August 10, 1999
Mr. John C. Couch
Dear John:
This letter will confirm our understandings with respect to your
retirement from Alexander & Baldwin, Inc. and all of its subsidiaries (the
"Company"), effective October 1, 1999.
1. You will remain on the payroll through September 30, 1999, and
then will retire, consistent with the provisions of the A&B
Retirement Plan for Salaried Employees.
2. You will receive, under the A&B Retirement Plan for Salaried
Employees, as a monthly benefit, such amount as is calculated by
our actuaries, payable on a life annuity basis, commencing
October 1, 1999 (see Attachment 1, Item I).
3. You will receive, under the defined benefit portion of the A&B
Excess Benefits Plan, THE LUMP-SUM PAYMENT, AS CALCULATED BY OUR
ACTUARIES, in the amount of $5,516,882 (see Attachment 1,
Item II).
4. You will receive, under the defined contribution portion of the
A&B Excess Benefits Plan, the balance of your deferred profit-
sharing account (such balance was $269,364.33 as of December 31,
1998), with interest credited to the date of distribution (see
Attachment 2), and with an additional amount, if any, payable in
2000, representing the excess defined contribution portion, in
respect of any profit sharing distribution declared for the 1999
fiscal year (see Paragraph 5, immediately below).
5. You will be eligible to receive a prorata share of any
distribution to be made under the Alexander & Baldwin, Inc.
Profit Sharing Retirement Plan, if any such distribution is
declared by the Board of Directors of Alexander & Baldwin, Inc.
for the 1999 fiscal year. Such prorata distribution would be
paid to you at the time distributions are paid to other
participants, in the year 2000.
6. You will be entitled to receive, under the A&B Executive
Survivor/ Retirement Benefit Plan, a benefit, payable for ten
years, in the amount of $14,079 per month. A request will be
made to the Alexander & Baldwin, Inc. Compensation and Stock
Option Committee ("CSOC") to pay you THE LUMP-SUM ACTUARIAL
EQUIVALENT OF SUCH BENEFIT, as calculated by our actuaries (see
Attachment 1, Item III).
7. You will be entitled to receive payments, at the rate of your
current monthly salary, from October 1, 1999 through May 10,
2001 (these payments represent 5 months of accrued vacation at
the rate of $57,000 per month, and 14-1/2 months of salary, at
the rate of $57,000 per month). A request will be made to the
CSOC to pay to you a LUMP-SUM PAYMENT, as of October 1, 1999,
representing the aggregate of such monthly payments to be made
through May 10, 2001.
8. Attachment 3 sets forth the relevant information with respect to
your stock options under the Alexander & Baldwin, Inc. 1989
Stock Option/Stock Incentive Plan and under the Alexander &
Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan. With
respect to the listed outstanding options under the Alexander &
Baldwin, Inc. 1989 Stock Option/Stock Incentive Plan, under the
terms of that plan, you will have six months from October 1,
1999 to exercise such options. With respect to options granted
under the Alexander & Baldwin, Inc. 1998 Stock Option/Stock
Incentive Plan, pursuant to the terms of the plan, in light of
your retirement, the vesting and exercisability of such options
will be as indicated on Attachment 3. A REQUEST WILL BE MADE TO
THE CSOC TO AMEND, EFFECTIVE AS OF OCTOBER 1, 1999, ALL
OUTSTANDING STOCK OPTION AGREEMENTS BETWEEN YOU AND THE COMPANY
PURSUANT TO THE ALEXANDER & BALDWIN, INC. 1989 STOCK
OPTION/STOCK INCENTIVE PLAN (COLLECTIVELY THE "STOCK
AGREEMENTS"), TO PROVIDE FOR THE CONTINUED EXERCISABILITY OF ALL
OPTION SHARES (AS THAT TERM IS DEFINED IN THE STOCK AGREEMENTS)
FOR THE PERIOD UP TO SEPTEMBER 30, 2002, PROVIDED THAT NO OPTION
EXERCISE SHALL BE EXTENDED TO A DATE BEYOND THE EXPIRATION OF
THE OPTION TERM (I.E., ITS ORIGINALLY-ESTABLISHED EXPIRATION
DATE).
9. You will be entitled to receive a prorata portion of all amounts
payable to you under the 1997-1999 and 1998-2000 cycles of the
Alexander & Baldwin, Inc. Three-Year Performance Improvement
Incentive Plan, computed at the Target level. These prorata
payments will amount to a one year and seven months', and a
seven months', portion of the amounts otherwise owing (computed
at the Target level) under the aforementioned cycles,
respectively.
10. In order to assist you with finalizing your personal business
affairs, the Company will provide you with an office and with
secretarial support at the Company's headquarters in both San
Francisco and Honolulu, through March 31, 2000.
11. During the period from October 1, 1999 through March 31, 2000,
the Company will provide you with three (3) first-class, round-
trip airline tickets from San Francisco to Honolulu, for which
you will account, through the normal Alexander & Baldwin, Inc.
expense account process.
12. As a retiree, you will be eligible for retiree medical coverage,
as provided under the Alexander & Baldwin, Inc. Retiree Health
and Welfare Benefit Plan.
13. The Alexander & Baldwin, Inc. Human Resources Department will
continue to provide administrative assistance to you in
connection with your medical claims.
14. You will, of course, be eligible for any and all other benefits
not mentioned above which are normally provided to retirees of
Alexander & Baldwin, Inc.
15. The Severance Agreement/Change of Control Agreement with you
dated August 22, 1991, as may have been amended and restated
from time to time, shall be deemed terminated as of October 1,
1999.
16. You agree that the above sets forth all of the understandings we
have with respect to the benefits which you shall receive upon
your retirement.
17. Prior to August 26, 1999, you will resign as a member of the
Boards of Directors of the Company, Matson Navigation Company,
Inc., A&B-Hawaii, Inc. and all of their subsidiaries.
If you are in agreement with the above, please acknowledge your
acceptance by signing and returning to me the duplicate copy of this letter.
Very truly yours,
ALEXANDER & BALDWIN, INC.
/s/ R. J. Pfeiffer
-----------------------------
R. J. Pfeiffer
Chairman of the Board and
Authorized Signatory
ACKNOWLEDGED:
/s/ John C. Couch
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John C. Couch
Date: 8/10/99