matson, inc. form def 14a - Shareholder.com

Appendix A
DESCRIPTION OF THE ALEXANDER & BALDWIN, INC.
AMENDED AND RESTATED 2007 INCENTIVE COMPENSATION PLAN
Summary Description of the Alexander & Baldwin, Inc. 2007 Incentive Compensation Plan
At the 2010 Annual Meeting of Shareholders (the “Annual Meeting”), the shareholders are being asked to approve the Company’s amended and restated 2007 Incentive Compensation
Plan (the “2007 Plan”). The principal changes that will be effected by the amended and restated 2007 Plan upon such shareholder approval may be summarized as follows:
(i) The number of shares of the Company’s common stock reserved for issuance under the 2007 Plan will be increased by an additional 2,200,000 shares.
(ii) The number of shares of the Company’s common stock that may be issued pursuant to tax-favored incentive stock options under Section 422 of the Internal
Revenue Code (the “Code”) will also be increased by the same 2,200,000–share increase to the authorized reserve under the 2007 Plan.
(iii) Any accrued dividends or dividend equivalents on performance-based awards will not vest or be paid out unless the applicable performance goals for the
underlying awards are attained and will be cancelled if such performance goals are not achieved.
(iv) No out-of-the-money options may be cashed out without shareholder approval. Such prohibition will be in addition to the pre-existing provision of the 2007
Plan that precludes the repricing of outstanding options without shareholder approval.
(v) There will be express authorization for certain adjustments to outstanding awards upon a change in control transaction, including the conversion of
performance-based awards into service-only vesting awards upon their assumption in a change in control transaction effected prior to the completion of the applicable
performance period.
The Board adopted the amended and restated 2007 Plan on January 28, 2010, subject to shareholder approval at the Annual Meeting.
The proposed revisions contemplated by the amended and restated 2007 Plan are designed to assure that the Company will have a sufficient share reserve to fund future equity
incentive awards to individuals in its employ or service who are essential to its financial success and long-term growth. In addition, the 2007 Plan as so amended and restated will continue to
provide the Company with the flexibility needed to structure awards in a manner that will attract and retain talented and skilled individuals who have the potential to make significant
contributions to the Company’s various lines of business and its overall growth and development. In addition, as indicated more specifically below, shareholder approval of the amended and
restated 2007 Plan will also constitute re-approval of (i) the various performance goals upon which specific vesting targets may be established for awards made under the 2007 Plan that are
intended to qualify as performance-based compensation under Section 162(m) of the Code (“Section 162(m)”) and (ii) the per participant limitations imposed under the 2007 Plan on such
awards.
Should the amended and restated 2007 Plan not be approved by the shareholders, then neither the 2,200,000-share increase to the share reserve nor the corresponding
2,200,000-share increase to the number of shares that may be issued pursuant to incentive stock option grants will be implemented. However, all of the other revisions effected by the amended
and restated 2007 Plan will remain in force and effect, and the 2007 Plan as so revised will continue in full force and effect until its scheduled April 26, 2017 expiration date or any earlier
termination date in accordance with the provisions of the 2007 Plan.
The principal terms and provisions of the 2007 Plan, as amended and restated, are summarized below. The summary, however, is not intended to be a complete description of
all the terms of the 2007 Plan and is qualified in its entirety by reference to the complete text of the amended and restated 2007 Plan. Any shareholder who wishes to obtain a copy of the actual
plan documents may do so upon written request to the Corporate Secretary at the Company’s principal offices at 822 Bishop Street, Honolulu, Hawaii 96813.
Incentive Programs. The 2007 Plan consists of four separate incentive compensation programs: (i) the discretionary grant program, (ii) the stock issuance program, (iii) the
incentive bonus program and (iv) the automatic grant program for the non-employee members of the Company’s Board of Directors. The principal features of each program are described below.
Administration . The Compensation Committee of the Board of Directors (either acting directly or through a subcommittee of two or more members) will have the exclusive
authority to administer the discretionary grant, stock issuance and incentive bonus programs with respect to awards made to the Company’s executive officers and non-employee Board members
and will also have the authority to make awards under those programs to all other eligible individuals. However, the Company’s Board of Directors may at any time appoint a secondary
committee of one or more Board members to have separate but concurrent authority with the Compensation Committee to make awards under those programs to individuals other than executive
officers and non-employee Board members. All awards to non-employee directors (other than under the automatic grant program described below) will be made by the Compensation
Committee (or a subcommittee thereof) comprised solely of independent directors, and any awards for members of the Compensation Committee (other than under the automatic grant program)
must be authorized by a disinterested majority of the independent directors.
The term “plan administrator,” as used in this summary, will mean the Company’s Compensation Committee (or subcommittee) and any secondary committee, to the extent
each such entity is acting within the scope of its administrative authority under the 2007 Plan.
The Compensation Committee will have the limited discretion under the automatic grant program to determine the annual dollar amount to be used to determine the specific
number of shares subject to each grant made under that program, up to the maximum dollar amount permissible per grant, but all grants will otherwise be made in strict compliance with the
express terms of that program.
Eligibility . Officers and employees, as well as independent consultants and contractors, in the Company’s employ or service or in the employ or service of the Company’s
parent or subsidiary companies (whether now existing or subsequently established) will be eligible to participate in the discretionary grant, stock issuance and incentive bonus programs. The
non-employee members of the Board of Directors will also be eligible to participate in those three programs as well as the automatic grant program. As of February 19, 2010, approximately 714
persons (including 9 executive officers) were eligible to participate in the discretionary grant, stock issuance and incentive bonus programs and 8 non-employee Board members were eligible to
participate in those programs and the automatic grant program.
Securities Subject to 2007 Plan . 4,415,000 shares of the Company’s common stock will be reserved for issuance over the term of the 2007 Plan, including the 2,200,000share
increase for which shareholder approval is being sought at the Annual Meeting. In addition, as was the case under the original version of the 2007 Plan, should any options currently
outstanding under the Company’s predecessor equity plans subsequently terminate unexercised or any stock issuances currently outstanding under those predecessor plans be subsequently
forfeited prior to vesting, the number of shares of common stock subject to those terminated options, together with the forfeited shares, will be added to the share reserve available for issuance
under the 2007 Plan, up to an additional 750,000 shares. For such purpose, the Company’s predecessor equity plans will remain limited to (i) the 1998 Stock Option/Stock Issuance Plan, (ii) the
1998 Non-Employee Director Stock Option Plan, (iii) the Restricted Stock Bonus Plan and (iv) the Non-Employee Director Stock Retainer Plan (collectively. the “Predecessor Plans”).
As of February 19, 2010, 2,277,450 shares were subject to outstanding options or had been granted as restricted stock or restricted stock units under the 2007 Plan and
2,442,041 shares (including the 2,200,000-share increase to the 2007 Plan which the shareholders are being asked to approve) remained unallocated and available for future awards. It is
anticipated that no awards of the Company’s common stock will be granted under the 2007 Plan between February 19, 2010 and the date of the Annual Meeting.
those plans.
As of February 19, 2010, 1,487,074 shares were subject to outstanding options under the predecessor plans, and 3,859 shares were subject to unvested stock issuances under
Awards made under the 2007 Plan are subject to the following per-participant limitations in order to provide the plan administrator with the opportunity to structure one or
more of those awards as performance-based compensation under Section 162(m).
• For awards denominated in terms of shares of the Company’s common stock at the time of grant (whether payable in the Company’s common stock, cash or a
combination of both), no participant in the 2007 Plan may receive awards for more than 500,000 shares of the Company’s common stock in any single calendar year, subject to
adjustment for subsequent stock splits, stock dividends and similar transactions. Shareholder approval of this proposal will also constitute re-approval of that 500,000-share limitation
for purposes Section 162(m). Accordingly, such limitation will assure that any deductions to which the Company would otherwise be entitled upon the exercise of stock options or stock
appreciation rights granted under the discretionary grant program will not be subject to the $1 million limitation on the income tax deductibility of compensation paid per executive