SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
--------------------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
--------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-12
--------------------
ALEXANDER & BALDWIN, INC.
-------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
--------------------
Payment of Filing Fee (Check the appropriate box):
-------------------------------------------------
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
--------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ALEXANDER & BALDWIN, INC.
822 Bishop Street, Honolulu, Hawaii 96813
March 10, 2003
To the Shareholders of Alexander & Baldwin, Inc.:
The 2003 Annual Meeting of Shareholders of Alexander & Baldwin, Inc.
will be held in the Plaza Meeting Room on the ground floor of the Topa Plaza
(formerly known as Amfac Center), 745 Fort Street, Honolulu, Hawaii, on
Thursday, April 24, 2003 at 8:30 a.m. You are invited to attend the meeting, and
we hope you will be able to do so. At the meeting, we will have the opportunity
to discuss the Company's financial performance during 2002, and our future plans
and expectations.
Whether or not you now plan to attend the Annual Meeting, you are urged
to sign, date and mail the enclosed proxy and return it in the enclosed envelope
at your earliest convenience. Alternatively, A&B shareholders of record can vote
their shares over the Internet, or by calling a specially designated telephone
number. These Internet and telephone voting procedures are designed to
authenticate your vote and to confirm that your voting instructions are
followed. Specific instructions for shareholders of record who wish to use
Internet or telephone voting procedures are set forth in the enclosed proxy.
Regardless of the size of your holding, it is important that your
shares be represented. If you attend the Annual Meeting, you may withdraw your
proxy and vote in person.
Sincerely,
/s/ W. Allen Doane
W. ALLEN DOANE
President and Chief Executive Officer
ALEXANDER & BALDWIN, INC.
822 Bishop Street, Honolulu, Hawaii 96813
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of
Alexander & Baldwin, Inc. ("A&B") will be held in the Plaza Meeting Room on the
ground floor of the Topa Plaza (formerly known as Amfac Center), 745 Fort
Street, Honolulu, Hawaii, on Thursday, April 24, 2003, at 8:30 a.m., Honolulu
time, for the following purposes:
1. To elect ten directors to serve until the next Annual Meeting
of Shareholders and until their successors are duly elected
and qualified;
2. To ratify the appointment of auditors for the ensuing year;
and
3. To transact such other business as properly may be brought
before the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on February 13,
2003 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting.
PLEASE PROMPTLY SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENVELOPE PROVIDED, OR VOTE VIA THE INTERNET OR BY TELEPHONE.
By Order of the Board of Directors
/s/ Alyson J. Nakamura
ALYSON J. NAKAMURA
Secretary
March 10, 2003
ALEXANDER & BALDWIN, INC.
822 Bishop Street, Honolulu, Hawaii 96813
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Alexander & Baldwin, Inc. ("A&B") for
use at the Annual Meeting of Shareholders to be held on April 24, 2003 and at
any adjournment or postponement thereof (the "Annual Meeting"). Shareholders may
submit their proxies either by signing, dating and returning the enclosed proxy,
or via the Internet or by telephone in accordance with the procedures set forth
in the enclosed proxy. A proxy may be revoked at any time prior to its exercise
by a written revocation bearing a later date than the proxy and filed with the
Secretary of A&B, by submission of a later-dated proxy or subsequent Internet or
telephonic proxy, or by voting in person at the Annual Meeting.
Only shareholders of record at the close of business on February 13,
2003 are entitled to notice of and to vote at the Annual Meeting. On that date,
A&B had outstanding 41,390,388 shares of common stock without par value, each of
which is entitled to one vote. Provided a quorum is present, the affirmative
vote of a majority of the shares of A&B common stock represented at the Annual
Meeting, in person or by proxy, will be necessary for the election of directors
and the ratification of the appointment of auditors. Abstentions and broker
non-votes will be included for purposes of determining a quorum at the Annual
Meeting. Broker non-votes will have the same effect as a vote to withhold
authority in the election of directors, and abstentions and broker non-votes
will have the same effect as a vote against the ratification of auditors.
Following the original mailing of proxy soliciting material, officers,
employees and directors of A&B and its subsidiaries may, without additional
compensation, solicit proxies by appropriate means, including by mail,
telephone, telecopy and personal interview. Arrangements also will be made with
brokerage houses and other custodians, nominees and fiduciaries which are record
holders of A&B's common stock to forward proxy soliciting material to the
beneficial owners of such stock, and A&B will reimburse such record holders for
their reasonable expenses. A&B has retained the firm of Morrow & Co., Inc. to
assist in the solicitation of proxies, at a cost of $9,000 plus reasonable
out-of-pocket expenses.
This Proxy Statement and the enclosed proxy are being mailed to
shareholders, and are being made available on the Internet at
www.alexanderbaldwin.com, on or about March 10, 2003.
ELECTION OF DIRECTORS
Directors will be elected at the Annual Meeting to serve until the next
Annual Meeting of Shareholders and until their successors are duly elected and
qualified. There is no cumulative voting in the election of directors.
Nominees. The nominees of the Board of Directors are the ten persons
named below, all of whom, except Mr. Watanabe, are currently members of the
Board of Directors. The Board of Directors has no reason to believe that any
nominee will be unable to serve. However, if any nominee or nominees should
decline or become unable to serve for any reason, shares represented by the
accompanying proxy will be voted for such other person or persons as the Board
of Directors may nominate.
The following table sets forth the name, age and principal occupation
of each person nominated by the A&B Board, their positions with A&B and business
experience during at least the last five years, and the year each first was
elected or appointed a director.
PRINCIPAL OCCUPATION, INFORMATION AS TO
OTHER POSITIONS WITH A&B, AND OTHER DIRECTOR
NAME DIRECTORSHIPS AGE SINCE
---- ------------------------------------------ --- --------
Michael J. Chun President and Headmaster, The Kamehameha 59 1990
Schools, Kapalama Campus, Honolulu, Hawaii
(educational institution) since June 1988;
Director of Bank of Hawaii.
Leo E. Denlea, Jr. Retired Chairman of the Board and Chief 71 1987
Executive Officer, Farmers Group, Inc.,
Los Angeles, California (insurance)
(September 1986 to March 1997).
W. Allen Doane President and Chief Executive Officer of 55 1998
A&B since October 1998; Chairman of
the Board of A&B's subsidiary, Matson
Navigation Company, Inc. ("Matson"), since
July 2002; Vice Chairman of the Board of
Matson from December 1998 to July 2002;
Executive Vice President of A&B from August
1998 to October 1998; Chief Executive
Officer of A&B's subsidiary, A&B-Hawaii,
Inc. ("ABHI"), from January 1997 to December
1999, when ABHI was merged into A&B;
President of ABHI from April 1995 to
December 1999; Director of BancWest
Corporation and its banking subsidiary,
First Hawaiian Bank.
Walter A. Dods, Chairman of the Board and Chief Executive 61 1989
Jr. Officer of BancWest Corporation and its
subsidiary, First Hawaiian Bank, Honolulu,
Hawaii (banking) since September 1989;
Director of BancWest Corporation and its
banking subsidiaries, First Hawaiian Bank
and Bank of the West.
Charles G. King President, King Windward Nissan, Kaneohe, 57 1989
Oahu, Hawaii (automobile dealership) since
February 1999; President, King Auto
Center, Lihue, Kauai, Hawaii (automobile
dealership) since October 1995.
Carson R. Managing Director, The Corporate 70 1971
McKissick Development Company, Los Angeles,
California (financial advisory services)
since July 1991.
C. Bradley Executive Vice President of A&B since 61 1991
Mulholland August 1998; Vice Chairman of Matson
since July 2002; Chief Executive Officer of
Matson from April 1992 to July 2002;
President of Matson from May 1990 to
July 2002.
Maryanna G. Shaw Private investor. 64 1980
Charles M. Managing Director, Trust Company of the 70 1972
Stockholm West, San Francisco, California
(investment management services) since
June 1986; Chairman of the Board of A&B
since August 1999; Chairman of the Board
of Matson from August 1999 to July 2002;
Chairman of the Board of ABHI from August
1999 to December 1999, when ABHI was merged
into A&B.
Jeffrey N. Managing Partner, Watanabe Ing Kawashima & 60 --
Watanabe Komeiji LLP, Honolulu, Hawaii (attorneys)
since 1990; Director of Hawaiian
Electric Industries, Inc.
The Bylaws of A&B provide that no person (other than a person nominated
by or on behalf of the Board) will be eligible to be elected a director at an
annual meeting of shareholders unless a written notice that the person's name be
placed in nomination is received by the Chairman of the Board, the President, or
the Secretary of A&B not less than 60 days nor more than 90 days prior to the
anniversary date of the immediately preceding annual meeting. If the annual
meeting is not called for a date which is within 30 days of the anniversary date
of the preceding annual meeting, a shareholder's notice must be given not later
than 10 days after the date on which notice of the annual meeting was mailed or
public disclosure of the date of the annual meeting was made, whichever occurs
first. To be in proper written form, a shareholder's notice must set forth
specified information about each nominee and the shareholder making the
nomination. Such notice must be accompanied by a written consent of each
proposed nominee to being named as a nominee and to serve as a director if
elected.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Board of Directors and Committees of the Board. The Board of Directors
held twelve meetings during 2002. All directors were present for 75 percent or
more of the total number of meetings of the Board of Directors and Committees of
the Board on which they serve. The Board of Directors has an Audit Committee, a
Compensation and Stock Option Committee, and a Nominating and Corporate
Governance Committee.
The current members of the Audit Committee, which held five meetings
during 2002, are Mr. McKissick, Chairman, Ms. Lynn M. Sedway (who is not
standing for reelection), Ms. Shaw, and Mr. Dods. The duties and
responsibilities of the Audit Committee are set forth in a written charter
adopted by the Board of Directors, a copy of which was attached as an appendix
to A&B's 2001 Proxy Statement, and are summarized in the Audit Committee Report
which appears in this Proxy Statement.
The current members of the Compensation and Stock Option Committee,
which held six meetings during 2002, are Mr. Denlea, Chairman, and Messrs. Chun,
King, and Stockholm. The Compensation and Stock Option Committee has general
responsibility for management and other salaried employee compensation,
including incentive compensation and stock option plans.
The current members of the Nominating and Corporate Governance
Committee are Mr. Stockholm, Chairman, and Messrs. Dods and McKissick. The
Nominating and Corporate Governance Committee was established on December 11,
2002 and held its first meeting in January 2003.
Compensation of Directors. During 2002, directors who were not
employees of A&B (outside directors) received an annual cash retainer of $18,000
and an additional $3,500 if also serving as Chairperson of a Board committee.
Also during 2002, outside directors received an attendance fee of $1,000 per
Board meeting and, in addition, attendance fees of $800 and $700 per committee
meeting if also serving as chairpersons and members, respectively, of Board
committees. Pursuant to an agreement with A&B, Mr. Stockholm, who, since August
26, 1999 has served as non-executive Chairman of the Board, receives an
additional annual retainer of $150,000 in such capacity. In 2003, Mr. Stockholm
also received a discretionary cash bonus in the amount of $25,000 for services
rendered in 2002. All directors of A&B served as directors of A&B's Matson
subsidiary and, in such capacities, outside directors received attendance fees
of $1,000 per Matson Board meeting. Outside directors may defer up to 100
percent of their annual cash retainer and meeting fees until retirement or until
such earlier date as they may select. No directors have deferred such fees. In
addition to the annual cash retainer and meeting fees, each individual who
served as an outside director during 2002 received an annual stock retainer of
300 shares of A&B common stock. Directors who are employees of A&B or its
subsidiaries do not receive compensation for serving as directors.
Under A&B's 1998 Non-Employee Director Stock Option Plan, a
non-qualified stock option to purchase 3,000 shares of A&B common stock
automatically is granted at each Annual Meeting of Shareholders to each
individual who is, at such meeting, elected or reelected as an outside director
of A&B. The option price per share is the fair market value of A&B common stock
on the grant date, and the option expires 10 years from the date of grant, or
earlier if the optionee ceases to be a director. Options become exercisable in
three annual installments of 1,000 shares each, beginning one year after the
grant date. At the 2002 Annual Meeting, held on April 25, 2002, options to
purchase 3,000 shares of A&B common stock, at an exercise price of $27.14 per
share, were granted to each of the outside directors under the 1998 Non-Employee
Director Stock Option Plan.
A&B maintains life insurance, personal excess liability insurance,
retirement and deferred compensation plans, and provides medical and dental
benefits, for its outside directors. In addition, the outside directors are
reimbursed for their estimated income tax liability by reason of A&B's payments
for the cost of life insurance, personal excess liability insurance, and medical
and dental benefits. The life insurance program affords coverage of $50,000 for
directors, as well as business travel accident coverage of $200,000 for
directors and $50,000 for their spouses while accompanying directors on A&B
business. The personal excess liability insurance program affords coverage of
$10 million for the outside directors ($20 million for the Chairman of the
Board). Under the retirement plan, a director who has five or more years of
service will receive a lump sum payment upon retirement or attainment of age 65,
whichever is later, that is actuarially equivalent to a payment stream for the
life of the director consisting of 50 percent of the amount of the annual
retainer fee in effect at the time of his or her retirement or other
termination, plus 10 percent of that amount, up to an additional 50 percent, for
each year of service as a director over five years. In addition, a director who
has ten or more years of service may elect certain post-retirement health care
insurance benefits. Ms. Sedway, who is not standing for reelection at the Annual
Meeting, became a director of A&B in June 1998 and will have served on the Board
for a period of four years, ten months. Upon her reaching age 65, she will
receive from A&B a lump sum payment estimated at $127,000, which is the amount
she would have received at age 65 had she served as a director for a full five
years.
SECURITY OWNERSHIP OF CERTAIN SHAREHOLDERS
The following table lists the names and addresses of the only
shareholders known by A&B to have owned beneficially more than five percent of
A&B's common stock outstanding on February 13, 2003, the number of shares they
beneficially own, and the percentage of outstanding shares such ownership
represents. Except as indicated in the footnotes, such shareholders have sole
voting and dispositive power over shares they beneficially own.
Name and Address Amount of Percent of
of Beneficial Owner Beneficial Ownership Class
------------------- -------------------- -----
BancWest Corporation (a) 2,185,966 (b) 5.3
999 Bishop Street
Honolulu, Hawaii 96813
FMR Corp. 2,562,448 (c) 6.2
82 Devonshire
Boston, MA 02109
The Harry and Jeanette 2,271,079 (d) 5.5
Weinberg Foundation,
Incorporated
7 Park Center Court
Owings Mills, Maryland 21117
--------------------
(a) For additional information concerning relationships and transactions
between A&B and BancWest Corporation, please see "Security Ownership of
Directors and Executive Officers" and "Certain Relationships and
Transactions" below.
(b) As reported in Amendment No. 3 to Schedule 13G dated February 20, 2003
(the "BancWest 13G") filed with the Securities and Exchange Commission.
According to the BancWest 13G, BancWest Corporation has sole voting
power over 367,936 shares, shared voting power over 1,818,030 shares,
sole dispositive power over 1,250,836 shares, and shared dispositive
power over 935,130 shares.
(c) As reported in Schedule 13G dated February 14, 2003 (the "FMR 13G")
filed with the Securities and Exchange Commission. According to the FMR
13G, FMR Corp., through its subsidiaries, Fidelity Management &
Research Company and Fidelity Management Trust Company, and two
affiliates of FMR Corp., Fidelity International Limited and Geode
Capital Management, LLC, have, in the aggregate, sole voting power over
1,991,048 shares, sole dispositive power over all 2,562,448 shares, and
do not have shared voting or dispositive power over any shares.
(d) As reported in Schedule 13G dated February 17, 1998 (the "Foundation
13G") filed by The Harry and Jeanette Weinberg Foundation, Incorporated
(the "Foundation") with the Securities and Exchange Commission.
According to the Foundation 13G, the Foundation has sole dispositive
and voting power over 2,164,530 shares and shared dispositive and
voting power over 106,549 shares. A representative of the Foundation
confirmed that the Foundation 13G is current as of February 13, 2003.
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
Security Ownership of Directors and Executive Officers. The following
table shows the number of shares of A&B common stock beneficially owned as of
February 13, 2003 by each director and nominee, by each executive officer named
in the "Summary Compensation Table" below, and by directors, nominees and
executive officers as a group and, if at least one-tenth of one percent, the
percentage of outstanding shares such ownership represents. Except as indicated
in the footnotes, directors, nominees and executive officers have sole voting
and dispositive power over shares they beneficially own.
Name or Number Amount of Beneficial Percent of
in Group Ownership (a)(b)(c) Class
-------- ------------------- -----
Michael J. Chun 28,732 --
Leo E. Denlea, Jr. 29,800 --
W. Allen Doane 470,844 1.1
Walter A. Dods, Jr. 29,706 --
Charles G. King 31,085 --
Carson R. McKissick 29,700 --
C. Bradley Mulholland 439,866 1.1
Lynn M. Sedway 10,625 --
Maryanna G. Shaw 585,345 1.4
Charles M. Stockholm 30,675 --
Jeffrey N. Watanabe -- --
James S. Andrasick 84,019 0.2
G. Stephen Holaday 164,754 0.4
Stanley M. Kuriyama 128,981 0.3
21 Directors, Nominees
and Executive Officers
as a Group 2,391,216 5.8
--------------------
(a) Amounts do not include shares owned by spouses of those directors
and executive officers who disclaim beneficial ownership thereof,
as follows: Mr. McKissick - 600, and directors, nominees and
executive officers as a group - 600. In addition, Mr. Stockholm
and Ms. Shaw, who are husband and wife, each disclaim beneficial
ownership of all shares beneficially owned by the other. Amounts
do not include shares beneficially owned in a fiduciary capacity
by trust companies or the trust departments of banks of which A&B
directors are directors or officers, or both, and shares held by
foundations or trusts of which A&B directors are trustees or
directors, as follows: BancWest Corporation - 2,185,966 shares, Bank
of Hawaii - 533,053 shares, The Wallace Alexander Gerbode
Foundation, of which Ms. Shaw and Mr. Stockholm are trustees -
40,000 shares, and the William Garfield King Educational Trust, of
which Mr. King is a trustee - 400 shares.
(b) Amounts include shares as to which directors, nominees and executive
officers have (i) shared voting and dispositive power, as follows: Mr.
Chun - 3,458 shares, Mr. King - 685 shares (held by a living trust of
which Mr. King is a co-trustee), Mr. Mulholland - 32,153 shares, Ms.
Sedway - 1,125 shares (held by a living trust of which Ms. Sedway is a
co-trustee), Ms. Shaw - 21,045 shares, and directors, nominees and
executive officers as a group - 63,270 shares, and (ii) sole voting
power only, as follows: Mr. Mulholland - 2,662 shares, Mr. Holaday -
362 shares, and directors, nominees and executive officers as a group -
9,531 shares.
(c) Amounts include shares deemed to be owned beneficially by directors,
nominees and executive officers because they may be acquired prior to
May 9, 2003 through the exercise of stock options, as follows: Mr.
Doane - 391,132, Mr. Mulholland - 318,166, Mr. Andrasick - 66,664, Mr.
Holaday - 122,766, Mr. Kuriyama - 95,899, Ms. Shaw and Messrs. Chun,
Denlea, Dods, King, McKissick and Stockholm - 24,000 each, Ms. Sedway -
9,000, and directors, nominees and executive officers as a group -
1,425,334.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a)
of the Securities Exchange Act of 1934 (the "Exchange Act") requires A&B's
directors and executive officers, and persons who own more than 10 percent of
its common stock, to file reports of ownership and changes in ownership on Forms
3, 4 and 5 with the Securities and Exchange Commission. A&B believes that during
fiscal 2002, its directors and executive officers filed all reports required to
be filed under Section 16(a) on a timely basis, except that Ms. Shaw was
required to file a Form 4 on or before June 10, 2002 with respect to sales
aggregating 41,100 shares, but such Form 4 was filed on July 8, 2002.
Certain Relationships and Transactions. Walter A. Dods, Jr., a director
of A&B, is Chairman of the Board and Chief Executive Officer of BancWest
Corporation, and Chairman of the Board and Chief Executive Officer of its
banking subsidiary, First Hawaiian Bank.
First Hawaiian Bank (i) has a 24.32 percent participation in and is
agent for a $185,000,000 revolving credit and term loan agreement with A&B,
under which $17,500,000 was outstanding at February 13, 2003, (ii) has a
revolving credit agreement with A&B under which the amount outstanding (no
amount was outstanding at February 13, 2003), when combined with First Hawaiian
Bank's share of amounts drawn under the previously described $185,000,000
revolving credit and term loan agreement, may not exceed $70,000,000, (iii) has
a $25,000,000 revolving credit facility with Matson to support the issuance of
commercial paper, under which no amount was outstanding at February 13, 2003,
(iv) has issued letters of credit, totaling $13,806,000 as of February 13, 2003,
on behalf of Matson for insurance security purposes, and (v) has issued letters
of credit totaling $1,950,000, as of February 13, 2003, on behalf of a real
estate subsidiary to secure obligations to governmental agencies in connection
with a real estate development.
EXECUTIVE COMPENSATION
Summary of Cash and Other Compensation. The following table summarizes
the cash and noncash compensation paid by A&B for services rendered, during each
of the last three completed fiscal years, by A&B's Chief Executive Officer and
the four other most highly compensated executive officers. As used in this Proxy
Statement, "named executive officers" means all persons identified in the
Summary Compensation Table.
Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
-------------------------------- -------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted Securities All
Compen- Stock Underlying LTIP Other
Name and sation Awards Options/SARs Payouts Compen-
Principal Position Year Salary($) Bonus($)(3) ($)(5) ($)(6) (#) ($)(7) sation($)(9)
------------------ ---- --------- ----------- ------ ------ ------------ ------- ------------
W. Allen Doane 2002 665,000 587,400 2,252 187,808 75,000 125,263(8) 29,925
President and Chief 2001 650,000 296,287(4) 2,501 319,460 93,500 342,753(8) 32,500
Executive Officer of A&B, 2000 575,000 435,032(4) 2,325 369,337 87,500 303,757(8) 31,625
Chairman of Matson since
July 2002
C. Bradley Mulholland 2002 523,000 138,212(4) 1,250 207,286 33,500 80,407 23,535
Executive Vice President of 2001 520,347 58,268(4) 1,182 87,357 51,000 250,500 26,017
A&B, Vice Chairman of 2000 503,685 150,001(4) 1,097 316,845 48,000 183,779(8) 27,703
Matson (1)
James S. Andrasick (2) 2002 322,500 330,243(4) 738 231,549 32,000 39,221(8) 14,513
Executive Vice President, 2001 291,000 86,215(4) 480 129,285 44,000 0 8,821
Chief Financial Officer and 2000 160,417 67,505(4) 262 101,246 40,000 0 0
Treasurer of A&B, President
and CEO of Matson
G. Stephen Holaday 2002 255,725 97,815(4) 510 146,616 14,000 102,481 11,508
Vice President of A&B, 2001 251,000 35,388(4) 480 52,987 21,000 70,500 12,550
General Manager of Hawaiian 2000 240,400 60,023(4) 446 89,977 26,000 105,000 13,222
Commercial & Sugar Company
Stanley M. Kuriyama 2002 239,425 75,630(4) 510 174,676 22,000 40,841(8) 10,774
Vice President of A&B, Vice 2001 235,000 67,152(4) 480 207,652 28,000 71,321(8) 11,750
Chairman and Chief Executive 2000 218,600 90,034(4) 446 134,966 26,000 0 12,023
Officer of A&B Properties,
Inc.
(1) Mr. Mulholland was appointed Vice Chairman of Matson, effective July 1,
2002. He had been President and Chief Executive Officer of Matson from
prior to January 1, 2000 to July 2002.
(2) Mr. Andrasick became an executive officer of A&B effective June 2000, as
Senior Vice President, Chief Financial Officer and Treasurer. He was
appointed Executive Vice President of A&B effective April 25, 2002, and
was appointed President and Chief Executive Officer of Matson, effective
July 1, 2002.
(3) "Bonus" consists of cash amounts earned for the fiscal year identified in
column (b) under A&B's One-Year Performance Improvement Incentive Plan
("One-Year Plan"), except as set forth in note (4).
(4) Represents the portion of the named executive officer's award under the
One-Year Plan payable in cash. The named executive officer elected to
receive the balance of the One-Year Plan award in restricted stock, the
value of which is included in column (f). In the case of Mr. Andrasick in
2002, the amount also includes a bonus of $215,000, in recognition of his
additional responsibilities in 2002 as President and Chief Executive
Officer of Matson.
(5) "Other Annual Compensation" consists of amounts reimbursed to the named
executive officers for their estimated income tax liability by reason of
A&B's payments for the cost of personal excess liability insurance.
(6) Represents (i) the dollar amount of One-Year Plan awards, for the fiscal
year identified in column (b), elected to be received in stock, (ii) the
dollar amount of A&B's Three-Year Performance Improvement Incentive Plan
("Three-Year Plan") awards, for the three-year plan cycle ending with and
including the fiscal year identified in column (b), elected to be
received in stock, and (iii) additional stock awarded, in the discretion
of the Compensation and Stock Option Committee ("Committee"), in an
amount equal to 50% of the dollar amount of the One-Year Plan and/or
Three-Year Plan award that the named executive officer has elected to
take in stock. As of December 31, 2002, the number and value (based upon
a $25.79 per share closing price of A&B's common stock on December 31,
2002) of shares of restricted stock held by the named executive officers
are as follows: Mr. Doane - 41,936 shares ($1,081,529); Mr. Mulholland -
26,031 shares ($671,339); Mr. Andrasick - 8,451 shares ($217,951); Mr.
Holaday - 10,906 shares ($281,266); and Mr. Kuriyama - 18,327 shares
($472,653). Dividends are payable on the restricted shares if and to the
extent payable on A&B's common stock generally.
(7) "LTIP Payouts" consist of cash amounts earned under the Three-Year Plan
for the three-year plan cycle ending with and including the fiscal year
identified in column (b).
(8) Represents the portion of the named executive officer's award under the
Three-Year Plan payable in cash. The named executive officer elected to
receive the balance of the Three-Year Plan award in restricted stock, the
value of which is included in column (f).
(9) "All Other Compensation" for 2002 includes: (i) amounts contributed by
A&B to the A&B Profit Sharing Retirement Plan (Mr. Doane - $9,000, Mr.
Mulholland - $9,000, Mr. Andrasick - $9,000, Mr. Holaday - $9,000, and
Mr. Kuriyama - $9,000), and (ii) amounts accrued for profit sharing under
the A&B Excess Benefits Plan, pursuant to which executives chosen by the
Committee receive additional credits and payments equal to the difference
between the maximum benefit permitted under federal tax laws and the
benefit the executives otherwise would receive under A&B's qualified
plans (Mr. Doane - $20,925, Mr. Mulholland - $14,535, Mr. Andrasick -
$5,513, Mr. Holaday - $2,508, and Mr. Kuriyama - $1,774).
Option Grants. The following table contains information concerning the
grant of stock options under A&B's 1998 Stock Option/Stock Incentive Plan during
2002 to the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options/SARs Exercise
Underlying Granted to or Base Grant Date
Options/SARs Employees Price Present Value
Name Granted (#) in Fiscal Year ($/share) Expiration Date ($)(b)
---- ------------ ---------------- --------- --------------- -------------
W. Allen Doane 75,000(a) 17.4% 26.52 January 22, 2012 332,513
C. Bradley Mulholland 33,500(a) 7.8% 26.52 January 22, 2012 148,522
James S. Andrasick 32,000(a) 7.4% 26.52 January 22, 2012 144,089
G. Stephen Holaday 14,000(a) 3.2% 26.52 January 22, 2012 62,069
Stanley M. Kuriyama 22,000(a) 5.1% 26.52 January 22, 2012 97,537
(a) Options granted on January 23, 2002 under the 1998 Stock Option/Stock
Incentive Plan ("1998 Plan") with an exercise price per share equal to the
fair market value of the underlying shares of A&B common stock on the grant
date. These options become exercisable in three annual installments
beginning one year after the date of grant. No stock appreciation rights
were granted with these options. Each of these granted options ("original
option") contains a reload feature, pursuant to which the optionee
automatically will be granted a new option to the extent the original
option is exercised within five years after the grant date through the
optionee's delivery of previously-acquired shares of A&B common stock in
payment of the exercise price, and certain other conditions are satisfied
at the time of such exercise. The reload option will be granted at the time
the original option is so exercised, and will allow the optionee to
purchase the same number of shares of A&B common stock as is delivered in
exercise of the original option. The reload option will have an exercise
price per share equal to the greater of (i) the fair market value per share
of A&B common stock on the date the reload option is granted or (ii) 150%
of the exercise price per share in effect under the original option. The
reload option will not become exercisable unless the shares purchased under
the original option have been held for at least two years. In certain
merger, reorganization or change in control situations involving A&B, the
exercisability of options under the 1998 Plan, whether original or reload
options, will be accelerated in accordance with the terms of the grant.
(b) Based on the Black-Scholes option pricing model, the assumptions used
included: (i) stock volatility of 23.4%, (ii) the expected exercise of
options in 5.53 years, (iii) a risk-free rate of return of 2.8%, (iv) a
discount of 2.9% for the forfeiture resulting from an executive officer's
termination of employment prior to exercise, and (v) a long-term dividend
yield of 3.4%. There is no assurance the value realized by an executive
officer will be at or near the value estimated by this option pricing
model. The actual value, if any, an executive officer may realize will
depend upon how much the stock price has increased over the exercise price
on the date the option is exercised.
Option Exercises and Fiscal Year-End Holdings. The following table
provides information, with respect to the named executive officers, concerning
(i) the exercise of stock options and stock appreciation rights during the 2002
fiscal year and the value realized in connection with such exercise, and (ii)
the number and value of unexercised options held as of December 31, 2002.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs At Options/SARs
FY-End (#) At FY-End ($)(b)
Shares -------------------------- ------------------
Acquired Value
Name on Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ------------ ----------- ------------- ----------- -------------
W. Allen Doane 0 0 335,798 166,502 1,049,916 143,106
C. Bradley Mulholland 45,000 83,250 (a) 274,000 83,500 703,913 78,500
James S. Andrasick 0 0 41,332 74,668 76,665 38,335
G. Stephen Holaday 0 0 116,432 36,668 324,010 42,527
Stanley M. Kuriyama 0 0 78,065 49,335 212,435 42,527
(a) Based on the highest sales price of A&B common stock on date of exercise
minus the exercise price.
(b) Based on the highest sales price of A&B common stock on December 31,
2002 ($26.50 per share), minus the exercise price.
Long-Term Incentive Plans. The following table provides information,
with respect to the named executive officers, concerning threshold, target and
maximum award levels determined in 2002 under A&B's Three-Year Performance
Improvement Incentive Plan ("Three-Year Plan") for the three-year performance
cycle beginning 2003 and ending 2005. Under the Three-Year Plan, neither shares,
units nor other quantifiable rights are awarded to participants at the outset of
the three-year cycle. Instead, at the beginning of the plan cycle, the
Compensation and Stock Option Committee ("Committee"), with the advice and
recommendations of management, identifies the participants for the Three-Year
Plan and formulates the performance goals to be achieved for the plan cycle.
Goals are established for A&B as a whole, for each major operating unit, and for
some individual participants. At the end of each plan cycle, results are
compared with goals, and awards are made accordingly. Aggregate awards for all
participants under the Three-Year Plan generally are limited by minimum pre-tax
income levels and return on adjusted net assets for A&B set by the Committee in
advance of each plan cycle, and if such minimum levels are not reached, the
aggregate awards to participants are reduced proportionately. The Committee
retains the discretion to adjust awards if, in its judgment, the awards do not
accurately reflect the performance of A&B, the major operating unit, or the
individual. Participants may elect to receive awards earned under the Three-Year
Plan entirely in cash or up to 50 percent in shares of A&B stock and the
remainder in cash. Alternatively, participants may defer all or a portion of
such awards. Cash amounts earned under the Three-Year Plan are reported in the
"Summary Compensation Table" above for the year for which those amounts are
earned, under column (h).
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts Under
Performance or Other Non-Stock Price-Based Plans (2)
Period Until Matura- -------------------------------------------------------
Name tion or Payout (1) Threshold ($) Target ($) Maximum ($)
---- ------------------ ------------- ---------- -----------
W. Allen Doane December 31, 2005 201,000 402,000 804,000
C. Bradley Mulholland December 31, 2005 136,610 273,220 546,440
James S. Andrasick December 31, 2005 68,000 136,000 272,000
G. Stephen Holaday December 31, 2005 43,419 86,839 173,678
Stanley M. Kuriyama December 31, 2005 45,169 90,338 180,675
--------------------
(1) Performance period beginning January 1, 2003 and ending December 31, 2005.
(2) In addition to the amounts shown, if the executive officers elect to
receive any portion of their awards in restricted shares of A&B common
stock, the Committee may, in its sole discretion, award additional shares
of A&B common stock under the A&B Restricted Stock Bonus Plan, valued at up
to 50 percent of the amount of the awards elected to be taken in stock.
Also, if the executive officers elect to defer all or a portion of their
awards under the A&B Deferred Compensation Plan and to convert all or a
portion of the deferred amount into common stock-equivalent units, the
Committee may, in its sole discretion, award additional common
stock-equivalent units of up to 50 percent of the number of such units into
which the deferred award is initially converted.
Retirement Plans. The A&B Retirement Plan for Salaried Employees
("Retirement Plan"), a non-contributory defined benefit pension plan, provides
retirement benefits to A&B's salaried employees who are not subject to
collective bargaining agreements. The table below shows estimated annual
retirement benefits to covered participants at normal retirement age (age 65)
under this plan, including amounts payable under A&B's Excess Benefits Plan,
pursuant to which executives chosen by the Committee will receive additional
credits and payments equal to the difference between the maximum benefit
permitted under federal tax laws and the benefit the executives otherwise would
receive under A&B plans.
PENSION PLAN TABLE
Years of Service
----------------
Remuneration 15 20 25 30 35 40
------------ -- -- -- -- -- --
$ 200,000 $ 52,862 $ 70,483 $ 88,103 $ 96,913 $105,724 $114,534
300,000 80,612 107,483 134,353 147,788 161,224 174,659
400,000 108,362 144,483 180,603 198,663 216,724 234,784
500,000 136,112 181,483 226,853 249,538 272,224 294,909
600,000 163,862 218,483 273,103 300,413 327,724 355,034
700,000 191,612 255,483 319,353 351,288 383,224 415,159
800,000 219,362 292,483 365,603 402,163 438,724 475,284
900,000 247,112 329,483 411,853 453,038 494,224 535,409
1,000,000 274,862 366,483 458,103 503,913 549,724 595,534
1,100,000 302,612 403,483 504,353 554,788 605,224 655,659
1,200,000 330,362 440,483 550,603 605,663 660,724 715,784
1,300,000 358,112 477,483 596,853 656,538 716,224 775,909
Retirement benefits are based on participants' average monthly
compensation in the five highest consecutive years of their final 10 years of
service. Compensation includes base salary, overtime pay, certain commissions
and fees, shift differentials and one-year bonuses. The amounts are based on an
ordinary straight life annuity payable at normal retirement age, and do not give
effect to social security offsets. Credited years of service as of March 1, 2003
for the named executive officers are: Mr. Doane - 11.9, Mr. Mulholland - 37.6,
Mr. Andrasick - 2.8, Mr. Holaday - 20.1 and Mr. Kuriyama - 11.1.
In addition, Messrs. Doane, Mulholland, and Holaday participate in the
A&B Executive Survivor/Retirement Benefit Plan ("Executive Survivor Plan"). The
Executive Survivor Plan provides for a pre-retirement death benefit equal to 50
percent of final base compensation for 10 years and, at such person's election
upon retirement, either (i) a continuation of such death benefit or (ii) an
additional retirement income benefit equal to 26 percent of final base
compensation for 10 years.
Severance Agreements. A&B currently has severance agreements (the
"Severance Agreements") with Messrs. Doane, Mulholland, Andrasick, Holaday and
Kuriyama in order to encourage their continued employment with A&B by providing
them with greater security in the event of termination of their employment
following a change in control of A&B. A&B also has entered into Severance
Agreements with five other employees, including two other executive officers.
Each Severance Agreement has an initial two-year term and is automatically
extended at the end of each term for a successive one-year period, unless
terminated by A&B. The Severance Agreements provide for certain severance
benefits if the executive's employment is terminated by A&B without "cause" or
by the executive for "good reason" following a "change in control" of A&B (as
those terms are defined in the Severance Agreements). Upon such termination of
employment, the executive will be entitled to receive a lump sum severance
payment equal to two times the sum of the executive's base salary plus certain
awards and amounts under various A&B incentive and deferred compensation plans,
and an amount equal to the spread between the exercise price of outstanding
options held by the executive and the higher of the then current market price of
A&B common stock or the highest price paid in connection with a change in
control of A&B. In addition, A&B will maintain all (or provide similar) employee
benefit plans for the executive's continued benefit for a period of two years
after termination. Each Severance Agreement provides for a tax gross-up payment
to offset any excise taxes that may become payable by an executive by reason of
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, if the
executive's employment is terminated without cause or for good reason following
a change in control of A&B.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee ("Committee") of the Board
of Directors directs the management of A&B's executive compensation program. The
Committee is composed entirely of independent, non-employee Board members, and
is assisted by an international management consulting firm that advises the
Committee on compensation matters.
Compensation Philosophy
The Committee has implemented an executive compensation philosophy,
approved by the Board, that seeks to relate executive compensation to corporate
performance, individual performance and creation of shareholder value. This
philosophy is achieved through a performance-based compensation system, pursuant
to which a substantial portion of executive officers' compensation is based on
the short-term and long-term results achieved for A&B and A&B shareholders and
on the executive officers' individual performances. For 2002, approximately 61%
of the compensation of named executive officers in the above Summary
Compensation Table was in the form of non-salary, performance-based
compensation.
An objective of the executive compensation philosophy is to enable
executive officers to receive above-average compensation, compared with
compensation of executive officers with comparable job responsibilities at other
companies, in order that A&B will be able to attract, retain and motivate
executive officers. Achievement of above-average compensation is tied to
corporate, business unit and individual performance, so there is no assurance
that this level of compensation will be achieved.
Comparative data is provided by the Committee's independent
compensation consultant and is based on national compensation survey data from
approximately 480 organizational operating units, controlled for size and
complexity. This survey data includes eight of the companies (other than A&B)
included in the Dow Jones US Industrial Transportation Index used in the
Shareholder Return Performance Graph which appears in this Proxy Statement. A&B
competes for executive talent across a broad group of industries, so survey data
based on a broad group of industrial companies is more appropriate than survey
data based on just the companies in the Dow Jones US Industrial Transportation
Index.
Consistent with the foregoing compensation objectives, the Committee
will not necessarily limit executive compensation to that amount deductible by
A&B under Section 162(m) of the Internal Revenue Code of 1986, as amended. The
Committee nevertheless will consider the deductibility of executive compensation
as one factor in its consideration of compensation matters, and will consider
reasonable steps and alternatives to preserve the deductibility of compensation
payments.
In accordance with the Committee's executive compensation philosophy,
the major components of compensation under A&B's executive compensation program
consist of: (i) base salary, (ii) annual incentive compensation pursuant to the
One-Year Performance Improvement Incentive Plan ("One-Year Plan"), (iii) annual
incentive compensation pursuant to the Annual Incentive Plan ("Annual Incentive
Plan"), and (iv) long-term incentive compensation pursuant to the Three-Year
Performance Improvement Incentive Plan ("Three-Year Plan") and the 1998 Stock
Option/Stock Incentive Plan ("1998 Plan").
Base Salary
Adjustments to base salary, if any, are considered annually by the
Committee. The Committee reviews the salary adjustments for the executive
officers (other than the Chief Executive Officer) with the Chief Executive
Officer and the senior human resources executive. In making a salary adjustment,
the Committee considers the executive officer's performance in the past year,
the previously-described survey data pertaining to the salary level necessary
for A&B to pay competitively, and projected salary increases in the coming year
for executive officers in the selected diversified group of companies, but does
not consider any specific corporate performance factor. For 2002, the base
salaries of the Chief Executive Officer and executive officers as a group were
set to approximate a range between the 25th and 75th percentile of salaries in
such diversified group, with the exception of three long-service executive
officers (one of whom is a named executive officer), whose base salaries
exceeded the 75th percentile.
Annual Incentives
The One-Year Plan provides performance-based incentives to eligible
executive officers and other key employees who contribute materially to the
financial success of A&B. In determining the size of an incentive award to an
executive officer, the Committee considers both corporate performance and
individual performance (the latter includes the performance of the business unit
for which the executive officer is responsible) in the past year. Corporate
performance counts toward 10%-60% of the incentive awards, depending upon the
executive officer's corporate responsibilities. For incentive awards granted for
the 2002 plan cycle, the corporate performance factors, and their relative
weights, were as follows: corporate profit before income tax (65%) and return on
adjusted net assets (35%). The relevant corporate performance factors and their
relative weights are determined annually by the Committee, and therefore are
subject to change for future plan cycles.
The Annual Incentive Plan, adopted in December 2001, provides
performance-based incentives to four groups of key employees, including
executive officers, at the A&B corporate level or one of three strategic
business units. Executive officers who are eligible under the One-Year Plan will
not be eligible to participate in the Annual Incentive Plan. In determining the
size of an incentive award to an executive officer, the Committee will consider
both corporate performance and individual performance. Corporate performance
will be measured, in the case of an executive officer at the A&B corporate
level, by the performance of A&B as a whole, and, in the case of an executive
officer located at one of the strategic business units, by the performance of
the applicable operating unit or units.
Under either incentive Plan, at the beginning of each one-year plan
cycle, the goals for corporate performance factors, as well as the goals for the
specific business units to which the executive officers are assigned and the
goals for the individuals themselves, are identified, and threshold, target and
maximum award levels are assigned. At the end of each plan cycle, the amounts of
the incentive awards, if any, are determined by comparing results with the
performance goals under the applicable plan. Aggregate awards are limited by
whether A&B or the business unit meets certain levels of performance set by the
Committee in advance of each plan cycle. The Committee, however, retains the
discretion to adjust awards if, in its judgment, the awards do not accurately
reflect the performance of A&B, the unit or the individual.
Long-Term Incentives
The Three-Year Plan is structured like the One-Year Plan, but provides
performance-based incentives to eligible executive officers and a limited number
of other key employees who contribute materially to the financial success of A&B
on the basis of corporate performance and individual performance over a
three-year performance cycle. Corporate performance counts toward 20%-100% of
the incentive awards, depending upon the executive officer's corporate
responsibilities. For incentive awards granted for the 2000-2002 plan cycle, the
specific corporate performance factors, and their relative weights, were as
follows: corporate profit before income tax (65%) and return on adjusted net
assets (35%). As with the One-Year Plan, the relevant corporate performance
factors and their relative weights are determined at the beginning of each plan
cycle by the Committee, and therefore are subject to change for future plan
cycles. In addition, as with the One-Year Plan, the specific business unit
performance factors used in assessing individual performance, and their relative
weights, vary by business unit and job position. These business unit performance
factors include, but are not limited to, profit before income tax, revenue, cost
reduction, gross margin, and cost of crops.
Stock option grants under the 1998 Plan are considered annually by the
Committee. Stock option grants are viewed as a desirable long-term compensation
method because they link directly the financial interests of executive officers
with those of shareholders. Stock options are granted in the discretion of the
Committee. In determining the size of a stock option award to an executive
officer, the Committee considers, among other things, the shares covered by the
option as a reflection of the executive officer's expected future contributions
to A&B. In determining the size of stock option awards, the Committee does not
consider amounts of stock options outstanding, but does consider the size of
previously-granted stock options and the aggregate size of current awards.
Chief Executive Officer Compensation
For 2002, the Committee approved a base salary increase for the Chief
Executive Officer, based on his performance in the previous year and the
salaries of other executive officers with comparable job responsibilities in the
selected diversified group of companies. In this regard, the Committee's
objective was to maintain a competitive base salary, which was set to correspond
to a level between the median and the 75th percentile of base salaries in the
selected diversified group of companies. Mr. Doane received an award under the
Three-Year Plan for the 2000-2002 performance cycle that was between threshold
and target, reflecting corporate profit before income tax and return on adjusted
net assets that were between threshold and target. Mr. Doane's award under the
One-Year Plan for 2002 approximated the commendable standard under that Plan,
and the amount of the award was determined on the basis of the performance of
A&B and Mr. Doane for the plan year. Mr. Doane also received a stock option
grant totaling 75,000 shares in 2002. That grant was based on an overall review
of corporate performance in 2001, without focus on any specific corporate
performance measure, and an assessment of Mr. Doane's past and expected
contributions to A&B.
The foregoing report is submitted by Leo E. Denlea, Jr.
(Chairman), and Messrs. Michael J. Chun, Charles G. King, and Charles M.
Stockholm.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2002, the members of the Compensation and Stock Option Committee
were Mr. Denlea, Chairman, and Messrs. Chun, King, and Stockholm. Mr. Stockholm
serves as non-executive Chairman of the Board of A&B and served as non-executive
Chairman of Matson through June 30, 2002.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of four
directors who have been determined to be independent pursuant to the
requirements of Nasdaq. The Board of Directors has adopted a written charter for
the Audit Committee, a copy of which was attached as an appendix to A&B's 2001
Proxy Statement.
The Audit Committee provides assistance to the Board of Directors in
fulfilling its obligations with respect to matters involving the accounting,
auditing, financial reporting, internal control and legal compliance functions
of A&B. Among other things, the Audit Committee reviews and discusses with
management and Deloitte & Touche LLP, A&B's independent auditors, the results of
the year-end audit of A&B, including the auditors' report and audited financial
statements. In this context, the Audit Committee has reviewed and discussed
A&B's audited financial statements with management, has discussed with Deloitte
& Touche LLP the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended, and, with and without management present, has
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The Audit Committee has received the written disclosures and the letter
from Deloitte & Touche LLP required by Independence Standards Board Standard No.
1, and has discussed with Deloitte & Touche LLP its independence from A&B. The
Audit Committee has determined that the provision of non-audit services rendered
by Deloitte & Touche LLP to A&B is compatible with maintaining the independence
of Deloitte & Touche LLP from A&B in the conduct of its auditing function.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that A&B's audited consolidated
financial statements be included in A&B's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 for filing with the Securities and Exchange
Commission. The Audit Committee also has appointed, subject to shareholder
ratification, Deloitte & Touche LLP as independent auditors.
The foregoing report is submitted by Carson R. McKissick
(Chairman), Mr. Walter A. Dods, Jr., Ms. Lynn M. Sedway, and Ms. Maryanna
G. Shaw.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on A&B's common stock against the
cumulative total return of the S&P Composite - 500 Stock Index and the Dow Jones
US Industrial Transportation Index (formerly known as the Dow Jones
Transportation Index). The Dow Jones US Industrial Transportation Index is a
published index, which includes A&B. For illustrative purposes, A&B again has
chosen to display the Dow Jones US Real Estate Investment Index in the
comparison.
[CHART]
* $100 INVESTED ON DECEMBER 31, 1997 IN ALEXANDER & BALDWIN, INC. COMMON
STOCK, THE S&P 500 STOCK INDEX, THE DJ US INDUSTRIAL TRANSPORTATION
INDEX, AND THE DJ US REAL ESTATE INVESTMENT INDEX. TOTAL RETURN
ASSUMES REINVESTMENT OF DIVIDENDS. FISCAL YEARS ENDING DECEMBER 31.
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Alexander & Baldwin, Inc. 100 88 90 108 114 114
S&P Composite - 500 100 129 156 141 125 97
DJ US Industrial Transportation 100 101 93 98 111 113
DJ US Real Estate 100 79 75 95 106 110
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has appointed Deloitte &
Touche LLP as independent auditors of A&B for the ensuing year, and the Audit
Committee recommends that shareholders vote in favor of ratifying such
appointment. Deloitte & Touche LLP and its predecessors have served A&B as such
since 1957. Representatives of Deloitte & Touche LLP are expected to be present
at the Annual Meeting, where they will have the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions from shareholders.
Fees paid to Deloitte & Touche LLP (including affiliates) for services
rendered for the year ended December 31, 2002 are as follows:
Audit Fees. For professional services rendered by Deloitte & Touche LLP
for the audit of A&B's annual consolidated financial statements
included in A&B's Form 10-K for 2002, and the reviews of the
consolidated financial statements included in A&B's Forms 10-Q for
2002, A&B was billed aggregate fees of $641,500.
Financial Information Systems Design and Implementation Fees. For 2002,
Deloitte & Touche LLP did not render professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X.
All Other Fees. For all other services rendered by Deloitte & Touche
LLP for 2002, A&B was billed aggregate fees of $75,000.
OTHER BUSINESS
The Board of Directors of A&B knows of no other business to be
presented for shareholder action at the Annual Meeting. However, should matters
other than those set forth in this proxy statement properly come before the
Annual Meeting, the proxyholders named in the accompanying proxy will vote upon
them in accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR 2004
Proposals of shareholders intended to be presented pursuant to Rule
14a-8 under the Exchange Act at the Annual Meeting of A&B in the year 2004 must
be received at the headquarters of A&B on or before November 10, 2003 in order
to be considered for inclusion in the year 2004 proxy statement and proxy. In
order for proposals of shareholders made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c) under
the Exchange Act, such proposals must be received at the headquarters of A&B not
later than January 24, 2004. A&B's Bylaws require that proposals of shareholders
made outside of Rule 14a-8 under the Exchange Act must be submitted, in
accordance with the requirements of the Bylaws, not later than January 24, 2004
and not earlier than December 25, 2003.
By Order of the Board of Directors
/s/ Alyson J. Nakamura
ALYSON J. NAKAMURA
Secretary
March 10, 2003
PROXY CARD
ALEXANDER & BALDWIN, INC.
822 Bishop Street, Honolulu, Hawaii 96813
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 24, 2003
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints W. A. Doane,
W. A. Dods, Jr., and M. G. Shaw, and each of them,
proxies with full power of substitution, to vote
the shares of stock of Alexander & Baldwin, Inc.,
which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Corporation
to be held on Thursday, April 24, 2003, and at any
adjournments or postponements thereof, on the
matters set forth in the Notice of Meeting and
Proxy Statement, as follows:
(continued and to be signed on reverse side)
______________________________________________________________________________
FOLD AND DETACH HERE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2 BELOW.
---
Please mark your X
votes as indicated
in this example
1. ELECTION OF DIRECTORS (Check one box only): 01 M. J. Chun, 02 L. E. Denlea,
Jr., 03 W. A. Doane, 04 W. A.
Dods, Jr., 05 C. G. King,
06 C. R. McKissick, 07 C. B.
Mulholland, 08 M. G. Shaw,
09 C. M. Stockholm,
10 J. N. Watanabe.
FOR all nominees __ (To withhold authority to vote
listed to the right: |__| for any individual nominee,
check the "FOR all nominees"
WITHOUT AUTHORITY box to the left and write the
to vote for all nominees listed to name of the nominee for whom
the right: __ you wish to withhold authority
|__| in the space provided below.)
____________________________________________________________________________
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
as the auditors of the Corporation:
FOR AGAINST ABSTAIN
__ __ __
|__| |__| |__|
3. In their discretion on such other matters as may
properly come before the meeting or any adjourn-
ments or postponments thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS
AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE SIGN EXACTLY AS NAME(S) APPEARS ABOVE
Signature____________________ Signature__________________ Date_________________
IMPORTANT: WHEN STOCK IS IN TWO OR MORE NAMES, ALL MUST SIGN. WHEN SIGNING
AS EXECUTOR, TRUSTEE, GUARDIAN OR OFFICER OF A CORPORATION, GIVE TITLE AS SUCH.
______________________________________________________________________________
FOLD AND DETACH HERE
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11PM Eastern Time
the business day prior to the annual meeting day.
Your telepnone or Internet vote authorizes the names proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card.
Internet
http://www.eproxy.com/alex
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number,
located in the box below, to create and submit an electronic ballot.
OR
Telephone
1-800-435-6710
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in
the box below, and then follow the directions given.
OR
Mail
Please sign and date your proxy card and return it in the enclosed postage-paid
envelope.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.