The Individual Deferred Compensation (IDC) Plan

The A&B Individual Deferred Compensation (IDC) Plan is a valuable part of the A&B Retirement and Investment Program—but it's up to you to make the most of this savings and investment opportunity. This section of your Handbook provides a detailed overview of the IDC Plan.

The A&B IDC Plan (also referred to as a 401(k) plan) allows you to save and invest money on a tax-deferred basis. Under this Plan, you can contribute a portion of your salary through automatic payroll deductions on a tax-deferred basis. A&B also provides you with a Company matching contribution if you meet the Plan's eligibility requirements. Thus, the Plan provides you with a convenient way to...

• Reduce your taxable income (and the taxes you pay) "today,"

• Save for the long term, and

• Boost your savings with Company matching contributions.

Your contributions, including the Company matching contributions, are invested on a tax-deferred basis—according to your instructions—in one or more available investment options. You decide and are responsible for how you invest your money.

Much of the information included in the IDC Plan information presented here—particularly the information regarding distributions, beneficiary designations, plan administration, and claiming benefits—also applies to the PSR Plan and is not repeated in the PSR Plan description.

Plan Highlights

The IDC Plan has several features designed to help you maximize your savings and investment potential...

• Convenient payroll deductions

  The Plan's automatic payroll deduction feature makes saving easy and convenient. Once you take the first step and enroll in the Plan, your savings grow automatically with each paycheck.

• Company matching contribution

  A special feature of the Plan is the Company matching contribution. You are eligible for the Company match if you have met the Plan's eligibility requirements.

• Wide choice of investment options

  The Plan features several investment options, providing you with a broad spectrum of risk and reward potential. These options enable you to select an appropriate investment mix, depending on your long-term savings goals and retirement objectives.

• On-demand information

  For those who want to track their savings and investments, information is just a phone call—or a mouse click—away through the information resources provided by Fidelity Investments, the Plan recordkeeper (as designated by the Plan Administrator).

• Flexibility and control

  Your Account balance is updated each business day so you always know how your investments are performing. You may change your contribution percentage and your investment mix on a daily basis.

• Access to your money

  The Plan is designed as a long-term savings and investment vehicle. However, there are provisions that allow you to access your Account funds for a variety of purposes.

Details on these provisions are provided in this section of your Handbook.

How To Enroll

You are eligible to enroll in the IDC Plan on your hire date or anytime thereafter, as long as you meet the eligibility requirements outlined under Who Is Eligible. If you leave A&B and are later rehired, you may re-enroll immediately following your rehire date.

To enroll, you can either call Fidelity directly at 800-835-5098 or by logging on to NetBenefitsSM at www.401k.com. You will be asked to provide...

• The percentage of your salary you would like to contribute, up to a maximum percentage of 50%, subject to certain IRS limits (see Tax Deferred Contributions)

• Your beneficiary(ies) (see Beneficiary Designations); and,

• How you would like your contributions invested (see Investing Your Savings.)

Note: You are eligible for the Company matching contribution as of the first day of the month coincident with or following the date on which you complete one year of eligibility service.

Plan Costs

Alexander & Baldwin, Inc. currently pays, if applicable, most administrative fees and expenses required for maintaining the IDC Plan. However, as a participant your Account may be charged recordkeeping and trustee fees. You may also be charged a fee for any loan you obtain, as outlined under Applying For An IDC Loan... Also, the Company may, at any time, choose to pass on all or a portion of Plan administrative costs. If that happens, such costs would be paid from the Plan Accounts.

Investment-related fees and expenses (including, for example, management fees and brokerage commissions) are incurred within each of the funds available for the investment of your Plan Account. The investment performance information you receive as a Plan participant is reported net of these fees and expenses.

The sections below summarize the key features of the IDC Plan.

Contributions

Your IDC Plan Account is comprised of the following...

• Your tax-deferred payroll contributions,

• Company matching contributions,

• Any qualified rollover contributions, plus

• Investment gains and losses on these contributions.

The three types of contributions are described below.

The Value Of Tax-Deferred Savings

Tax-deferred savings—as opposed to saving on an after-tax basis—can increase your current "spendable" income. When you contribute tax-deferred dollars to the IDC Plan, your savings are deducted from your pay before Federal and state income taxes are withheld from your paycheck (see Effect On Benefits above for more details). As a result, your taxable income is reduced by the amount you save, so you pay less in taxes.

You do not pay income taxes on the money you save until you receive payment from the IDC Plan, typically at retirement when you will likely be in a lower tax bracket or eligible for special tax treatment.

There is an additional advantage to saving in the IDC Plan—your investment earnings are also tax-deferred. Tax-deferred earnings help your Account grow more rapidly than if you were contributing to an after-tax savings plan.

The example in the table below compares tax-deferred savings through the IDC Plan with after-tax savings, such as a bank savings account.

Investing Your Savings

In conjunction with Fidelity Investments, Inc.—a nationally recognized 401(k) recordkeeper and money manager—the IDC Plan allows you to choose how your IDC Account balance (including rollover contributions) is invested. Currently, you may invest your Plan Account in a variety of investment options in increments of 1% (as outlined below under Your IDC Investment Options). Your total investment allocation must equal 100%.

As mentioned previously, your investment returns accumulate on a tax-deferred basis. This can help your savings grow faster than if you were saving in a traditional after-tax savings account.

You may change your IDC Plan investment mix on any business day by...

• Calling the Fidelity toll-free customer service number at 800-835-5098, or

• Accessing the Fidelity NetBenefitssm Website at www.401k.com.

For more information about Fidelity's services, see Customer Service.

Vesting

The term "vesting" refers to your right of ownership to the funds in your IDC (and PSR) Account. You are 100% vested in your Account balance the day you begin participating.

Your Plan Account Value

By law, all assets in the IDC Plan must be valued at least once a year at fair market value—Fidelity values the IDC Plan's assets daily. The value of your IDC Account will vary on a daily basis according to the value of the investments you have elected.

Your Accounts will be adjusted for the earnings, expenses, gains, and losses of the Trust Fund attributable to your investment selections as determined by the Fund Manager.

Loan Provisions

If you need access to the funds in your IDC Account for any reason, you may borrow against the balance of your Account. Certain rules apply to borrowing money from your Account. Specifically, you...

• Must have completed at least two years of participation in the IDC Plan,

• May borrow up to 50% of the balance in your Account, up to a maximum of $50,000 less your highest outstanding loan balance in the previous 12 months,

• May not borrow against any accumulated Company matching contributions or any earnings attributable to those contributions (unless you are a former Transamerica employee),

• Must borrow at least $1,000, and

• May have only one loan outstanding at any time, excluding any loans transferred to the Plan from a prior trustee.

In general, you will have up to five years to repay the loan. The only exception is if the loan is for the purchase of a primary residence, in which case you may have 15 years to repay the loan.

Loan repayments will occur at scheduled installments through automatic payroll deductions. In addition, you may prepay your loan (in part or in full) at any time without penalty. You will be charged a reasonable rate of interest, as determined by the Plan Administrator. This interest payment will be deposited to your Account. The interest rate is the prime lending rate as determined by First Hawaiian Bank, plus 1%. The interest rate established at the time the loan is initiated will remain in effect throughout the term of the loan.

Hardship Withdrawals

While it is generally not expected that you will withdraw the funds from your IDC Account before you leave A&B, you may be allowed to make a withdrawal in the event of an extreme financial hardship.

If you suffer an immediate and "extreme financial hardship" as defined below and you do not have money available from any other source (including taking out an IDC Plan loan), you may make a hardship withdrawal. Such a withdrawal will be subject to Federal and state taxes, and/or penalties. Each hardship withdrawal may not be less than a minimum of $500.

In such situations, you may withdraw all or a portion of your tax-deferred contributions, but not the investment earnings on those contributions or any portion attributable to your Company matching contributions. (You also may not withdraw the PSR contributions the Company makes to your PSR Account; however, you may withdraw all or a portion of your IDC Rollover Account, including any earnings on this Account.) You may not withdraw more than the amount necessary to satisfy the financial need.

The IRS defines extreme financial hardships to include the...

• Payment of medical expenses for you or your dependents that are deductible under Federal tax laws and are not covered by your medical plan(s)

• Purchase of your primary residence (not including mortgage payments)

• Tuition payments and related educational fees for the next 12 months of post-secondary education for you or your dependents; and,

• Cost of preventing your eviction from, or foreclosure of the mortgage for, your primary residence.

Your hardship withdrawal will be subject to a 10% (on IDC account) Federal tax withholding, which will automatically be deducted from your distribution check. You may also waive tax withholding. For example, if you request a hardship withdrawal of $1,000 and you do not waive tax withholding, you will receive a check for $900 and the remainder ($100) will be sent to the IRS as income tax withholding to be credited against your taxes. When determining your withdrawal amount, you should factor in this withholding.

In addition, any withdrawal you make from your IDC Account before reaching age 59 1/2 may be subject to a 10% Federal penalty tax unless the withdrawn funds are used toward the payment of medical expenses that are deductible under Federal tax laws. Note, too, that state taxes may also apply.

Keep in mind that you may only be granted one hardship withdrawal during any 12-month period; also, your participation in the IDC Plan will be suspended for 6 months.

Distributions From The Plan

Plan distributions are generally made when you retire or otherwise end your A&B employment, or if you become disabled or die. Distributions will be made as soon as possible as of the most current valuation date.

The following provisions apply to distributions, depending on the circumstances...

• When you retire, you receive the full value of your Account balance (the normal retirement date is at age 65).

• If you continue to work for A&B after you reach age 65, you may elect to defer receipt of your Plan distributions until you retire. However, in accordance with IRS regulations, if you are a "5% owner" of A&B, your Plan Account balance will begin to be paid to you on January 1 following your attainment of age 70 1/2, and every January 1 thereafter, even if you are still working. Please note that individuals who are not 5% owners who began receiving the distributions described above under prior IRS requirements and transition rules will continue to receive such distributions while still employed with the Company.

• If you leave the Company before retiring and your Account balance is...

  • more than $5,000, you may choose to leave your money in the Plan until a later date, or you may request to have your Account balance distributed.

  • over $1,000 but less than $5,000 at the time your employment with A&B ends, your Account balance will be rolled over into an IRA account unless you wish to roll it over to another IRA account that you specify.

  • less than $1,000 at the time your employment with A&B ends, you are required to take a distribution from the Plan.

  If you go to work for another employer and your new employer has a 401(k) or similar plan, you may roll your IDC Account directly over to your new employer's plan and thereby retain the tax-deferred status of your funds. Alternately, you may roll your IDC Account directly over to an IRA.

• If you die, your beneficiary will receive 100% of your Account balance.

• If you become "totally disabled", you may receive all or part of your Account balance. "Totally disabled" for the purposes of this Plan provision means, under the terms of the A&B Long-Term Disability (LTD) Plan, you are ill or injured and cannot carry out the usual duties of your job with A&B for an indefinite period of time.

Tax Consequences

Your contributions (payroll, Company match, and rollover contributions) to the IDC Plan are tax-deferred, not tax-free—you must pay taxes when you receive a distribution from the Plan. When you obtain information regarding distributions, it will include an IRS Tax Notice. This Notice summarizes the rules related to your distribution, including whether it is eligible to be rolled over ("eligible rollover distribution").

If after receiving an eligible rollover distribution, you roll over all or part of the distribution directly into an IRA or another eligible employer plan, you may...

• Continue to defer taxes on this money, and

• Avoid penalties on all or part of your distribution.

The portion, if any, of your distribution that you do not roll over will be recognized as taxable income in the year of distribution and subject to a 20% Federal income tax withholding. In addition, if you are under age 59 1/2, you will pay an additional 10% penalty tax, and some state taxes may apply, depending on your situation.

There are instances, however, in which you may receive a distribution and the 10% penalty tax will not apply. Specifically, the penalty will not apply if the distribution...

• Is deemed a hardship withdrawal and used exclusively for tax-deductible medical expenses not covered by your medical plan(s);

• Follows your death or is attributable to your total and permanent disability;

• Is made to comply with a qualified domestic relations order (QDRO) as described below;

• Is part of a series of substantially equal periodic payments made for your life (or life expectancy), or the joint lives (or life expectancies) of you and your beneficiary;

• Is for separation from service after age 55; or

• Is rolled over within 60 days to an IRA or another eligible employer plan.

In addition, if you receive a full payout from your IDC and PSR Plan Accounts in one taxable year after you reach age 59 1/2, you participated in both Plans for at least five years and you were born before 1936, your distribution may be eligible for special tax treatment.

Please keep in mind that the tax rules are complex and frequently change. You should consult a qualified tax advisor or financial planner before taking a distribution from the Plans.

Note: Much of the information presented here also applies to the PSR Plan.

Customer Service

By using Fidelity Investments to handle the IDC Plan recordkeeping duties, A&B gives you access to a variety of information resources, provided through Fidelity's Retirement Benefits Line (800-835-5098) and its Website, www.401k.com. For hearing impaired access, call 800-835-5089; from overseas, call collect 606-491-8257.

The Fidelity Retirement Benefits Line provides you with information pertaining to your IDC Plan Account 24 hours a day, seven days a week, through an automated voice response system. You may also speak to a Fidelity Participant Services representative by calling Monday through Friday, 8:30 a.m. to midnight, Eastern Standard Time (EST).

Information about your IDC Account is also just a click away via Fidelity's NetBenefitsSM Website. Through one or both of these systems, you can...

• Enroll in the IDC Plan;

• Create or change your Personal Identification Number (PIN)—you need a PIN to regularly access your personal data via either system;

• Access your current account balance information and chart your savings;

• Change your deferral percentage;

• Obtain information about the available investment options, including historical fund performance;

• Change your current or future investment allocation;

• Review selected transaction history for the preceding 90 days;

• Request and print an online statement;

• Obtain loan information; and

• Request prospectuses and other literature.

In addition, through the Fidelity Website you can also access...

• Personal financial planning information, including investment education, an "Ask the Experts" service and Fidelity's Stages magazine;

• Answers to frequently asked 401(k) questions;

• Tools, worksheets and calculators designed to help you plan your financial future; and

• Market and fund performance information, including Fidelity's outlook on the market and up-to-date mutual fund information.

Beneficiary Designations

When you enroll in the A&B IDC and PSR Plans, you must name a beneficiary (or beneficiaries). If you die, your beneficiary(ies) will receive the value of your Accounts.

You can...

• Name anyone as your beneficiary—your IDC and PSR Plan beneficiary(ies) do not have to be the same individual(s) named as beneficiary(ies) to your life insurance benefits;

• Name more than one beneficiary; and

• Change your beneficiary designation at any time.

However, if you are married, your spouse is automatically your sole beneficiary, unless your spouse consents to you naming another sole beneficiary, or naming more than one beneficiary. Your spouse's consent must be provided in writing, and it must be notarized. Should you decide to change your beneficiary designation to someone other than, or in addition to, your spouse you must again obtain your spouse's consent as explained above. Similarly, your beneficiary designation will no longer be in effect if you remarry; you must then name a new beneficiary.

If you die without naming a beneficiary, or if you are not survived by your designated beneficiary, benefits will be payable...

• First to your surviving spouse;

• Then, to your surviving children if you have no surviving spouse; and

• Finally, to your estate if you have no surviving spouse or children.

Please remember that your IDC and PSR Plan Accounts may be a significant financial asset that can help provide for your family or others in the event of your death—it is your responsibility to keep your beneficiary designations up to date.

Assignment Of Plan Assets

You may not transfer or assign your right to receive benefits under the IDC or PSR Plans, nor may you use your right to benefits as collateral for any loan (other than a loan from the IDC Plan). Similarly, your benefits are not subject to any creditors' claims or to attachment by legal process (other than Federal tax levies and judgments, or the enforcement of offset rights or security interests granted in connection with Plan loans or as required by law).

Plan benefits, however, may be applied to the satisfaction of child support and alimony claims in accordance with a Qualified Domestic Relations Order (QDRO), as explained previously.

If You Are Returning From Uniformed Service

If you are absent due to service in the uniformed services of the U.S. and you return to work for the Company while your re-employment rights are protected by law, you may make "make-up" contributions to your Account up to the amount that could have been contributed if you had remained employed during your uniformed service period. (Note that this provision applies only to those returning from uniformed service on or after December 12, 1994.)

You may make these additional make-up contributions during the make-up period, which is...

• Equal to three times your period of absence, but

• Not longer than five years.

This period begins on your rehire date, or the date the Company notifies you of your right to make these additional contributions, whichever occurs later.

You will also receive Company matching contributions applicable to your make-up contributions. However, no retroactive interest or investment earnings will be credited to your Plan Account.

When Your Right To Contribute Ends

Your right to contribute to the A&B IDC Plan ends when you...

• Are no longer considered to be an eligible participant, as outlined under Who Is Eligible;

• Retire;

• Leave A&B;

• Become disabled and are no longer receiving compensation from A&B; or

• Die.

Plan Administration And Funding

Alexander & Baldwin, Inc. is the Plan Administrator responsible for the day-to-day administration and operation of the IDC and PSR Plans. The Plan Administrator or its designate will maintain records of all participant accounts and transactions that occur under the Plans.

For each participant, the Plan Administrator will maintain two separate accounts...

• A PSR Account, in which your share of the Company's contributions are deposited; and

• An IDC Account, in which any salary deferral contributions and Company matching contributions are deposited.

The Plan Administrator, through the A&B Administrative and Investment Committees, will also have the authority and responsibility for the...

• Interpretation of the Plans' provisions;

• Establishment of rules and regulations for the day-to-day administration of the Plans;

• Review of benefit claims and hardship withdrawals and loan requests;

• Selection of one or more investment managers; and

• Retention of legal, accounting and other professional services.

The Plan Administrator, or its designate, will also provide you with a statement of your IDC and PSR Accounts at least once each year.

Administrative expenses may be paid directly by A&B out of its own assets or charged against any account in the Trust Fund.

All amounts contributed to the Plans are deposited into a Trust Fund managed by the trustee. The benefits provided by the Plans will be paid to participants or their beneficiaries solely, and directly, from the Trust Fund. The Company will not be responsible or liable for any benefit payments.

Note: The Trust Fund is a separate and distinct fund. It is not part of A&B's general assets and cannot be commingled with Company assets.

Claims For Plan Benefits

You must apply for the payment of any benefits under the IDC/PSR Plans. Such an application should be made with the Plan Administrator.

Should you or your beneficiary believe that your benefits differ from the amount determined by the Plan Administrator, you or your beneficiary may file an official claim for benefits with the Plan Administrator in writing. The Plan Administrator will process your claim within 90 days of receiving the claim.

For information regarding appealing a claim that is denied in whole or in part, see Claim Procedures.

No Guarantee Of Benefits

The Pension Benefit Guaranty Corporation (PBGC) insures benefits payable under plans that provide for fixed and determinable retirement benefits, such as the benefits to which you may be entitled under the A&B Retirement Plan for Salaried Employees. Because the amount of benefits due you under the A&B IDC and PSR Plans depends on the investment experience of your Account(s)—and so are not fixed and determinable—they are not insured by the PBGC.

However, state and Federal laws governing trustee conduct set high standards of care for the Plan trustee.

"Top Heavy" Provisions

Federal law imposes limitations on the total dollar amount that may be allocated each year to any one participant through profit sharing contributions, salary deduction contributions and the reallocation of forfeitures. In this way, the Plans are prevented from becoming "top heavy." These limitations will generally affect only a few highly paid participants, and the Plans incorporate procedures for reducing allocations in the event these imitations would otherwise be exceeded.

You will be notified by the Company if you are affected by these limitations.

Additional Information

Additional information pertaining to your Plan is provided under Putting It All Together... . Also, for information pertaining to plan administration and your rights under Federal law, see Legal Information.