<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1996
REGISTRATION NO.
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
HAWAIIAN ELECTRIC INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HAWAII 99-0208097
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
--------------------
900 RICHARDS STREET
HONOLULU, HAWAII 96813
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
--------------------
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
(FULL TITLE OF PLAN)
--------------------
ROBERT F. MOUGEOT
900 RICHARDS STREET
HONOLULU, HAWAII 96813
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(808) 543-7750
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
DAVID J. REBER, ESQ.
GOODSILL ANDERSON QUINN & STIFEL
P.O. BOX 3196
HONOLULU, HAWAII 96801
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 5,000,000 Shares $35.31 $176,550,000 $60,879
(without par value)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) based upon the average of the high and low prices
for a share of Common Stock on the New York Stock Exchange Composite Tape on
March 26, 1996.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the Hawaiian Electric Industries Retirement
Savings Plan (including units consisting of shares of Common Stock and cash
or cash equivalents to be offered or sold pursuant to said Plan).
As permitted pursuant to Rule 429 under the Securities Act of 1933, the
Prospectus covering the securities that are registered hereby is a combined
prospectus which relates to the securities registered pursuant to this
Registration Statement and pursuant to Registration Statement No. 33-52911.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION/*/
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION./*/
_________
/*/ Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933 and the Note to Part I of
Form S-8.
I-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Hawaiian Electric Industries, Inc. ("HEI"
or the "Company") with the Securities and Exchange Commission (the "Commission")
under the Securities Exchange Act of 1934 (the "Exchange Act") are incorporated
herein by reference: (1) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995; (2) the Plan's Annual Report on Form 11-K, which
contains audited financial statements for the Plan for the Plan's year ended
December 31, 1995; (3) the Company's Proxy Statement dated March 8, 1996 filed
pursuant to Section 14 of the Exchange Act in connection with the Company's 1996
Annual Meeting of Stockholders; (4) the description of the Common Stock of the
Company contained in the Registration for such Common Stock filed under Section
12 of the Exchange Act, and in past and future amendments thereto and in those
portions of periodic reports filed under the Exchange Act for the purpose of
updating such description, as such description has most recently been updated in
the Company's Current Report on Form 8-K dated March 30, 1994; and (5) all
reports and other documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all shares of Common Stock offered
hereby have been sold or which deregisters all securities then remaining unsold.
Any statement contained in this Registration Statement or in any document
incorporated herein by reference (each referred to as an "Incorporated
Document") shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement in this Registration
Statement or any subsequently filed Incorporated Document modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Goodsill Anderson Quinn & Stifel has rendered an opinion (filed as an
Exhibit to this Registration Statement) as to the legality of the securities
being registered. D'Amato & Maloney has rendered an opinion (filed as an
Exhibit to this Registration Statement) to the effect that Amendment 1995-1 to
the Plan complies with the requirements of ERISA. Filed as an Exhibit to the
Registration Statement is a determination letter issued by the Internal Revenue
Service dated June 21, 1995, signifying that, prior to Amendment 1995-1, the
governing, written plan document for the Plan met the requirements of and is
qualified under Section 401 of the Internal Revenue Code.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Restated Articles of Incorporation of HEI provide that HEI will indemnify
any person against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
any threatened, pending or completed action, suit or proceeding to which such
person is a party or is threatened to be made a party by reason of being or
having been a director, officer, employee or agent of HEI, provided that such
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of HEI, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. With respect to an action brought by or in the right of HEI in
which such person is adjudged to be liable for negligence or misconduct in
performance of that person's duty to HEI, indemnification may be made only to
the extent deemed fair and reasonable in view of all the circumstances of the
case by the court in which the action was brought or any other having
jurisdiction. The indemnification provisions in the Restated Articles of
Incorporation were authorized at the time of their adoption by the applicable
provisions of the Hawaii Revised Statutes, and substantially similar authorizing
provisions are currently set forth in Section 415-5 of the Hawaii Revised
Statutes.
At HEI's annual meeting of stockholders held on April 18, 1989, the
stockholders adopted a proposal authorizing HEI to enter into written indemnity
agreements with its officers and directors. Pursuant to such authority, HEI has
entered into agreements of indemnity with certain of its officers and directors.
The agreements provide for mandatory indemnification of officers and directors
to the fullest extent authorized or permitted by law, which could among other
things protect officers and directors from certain liabilities under the
Securities Act of 1933. Indemnification under the agreements may be provided
without a prior determination that an officer or director acted in good faith or
in the best interests of the Company, and without prior court approval of
indemnification of an officer or director adjudicated liable in a shareholder's
derivative action. The agreements provide for indemnification against expenses
(including attorneys' fees), judgments, fines and settlement amounts in
connection with any action by or in the right of the Company.
Under a directors' and officers' liability insurance policy, directors and
officers are insured against certain liabilities, including certain liabilities
under the Securities Act of 1933.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits designated by an asterisk (*) are filed herein. The exhibits
not so designated are incorporated by reference to the indicated filing.
4(a) Restated Articles of Incorporation of Hawaiian Electric
Industries, Inc. (previously filed as Exhibit 4(b) to
Registration Statement on Form S-3 (Regis. No. 33-7895))
4(b) Articles of Amendment of Hawaiian Electric Industries, Inc. filed
June 30, 1990 (previously filed as Exhibit 4(b) to
Registration Statement on Form S-3, Regis. No. 33-40813)
4(c) By-Laws of Hawaiian Electric Industries, Inc. (previously filed
as Exhibit 4(c) to Registration Statement on Form S-8, Regis. No.
33-21761)
*4(d) Hawaiian Electric Industries Retirement Savings Plan effective as
of January 1, 1994
*4(e) Amendment 1995-1 effective as of December 18, 1995 to Hawaiian
Electric Industries Retirement Savings Plan
II-2
<PAGE>
4(f) Trust Agreement dated as of November 28, 1988 between Hawaiian
Electric Industries, Inc. and Fidelity Management Trust Company
(previously filed as Exhibit 4(i) to Registration Statement on
Form S-8, Regis. No. 33-43892)
4(g) Amendment dated as of January 1, 1990 to Trust Agreement dated as of
November 28, 1988 between Hawaiian Electric Industries, Inc.
and Fidelity Management Trust Company (previously filed as Exhibit
4(j) to Registration Statement on Form S-8, Regis. No. 33-43892)
4(h) Second Amendment to Trust Agreement dated as of January 1, 1994 to
Trust Agreement dated as of November 28, 1988 between Hawaiian
Electric Industries, Inc. and Fidelity Management Trust Company
(previously filed as Exhibit 4(n) to Registration Statement on
Form S-8, Regis. No. 33-52911)
4(i) Third Amendment to Trust Agreement dated as of March 15, 1994 to
Trust Agreement dated as of November 28, 1988 between Hawaiian
Electric Industries, Inc. and Fidelity Management Trust Company
(previously filed as Exhibit 4(o) to Registration Statement on
Form S-8, Regis. No. 33-52911)
*4(j) Fourth Amendment to Trust Agreement dated as of February 1, 1996
to Trust Agreement dated as of November 28, 1988 between Hawaiian
Electric Industries, Inc. and Fidelity Management Trust Company
*4(k) Fifth Amendment to Trust Agreement dated as of April 1, 1996 to
Trust Agreement dated as of November 28, 1988 between Hawaiian
Electric Industries, Inc. and Fidelity Management Trust Company
*5(a) Opinion of Goodsill Anderson Quinn & Stifel (including consent)
*5(b) Determination Letter issued by the Internal Revenue Service dated
June 21, 1995 and letter to the Internal Revenue Service from
D'Amato & Maloney dated October 10, 1995
*5(c) Opinion of D'Amato & Maloney (including consent)
*23(a) Consent of KPMG Peat Marwick LLP
*23(b) Consent of Goodsill Anderson Quinn & Stifel (included in Exhibit
5(a))
*23(c) Consent of D'Amato & Maloney (included in Exhibit 5(c))
*24 Power of Attorney
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference in this Registration
Statement;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference in this Registration
Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 6, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City and County of Honolulu, State of Hawaii, on the 1st
day of April, 1996.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By /s/ Robert F. Mougeot
--------------------------------------
Robert F. Mougeot
Financial Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
ROBERT F. CLARKE* President and Director April 1, 1996
- -------------------------------- (Chief Executive Officer)
Robert F. Clarke
ROBERT F. MOUGEOT* Financial Vice President April 1, 1996
- -------------------------------- and Chief Financial
Robert F. Mougeot Officer (Principal
Financial Officer)
CURTIS Y. HARADA* Controller (Principal April 1, 1996
- -------------------------------- Accounting Officer)
Curtis Y. Harada
DON E. CARROLL* Director April 1, 1996
- --------------------------------
Don E. Carroll
EDWIN L. CARTER* Director April 1, 1996
- --------------------------------
Edwin L. Carter
JOHN D. FIELD* Director April 1, 1996
- --------------------------------
John D. Field
RICHARD HENDERSON* Director April 1, 1996
- --------------------------------
Richard Henderson
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
Director
- --------------------------------
Victor Hao Li
T. MICHAEL MAY* Director April 1, 1996
- --------------------------------
T. Michael May
BILL D. MILLS* Director April 1, 1996
- --------------------------------
Bill D. Mills
Director
- --------------------------------
A. Maurice Myers
RUTH M. ONO* Director April 1, 1996
- --------------------------------
Ruth M. Ono
DIANE J. PLOTTS* Director April 1, 1996
- --------------------------------
Diane J. Plotts
JAMES K. SCOTT* Director April 1, 1996
- --------------------------------
James K. Scott
OSWALD K. STENDER* Director April 1, 1996
- --------------------------------
Oswald K. Stender
Director
- --------------------------------
Kelvin H. Taketa
JEFFREY N. WATANABE* Director April 1, 1996
- --------------------------------
Jeffrey N. Watanabe
</TABLE>
*By /s/ Robert F. Mougeot
- --------------------------------
Robert F. Mougeot
For himself and as Attorney-In-Fact for the
above mentioned officers and directors
II-6
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
trustees (or other persons who administer the employee benefit plan) have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City and County of Honolulu,
State of Hawaii, on the 1st day of April, 1996.
Hawaiian Electric Industries Retirement
Savings Plan
By HEI Pension Investment Committee
Its Named Fiduciary
By /s/ Robert F. Mougeot
---------------------------------------
Robert F. Mougeot
Its Chairman
By /s/ Constance H. Lau
--------------------
Constance H. Lau
Its Asset Manager and Secretary
II-7
<PAGE>
EXHIBIT INDEX
The exhibits designated by an asterisk (*) are filed herein. The exhibits
not so designated are incorporated by reference to the indicated filing.
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ------------
<S> <C> <C>
4(a) Restated Articles of Incorporation of Hawaiian Electric Industries, Inc.
(previously filed as Exhibit 4(b) to Registration Statement on Form S-3
(Regis. No. 33-7895))
4(b) Articles of Amendment of Hawaiian Electric Industries, Inc. filed June 30, 1990
(previously filed as Exhibit 4(b) to Registration Statement on Form S-3,
Regis. No. 33-40813)
4(c) By-Laws of Hawaiian Electric Industries, Inc. (previously filed as Exhibit 4(c) to
Registration Statement on Form S-8, Regis. No. 33-21761)
*4(d) Hawaiian Electric Industries Retirement Savings Plan effective as of January 1, 1994
*4(e) Amendment 1995-1 effective as of December 18, 1995 to Hawaiian Electric Industries
Retirement Savings Plan
4(f) Trust Agreement dated as of November 28, 1988 between Hawaiian Electric
Industries, Inc. and Fidelity Management Trust Company (previously filed
as Exhibit 4(i) to Registration Statement on Form S-8, Regis. No. 33-43892)
4(g) Amendment dated as of January 1, 1990 to Trust Agreement dated as of
November 28, 1988 between Hawaiian Electric Industries, Inc. and
Fidelity Management Trust Company (previously filed as Exhibit 4(j) to
Registration Statement on Form S-8, Regis. No. 33-43892)
4(h) Second Amendment to Trust Agreement dated as of January 1, 1994 to
Trust Agreement dated as of November 28, 1988 between Hawaiian Electric
Industries, Inc. and Fidelity Management Trust Company (previously
filed as Exhibit 4(n) to Registration Statement on Form S-8, Regis. No.
33-52911)
4(i) Third Amendment to Trust Agreement dated as of March 15, 1994 to
Trust Agreement dated as of November 28, 1988 between Hawaiian Electric
Industries, Inc. and Fidelity Management Trust Company (previously
filed as Exhibit 4(o) to Registration Statement on Form S-8, Regis. No.
33-52911)
*4(j) Fourth Amendment to Trust Agreement dated as of February 1, 1996 to
Trust Agreement dated as of November 28, 1988 between Hawaiian Electric
Industries, Inc. and Fidelity Management Trust Company
*4(k) Fifth Amendment to Trust Agreement dated as of April 1, 1996 to Trust
Agreement dated as of November 28, 1988 between Hawaiian Electric
Industries, Inc. and Fidelity Management Trust Company
*5(a) Opinion of Goodsill Anderson Quinn & Stifel (including consent)
*5(b) Determination Letter issued by the Internal Revenue Service dated June
21, 1995 and letter to the Internal Revenue Service from D'Amato &
Maloney dated October 10, 1995
*5(c) Opinion of D'Amato & Maloney (including consent)
*23(a) Consent of KPMG Peat Marwick LLP
*23(b) Consent of Goodsill Anderson Quinn & Stifel (included in Exhibit
5(a))
*23(c) Consent of D'Amato & Maloney (included in Exhibit 5(c))
*24 Power of Attorney
</TABLE>
1
<PAGE>
EXHIBIT 4(d)
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Effective as of
January 1, 1994
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PROLOGUE . . . . . . . . . . . . . . . . . . . . . . . . . iv
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . 1
ARTICLE II PARTICIPATION AND SALARY REDUCTION AGREEMENTS
2.1 Eligibility for Participation . . . . . . . . . . 8
2.2 Re-Employment Rules . . . . . . . . . . . . . . . 8
ARTICLE III CONTRIBUTIONS
3.1 Salary Reduction Contributions............... 9
3.2 Participant Voluntary
Contributions................................ 9
3.3 Rollover Contributions....................... 10
3.4 Return of Contributions...................... 10
3.5 Employer Contributions for HEIDI Participants 10
ARTICLE IV LIMITATIONS ON CONTRIBUTIONS
4.1 Section 401(k) Limitations on
Salary Reduction Contributions............... 12
4.2 Section 401(m) Limitations
on Participant Voluntary
Contributions................................ 14
4.3 Combined Section 401(k) and
Section 401(m) Limitations................... 16
4.4 $7,000 Limit On Salary
Reduction Contributions...................... 16
4.5 Section 415 Limitations...................... 17
ARTICLE V INVESTMENT OF FUNDS
5.1 Assets To Be Held by Trustee
or Insurance Company......................... 20
5.2 Investment of Accounts....................... 20
5.3 Valuations................................... 21
5.4 Common Stock Adjustment Provisions........... 21
</TABLE>
i
<PAGE>
ARTICLE VI VESTING AND DISTRIBUTIONS
<TABLE>
<S> <C> <C>
6.1 Nonforfeitable Right to Accounts... 23
6.2 Distributions...................... 23
6.3 Withdrawals........................ 27
6.4 Loans to Participants.............. 29
6.5 Valuation Dates for Withdrawals
and Loans.......................... 31
6.6 Special Distribution Rules......... 31
ARTICLE VII ADMINISTRATION
7.1 The Committee to Be Named Fiduciary 33
7.2 Asset Manager...................... 33
7.3 Plan Administrator................. 34
7.3 Expenses........................... 35
ARTICLE VIII FIDUCIARY
8.1 Fiduciary Responsibilities......... 36
8.2 Bonding, Indemnification, Insurance 36
ARTICLE IX CLAIMS PROCEDURE..................... 37
ARTICLE X AMENDMENT, TERMINATION, AND MERGER
10.1 Amendment......................... 38
10.2 Termination or Discontinuance..... 38
10.3 Merger............................ 39
ARTICLE XI MISCELLANEOUS
11.1 Right to Employment or Benefits... 40
11.2 Inalienability.................... 40
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
11.3 Facility of Payment............... 40
11.4 Changes to Plan Necessary to Qualify
Under ERISA and the Code............ 40
11.5 Construction of Plan................ 41
11.6 Top-Heavy Rules..................... 41
APPENDIX A ELECTION RULES................... 42
APPENDIX B TOP-HEAVY RULES.................. 43
APPENDIX C ASB PLAN......................... 48
APPENDIX D HTB PLAN......................... 53
APPENDIX E HEISOP........................... 56
APPENDIX F FNB PLAN......................... 65
APPENDIX G HEIDI PLAN....................... 66
</TABLE>
iii
<PAGE>
PROLOGUE
--------
Effective as of January 1, 1994, the Hawaiian Electric Industries
Retirement Savings Plan is hereby amended and restated in its entirety. The
purpose of the Plan is to encourage eligible employees to save for retirement
under favorable tax laws. The Plan is intended to qualify as a profit sharing
plan under Section 401(a) of the Internal Revenue Code of 1986, as amended, and
meet the requirements of a qualified cash or deferred arrangement under Section
401(k) of such Code.
Unless otherwise specifically provided for herein or by law, the provisions
set forth herein shall determine as of January 1, 1994 the rights and benefits
of all employees who terminate employment on or after said date. Unless
otherwise specifically provided herein or by law, the rights and benefits of
eligible employees who terminated employment on or before December 31, 1993
shall be determined in accordance with the provisions of this Plan as in effect
on the date their employment terminated.
iv
<PAGE>
ARTICLE I
DEFINITIONS
-----------
The following terms as used herein shall have the indicated meaning, unless
a different meaning is plainly required by the context. Whenever appropriate,
words used in the singular may include the plural and vice versa and the
masculine gender shall always include the feminine gender.
1.1 Accounts means a Participant's Salary Reduction Account, Participant
--------
Voluntary Contributions Account, and Rollover Account. Where appropriate in the
context (as determined by the Plan Administrator in his discretion), Accounts
shall also include separate accounts maintained for Special Participants for
assets transferred to the Plan from any Merged Plan. "Merged Plan" shall mean
the Hawaiian Electric Industries Stock Ownership Plan, the American Savings Bank
Profit Sharing and Tax-Favored Retirement Savings Plan and the Hawaiian Tug &
Barge Corp. Supplemental Retirement Plan upon their merger into the Plan, and
any other plan maintained by the Company or an affiliate of the Company upon its
merger into the Plan in the future.
1.2 Asset Manager means the person designated to manage the assets of the
-------------
Plan in accordance with Section 7.2.
1.3 Beneficiary means the Participant's surviving spouse. If the
-----------
Participant is not married or if the Participant wishes to designate a
Beneficiary other than his spouse, he may do so on a form furnished for that
purpose by the Plan Administrator and filed with the Plan Administrator. Such a
designation of a Beneficiary other than a spouse shall not be effective unless
consented to by the Participant's spouse in a written instrument (i) in which
the spouse acknowledges the effect of such election and (ii) witnessed by an
authorized representative of the Plan or a notary public. Such written consent
shall not be required if it is established to the satisfaction of the authorized
representative of the Plan that such consent may not be obtained because there
is no spouse, the spouse cannot be located, or such other circumstances as
Treasury Regulations may prescribe. A Participant may also name a contingent
Beneficiary to succeed to the interests of the named Beneficiary in the event
such named Beneficiary shall not survive the Participant. If a Participant
fails to make any designation or the person so designated shall not survive the
Participant, or the legal entity so designated shall no longer be in existence
or shall be legally incapable of
-1-
<PAGE>
receiving benefits hereunder, Beneficiary shall mean the estate of the
Participant.
1.4 Code means the Internal Revenue Code of 1986, as amended.
----
1.5 Committee means the Pension Investment
---------
Committee appointed pursuant to resolution of the Board of
Directors of the Company.
1.6 Company means Hawaiian Electric Industries, Inc.
-------
1.7 Compensation means all straight-time pay paid or accrued for services
------------
rendered to a Participating Employer while a Participant before reduction for an
arrangement qualifying under Section 125 or 401(k) of the Code. Compensation
shall not, however, include overtime or premium pay, discretionary bonuses, or
contributions (except for Salary Reduction Contributions) by a Participating
Employer to this Plan or any other employee benefit plan. Commencing January 1,
1994, only the first $150,000 (or such larger amount as the Commissioner of
Internal Revenue may prescribe) of a Participant's Compensation (determined in
accordance with Section 401(a)(17) of the Code) shall be taken into account for
purposes of the Plan. In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except that in applying such rules, the term "family" shall include only
the spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the Plan Year. If, as a result of
the application of such rules, the dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this Section prior to
the application of the limitation."
1.8 Employee means any person employed on a regular, non-probationary
--------
basis by a Participating Employer. Eligible Employee means a Participant who is
-------- --------
eligible to receive an allocation of Salary Reduction Contributions for all or
a portion of the Plan Year.
1.9 ERISA means the Employee Retirement Income Security Act of 1974, as
-----
amended.
-2-
<PAGE>
1.10 Family Member means the Participant's spouse, lineal ascendants or
-------------
descendants, and the spouses of such lineal ascendants and descendants.
1.11 Highly Compensated Employee means a "highly compensated employee"
---------------------------
within the meaning of Section 414(q) of the Code.
1.12 Hours of Service means the following hours as determined from the
----------------
payroll or other records of a Participating Employer:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment by a Participating Employer for the performance of duties;
(b) Each hour for which an Employee is directly or indirectly entitled to
payment on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity, disability, layoff, jury duty, military
duty, or leave of absence, except that Hours of Service shall not be counted
where such payment is made or is due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, unemployment, or
disability insurance laws, or solely to reimburse an Employee for medical or
medically related expenses;
(c) Each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by a Participating Employer. The same
Hours of Service shall not be credited both under subparagraph (a) or (b), as
the case may be, and this subparagraph (c).
The Hours of Service rules stated in Department of Labor Regulations
(S)2530.200b-2(b) and (c) are herein incorporated by reference. Hours of Service
shall be credited for employment with other members of an affiliated service
group (within the meaning of Section 414(m) of the Code), a controlled group of
corporations (within the meaning of Section 414(b) of the Code), or a group of
trades or businesses under common control (within the meaning of Section 414(c)
of the Code), of which a Participating Employer is a member. Hours of Service
shall also be credited for any individual considered an Employee for purposes of
the Plan under Section 414(n) of the Code.
-3-
<PAGE>
1.13 Insurance Company means any insurance company designated by the Asset
-----------------
Manager.
1.14 Insurance Contract means any contract with an insurance company
------------------
established for the purpose of investing assets of the Plan.
1.15 Normal Retirement Age means a Participant's 55th birthday; except
---------------------
that in the case of the HEI Diversified Account, it means a HEIDI Participant's
65th birthday.
1.16 Participant means any Employee who has satisfied the eligibility
-----------
requirements of Article II and whose Accounts remain in the Plan and allocated
to him. Active Participant means a Participant during the period he is employed
------------------
in an eligible class of Employees and is, therefore, eligible to receive an
allocation of Salary Reduction Contributions.
1.17 Participant Voluntary Contribution means the voluntary contributions
----------------------------------
of a Participant permitted prior to July 1, 1992.
1.18 Participant Voluntary Contributions Account means an account
-------------------------------------------
recording the amount of Participant Voluntary Contributions made by a
Participant, as adjusted for allocations of income or loss, withdrawals or
distributions, and other factors affecting the value of such account.
1.19 Participating Employer means the Company and any corporation
----------------------
affiliated with the Company whose participation in the Plan has been approved by
such corporation's Board of Directors.
1.20 Plan means the Hawaiian Electric Industries
----
Retirement Savings Plan as herein set forth and as it may hereafter be amended
from time to time.
1.21 Plan Administrator means the person designated to administer the Plan
------------------
in accordance with Section 7.3.
1.22 Plan Year means a 12-month period commencing on January 1 and
---------
anniversaries thereof.
1.23 Rollover Account means an account recording the amount of a
----------------
contribution to the Plan pursuant to Section 3.3, as adjusted for allocations of
income or loss, withdrawals, or
-4-
<PAGE>
distributions, and other factors affecting the value of such account.
1.24 Salary Reduction Contribution means a contribution made by the
-----------------------------
Participating Employers on a Participant's behalf pursuant to Section 3.1.
1.25 Salary Reduction Account means an account recording the amount of
------------------------
Salary Reduction Contributions made on behalf of a Participant, adjusted for
allocations of income or loss, withdrawals or distributions, and other factors
affecting the value of such account.
1.26 Trust Agreement means any agreement with a Trustee established for
---------------
the purpose of investing assets of the Plan.
1.27 Trustee means any individual, committee of individuals, bank, trust
-------
company, and/or other qualified entity designated by the Committee.
1.28 Disability means a total disability that, in the opinion of a medical
----------
examiner satisfactory to the Plan Administrator, prevents a Participant from
further performance of duty and is likely to be permanent.
1.29 Forfeiture means that portion of a HEIDI Participant's HEI
----------
Diversified Account in which he is not vested. Such nonvested portion shall be
forfeited and allocated to other HEIDI Participants upon the HEIDI Participant's
incurring five consecutive One-Year Breaks in service.
1.30 HEI Diversified Account means the Plan account established to record
-----------------------
the amount transferred from the HEI Diversified Defined Contribution Pension
Plan to the Plan and the amount of employer contributions to the Plan made by
Malama Pacific Corp. and Lalamilo Ventures, Inc. on behalf of HEIDI
Participants, as adjusted for allocations of income or loss, withdrawals, or
distributions, and other factors affecting the value of such account.
1.31 HEIDI Participant means Eligible Employees of certain Participating
-----------------
Employers who were formerly participating employers of the HEI Diversified
Defined Contribution Pension Plan, specifically, Malama Pacific Corp. and
Lalamilo Ventures, Inc.
-5-
<PAGE>
1.32 One-Year Break in Service means, as to a HEIDI Participant,
-------------------------
severance from the employment of the Participating Employers for a 12-
consecutive month period. The following rules shall apply in determining a One-
Year Break in service:
(a) If a HEIDI Participant who does not have any nonforfeitable right to
his HEI Diversified Account incurs a One-Year Break in service, Vesting Service
granted prior to such OneYear Break in Service shall be disregarded after the
continuous period of severance equals or exceeds the greater of (i) the HEIDI
Participant's Vesting Service credited prior to such One-Year Break in Service
or (ii) five years.
(b) If a HEIDI Participant incurs five consecutive One-Year Breaks in
Service, Vesting Service credited subsequent to such One-Year Breaks in Service
shall be disregarded for purposes of determining the nonforfeitable percentage
of his HEI Diversified Account that accrued before such One-Year Breaks in
Service.
1.33 Vesting Service means the period of employment for which credit is
---------------
given under the Plan for purposes of determining a HEIDI Participant's
nonforfeitable interest in his HEI Diversified Account. For this purpose, the
following rules shall apply:
(a) (i) Vesting Service shall be granted for the period of time beginning
with the date the HEIDI Participant commences employment with a Participating
Employer (including employment prior to the Effective Date, as defined in the
HEI Diversified Defined Contribution Pension Plan), to the date the HEIDI
Participant terminates employment with all of the Participating Employers.
(ii) If a HEIDI Participant who was formerly employed by a
Participating Employer is reemployed by a Participating Employer, Vesting
Service shall be granted for the period of time beginning with the date the
HEIDI Participant commences re-employment to the date the HEIDI Participant
subsequently terminates employment with all of the Participating Employers.
(iii) If a HEIDI Participant subject to paragraph (A) (ii) of this
Section 1.33 is so re-employed within the 12-consecutive months following the
date on which the HEIDI Participant terminated employment, Vesting Service shall
also be
-6-
<PAGE>
granted for the period commencing with such termination date and ending with
such reemployment date.
(iv) Except as provided in Section 1.32, all of a HEIDI Participant's
Vesting Service shall be recognized for purposes of the Plan.
(b) If a HEIDI Participant is absent from work for any period (i) by reason
of pregnancy, the birth of a child, or the placement of a child in connection
with the HEIDI Participant's adoption of such child or (ii) for purposes of
caring for such child for a period beginning immediately following such birth or
placement, the HEIDI Participant shall be credited with additional Vesting
Service equal to the lesser of such period or 12 months. The severance from
service date of a HEIDI Participant absent beyond the first anniversary of the
first day of maternity or paternity absence is the second anniversary of the
first day of such absence. The period between the first and second
anniversaries of the first date of such absence shall not be regarded as a
period of service or a period of severance.
(c) (i) Vesting Service shall be granted for:
(A) Military leave of absence provided the HEIDI Participant
returns to active employment with a Participating Employer within the period and
conditions prescribed by law.
(B) Personal leave of absence authorized by a Participating
Employer that is not in excess of one year. Personal leave of absence in excess
of one year may be authorized by a Participating Employer; however, no Vesting
Service will be granted for such leave.
(C) A period of absence because of curtailment of work, not to
exceed six months, provided the HEIDI Participant returns to employment within
two weeks after notification by a Participating Employer that work is available.
(D) Any other absence from active employment provided such
absence is authorized by a Participating Employer.
Any HEIDI Participant absent from active employment because of illness or injury
will be treated the same as though the HEIDI Participant were actively employed
as long as any compensation
-7-
<PAGE>
prior to termination of employment is paid by a Participating Employer.
(ii) In determining leaves of absence a Participating Employer must
act in a nondiscriminatory manner.
(d) (i) If a HEIDI Participant is at any time employed by a company while
it is an Associated Company, such employment shall be treated as employment by a
Participating Employer for purposes of determining such individual's eligibility
for participation in this Plan and his Vesting Service. However, the individual
shall not be an active Participant during any such service with any Associated
Company during the period the Associated Company is not a Participating
Employer.
(ii) If a HEIDI Participant's employment with a Participating Employer
is terminated and he is immediately employed by an Associated Company, his
Accounts shall remain in the Plan so long as he is employed by an Associated
Company and such employment shall be treated as employment by a Participating
Employer for purposes of determining such Participant's Vesting Service.
However, he shall not be an active Participant while he is so employed. During
any such employment with an Associated Company, the Participant's Accounts shall
continue to share in earnings of the Trust Fund and to bear and share expenses
and losses but the Participant will not be eligible to receive further
allocation of employer contributions. Further employment by any Associated
Company shall be similarly treated. If the Participant is re-employed by a
Participating Employer in an eligible class of employees, he shall immediately
become an active Participant. If the Participant is terminated while in the
employ of the Associated Company, he shall be treated in the same manner as if
he had been terminated while in the employ of a Participating Employer.
-8-
<PAGE>
ARTICLE II
PARTICIPATION AND SALARY REDUCTION AGREEMENTS
---------------------------------------------
Section 2.1 Eligibility for Participation
- ----------- -----------------------------
Every Employee who was a Participant on December 31, 1993 shall remain a
Participant as of January 1, 1994. Every other Employee shall commence
participation on the date he first completes an Hour of Service as an Employee,
provided that individuals in a collective bargaining unit that bargained in good
faith for other or no retirement benefits shall not be eligible to become
Participants. Notwithstanding the preceding sentence, employees of Hawaiian Tug
& Barge Corp. and Young Brothers, Ltd. who are individuals in a collective
bargaining unit shall become eligible to participate in the Plan effective
January 1, 1990.
Section 2.2 Re-Employment Rules
- ----------- -------------------
(a) A former Employee shall become an active Participant immediately upon
his return to the employ of a Participating Employer in an eligible class of
Employees.
(b) If an Active Participant ceases to be so because he is no longer a
member of an eligible class of Employees, he shall become an active Participant
immediately upon his return to an eligible class of Employees.
(c) In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall become an
active Participant immediately if he has satisfied the requirements of Section
2.1 and would have previously become a Participant had he been in the eligible
class.
-9-
<PAGE>
ARTICLE III
CONTRIBUTIONS
-------------
Section 3.1 Salary Reduction Contributions
- ----------- ------------------------------
(a) In consideration of an Active Participant's reduction in salary
pursuant to a salary reduction agreement, the Participating Employer shall
(subject to Article IV) make a Salary Reduction Contribution to such
Participant's Salary Reduction Contribution Account in an amount equal to the
amount by which such Participant's Compensation was reduced. Such contributions
shall be made as soon as practicable after the payroll period for which the
salary reduction applies.
(b) For Federal tax purposes (and, wherever permitted, for state tax
purposes) Salary Reduction Contributions shall be deemed to be Participating
Employer contributions.
(c) (1) An Active Participant may cause Salary Reduction Contributions to
be made on his behalf by completing a salary reduction agreement furnished to
him by the Plan Administrator on which he designates the rate of Salary
Reduction Contributions to be made on his behalf, and agrees to comply with the
provisions of the Plan and to provide such information as may be necessary to
administer the Plan. Certain rules regarding the effectiveness of salary
reduction agreements and amendments to or revocation of such agreements are set
forth in Appendix A.
(2) A salary reduction agreement may be completed and submitted to the
Plan Administrator prior to the date the Participant first completes an Hour of
Service or at any time thereafter. Participation shall commence as soon as
practicable after such submission.
(d) The Plan Administrator may amend or revoke a salary reduction agreement
with any Participant at any time, if the Plan Administrator determines that such
revocation or amendment is necessary to insure that (i) the requirements of
Article IV are satisfied or (ii) the Plan does not become subject to the top-
heavy provisions of Section 416 of the Code.
Section 3.2 Participant Voluntary Contributions
- ----------- -----------------------------------
-10-
<PAGE>
(a) An Active Participant may (subject to Article IV) elect on a form
furnished by and filed with the Plan Administrator to contribute to his
Participant Voluntary Contributions Account up to 10% of his Compensation for a
Plan Year. In no case, however, may the total of the Participant Voluntary
Contributions to the Plan and voluntary contributions to all other qualified
plans of a Participating Employer exceed 10% of his Compensation for a Plan
Year.
(b) Rules regarding the effectiveness of Participant Voluntary
Contributions and amendments or revocations thereof are set forth in Appendix A.
(c) Notwithstanding subsections (a) and (b) hereof, effective July 1, 1992,
no contributions to Participant Voluntary Contributions Accounts will be
permitted.
Section 3.3 Rollover Contributions
- ----------- ----------------------
Any Participant who has received a distribution from a qualified employee
pension benefit plan or annuity plan may make a contribution to a Rollover
Account established on his behalf; provided that proper verification is provided
and the Plan Administrator, in his sole discretion, agrees in writing to such a
contribution. The Plan shall not accept rollovers from individual retirement
accounts, whether or not the funds involved originally were received as
distributions from a qualified employee pension benefit plan.
Section 3.4 Return of Contributions
- ----------- -----------------------
If a contribution is made to a Participant's Account by a mistake of fact,
the Participant shall be entitled to return of such contribution (as adjusted
for any earnings or losses thereon) within one year of the making of such
contribution.
Section 3.5 Employer Contributions for HEIDI Participants
- ----------- ---------------------------------------------
(a) For each Plan Year beginning January 1, 1993, Malama Pacific Corp., and
Lalamilo Ventures, Inc., respectively, shall contribute to the HEI Diversified
Account of each HEIDI Participant employed by it during the Plan Year and
eligible for an allocation of employer contributions an amount equal to six
percent (6%) of the Compensation of such HEIDI Participant while employed by
such employer.
-11-
<PAGE>
(b) (1) In addition to employer contributions pursuant to Section 3.5(a),
for each Plan Year Malama Pacific Corp. and Lalamilo Ventures, Inc., shall
contribute to the HEI Diversified Accounts under the Plan for each Plan Year
such amount, if any, as may be determined by its Board of Directors.
(2) An employer's contribution under this paragraph (b) shall be
allocated as soon as practicable after the close of such Plan Year among each
HEIDI Participant employed by such contributing employer during such Plan Year
and eligible for an allocation of employer contributions under Section 3.5(d).
Such allocation shall be in the proportion that the Compensation of each such
HEIDI Participant for such year bears to the Compensation of all such HEIDI
Participants for such year.
(c) Any Forfeiture occurring during a Plan Year shall be regarded as
employer contributions for such Plan Year. To the extent that the amount of
Forfeitures for such Plan Year exceed the amount required by subparagraph (a),
such excess Forfeiture amount shall be held in a suspense account and shall be
used to reduce employer contributions under this Section 3.5 in the succeeding
year or years.
(d) Each HEIDI Participant shall be eligible for an allocation of employer
contributions for a Plan Year pursuant to (a) and (b) above if the HEIDI
Participant:
(i) Is employed by Malama Pacific Corp. or Lalamilo Ventures, Inc., on
the last day of such Plan Year;
(ii) Died, retired or terminated serviced because of Disability during
such Plan Year;
(iii) Transferred from Malama Pacific Corp., or Lalamilo Ventures,
Inc. to the service of another Participating Employer in that Plan Year and is
employed by a Participating Employer on the last day of such Plan Year; or
(iv) Is on leave of absence or military service on the last day of
such Plan Year.
-12-
<PAGE>
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
----------------------------
Section 4.1 Section 401(k) Limitations on Salary
Reduction Contributions
- -------------------------------------------------
(a) Section 401(k) Tests For each Plan Year the Plan Administrator shall
--------------------
review each Eligible Employee's Salary Reduction Contributions in order to
determine whether the Salary Reduction Contributions with respect to all
Eligible Employees satisfy one of the following tests:
(1) The actual deferral percentage for the group of Eligible
Employees who are Highly Compensated Employees for such Plan Year is not more
than the actual deferral percentage of all non-Highly Compensated Employees for
such Plan Year multiplied by 1.25.
(2) The excess of the actual deferral percentage for the group of
Eligible Employees who are Highly Compensated Employees for such Plan Year over
all non-Highly Compensated Employees for such Plan Year is not more than two
percentage points, and the actual deferral percentage for the group of Highly
Compensated Employees is not more than the actual deferral percentage of such
non-Highly Compensated Employees multiplied by two.
(b) Actual Deferral Percentage Rules
--------------------------------
(1) For purposes of this Section 4.1, the actual deferral
percentage for a specified group of Eligible Employees for a Plan Year means the
average of the ratios (calculated separately for each Eligible Employee in such
group) of (i) the amount of the Salary Reduction Contributions actually paid
over to the Plan on behalf of each such Employee for such Plan Year to (ii) such
Employee's compensation for such Plan Year. The actual deferral percentage of an
Eligible Employee who is eligible to but does not make any Salary Reduction
Contributions for a Plan Year shall be zero.
(2) The actual deferral percentage for any Eligible Employee who is
a Highly Compensated Employee for the Plan Year and who is eligible to have
contributions allocated to his account under two or more arrangements described
in Section 401(k) of the Code that are maintained by a Participating Employer
-13-
<PAGE>
shall be determined as if such contributions were made under a single
arrangement.
(3) For purposes of determining the actual deferral percentage of
an Eligible Employee who is a Highly Compensated Employee by virtue of being
either a five percent (5%) owner or among the top 10 highest paid, the Salary
Reduction Contributions and compensation of Family Members of such Highly
Compensated Employee shall be combined and the Family Members and such Highly
Compensated Employee shall be treated as a single Employee. Such Family Members
shall be disregarded in determining the actual deferral percentage for
Participants who are non-Highly Compensated Employees.
(4) If this Plan satisfies the requirements of Sections 401(a)(4),
401(k), and 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy such requirements only if aggregated with
this Plan, then this Section 4.1 shall be applied by determining the
contribution percentages of Eligible Employees as if all such plans were a
single plan.
(5) The determination and treatment of the Salary Reduction
Contributions and the actual deferral percentage of any Eligible Employee shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
(6) For purposes of this Section 4.1, the term "compensation" shall
mean W-2 pay including any reductions related to arrangements qualifying under
Sections 125 or 401(k) of the Code.
(c) Reductions of Salary Reduction Contributions
--------------------------------------------
(1) If the Plan Administrator determines that neither of the tests
of Section 4.1(a) is satisfied, he shall require that the Salary Reduction
Contributions for such Plan Year on behalf of the Eligible Employees who are
Highly Compensated Employees be reduced in accordance with the leveling method
of Treas. Reg. (S) 1.401(k)-l(f)(2) until the permitted percentage is met. The
test to be met shall be the test that permits the highest amount of Salary
Reduction Contributions.
(2) If a reduction in the amount of an Eligible Employee's Salary
Reduction Contributions is so required, the excess contributions (as defined in
Section 401(k)(8)(B) of the
-14-
<PAGE>
Code) shall be distributed no later than the last day of each Plan Year to
Participants to whose accounts such excess contribution was allocated for the
preceding Plan Year. In order to avoid the 10% excise tax of Section 4979 of the
Code, the Plan Administrator may, in his sole discretion, cause such
distributions to be made within the first 2-1/2 months of the Plan Year.
(3) The excess contribution to be so distributed shall be adjusted for
income or loss, which shall be determined by multiplying the income or loss
allocable to the Participant's Salary Reduction Contributions for the Plan Year
by a fraction, the numerator of which is the amount of the excess contribution
on behalf of the Participant for the preceding Plan Year and the denominator of
which is the balance of the Participant's Salary Reduction Contribution Account
on the last day of the preceding Plan Year.
Section 4.2 Section 401(m) Limitations on Participant
Voluntary Contributions
- ------------------------------------------------------
(a) Section 401(m) Tests For each Plan Year the Plan Administrator shall
--------------------
review the contributions on behalf of each Eligible Employee to his Participant
Voluntary Contributions Account in order to determine whether such contributions
with respect to all Participants satisfy one of the following tests:
(1) The average contribution percentage for the group of Eligible
Employees who are Highly Compensated Employees for such Plan Year is not more
than the average contribution percentage for the group of all non-Highly
Compensated Employees for the Plan Year multiplied by 1.25.
(2) The average contribution percentage for the group of Eligible
Employees who are Highly Compensated Employees for such Plan Year is not more
that the average contribution percentage for the group of all non-Highly
Compensated Employees for the Plan Year multiplied by two, and the excess of the
average contribution percentage for the group of Eligible Employees who are
Highly Compensated Employees over the average contribution percentage for the
group of all non-Highly Compensated Employees is not more than two percentage
points.
(b) Special Rules
-------------
(1) For purposes of this Section 4.2, the contribution percentage for
any Eligible Employee who is a Highly
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<PAGE>
Compensated Employee eligible to make Participant Voluntary Contributions or to
have matching contributions (as defined in Treas. Reg. (S) 1.401(m)-l(f)(8))
allocated to his account under two or more plans or arrangements described in
Section 401(k) of the Code that are maintained by a Participating Employer shall
be determined as if the total of such Participant Voluntary Contributions and
such matching contributions was made under each plan.
(2) If this Plan satisfies the requirements of Sections 401(a)(4), 401(m),
and 410(b) of the Code only if aggregated with one or more other plans, or if
one or more other plans satisfy such requirements only if aggregated with this
Plan, then this Section 4.2 shall be applied by determining the contribution
percentages of Eligible Employees as if all such plans were a single plan.
(3) For purposes of determining the contribution percentage of an Eligible
Employee who is a Highly Compensated Employee by virtue of being either a five
percent (5%) owner or among the top 10 highest paid, the Participant Voluntary
Contributions and compensation of Family Members of such Highly Compensated
Employee shall be combined and the Family Members and such Highly Compensated
Employee shall be treated as a single Employee. Such Family Members shall be
disregarded in determining the actual deferral percentage for Participants who
are non-Highly Compensated Employees.
(4) The determination and treatment of the contribution percentage of any
Eligible Employee shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
(c) Distribution of Excess Aggregate Contributions
----------------------------------------------
(1) If the Plan Administrator determines that neither of the tests of
Section 4.2(a) is satisfied, he shall require that the Participant Voluntary
Contributions for such Plan Year on behalf of the Eligible Employees who are
Highly Compensated Employees be reduced in accordance with the leveling method
of Treas. Reg. (S) 1.401(m)-l(e)(2) until the permitted percentage is met. The
test to be met shall be the test that permits the highest amount of
contributions.
-16-
<PAGE>
(2) Notwithstanding any other provision of this Plan, excess aggregate
contributions shall be (i) forfeited, if forfeitable, or (ii) if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose accounts Participant Voluntary Contributions were
allocated for the preceding Plan Year. In order to avoid the 10% excise tax of
Section 4979 of the Code, the Plan Administrator, in his sole discretion, may
cause such distributions or forfeitures to be made within the first 2-1/2 months
of the Plan Year.
(3) Such excess aggregate contributions shall be adjusted for income or
loss, which shall be determined by multiplying the income or loss allocable to
the Participant's Participant Voluntary Contributions for the Plan Year by a
fraction, the numerator of which shall be the excess aggregate contributions on
behalf of the Participant for the preceding Plan Year and the denominator of
which shall be the sum of the balance of the Participant's Participant Voluntary
Contributions Account on the last day of the preceding Plan Year.
(4) The determination of the excess aggregate contributions shall be
made after first complying with Section 4.1.
(d) Definitions For purposes of this Section 4.2,
-----------
(1) "average contribution percentage" shall mean the average (expressed
as a percentage) of the contribution percentages of the Eligible Employees in a
group.
(2) "contribution percentage" shall mean the ratio (expressed as a
percentage) of the sum of the Participant Voluntary Contributions on behalf of
the Eligible Employee for the Plan Year to the Eligible Employee's compensation
for the Plan Year.
(3) "excess aggregate contributions" shall mean the amount described in
Section 410(m)(6)(B) of the Code.
(4) "compensation" shall mean W-2 pay including any reductions related
to arrangements qualifying under Sections 125 or 401(k) of the Code.
Section 4.3 Combined Section 401(k) and Section 401(m)
Limitations
- -------------------------------------------------------
-17-
<PAGE>
(a) Combined Test The sum of the actual deferral percentage as determined
-------------
under Section 4.1 of the group of Eligible Employees who are Highly Compensated
Employees and the average contribution percentage as determined under Section
4.2 of such group for the Plan Year shall not exceed the sum of:
(1) 125% of the greater of (i) the actual deferral percentage as
determined under Section 4.1 of the group of Eligible Employees who are non-
Highly Compensated Employees for the Plan Year or (ii) the average contribution
percentage as determined under Section 4.2 of such group for the Plan Year, and
(2) Two plus the lesser of clause (i) or (ii) of subparagraph (1)
above; provided that in no event shall this amount exceed 200% of the lesser of
such clause (i) or (ii).
(b) Reductions If the Plan Administrator determines that the test of
----------
Section 4.3(a) is not satisfied, he shall require reduction of contributions in
accordance with Treas. Reg. (S) 1.401(m)-2(c)(3).
Section 4.4 $7,000 Limit On Salary Reduction
Contributions
- ---------------------------------------------
(a) Notwithstanding any other provision of the Plan, no Participant shall
be permitted to make Salary Reduction Contributions during any calendar year in
excess of the amount of elective deferrals permitted by Section 402(g)(1) of the
Code.
(b) Any Salary Reduction Contributions in excess of such limitation, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to Participants to whose Salary Reduction Accounts such excess was
allocated for the preceding calendar year and who claim such excess for such
calendar year.
(c) The Participant's claim for distribution of such excess must (i) be in
writing, (ii) be submitted to the Plan Administrator no later than February 15,
(iii) specify the amount of such excess for the preceding calendar year, and
(iv) be accompanied by the Participant's written statement that if such amounts
are not distributed, such excess (when added to amounts deferred under other
plans or arrangements described in Sections 401(k), 408(k), or 403(b) of the
Code) would exceed the limit imposed on the Participant by Section 402(g) of the
Code for the year in which the contribution occurred.
-18-
<PAGE>
(d) Such excess shall be adjusted for income or loss, which shall be
determined by multiplying the income or loss allocable to the Participant's
Salary Reduction Contributions for the Plan Year by a fraction, the numerator of
which is the Salary Reduction Contributions on behalf of the Participant for the
preceding Plan Year and the denominator of which is the balance of the
Participant's Salary Reduction Account on the last day of the preceding Plan
Year.
Section 4.5 Section 415 Limitations
- ----------- -----------------------
(a) In no event shall the sum of the annual additions to the accounts of a
Participant in the defined contribution plans (as defined in Section 414(i) of
the Code) maintained by a Participating Employer, including the contributions to
a Participant's Accounts (other than his Rollover Account), for any limitation
year exceed the lesser of (i) $30,000 (or if greater, one-fourth of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code) or (ii) 25% of the
Participant's compensation for such year.
(b) If necessary to limit the annual addition to a Participant's Accounts
for a limitation year, the Plan Administrator may reduce or suspend Salary
Reduction Contributions, provided that notice of such reduction or suspension be
given to the Participant. Such notice need not precede the reduction or
suspension. If further necessary to limit the annual addition to a
Participant's Accounts for a limitation year, distributions shall be made in the
following order to the Participant on whose behalf such contributions were made,
to the extent necessary to reduce the annual addition to the prescribed amount:
(i) Participant Voluntary Contributions and interest thereon; (ii) Salary
Reduction Contributions and interest thereon; (iii) Employer Contributions.
(c) In any case where a Participant is also a participant in any defined
benefit plan (as defined in Section 414(j) of the Code) maintained by a
Participating Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction shall not (subject to the restrictions and
exceptions contained in Section 415 of the Code) exceed 1.0 for any limitation
year. Reduction of benefits and/or contributions or allocations to the plans,
where required, shall be accomplished first by reducing the Participant's
benefits under the defined benefit plans and then by reducing the contributions
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or allocations under the defined contribution plans. If the Participant
participates in more than one defined benefit plan or more than one defined
contribution plan maintained by a Participating Employer, reductions in each
such category of plans shall be made first from the first such plan in which he
commenced participation and if further reduction required, then from the second
such plan in which he commenced participation, and proceeding in such order
until the limitation of this Section 4.5 is no longer exceeded.
(d) For purposes of this Section 4.5, the following terms shall have the
following meanings:
(1) The term "annual addition" shall mean for each Plan Year the sum of (i)
employer contributions, (ii) employee contributions, and (iii) forfeitures, for
such Plan Year. For this purpose, employee contributions shall be determined
without regard to any rollover contributions (as defined in the Code) and
employee contributions to a simplified employee pension plan that are excludable
from gross income under the Code. Annual additions for a limitation year shall,
however, include Salary Reduction Contributions for such Plan Year that are
subsequently distributed to or forfeited by a Participant pursuant to this
Article IV, except to the extent of excess Salary Reduction Contributions and
earnings thereon refunded to the Participant by April 15 of the following Plan
Year. Annual additions shall also include (i) amounts allocated after March 31,
1984 to an individual medical account (as defined in Section 415(l) of the
Code), and (ii) amounts derived from contributions paid or accrued in taxable
years ending after December 31, 1985 that are attributable to post-retirement
medical benefits allocated to the separate account of a key employee (as defined
in Section 419A(d)(3) of the Code) under a welfare benefit fund (as defined in
Section 419(e) of the Code) maintained by a Participating Employer.
(2) The term "compensation" shall mean a Participant's compensation as
determined under Section 415(c)(3) of the Code.
(3) The term "limitation year" shall mean the Plan Year.
(4) The term "defined benefit plan fraction" shall mean a fraction where
the numerator is the projected annual benefit of the participant determined as
of the close of the Plan Year and the denominator is the lesser of (i) the
maximum dollar
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<PAGE>
limit of Section 415 of the Code for such Plan Year for a defined
benefit plan multiplied by 1.25, or (ii) the percentage of compensation
limitation of Section 415 of the Code for such Plan Year for a defined benefit
plan multiplied by 1.4.
(5) The term "defined contribution plan fraction" shall mean a fraction
where the numerator is the annual addition to the participant's accounts for
such Plan Year and the denominator of which is the lesser of (i) the maximum
dollar limit of Section 415 of the Code for such Plan Year for a defined
contribution plan multiplied by 1.25, or (ii) the percentage of compensation
limitation of Section 415 of the Code for such Plan Year for a defined
contribution plan multiplied by 1.4.
(e) For purposes of applying the limitations of this Section 4.5:
(1) All defined benefit plans (whether or not terminated) of a
Participating Employer shall be treated as one plan, and all defined
contribution plans (whether or not terminated) of a Participating Employer shall
be treated as one plan; and
(2) The term "Participating Employer" shall include all corporations that
are members of the same controlled group of corporations (as defined in Code
Section 414(b) as modified by Code Section 415(h)) as a Participating Employer.
(f) Notwithstanding any other provisions of this Section 4.5, a
Participant's accounts or accrued benefit accrued prior to any amendment of
Section 415 of the Code shall be determined in accordance with the transitional
rules provided by such amendment.
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ARTICLE V
INVESTMENT OF FUNDS
-------------------
Section 5.1 Assets To Be Held by Trustee or Insurance
Company
- ------------------------------------------------------
All contributions to the Plan shall be paid to (i) one or more Trustees and
held and invested by each Trustee pursuant to a Trust Agreement, and/or (ii) one
or more Insurance Companies and held and invested by each Insurance Company
pursuant to an Insurance Contract.
Section 5.2 Investment of Accounts
- ----------- ----------------------
(a) Each Participant may elect in a manner approved by the Asset Manager
the investment alternatives in which his Accounts shall be invested. There
shall be such investment alternatives available as determined by the Committee
from time to time, which may at the sole option of the Committee include (i) an
investment alternative that is invested to the extent possible in deposits of
Americans Savings Bank, F.S.B. and (ii) an investment alternative that is
invested to the extent possible in common stock of the Company.
(b) (1) Each Participant may elect on a form furnished by the Plan
Administrator the investment alternatives in which his Accounts are to be
invested. If a Participant fails to make such an election, he shall be deemed
to have elected to have his Accounts invested in such alternative as the Asset
Manager shall designate and communicate to Employees from time to time as the
alternative in which Accounts are to be invested in such a case. If a
Participant wishes to invest the balance of his Accounts in more than one
investment alternative, he shall indicate on the election form the percentage of
each Account to be invested in each investment alternative.
(2) Rules regarding the effectiveness of investment alternative
elections and amendments thereto are set forth in Appendix A.
(c) (1) Common stock of the Company held in the Plan shall be voted by
the Trustee at each meeting of the stockholders of the Company as directed by
the Participants to whose Accounts such stock is credited. Fractional shares
may be combined and voted by the Trustee to the extent possible. In the absence
of direction by the Participants, the Trustee shall vote such shares
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in the same proportion as directed by Participants from whom direction has been
received by the Trustee.
(2) The Company shall cause each Participant to be provided with a notice
of each such stockholder meeting and the proxy statement of the Company,
together with an appropriate form of proxy for the Participant to indicate his
voting instructions.
(d) A transaction may be made between the Trustee or an Insurance Company
and (i) a common or collective trust fund or pooled investment fund maintained
by a party in interest (as such term is defined in ERISA) which is a bank or
trust company supervised by a state or Federal agency or (ii) a pooled
investment fund of an insurance company qualified to do business in a state, if
[A] the transaction is a sale or purchase of an interest in such fund, and [B]
the bank, trust company, or insurance company receives not more than reasonable
compensation.
(e) The Committee may authorize the retention of an investment manager or
managers to manage (including the power to acquire and dispose of) any assets of
the Plan, provided that there is an acknowledgment in writing by the investment
manager that such investment manager is qualified to so act under the terms of
ERISA, and that such investment manager is, by acceptance of such appointment, a
Plan fiduciary.
(f) The assets of each Participating Employer may be commingled with the
assets of the other Participating Employers.
(g) Up to 100% of the assets of the Plan may be invested in (i) deposits in
the American Savings Bank, F.S.B., that bear a reasonable interest rate and/or
(ii) "qualifying employer real property" or "qualifying employer securities" (as
such terms are defined in ERISA).
Section 5.3 Valuations
- ----------- ----------
The assets of the Plan and each investment alternative shall be valued on a
daily basis. Such valuation shall be based upon the fair market value of such
assets. Each Account of each Participant shall be adjusted as of each such
valuation date (and before making the allocation of contributions for such
valuation period) by increasing or decreasing the net credit balance in such
Account by the proportion of the income, profits, and gains (whether realized or
unrealized) or losses (whether realized or unrealized) of the investment
alternative for such period that the
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balance of the Participant's Account in such investment alternative as of such
date bears to the aggregate balance of the Accounts of all Participants in such
investment alternative.
Section 5.4 Common Stock Adjustment Provisions
- ----------- ----------------------------------
If the outstanding shares of common stock of the Company are decreased, or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of common stock or other securities through merger,
consolidation, sale of all or substantially all of the property of the Company,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of common stock or other
securities, an appropriate and proportionate adjustment may, subject to the
requirements of federal securities laws and regulations, be made by the
Committee to the maximum number and kind of shares or other securities which are
subject to an effective registration statement filed with the Securities
Exchange Commission pursuant to the Securities Act of 1933, as amended.
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ARTICLE VI
----------
VESTING AND DISTRIBUTIONS
-------------------------
Section 6.1 Nonforfeitable Right to Accounts
- ----------- --------------------------------
(a) Except as to amounts in the HEI Diversified Account attributable to
employer contributions for Plan Years beginning January 1, 1993, and any
investment earnings thereon, the interest of each Participant in his Accounts
shall always be fully vested and nonforfeitable.
(b) (i) Upon a HEIDI Participant's termination of employment on or after
attainment of his Normal Retirement Age or because of his death or Disability,
the HEIDI Participant or his Beneficiary, as the case may be, shall be entitled
to receive 100% of the adjusted balance of his HEI Diversified Account as of the
valuation date preceding distribution thereof.
(ii) If a HEIDI Participant's employment shall terminate under
circumstances other than those set forth in Section 6.1(b)(i), he shall be
entitled to receive, as to amounts in the HEI Diversified Account attributable
to employer contributions for Plan Years beginning January 1, 1993, and any
investment earnings thereon, the following percentage of such amount as of the
valuation date preceding distribution thereof:
Years of Vesting Service Percentage
- ------------------------ ----------
Less than 2 0%
2 or more 100%
Section 6.2 Distributions
- ----------- -------------
(a) General Rules.
--------------
(1) Except for withdrawals permitted by Section 6.3, a Participant's
Accounts shall be distributed only upon the Participant's death, permanent
disability, retirement, or other termination of employment with the
Participating Employers. Except for distribution to a Beneficiary in the case
of death, all distributions shall be to the Participant. For these purposes, a
Participant shall be regarded as permanently disabled if he is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of no less than 12
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months. A Participant must furnish proof of the existence of permanent
disability to the Plan Administrator.
(2) Subject to Section 6.6, distributions shall be made as soon as
practicable after the event that entitled the Participant or, in the case of a
Participant's death, his Beneficiary, to such distribution. The Participant's
Accounts shall be valued as of the end of the month immediately prior to
distribution.
(b) Form of Distributions to Participants Who Were Participants Prior to
--------------------------------------------------------------------
January 1, 1989. The provisions of this Section 6.2(b) shall apply only if a
- ---------------
Participant was a Participant in the Plan prior to January 1, 1989.
(1) Unless a Participant otherwise elects in accordance with the
provisions contained in this Section 6.2(b), a Participant's Accounts shall be
applied to the purchase of a (i) "qualified joint and survivor annuity" (as
defined in Section 6.2(b)(6)) if the Participant is married on the first day of
the first period for which a retirement income payment is received or (ii)
single life annuity for any other Participant, and such form of annuity
distributed to the Participant.
(2) A Participant (or the Participant's beneficiary if the Participant
is deceased) may at any time within the 90-day period prior to the annuity
starting date make a written election to convert the form of distribution of his
Accounts into one of the optional benefits described in this Section 6.2(b).
(3) (i) The Plan Administrator must furnish to the Participant a
written notification in nontechnical terms of the availability of the election
not to take the qualified joint and survivor annuity within a reasonable amount
of time before the annuity starting date. This notification shall also inform
the Participant of the availability of the information specified in the
following paragraph (3)(ii).
(ii) The Plan Administrator must furnish to the Participant a
written explanation in nontechnical language of the terms and conditions of the
qualified joint and survivor annuity; his right to make, and the effect of, an
election to waive such annuity; the rights of his spouse under Section
6.2(b)(2); and the right to make, and the effect of, a revocation of an election
under Section 6.2(b)(2). This explanation must be
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furnished within a reasonable amount of time from the date of the Participant's
request after his receipt of the notification required by Section 6.2(b)(3)(i).
During such period any election may be revoked in writing and another election
made during such period. However, if a vested Participant is to receive a
qualified joint and survivor annuity, he (i) may elect not to take such an
annuity only with the consent of his spouse and (ii) may revoke an election not
to take such an annuity or elect to take such an election at any time and any
number of times within such period.
(4) The "annuity starting date" means (i) the first day of the first period
for which an amount is payable as an annuity, or (ii) if a benefit is not
payable in the form of an annuity, the first day on which all events have
occurred that entitle the Participant to such benefit.
(5) In lieu of the normal form of retirement income, a Participant may
elect one of the following forms:
(i) The purchase of a single life annuity in the case of a Participant
electing not to receive a qualified joint and survivor annuity.
(ii) A lump sum distribution of the value of his Accounts as of the
valuation date preceding distribution. In such a case distributions from the
investment alternative invested to the extent possible in common stock of the
Company shall be in the form of shares of common stock except that (A) cash
shall be distributed in lieu of any fractional shares and for the Participant's
allocable portion of such alternative not yet invested in such shares, (B)
distributions shall be solely in the form of cash for Participants whose
Accounts contain ten shares or less of Common Stock, and (C) Participants whose
Accounts contain more than ten shares of Common Stock may elect in writing to
receive distributions solely in the form of cash. Distributions from any other
investment alternative shall be made in cash or, if permitted by the investment
alternative, in kind. Notwithstanding any other provision to the contrary, any
Participant eligible to receive a distribution which would qualify as an
"eligible rollover distribution" under Section 401(a)(31)(C) of the Code may
elect to have such distribution paid directly to an "eligible retirement plan"
as defined in Section 401(a)(31)(D) of the Code and, upon the Participant's
specification of the eligible retirement plan to which such distribution is to
be paid, such
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<PAGE>
distribution shall be made in the form of a direct trustee-to-trustee transfer
to the eligible retirement plan so specified.
(6) For purposes of this Section 6.2(b), "qualified joint and survivor
annuity" shall mean an annuity (i) for the life of the Participant with a
survivor annuity for the life of the spouse of the Participant to whom he/she is
married at the time the distribution of his/her Accounts commences that is one-
half of the amount of the annuity payable during the joint lives of the
Participant and the Participant's spouse, and (ii) that is the actuarial
equivalent of a single life annuity for the life of the Participant.
(c) Qualified Preretirement Survivor Annuity Participants Who Were
--------------------------------------------------------------
Participants Prior to January 1, 1989. The provisions of this Section 6.2(c)
- --------------------------------------
shall apply only if a Participant was a Participant in the Plan prior to January
1, 1989.
(1) If a Participant who has a vested interest in all or a portion of
his Accounts dies prior to commencement of distribution of his Accounts, his
surviving spouse shall (except as provided below) receive a "qualified
preretirement survivor annuity" as defined in Section 6.2(c)(4).
(2) A Participant may elect at any time to waive the qualified
preretirement survivor annuity (and thereby have a lump sum distribution of his
vested Accounts paid to his Beneficiary) or revoke such waiver.
Such waiver shall not take effect unless the Participant's spouse consents in
writing to the waiver of the qualified preretirement survivor annuity,
acknowledges the effect of such waiver, and such waiver is witnessed by an
authorized representative of the Plan or a notary public. Such a written waiver
shall not be required if it is established to the satisfaction of the authorized
representative of the Plan that the consent of the spouse may not be obtained
because there is no spouse, the spouse cannot be located, or such other
circumstances as Treasury regulations may prescribe.
(3) The Plan shall provide each Participant on the later of his date of
hire or his attainment of age 32 a written explanation the terms and conditions
of the qualified preretirement survivor annuity; his right to make, and the
effect of, an election to waive the qualified preretirement survivor
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<PAGE>
annuity; the rights of his spouse under Section 6.2(c)(2); and the right to
make, and the effect of, a revocation of such an election.
(4) For purposes of this Section 6.2(c), "qualified preretirement
survivor annuity" shall mean an annuity for the life of the surviving spouse
that is purchased by the balance of the Participant's vested Accounts as of the
valuation date preceding such purchase.
(d) Distributions to Participants Who Became Participants on or After
-----------------------------------------------------------------
January 1, 1989. The provisions of this Section 6.2(d) shall apply if a
- ----------------
Participant became a Participant in the Plan on or after January 1, 1989.
Distributions from the investment alternative invested to the extent possible in
common stock of the Company shall be in the form of shares of common stock
except that (i) cash shall be distributed in lieu of any fractional shares and
for the Participant's allocable portion of such alternative not yet invested in
such shares, (ii) distributions shall be solely in the form of cash for
Participants whose Accounts contain ten shares or less of Common Stock, and
(iii) Participants whose Accounts contain more than ten shares of Common Stock
may elect in writing to receive distributions solely in the form of cash.
Distributions from any other investment alternative shall be made in cash or, if
permitted by the investment alternative, in kind. Notwithstanding any other
provision to the contrary, any Participant eligible to receive a distribution
which would qualify as an "eligible rollover distribution" under Section
401(a)(31)(C) of the Code may elect to have such distribution paid directly to
an "eligible retirement plan" as defined in Section 401(a)(31)(D) of the Code
and, upon the Participant's specification of the eligible retirement plan to
which such distribution is to be paid, such distribution shall be made in the
form of a direct trustee-to-trustee transfer to the eligible retirement plan so
specified.
(e) Distributions to Special Participants Relating to Separate Accounts
-------------------------------------------------------------------
From Merged Plans. Unless otherwise provided in the Plan, to the extent that
- ------------------
the distribution provisions of a Merged Plan (as such term is defined under the
definition of "Accounts" under Section 1.1) differ from the provisions in this
Section 6.2, the distribution provisions of such Merged Plan shall continue to
govern the distribution of the assets transferred to the Plan from such Merged
Plan, and the earnings thereon. The assets transferred to the Plan from the
American Savings Bank Profit Sharing and TaxFavored Retirement Savings Plan, the
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Hawaiian Tug & Barge Corp. Supplemental Retirement Plan, the Hawaiian Electric
Industries Stock Ownership Plan, the First Nationwide Employees' Investment Plan
and the HEI Diversified Defined Contribution Pension Plan upon their merger or
transfer of assets and liabilities into the Plan shall be governed by Appendices
C, D, E, F, and G respectively, which are incorporated into the Plan by
reference.
Section 6.3 Withdrawals
- ----------- -----------
(a) Withdrawals from Participant Voluntary Contributions Account A
------------------------------------------------------------
Participant may at any time request (on a form provided by the Plan
Administrator) a withdrawal of all or any portion of his Participant Voluntary
Contributions Account. Unless the Committee has good cause for denying such
request, a distribution shall be made as soon as practicable following the Plan
Administrator's receipt of a withdrawal request. Only one such withdrawal shall
be permitted each Plan Year. In distributing such amounts, distributions shall
be made first from Participant Voluntary Contributions made prior to 1986.
(b) Withdrawals from Salary Reduction Account
-----------------------------------------
(1) Subject to the conditions set forth in this Section 6.3(b), the
requirements of Section 6.3(c), and the requirements of Section 401(k) of the
Code, a Participant may upon the showing to the Committee of an immediate and
heavy financial need or disability request a withdrawal from his Salary
Reduction Account. However, no such withdrawal shall be made from any income
allocable to Salary Reduction Contributions for income earned after January 1,
1989.
(2) Any such withdrawal request shall be made on a form made available by
the Plan Administrator and shall set forth the amount requested to be withdrawn.
If approved by any two members of the Committee, the Participant's request shall
be carried out as soon as practicable after the valuation date next following
such approval and shall be based upon the adjusted balance of the Salary
Reduction Account at such valuation date. Only one such request shall be
accepted in any one Plan Year.
(3) For purposes of this Section 6.3(b), the existence of "an immediate and
heavy financial need" and "disability" shall be determined by the Committee
members on the basis of all relevant facts and circumstances. A Participant
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<PAGE>
shall automatically be deemed to have an immediate and heavy financial need in
connection with:
(i) Payment of the funeral expenses of a Family Member.
(ii) Payment of medical expenses described in Section 213(d) of the Code
incurred by the Participant, his spouse, or his dependents (as defined in
Section 152 of the Code).
(iii) The purchase (excluding mortgage payments) of a principal residence
for the Participant.
(iv) Payment of tuition for the next 12 months of post-secondary education
for the Participant, his spouse, children or dependents (as defined in Section
152 of the Code).
(v) Payments to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
(4) The amount of a withdrawal may not exceed the amount required to
relieve the immediate and heavy financial need after taking into consideration
the amount of such need that may be satisfied from other resources reasonably
available to the Participant. In connection with determining the amount of such
need that may be satisfied from other resources reasonably available to the
Participant, the Committee members may rely on the Participant's written
representation that the need cannot be relieved:
(i) Through reimbursement or compensation by insurance or otherwise,
(ii) By reasonable liquidation of the Participant's assets, to the extent
such liquidation would not itself cause an immediate and heavy financial need,
(iii) By cessation of Salary Reduction Contributions under the Plan, or
(iv) Through other distributions or nontaxable loans from the Plan or other
plans maintained by a Participating Employer or any other employer of the
Participant or by borrowing from commercial sources on reasonable commercial
terms.
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<PAGE>
(c) Spouse Consent A Participant must obtain the consent of his spouse, if
--------------
any, within the 90-day period before the time any portion of his Accounts is
withdrawn under this Section 6.3. A new consent must be obtained for each such
withdrawal. Such consent must be in a written instrument (i) in which the
spouse acknowledges the effect of such consent and (ii) witnessed by an
authorized representative of the Plan or a notary public. Such consent shall
not be required if it is established to the satisfaction of the authorized
representative of the Plan that such consent may not be obtained because there
is no spouse, the spouse cannot be located, or such other circumstances as
Treasury Regulations may prescribe.
Section 6.4 Loans to Participants
- ----------------------------------
(a) Amount of Loans.
----------------
(1) A Participant may obtain a cash loan from the Plan. For loans granted
or renewed after October 18, 1989, the minimum amount of any such loan shall be
$1,000. To apply for such a loan a Participant must file a prescribed loan
request form with the Plan Administrator. The maximum amount of the loan is
subject to the limitations set forth in subparagraph (2) below.
(2) At no time shall the aggregate balance of all loans that a Participant
has outstanding under the Plan or under any other qualified plan maintained by a
Participating Employer exceed the lesser of the following:
(i) $50,000, reduced by the excess (if any) of -- (I) the Participant's
highest outstanding balance of loans from the Plan during the one (1) year
period ending on the day before the date on which such loan was made, over (II)
the Participant's outstanding balance of loans from the Plan on the date on
which such loan was made; or
(ii) 50% of the vested portion of the Participant's Accounts.
No loan shall be granted if it would cause either of the foregoing limitations
to be exceeded. For purposes of this provision, any renegotiation, extension,
renewal or revision of an existing loan is treated as a new loan on the date of
such renegotiation, extension, renewal or revision.
(b) Number of Loans Outstanding.
----------------------------
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<PAGE>
(1) Except as set forth in (b)(2) below, at no time shall a Participant
have more than one (1) loan outstanding under the Plan.
(2) In the case of a Participant's financial hardship meeting the criteria
set forth for a withdrawal pursuant to section 6.3(b), a Participant may apply
for a loan although the Participant already has one (1) loan outstanding from
the Plan; provided, however, that such a loan application shall be subject to
approval of two members of the Committee. The Committee members, in their sole
discretion, may withhold their consent to any such loan request under this
Section 6.4(b)(2), or may consent only to the borrowing of a part of the amount
requested by the Participant. The Committee members shall act upon requests for
such loans in a uniform and nondiscriminatory manner consistent with the
requirements of the Code and applicable regulations (taking into account only
those factors which would be considered in a normal business setting by a
commercial lender).
(c) Participants Eligible for Loans. For purposes of this Section 6.4,
--------------------------------
Participants eligible to receive loans shall include inactive terminated
employees who (1) still have an Account balance under the Plan and (2) are
classified as "parties in interest" under Section 3(14) of ERISA (such
individuals being hereinafter referred to as "Eligible Former Participants"),
provided, however, that the granting of loans to Eligible Former Participants
not result in disqualification of or other sanction to the Plan under the Code
or other applicable law.
(d) Terms of Loans. A loan to a Participant shall be made on such terms
---------------
and conditions as the Asset Manager may determine, provided that the loan shall:
(1) Be evidenced by a promissory note signed by the Participant and secured
by his Accounts;
(2) Bear interest on unpaid principal at the then current money market
account rate at American Savings Bank, plus two percent (2%).
(3) Be subject to a substantially level amortization schedule and repayment
on at least a monthly basis.
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<PAGE>
(4) Provide for loan payments to be withheld through periodic payroll
deductions from the Participant's compensation from a Participating Employer;
and
(5) Provide for repayment in full on or before the earlier of (i) except
for Eligible Former Participants not receiving lump-sum distributions of their
Accounts upon severance, the date when the Participant severs from all
employment with the Participating Employers, or (ii) the date five years after
the loan is made, provided that such date may be 15 years after the loan is made
if the loan is used to acquire or construct a dwelling that within a reasonable
period of time is to be used as the Participant's principal residence.
(e) Source of Loans. The Accounts which may be subject to loans by
----------------
Participants are the Salary Reduction Account, Participant Voluntary Account,
Rollover Account, and Employer-ASB Account.
(f) Disbursement of Loans. A loan, if approved, shall be disbursed as soon
----------------------
as reasonably practicable after the date on which the loan is approved.
(g) Spouse Consent. A Participant must obtain the consent of his spouse,
---------------
if any, within the 90-day period before the time the Participant's Accounts are
used as security for a loan under this Section 6.4. A new consent shall be
required if the Accounts are used for any increase in the amount of security. A
consent under this Section 6.4 shall comply with the requirements of Section
6.3(c), but shall be deemed to meet any requirements contained in such section
relating to the consent of any subsequent spouse.
(h) Investment Gain or Loss. Upon the making of such a loan, the Asset
------------------------
Manager shall cause a separate investment account to be established in the name
and for the sole benefit of the Participant. Such loan shall be regarded as an
investment asset of such account and all gain, loss, or expenses of such loan
shall be attributed solely to this separate account. This separate account
shall not share in the gains or losses of any other investment alternative of
the Plan, nor shall any other investment alternative of the Plan share in the
gains, losses, or expenses of this separate account.
(i) Default. Plan loans will be considered to be in default when any
--------
required payment is not made within ninety (90)
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<PAGE>
days of its due date. The Committee will enforce the security interest for the
loan by retaining, upon the first distributable event applicable to the
Participant, up to 100% of the portion of the Participant's vested Accounts
which were originally given as security on the loan, or such portion thereof
sufficient to cover the Participant's defaulted principal and interest payments,
and any additional interest accruing thereon.
Section 6.5 Valuation Dates for Withdrawals and Loans
- ----------- -----------------------------------------
For purposes of Sections 6.3 and 6.4, the value of a Participant's Accounts
shall be determined as of the valuation date preceding the date of the
withdrawal or loan.
Section 6.6 Special Distribution Rules
- ----------- --------------------------
(a) Notwithstanding any other provisions of the Plan, unless a Participant
requests pursuant to this Section 6.6(a), the distribution of a Participant's
Accounts must begin not later than the 60th day after the latest of the close of
the Plan Year in which (i) the Participant attains age 65, (ii) occurs the fifth
anniversary of the year in which the Participant commenced participation in the
Plan, or (iii) the Participant terminates his service with the Participating
Employers. A Participant may request that distribution of his Accounts commence
at a date later than the latest date provided under the prior sentence. This
request must be made by submitting to the Plan Administrator a written
statement, signed by the Participant, that describes the distribution and the
date on which the Participant requests payment to commence. The Plan
Administrator shall not grant this request if such request would not comply with
the requirements of regulations under Section 401(a)(9) of the Code, including
Treas. Reg. (S) 1.401(a)(9)-2.
(b) (1) If a form of distribution commenced prior to the Participant's
death, the portion, if any, of his Accounts remaining at his death must be
distributed to his Beneficiary at least as rapidly as under such form.
(2) If distribution of the Participant's Accounts had not commenced at his
date of death, such Accounts must be distributed within five years of such date,
unless such accounts are paid over the life of the Participant's (i) designated
Beneficiary and such payment commences no later than one year after the
Participant's death or (ii) surviving spouse and such
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payment commences no later than the date the Participant would have attained age
70-1/2.
(3) Notwithstanding any other provision of the Plan, a Participant's vested
Accounts must be distributed (or commence to be distributed over his life
expectancy or the joint life expectancies of the Participant and his
Beneficiary) no later than April 1 of the calendar year following the calendar
year in which he attains age 70-1/2. The amount of the minimum which must be
distributed in each calendar year shall be determined by dividing the
Participant's vested Accounts by the applicable life expectancy. Any
Participant who has attained age 70-1/2 may elect to have distributed to him in
any Plan Year an amount greater than the minimum required distribution.
(4) If the present value of the Member's Participant's vested Accounts does
not exceed $3,500, such vested Accounts shall be distributed as soon as
practicable following the event that entitled the Member to a distribution
thereof. If the present value of the Participant's vested Accounts exceeds
$3,500, written consent of the Participant (and his spouse, if required) must be
obtained not more than 90 days before the commencement of the distribution of
any part of the Participant's Accounts. If a Participant's vested Accounts are
so distributable to him and he fails to consent to an immediate distribution,
such failure shall be regarded as an election to defer distribution to the later
of age 62 or Normal Retirement Age.
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ARTICLE VII
ADMINISTRATION
Section 7.1 The Committee To Be Named Fiduciary
- ----------- -----------------------------------
(a) The Committee shall be the "Named Fiduciary" (within the meaning of
ERISA) of the Plan with all responsibility for the operation and administration
of the Plan. The Committee shall have the power to delegate specific fiduciary
responsibilities of the Participating Companies (other than those of the Trustee
or Insurance Company with respect to control of the assets of the Plan) to any
person or group of persons, and such person or group may serve in more than one
such delegated capacity. Such delegations must be accepted in writing and may
be to employees of the Participating Companies or Associated Companies or to
other individuals, all of whom shall serve at the pleasure of the Committee, and
if full-time employees of the Participating Companies or Associated Companies,
without Compensation. Any such person may resign by delivering a written
resignation to the Committee.
(b) The Committee shall supervise and review the activities of the Asset
Manager and the Plan Administrator.
Section 7.2 Asset Manager
- ----------- -------------
(a) The Asset Manager shall be the person named from time to time by the
Board of Directors of the Company and shall be the fiduciary in charge of the
financial affairs of the Plan. The Asset Manager shall manage the assets in
accordance with the terms of the Plan and shall have all powers necessary to
carry out her duties. If at any time there shall be no Asset Manager or if the
Asset Manager shall be unable to perform her duties, the Committee shall
designate a person to serve as Asset Manager until the Board of Directors of the
Company appoints a successor.
(b) The Asset Manager shall have the following specific duties and
responsibilities in addition to any other duties specified in the Plan or by
applicable law.
(1) The Asset Manager shall have responsibility for legal, actuarial, and
accounting services provided to the Plan; may authorize an agent, to act on her
behalf; and may contract for legal, actuarial, medical, accounting, clerical,
and other services to carry out her duties and to discharge her
responsibilities.
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(2) The Asset Manager shall adopt from time to time actuarial tables and
actuarial methods for use in all actuarial calculations, if any, required in
connection with the determination of the funding status of the Plan. As an aid
to the Asset Manager in connection therewith, the actuary consultant designated
by the Asset Manager shall, if any, make annual actuarial valuations of the
contingent assets and liabilities of the Plan, and shall certify to the Asset
Manager the tables, actuarial methods, rates of contribution, and other
pertinent data and information that such actuary would recommend for use by the
Asset Manager.
(3) The Asset Manager shall adopt a funding policy and method for the Plan
that is consistent with the needs of the Plan and the requirements of ERISA.
(4) The Asset Manager shall be responsible for the maintenance of all
financial records of the Plan.
(5) The Asset Manager shall be responsible for the maintenance of all
financial records of the Plan.
(6) The Asset Manager shall be the Plan's agent for service of any notice
of process authorized by law.
Section 7.3 Plan Administrator
- ----------- ------------------
(a) The Plan Administrator shall be the person named from time to time by
the Board of Directors of the Company and shall be the fiduciary in charge of
administration of the Plan. The Plan Administrator shall administer the Plan in
accordance with its terms, and shall have all powers necessary to carry out his
duties. If at any time there shall be no Plan Administrator or if the Plan
Administrator shall be unable to perform his duties, the Committee shall
designate a person to serve as Plan Administrator until the Board of Directors
of the Company appoints a successor.
(b) The Plan Administrator shall have the following specific duties and
responsibilities in addition to any other duties specified in the Plan or by
applicable law.
(1) Subject to the limitations contained in this Plan, the Plan
Administrator shall adopt rules for the
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administration of the Plan as he considers desirable, provided such rules do not
conflict with the Plan.
(2) The Plan Administrator may authorize an agent, to act on his behalf,
and may contract for legal, actuarial, medical, accounting, clerical, and other
services to carry out the Plan and to discharge his responsibilities.
(3) Except as otherwise expressly provided herein, the Plan Administrator
may interpret and construe the Plan, or reconcile inconsistencies to the extent
necessary to effectuate the Plan, and such action shall be binding upon all
persons.
(4) The Plan Administrator shall adopt from time to time actuarial tables
and actuarial methods for use in all actuarial calculations, if any, required in
connection with the determination of benefit payments under the Plan. As an aid
to the Plan Administrator in connection therewith, the actuary consultant
designated by the Asset Manager shall, if needed, certify to the Plan
Administrator the tables, actuarial methods, rates of contribution, and other
pertinent data and information that such actuary would recommend for use by the
Plan Administrator.
(5) The Plan Administrator shall be responsible for the maintenance of all
employee, Participant, and beneficiary records for the Plan. The Plan
Administrator shall also be responsible for the maintenance of records,
appropriate notifications, and filings in connection with the interest of all
Participants or their spouses or Contingent Annuitants.
(6) The Plan Administrator shall be responsible for the filing and
disclosure of the annual report on Form 5500, summary plan description, summary
of material modifications, summary annual report, and other disclosure
information regarding the provisions of the Plan or rights thereunder that must
be provided to Participants and their beneficiaries under the Plan.
Section 7.4 Expenses
- ----------- --------
To the extent any expenses of the Plan are not paid by Participants or paid
out of the assets of the Plan, the Participating Companies shall pay all
expenses of administering the Plan. Such expenses shall include any expenses
incurred by a Participating Company, the Committee, the Asset Manager, or the
Plan Administrator, including, but not limited to, the payment of
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professional fees of consultants. Commencing March 31, 1994 Participants shall
be assessed a portion of Plan recordkeeping fees, including fees for plan loans,
set-up fees and annual maintenance fees.
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ARTICLE VIII
FIDUCIARY
---------
Section 8.1 Fiduciary Responsibilities
- ----------- --------------------------
(a) The duties of each fiduciary (as defined in ERISA) with respect to the
Plan shall be discharged solely in the interests of Participants and
Beneficiaries and for the exclusive purpose of providing benefits to
Participants and Beneficiaries and defraying reasonable expenses of
administering this Plan. Each fiduciary shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character with like aims. Each fiduciary shall
act in accordance with Plan documents to the extent they are consistent with
such person's responsibilities as a fiduciary.
(b) Each fiduciary of the Plan shall use ordinary care and reasonable
diligence in the exercise of the powers and the performance of duties as a
fiduciary hereunder, but (with the sole exception of such liability, if any, as
may be imposed by ERISA) a fiduciary shall not be liable for any mistake of
judgment or other actions taken in good faith, or for any loss, if actions were
done in good faith and in a manner the fiduciary reasonably believed to be in or
not opposed to the best interests of the Plan. A fiduciary shall not be
personally liable by virtue of any contract, agreement, bond, or other
instrument made or executed by himself or any other fiduciary.
Section 8.2 Bonding, Indemnification, Insurance
- ----------- -----------------------------------
(a) The Participating Employers shall arrange to have the appropriate
persons bonded in accordance with the provisions of ERISA or the regulations
thereunder.
(b) The Participating Employers shall indemnify and save harmless and/or
insure each fiduciary who is an employee or a director of a Participating
Employer, and may indemnify and/or insure those to whom the Company has
delegated its fiduciary duties, against any and all claims, loss, damages,
expense, and liability arising from their responsibilities in connection with
this Plan, if the fiduciary acted in good faith and in a manner the fiduciary
reasonably believed to be in or not opposed to the best interests of the Plan.
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ARTICLE IX
CLAIMS PROCEDURE
----------------
The procedure for claiming benefits under the Plan shall be as follows:
(a) The Plan Administrator shall determine the benefits due hereunder to a
Participant or Beneficiary, but a person may file a claim for benefits by
written notice to the Plan Administrator.
(b) If a claim is denied in whole or in part, the Plan Administrator shall
give the claimant written notice of such denial within 30 days of the filing of
the claim. Such notice shall (i) specify the reason or reasons for denial, (ii)
refer to the pertinent Plan provisions on which the denial is based, (iii)
describe any additional material or information necessary to perfect the claim
and explain the need therefor, and (iv) explain the review procedure described
in subparagraph (c) hereof.
(c) The claimant may then appeal the denial of the claim by filing written
notice of such appeal with the Committee within 90 days after receipt of the
notice of denial. The claimant or any authorized representative may, before or
after filing notice of appeal, review any documents pertinent to the claim and
submit issues and comments in writing. The Committee shall render a decision on
such appeal within 30 days after receipt of the appeal (unless a longer period
is requested by the claimant), and shall forthwith give written notice of such
decision.
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ARTICLE X
AMENDMENT, TERMINATION, AND MERGER
----------------------------------
Section 10.1 Amendment
- ------------ ---------
(a) (1) Subject to the provisions hereinafter set forth, the Company
reserves the right to amend the Plan at any time, and (to the extent permitted
by ERISA and the Code) give any such amendment retroactive effect. No amendment
shall, however, have the effect of revesting in any of the Participating
Employers any part of the assets of the Plan, of diverting any part of the
assets of the Plan for purposes other than for the exclusive benefit of the
Participants and Beneficiaries, or of reducing the vesting percentage of any
Participant. No amendment to the Plan shall substantially increase the duties
or responsibilities of a Trustee or an Insurance Company without its consent.
(2) The Committee may approve any technical amendments to the Plan (i)
necessary to comply with federal law and regulations thereunder or (ii) that do
not have a substantial impact on the cost or terms of the Plan. All other
amendments must be approved by the Board of Directors of the Company.
(b) If the vesting schedule of the Plan is amended in way that directly or
indirectly affects the computation of a Participant's vested percentage or if
the Plan is deemed amended by an automatic change to or from a top-heavy vesting
schedule under Appendix B, each Participant with at least five years of Vesting
Service may elect within a reasonable period after such amendment to have his
vested percentage computed under the Plan without regard to such amendment. The
period during which the election may be made shall commence with the date the
amendment is adopted or deemed to be made and shall end on the latest of (i) 60
days after the amendment is adopted, (ii) 60 days after the amendment becomes
effective, or (iii) 60 days after the Participant is issued written notice of
the amendment by the Plan Administrator.
Section 10.2 Termination or Discontinuance
- ------------ -----------------------------
The Plan is adopted with the expectation that it shall be continued
indefinitely, but the continuation of the Plan is not assumed as a contractual
obligation by any Participating Employer. Each Participating Employer reserves
the right to terminate the Plan with respect to its own participation, or to
discontinue contributions to the Plan with respect to its own participation at
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any time. If the Plan is terminated (in full or in part) or if contributions to
the Plan are discontinued as to any of the Participating Employers, then the
interest of each affected Participant shall remain fully vested. Upon the
termination of the Plan by any Participating Employer, the assets of the Plan
which are attributable to such Participating Employer's participation shall be
distributed in accordance with Section 6.2(c). In the event of a discontinuance
of contributions by any Participating Employer, without a termination of the
Plan, the assets of the Plan that are attributable to such Participating
Employer's participation shall continue to be so held and administered in
accordance with the applicable provisions hereof and of the Trust Agreements or
Insurance Contracts; however, no person employed by such Participating Employer
who was not a Participant immediately prior to such discontinuance of
contributions shall become a Participant until contributions to the Plan are
continued by such Participating Employer.
Section 10.3 Merger
- ------------ ------
The Plan and its assets shall not be merged or consolidated with, nor shall
any assets or liabilities be transferred to, any other plan, unless each
Participant would (if the Plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer that is equal to or greater than
the benefit such persons would have been entitled to receive immediately before
the merger, consolidation, or transfer (if the Plan then terminated).
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ARTICLE XI
MISCELLANEOUS
-------------
Section 11.1 Right to Employment or Benefits
- ------------ -------------------------------
(a) Nothing contained in the Plan shall be deemed to give any Participant a
right to remain in the employ of the Participating Employers.
(b) Nothing contained in the Plan shall be deemed to give any Participant
or Beneficiary any right or claim to benefits except as expressly provided in
the Plan.
Section 11.2 Inalienability
- ------------ --------------
Except as provided in Section 6.4, no Participant or any person having or
claiming to have any interest of any kind or character in or under the Plan
shall have any right to sell, assign, transfer, convey, hypothecate, anticipate,
or otherwise dispose of such interest, and such interest shall not be subject to
any liabilities or obligations of, or any bankruptcy proceedings, claims of
creditors, attachment, garnishment, execution, levy, or other legal process
against such person or person's property. However, the prior sentence shall not
apply to the creation, assignment, or recognition of any benefit payable with
respect to a Participant pursuant to a "qualified domestic relations order" as
defined in Section 414(p) of the Code.
Section 11.3 Facility of Payment
- ------------ -------------------
If any Participant or Beneficiary eligible to receive benefits under this
Plan is, in the opinion of the Plan Administrator, legally, physically, or
mentally incapable of personally receiving and receipting for any payment under
the Plan, the Plan Administrator may direct payments to such other person,
persons, or institutions who, in the opinion of the Plan Administrator, are then
maintaining or having custody of such payee, until claims are made by a duly
appointed guardian or other legal representative of such payee. Such payments
shall constitute a full discharge of the liability of the Plan to the extent
thereof.
Section 11.4 Changes to Plan Necessary to Qualify Under
ERISA and the Code
- --------------------------------------------------------
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Notwithstanding anything herein to the contrary, the company may make any
modifications or amendments of the Plan which it deems necessary or appropriate
in order to enable the Plan to qualify under ERISA and the Code.
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Section 11.5 Construction of Plan
- ------------ --------------------
(a) The headings of articles and sections are included herein solely for
convenience of reference, and if there is any conflict between such headings and
the text of the Plan, the text shall be controlling.
(b) To the extent not preempted by ERISA, the Plan shall be governed,
construed, administered, and regulated according to the laws of the State of
Hawaii.
Section 11.6 Top-Heavy Rules
- ------------ ---------------
If the Plan is or becomes subject to the topheavy rules of Section 416 of
the Code, the provisions of Appendix B shall apply.
TO RECORD the adoption of this amended and restated form of the Plan, the
Committee, on behalf of the Participating Employers, has caused this document to
be executed this 30th day of August, 1995.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By /s/ Peter C. Lewis
-------------------------------
Its Plan Administrator
By /s/ Constance H. Lau
-------------------------------
Its Asset Manager and Secretary
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APPENDIX A
ELECTION RULES
--------------
Section 1. Forms
- ---------- -----
All consents, elections, applications, designations, etc. required or
permitted under the Plan must be made on forms prescribed and furnished by the
Plan Administrator, or in accordance with procedures established by the Plan
Administrator, and shall be recognized only if properly completed, executed, and
returned to the Plan Administrator.
Section 2. Amendments to or Revocations of Elections
- ---------- -----------------------------------------
(a) A Participant's salary reduction agreement and investment elections
shall remain in effect until amended or revoked as provided in this Appendix A.
(b) (1) A salary reduction agreement may be amended or revoked at any
time by completing the Contribution Election Form. Amendments or revocations
shall become effective as soon as practicable following receipt thereof by the
Plan Administrator.
(2) Pursuant to such an amendment a Participant may increase or
decrease the rate of salary reduction (and Salary Reduction Contributions).
(3) Such a revocation shall cause the discontinuation of salary
reduction (and Salary Reduction Contributions).
(c) A Participant may (at such times as may be permitted by the Plan
Administrator and subject to such limitations and procedures as may be
established by the Plan Administrator) (i) revise the portions of future
contributions to the Plan to be invested in the investment alternatives or (ii)
transfer all or a portion of his Accounts invested in one or more of the
investment alternatives to one or more other investment alternatives.
Section 3. Miscellaneous.
- ---------- --------------
Except as otherwise specifically defined in this Appendix A, all terms used
in this Appendix A shall have the same meanings as set forth in Article I of the
Plan.
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APPENDIX B
TOP-HEAVY RULES
---------------
Section 1. Determination of Top-Heavy Status
- ---------- ---------------------------------
For purposes of this Appendix B, the following terms shall have the
meanings set forth below:
(a) Key Employee: Any Employee or former Employee (and the beneficiaries of
such Employee) who at any time during the determination period was:
(i) An officer of a Participating Employer having annual compensation
greater than 50% of the dollar limit specified in section 415(b)(1)(A) of the
Code for any such year; provided however, no more than the lesser of [x] 50
Employees or [y] the greater of three Employees or 10% of all Employees shall be
regarded as officers,
(ii) One of the ten Employees having annual compensation from a
Participating Employer of more than the dollar limit specified in Section
415(c)(1)(A) of the Code and owning (or considered as owning within the meaning
of Section 318 of the Code) the largest interests in the Participating Employer;
provided that if two or more Employees own an equal interest, the Employee
having the greater annual compensation shall be regarded as having the larger
interest,
(iii) A 5% owner of the Participating Employer, or
(iv) A 1% owner of the Participating Employer who has an annual
compensation of more than $150,000.
The determination period is the Plan Year containing the Determination Date and
the four preceding Plan Years. The determination of who is a Key Employee shall
be made in accordance with Section 416(i)(1) of the Code and the regulations
thereunder, and "compensation" shall have the meaning set forth in Section
414(q)(7) of the Code.
A "non-Key Employee" is any Employee who is not a Key Employee.
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(b) Top-heavy plan: The Plan shall be top-heavy if any of the following
conditions exists:
(1) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not
part of any required aggregation group or permissive aggregation group of plans.
(2) If the Plan is a part of a required aggregation group of plans but not
part of a permissive aggregation group and the Top-Heavy Ratio for the group of
plans exceeds 60%.
(3) If this Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the Top-Heavy Ratio for the permissive
aggregation group exceeds 60%.
(4) For purposes of determining whether the Plan is a top-heavy plan, the
accrued benefit of an individual who has not received any compensation from a
Participating Employer at any time during the five-year period ending on the
determination date shall be disregarded.
(c) Top-Heavy Ratio:
(1) If a Participating Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the Participating
Employer has not maintained any defined benefit plan that during the five-year
period ending on the Determination Date has or had accrued benefits, the Top-
Heavy Ratio for the Plan alone or for the required or permissive aggregation
group as appropriate is a fraction, the numerator of which is the sum of the
account balances of all Key Employees as of the Determination Date (including
any part of any account balance distributed in the five-year period ending on
the Determination Date) and the denominator of which is the sum of all account
balances (including any part of any account balance distributed in the five-year
period ending on the Determination Date) of all Participants as of the
Determination Date, both computed in accordance with Section 416 of the Code and
the regulations thereunder. Both the numerator and denominator of the Top-Heavy
Ratio shall be adjusted to reflect any contribution that is due but unpaid as of
the Determination Date and is required to be taken into account on that date
under Section 416 of the Code and the regulations thereunder.
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(2) If a Participating Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the Participating
Employer maintains or has maintained one or more defined benefit plans that
during the five-year period ending on the Determination Date has or had accrued
benefits, the Top-Heavy Ratio for any required or permissive aggregation group
as appropriate is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all Key
Employees and the present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the Determination Date and the
denominator of which is the sum of account balances under the aggregated defined
contribution plans for all Participants and the present value of accrued
benefits under the defined benefit plans for all participants as of the
Determination Date, all as determined in accordance with Section 416 of the Code
and the regulations thereunder. Both the numerator and denominator of the Top-
Heavy Ratio shall be adjusted for any distribution of an account balance or an
accrued benefit made in the five-year period ending on the Determination Date
and any contribution due but unpaid as of the Determination Date.
(3) For purposes of subparagraphs (1) and (2) above, the value of account
balances and the present value of accrued benefits shall be determined as of the
most recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Section 416 of the Code
and the regulations thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a Participant (i)
who is not a Key Employee but who was a Key Employee in a prior year or (ii) who
has not been credited with at least one Hour of Service with any employer
maintaining the Plan at any time during the five-year period ending on the
Determination Date shall be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, and transfers are taken
into account shall be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions shall not be taken
into account for purposes of computing the Top-Heavy Ratio. When aggregating
plans the value of account balances and accrued benefits shall be calculated
with reference to the Determination Dates that fall within the same calendar
year.
(d) Permissive aggregation group: The required aggregation group of plans
plus any other plan or plans of the Participating Employer that, when considered
as a group with the
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required aggregation group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) Required aggregation group: (i) Each qualified plan of the
Participating Employer in which at least one Key Employee participates or
participated at any time during the determination period (regardless of whether
the plan has terminated), and (ii) any other qualified plan of the Participating
Employer that enables a plan described in (i) to meet the requirements of
Sections 401(a)(4) and 410 of the Code. For this purpose, "Participating
Employer" shall include all employers aggregated under Section 414(b), (c), or
(m) with a Participating Employer.
(f) Determination Date: For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year, the
last day of that year.
(g) Valuation Date: The Determination Date as of which account balances or
accrued benefits are valued for purposes of calculating the Top-Heavy Ratio.
(h) Present Value: Present value shall be based only on an 6.5% interest
and mortality rates specified in the UP-1984 Table with ages set back two years
for Participants and seven years for beneficiaries; provided that the present
value of the accrued benefit of a non-Key Employee shall be determined under the
method used for accrual purposes for all defined benefit plans of the
Participating Employers, or if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual permitted under Section
411(b)(1)(C) of the Code.
Section 2. Special Top-Heavy Rules
- ---------- -----------------------
(a) If the Plan is or becomes top-heavy in any Plan Year, the provisions of
this Appendix B shall supersede any conflicting provisions in the Plan.
(b) (1) Except as otherwise provided in subparagraph (3) below, the
Participating Employer contributions allocated on behalf of any Participant who
is not a Key Employee shall be the lesser of (i) 3% of such Participant's
Compensation; or (ii) in the case where the Participating Employer has no
defined benefit plan that designates the Plan to satisfy section 401 of the
Code, the largest percentage of Participating Employer contributions and
forfeitures, as a percentage of the first $200,000 of the Key
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Employee's Compensation, allocated on behalf of any Key Employee for that year.
The minimum allocation shall be determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation because of the
Participant's failure to (i) complete 1,000 Hours of Service (or any equivalent
provided in the Plan), (ii) to make mandatory Employee contributions to the
Plan, or (iii) to earn compensation in excess of a stated amount.
(2) For purposes of computing the minimum allocation, Compensation shall
mean compensation as defined in Section 4.5(d)(2) of the Plan.
(3) If a Participant is covered by both this Plan and a defined benefit
plan, the minimum benefit required by Section 416 of the Code shall be provided
by the defined benefit plan, provided that such benefit shall be offset by the
benefits, if any, provided by this Plan.
(4) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b)) may not be forfeited under Section
411(a)(3)(B) or 411(a)(3)(D) of the Code.
(c) For any Plan Year in which this Plan is top-heavy, the Accounts of each
Participant shall be fully vested. This vesting provision shall apply to all
benefits within the meaning of Section 411(a)(7) of the Code except those
attributable to Employee contributions, including benefits accrued before the
effective date of Section 416 of the Code and benefits accrued before the Plan
became top-heavy. Further, no reduction in vested benefits may occur in the
event the Plan's status as top-heavy changes for any Plan Year. However, this
paragraph does not apply to the account balances of any Employee who does not
have an Hour of Service after the Plan initially becomes top-heavy and such
Employee's account balance attributable to Participating Employer contributions
and forfeitures shall be determined without regard to this paragraph.
(d) For purposes of computing the aggregate limitation on benefits and
contributions for an employee who participates in a defined contribution and
defined benefit plans included in the aggregation group, the dollar limitation
of 1.25 and the denominator of the fraction shall be reduced to 1.0.
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Section 3. Miscellaneous
- ---------- -------------
(a) Except as otherwise specifically defined in this Appendix B, all terms
used in this Appendix B shall have the same meanings as set forth in Article I
of the Plan.
(b) The provisions of this Appendix B shall not apply with respect to any
Employee included in a unit of employees covered by a collective bargaining
agreement if there is evidence the retirement benefits were the subject of good
faith bargaining between Employee representatives and the Participating
Employer. For this purpose, the term "Employee representatives" does not
include any organization more than half of whose members are employees who are
owners, officers, or executives of the Participating Employer.
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APPENDIX C
TO
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Re: American Savings Bank Profit Sharing and
Tax-Favored Retirement Savings Plan
This Appendix C sets forth and incorporates the provisions which will
govern the assets transferred to the Hawaiian Electric Industries Retirement
Savings Plan (the "Plan") from the American Savings Bank, F.S.B. ("ASB") Profit
Sharing and Tax-Favored Retirement Savings Plan (the "ASB Plan"). Unless
otherwise defined herein, all terms defined in the Plan and not defined herein
shall be used herein as defined in the Plan.
1. A separate account (each, an "ASB Account") will be maintained for the
assets transferred from the ASB Plan to the Plan for each former participant in
the ASB Plan, which shall be fully vested and nonforfeitable at all times.
2. The assets transferred from the ASB Plan to the Plan will be governed
by the terms of the Plan as "Contributions" under the Plan, each participant in
the ASB Plan prior to its merger into the Plan will be considered a
"Participant" in the Plan with respect to such assets and each ASB Account will
be considered an "Account" under the Plan, in each case when appropriate in the
context (as determined by the Plan Administrator in his discretion) following
the merger of the ASB Plan into the Plan; provided, however, that distributions
of such assets will be governed by the provisions of the ASB Plan and not by
provisions of the Plan. In particular, the provisions of Article VII
(Retirement Benefits) and Section 8.02 (Distribution of Benefits) of the ASB
Plan, copies of which are attached hereto, shall govern the distribution of said
assets, except that all references to "Trust Committee" shall refer to the Plan
Administrator under the Plan.
3. Notwithstanding the foregoing, the assets transferred from the ASB Plan
to the Plan shall be governed by provisions of the ASB Plan, and by the Internal
Revenue Code of 1986, as amended (the "Code"), and regulations thereunder, to
the extent required by the Code and such regulations.
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ARTICLE VII
-----------
Retirement Benefits
-------------------
7.01 Amount of Retirement Benefits
---- -----------------------------
Upon the termination of employment of a Participant, other than by reason
of death, on or after his Early or Normal Retirement Date, the entire amount of
his Accrued Benefit determined in accordance with Article XII hereof as of the
last Valuation Date coincident with or preceding his termination of employment,
shall be credited to a Retirement Account in his name. All amounts in such
Retirement Account shall be fully vested and nonforfeitable.
7.02 Distribution of Benefits
---- ------------------------
Subject to Section 7.03 and Section 7.05 hereof and after all required
accounting adjustments, a Participant's Retirement Account established under
Section 7.01 hereof shall be distributed to him beginning on his Distribution
Date by whichever one or more of the following methods the Participant shall
elect in writing:
(a) One or more payments constituting a total distribution of the
Participant's entire Retirement Account within a single calendar year;
(b) Payment in substantially equal monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant or the joint life expectancy of the Participant
and his spouse, with all sums remaining in the Trust continuing to share in
Trust earnings or losses; or
(c) With the prior written approval of the Trust Committee, any combination
of the above forms of payment. In this regard a Participant may request
accelerated payment of all or any portion of his Retirement Account at any time
if he has elected option (b) and distribution has commenced.
Unless the Participant specifically elects otherwise as provided in Section
7.05 hereof, his Retirement Account shall be distributed in accordance with
option (a). For purposes of this Section 7.02, "Distribution Date" shall mean
the first day of the first period with respect to which payment of a
Participant's Retirement Account is to begin, regardless of the form of payment.
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The Participant shall not permitted to make any election for an optional
form of payment to himself under which the present value of the Participant's
Retirement Account payable solely to the Participant will not be greater than
fifty percent (50%) of the present value of the total Accrued Benefit payable to
the Participant and his Beneficiaries. The Trust Committee shall determine
"present value" as of the date the Trustee is to commence payment of the
Participant's Retirement Account to him. The Trust Committee shall apply the
provisions of this Section 7.02 in a nondiscriminatory and uniform manner.
Moreover, no distribution of the Participant's Retirement Account shall be
permitted under any method of payment which does not satisfy the minimum
distribution requirements set forth hereafter or which is not consistent with
Treasury regulations. The minimum distribution from a Participant's Retirement
Account for a calendar year shall equal the balance in the Participant's
Retirement Account at the beginning of the year divided by the Participant's
life expectancy or, if applicable, the joint life expectancy of the Participant
and his Beneficiary. In computing a minimum distribution, the Trust Committee
shall use the lie expectancy multiples under Treas. Reg. (S) 1.72-9. The Trust
Committee may compute the minimum distribution for a calendar year subsequent to
the first calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Trust Committee may
not redetermine the joint life expectancy of the Participant and a nonspouse
Beneficiary in a manner which takes into account any adjustment to a life
expectancy other than that of the Participant.
7.03 Time of Distribution
---- --------------------
Unless the Participant otherwise elects in writing, distribution of the
Participant's Retirement Account shall commence no later than sixty (60) days
after the close of the Plan Year in which the Participant attains his Normal
Retirement Date, or if later, the date the Participant terminates his employment
with the Employer. In no event shall distribution of a Participant's Retirement
Account commence later than April 1 following the calendar year in which the
Participant attains age seventy and one half (70-1/2) or if later, April 1
following the calendar year in which the Participant terminates his employment
with the Employer.
Notwithstanding the foregoing, if the Participant is a more than five percent
(5%) owner of the Employer (as defined in Code (S) 416) at any time during the
five (5) Plan Year period ending within the
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calendar year in which the Participant attains age seventy and one half (70
1/2), distribution of his Retirement Account shall commence no later than April
1 following the calendar year in which he attains age seventy and one half (70-
1/2) regardless of whether he continues in the Service of the Employer.
7.04 Annuity Distributions Not Permitted
---- -----------------------------------
No Employee shall be entitled to receive distribution of his Retirement
Account in annuity form. For purposes of this Plan "annuity form" shall mean
any form of distribution whereby payment of a benefit is contingent on the
survival of the Participant or his Beneficiary.
7.05 Election and Payment of Benefit
---- -------------------------------
(a) Upon the Participant's request the Trust Committee shall furnish the
Participant an appropriate form for making a Participant election. The
Participant shall make an election under this Section 7.05 by filing the
election form with the Trust Committee at any time before the anticipated
Distribution Date. A Participant also may elect the form and timing of payment
of his Retirement Account to his Beneficiaries.
(b) To facilitate installment payments under option (b) or (c) of Section
7.02, the Trust Committee in its sole discretion may segregate all or any part
of the Participant's Retirement Account into a separate account. The Trust
Committee may invest the Participant's segregated Retirement Account in
federally insured interest bearing savings account(s) or time deposit(s) (or a
combination of both) or in other fixed income investments. The segregated
Retirement Account shall remain a part of the Trust, but it alone shall share in
any income it earns, and it alone shall bear any expense or loss it incurs.
8.02 Distribution of Benefits
---- ------------------------
Upon the death of a Participant, whether before or after his termination of
employment, his Retirement Account or any balance remaining therein shall be
distributed to his beneficiary within five (5) years of the Participant's death.
If, however, the distribution of the Participant's Retirement Account has
already commenced under a method which the Participant has elected pursuant to
Section 7.02(e), distribution shall continue in accordance with such election
without regard to the five (5) year distribution requirement above. If payments
are to be made to a
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Beneficiary (other than a Surviving Spouse) who has been named by the
Participant pursuant to a valid beneficiary designation notice which is
consented to by the Surviving Spouse and payments commence within one (1) year
from the date of the Participant's death, then payments may be made over any
period certain not to exceed the Beneficiary's life expectancy without regard to
the five (5) year distribution requirement. If payment of the Participant's
Retirement Account is to be made to the Participant's Surviving Spouse, the
Trustee shall make payment over any period certain not to exceed the Surviving
Spouse's life expectancy. If the present value of the Participant's Retirement
Account exceeds $3,500.00, the Trustee shall not commence payment to the
Surviving Spouse prior to the date the deceased Participant would have attained
his Normal Retirement Date unless the Surviving Spouse first consents in
writing. Moreover, at the written election of the Surviving Spouse, the Trustee
may delay commencing payment to any date which is not later than the date on
which the deceased Participant would have attained age seventy and one half (70-
1/2). The Trust Committee shall use the life expectancy multiples under Treas.
Reg. (S)1.72-9 for purposes of this Section. The Trust Committee may recalculate
the life expectancy of the Participant's Surviving Spouse not more frequently
than annually, but may not recalculate the life expectancy of a nonspouse
Beneficiary after the Trust Committee commences payment. The Trust Committee
shall apply this paragraph by treating any amount paid to the Participant's
child which becomes payable to the Participant's Surviving Spouse upon the
child's attaining the age of majority, as paid to the Participant's Surviving
spouse. Upon the Beneficiary's written request, the Trust Committee in its sole
discretion may accelerate payment of all or any portion of the Participant's
unpaid Retirement Account. The Trust Committee may not accelerate payment once
distribution has commenced without the prior written consent of the Beneficiary.
If the Participant has failed to make a valid written election during his
lifetime, then his beneficiary shall have a reasonable time in which to elect in
writing any appropriate method of distribution, subject to the limitations in
this Section. Except as otherwise permitted in this Section, distribution shall
commence no later than the 60th day following the end of the Plan Year in which
the Participant's death occurred.
For purposes of this Article VIII, "Surviving Spouse" shall mean a spouse
of the Participant to whom the Participant has been married throughout the one
(1) year period preceding the date on which distribution of the Participant's
Accrued Benefit commences,
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or if not so married, then married prior to the date on which distribution of
the Participant's Accrued Benefit commences and throughout the one (1) year
period immediately preceding the date of the Participant's death. A former
spouse of the Participant shall also be deemed to be a Surviving Spouse, but
only to the extent provided under a qualified domestic relations order as
defined in Code (S)414(p).
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APPENDIX D
TO
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Re: Hawaiian Tug & Barge Corp. Supplemental
Retirement Plan
This Appendix D sets forth and incorporates the provisions which will
govern the assets transferred to the Hawaiian Electric Industries Retirement
Savings Plan (the "Plan") from the Hawaiian Tug & Barge Corp. Supplemental
Retirement Plan (the "HTB Plan"). Unless otherwise defined herein, all terms
defined in the Plan and not defined herein shall be used herein as defined in
the Plan.
1. A separate account (each, an "HTB Account") will be maintained for the
assets transferred from the HTB Plan to the Plan for each former participant in
the HTB Plan (each, a "HTB Participant"), which shall be fully vested and
nonforfeitable at all time.
2. The assets transferred from the HTB Plan to the Plan will be governed
by the terms of the Plan as "Contributions" under the Plan, each participant in
the HTB Plan prior to its merger into the Plan will be considered a
"Participant" in the Plan with respect to such assets and each HTB Account will
be considered an "Account" under the Plan, in each case when appropriate in the
context (as determined by the Plan Administrator in his discretion) following
the merger of the HTB Plan into the Plan; provided, however, that distributions
of such assets will be governed by the provisions of the HTB Plan and not by
provisions of the Plan. In particular, the provisions of Section 7.2
(Distributions) and Section 7.3 (Special Distribution Rules) of the HTB Plan,
copies of which are attached hereto, shall govern the distribution of said
assets.
3. Notwithstanding anything to the contrary herein or in the Plan, HTB
Participants will not be allowed to borrow against or, prior to the distribution
events set forth in Section 7.1 of the HTB Plan (including the retirement,
disability or termination of employment of the Special Participant), withdraw
assets transferred to the Plan from the HTB Plan.
4. Notwithstanding the foregoing, the assets transferred from the HTB Plan
to the Plan shall be governed by
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provisions of the HTB Plan, and by the Internal Revenue Code of 1986, as amended
(the "Code") and regulations thereunder, to the extent required by the code and
such regulations.
Section 7.2 Distributions.
- ----------- --------------
(a) A Participant's vested interest in his Accounts shall be distributed
only upon his termination of employment with the Participating Employers and the
Associated Companies. No distributions shall be made if a Participant remains
employed by a Participating Employer or an Associated Company in a capacity in
which he is not eligible to participate in the Plan. Except for distribution to
a Beneficiary in the case of death, all distributions shall be to the
Participant.
(b) Distributions shall be made as soon as practicable after the event that
entitled the Participant or, in the case of a Participant's death, his
Beneficiary, to such distribution.
(c) Distributions shall be made in a lump sum.
(d) If a Participant (i) terminated employment, (ii) was not 100% vested in
his Profit Sharing Account, (iii) received a distribution, and (iv) is re-
employed prior to incurring five consecutive One-Year Breaks in Service, the
value of his vested interest ("X") in his Profit Sharing Account after such re-
employment shall be determined by the following formula:
X = P(AB + D) - D
For purposes of this formula, P is the vested percentage at the relevant time;
AB is the account balance at the relevant time; and D is the amount of the
distribution.
Section 7.3 Special Distribution Rules
- ----------- --------------------------
(a) Notwithstanding any other provisions of the Plan, unless a Participant
requests pursuant to this Section 7.3(a), the distribution of a Participant's
Accounts must begin not later than the 60th day after the latest of the close of
the Plan Year in which (i) the Participant attains age 65, (ii) occurs the tenth
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anniversary of the year in which the Participant commenced participation in the
Plan, or (iii) the Participant terminates his service with the Participating
Employers. A Participant may request that distribution of his Accounts commence
at a date later than the latest date provided under the prior sentence. This
request must be made by submitting to the Plan Administrator a written
statement, signed by the Participant, that describes the distribution and the
date on which the Participant requests payment to commence. The Plan
Administrator shall not grant this request if such request would not comply with
the requirements of regulations under Section 401(a)(9) of the Code, including
Treas. Reg. (S) 1.401(a)(9)-2.
(b) (1) If a form of distribution commenced prior to the Participant's
death, the portion, if any, of his Accounts remaining at his death must be
distributed to his Beneficiary at least as rapidly as under such form.
(2) If distribution of the Participant's Accounts had not commenced at
his date of death, such Accounts must be distributed within five years of such
date, unless such Accounts are paid over the life of the Participant's (i)
designated Beneficiary and such payment commences no later than one year after
the Participant's death or (ii) surviving spouse and such payment commences no
later than the date of the Participant would have attained age 70-1/2.
(3) Notwithstanding any other provision of the Plan, a Participant's
vested Accounts must be distributed (or commence to be distributed over his life
expectancy or the joint life expectancies of the Participant and his
Beneficiary) no later than April 1 of the calendar year following the calendar
year in which he attains age 70-1/2.
(4) If the present value of the Member's Participant's vested Accounts
does not exceed $3,500, such vested Accounts shall be distributed as soon as
practicable following the event that entitled the Member to a distribution
thereof. If the present value of the Participant's vested Accounts exceeds
$3,500, written consent of the Participant must be obtained not more than 90
days before the commencement of the distribution of any part of the
Participant's Accounts. If a Participant's vested Accounts are so distributable
to him and he fails to consent to an immediate distribution, such failure shall
be regarded as an election to defer distribution to the later of age 62 or
Normal Retirement Age.
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APPENDIX E
TO
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Re: Hawaiian Electric Industries Stock
Ownership Plan
This Appendix E sets forth and incorporates the provisions which will
govern the assets transferred to the Hawaiian Electric Industries Retirement
Savings Plan (the "Plan") from the Hawaiian Electric Industries Stock Ownership
Plan ("HEISOP"). Unless otherwise defined herein, all terms defined in the Plan
and not defined herein shall be used herein as defined in the Plan.
1. A separate account (each, a "Stock Ownership Account") will be
maintained for the assets transferred from "Stock Ownership Accounts" under
HEISOP to the Plan for each former participant in HEISOP (each, a "HEISOP
Participant"). In addition, a separate account (each, a "Deductible
Contribution Account") will be maintained for the funds transferred from
"Deductible Contribution Accounts" under HEISOP to the Plan for each HEISOP
Participant. Each Stock Ownership Account and each Deductible Contribution
Account maintained under the Plan shall be fully vested and nonforfeitable at
all time.
2. The assets transferred from HEISOP to the Plan will be governed by the
terms of the Plan as "Contributions" under the Plan, each participant in HEISOP
prior to its merger into the Plan will be considered "Participant" in the Plan
with respect to such transferred assets and each Stock Ownership Account and
Deductible Contribution Account will be considered an "Account" under the Plan,
in each case when appropriate in the context (as determined by the Plan
Administrator in his or her discretion) following the merger of HEISOP into the
Plan; provided, however, that distributions and withdrawals of such assets will
be governed by the provisions of HEISOP and not by provisions of the Plan;
provided, further, that the investment of such assets will continue to be
governed by the provisions of HEISOP and not by provisions of the Plan. in
particular, the provisions of Article V (Benefits), Section 7.4 (Diversification
of Investments) and Article XIII (Deductible Participant Contributions) of
HEISOP, copies of which are attached hereto, shall govern the distribution and
withdrawal of said assets. As to the voting of shares of common stock of the
company held in Stock Ownership Accounts and
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Deductible Contribution Accounts, such shares will be voted, and notices and
other materials relating to stockholder meetings and tender offers will be
handled, in the same manner as other shares held under the Plan, except that
shares attributable to "Tax Credit Contributions" under Section 4.2(a) of HEISOP
will not be voted absent instructions from a Special Participant as to the
voting of such shares.
3. Notwithstanding anything to the contrary herein or in the Plan, HEISOP
Participants will not be allowed to borrow against assets transferred to the
Plan from HEISOP.
4. Notwithstanding the foregoing, the assets transferred from HEISOP to
the Plan shall be governed by provisions of HEISOP, and by the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations thereunder, to the extent
required by the Code and such regulations.
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ARTICLE V
BENEFITS
Section 5.1 Nonforfeitable Right To Stock Ownership Account
- ----------- -----------------------------------------------
A Participant's Stock Ownership Account shall always be fully vested and
nonforfeitable.
Section 5.2 Distribution Of Stock Ownership Account
- ----------- ---------------------------------------
(a) (1) Except as provided in Section 8.2, a Participant's Stock
Ownership Account shall be distributed only at such time as the Participant
ceases to be an employee by reason of retirement, disability, death, or other
termination of employment. Such a distribution shall be made to the
Participant, or where applicable, to his beneficiary, in a lump sum no later
than 60 days following the close of the Plan Year during which such event
occurs.
(2) A Participant may request that the payment to the Participant of
benefits under this Plan commence at a date later than the date provided under
paragraph (1) of this Section 5.2(a). This request must be made by submitting
to the Company a written statement, signed by the Participant, which describes
the benefit and the date on which the Participant requests payment to commence.
The Company in its sole discretion shall decide whether to grant the
Participant's request. The Company shall not grant this request if such request
would cause death benefits payable under this Plan with respect to the
Participant to be more than "incidental" within the meaning of the applicable
Treasury regulations. Notwithstanding any other provision of the Plan, a
Participant's benefits under the Plan must be distributed in a manner
permissible under Section 5.4.
(b) (1) If a Participant's Stock Ownership Account is credited with less
than ten shares of Common Stock, distribution therefrom shall, at the
Participant's (or, in the case of the Participant's death, his Beneficiary's)
option, be made in whole or in part in the form of Common Stock (except for
fractional shares, which shall be distributed in cash) or cash. If a
Participant's Stock Ownership Account is credited with ten or more shares of
Common Stock, distribution therefrom shall be made in the form of Common Stock
(except for fractional shares, which shall be distributed in cash).
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(2) Fractional shares shall be valued by reference to their fair market
value. For purposes of this Section 5, fair market value shall mean the closing
sales price recorded on the New York Stock Exchange - Composite Transactions for
the last trading day on which there were recorded sales preceding the effective
date of the distribution.
(c) (1) A Participant may withdraw the shares of the Common Stock
credited to his Stock Ownership Account prior to his termination of employment
only with the consent of his spouse and the Company; but only for an amount
authorized by the Company. Such withdrawals shall be permitted only upon a
showing by the Participant to the Company of a financial need for such a
withdrawal to meet an unusual or special situation in his financial affairs. A
request for withdrawal shall be made by filing a claim with the Company as
provided in Article VII. No such withdrawal may be made of shares of the Common
Stock which have been allocated to his Stock Ownership Account for less than 84
months from the end of the month in which such shares were so allocated.
(2) Notwithstanding the prior paragraph, a Participant may at any time
upon written request withdraw that portion of his Stock Ownership Account that
represents his voluntary contribution to his Stock Ownership Account in excess
of the amount of any matching Contributions allocated thereto.
(3) The consent of the Participant's spouse must be in a written
instrument (i) in which the spouse acknowledges the effect of such election and
(ii) witnessed by an authorized representative of the Plan or a notary public.
Such written instrument shall not be required if it is established to the
satisfaction of the authorized representative of the Plan that such consent may
not be obtained because there is no spouse, the spouse cannot be located, or
such other circumstances as Treasury Regulations may prescribe.
Section 5.3 Voting of Shares
- ----------- ----------------
Each Participant shall be entitled to direct the Trustee as to the manner
in which any Common Stock allocated to his Stock Ownership Account shall be
voted. The Company shall furnish to each Participant a proxy statement adequate
for such purpose. To the extent that Participants fail to direct the voting of
Common Stock allocated to their accounts, such shares shall not be voted.
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Section 5.4 Special Distribution Rules
- ----------- --------------------------
(a) If a form of distribution commenced prior to the Participant's death,
the portion, if any, of his Stock Ownership Account remaining at his death must
be distributed to his beneficiary at least as rapidly as under such form.
(b) If distribution of the Participant's Stock Ownership Account had not
commenced at his date of death, the Stock Ownership Account must be distributed
within five years of such date, unless the account is paid over the life of the
Participant's (i) designated beneficiary and such payment commences no later
than one year after the Participant's death or (ii) surviving spouse and such
payment commences no later than the date the Participant would have attained age
70 1/2.
(c) Notwithstanding any other provision of the Plan, a Participant's Stock
Ownership Account must be distributed (or commence to be distributed over his
life expectancy or the joint life expectancies of the Participant and his
beneficiary) no later than April 1 of the calendar year following the later of
the year in which he (i) attains age 70 1/2 or (ii) retires, provided that such
interest of a five percent owner of the Participating Employer must be
distributed (or commence to be distributed over the period set forth above) by
April 1 of the calendar year following the year in which he attains age 70 1/2
even if he remains as an Employee.
(d) If the present value of the Participant's Stock Ownership Account
exceeds $3,500, written consent of the Participant (and the Participant's spouse
if the spouse's consent is required) must be obtained not more than 90 days
before the commencement of the distribution of any part of the Participant's
Stock Ownership Account. If such a Participant fails to consent to an immediate
distribution, such failure shall be regarded as an election to defer
distribution to the later of age 62 or the normal retirement age of the
Participant.
2. Effective January 1, 1987, Article VII is amended by adding a new
Section 7.4, to read as follows:
Diversification of Investments
------------------------------
(a) Each qualified Participant in the Plan may elect within ninety
(9O) days after the close of each Plan Year in the qualified
election period to
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direct the Plan as to the investment of at least 25 percent of
the Participant's Stock Ownership Account in the Plan (to the
extent such portion exceeds the amount to which a prior election
under this Section 7.4 applies). In the case of the election year
in which the Participant can make his last election, the
preceding sentence shall be applied by substituting "50 percent"
for "25 percent."
(b) The Plan shall be treated as meeting this requirement if --
(i) the portion of the Participant's Stock Ownership
Account covered by the election under clause (a) is
distributed within ninety (90) days after the period
during which the election may be made, or
(ii) the Plan offers at least three (3) investment options
(not inconsistent with regulations prescribed by the
Secretary) to each Participant making an election under
clause (i) and within ninety (90) days after the period
during which the election may be made, the Plan invests
the portion of the Participant's Stock Ownership
Account covered by the election in accordance with such
election.
(c) For purposes of this Section 7.4, the term "qualified
Participant" means any Employee who has completed at least ten
(10) years of participation under the Plan and has attained age
55. Furthermore, the term "qualified election period" means the
6-Plan-Year period beginning with the later of--
(i) the 1st Plan Year in which the individual first became a
qualified Participant, or
(ii) the 1st Plan Year beginning after December 31, 1986.
For purposes of the preceding sentence, the Company may elect to
treat an individual first becoming a
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qualified Participant in the 1st Plan Year beginning in 1987 as
having become a Participant in the beginning in 1988.
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ARTICLE XIII
DEDUCTIBLE PARTICIPANT CONTRIBUTIONS
Section 13.1 Election To Make Deductible Contributions
- ------------ -----------------------------------------
(a) In addition to or in lieu of making contributions pursuant to Section
3.1, a Participant may elect in writing on a form prescribed by the Company to
make Deductible Contributions (as defined in Section 13.7) to the Plan. Such
Deductible Contributions may not exceed the lesser of $2,000 or 100% of the
Participant's Total Compensation (as defined in Section 13.7) with respect to
the calendar year for which such Deductible Contributions are made. No
Deductible Contributions may, however, be made with respect to any calendar year
(i) in which the Participant attains age 70-1/2 or any subsequent calendar year
or (ii) after 1986.
(b) Pursuant to such rules as may be adopted by the Company, Deductible
Contributions may be made by a Participant either by periodic payroll deductions
or in cash. Deductible Contributions shall not be credited to the Deductible
Contributions Account (as defined in Section 13.7) of the Participant until the
first day of the month following the month in which such contribution is made.
(c) Any contributions by a Participant in excess of the amount deductible
by such Participant under Section 219 of the Code shall be regarded as a
voluntary Participant contribution, transferred to the Participant's Stock
Ownership Account, and treated as such pursuant to Section 3.1 of the Plan.
Section 13.2 Separate Records
- ------------ ----------------
The Company shall keep or cause to be kept separate records regarding
Deductible Contributions and Deductible Contribution Accounts.
Section 13.3 Vesting
- ------------ -------
A Participant's Deductible Contributions Account shall always be fully
vested and nonforfeitable notwithstanding any other provision of this Plan.
Section 13.4 Investment Of Deductible Contributions Accounts
- ------------ -----------------------------------------------
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All Deductible Contributions Accounts shall be invested to the extent
possible in Common Stock. Such Common Stock may be purchased by the Trustee
from the company or any other source, and such Common Stock may be outstanding
or newly issues shares. All such purchases must be made at fair market value.
If no Common Stock is available for purchase, the Trustee is authorized to
temporarily retain cash uninvested or invested, all or in part, in short-term
investments.
Section 13.5 Distributions
- ------------ -------------
(a) Distributions of a Participant's Deductible Contributions Account shall
be in the manner set forth in this Section 13.5. No distribution from a
Deductible Contributions Account shall be made prior to the time the Participant
attains age 59-1/2 except in the case of the Participant's death, disability,
termination of employment with the Participating Employers, termination of the
Plan, or withdrawal pursuant to Section 13.6.
(b) At any time after a Participant has attained age 59-1/2 or incurred
disability, he may request a distribution of his Deductible Contributions
Account.
(c) Upon a Participant's termination of employment with the Participating
Employers prior to attainment of age 59-1/2 or upon termination of the Plan, the
Participant's Deductible Contributions Account shall be distributed to the
Participant.
(d) In the event of a Participant's death while any balance remains in the
Participant's Deductible Contributions Account, such balance will be paid in a
lump sum to the Participant's Beneficiary.
(e) Distributions under this Section 13.5 shall be made as soon as
practicable following the end of the month in which the Trustee receives notice
to make such distribution from the Company. Each distribution shall be based
upon the value of the Participant's Deductible Contributions Account as of the
end of the month in which the Trustee receives said notice. The form of such
distributions shall be in accordance with the provisions of Section 5.2.
Section 13.6 Withdrawal
- ------------ ----------
-72-
<PAGE>
(a) A Participant may withdraw from his or her Deductible Contributions
Account any of the balance thereof, provided the Participant requests such
withdrawal by an instrument in writing submitted to the Company. Any such
request for withdrawal made before the Participant reaches age 59-1/2 shall
contain a declaration of the Participant's intention as to the disposition of
the amount withdrawn. No more than one withdrawal may be made in any calendar
year.
(b) Withdrawals under this Section 13.6 shall be treated as distributions
and made pursuant to the provisions of Section 13.5(e).
Section 13.7 Definitions and General Provisions
- ------------ ----------------------------------
(a) As used in the Article XIII, the following terms shall have the
meanings set forth below:
(i) Deductible Contributions: A Participant's contributions to the Plan
pursuant to this Article XIII that are deductible from income for a taxable year
of such Participant pursuant to Section 219 of the Code.
(ii) Deductible Contributions Account: An account recording the aggregate
amount of the Participant's Deductible Contributions as adjusted for allocations
of income or loss, withdrawals, and other factors affecting the value of such
account.
(iii) Total Compensation: The total amount of the Participant's
compensation for purposes of Section 219 of the Code.
(b) All other terms used in this Article XIII shall have the same meanings
as set forth in Article I of the Plan.
(c) The provisions of Article VI of this plan shall not apply to the
Deductible Contributions of a Participant.
(d) In accordance with the provisions of Section 5.3, each Participant
shall be entitled to direct the Trustee as to the manner in which any Common
Stock allocated to said Participant's Deductible Contributions Account shall be
voted.
-73-
<PAGE>
APPENDIX F
TO
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Re: First Nationwide Employees' Investment Plan
This Appendix F sets forth and incorporates the provisions which will
govern the assets transferred to the Hawaiian Electric Industries Retirement
Savings Plan (the "Plan") from the First Nationwide Employees' Investment Plan
(the "FNB Plan"). Unless otherwise defined herein, all terms defined in the
Plan and not defined herein shall be used herein as defined in the Plan.
1. Assets of the FNB Plan attributable to employer contributions shall be
held as part of the separate accounts (the "ASB Accounts") established for
assets transferred to the Plan from the ASB Plan, while assets of the FNB Plan
attributable to employee contributions shall be held in a Salary Reduction
Account under the Plan for each former participant in the FNB Plan. All amounts
transferred from the FNB Plan to the Plan, shall be fully vested and
nonforfeitable at all times.
2. The assets transferred from the FNB Plan to the Plan will be governed
by the terms of the Plan and each participant in the FNB Plan prior to this
transfer of assets and into the Plan will be considered a "Participant" in the
Plan with respect to such assets, in each case when appropriate in the context
(as determined by the Plan Administrator in his discretion).
3. Notwithstanding the foregoing, the assets transferred from the FNB Plan
to the Plan shall be governed by provisions of the FNB Plan, and by the Internal
Revenue Code of 1986, as amended (the "Code"), and regulations thereunder, to
the extent required by the Code and such regulations.
-74-
<PAGE>
APPENDIX G
TO
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Re: HEI Diversified Defined Contribution
Pension Plan
This Appendix G sets forth the provisions which will govern the assets
and liabilities transferred to the Hawaiian Electric Industries Retirement
Savings Plan (the "Plan") from the HEI Diversified Defined Contribution Pension
Plan (the "HEIDI Plan") (such assets and liabilities being hereinafter referred
to as the "Transferred Assets"). Unless otherwise defined herein, all terms
defined in the Plan and not defined herein shall be used herein as defined in
the Plan.
1. A separate account will be maintained for the Transferred Assets for
each Special Participant (each, a "HEIDI Account"), which shall be fully vested
and nonforfeitable at all times.
2. The Transferred Assets will be governed by the terms of the Plan as
"Contributions" under the Plan, each Special Participant who was a participant
in the HEIDI Plan prior to the transfer of the Transferred Assets will be
considered a "Participant" in the Plan with respect to such Transferred Assets
and each HEIDI Account will be considered an "Account" under the Plan, in each
case when appropriate in the context (as determined by the Plan Administrator in
his discretion) following the transfer of the Transferred Assets; provided,
however, that distributions of such Transferred Assets will be governed by the
provisions of the HEIDI Plan, unless and until such provisions are amended
pursuant to the Plan, and by provisions of the Plan to the extent they are not
inconsistent with such HEIDI Plan provisions (as determined by the Plan
Administrator). In particular, the provisions of Section 7.2 (Distributions)
and 7.3 (Special Distribution Rules) of the HEIDI Plan, copies of which are
attached hereto, shall govern the distribution of said Transferred Assets.
3. Notwithstanding the foregoing, the Transferred Assets shall be governed
by provisions of the HEIDI Plan, and by the Internal Revenue Code of 1986, as
amended (the "Code"), to the extent required by the Code and such regulations.
-75-
<PAGE>
Section 7.2 Distributions
- ----------- -------------
(a) A Participant's vested interest in his Accounts shall be distributed
only upon his termination of employment with the Participating Employers and the
Associated Companies. No distributions shall be made if a Participant remains
employed by a Participating Employer or an Associated Company in a capacity in
which he is not eligible to participate in the Plan. Except for distribution to
a Beneficiary in the case of death, all distributions shall be to the
Participant.
(b) Distributions shall be made as soon as practicable after the event that
entitled the Participant or, in the case of a Participant's death, his
Beneficiary, to such distribution.
(c) Distributions shall be made in a lump sum.
(d) If a Participant (i) terminated employment, (ii) was not 100% vested in
his Employer Contribution Account, (iii) received a distribution, and (iv) is
re-employed prior to incurring five consecutive One-Year Breaks in Service, the
value of his vested interest ("X") in his Employer Contribution Account after
such re-employment shall be determined by the following formula:
X = P(AB + D) - D.
For purposes of this formula, P is the vested percentage at the relevant time;
AB is the account balance at the relevant time; and D is the amount of
distribution.
Section 7.3 Special Distribution Rules
- ----------- --------------------------
(a) Notwithstanding any other provisions of the Plan, unless a Participant
requests pursuant to this Section 7.3(a), the distribution of a Participant's
Accounts must begin not later than the 60th day after the latest of the close of
the Plan Year in which (i) the Participant attains age 65, (ii) occurs the tenth
anniversary of the year in which the Participant commenced participation in the
Plan, or *iii) the Participant terminates his service with the Participating
Employers. A Participant may request that distribution of his Accounts commence
at a date later than the latest date provided under the prior sentence. This
request must be made by submitting to the Plan Administrator a written
statement, signed by the Participant, that describes the distribution and the
date on which the Participant requests payment to commence. The Plan
Administrator shall not grant this
-76-
<PAGE>
request if such request would not comply with the requirements of regulations
under Section 401(q)(98) of the Code, including Treas. Reg. (S)1.401(a) 91-2.
(b) (1) If a form of distribution commenced prior to the Participant's
death, the portion, if any, of his Accounts remaining at his death must be
distributed to his Beneficiary at least as rapidly as under such form.
(2) If distribution of the Participant's Accounts had not commenced at his
date of death, such Accounts must be distributed within five years of such date,
unless such Accounts are paid over the life of the Participant's (i) designated
Beneficiary and such payment commences no later than one year after the
Participant's death or (ii) surviving spouse and such payment commences no later
than the date the Participant would have attained age 70-1/2.
(3) Notwithstanding any other provision of the Plan, a Participant's vested
Accounts must be distributed (or commence to be distributed over his life
expectancy or the joint life expectancies of the Participant and his
Beneficiary) no later than April 1 of the calendar year following the calendar
year in which he attains age 70-1/2, whether or not he has retired by that date.
(4) If the present value of the Member's Participant's vested Accounts does
not exceed $3,500, such vested Accounts shall be distributed as soon as
practicable following the event that entitled the Member to a distribution
thereof. If the present value of the Participant's vested Accounts exceeds
$3,500, written consent of the Participant must be obtained not more than 90
days before the commencement of the distribution of any part of the
Participant's Accounts. If a Participant's vested Accounts are so distributable
to him and he fails to consent to an immediate distribution, such failure shall
be regarded as an election to defer distribution to the later of age 62 or
Normal Retirement Age.
-77-
<PAGE>
EXHIBIT 4(e)
AMENDMENT 1995-1
TO THE
HAWAIIAN ELECTRIC INDUSTRIES RETIREMENT SAVINGS PLAN
----------------------------------------------------
In accordance with Section 10.1 of the Hawaiian Electric Industries
Retirement Savings Plan (the "Plan"), the Hawaiian Electric Industries, Inc.
Pension Investment Committee hereby amends the Plan as follows:
1. Paragraph 2 of Appendix E is deleted in its entirety and is replaced by
a new paragraph 2 to read as follows:
"2. The assets transferred from HEISOP to the Plan will be governed by
the terms of the Plan as "Contributions" under the Plan, each
participant in HEISOP prior to its merger into the Plan will be
considered a "Participant" in the Plan with respect to such transferred
assets and each Stock Ownership Account and Deductible Contribution
Account will be considered an "Account" under the Plan, in each case
when appropriate in the context (as determined by the Plan
Administrator in its discretion) following the merger of HEISOP into
the Plan; provided, however, that distributions and withdrawals of such
assets will be governed by the provisions of HEISOP and not by
provisions of the Plan. In particular, the provisions of Article V
(Benefits) and Article XIII (Deductible Participant Contributions) of
HEISOP, copies of which are attached hereto, shall govern the
distribution and withdrawal of said assets. As to the voting of shares
of common stock of the company held in Stock Ownership Accounts and
Deductible Contribution Accounts, such shares will be voted, and
notices and other materials relating to stockholder meetings and tender
offers will be handled, in the same manner as other shares held under
the Plan, except that shares attributable to "Tax Credit Contributions"
under Section 4.2(a) of HEISOP will not be voted absent instructions
from a Special Participant as to the voting of such shares."
2. A new paragraph 5 is added to Appendix E to read as follows:
"5. Beginning February 1, 1996, HEISOP Participants may begin
diversifying their Stock Ownership Accounts and
<PAGE>
Deductible Contribution Accounts as follows:
(a) HEISOP Participants may diversify, on a cumulative basis, up
to the "Applicable Percentage" of the Common Stock in their Stock
Ownership Accounts and Deductible Contribution Accounts on
December 31, 1995. The "Applicable Percentage" in effect from
time to time shall be as follows:
Effective Date Applicable Percentage
-------------- ---------------------
February 1, 1996 25%
January 1, 1997 50%
January 1, 1998 75%
Accordingly, the total number of shares of Common Stock available
for diversification by a HEISOP Participant at any time shall be
the Applicable Percentage (in effect at the time) of the Common
Stock in the HEISOP Participant's Stock Ownership Account and
Deductible Contribution Account on December 31, 1995, less the
number of shares previously diversified by the HEISOP
Participant.
(b) Commencing January 1, 1999, HEISOP Participants may diversify
100% of the Common Stock in their Stock Ownership Accounts and
Deductible Contribution Accounts.
Upon diversification, the Stock Ownership Accounts and Deductible
Contribution Accounts of HEISOP Participants shall be invested as
directed by the HEISOP Participants in accordance with Section 5.2,
hereunder. Effective January 1, 1999, Sections 7.4 and 13.4 of the
HEISOP, which are attached to this Plan, shall be disregarded."
3. Section 5.2 of the Plan is amended by adding a new paragraph (h) to
read as follows:
"(h) (1) The Participating Employers, the Committee, the Trustee, and
the Asset Manager intend this Plan to constitute a plan described in
Section 404(c) of ERISA. Section 404(c) insulates fiduciaries from
liability for
2
<PAGE>
losses which result from Participant-directed investments. Except as
provided in Section 5.2(b)(1), hereinabove, all investments in this
Plan shall be Participant-directed.
(2) The Committee has instituted procedures intended to meet the
requirements of Section 404(c) of ERISA. These procedures provide, in
part, a means for Participants to give investment instructions with
respect to their Accounts and to receive written confirmation that
their instructions have been carried out."
4. Section 11.2 of the Plan is deleted in its entirety and is replaced
by a new Section 11.2 to read as follows:
"11.2 Inalienability; QDROs
----------------------------
(a) Subject to the exception provided in Section 11.2(b), below, and
subject to the provisions with respect to Plan loans in Section 6.4,
hereinabove, a Participant's Accounts shall not be subject in any
manner to alienation, sale, transfer, assignment, pledge, encumbrance,
or charge, and any attempt to alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be void. Furthermore, no Account
shall be subject in any manner to the debts, contracts, liabilities,
engagements, or torts of any Participant, nor shall any Account be
subject to attachment or legal process against a Participant, and any
attempt to attach a Participant's Accounts shall not be recognized by
the Plan Administrator, except to the extent required by law.
(b) The prohibition against alienation in Section 11.2(a) shall not
apply to a Participant's Account that is subject to a Qualified
Domestic Relations Order. The Plan Administrator has established
procedures in accordance with Section 414(p) of the Code for
determining whether a domestic relations order ("DRO") is a Qualified
Domestic Relations Order ("QDRO") within the meaning of Code Section
414(p)(1)(A) and for notifying the Participant and each "alternate
payee," as defined in Section 414(p)(8) of the Code, of the Plan
Administrator's receipt of the DRO and of its procedures
3
<PAGE>
to determine whether the DRO is a QDRO.
c. If the Plan Administrator determines that a DRO constitutes a QDRO,
the QDRO shall be honored by the Plan Administrator. To the full extent
permitted by Section 414(p)(10) of the Code and by the terms of the
particular QDRO, amounts assigned to an alternate payee may be paid as
soon as possible, in a lump sum, notwithstanding age, employment
status, or other factors that might prevent the Participant from
receiving a distribution from his or her Accounts at the same time. If
an amount assigned to an alternate payee will not be paid promptly, it
shall be segregated and invested separately pending distribution."
5. Section 6.2(a)(2) is deleted in its entirety and is replaced by a new
Section 6.2(a)(2) to read as follows:
"(2) Subject to Section 6.6, distributions shall be made as soon as
practicable after the event that entitled the Participant or, in the
case of a Participant's death, his Beneficiary, to such distribution."
6. Section 3.3 is deleted in its entirety and is replaced by a new Section
3.3 to read as follows:
"Section 3.3 Rollover Contributions
------------------------------------
(a) Any Participant who has received a distribution from a qualified
employee pension benefit plan or annuity plan may make a contribution
to a Rollover Account established on his behalf; provided that proper
verification is provided and the Plan Administrator, in its sole
discretion, agrees in writing to such a contribution. The Plan shall
only accept rollover contributions of amounts which are "direct
rollovers," as defined in Section 1.401(a)(31)-1T(Q&A 3) of the
Treasury Regulations. The Plan shall not accept rollovers from
individual retirement accounts, whether or not the funds involved
originally were received as distributions from a qualified employee
pension benefit plan.
(b) A rollover contribution transferred to this Plan shall be added to
the Participant's Accounts and shall
4
<PAGE>
be subject to the rules on distributions set forth in Sections 6.2,
6.4, 6.5, and 6.6, hereunder."
7. Section 1.1 is deleted in its entirety and is replaced by a new Section
1.1 to read as follows:
"1.1 Accounts means a Participant's Salary Reduction Account,
--------
Participant Voluntary Contributions Account, and Rollover Account.
Where appropriate in the context (as determined by the Plan
Administrator in his discretion), Accounts shall also include separate
accounts maintained for Special Participants for assets transferred to
the Plan from any Merged Plan. "Merged Plan" shall mean the Hawaiian
Electric Industries Stock Ownership Plan, the American Savings Bank
Profit Sharing and Tax-Favored Retirement Savings Plan, the HEI
Diversified Defined Contribution Plan, the First Nationwide Plan, and
the Hawaiian Tug & Barge Corp. Supplemental Retirement Plan upon their
merger into the Plan, and any other plan maintained by the Company or
an affiliate of the Company upon its merger into the Plan in the
future."
8. The Table of Contents is deleted in its entirety and is replaced by a
new Table of Contents to read as attached hereto.
TO RECORD the adoption of these amendments to the Plan, the Hawaiian
Electric Industries, Inc. Pension Investment Committee has caused this document
to be executed this 18th day of December, 1995.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By /s/ Constance H. Lau
--------------------------
Its member and Secretary
By /s/ Peter C. Lewis
--------------------------
Its member
5
<PAGE>
EXHIBIT 4(j)
FOURTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
HAWAIIAN ELECTRIC INDUSTRIES, INC.
THIS FOURTH AMENDMENT TO TRUST AGREEMENT is made and entered into February
1, 1996, by and between Hawaiian Electric Industries, Inc. (the "Sponsor") and
Fidelity Management Trust Company (the "Trustee").
W I T N E S S E T H:
--------------------
WHEREAS, the Sponsor and the Trustee have entered into a trust agreement
dated November 28, 1988, and amended December 22, 1989, January 1, 1994, and
March 15, 1994 (the "Trust Agreement") for the Hawaiian Electric Industries
Retirement Savings Plan (the "Plan"); and
WHEREAS, the Sponsor and the Trustee wish to further amend the Trust
Agreement as provided in Section 13 thereunder; and
WHEREAS, the Sponsor heretofore established three trusts: the first, for
which Peter C. Lewis and Constance H. Lau serve as trustee, to hold the Plan
assets invested in Hawaiian Electric Industries, Inc. common stock and in the
ASB Money Market Account and to hold uninvested Plan contributions and
repayments of Plan loans until such amounts are invested as directed by
participants in accordance with the Plan; the second, for which Hawaiian Trust
Company, Limited, serves as trustee, to vote the Plan assets invested in
Hawaiian Electric Industries, Inc. common stock; and the third, for which the
Trustee serves as trustee, to hold and invest the remaining Plan assets for the
exclusive benefit of participants in the Plan and their beneficiaries; and
WHEREAS, contemporaneously with this Fourth Amendment to Trust Agreement,
the Sponsor has removed Peter C. Lewis and Constance H. Lau as trustee with
respect to Plan assets invested in the ASB Money Money Market Account and wishes
to appoint the Trustee to succeed to such responsibilities; and
WHEREAS, the Trustee is willing to succeed to the responsibilities of
trustee for Plan assets invested in the ASB Money Market Account;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements set forth below, the Sponsor and the Trustee agree as
follows:
1. The Sponsor hereby appoints the Trustee to serve as trustee for Plan
assets invested in the ASB Money Market Account, such appointment to be
effective as of the date of this Fourth Amendment to Trust Agreement.
<PAGE>
2. The Trustee hereby accepts the appointment to serve as trustee for Plan
assets invested in the ASB Money Market Account and agrees to take any and all
steps which may be necessary or desirable to facilitate the transfer of title to
said assets from Peter C. Lewis and Constance H. Lau to the Trustee.
3. The Trust Agreement is hereby amended as follows:
(a) Schedules "A," "C," "G," and "I" are hereby restated as
attached hereto.
IN WITNESS WHEREOF, the Sponsor and the Trustee have caused this Fourth
Amendment to Trust Agreement to be executed by their duly authorized officers or
agents effective as of the date first written above.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
By Hawaiian Electric Industries, Inc.
Pension Investment Committee
By /s/ Constance H. Lau
--------------------------------------
Constance H. Lau
Asset Manager & Secretary
By /s/ Peter C. Lewis
-------------------------------------
Peter C. Lewis
Member
FIDELITY MANAGEMENT TRUST COMPANY
By /s/ Christina L. Epstein
------------------------
Its Vice President
2
<PAGE>
SCHEDULE "A"
ADMINISTRATIVE SERVICES
-----------------------
Administration
- --------------
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the following plan investment options:
- Fidelity Retirement Money Market Portfolio
- ASB Money Market Account
- Hawaiian Electric Industries, Inc. Common Stock (Fidelity Management
Trust Company does not serve as Trustee)
- Fidelity Puritan Fund
- Fidelity Magellan Fund
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Overseas Fund
- Fidelity Global Bond Fund
* Maintenance of the following money classifications:
- Salary Reduction
- Participant Voluntary
- Rollover
- HEI Diversified Plan
- Employer ASB
- Employer Supplemental
- IRA
- Voluntary HEISOP
- Employer HEISOP
* Processing of investment option trades.
The Trustee will provide only the recordkeeping and administrative services
set forth on this Schedule "A" and no others.
<PAGE>
Processing
- ----------
* Weekly processing of contribution data and contributions
* Processing of transfers and changes of future allocations via the
telephone exchange system, subject, however, to the following limitations:
Transfers to and from the Hawaiian Electric Industries, Inc. Common Stock
investment option shall be accomplished via hard copy only.
* Monthly processing of withdrawals.
Other
- -----
* Monthly trial balance
* Quarterly administrative reports
* Quarterly participant statements
* 1099Rs and W-2Ps
* Participant Loans
HAWAIIAN ELECTRIC INDUSTRIES, INC. FIDELITY MANAGEMENT TRUST COMPANY
BY: HAWAIIAN ELECTRIC INDUSTRIES,
PENSION INVESTMENT COMMITTEE
By /s/ Constance H. Lau 2/1/96 By /s/ Christina L. Epstein 2/1/96
------------------------------ ----------------------------------
Constance H. Lau Date Vice President Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 2/1/96
------------------------------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "C"
INVESTMENT OPTIONS
------------------
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:
- Fidelity Retirement Money Market Portfolio
- ASB Money Market Account
- Hawaiian Electric Industries, Inc. Common Stock (Fidelity Management
Trust Company does not serve as Trustee)
- Fidelity Puritan Fund
- Fidelity Magellan Fund
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Overseas Fund
- Fidelity Global Bond Fund
The investment option referred to in Section 4(c) and Section 4(e)(v)(B)(5)
shall be the ASB Money Market Account.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
BY: HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By: /s/ Constance H. Lau 2/1/96
-------------------- ------
Constance H. Lau Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 2/1/96
------------------ ------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
-----------------------------
The following telephone exchange guidelines are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone exchange guidelines at its
discretion. FIRSCO will notify the Sponsor of its intent to change these
guidelines prior to any change being instituted.
MUTUAL FUNDS
------------
EXCHANGES BETWEEN MUTUAL FUNDS
------------------------------
Participants may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m. (ET) will be
processed on a next business day basis.
SPONSOR STOCK
-------------
I. EXCHANGES FROM MUTUAL FUNDS INTO SPONSOR STOCK
----------------------------------------------
Participants who wish to exchange from a mutual fund into Sponsor Stock may
call on any business day; however, all trades are held until the 10th of the
month. No calls will be accepted after 4:00 p.m. (ET) on the 10th (or
previous business day if the 10th is not a business day).
Mutual fund shares are sold on the 10th of the month (or the previous
business day if the 10th is not a business day) and the Sponsor Stock
generally is purchased within two (2) business days after the date on which
the mutual fund shares are sold.
II. EXCHANGES FROM SPONSOR STOCK INTO MUTUAL FUNDS AND ASB MONEY MARKET ACCOUNT
---------------------------------------------------------------------------
Participants who wish to exchange from Sponsor Stock into mutual funds or
ASB Money Market Account may call on any business day; however, all trades
are held until the 10th of the month. No calls will be accepted after 4:00
p.m. (ET) on the 10th (or previous business day if the 10th is not a
business day).
<PAGE>
The Sponsor Stock generally is sold on the 12th (or the next business day if
the 12th is not a business day) and the subsequent purchase of other
investment options will generally take place four (4) business days later.
This allows for settlement of the stock trade and the corresponding transfer
of funds to Fidelity.
ASB MONEY MARKET ACCOUNT
------------------------
I. EXCHANGES BETWEEN MUTUAL FUNDS AND ASB MONEY MARKET ACCOUNT
-----------------------------------------------------------
Participants may call on any business day to exchange between the mutual
funds and the ASB Money Market Account. If the request is received before
4:00 p.m. (ET), it will receive that day's trade date. Calls received
after 4:00 p.m. (ET) will be processed on a next day basis
II. EXCHANGES FROM ASB MONEY MARKET ACCOUNT INTO SPONSOR STOCK
------------------------------------------------------------
Participants who wish to exchange out of the ASB Money Market Account into
Sponsor Stock may call on any business day; however, all trades are held
until the 10th of the month. No calls will be accepted after 4:00 p.m.
(ET) on the 10th (or previous business day if the 10th is not a business
day).
ASB Money Market Account balances are liquidated on the 11th (or the next
business day if the 11th is not a business day) and the Sponsor Stock is
generally purchased within two (2) business days after the ASB Money
Market Account balances are liquidated.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
BY: HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By: /s/ Constance H. Lau 2/1/96
-------------------- ------
Constance H. Lau Date
Asset Manager & Member
By: /s/ Peter C. Lewis 2/1/96
------------------ ------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "I"
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
OPERATING PROCEDURES AGREEMENT
Based upon Fidelity Institutional Retirement Services Company's ("Fidelity's")
understanding of the American Savings Bank ("ASB") Money Market Account (the
"Fund") which will be priced at $1.00, the operating procedures are as follows:
PRICING
ASB shall provide Fidelity with a change to the net asset value (NAV) and
interest rate, in writing, via fax, at least fifteen calender days prior to the
effective date. A list of employee names, including signatures, that are
authorized to initiate changes to the interest rate are attached hereto as
Exhibit I. If for any reason, ASB is unable to determine a current valuation,
the last reported valuation of the Fund shall remain in effect. The valuations
provided by ASB shall not be reviewed by Fidelity. Fidelity shall be
responsible for accurately reflecting the NAV on the Fidelity Participant
Recordkeeping System and participant statements.
TRADE INSTRUCTIONS:
By 9:00 a.m. Eastern Time ("ET") each business day, Fidelity will provide to
Hawaiian Electric Industries ("Sponsor"), via fax, a report of net activity that
occurred in the Fund on the prior business day. The report will reflect the net
dollar and share amounts of assets invested or withdrawn as of the end of the
processing date.
Fidelity will fax the report to the Sponsor each day, regardless of processing
activity. If for any reason Fidelity is unable to fax the report to the
Sponsor, Fidelity will notify Sponsor of this by 2:00 p.m. ET. Sponsor is
responsible each business day, by 3:00 p.m. ET, for notifying Fidelity if the
report has not been received.
MONETARY TRANSFERS:
For purposes of wire transfers, Fidelity will net purchase and redemption
activity occurring on the same day. The monetary transfers between Fidelity and
ASB will operate as follows:
. Based upon the cash value of the net redemption activity reported each day,
ASB will initiate a wire transfer to Fidelity for receipt by no later than the
close of business at the New York Federal Reserve Bank on the date the report
of net activity is received by ASB. The mailing of participant distribution
checks and investments into other investment options will occur upon receipt
of the wire from ASB.
. Based upon the cash value of the net purchase activity reported each day,
Fidelity will initiate a wire transfer to ASB for receipt by no later than the
close of business at the New York Federal Reserve Bank on the business day
after the transactions are processed on the Fidelity Participant Recordkeeping
System.
. Wires will be sent according to wire instructions listed below.
Fidelity and ASB will monitor the receipt of wires on a daily basis. If for any
reason a wire is not received, the receiving party is responsible for notifying
the sender of this problem by 3:00 p.m. ET the next day. The party in error
shall be responsible for the amount of such wire, plus associated bank
penalties.
<PAGE>
CORPORATE ACTIONS:
If applicable, Sponsor will notify Fidelity of any proxies and other corporate
actions. If requested, Fidelity will provide Sponsor with participant balance
and address information necessary for any proxy mailing or other corporate
actions. Fidelity will not have any additional responsibilities relative to
corporate actions.
Fidelity assumes no responsibility for any loss incurred due to inaccurate
communication of corporate actions or failure to communicate corporate actions
by Sponsor.
RECONCILIATION:
Fidelity shall send a Monthly Trial Balance that summarizes activity in the Fund
to the Sponsor within twenty (20) business days of each calendar month end. The
Sponsor or ASB shall notify Fidelity of any discrepancies within twenty (20)
business days of receipt. Additionally, ASB shall send Fidelity monthly fund
statements no later than ten (10) business days after each calendar month end.
The Sponsor agrees to indemnify and hold harmless Fidelity for any loss related
to discrepancies between the participant balances maintained by Fidelity and the
Plan's balance in the Fund, as maintained by ASB, due to errors caused by ASB or
the Sponsor.
Fidelity agrees to indemnify and hold harmless the Sponsor and ASB for any loss
related to balance discrepancies between the participant balances maintained by
Fidelity and the Plan's balance in the Fund, as maintained by ASB, due to errors
caused by Fidelity.
INDEMNIFICATIONS:
Sponsor agrees to indemnify and hold harmless Fidelity for the following:
- - Any loss incurred by Fidelity due to a pricing error caused by the Sponsor or
ASB. The Sponsor also agrees to compensate Fidelity for the cost of any
adjustments made to participant accounts due to such an error.
- - Any loss incurred by Fidelity due to the inaccurate communication of corporate
actions by the Sponsor or ASB, or failure to communicate corporate actions
by the Sponsor or ASB.
- - Any loss related to balance discrepancies between the participant balances
maintained by Fidelity and the balance maintained by ASB due to errors caused
by the Sponsor or ASB.
Fidelity agrees to indemnify and hold harmless Sponsor and ASB for the
following:
- - Any loss incurred by ASB, the Sponsor or a participant and/or beneficiary
due to a trading error caused by Fidelity. Fidelity also agrees to
compensate the Sponsor, ASB, participant and/or beneficiary for the cost
of any adjustments to the Fund due to such error.
- - Any loss related to balance discrepancies between the participant balances
maintained by Fidelity and the balance maintained by ASB due to errors
caused by Fidelity.
<PAGE>
Fidelity's Wire Transfer American Savings Bank's Wire
Instructions: Instructions:
Bankers Trust of New York, NY Federal Home Loan Bank of Seattle
ABA Number: 021 001 033 ABA Number: 125040880
Account Name: FPRS Depository Account Name: American Savings Bank
Account Number: 00163002 Account Number: 8384-0012
Plan 56566 Hawaiian Electric Retirement Ref: Hawaiian Electric Industries
Savings Plan Retirement Savings Plan
The above procedure and conditions are hereby confirmed by all parties.
FIDELITY INSTITUTIONAL RETIREMENT HAWAIIAN ELECTRIC INDUSTRIES
SERVICES COMPANY PENSION INVESTMENT COMMITTEE
By: /s/ James M. McKinney By: /s/ Constance H. Lau
--------------------- --------------------
Constance H. Lau
Title: Sr. Vice President Title: Asset Manager & Secretary
------------------ ---------------------------
Date: 3/1/96 Date: 2/1/96
------ ------
AMERICAN SAVINGS BANK
By: /s/ Peter C. Lewis
--------------------------------
Peter C. Lewis
By: /s/ Wayne Minami Title: Member
---------------- -----------------------------
Wayne Minami
Title: President Date: 2/1/96
---------- ------
Date: February 1, 1996
------------------
<PAGE>
EXHIBIT 1
SCHEDULE "I"
The following individuals are authorized to initiate changes to the daily
interest rate for the ASB Money Market Account investment alternative.
/s/ Ralph Y. Nakatsuka
- ------------------------------------------
Ralph Y. Nakatsuka, Executive Vice
President
/s/ Alvin N. Sakamoto
- ------------------------------------------
Alvin N. Sakamoto, Vice President/
Controller
/s/ Elizabeth Kunishima
- ------------------------------------------
Elizabeth Kunishima, Assistant Vice
President/Assistant Controller
/s/ Sharon Kanno
- ------------------------------------------
Sharon Kanno, Assistant Controller
<PAGE>
EXHIBIT 4(k)
FIFTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
HAWAIIAN ELECTRIC INDUSTRIES, INC.
THIS FIFTH AMENDMENT TO TRUST AGREEMENT is made and entered into April 1,
1996, by and between Fidelity Management Trust Company (the "Trustee") and
Hawaiian Electric Industries, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated November 28, 1988, and amended December 22, 1989, January 1,
1994, March 15, 1994 and February 1, 1996 (the "Trust Agreement") for the
Hawaiian Electric Industries Retirement Savings Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor wish to further amend said Trust
Agreement as provided in Section 13 thereunder; and
WHEREAS, the Sponsor heretofore established three trusts: the first, for
which Peter C. Lewis and Constance H. Lau serve as trustee, to hold the Plan
assets invested in Hawaiian Electric Industries, Inc. common stock and to hold
uninvested Plan contributions and repayments of Plan loans until such amounts
are invested as directed by participants in accordance with the Plan; the
second, for which Hawaiian Trust Company, Limited, serves as trustee, to vote
the Plan assets invested in Hawaiian Electric Industries, Inc. common stock; and
the third, for which the Trustee serves as trustee, to hold and invest the
remaining Plan assets for the exclusive benefit of participants in the Plan and
their beneficiaries; and
WHEREAS, the Sponsor wishes to establish the HEI Common Stock Fund
(replacing Hawaiian Electric Industries, Inc. common stock as an investment
option) that will consist of shares of Hawaiian Electric Industries, Inc. common
stock and the Fidelity Institutional Cash Portfolio: Money Market: Class I; and
WHEREAS, contemporaneously with this Fifth Amendment to Trust Agreement,
the Sponsor has removed Peter C. Lewis and Constance H. Lau as trustees with
respect to Plan assets invested in Hawaiian Electric Industries, Inc. common
stock, uninvested contributions and repayments of Plan loans until such amounts
are invested as directed by participants in accordance with the Plan and wishes
to appoint the Trustee to succeed to such responsibilities; and
WHEREAS, the Sponsor wishes to appoint the Trustee as trustee for plan
assets invested in the HEI Common Stock Fund; and
WHEREAS, the Trustee is willing to succeed to the responsibilities of
trustee for Plan assets invested in the HEI Common Stock Fund; and
WHEREAS, the Sponsor represents that Hawaiian Trust Company, Limited,
acting pursuant to provisions of a prior trust agreement authorizing pass-
through
<PAGE>
voting by participants, has collected or will collect instructions from
participants, and will cast votes in accordance with instructions so collected
(with respect to shareholder votes for which the February 14, 1996 record date
occurred prior to the execution of this amendment) and Fidelity shall have no
responsibility or liability in connection therewith; and
WHEREAS, the Sponsor will remove Hawaiian Trust Company, Limited as
trustee, effective March 31, 1996, however, not withstanding the termination of
such trust agreement, Hawaiian Trust Company, Limited shall vote, in accordance
with the provisions of such trust agreement at the annual meeting of the
shareholders of the Sponsor to be held April 23, 1996, all of the shares of HEI
common stock for which they were record holder for voting purposes on February
14, 1996, the record date for the April 23, 1996, annual meeting;
NOW THEREFORE, in consideration of the above premises the Trustee and the
Sponsor hereby amend the trust agreement by:
(1) The Sponsor hereby appoints the Trustee to serve as trustee for Plan
assets invested in the HEI Common Stock Fund, uninvested contributions
and repayments of Plan loans until such amounts are invested as
directed by participants, in accordance with the Plan. The Trustee
hereby accepts the appointment and agrees to take any and all steps
which may be necessary or desirable to facilitate the transfer of
title to said assets from Peter C. Lewis and Constance H. Lau to the
Trustee.
(2) Amending and restating Section 4(d) as follows:
(d) Sponsor Stock. Trust investments in the HEI Common Stock Fund
-------------
shall consist of shares of HEI common stock and short-term liquid
investments. The cash will be invested via the Fidelity Institutional
Cash Portfolios: Money Market: Class I or such other Mutual Fund or
commingled money market pool as agreed to by the Sponsor and the
Trustee. To satisfy the Fund's cash needs for participant-directed
distributions and exchanges a target range for cash shall be
maintained in the HEI Common Stock Fund. Such target range is
currently 2%, plus/minus 0.2%, and may be changed as agreed to
in writing by the Sponsor and the Trustee. The Trustee is responsible
for ensuring that the actual cash held in the HEI Common Stock Fund
falls within the agreed upon range. Each participant's proportional
interest in the HEI Common Stock Fund shall be measured in units of
participation, rather than shares of HEI Common Stock. Such units
shall represent a proportionate interest in all of the assets of the
HEI Common Stock Fund, which includes shares of HEI common stock,
short-term investments, money market mutual fund shares, interest in
commingled money market pools and at times, receivables for dividends
and interest, and/or HEI common stock sold and payables for HEI common
stock purchased. A Net Asset Value ("NAV") per unit for the HEI Common
Stock Fund will be determined daily for each unit outstanding of the
HEI Common Stock Fund.
The Net Asset Value is calculated as follows: The daily NAV
<PAGE>
is equal to the total net assets of the HEI Common Stock Fund
divided by the outstanding units of the HEI Common Stock Fund on
the valuation date. The total net assets of the HEI Common Stock
Fund is equal to the number of underlying shares of HEI common
stock multiplied by the stock's closing price on the New York
Stock Exchange plus the market value of the Fund's interest in
Fidelity Institutional Cash Portfolio: Money Market: Class I
["FICAP"]; plus receivables for HEI common stock sold; minus
payables for HEI common stock purchased; plus dividends accrued as
of the ex-date on the underlying stock; plus interest accrued on
the FICAP component of the Fund.
The total return on the HEI Common Stock Fund shall include all
accrued dividends and interest, realized and unrealized gains/losses
on the underlying investments. Dividends received by the HEI Common
Stock Fund are reinvested in the HEI Common Stock Fund. Investments
in HEI common stock shall be subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust will be
-----------------
invested in HEI common stock to the extent necessary to comply with
investment directions under Section 4(c) of this Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The Named Fiduciary
---------------------------------
shall continually monitor the suitability under the fiduciary duty
rules of Section 404(a)(1) of ERISA (as modified by Section 404(a)(2)
of ERISA) of offering the HEI Common Stock Fund. The Trustee shall
not be liable for any loss, or by reason of any breach, which arises
from the directions of the Named Fiduciary with respect to the
acquisition and holding of HEI common stock, unless it is clear that
the actions to be taken under those directions would be prohibited by
the foregoing fiduciary duty rules or would be contrary to the terms
of the Plan or this Agreement.
(iii) Execution of Purchases and Sales. (A) Purchases and sales
--------------------------------
of HEI common stock shall be made on the open market, on the date on
which the Trustee receives from the Sponsor in good order all
information and documentation necessary to accurately effect such
purchases and sales and in the case of purchases, upon receipt of the
wire transfer necessary to make such purchases. If directed by the
Sponsor in writing the Trustee may purchase or sell HEI common stock
from or to the Sponsor. Exchanges of HEI common stock shall be made
in accordance with the Telephone Exchange Guidelines attached hereto
as Schedule "G". The Trustee is not obligated to buy or sell some or
all of the shares of HEI common stock required for the transaction in
the following circumstances:
(1) If the Trustee is unable to determine the number of
shares required to be purchased or sold on such day; or
<PAGE>
(2) If the Trustee is unable to purchase or sell the
total number of shares required to be purchased or sold on such day as
a result of market conditions; or
(3) If the Trustee is prohibited by the Securities and
Exchange Commission, the New York Stock Exchange, or any other
regulatory body from purchasing or selling any or all of the shares
required to be purchased or sold on such day.
The Trustee may follow directions from the Named Fiduciary to deviate
from the above purchase and sale procedures provided that such
direction is made in writing by the Named Fiduciary.
(B) Purchases and Sales from or to Sponsor. If directed by
--------------------------------------
the Sponsor in writing prior to the trading date, the Trustee may
purchase or sell HEI common stock from or to the Sponsor if the
purchase or sale is for adequate consideration (within the meaning of
Section 3(18) of ERISA) and no commission is charged. If Sponsor
contributions or contributions made by the Sponsor on behalf of the
participants under the Plan are to be invested in the HEI Common Stock
Fund, the Sponsor may transfer HEI common stock in lieu of cash to the
Trust. In either case, the number of shares to be transferred will be
determined by dividing the total amount of HEI common stock to be
purchased or sold by the closing price of the HEI common stock on the
New York Stock Exchange on the trading date, rounded up to the nearest
whole share.
(C) Use of an Affiliated Broker. The Sponsor hereby
---------------------------
authorizes the Trustee to use Fidelity Brokerage Services, Inc.
("FBSI") to provide brokerage services in connection with any purchase
or sale of HEI common stock on the open market in accordance with
directions from Plan participants. FBSI shall execute such directions
directly or through its affiliate, National Financial Services Company
("NFSC"). The provision of brokerage services shall be subject to the
following:
(1) As consideration for such brokerage services, the
Sponsor agrees that FBSI shall be entitled to remuneration under this
authorization provision in the amount of three and one-half cents
($.035) commission on each share of HEI common stock purchased or
sold. Any change in such remuneration may be made only by a signed
agreement between Sponsor and Trustee.
(2) Following the procedures set forth in Department of
Labor Prohibited Transaction Class Exemption 86-128 ("PTCE 86-128"),
the Trustee will provide the Sponsor with the following documents: (1)
a description of FBSI's brokerage placement practices; (2) a copy of
PTCE 86-128; and (3) a form by which the Sponsor may terminate this
authorization to use a broker affiliated with the Trustee. The Trustee
will provide the Sponsor with this termination form annually. The
Trustee will also provide the Sponsor with
<PAGE>
quarterly and annual reports regarding securities transactions and
transaction-related charges as required by and in conformance with
PTCE 86-128.
(3) Any successor organization of FBSI, through
reorganization, consolidation, merger or similar transactions, shall,
upon consumption of such transaction, become the successor broker in
accordance with the terms of this authorization provision, provided
FBSI provides advance written notice of such transfer to the Sponsor.
(4) The authorization by the Sponsor to use FBSI for
brokerage services as provided in this Section is terminable at will
by the Sponsor, without penalty to the Plan, upon receipt by the
Trustee of a written notice of termination.
(iv) Securities Law Reports. The Named Fiduciary shall be
----------------------
responsible for filing all reports required under federal or state
securities laws with respect to the Trust's ownership of HEI common
stock, including, without limitation, any reports required under
Sections 13 or 16 of the Securities Exchange Act of 1934, and shall
immediately notify the Trustee in writing of any requirement to stop
purchases or sales of HEI common stock pending the filing of any
report. The Trustee shall provide to the Named Fiduciary such
information on the Trust's ownership of HEI common stock as the Named
Fiduciary may reasonably request in order to comply with federal or
state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other
------------------------
provision of this Agreement the provisions of this Section shall
govern the voting and tendering of HEI common stock. The Sponsor,
after consultation with the Trustee, shall provide and pay for all
printing, mailing, tabulation and other costs associated with the
voting and tendering of HEI common stock.
(A) Voting.
------
(1) When the Sponsor prepares for any annual or special
meeting , the Sponsor shall notify the Trustee thirty (30)days in
advance of the intended record date (or as soon as administratively
feasible) and the Trustee shall furnish to the Sponsor's transfer
agent the name, address and social security number of the participants
holding units in the HEI Common Stock Fund, and each participants'
interest (in number of shares) as of the record date broken down by
HEIRS (the first eight money classifications as indicated on Schedule
"A") and HEISOP (the ninth money classification as indicated on
Schedule "A"). The Sponsor shall cause proxy materials and voting
instruction forms to be distributed to participants holding an
interest in the HEI Common Stock Fund. The Sponsor shall provide the
Trustee with a copy of any materials provided to the participants and
shall certify to the Trustee that the materials have been mailed or
otherwise sent to participants.
(2) Each participant with an interest in the HEI Common
Stock Fund shall have the right to direct the Trustee as to the manner
in which the Trustee is to vote (including not to vote) that number of
shares of HEI
<PAGE>
common stock reflecting such participant's proportional interest in
the HEI Common Stock Fund (both vested and unvested). Directions from
a participant to the Trustee concerning the voting of HEI common stock
shall be communicated in writing, or by mailgram or similar means.
These directions shall be tabulated by an affiliate of the Sponsor or
any other organization deemed appropriate by the Sponsor, held in
confidence, in accordance with confidentiality procedures established
by the Plan Administrator and adopted by the Named Fiduciary. Upon its
receipt of the directions, the Plan Administrator shall provide the
Trustee with an omnibus proxy form and the Trustee shall vote the
shares of HEI common stock reflecting the participant's proportional
interest in the HEI Common Stock Fund as directed by the participant
for HEIRS. The Trustee shall vote shares of HEI common stock
reflecting the participant's proportional interest in the HEI Common
Stock Fund for which it has received no direction from the participant
in the same proportion on each issue as it votes those shares
reflecting a participants' proportional interest in the HEI Common
Stock Fund for which it received voting directions from participants.
For HEISOP, the Trustee shall not vote shares of HEI common stock
reflecting a participant's proportional interest in the HEI Common
Stock Fund for which it has received no direction from the
participant.
The Plan Administrator shall notify the Trustee of any situation
regarding undue influence including, but not limited to the following:
tender offers, exchange offers, contested board elections, mergers and
the disposition of corporate assets. In the event of any of the above
mentioned actions directions from a participant concerning the voting
of HEI common stock shall be communicated to the Trustee. Directions
from a participant to the Trustee concerning the voting of HEI common
stock shall be communicated in writing, or by mailgram or similar
means. These directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any officer or employee
thereof, or any other person except (i) as necessary to meet
applicable legal requirements, (ii) in the case of any contested proxy
solicitation, as may be necessary to permit proper parties to verify
the propriety of proxies presented by any person and the results of
the voting, and (iii) in the event a shareholder has made a written
comment on the proxy form. In addition, the Trustee will provide the
Sponsor as reasonably requested by the Sponsor, periodic reports
indicating the number of shares voted and not voted. For HEIRS, upon
its receipt of the directions the Trustee shall vote the shares of HEI
common stock reflecting the participant's proportional interest in the
HEI Common Stock Fund as directed by the participant. The Trustee
shall vote shares of HEI common stock reflecting the participant's
proportional interest in the HEI Common Stock Fund for which it has
received no direction from the participant in the same proportion on
each issue as it votes those shares reflecting a participants'
proportional interest in the HEI Common Stock Fund for which it
received voting directions from participants. For HEISOP, the Trustee
shall not vote shares of HEI common stock reflecting a participant's
proportional interest in the HEI Common Stock Fund for which it has
received no direction from the participant.
<PAGE>
(3) The Trustee shall vote that number of shares of HEI
common stock not credited to participants' accounts in the same
proportion on each issue as it votes those shares credited to
particpants' accounts for which it received voting directions from
participants.
(B) Tender Offers.
--------------
(1) Upon commencement of a tender offer for any securities
held in the Trust that are HEI common stock, the Sponsor shall notify
each Plan participant with an interest in such HEI common stock of the
tender offer and utilize its best efforts to timely distribute or
cause to be distributed to the participant the same information that
is distributed to shareholders of the issuer of HEI common stock in
connection with the tender offer, and, after consulting with the
Trustee, shall provide and pay for a means by which the participant
may direct the Trustee whether or not to tender the HEI common stock
reflecting such participant's proportional interest in the HEI Common
Stock Fund (both vested and unvested). The Sponsor shall provide the
Trustee with a copy of any material provided to the participants and
shall certify to the Trustee that the materials have been mailed or
otherwise sent to participants.
(2) Each participant shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of HEI
common stock reflecting such participant's proportional interest in
the HEI Common Stock Fund (both vested and unvested). Directions from
a participant to the Trustee concerning the tender of HEI common stock
shall be communicated in writing, or by mailgram or such similar means
as is agreed upon by the Trustee and the Sponsor under the preceding
paragraph. These directions shall be held in confidence by the
Trustee and shall not be divulged to the Sponsor, or any officer or
employee thereof, or any other person except to the extent that the
consequences of such directions are reflected in reports regularly
communicated to any such persons in the ordinary course of the
performance of the Trustee's services hereunder. However, the Trustee
will provide to the Sponsor, as reasonably requested by the Sponsor,
periodic reports indicating the number of shares tendered and not
tendered. The Trustee shall tender or not tender shares of HEI Common
Stock as directed by the participant. The Trustee shall not tender
shares of HEI common stock reflecting a participant's proportional
interest in the HEI Common Stock Fund for which it has received no
direction from the participant.
(3) The Trustee shall tender that number of shares of HEI
common stock not credited to participants' accounts in the same
proportion as the total number of shares of HEI common stock credited
to participants' accounts for which it has received instructions from
Participants.
(4) A participant who has directed the Trustee to tender
some or all of the shares of HEI common stock reflecting the
participant's proportional interest in the HEI Common Stock Fund may,
at any time prior to the tender offer withdrawal date, direct the
Trustee to withdraw some or all of the tendered shares reflecting the
participant's proportional interest, and the
<PAGE>
Trustee shall withdraw the directed number of shares from the tender
offer prior to the tender offer withdrawal deadline. Prior to the
withdrawal deadline, if any shares of HEI common stock not credited to
participants' accounts have been tendered, the Trustee shall
redetermine the number of shares of HEI common stock that would be
tendered under Section 4(d)(v)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the
tender offer the number of shares of HEI common stock not credited to
participants' accounts necessary to reduce the amount of tendered HEI
common stock not credited to participants' accounts to the amount so
redetermined. A participant shall not be limited as to the number of
directions to tender or withdraw that the participant may give to the
Trustee.
(5) A direction by a participant to the Trustee to tender
shares of HEI common stock reflecting the participant's proportional
interest in the HEI Common Stock Fund shall not be considered a
written election under the Plan by the participant to withdraw, or
have distributed, any or all of his withdrawable shares. The Trustee
shall credit to each participant's account a proportional share of the
proceeds received by the Trustee for the shares of HEI common stock
tendered. Pending receipt of directions (through the Plan
Administrator) from the participant or the Named Fiduciary, as
provided in the Plan, as to which of the remaining investment options
the proceeds should be invested in, the Trustee shall invest the
proceeds in the investment option described in Schedule "C".
(vi) Shares Credited. For all purposes of this Section, the
---------------
number of shares of HEI common stock deemed credited to each
participant's account as of the relevant date (the record date or the
date specified in a tender offer) shall be calculated by reference to
the number of shares reflected on the books of the transfer agent as
of the relevant date. In the case of a tender, the number of shares
credited shall be determined as of a date as close as administratively
feasible to the relevant date. For the HEI Common Stock Fund, each
Participant shall be credited with a pro rata portion of the shares
held by the fund calculated in accordance with the preceding
sentences.
(vii) General. With respect to all rights other than the right
-------
to vote, the right to tender, and the right to withdraw shares
previously tendered, in the case of HEI common stock credited to a
participant's proportional interest in the HEI Common Stock Fund, the
Trustee shall follow the directions of the participant and if no such
directions are received, the directions of the Named Fiduciary. The
Trustee shall have no duty to solicit directions from participants.
With respect to all rights other than the right to vote and the right
to tender, in the case of HEI common stock not credited to
participants' accounts, the Trustee shall follow the directions of the
Named Fiduciary.
(viii) Conversion. All provisions in this Section 4(d) shall also
----------
apply to any securities received as a result of a conversion of HEI
common stock.
(3) Amending Section 4 by adding a new Section 4(e) and renumbering
existing sections accordingly:
<PAGE>
(e) ASB Money Market Account Operating Procedures. Transactions
---------------------------------------------
involving the ASB Money Market Account shall be executed in accordance
with separate written Operating Procedures as agreed to between the
Sponsor and the Trustee as amended from time to time in writing and
attached hereto as Schedule "I".
(4) Amending Section 4(h) by adding a new subsection (v) and renumbering
existing subsections accordingly:
(v) To borrow funds from a bank not affiliated with the Trustee in
order to provide sufficient liquidity to process Plan transactions
relating to the HEI Common Stock Fund in a timely fashion; provided
that the cost of such borrowing shall be allocated to the HEI Common
Stock Fund.
(5) Amending and restating Schedules "A", "C" and "G" as attached.
(6) Deleting Schedule "H".
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Fifth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
HAWAIIAN ELECTRIC FIDELITY MANAGEMENT TRUST COMPANY
INDUSTRIES, INC.
BY: HAWAIIAN ELECTRIC
INDUSTRIES, INC. PENSION
INVESTMENT COMMITTEE
By: /s/ Constance H. Lau 3/19/96 By: /s/ Christina L. Epstein 3/22/96
------------------------------ -------------------------------------
Constance H. Lau Date Vice President Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 3/19/96
------------------------------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "A"
ADMINISTRATIVE SERVICES
-----------------------
Administration
- --------------
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the following plan investment options:
- Fidelity Retirement Money Market Portfolio
- ASB Money Market Account
- HEI Common Stock Fund
- Fidelity Puritan Fund
- Fidelity Magellan Fund
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Overseas Fund
- Fidelity Global Bond Fund
* Maintenance of the following money classifications:
- Salary Reduction
- Participant Voluntary
- Rollover
- HEI Diversified Plan
- Employer ASB
- Employer Supplemental
- IRA
- Voluntary HEISOP
- Employer HEISOP
* Processing of investment option trades.
The Trustee will provide only the recordkeeping and administrative services
set forth on this Schedule "A" and no others.
Processing
- ----------
* Weekly processing of contribution data and contributions
* Processing of transfers and changes of future allocations via the
telephone exchange system
* Monthly processing of withdrawals
<PAGE>
Other
- -----
* Monthly trial balance
* Quarterly administrative reports
* Quarterly participant statements
* 1099Rs and W-2Ps
* Participant Loans
HAWAIIAN ELECTRIC INDUSTRIES, INC. FIDELITY MANAGEMENT TRUST COMPANY
BY: HAWAIIAN ELECTRIC INDUSTRIES,
PENSION INVESTMENT COMMITTEE
By /s/ Constance H. Lau 3/19/96 By Christina L. Epstein 3/22/96
---------------------------------- -------------------------------------
Constance H. Lau Date Vice President Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 3/19/96
----------------------------------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "C"
INVESTMENT OPTIONS
------------------
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:
- Fidelity Retirement Money Market Portfolio
- ASB Money Market Account
- HEI Common Stock Fund
- Fidelity Puritan Fund
- Fidelity Magellan Fund
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Overseas Fund
- Fidelity Global Bond Fund
The investment option referred to in Section 4(c) and Section 4(e)(v)(B)(5)
shall be the ASB Money Market Account.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
BY: HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By: /s/ Constance H. Lau 3/19/96
------------------------------------------------
Constance H. Lau Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 3/19/96
-------------------------------------------------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "G"
TELEPHONE EXCHANGE GUIDELINES
-----------------------------
The following telephone exchange guidelines are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone exchange guidelines at its
discretion. FIRSCO will notify the Sponsor of its intent to change these
guidelines prior to any change being instituted.
INVESTMENT OPTIONS
------------------
EXCHANGES BETWEEN INVESTMENT OPTIONS
------------------------------------
Participants may call on any business day to exchange between investment
options. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m. (ET) will be
processed on a next business day basis.
HAWAIIAN ELECTRIC INDUSTRIES, INC.
BY: HAWAIIAN ELECTRIC INDUSTRIES, INC.
PENSION INVESTMENT COMMITTEE
By: /s/ Constance H. Lau 3/19/96
----------------------------------------
Constance H. Lau Date
Asset Manager & Secretary
By: /s/ Peter C. Lewis 3/19/96
-----------------------------------------
Peter C. Lewis Date
Member
<PAGE>
SCHEDULE "I"
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
OPERATING PROCEDURES AGREEMENT
Based upon Fidelity Institutional Retirement Services Company's ("Fidelity's")
understanding of the American Savings Bank ("ASB") Money Market Account (the
"Fund") which will be priced at $1.00, the operating procedures are as follows:
PRICING
ASB shall provide Fidelity with a change to the net asset value (NAV) and
interest rate, in writing, via fax, at least fifteen calender days prior to the
effective date. A list of employee names, including signatures, that are
authorized to initiate changes to the interest rate are attached hereto as
Exhibit I. If for any reason, ASB is unable to determine a current valuation,
the last reported valuation of the Fund shall remain in effect. The valuations
provided by ASB shall not be reviewed by Fidelity. Fidelity shall be
responsible for accurately reflecting the NAV on the Fidelity Participant
Recordkeeping System and participant statements.
TRADE INSTRUCTIONS:
By 9:00 a.m. Eastern Time ("ET") each business day, Fidelity will provide to
Hawaiian Electric Industries ("Sponsor"), via fax, a report of net activity that
occurred in the Fund on the prior business day. The report will reflect the net
dollar and share amounts of assets invested or withdrawn as of the end of the
processing date.
Fidelity will fax the report to the Sponsor each day, regardless of processing
activity. If for any reason Fidelity is unable to fax the report to the
Sponsor, Fidelity will notify Sponsor of this by 2:00 p.m. ET. Sponsor is
responsible each business day, by 3:00 p.m. ET, for notifying Fidelity if the
report has not been received.
MONETARY TRANSFERS:
For purposes of wire transfers, Fidelity will net purchase and redemption
activity occurring on the same day. The monetary transfers between Fidelity and
ASB will operate as follows:
. Based upon the cash value of the net redemption activity reported each day,
ASB will initiate a wire transfer to Fidelity for receipt by no later than the
close of business at the New York Federal Reserve Bank on the date the report
of net activity is received by ASB. The mailing of participant distribution
checks and investments into other investment options will occur upon receipt
of the wire from ASB.
. Based upon the cash value of the net purchase activity reported each day,
Fidelity will initiate a wire transfer to ASB for receipt by no later than the
close of business at the New York Federal Reserve Bank on the business day
after the transactions are processed on the Fidelity Participant Recordkeeping
System.
. Wires will be sent according to wire instructions listed below.
Fidelity and ASB will monitor the receipt of wires on a daily basis. If for any
reason a wire is not received, the receiving party is responsible for notifying
the sender of this problem by 3:00 p.m. ET the next day. The party in error
shall be responsible for the amount of such wire, plus associated bank
penalties.
<PAGE>
CORPORATE ACTIONS:
If applicable, Sponsor will notify Fidelity of any proxies and other corporate
actions. If requested, Fidelity will provide Sponsor with participant balance
and address information necessary for any proxy mailing or other corporate
actions. Fidelity will not have any additional responsibilities relative to
corporate actions.
Fidelity assumes no responsibility for any loss incurred due to inaccurate
communication of corporate actions or failure to communicate corporate actions
by Sponsor.
RECONCILIATION:
Fidelity shall send a Monthly Trial Balance that summarizes activity in the Fund
to the Sponsor within twenty (20) business days of each calendar month end. The
Sponsor or ASB shall notify Fidelity of any discrepancies within twenty (20)
business days of receipt. Additionally, ASB shall send Fidelity monthly fund
statements no later than ten (10) business days after each calendar month end.
The Sponsor agrees to indemnify and hold harmless Fidelity for any loss related
to discrepancies between the participant balances maintained by Fidelity and the
Plan's balance in the Fund, as maintained by ASB, due to errors caused by ASB or
the Sponsor.
Fidelity agrees to indemnify and hold harmless the Sponsor and ASB for any loss
related to balance discrepancies between the participant balances maintained by
Fidelity and the Plan's balance in the Fund, as maintained by ASB, due to errors
caused by Fidelity.
INDEMNIFICATIONS:
Sponsor agrees to indemnify and hold harmless Fidelity for the following:
- - Any loss incurred by Fidelity due to a pricing error caused by the Sponsor or
ASB. The Sponsor also agrees to compensate Fidelity for the cost of any
adjustments made to participant accounts due to such an error.
- - Any loss incurred by Fidelity due to the inaccurate communication of corporate
actions by the Sponsor or ASB, or failure to communicate corporate actions
by the Sponsor or ASB.
- - Any loss related to balance discrepancies between the participant balances
maintained by Fidelity and the balance maintained by ASB due to errors caused
by the Sponsor or ASB.
Fidelity agrees to indemnify and hold harmless Sponsor and ASB for the
following:
- - Any loss incurred by ASB, the Sponsor or a participant and/or beneficiary
due to a trading error caused by Fidelity. Fidelity also agrees to
compensate the Sponsor, ASB, participant and/or beneficiary for the cost
of any adjustments to the Fund due to such error.
- - Any loss related to balance discrepancies between the participant balances
maintained by Fidelity and the balance maintained by ASB due to errors
caused by Fidelity.
<PAGE>
Fidelity's Wire Transfer American Savings Bank's Wire
Instructions: Instructions:
Bankers Trust of New York, NY Federal Home Loan Bank of Seattle
ABA Number: 021 001 033 ABA Number: 125040880
Account Name: FPRS Depository Account Name: American Savings Bank
Account Number: 00163002 Account Number: 8384-0012
Plan 56566 Hawaiian Electric Retirement Ref: Hawaiian Electric Industries
Savings Plan Retirement Savings Plan
The above procedure and conditions are hereby confirmed by all parties.
FIDELITY INSTITUTIONAL RETIREMENT HAWAIIAN ELECTRIC INDUSTRIES
SERVICES COMPANY PENSION INVESTMENT COMMITTEE
By: /s/ James M. McKinney By: /s/ Constance H. Lau
--------------------- --------------------
Constance H. Lau
Title: Sr. Vice President Title: Asset Manager & Secretary
------------------ ---------------------------
Date: 3/1/96 Date: 2/1/96
------ ------
AMERICAN SAVINGS BANK
By: /s/ Peter C. Lewis
--------------------------------
Peter C. Lewis
By: /s/ Wayne Minami Title: Member
---------------- -----------------------------
Wayne Minami
Title: President Date: 2/1/96
---------- ------
Date: February 1, 1996
------------------
<PAGE>
EXHIBIT 1
SCHEDULE "I"
The following individuals are authorized to initiate changes to the daily
interest rate for the ASB Money Market Account investment alternative.
/s/ Ralph Y. Nakatsuka
- ------------------------------------------
Ralph Y. Nakatsuka, Executive Vice
President
/s/ Alvin N. Sakamoto
- ------------------------------------------
Alvin N. Sakamoto, Vice President/
Controller
/s/ Elizabeth Kunishima
- ------------------------------------------
Elizabeth Kunishima, Assistant Vice
President/Assistant Controller
/s/ Sharon Kanno
- ------------------------------------------
Sharon Kanno, Assistant Controller
<PAGE>
EXHIBIT 5(a)
[Goodsill Anderson Quinn & Stifel Letterhead]
April 1, 1996
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Ladies and Gentlemen:
Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"Company"), has filed a Registration Statement on Form S-8 under the Securities
Act of 1933, covering an additional 5,000,000 shares of Common Stock, without
par value (the "Shares"), of the Company, and an indeterminate amount of
interests, to be offered and sold in connection with the Company's Retirement
Savings Plan.
We have examined the Registration Statement. We have also examined
the Restated Articles of Incorporation of the Company, as amended, and such
appropriate records of the Company, certificates of public officials and other
documents as we deem pertinent as a basis for the opinions hereinafter
expressed.
Upon the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Hawaii.
2. When the Shares have been duly issued and sold as contemplated in
the Registration Statement, the Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5(a) to the
Registration Statement and to the references to our firm as an expert under Item
5 to the Registration Statement.
Very truly yours,
/s/ Goodsill Anderson Quinn & Stifel
<PAGE>
EXHIBIT 5(b)
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
915 SECOND AVENUE, MS 510
SEATTLE, WA 98174 Employer Identification Number:
99-0208097
Date: June 21, 1995
File Folder Number:
HAWAIIAN ELECTRIC INDUSTRIES, INC. 990010537
P.O. BOX 730 CODE FB Person to Contact:
HONOLULU, HI 96808 WAYNE LUNCEFORD
Contact Telephone Number:
(206) 220-6080
Plan Name:
HAWAIIAN ELECTRIC INDUSTRIES
RETIREMENT SAVINGS PLAN
Plan Number: 003
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-l(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
Your plan does not consider total compensation for purposes of figuring
benefits. In operation, the provision may discriminate in favor of employees
who are highly compensated. If this occurs, your plan will not remain
qualified.
This determination letter is applicable for the amendment(s) adopted on 11-
21-94.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
Letter 835 (DO/CG)
<PAGE>
-2-
HAWAIIAN ELECTRIC INDUSTRIES, INC.
This plan satisfies the nondiscriminatory current availability requirements
of section 1.401(a)(4)-4(b) of the regulations with respect to those benefits,
rights, and features that are currently available to all employees in the plan's
coverage group. For this purpose, the plan's coverage group consists of those
employees treated as currently benefiting for purposes of demonstrating that the
plan satisfies the minimum coverage requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Richard R. Orosco
------------------------------------
Richard R. Orosco
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
This plan also satisfies the requirements of Code section 401(k).
Letter 835 (DO/CG)
<PAGE>
[D'Amato & Maloney Letterhead]
October 10, 1995
CERTIFIED MAIL
Mr. Wayne Lunceford
Internal Revenue Service
District Director
915 Second Avenue, MS 510
Seattle, WA 98174
Re: Hawaiian Electric Industries Retirement Savings Plan
EIN: 99-0208097
File Folder Number: 990010537
------------------------------
Dear Mr. Lunceford:
We write to confirm our telephone conversation this morning. We enclose a
copy of the favorable determination letter issued June 21, 1995, for the
Hawaiian Electric Industries Retirement Savings Plan (the "Plan"). We had
contacted you last month questioning the reference to "amendment(s) adopted on
11-21-94" in the sixth paragraph of the determination letter.
You have had a chance to review the file and we understand your conclusions
to be as follows: the favorable determination letter was for the restated Plan
submitted to the Internal Revenue Service June 30, 1994, the cover of the Plan
reading "Working Copy, Effective January 1, 1994". In June 1995, you received a
copy of amendments to the Plan entitled, "Amendment 1994-2," which was signed on
page 5 and dated November 21, 1994. The favorable determination letter covers
both the restated Plan submitted June 30, 1994, and Amendment 1994-2, adopted
---
November 21, 1994. We note that the Plan was signed August 30, 1995.
We will review this letter with Hawaiian Electric Industries, Inc. If this
understanding is satisfactory to them, we will not contact you again with
respect to this matter. Please let us know if we have not correctly stated
your conclusions. Thank you.
Sincerely,
D'Amato & Maloney
/s/ Tom Maloney
J. Thomas Maloney, Jr.
Enclosure
cc: Ms. Julie Price
<PAGE>
EXHIBIT 5(c)
[D'Amato & Maloney Letterhead]
April 1, 1996
Hawaiian Electric Industries, Inc.
900 Richards Street
Honolulu, Hawaii 96813
Re: Hawaiian Electric Industries Retirement Savings Plan
----------------------------------------------------
Ladies and Gentlemen:
Hawaiian Electric Industries, Inc., (the "Company") is preparing to file
with the United States Securities and Exchange Commission a Form S-8
Registration Statement (the "Registration Statement") under the Securities Act
of 1933. The Registration Statement covers 5,000,000 shares of common stock
without par value of the Company offered under a Prospectus for the Hawaiian
Electric Industries Retirement Savings Plan (the "Plan") and an indeterminate
number of interests in the Plan. The Registration Statement will be filed April
1, 1996. Federal securities law requires the Company to provide as exhibits to
the Registration Statement a copy of the Internal Revenue Service determination
letter that the Plan is qualified under Section 401 of the Internal Revenue Code
(the "Code") and, if applicable, an opinion of counsel that any amendments to
the Plan adopted subsequent thereto comply with the requirements of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA").
You have informed us that a copy of the latest favorable determination
letter issued by the Internal Revenue Service with respect to the Plan will be
attached as an exhibit to the Registration Statement. This determination letter
was issued June 21, 1995, and it signifies that the governing, written Plan
document meets the requirements of a qualified retirement plan under Section 401
of the Code, including Section 401(k) thereof.
On December 18, 1995, the Hawaiian Electric Industries, Inc. Pension
Investment Committee, the named fiduciary and Plan Administrator of the Plan,
adopted an amendment to the Plan, entitled "Amendment 1995-1 to the Hawaiian
Electric Industries Retirement Savings Plan" (the "Amendment"). Our firm
drafted the Amendment. We are of the opinion that the Amendment complies with
the requirements of ERISA. We are not aware of any other amendments to the Plan
subsequent to the date of the latest determination letter.
We consent to the filing of this opinion as Exhibit 5(c) to the
Registration Statement and to the reference to our firm under Item 5 to the
Registration Statement.
Sincerely,
/s/ D'Amato & Maloney
<PAGE>
EXHIBIT 23(a)
[KPMG PEAT MARWICK LLP LETTERHEAD]
The Board of Directors
Hawaiian Electric Industries, Inc.:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Hawaiian Electric Industries, Inc. of our report dated January 25, 1996,
relating to the consolidated balance sheets of Hawaiian Electric Industries,
Inc. and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, retained earnings and cash flows for each of
the years in the three-year period ended December 31, 1995, which report is
incorporated by reference in the December 31, 1995 annual report on Form 10-K of
Hawaiian Electric Industries, Inc.
We consent to incorporation by reference of our report dated January 25, 1996
relating to the financial statement schedules of Hawaiian Electric Industries,
Inc. in the aforementioned December 31, 1995 annual report on Form 10-K, which
report appears in said Form 10-K.
We also consent to incorporation by reference of our report dated March 4, 1996
relating to the statements of net assets available for benefits of the Hawaiian
Electric Industries Retirement Savings Plan as of December 31, 1995 and 1994,
and the related statements of changes in net assets available for benefits for
each of the years in the three-year period ended December 31, 1995.
/s/ KPMG Peat Marwick LLP
Honolulu, Hawaii
April 1, 1996
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned, HAWAIIAN ELECTRIC
INDUSTRIES, INC. a Hawaii corporation, and the officers and directors of said
corporation whose names are signed hereto, hereby constitute and appoint ROBERT
F. CLARKE, ROBERT F. MOUGEOT, PETER C. LEWIS, CONSTANCE H. LAU, CURTIS Y.
HARADA, DAVID J. REBER and GREGORY R. KIM of Honolulu, Hawaii, and each of them,
with full power of substitution in the premises (with full power to each of them
to act alone), their true and lawful attorneys and agents, and in its and their
name, place and stead, to do any and all acts and things and to execute any and
all instruments and documents which said attorneys and agents or any of them may
deem necessary or advisable to enable Hawaiian Electric Industries, Inc. to
comply with the Securities Act of 1933, as amended (the "Securities Act"), and
any rules, regulations or requirements of the Securities and Exchange Commission
in respect thereof, in connection with:
(i) the registration under said Act pursuant to a Registration
Statement on Form S-8 (the "Registration Statement") of up to an additional
5,000,000 shares of Common Stock without par value of Hawaiian Electric
Industries, Inc. for issuance pursuant to the Hawaiian Electric Industries
Retirement Savings Plan and an indeterminate amount of interests in said Plan,
including interests in a pooled fund which holds participant investments under
the Plan in Common Stock and cash equivalents ("Common Stock Fund"), and to
include in such Registration Statement pursuant to Rule 429 promulgated under
the Securities Act a combined prospectus covering such 5,000,000 shares of
Common Stock plus the shares of Common Stock registered but not yet sold
pursuant to Regis. No. 33-52911, including specifically but
<PAGE>
without limiting the generality of the foregoing, power and authority to sign
the name of Hawaiian Electric Industries, Inc. and the names of the undersigned
officers and directors thereof, in the capacities indicated below, to the
Registration Statement to be filed with the Securities and Exchange Commission
in respect of the aforementioned securities and Plan interests, including
interests in the Common Stock Fund, to any and all amendments and supplements to
said Registration Statement and to any instruments or documents filed as a part
of or in connection with said Registration Statement or amendments or
supplements thereto, and each of the undersigned hereby ratifies and confirms
all of the aforesaid that said attorneys and agents or any of them shall do or
cause to be done by virtue hereof; and
(ii) the current registration under said Act of up to 350,000 shares
of the Common Stock of Hawaiian Electric Industries, Inc. for issuance pursuant
to the Plan and an indeterminate amount of interests in said Plan (Regis. No.
33-52911), including specifically but without limiting the generality of the
foregoing, power and authority to sign the name of Hawaiian Electric Industries,
Inc. and the names of the undersigned officers and directors thereof, in the
capacities indicated below, to any and all amendments and supplements to said
Registration Statement and to any instruments or documents filed as a part of or
in connection with said Registration Statement or amendments or supplements
thereto and/or which operate pursuant to Rule 429 to amend said Registration
Statement or amendments or supplements thereto, and each of the undersigned
hereby ratifies and confirms all of the aforesaid that said attorneys and agents
or any of them shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, Hawaiian Electric Industries, Inc. has caused this
Power of Attorney to be executed in its name by its President and its Financial
Vice President and attested by its Secretary, and the undersigned officers and
directors of
<PAGE>
Hawaiian Electric Industries, Inc. have hereunto set their hands, as of the 20th
day of February, 1996. This Power of Attorney may be executed in any number of
counterparts by the corporation and by any one or more of the officers and
directors named below.
ATTEST: HAWAIIAN ELECTRIC INDUSTRIES, INC.
/s/ Betty Ann M. Splinter By /s/ Robert F. Clarke
- ------------------------------- ----------------------------------------
Betty Ann M. Splinter Robert F. Clarke
Secretary President and Principal
Executive Officer
By /s/ Robert F. Mougeot
----------------------------------------
Robert F. Mougeot
Financial Vice President
and Principal Financial Officer
/s/ Robert F. Clarke President, Principal Executive
- ------------------------------- Officer and Director
Robert F. Clarke
/s/ Robert F. Mougeot Financial Vice President and
- ------------------------------- Principal Financial Officer
Robert F. Mougeot
/s/ Curtis Y. Harada Controller and Principal
- ------------------------------- Accounting Officer
Curtis Y. Harada
/s/ Don E. Carroll Director
- -------------------------------
Don E. Carroll
/s/ Edwin L. Carter Director
- -------------------------------
Edwin L. Carter
/s/ John D. Field Director
- -------------------------------
John D. Field
/s/ Richard Henderson Director
- -------------------------------
Richard Henderson
<PAGE>
Director
- -------------------------------
Victor Hao Li
/s/ T. Michael May Director
- -------------------------------
T. Michael May
/s/ Bill D. Mills Director
- -------------------------------
Bill D. Mills
Director
- -------------------------------
A. Maurice Myers
/s/ Ruth M. Ono Director
- -------------------------------
Ruth M. Ono
/s/ Diane J. Plotts Director
- -------------------------------
Diane J. Plotts
/s/ James K. Scott Director
- -------------------------------
James K. Scott
/s/ Oswald K. Stender Director
- -------------------------------
Oswald K. Stender
Director
- -------------------------------
Kelvin H. Taketa
/s/ Jeffrey N. Watanabe Director
- -------------------------------
Jeffrey N. Watanabe
