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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-44737
PROSPECTUS
[LOGO OF HAWAIIAN ELECTRIC INDUSTRIES]
HAWAIIAN ELECTRIC INDUSTRIES, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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2,596,857 SHARES OF COMMON STOCK
(WITHOUT PAR VALUE)
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Hawaiian Electric Industries, Inc. (the "Company") is offering a convenient
method of purchasing additional shares of the Company's Common Stock pursuant
to the Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock
Purchase Plan (the "Plan") with dividends paid on the Company's common stock
("Common Stock"), with dividends paid on the preferred stock ("Preferred
Stock") of its electric utility subsidiaries, and with optional cash payments.
Any person or entity, whether or not a holder of Common Stock or Preferred
Stock, is eligible to join the Plan, subject to applicable laws and
regulations and the requirements of the Plan. The Company's electric utility
subsidiaries are Hawaiian Electric Company, Inc. and its subsidiaries Maui
Electric Company, Limited and Hawaii Electric Light Company, Inc.
PARTICIPANTS IN THE PLAN MAY:
. Reinvest all or a portion of cash dividends on Common Stock or Preferred
Stock registered in their names or in their Plan accounts.
. Purchase Common Stock with an initial cash payment of at least $250.
. Make additional optional purchases of Common Stock of at least $25 up to
a maximum of $120,000 per calendar year, including any initial purchase.
. Receive, upon written request, certificates for whole shares of Common
Stock credited to their Plan accounts.
. Deposit certificates representing Common Stock into the Plan for
safekeeping.
. Sell shares of Common Stock credited to their Plan accounts through the
Plan.
Shares of Common Stock will, at the option of the Company, be newly issued
shares purchased from the Company or shares purchased on the open market.
Purchases on the open market will be effected through an independent agent
appointed by the Company. The Common Stock is listed on the New York Stock
Exchange and Pacific Exchange. The Company is in the process of withdrawing
the listing of its Common Stock from the Pacific Exchange. The closing price
of the Common Stock on January 16, 1998 on the New York Stock Exchange
was $39.
The purchase price of newly issued shares of Common Stock purchased under
the Plan will be the average of the high and low sales prices for Common Stock
on the composite tape for stocks listed on the New York Stock Exchange on the
business day prior to the purchase. The purchase price of Common Stock
purchased on the open market will be the weighted average price per share
(adjusted for brokerage fees and commissions, any service charges and
applicable taxes) of the aggregate number of shares purchased during the
applicable investment period. Plan participants bear the cost of brokerage
fees and commissions, any related service charges and applicable taxes
relating to shares of Common Stock purchased or sold on the open market, and
the Company currently charges participants who reinvest Common Stock or
Preferred Stock dividends a fee of $0.50 per quarter (subject to change with
prior notice) to defray in part the administrative costs of the Plan incurred
by the Company. The Company reserves the right to charge fees to participants
to recover up to the actual costs of the Plan. (See Question 10.)
To the extent required by applicable law in certain jurisdictions, shares of
Common Stock offered under the Plan to persons not presently record holders of
Common Stock may be offered only through a registered broker/dealer in such
jurisdictions.
This Prospectus relates to 596,857 shares of Common Stock registered under
the Plan and unissued as of December 12, 1997, and to an additional 2,000,000
shares of the Company's authorized but unissued Common Stock, and describes
the Plan as amended to date. Please retain it for future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is February 2, 1998.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (herein, together with all
amendments and exhibits, collectively referred to as the "Registration
Statement") with respect to the securities offered hereby. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with rules and regulations of
the Commission. For further information, reference is hereby made to the
Registration Statement, which may be inspected without charge at the principal
office of the Commission in Washington, D.C. and copies of all or parts of
which may be obtained from the Commission upon payment of the prescribed fees.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Commission. Such reports, proxy statements and other information may be
inspected at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 or at the following Regional
Offices of the Commission: Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and the Northeast
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can also be obtained from the Commission at prescribed
rates. Written requests for such material should be addressed to the Public
Reference Section, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. If available, reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission, including those of the Company, may also
be accessed through the Commission's electronic gathering, analysis and
retrieval system ("EDGAR") via electronic means, including the Commission's
Web Site on the Internet (http://www.sec.gov). Such reports, proxy statements
and other information can also be inspected and copied at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, and the
Pacific Exchange, 301 Pine Street, San Francisco, California 94104, on which
Exchanges the Company's Common Stock is listed. The Company is in the process
of withdrawing the listing of its Common Stock from the Pacific Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-8503) under the Exchange Act are incorporated herein by reference: (1) The
Company's Annual Report on Form 10-K for the year ended December 31, 1996; (2)
The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997; (3) The Company's Current Reports
on Form 8-K dated January 3, 1997, January 27, 1997, February 4, 1997,
February 26, 1997, March 10, 1997, March 27, 1997, May 26, 1997, May 30, 1997
and October 16, 1997, and the Company's Current Report on Form 8-K dated
December 6, 1997, as amended by the Company's amended Current Report on Form
8-K/A dated December 6, 1997; (4) The description of the Common Stock of the
Company contained in the Registration Statement 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 was most
recently updated in the Company's Current Report on Form 8-K dated March 30,
1994 and the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997; (5) The description of the rights to purchase shares of
the Company's Series A Junior Participating Preferred Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
November 5, 1997; and (6) 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
Common Stock offered hereby has been sold or which deregisters all securities
then remaining unsold.
The documents incorporated herein by reference are sometimes hereinafter
called the "Incorporated Documents." Any statement contained herein or in an
Incorporated Document shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement in this Prospectus
or in any subsequently filed Incorporated Document modifies or supersedes such
statement. Any such statement so
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modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon
the written or oral request of any such person, a copy of any or all of the
Incorporated Documents, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to Shareholder Services Division,
Hawaiian Electric Industries, Inc., P.O. Box 730, Honolulu, Hawaii 96808-0730,
telephone: (808) 532-5841, facsimile: (808) 532-5868.
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THE COMPANY
Hawaiian Electric Industries, Inc. ("HEI" or the "Company") is a holding
company with subsidiaries engaged in the electric utility, savings bank,
freight transportation, real estate development and other businesses,
primarily in the State of Hawaii, and in the pursuit of independent power
projects in Asia and the Pacific. HEI was incorporated under the laws of the
State of Hawaii in July 1981. As a result of a 1983 corporate reorganization,
HEI became the parent of Hawaiian Electric Company, Inc. ("HECO"), which had
been incorporated under the laws of the Kingdom of Hawaii in 1891, and the
common stockholders of HECO became the stockholders of HEI. HEI's executive
offices are located at 900 Richards Street, Honolulu, Hawaii 96813, and its
telephone number is (808) 543-5662.
HECO and its subsidiaries, Maui Electric Company, Limited ("MECO") and
Hawaii Electric Light Company, Inc. ("HELCO"), are regulated operating
electric public utilities providing the only electric public utility service
on the islands of Oahu, Maui, Hawaii, Lanai and Molokai, on which islands
reside approximately 95 percent of the population of the State. The Company's
other activities are carried out by its other direct and indirect
subsidiaries. American Savings Bank, F.S.B. ("ASB"), acquired in 1988, was the
third largest financial institution based on deposits of $2.2 billion, at June
30, 1997. Effective December 6, 1997, ASB acquired certain of Bank of America,
FSB ("BoA") assets (including Hawaii-based loans and cash) and assumed certain
BoA liabilities (primarily Hawaii deposits). The total purchase price amounted
to approximately $1.7 billion. Hawaiian Tug & Barge Corp., acquired in 1986,
provides ship assist and charter towing services and owns Young Brothers,
Limited, a regulated interisland cargo carrier of waterborne freight among the
Hawaiian Islands. Malama Pacific Corp., formed in 1985, and its subsidiaries
develop and invest in real estate either directly or through joint ventures
and currently have no plans to invest in new projects. HEI Investment Corp.
was formed in 1984 to make long-term, passive, financial investments and
currently plans no new investments. HEI Power Corp. was formed in 1995 to
pursue independent power projects in Asia and the Pacific.
HEI is a legal entity separate and distinct from its various subsidiaries.
As a holding company with no significant operations of its own, the principal
sources of its funds are dividends or other distributions from its operating
subsidiaries, borrowings and sales of equity. The ability of certain of the
Company's subsidiaries to pay dividends or make other distributions to the
Company is subject to contractual and regulatory restrictions, including the
provisions of an agreement with the Hawaii Public Utilities Commission and the
capital distribution regulations of the Office of Thrift Supervision, as well
as restrictions and limitations set forth in debt instruments, preferred stock
resolutions and guarantees.
DESCRIPTION OF THE PLAN
The following is a summary in question and answer form of the principal
provisions of the Plan. This summary does not purport to be complete nor to
modify the Plan, and is qualified in its entirety by reference to the
provisions of the Plan. In case of any conflict, the provisions of the Plan
will govern.
PURPOSE OF THE PLAN
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of Common Stock
and/or Preferred Stock, and any other individual of legal age and any entity
("Non-holder"), with a convenient method of buying Common Stock using their
cash dividends and/or making optional cash purchases.
CERTAIN FEATURES OF THE PLAN
2. What are some of the important features of the Plan?
--A participant may elect to have cash dividends on all or a portion of the
participant's shares of Common Stock or Preferred Stock automatically
reinvested. (See Question 9.)
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--A participant may purchase Common Stock each month with optional cash
payments of not less than $25 per payment and not more than an aggregate of
$120,000 per calendar year. (See Questions 18 and 19.)
--Any individual of legal age or entity may join the Plan by making a
minimum initial cash investment of $250 (maximum of $120,000). (See Questions
6 and 7.)
--A participant may have the Administrator sell all or any of his or her
Plan shares, subject to certain charges. (See Questions 10 and 32-36.)
--Full investment of funds is possible under the Plan (subject to minimum
and maximum purchase requirements) because both full and fractional shares
will be credited to the participant's Plan account. (See Question 14.)
--A participant may deposit any or all the participant's shares of Common
Stock with the Administrator for safekeeping and will receive credit to the
participant's Plan account for such shares. (See Question 23.)
--No interest is paid on reinvested dividends or optional cash payments
received by the Plan. (See Question 15.)
--Certain participants will receive periodic statements of account. (See
Questions 20 and 21.)
ADMINISTRATION OF THE PLAN
3. Who administers the Plan?
The administrator of the Plan (the "Administrator") keeps records, sends
periodic statements to participants and performs other clerical and
administrative duties relating to the Plan. The Shareholder Services Division
of the Company presently serves as the Administrator. The Company believes
that the Shareholder Services Division's position as Administrator, as
compared to that of a registered broker-dealer or federally insured banking
institution, poses no additional material risks to participants. The Company
believes this because the Shareholder Services Division's duties are limited
to clerical and administrative tasks such as keeping records and sending
periodic statements, because the Company has an errors and omissions policy
which covers the Shareholder Services Division, and because the Company has
established an escrow with a bank to hold optional cash payments pending
investment pursuant to the Plan, thereby reducing the risk to participants.
(See Question 18.)
4. Who should I contact with questions concerning the Plan and its
administration?
For all communications about the Plan, please contact:
HAWAIIAN ELECTRIC INDUSTRIES, INC.
ATTENTION: DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
P.O. BOX 730
HONOLULU, HI 96808-0730
TELEPHONE: (808) 532-5841
FACSIMILE: (808) 532-5868
5. Who holds the shares credited to participants' Plan accounts?
Shares of Common Stock purchased under the Plan are registered in the name
of an independent trustee (the "Trustee"). Pacific Century Trust, a division
of Bank of Hawaii, currently serves as Trustee under the Plan. Should it
become necessary or desirable to replace Pacific Century Trust as Trustee, the
Company may appoint a successor Trustee.
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PARTICIPATION IN THE PLAN
6. Who is eligible to participate?
Any person or entity, whether or not a holder of Common Stock or Preferred
Stock, is eligible to join the Plan, provided that (i) such person or entity
fulfills the prerequisites for participation described under Question 7, and
(ii) participation would not violate securities or other laws of the state,
territory or country where the participant resides that are applicable to the
Company, the Plan or the participant. A beneficial owner of Common Stock
and/or Preferred Stock whose shares are registered in the name of another
(e.g., a broker or bank nominee), if the owner would like such shares to
participate in the Plan, must first either have the shares transferred into
such beneficial owner's name or, in the case of Common Stock only, to the
Trustee for safekeeping. The Company reserves the right to restrict
participation in the Plan if it believes that such participation may be
contrary to the general intent of the Plan or in violation of applicable law.
A participant must maintain at least one whole share in the Plan to maintain a
Plan account.
7. How do I enroll?
Current participants will automatically be participants in the Plan as
amended to date, and need do nothing to continue their participation.
After receiving a copy of this Prospectus, eligible applicants may join the
Plan by completing and signing a "Shareholder Authorization Form" (for holders
of Common Stock or Preferred Stock) or a "Non-holder Enrollment Form" (for
Non-holders). Holders of Common Stock or Preferred Stock may elect in the Form
to have dividends reinvested in whole or in part, to make an initial cash
investment or to make optional cash investments only. If a participant signs a
Shareholder Authorization Form, dividends on all shares of Common Stock and
Preferred Stock registered in the participant's name will be reinvested under
the Plan, unless the participant elects to receive dividends in whole or in
part on the Form. If such a holder does not select an option, all dividends on
Common Stock and Preferred Stock in such holder's name, and on Common Stock
held under the Plan for the holder, will be reinvested in shares of Common
Stock pursuant to the Plan. The execution of a Non-holder Enrollment Form will
result in the reinvestment of all dividends held under the Plan for the
participant, unless the participant submits a Shareholder Authorization Form
and selects a different investment option in that Form. Non-holders must make
an initial cash investment of not less than $250 and not more than $120,000.
Participants may change any of the designations in a Form by signing a new
form and submitting it to the Administrator. Any election to reinvest
dividends or to change any option with respect thereto will be effective on
the next record date after the Administrator receives the new form.
8. Where can I get Shareholder Authorization Forms and Non-holder Enrollment
Forms?
The Forms may be obtained from the Administrator at the address or by
calling the telephone number noted under Question 4.
9. What investment options are available to participants?
Each participant must elect one of the following investment options:
FULL DIVIDEND REINVESTMENT--Participant automatically reinvests cash
dividends on all shares of Common Stock and Preferred Stock.
PARTIAL DIVIDEND REINVESTMENT--Participant specifies the number of shares of
Common Stock, and the number and class and series of shares of Preferred
Stock, as to which the participant wishes to receive cash dividends, and
automatically reinvests the remainder of the cash dividends.
OPTIONAL CASH INVESTMENTS ONLY/NO DIVIDEND REINVESTMENT--Participant
receives cash dividends on all shares of Common Stock and Preferred Stock.
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Under any of the investment options, a participant may make optional cash
payments of a minimum of $25 (or a minimum of $250 for the initial investment
by a Non-holder) and a maximum of $120,000 per calendar year (including the
initial investment) towards the purchase of additional shares of Common Stock.
(See Questions 18 and 19.)
FEES AND CHARGES
10. Are there any fees or charges to a participant in connection with
purchases or sales under the Plan?
Participants in the Plan will bear the cost of brokerage fees and
commissions, any service charges and applicable taxes related to shares
purchased or sold on the open market. Brokerage fees and commissions will be
at competitive rates. Under the Plan, the Company may also charge participants
fees to recover up to the actual administrative costs of the Plan. To defray
in part the costs the Company incurs in administering the Plan, the Company
currently charges each participant who reinvests Common Stock or Preferred
Stock dividends an administrative fee of $0.50 per quarter. This fee does not
apply to participants who do not reinvest dividends. A service fee is also
charged in connection with the sale of shares through the Plan. (See Question
35.) The Company reserves the right at any time to change these fees or to
charge participants (including those who do not reinvest dividends) other
fees, including but not limited to administrative, setup and handling fees.
Notices of such future changes or additional fees will be sent to participants
at least 30 days prior to their effective date.
PURCHASES UNDER THE PLAN
11. What is the source of shares purchased under the Plan?
Common Stock will be obtained through purchases of newly-issued shares from
the Company or through open market purchases of shares. The Company will not
change the method of acquiring shares of Common Stock more than once in any
three-month period.
12. How will open market purchases of Common Stock be made under the Plan?
Open market purchases of Common Stock will be made through an independent
agent selected by the Company (the "Broker"). The Company will not control or
influence the prices or timing of open market purchases made by the Broker,
the amount of shares to be purchased (other than specifying the aggregate
dollar amount to be invested), the manner of purchase of shares or the
selection by the Broker of any broker or dealer through which purchases will
be made.
13. What will be the price of shares of Common Stock purchased under the
Plan?
The price of newly-issued shares purchased directly from the Company will be
the average of the high and low sales prices of the Common Stock on the
composite tape for stocks listed on the New York Stock Exchange on the
business day prior to the Investment Date (as defined under Question 15) or
the next preceding day on which the Company's Common Stock is traded if there
is no trade reported on that business day. The price of Common Stock purchased
on the open market will be the weighted average price per share (adjusted for
brokerage fees and commissions, any service charges and applicable taxes) of
the aggregate number of shares purchased during the applicable Investment
Period.
14. How many shares of Common Stock will be purchased by the Plan?
The number of shares to be purchased by the Plan for each participant will
equal the amount of the participant's reinvested dividends and optional cash
payments, less administrative fees and amounts required to be withheld for tax
purposes, divided by the purchase price of the shares (adjusted for brokerage
fees and commissions, any service charges and applicable taxes). Both whole
shares and fractional shares (computed to four decimal places) will be
credited by the Plan to the accounts of its participants.
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15. When will purchases be made under the Plan?
Newly-issued shares will be purchased from the Company on the applicable
Investment Date and shares acquired on the open market will be purchased
during an investment period commencing on the applicable Investment Date and
ending thirty (30) days thereafter (each, an "Investment Period"). Dividends
not invested in shares of Common Stock within 30 days of the dividend payment
date, optional cash payments not invested in shares of Common Stock within 35
days of receipt, and any funds not invested within an Investment Period, will
be promptly returned, without interest, to the participant. Funds to be
invested during any Investment Period will be invested to the extent possible
before funds from any subsequent Investment Period are invested, and funds
related to different Investment Periods will not be pooled for purposes of
computing per share prices.
Investment Dates for optional cash payments shall occur twice a month on the
15th and 30th days of each month (except that the second Investment Date for
February will be the last day of the month). Investment Dates for Common Stock
dividends and Preferred Stock dividends shall be on the dividend payment date
or within three (3) business days prior to the dividend payment date (with
settlement in such case occurring on or after the dividend payment date). The
dividend payment date for Common Stock dividends is normally expected to be
the 10th day of March, June, September and December each year, and for
Preferred Stock is normally expected to be the 15th day of January, April,
July and October each year, but the actual dates could vary. If an Investment
Date would not be a business day based on the foregoing, the Investment Date
would be the next succeeding business day.
If the Broker is unable to invest all cash dividends or optional cash
payments in shares of Common Stock on the open market, the shares purchased by
the Broker shall be allocated to participants on a pro rata basis based,
first, on reinvested dividends and, if any shares are remaining, then based on
optional cash payments, and any remaining funds will be returned to
participants.
PARTICIPANTS MAY NOT SELECT THE PRECISE TIME FOR PURCHASES AND A NUMBER OF
DAYS MAY ELAPSE BEFORE DIVIDENDS AND OPTIONAL CASH PAYMENTS ARE INVESTED IN
SHARES OF COMMON STOCK. INTEREST WILL NOT BE PAID ON CASH DIVIDENDS OR
OPTIONAL CASH PAYMENTS PRIOR TO OR AFTER THEIR INVESTMENT IN COMMON STOCK OR
IF FOR ANY REASON SUCH DIVIDENDS AND PAYMENTS ARE NOT SO INVESTED. ANY
INTEREST EARNED ON DIVIDENDS OR OPTIONAL CASH PAYMENTS WILL BE THE PROPERTY OF
THE COMPANY.
DIVIDEND REINVESTMENT
16. How does the dividend reinvestment feature of the Plan work?
Cash dividends to be reinvested will remain with the Company if reinvested
on the dividend payment date in shares newly issued by the Company. To the
extent shares will not be so purchased on the dividend payment date or are to
be purchased by the Plan on the open market, cash dividends will be delivered
to an escrow account or to the Broker pending investment concurrently with
payment of cash dividends to non-participating shareholders. Such dividends
will be credited to each participant's account under the Plan and will be
automatically reinvested to purchase additional Common Stock on behalf of the
participants during the applicable Investment Period in the manner described
under Question 15. The amount of any United States income tax withholding and
any administrative fees will be deducted from the amount of dividends on
Common Stock and/or Preferred Stock to determine the amount of dividends to
reinvest.
17. Will participants be credited with dividends on fractional shares?
Yes. Plan accounts will be credited on the payment dates with dividends on
whole shares and fractional shares of Common Stock held in participants'
accounts as of the applicable record dates.
OPTIONAL CASH PAYMENTS
18. How are optional cash payments made?
Optional cash payments by a participant cannot be less than $25 per payment
nor more than a total of $120,000 per calendar year (including for purposes of
this limitation the initial payment made by a Non-holder
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upon enrollment in the Plan). In the case of Non-holders, the initial cash
investment with the Non-holder Enrollment Form must be at least $250.
Optional cash payments may be made by sending either a check or money order
in U.S. Dollars payable to HEI/DRIP, addressed to Hawaiian Electric
Industries, Inc., Attn: Dividend Reinvestment and Stock Purchase Plan, P.O.
Box 730, Honolulu, HI 96808-0730. THE PLAN WILL NOT BE REQUIRED TO ACCEPT ANY
CHECKS PAYABLE TO A PARTY OTHER THAN HEI/DRIP EVEN IF ENDORSED FOR PAYMENT TO
THE PLAN. OPTIONAL CASH PAYMENTS MUST NOT BE INCLUDED IN REMITTANCES FOR
PAYMENT OF UTILITY SERVICE BILLINGS.
If a participant wishes to make one cash payment of the same amount each
month, the participant may use the Plan's automatic debit option. This allows
a participant to make one cash payment of the same amount each month by
automatic deduction of that amount from the participant's designated bank
account. Employees of the Company and certain of its subsidiaries may also
make cash payments through payroll deductions or by other means, subject to
approval by the Treasurer of the Company or the Administrator.
The forms to accompany optional cash payments, and to authorize such
automatic deduction of optional cash payments, may be obtained from the
Administrator at the address noted under Question 4.
Optional cash payments will be promptly forwarded to a segregated escrow
account at a bank designated by the Company ("Escrow Agent") to be held for
the benefit of the participants pending investment in shares of Common Stock.
Any interest earned on such funds prior to their investment is the property of
the Company. The current Escrow Agent is First Hawaiian Bank. Should it become
necessary or desirable to replace First Hawaiian Bank as Escrow Agent, the
Company may appoint a successor Escrow Agent.
19. When must optional cash payments be received?
Optional cash payments must be received by the Administrator at least 5 days
before the applicable Investment Date in order to be invested on or commencing
on that Investment Date. (See Question 15.)
ACCOUNT RECORDS AND REPORTS TO PARTICIPANTS
20. What records are maintained of a participant's ownership of Common Stock
under the Plan?
The Administrator will maintain an individual account for each participant
recording the participant's ownership interests in the Plan.
21. What kind of reports will be sent to participants in the Plan?
Participants who have reinvested dividends during a quarterly period will
receive quarterly statements of account. A participant who has not reinvested
any dividends during a quarter will not receive such a statement of account
for that quarter but will be notified with each dividend check as to the
number of shares held for such participant under the Plan. Monthly statements
will also be sent to participants who have made optional cash payments or have
had other activity (other than reinvestment of dividends) in the account
during the month. In addition, participants will receive copies of the same
communications sent to other holders of Common Stock, including the Company's
annual report, notices of meetings of shareholders, proxy statements and
information for income tax reporting purposes.
REGISTRATION OF SHARES
22. Will certificates be issued to participants for shares of Common Stock
purchased under the Plan?
Unless a participant withdraws shares from the Plan or terminates
participation in the Plan (see Questions 24-31), certificates for shares of
Common Stock purchased under the Plan will not be issued to participants.
Instead, shares of Common Stock will be registered in the name of the Trustee
as agent for participants in the Plan.
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SAFEKEEPING OF SHARES
23. Does the Plan offer a safekeeping service for shares?
Yes. A holder of record of Common Stock who submits a Shareholder
Authorization Form may elect to transfer such holder's shares without charge
to the Trustee for credit to the holder's Plan account and for safekeeping
under the Plan. The Trustee also holds for safekeeping the shares purchased
through the Plan unless the shares are withdrawn by or distributed to the
participant upon termination. (See Question 22.) These safekeeping
arrangements protect against loss, theft and destruction of stock
certificates. Shares of Preferred Stock may not be transferred to the Trustee
for safekeeping.
TERMINATION OF PARTICIPATION IN THE PLAN
24. When and how may a participant terminate participation in the Plan?
A participant may terminate participation in the Plan as to all (but not
less than all) Common Stock and Preferred Stock by written notification to the
Administrator. Any notice of termination received on or after an ex-dividend
record date will be processed as soon as practicable after the dividends
payable as of the record date have been paid and reinvested in accordance with
the Plan. The "ex-dividend record date" for purposes of the Plan is three (3)
business days before the dividend record date.
A participant must also maintain at least one whole share in the Plan to
keep an active account. If a participant does not do so, the participant's
participation in the Plan may be terminated, in which case the participant
will receive a cash payment for the fractional shares based on market prices
on the business day prior to the date of payment.
25. What occurs following receipt by the Administrator of a participant's
written notice of termination of participation in the Plan?
Within 10 business days after receipt of the notice (or the reinvestment of
dividends if the notice is received between the ex-dividend record and payment
dates), certificates for shares of Common Stock will be issued to the
participant and a cash payment will be made for any fractional share. If a
participant's account has less than 5 shares, the Company may elect to issue a
cash payment for all the shares. The purchase price for purposes of such cash
payments will be the average of the high and low sales prices for Common Stock
on the composite tape for stocks listed on the New York Stock Exchange on the
last business day prior to the date of payment on which Common Stock is
traded. IN NO CASE WILL FRACTIONAL SHARES BE ISSUED.
26. Will a participant be allowed to re-enroll in the Plan after terminating
participation?
Termination of participation in the Plan will not preclude re-enrollment,
except that the Company reserves the right to reject re-enrollment where in
its sole discretion it deems there have been excessive terminations and re-
enrollments.
WITHDRAWAL OF SHARES FROM THE PLAN
27. How does a participant withdraw shares from the Plan?
To withdraw shares of Common Stock from the Plan, a participant must so
notify the Administrator in writing and specify the whole number of shares to
be withdrawn.
28. When may a participant withdraw shares from the Plan?
A participant may withdraw whole shares of Common Stock from the Plan at any
time. However, any notice of withdrawal received by the Administrator between
the ex-dividend record and payment dates will not be effective until after the
dividends have been paid and reinvested in accordance with the Plan.
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29. How soon after notice of withdrawal of shares is given will the
participant receive certificates for shares?
Certificates for shares will be issued within 10 business days after receipt
of the notice (or after the reinvestment of dividends if the notice is
received between the ex-dividend record and payment dates). IN NO CASE WILL
CERTIFICATES FOR FRACTIONAL SHARES BE ISSUED.
30. May a participant who withdraws shares from the Plan continue to
participate in the Plan?
Yes. Shares of Common Stock withdrawn from the Plan and registered in the
participant's name will continue to participate in the Plan if the participant
has so instructed the Administrator pursuant to a Shareholder Authorization
Form and has not terminated participation in the manner described under
Question 24.
31. May a participant who requests the withdrawal of shares under the Plan
have the withdrawn shares issued in the name of another person?
Yes. A participant may do so by submitting a properly completed and executed
stock power, with a medallion signature guarantee, and by complying with such
other procedures as the Company or Administrator shall establish. The forms
necessary to effect any such transfer may be obtained from the Administrator
at the address noted under Question 4.
SALE AND OTHER TRANSFER OF SHARES
32. May a participant sell, pledge, encumber, or otherwise transfer shares
of Common Stock credited to such participant's account under the Plan?
No. A participant wishing to pledge, encumber or otherwise dispose of such
shares must first have those shares registered in the participant's or another
person's name by withdrawing the shares from the Plan. (See Question 31.)
33. May a participant receive cash in lieu of shares of Common Stock upon
termination of participation in the Plan or withdrawal of shares from the
Plan?
Yes. The participant must submit a request to the Administrator to sell such
shares of Common Stock and to distribute to the participant the net cash
proceeds from such sale in lieu of shares. The Company may retain a broker-
dealer not affiliated with the Company to effect such sales.
34. If a participant requests a distribution of cash in lieu of certificates
for shares, when will the Common Stock be sold?
If the shares will be sold on the open market, the sale will occur generally
within the same period of time that would be required if shares rather than
cash were to be distributed. (See Questions 25 and 29.) Delays in selling
shares are possible, however, and interest will not be paid to a participant
for any such delays and the participant assumes the risk of any price
fluctuations.
35. What amount will be distributed to a participant who requests a
distribution of cash in lieu of shares?
A check representing the selling price of the shares, less the brokerage
fees and commissions, any withholding required under applicable tax laws and a
$15 service fee for the handling of each such request, will be sent to the
participant at the end of the settlement period.
36. What happens if a participant sells or transfers all of the shares
registered in the participant's name?
Until the shares are withdrawn from the Plan or the participant terminates
participation in the Plan, such shares will continue to participate in the
Plan and dividends thereon will continue to be reinvested in accordance with
the participant's instructions.
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VOTING OF SHARES IN THE PLAN; TENDER OFFERS
37. How will a participant's shares of Common Stock be voted at meetings of
shareholders of the Company?
Participants will be sent notices of meetings, proxy statements and proxy
forms for each shareholders' meeting. Shares registered in a participant's
name will be voted directly by the participant. Shares held by the Trustee for
a participant will be voted in accordance with the participant's instructions
on a proxy form duly signed by the participant. In the absence of such
instructions, the Trustee will be deemed instructed to vote shares the same
way the participant votes shares registered in the participant's name. In the
absence of any such instructions, the Trustee will vote shares in the same
proportion as it votes shares as to which it has received instructions from
other participants.
38. What arrangements will be made in the event of the commencement of a
tender offer for shares of Common Stock held in the Plan?
The Company or the Trustee will notify each participant of the commencement
of the tender offer and will provide a means by which participants may direct
the Trustee whether or not to tender the Company's Common Stock credited to
their accounts.
STOCK DIVIDENDS AND STOCK SPLITS
39. What happens to participants' accounts if the Company issues a stock
dividend or declares a stock split?
Any stock dividends or split shares distributed by the Company on shares of
Common Stock credited to the account of a participant under the Plan will be
added to the participant's account.
ADJUSTMENT OF NUMBER AND KIND OF REGISTERED SECURITIES
40. Under what circumstances may the Company adjust the number and/or kind
of registered securities?
The Company may make appropriate and proportionate adjustments to the number
or kind of securities registered with the Commission if there is a decrease in
the number of outstanding shares of Common Stock, an exchange of such shares
or a distribution with respect to such shares as a result of any merger,
recapitalization, stock dividend, stock split, reverse stock split or other
distribution. Any such adjustment will be subject to federal and state
securities laws requirements.
INTERPRETATION, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN
41. To what extent may the Plan be modified, suspended or terminated by the
Company?
The Company reserves the right to suspend, modify or terminate, or make
additions to, the Plan at any time, and the Treasurer of the Company may
interpret the Plan and make additions thereto which are not inconsistent with
its provisions. All participants will receive notice of any such suspension,
modification, or termination. Upon termination of the Plan by the Company,
certificates for whole shares credited to a participant's account under the
Plan will be issued and cash payments will be made in the same manner as if
each participant had terminated participation in the Plan.
LIMITATION OF LIABILITY
42. What limitations of liability exist under the Plan?
Neither the Company nor the Administrator nor the Trustee nor any of their
respective officers, directors, representatives, employees or agents shall be
liable for any damages resulting from any act or omission in
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connection with the Plan in the absence of bad faith or gross negligence,
including, without limitation, any claim of liability arising out of failure
to terminate a participant's account upon the participant's death, the price
or timing at which shares are purchased for participants' accounts or
fluctuations in the market value of shares. However, the foregoing in no way
affects a participant's right to bring a cause of action based on alleged
violations of federal securities laws.
PARTICIPANTS SHOULD RECOGNIZE THAT NEITHER THE COMPANY, THE ADMINISTRATOR,
THE BROKER NOR THE TRUSTEE CAN ASSURE THEM OF A PROFIT OR PROTECT THEM AGAINST
A LOSS ON SHARES PURCHASED FOR THEIR ACCOUNT UNDER THE PLAN.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary, under the Internal Revenue Code of 1986,
as amended (the "Code"), of certain applicable federal income tax aspects of
participating in the Plan. IN ADDITION, THERE MAY BE FOREIGN, STATE AND LOCAL
LAWS APPLICABLE TO PARTICIPATION IN THE PLAN. SINCE INDIVIDUAL TAX SITUATIONS
MAY VARY, AND SINCE PROVISIONS OF THE CODE AND OTHER TAX LAWS MAY BE MODIFIED
BY SUBSEQUENT AMENDMENTS, PARTICIPANTS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS FOR ADVICE ON APPLICABLE FEDERAL, FOREIGN, STATE AND LOCAL TAX
CONSEQUENCES OF THEIR PARTICIPATION IN THE PLAN.
A participant will be required to include in income for federal income tax
purposes Common Stock dividends whether cash is received or such amount is
applied to the purchase of shares or to payment of administrative costs of the
Plan.
A participant's tax basis for shares of Common Stock purchased pursuant to
the Plan will be equal to the amount of reinvested dividends or optional cash
payments used to purchase such shares. A participant's holding period for
shares purchased with optional cash payments or Preferred Stock dividends will
begin on the date after the shares are purchased. A participant's holding
period for shares purchased with Common Stock dividends will begin on the date
following the date of distribution of the dividends. In the event shares are
purchased on the open market, the holding period for the shares will begin no
later than the day after the date such shares are credited to the
participant's account.
A participant will not realize any taxable income upon receipt of
certificates for shares credited to the participant's account. Gain or loss
will be recognized when the shares of Common Stock from the participant's
account are sold pursuant to the terms of the Plan.
In the case of participants whose dividends are subject to tax withholding,
such as United States income tax withholding on foreign shareholders or 31%
backup withholding, the amount of such tax withholding is deducted from the
dividends and the balance is reinvested. Statements of account for those
participants indicate the amount withheld.
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USE OF PROCEEDS
It is anticipated that the Common Stock offered hereby will be sold by the
Company over a period of approximately two years from the date hereof, but the
Company does not know precisely the number of shares that will ultimately be
sold under the Plan or the prices at which shares will be sold. The net
proceeds from the direct sale by the Company to the Plan of authorized but
unissued shares of Common Stock will broaden and strengthen the equity base of
the Company and are expected to be used primarily to help finance the capital
expenditure and growth programs of its subsidiaries and for working capital
and general corporate purposes, including the reduction or deferral of short-
term borrowings (in the case of commercial paper bearing interest at
prevailing market rates and with maturities varying between 1 and 270 days)
that might otherwise be required.
PLAN OF DISTRIBUTION
The Company may from time to time inform the general public about the Plan
through announcements, newspaper advertisements, circulars, notices and
investor fairs. The Company may also from time to time inform those
prospective participants with whom the Company has a pre-existing, continuing
relationship, such as shareholders, customers and employees of the Company or
its subsidiaries, about the Plan by including information with other regular
written communications with them, such as billing statements, annual reports
and payroll stubs.
VALIDITY OF COMMON STOCK
Counsel for the Company, Goodsill Anderson Quinn & Stifel, Honolulu, Hawaii,
has rendered an opinion (filed as an Exhibit to the Registration Statement of
which this Prospectus is a part) to the effect that the Common Stock offered
hereby, when purchased by the Plan in the manner described in this Prospectus,
will be duly and validly issued, fully paid and nonassessable.
EXPERTS
The consolidated financial statements and schedules of HEI and its
subsidiaries as of December 31, 1996 and 1995, and for each of the years in
the three-year period ended December 31, 1996, which financial statements and
schedules have been incorporated by reference and included, respectively, in
HEI's Annual Report on Form 10-K for the year ended December 31, 1996, have
been incorporated by reference herein and in the Registration Statement of
which this Prospectus is a part in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
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NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN
AS CONTAINED IN THIS PROSPECTUS AND IN OTHER DOCUMENTS RELATING TO THE PLAN
DELIVERED TO ELIGIBLE PARTIES AND FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, IN CONNECTION WITH THIS OFFER, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES TO WHICH THIS PROSPECTUS RELATES IN ANY STATE TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Cover Page of Prospectus................................................... 1
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 4
Description of the Plan.................................................... 4
Purpose of the Plan....................................................... 4
Certain Features of the Plan.............................................. 4
Administration of the Plan................................................ 5
Participation in the Plan................................................. 6
Fees and Charges.......................................................... 7
Purchases under the Plan.................................................. 7
Dividend Reinvestment..................................................... 8
Optional Cash Payments.................................................... 8
Account Records and Reports to Participants............................... 9
Registration of Shares.................................................... 9
Safekeeping of Shares..................................................... 10
Termination of Participation in the Plan.................................. 10
Withdrawal of Shares from the Plan........................................ 10
Sale and Other Transfer of Shares......................................... 11
Voting of Shares in the Plan; Tender Offers............................... 12
Stock Dividends and Stock Splits.......................................... 12
Adjustment of Number and Kind of Registered Securities.................... 12
Interpretation, Modification, Suspension or Termination of the Plan....... 12
Limitation of Liability................................................... 12
Federal Income Tax Considerations.......................................... 13
Use of Proceeds............................................................ 14
Plan of Distribution....................................................... 14
Validity of Common Stock................................................... 14
Experts.................................................................... 14
</TABLE>
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[LOGO OF HAWAIIAN ELECTRIC INDUSTRIES]
HAWAIIAN ELECTRIC INDUSTRIES, INC.
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
FEBRUARY 2, 1998
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