plan shall continue in full force and effect.
IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused its
authorized officers to affix the corporate name and seal hereto this 7th day of
December, 2005.
ALEXANDER & BALDWIN, INC.
By /s/ Ruthann S. Yamanaka
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Its Vice President
By /s/ Alyson J. Nakamura
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Its Secretary