February 24, 1999
Miles B. King
c/o Alexander & Baldwin, Inc.
333 Market Street
P. O. Box 7452
San Francisco, CA 94120
Dear Miles:
This letter sets forth the agreement between Alexander & Baldwin, Inc. and
all of its subsidiaries (the "Company") and you in connection with your
resignation from the Company and your general release of claims.
1. TERMINATION OF ACTIVE SERVICES. Your active services for the Company
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will terminate on February 28, 1999.
2. CONTINUED PASSIVE EMPLOYMENT. The Company will continue to employ
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you through August 31, 2000, or until you obtain other employment, whichever
occurs first. It is understood that your active employment with the Company
will cease on February 28, 1999, and your employment from March 1, 1999 through
August 31, 2000 will be for all purposes a passive employment, and therefore,
you will not receive any promotions, salary increases, accrued vacation, bonus,
or employment benefits, other than those enumerated in this letter agreement,
and you will not be required to maintain an office or report to the Company or
perform any work assignments.
3. TITLE. During your passive employment, you may retain the title of
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Vice President and Chief Administrative Officer, but your only responsibility
will be to seek new employment.
4. COMPENSATION. You will remain on the payroll at your current base
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salary, and during the period of passive employment, you will be paid, by
direct deposit, your current monthly base salary, less appropriate withholdings
and deductions through August 31, 2000. These payments will include all
vacation pay, accrued through February 28, 1999. If you find other employment
before August 31, 2000, the Company will pay to you a one-time severance
payment equal to the remaining salary payments through August 31, 2000. If you
should die prior to August 31, 2000, the Company will pay to your designated
beneficiary an amount equal to the remaining salary payments through August 31,
2000.
You acknowledge that the payments set forth above constitute payments in
excess of any obligation of the Company to pay you any separation or severance
payment to you and that such excess payments are made to you as an accommoda-
tion to you as partial consideration for promises you are making under this
agreement regarding your separation from the Company. You acknowledge that
except for the payments set forth above, you are not entitled to any other
severance pay under any Company separation or severance policies and no other
severance or separation pay will be paid to you.
5. VACATION. You will accrue vacation benefits through February 28,
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1999. Thereafter, you will not accrue further vacation benefits. You shall be
deemed scheduled on vacation from March 31, 1999 to April 21, 1999 (38 days).
Thereafter, you will not earn, become entitled to, or receive any other
vacation pay.
6. PARKING. The Company will provide you with parking for one auto-
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mobile at the parking facility at the 333 Market Street Building, San
Francisco, California, through the earlier of August 31, 1999, or the date you
find other employment.
7. CAR ALLOWANCE. The Company will continue to pay to you a car
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allowance in the same amount as your existing car allowance through August 31,
2000 or until you find other employment.
8. OFFICE AND SECRETARIAL SERVICES. The Company will provide you with
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an office at 333 Market Street, San Francisco, California, and secretarial
services through the earlier of August 31, 1999 or the date you find other
employment.
9. PIIP. The Company will pay to you the amounts of $156,000 and
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$122,000 in full and complete satisfaction of any and all amounts owed to you
under the 1999 One-Year Performance Improvement Incentive Plan and the 1997-
1999, 1998-2000, and 1999-2001 cycles under the Three-Year Performance
Improvement Incentive Plan, respectively. With these payments, you will have
no claim to any other amounts owed under these plans. The Company will pay you
the above sums on or before that date which is thirty (30) days after the
Company receives from you this agreement executed by you.
10. NONQUALIFIED PLANS. In lieu of any benefit to which you otherwise
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would be entitled under the provisions of the A&B Excess Benefits Plan, the A&B
1985 Supplemental Executive Retirement Plan and the A&B Executive
Survivor/Retirement Plan (collectively, the "A&B Non-Qualified Plans"), A&B
will pay a single lump sum payment to you as soon as practicable after
August 31, 2000 equal to the sum of the amounts defined in paragraphs (b), (c)
and (d) which follow, using the assumptions stated in subparagraph (a) which
follows:
(a) Solely for the purposes of the calculations in subparagraphs
(b), (c) and (d), it shall be deemed that (i) your service with A&B
continued until August 31, 2000, at which time you would be deemed to be
involuntarily terminated, (ii) from March 1, 1999 through and including
August 31, 2000, your annual base compensation shall be deemed to be
$245,000, and (iii) your annualized award under the One-Year Performance
Improvement Incentive Plan shall be deemed to be the average of your
awards for 1996, 1997 and 1998, rounded to the nearest thousand, which
average is $104,000, further provided that to the extent that your benefit
under the A&B Retirement Plan for Salaried Employees is a factor taken
into consideration in determining your benefit under any A&B Non-Qualified
Plan, the calculation of your benefit under the A&B Retirement Plan for
Salaried Employees shall be based on your actual service, termination date
and compensation and shall not be affected by any of the assumptions
contained in this agreement.
(b) The amount determined under this subparagraph (b) shall be the
amount that would be payable by the A&B Excess Benefits Plan to you on
August 31, 2000 using the assumptions in paragraph (a) and based on the
terms of such plan as in effect on the date this agreement is executed,
such terms to include the after-tax discount rate, which is 2.50% and all
other actuarial factors specified in the plan.
(c) The amount determined under this subparagraph (c) shall be the
amount that would be payable by the A&B Supplemental Executive Retirement
Plan to you on August 31, 2000 using the assumptions in paragraph (a) and
based on the terms of such plan as in effect on the date this agreement is
executed, such terms to include the discount rate, which is 2.5%, and all
other actuarial factors specified in the plan, and further specifying that
an Approved Early Retirement Date is not approved by the Committee as that
term is defined in such plan.
(d) The amount determined under this subparagraph (d) shall be the
amount that would be payable by the A&B Executive Survivor/Retirement
Benefit Plan to you on August 31, 2000 using the assumptions in paragraph
(a) and based on the terms of such plan as in effect on the date this
agreement is executed, such terms to include a determination of any
discount rate or other actuarial factors by applying the terms of such
plan as in effect on the date this agreement is executed.
11. VESTING IN PIIP STOCK PROGRAM. With regard to awards granted under
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the Performance Improvement Incentive Plans, effective as of March 1, 1999, you
will be fully vested in and the Company will waive its repurchase rights in
(1) all base and bonus shares of Company common stock issued under the A&B
Restricted Stock Bonus Plan and (2) all common stock-equivalent units credited
under the A&B Deferred Compensation Plan.
12. STOCK OPTION. Effective as of March 1, 1999, The Nonqualified Stock
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Option Agreement dated January 27, 1999, between you and the Company pursuant
to the Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan and all
Stock Option Agreements between you and the Company pursuant to the Alexander &
Baldwin, Inc. 1989 Stock Option/Stock Incentive Plan (collectively the "Stock
Agreements") shall be amended to provide for the immediate exercisability of
all Option Shares covered thereby and the continued exercisability of all
Option Shares (as that term is defined in the Stock Agreements) for a period of
up to one (1) year after March 1, 1999, provided that no option exercise shall
be extended to a date beyond the expiration of the option term. You will not
be entitled to receive any stock options for 1999 and thereafter.
13. SEVERANCE AGREEMENT. The Severance Agreement/Change of Control
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Agreement dated October 1, 1992, as it may have been amended and restated, is
terminated as of February 28, 1999.
14. BENEFITS. Until the earlier of either August 31, 2000 or that date
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upon which you obtain coverage through another source, you will participate
under all insured and self-insured benefit plans in which you are currently
participating to the extent coverage or benefits are provided by these plans,
with one exception. Because you will be on paid leave, you will not be covered
by the sick leave policy. If after August 31, 2000, you have not obtained
health insurance coverage, you will be eligible to continue to receive health
insurance benefits for a period of up to eighteen months pursuant to the so-
called "COBRA" law at the Company's current cost. You will be required to
complete the COBRA form and pay the insurance premium and a small service fee.
15. 401(K). Your investment in the Company's 401(k) Plan, less the
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balance of any outstanding loans, may, at your option, be left in the Plan or
distributed to you in a lump sum. You should consult with your tax advisor to
discuss the tax consequences of the option chosen.
16. CAREER CONTINUATION SERVICES. To assist you in continuing your
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career, the Company will, at its expense, provide to you, certain outplacement
and counseling services through an executive outplacement firm which you may
select, subject to the Company's prior written approval. You may decline such
services. However, if you wish to avail yourself to these services, we can
assist you in coordinating such services.
17. CONFIDENTIALITY. You acknowledge that by reason of your position as
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Vice President, Chief Administrative Officer, you have had access to informa-
tion of a confidential or sensitive nature. You represent that you have held
all such information confidential and will continue to do so, except as
required by subpoena or court process, provided that you give the Company
sufficient notice to contest a subpoena or court process.
It is understood that, with the exception of the announcement of your
separation from employment and sharing of this letter with any outplacement
service firm (should you decide to avail yourself to the services offered to
you in Section 16), the parties hereto will keep the terms of this agreement
confidential. Without limiting the generality of the foregoing, you
specifically agree that you will not disclose information regarding this
agreement to any person other than your legal counsel or financial advisor,
except as required by subpoena or court process. You acknowledge that this
agreement of confidentiality is a material reason for the Company to enter into
this agreement.
18. RETURN OF COMPANY MATERIALS AND PROPERTY. You understand and agree
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that you will turn over to John F. Gasher all Company files, memoranda, records
and other documents, physical or personal property and keys which you have in
your possession by March 31, 1999, except for keys to the office the Company
will provide to you at 333 Market Street, San Francisco, California, which you
must return when you vacate the office.
19. COMPLETE RELEASE. As a material inducement to the Company to enter
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into this agreement, you hereby irrevocably and unconditionally release, acquit
and discharge the Company and each of the Company's stockholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives,
attorneys, parent companies, divisions, subsidiaries, affiliates (and agents,
directors, officers, employees, representatives and attorneys of such parent
companies, divisions, subsidiaries, affiliates) (collectively "Releasees"), or
any of them, from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent ("Claim" or "Claims")
which you now have, own, hold, or claim to have, claim to own, or claim to
hold, or which you at any time heretofore had, owned, held or claimed to have,
claimed to own, or claimed to hold, or which you at any time hereafter may
have, own, hold or claim to have, claim to own, or claim to hold, against each
or any of the Releasees, including, but not limited to, any arising out of your
employment with and/or separation from the Company, out of an alleged violation
of an alleged employment agreement, express or implied, any covenants of good
faith and fair dealing, express or implied, or any tort, or any legal restric-
tions on the Company's right to terminate employees, or any federal, state or
other governmental statute, regulation or ordinance, including, without
limitation: (1) Title VII of the Civil Rights At of 1964 (race, color,
religion, sex and national origin discrimination); (2) 42 U.S.C. S1981
(discrimination); (3) 42 U.S.C. SS621-634 (age discrimination); and
(4) 29 U.S.C. S206(d)(1) (equal pay); (5) the Americans with Disabilities Act,
42 U.S.C. S12101, et seq.; and (6) the California Fair Employment and Housing
Act, California Government Code Sections 12900, et seq. (race, color, religion,
sex, national origin, disability).
20. AGE RELEASE. You will not institute, cause, authorize or participate
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in any legal action, lawsuit or complaint against the Company on your own
behalf or on behalf of others, and no such action will be taken by your spouse,
children, heirs or personal representatives, arising directly or indirectly out
of your employment with the Company or the actions of its employees, officers,
directors, and all other persons, firms and corporations, and their respective
heirs, successors, successor corporations, and assigns. All such persons and
entitles are released from any and all liabilities for any and all Claims,
actions, and damages, whether or not now known or existing, arising out of your
employment and your retirement from your employment by the Company. This
release includes, but is not limited to, Claims under all State and Federal
laws, and Company policies and documents other than this agreement. Claims
under the Federal Age Discrimination in Employment Act, 29 U.S.C. Sec. 621 et
sq., as amended, are expressly waived.
a. Nothing herein waives any claims or rights which may arise after the
date of execution hereof. The consideration for this release and
waiver is agreed to be in addition to anything of value to which you
are already entitled;
b. You have twenty-one (21) days within which to review and consider
this letter. You may sign this agreement prior to the expiration of
the twenty-one (21) day period and, if you do so, you should only do
so if the Company has not induced you to waive this period by fraud,
misrepresentation, threat to withdraw or alter the offer prior to the
expiration of the twenty-one (21) day period or by providing
different terms to employees who sign this release prior to the
expiration of the twenty-one (21) day period.
c. For seven (7) days following the execution of the agreement you have
the right to revoke this agreement, and this agreement shall not be
effective until that period has expired;
d. You have been advised prior to executing the agreement to consult an
attorney of your choice and otherwise fully consider the agreement,
and acknowledge that you have had ample time to do so.
21. RELEASE. It is expressly agreed that your acceptance of the terms of
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this letter agreement shall constitute your acknowledgment of the Company's
full satisfaction of all of your claims, known or unknown, against the Company
and your express release of the Company with respect to such Claims, whether
arising out of the terms of your employment or otherwise, BY SIGNING THIS
LETTER OF AGREEMENT, YOU ARE EXPRESSLY WAIVING ANY AND ALL RIGHTS YOU MAY HAVE
UNDER CALIFORNIA CIVIL CODE SECTION 1542 WHICH STATES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Notwithstanding the provisions of Section 1542 of the Civil Code, and for
the purpose of effectuating this agreement, you understand and agree that you
are releasing the Company and its officers, agents, employees, insurers, and
any other entity or person operating on its behalf of all actions, causes of
action, Claims, or obligations whether known or unknown, and that you cannot
hereinafter institute or maintain any action, suit or Claim against the Company
for anything arising out of your employment, the termination of your employ-
ment, or arising out of any incident, matter or conduct in any way pertaining
to the Company occurring at any time up to and including the date of the
signing of this agreement.
22. NO ADMISSION. In connection with all matters relating to this letter
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agreement, neither party admits that it has acted in any way unlawfully as to
the other party. The releases are given for the purpose of making a full,
final and amicable resolution of each party's obligations to the other.
23. ARBITRATION. Any dispute regarding any aspect of this agreement or
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any act which allegedly has or would violate any provision of this agreement
("arbitrable dispute") will be submitted to arbitration in Hawaii, before an
experienced employment arbitrator licensed to practice law in Hawaii and
selected in accordance with the rules of the American Arbitration Association
as the exclusive remedy for such claim or dispute. Should any party to this
agreement hereafter institute any legal action or administrative proceeding
against the other with respect to any Claim waived by this agreement or to
pursue any arbitrable dispute by any method other than said arbitration, the
responding party shall be entitled to recover from the initiating party all
damages, costs, expenses, and attorneys' fees incurred as a result of such
action.
24. SEVERABILITY, INTEGRATION AND MODIFICATION. Should any of the
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provisions herein be determined to be invalid, it is agreed that this shall not
affect the enforceability of other provisions herein. This agreement is fully
integrated, represents the entire understanding of the parties, and there are
no other agreements, representations, promises or negotiations which have not
been expressly embodied herein. The parties agree that this agreement may not
be amended or modified except by a signed written document.
25. ATTORNEYS FEES. Should either party institute any action or
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proceeding to enforce any provision hereof or for damages by reason of any
alleged breach of any provision of this agreement, or for a declaration of such
party's rights or obligations hereunder or to set aside any provision hereof,
or for any other judicial remedy, the non-breaching party shall be entitled to
be reimbursed for all costs and expenses incurred thereby, including, but not
limited to, such amount as the court may adjudge to be reasonable attorneys'
fees for the services rendered in such action or proceeding.
26. SUCCESSORS. This agreement shall be binding upon the Company, its
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successors and/or assigns, and upon you and upon your respective heirs,
administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of each and all of the Releasees, and to their heirs,
representatives, executors, administrator, successors and assigns.
27. NONADMISSIONS CLAUSE. It is understood and agreed by the parties
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hereto that this agreement represents a compromise and settlement between the
parties hereto, and that nothing contained herein shall be construed as an
admission of liability by or on behalf of either party, by whom liability is
expressly denied. The covenants and releases and payments under this Agreement
should therefore not be construed as an admission of any negligence, strict
liability, willful conduct, breach of warranty, breach of contract, liability
or fault of any kind whatsoever by the Company or you.
28. VIOLATION OF AGREEMENT. In the event you willfully violate any
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provision of this agreement which causes the Company to suffer harm, the
Company will have the right to terminate the agreement without any obligation
to make further payment to you.
29. ENTIRE AGREEMENT. This agreement contains the entire understanding
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between you and the Company and fully supersedes any and all prior agreements
or understandings pertaining to the subject matter of this Release. Each of
the parties hereto acknowledges that no party or agent of any party has made
any promise, representation or warranty whatsoever, either express or implied,
not contained in this agreement concerning the subject matter hereof to induce
any other party to execute this agreement and each of the parties hereto
acknowledges that it has not executed this agreement in reliance of any such
promises, representations or warranties not specifically contained in this
agreement.
30. EXECUTION REQUIRED. This agreement shall not be effective unless
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and until you execute and return one of the two originals hereof executed by
the Company. We may revoke the offers contained in this letter agreement and
any or all of the terms hereof by a writing delivered to you any time prior to
the time you execute and deliver this agreement.
31. GOVERNING LAW. This agreement shall be deemed to have been entered
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into in the State of Hawaii and shall be construed and interpreted in
accordance with the laws of the State of Hawaii.
32. ACKNOWLEDGMENT. You acknowledge that you have read the terms of
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this agreement, that you fully understand its terms and language, that you
fully understand the provisions, that you have been granted adequate time to
review and consider this agreement with the aid of your personal attorney if
you so desire, and that you have signed this agreement as your own free and
knowing act. YOU UNDERSTAND AND AGREE THAT THIS AGREEMENT CONTAINS A BROAD
GENERAL UNEQUIVOCAL RELEASE.
If the above agreement is satisfactory to you, please sign and return the
original of this letter to me. The time limit for acceptance of this agreement
is twenty-one (21) days from the date of this letter or, in other words, by
March 17, 1999. A duplicate original of this letter is enclosed for your
records.
Sincerely,
/s/ W. Allen Doane
President & Chief Executive Officer
I HAVE READ AND I UNDERSTAND THE TERMS OF THIS LETTER AGREEMENT. I HAVE HAD
THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. I AGREE AND ACCEPT THE TERMS OF
THIS AGREEMENT AND UNDERSTAND THAT I AM WAIVING IMPORTANT RIGHTS. I HAVE SIGNED
THIS AGREEMENT OF MY OWN FREE WILL.
/s/ Miles B. King
Miles B. King
Date: February 26, 1999