Document:

exh10_2.htm

ALEXANDER & BALDWIN, INC.

NOTICE OF AWARD OF PERFORMANCE SHARE UNITS

The Corporation hereby awards to Participant, as of the Award Date indicated below, an award (the “Award”) of Performance Share Units under the Corporation’s 2012 Incentive Compensation Plan (the “Plan”).  Each Performance Share Unit represents the right to receive one or more shares of Common Stock on the applicable issuance date following the vesting of that Performance Share Unit.  The number of Performance Share Units subject to this Award and the applicable performance-vesting requirement for those Performance Share Units and the underlying shares of Common Stock are set forth below. The remaining terms and conditions governing the Award, including the applicable service-vesting requirements and the applicable issuance date or dates for the shares of Common Stock that vest and become issuable under the Award, shall be as set forth in the form Performance Share Unit Award Agreement.

AWARD SUMMARY

 

	
Participant

	
___________________________

 

	
Award Date:

	
______________, 2013

 

	
Performance Share Units:

	
The actual number of shares of Common Stock that may become issuable pursuant to this Award shall be determined in accordance with the performance-vesting provisions of attached Schedule I and the service-vesting provisions of the form Performance Share Unit Award Agreement. For purposes of the applicable calculations under those vesting provisions, the number of shares of Common Stock to be utilized is                      shares (the “Performance Share Units”).

 

	
Vesting Schedule:

	
The number of shares of Common Stock which may actually vest and become issuable pursuant to the Award shall be determined pursuant to a two-step process: (i) first there shall be calculated the maximum number of Performance-Qualified Shares that become subject to this Award as a result of the level at which the Performance Goal specified on attached Schedule I is in fact attained and (ii) then the number of Performance-Qualified Shares calculated under clause (i) in which Participant may actually vest shall be determined on the basis of his or her satisfaction of the applicable Service vesting requirements set forth in the form Performance Share Unit Award Agreement.

 

Performance Vesting: Attached Schedule I specifies the applicable Performance Goal and Performance Period established for this Award.  For such Performance Goal, there are three designated levels of attainment set forth in Schedule I: Threshold, Target and Extraordinary.  Within sixty (60) days after the completion of the Performance Period, the Plan Administrator shall determine and certify the actual level of attainment for the Performance Goal and shall then measure that level of attainment against the Threshold, Target and Extraordinary Levels set forth for that Performance Goal in attached Schedule I.  The maximum number of Performance-Qualified Shares in which Participant can vest based upon the actual level of attainment of such Performance Goal shall be determined by applying the corresponding  percentage below for that level of attainment to the number of Performance Share Units set forth above:

 

Attainment below the Threshold Level:      0% of the Performance Share

                                                                           Units

Attainment at the Threshold Level:             35% of the Performance Share

                                                                           Units

Attainment at the Target Level:                    100% of the Performance Share

                                                                            Units

Attainment at Extraordinary Level:               150% of the Performance Share

                                                                           Units

 

To the extent the actual level of attainment of the Performance Goal is at a point between the Threshold and Target Levels, the maximum number of Performance-Qualified Shares in which Participant can vest shall be pro-rated between the two points on a straight line basis in accordance with the payout slope set forth in attached Schedule I.

 

To the extent the actual level of attainment of the Performance Goal is at a point between the Target and Extraordinary Levels, the maximum number of Performance-Qualified Shares in which Participant can vest shall be pro-rated between the two points on a straight line basis in accordance with the payout slope set forth in attached Schedule I.

 

The maximum numbers of Performance-Qualified Shares in which Participant can vest on the basis of the actual level of Performance Goal attainment shall in no event exceed in the aggregate 150% of the number of Performance Share Units set forth above.

 

Service Vesting.  The number of Performance-Qualified Shares in which Participant actually vests shall be determined on the basis of his or her satisfaction of the Service-vesting requirements set forth in Paragraph 3 of the form Performance Share Unit Agreement.

 

Resulting Shares.  Each Performance-Qualified Share in which Participant vests in accordance with the applicable performance-vesting and service-vesting provisions of this Award shall entitle such Participant to receive one share of Common Stock on the designated issuance date for that share determined in accordance with the provisions of the Performance Share Unit Award Agreement.

 

Participant understands and agrees that the Award is granted subject to and in accordance with the terms of the Plan and hereby agrees to be bound by the terms of the Plan and the terms of the Award as set forth in the form Performance Share Unit Award Agreement attached hereto as Exhibit A.  A copy of the Plan is available upon request made to the Human Resources Department at the Corporation’s principal offices at 822 Bishop Street, Honolulu, Hawaii 96813.

 

Coverage under Recoupment Policy. By accepting this Award, Participant hereby agrees that should Participant at this time be, or at any time hereafter become, either an executive officer of the Corporation subject to Section 16 of the Securities Exchange Act of 1934, as amended, or a participant in the Corporation’s Performance Improvement Incentive Plan, then:

 

(a)           Participant shall be subject to the Alexander & Baldwin, Inc. Policy Regarding Recoupment of Certain Compensation, effective as of June 29, 2012, the terms of which are hereby incorporated herein by reference and receipt of a copy of which Participant hereby acknowledges; and

 

(b)           any incentive compensation that is paid or granted to, or received by, Participant on or after June 29, 2012 (including any incentive compensation that is paid to, or received by, Participant on or after June 29, 2012 pursuant to an incentive compensation award made to Participant prior to June 29, 2012, whether by the Corporation or any predecessor entity) and during the three-year period preceding the date on which the Corporation is required to prepare an accounting restatement due to material non-compliance with any applicable financial reporting requirements under the federal securities laws shall, accordingly, be subject to recovery and recoupment pursuant to the terms of such policy.

 

For purposes of such recoupment policy, “incentive compensation” means any cash or equity-based awards (e.g., any stock award, restricted stock unit award, performance share unit award or stock option grant or shares of Common Stock issued thereunder) or any profit sharing payment or distribution that is based upon the achievement of financial performance metrics.  An additional copy of the recoupment policy is available upon request made to the Corporate Secretary at the Corporation’s principal offices.

 

Continuing Consent. Participant further acknowledges and agrees that, except to the extent the Plan Administrator notifies Participant in writing to the contrary, each subsequent award of Performance Share Units made to him or her under the Plan shall be subject to the same terms and conditions set forth in the form Performance Share Unit Award Agreement attached hereto as Exhibit A, and Participant hereby accepts those terms and conditions for each such subsequent Performance Share Unit award that may be made to him or her under the Plan and hereby agrees to be bound by those terms and conditions for any such Performance Share Unit awards, without any further consent or acceptance required on his or her part at the time or times when those awards may be made.  However, Participant may, at any time he or she holds an outstanding Performance Share Unit award under the Plan, request a written copy of the form Performance Share Unit Award Agreement from the Corporation by contacting the Corporation’s Human Resources Department at the Corporation’s principal offices.

 

Employment at Will.  Nothing in this Notice or in the form Performance Share Unit Award Agreement or in the Plan shall confer upon Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant’s Service at any time for any reason, with or without cause.

 

Definitions.  All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the form Performance Share Unit Award Agreement.

 

DATED:   _____________, 2013

 

 

	 	
ALEXANDER & BALDWIN, INC.

	 
	 	
By:

	  	 
	 	  	  	 
	 	
Title:

	  	 
	 	 	 	 
	 	  	  	 
	 	  	
                PARTICIPANT

	 
	 	 	 	 
	 	 	 	 
	 	Address:	 	 
	 	 	  	 
	 	  	  	 

 

  

  

  

SCHEDULE I

 

 

PERFORMANCE GOAL AND PERFORMANCE PERIOD

 

PERFORMANCE PERIOD

 

The Performance Period shall be the two-year period beginning January 1, 2013 and ending December 31, 2014.

 

PERFORMANCE GOAL FOR PERFORMANCE VESTING

 

Performance Goal  – Total Shareholder Return: The performance-vesting requirement for the Performance Share Units subject to this Award shall be tied to the percentile level at which the total shareholder return (including stock price appreciation and reinvestment of any cash dividends or other stockholder distributions) to the Corporation’s stockholders over the Performance Period stands in relation to the total shareholder return realized for that period by the companies comprising the S&P MidCap 400 Index.

For such purpose, the total shareholder return (“TSR”) for the Corporation’s stockholders shall be determined pursuant to the following formula:

TSR  = (Ending Stock Price* - Beginning Stock Price**) + Reinvested Dividends***             

                                                      Beginning Stock Price**

*  Ending Stock Price is the average daily closing price per share of the Common Stock calculated for last thirty-one (31) days within the Performance Period.

**  Beginning Stock Price is the average daily closing price per share of the Common Stock calculated for the thirty-one (31)-day period immediately preceding the commencement date of the Performance Period.

*** Reinvested Dividends shall be calculated by multiplying (i) the aggregate number of shares (including fractional shares) of Common Stock that could have been purchased during the Performance Period had each cash dividend paid on a single share of Common Stock during that period been immediately reinvested in additional shares (or fractional shares) of Common Stock at the closing price per share of the Common Stock on the applicable dividend payment date by (ii) the average daily closing price per share of Common Stock calculated for the last thirty-one (31) days within the Performance Period.

Each of the foregoing amounts shall be equitably adjusted for stock splits, stock dividends, recapitalizations and other similar events affecting the shares in question without the issuer’s receipt of consideration.

For each company in the S&P MidCap 400 Index, the TSR with respect to its common stock shall be calculated in the same manner as for the Common Stock.

Should a Change in Control occur during the Performance Period, then the attained level of the Performance Goal shall be determined in accordance with the applicable Change in Control provisions of the form Performance Share Unit Award Agreement.

Performance-Qualified Shares: Within sixty (60) days after the completion of the  Performance Period, the Plan Administrator shall determine and certify the actual level at which the TSR Performance Goal is attained. The actual number of Performance-Qualified Shares that results from such certification (the “Performance-Qualified Shares”) may range from 0% to 150% of the number of Performance Share Units subject to this Award, with the actual percentage to be determined on the basis of the percentile level at which the Plan Administrator certifies that the TSR Performance Goal has been attained in relation to the total shareholder return realized for that period by the companies comprising the S&P MidCap 400 Index; provided, however, that the maximum number of the shares of Common Stock that may qualify as Performance-Qualified Shares may not exceed 150% of the number of Performance Share Units subject to this Award.

Payout Slope for Determining Number of Performance-Qualified Shares Based on Attained Levels of TSR Performance Goal:  The number of shares of Common Stock that may qualify as Performance-Qualified Shares on the basis of the certified percentile level of TSR Performance Goal attainment shall be calculated by multiplying the number of Performance Share Units subject to this Award by the applicable percentage determined in accordance with the following payout slope for the TSR Performance Goal:

	
 

  

  

  

 

                

   Payout Slope Details

 

	 	

Percentile

	

Percentage of Performance Share Units Qualifying as Performance-Qualified Shares*

	 
	 	

<35th

	

0%

	 
	 	

35th

	

35%

	 
	 	

45th

	

67.5%

	 
	 	

55th

	

100%

	 
	 	

65th

	

125%

	 
	 	

75th

	

150%

	 

                             *linear interpolation between performance levels, rounded down to the nearest whole shareexh10_3.htm

  

  

  

EXHIBIT A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALEXANDER & BALDWIN, INC.

 

ONE-YEAR

 

PERFORMANCE IMPROVEMENT INCENTIVE PLAN

 

 

EFFECTIVE JANUARY 1, 2013

 

  

  

  

 

I.           Establishment and Purpose

 

A.           Alexander & Baldwin, Inc. (the “Company”) established the Alexander & Baldwin, Inc. One-Year Performance Improvement Incentive Plan (the “Plan”) on June 29, 2012.  The Plan was subsequently amended and restated effective January 1, 2013.

 

B.           The purpose of this Plan is to motivate employees to exceed business plan performance and to provide a reward to individuals for their successful results.  Further, the Plan is intended to:

 

1.           Communicate and reinforce the changing management style and direction the Company is to take.

 

2.           Emphasize current and future profitability, improvement or desirable change.

 

3.           Improve the planning process throughout the Company.

 

4.           Reinforce the implementation of business plans.

 

5.           Reward Company, subsidiary, business unit, division and individual performance above that which is expected.

 

C.           It is further intended that this Plan will complement other compensation program components to assure a sound basis upon which the Company will attract and retain key employees.

 

D.           Payment of incentive compensation under the Plan is conditioned on attainment of specified goals for a performance period and a service retention period that extends through the date of payment of an award for that performance period as described below.

II.           Administration

 

A.           The Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board of Directors”) shall have responsibility for administration of this Plan.  Under the direction of this Committee, the corporate officer in charge of the compensation programs of the Company and other executives designated by the Chief Executive Officer of the Company shall develop and maintain guidelines for the administration of the Plan and will perform day-to-day administrative details as required.

 

B.           The Committee shall interpret the Plan, make or approve procedures and guidelines relating to it, and make any factual determinations arising in connection with it.  The Committee's interpretations and determinations shall be final and binding.

 

III.           Eligibility

 

A.           Employees must have served with the Company or its subsidiaries 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 CEO, Band A, or Band B under the Company's job evaluation program.  Eligible Employees who are hired or promoted after the start of a Plan Year may, at the discretion of the Committee, become eligible for a pro-rata bonus based on their length of service that year.

 

B.           Employees must be on the payroll at the time awards are paid for the previous Plan Year, except that employees who have become Permanently Disabled, taken Early Retirement with the approval of the Company, taken Normal Retirement, or died during the Plan Year for which the award is made shall be eligible to receive a pro-rata award based on their performance and their term of service during that Plan Year.  For purposes of the Plan, the following definitions shall be in effect:  (1) “Permanently Disabled” shall mean the inability of the participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more; (2) “Early Retirement” shall mean the participant’s termination of employment, on or after attainment of age fifty-five (55) and completion of at least five (5) years of service; and (3) “Normal Retirement” shall mean the participant’s termination of employment on or after attainment of age sixty-five (65).

 

C.           Exceptions (additions or deletions) to the eligibility requirements of A above can be made by the Committee.

 

IV.           Goals (Objectives)

 

A.           The Plan is based on attainment of performance objectives that relate to financial, operational or other criteria with respect to the Company, any of its subsidiaries, business units and/or divisions (“Company Goals”) and individual performance.

B.           The Company Goals used as the basis of this Plan shall be approved by the Committee and may include, but are not limited to, one or more of the following criteria: (i) cash flow; (ii) earnings  (including gross margin, earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation, amortization and charges for stock-based compensation, earnings before interest, taxes, depreciation and amortization, and net earnings); (iii) earnings per share; (iv) growth in earnings or earnings per share; (v) stock price; (vi) return on equity or average stockholder equity; (vii) total stockholder return or growth in total stockholder return either directly or in relation to a comparative group; (viii) return on capital; (ix) return on assets or net assets; (x) invested capital, required rate of return on capital or return on invested capital; (xi) revenue, growth in revenue or return on sales; (xii) income or net income; (xiii) operating income, net operating income or net operating income after tax; (xiv) operating profit or net operating profit; (xv) operating margin; (xvi) return on operating revenue or return on operating profit; (xvii) collections and recoveries; (xviii) property purchases, sales, investments and construction goals; (xix) application approvals; (xx) litigation and regulatory resolution goals; (xxi) occupancy or occupancy rates; (xxii) leases, contracts or financings, including renewals; (xxiii) overhead, savings, G&A and other expense control goals; (xxiv) budget comparisons; (xxv) growth in stockholder value relative to the growth of the S&P 400 or S&P 400 Index, the S&P Global Industry Classification Standards (“GICS”) or GICS Index, or another peer group or peer group index; (xxvi) credit rating; (xxvii) development and implementation of strategic plans and/or organizational restructuring goals; (xxviii) development and implementation of risk and crisis management programs; (xxix) improvement in workforce diversity; (xxx) net cost per ton; (xxxi) crop yields; (xxxii) compliance requirements and compliance relief; (xxxiii) safety goals; (xxxiv) productivity goals; (xxxv) workforce management and succession planning goals; (xxxvi) economic value added (including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value added performance measures); (xxxvii) measures of customer satisfaction, employee satisfaction or staff development; (xxxviii) development or marketing collaborations, formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance the Company’s revenue or profitability or enhance its customer base; (xxxix) merger and acquisitions; (xl) water rights; (xli) entitlement; (xlii); regulatory approvals, (xliii) investment in and acquisition of real estate, (xliv) formation of joint ventures partnerships, and strategic alliances to acquire, develop and commercialize real estate, (xlv) building the pipeline of development projects, including planning, design, permitting and construction thereof, (xlvi) risk mitigation goals, (xlvii) objectives tied to long-term growth and shareholder value creation, and (xlviii) other similar criteria consistent with the foregoing.  In addition, such performance criteria may be based upon the attainment of specified levels of the Company’s performance under one or more of the measures described above relative to the performance of other entities and may also be based on the performance of any of the Company’s subsidiaries, business units or divisions.  Each applicable performance goal may include a minimum threshold level of performance below which no award will be earned, levels of performance at which specified portions of an award will be earned and a maximum level of performance at which an award will be fully earned. Each applicable performance goal may be structured at the time of the award to provide for appropriate adjustment for one or more of the following items: (A) asset impairments or write-downs; (B) litigation judgments or claim settlements; (C) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (D) accruals for reorganization and restructuring programs; (E) bonus, incentive, pension or other post-retirement compensation costs or accruals; (F) any extraordinary nonrecurring items; (G) the operations of any business acquired by the Company; (H) the divestiture of one or more business operations or the assets thereof; and (I) any other adjustment consistent with the operation of the Plan.

C.           Performance goals shall be weighted as determined by the Committee and may vary from participant to participant.  For each performance objective, the Committee may establish up to three (3) designated levels of attainment: threshold, target and extraordinary levels of attainment.  The Committee may also establish an alternative formula for determining the bonus potential at various points of performance goal attainment.

V.           Individual Bonus Awards

 

A.           Opportunity.  For each Company Goal established pursuant to Section IV, a bonus opportunity for each participant (stated as a dollar amount or percentage of salary) will be set at one or more levels based on corresponding levels of attainment of that goal. For example, a target level bonus may be set for target level attainment of each established goal.  Accordingly, each participant’s maximum award under the Plan for a particular Plan Year shall be equal to the sum of the maximum level of bonus opportunity set for each goal established for him or her for that Plan Year.

 

B.           Bonus Pool.  For each Plan Year, the Committee shall establish a bonus pool, which will be funded based on the actual level of attainment of Company Goals for that year.  The Committee shall determine the formula to be used to fund the bonus pool.  Subject to Committee discretion, a minimum level of achievement must be obtained for each Company Goal to fund the pool.  The Committee may, in its sole discretion, increase or decrease (including to zero) the funding of the pool for any year regardless of performance.  However, the maximum bonus pool for a Plan Year shall not exceed 200% of the aggregate target bonuses for all participants for such Plan Year.  The aggregate bonuses paid for a Plan Year to all participants shall not exceed the bonus pool for that year, and shall not exceed Five Million Dollars ($5,000,000).

 

C.           Individual Bonus Calculation.  Once the bonus pool is funded for a Plan Year, the bonus payable to each participant for that Plan Year shall be determined initially based on attainment of Company Goals and modified based on individual performance as described below.  However, the actual bonus amount to be paid to the participant shall be subject to his or her satisfaction of the employment requirement set forth in Section III.B (or any pro-ration effected in accordance with such section) and any adjustments effected by the Committee pursuant to Section V.C.3.

1.           Initial Individual Bonus Calculation.  Based on the Committee’s determination of the attained level of each Company Goal and the participant's bonus opportunity, an initial calculation shall be made of the bonus amount for the participant attributable to that goal, and the participant’s potential bonus amount for that Plan Year shall be equal to sum of those individually calculated bonus amounts.

2.           Individual Performance Modifier.  The amount determined pursuant to Section V.C.1 shall be adjusted by a multiplier (ranging from 0% to 150%) based on the Chief Executive Officer’s subjective evaluation of the participant's individual performance, provided that the adjustment for the Chief Executive Officer’s bonus amount shall be conducted by the Committee.  A participant who does not meet his or her performance expectations will not receive any bonus under the Plan.  In no event shall the adjustment pursuant to this Section V.C.2 result in a bonus for a participant in excess of 150% of the amount of bonus determined for such participant under Section V.C.1.

 

3.           Committee Discretion.  The award calculated for each participant pursuant to Section V.C.1 and Section V.C.2 may be increased or decreased by the Committee in its absolute discretion if such award does not, in the judgment of the Committee, accurately reflect the performance of the Company or of the applicable subsidiary, business unit, division or individual (including, without limitation by reason of circumstances occurring during the Plan Year, which may or may not have been beyond the control of the Company, subsidiary, business unit, division or the individual participant).  Such adjustments by the Committee may be applied uniformly with respect to all participants, or such adjustment may be applied selectively with respect to one or more individual participants.

 

D.           Payments

1.           Approval of the award payments for each Plan Year will be made by the Committee at its first meeting following the availability of the financial results for that Plan Year.  Award payments shall be made as soon as practicable following such approval but in no event later than March 15 of the year following the Plan Year to which the award relates.

2.           Awards shall be paid only in cash, with such cash payment to be made at the time the award is determined.  Participants will not be permitted to receive any portion of their awards in the form of the Company’s common stock.

 

3.           All award payments shall be subject to the Company’s collection of all applicable income and employment withholding taxes.

 

VI.           General Provisions

 

A.           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.

 

B.           It is intended that the Plan shall continue from year to year.  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 awards finally determined by the Committee but unpaid at the time of such termination or amendment.

 

C.           The parameters of the Plan shall be construed, administered and governed by the laws of the State of Hawaii without resort to its conflict-of-laws provisions.

D.           No amounts awarded or accrued under this Plan shall actually be funded, set aside or otherwise segregated prior to payment.  The obligation to pay the bonuses awarded hereunder shall at all times be an unfunded and unsecured obligation of the Company.  Plan participants shall have the status of general creditors and shall look solely to the general assets of the Company for the payment of their bonus awards.

E.           The Plan shall be administered, operated and construed in compliance with the requirements of the short-term deferral exception to Section 409A of the Internal Revenue Code (the “Code”) and Treasury Regulations Section 1.409A-1(b)(4).  Accordingly, to the extent there is any ambiguity as to whether one or more provisions of the Plan would otherwise contravene the requirements or limitations of Section 409A of the Code applicable to such short-term deferral exception, then those provisions shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of Section 409A of the Code and the Treasury Regulations thereunder that apply to such exception.

IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused this Plan to be executed by its duly authorized officers effective this 1st day of January, 2013.

 

 

ALEXANDER & BALDWIN, INC.

 

By /s/ Son-Jai Paik                                

      Its Vice President

 

By /s/ Alyson J. Nakamura                  

                      Its Secretary

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