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Exhibit 10(ix)
FIRST HAWAIIAN, INC.
DEFERRED COMPENSATION PLAN
(Amended and Restated as of January 1, 1996)
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TABLE OF CONTENTS
Page
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PROLOGUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III - DEFERRALS
Section 3.1 Deferral Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3.2 Length of Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3 Memorandum Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4 Discretionary Investment
by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.5 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.6 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV - NO CONTRIBUTIONS
Section 4.1 No Contributions By
Participating Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.2 Benefits Payable From
General Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V - ADMINISTRATION
Section 5.1 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.2 Indemnification, Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.3 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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Page
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ARTICLE VI - AMENDMENT, TERMINATION, MERGER
Section 6.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.2 Termination or Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.3 Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII - MISCELLANEOUS
Section 7.1 Rights of Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.2 Misc. Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
EXHIBIT I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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FIRST HAWAIIAN, INC.
DEFERRED COMPENSATION PLAN
PROLOGUE
The First Hawaiian, Inc. Deferred Compensation Plan (this "Plan")
permits eligible employees to defer payment of certain compensation. This Plan
is an unfunded deferred compensation arrangement solely for a select group of
management or highly compensated employees of First Hawaiian, Inc. and its
affiliates.
This Plan is hereby amended and restated in its entirety. Unless
otherwise specifically provided for herein or by law, the provisions set forth
herein shall be effective as of January 1, 1996.
ARTICLE I
DEFINITIONS
As used herein the following terms shall have the following meanings
unless the context clearly requires otherwise.
1.1 "Affiliate" means Affiliate as defined in the First Hawaiian,
Inc. Profit Sharing Plan.
1.2 "Beneficiary" means the person, persons, or legal entity
designated by the Participant to receive his benefits under this Plan in the
event of his death. If a Participant fails to make any designation, 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
receiving benefits hereunder, Beneficiary shall mean the
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Participant's surviving spouse, or if there is no surviving spouse, the estate
of the Participant.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Change in Control" means Change in Control as defined in the
First Hawaiian, Inc. Stock Incentive Plan.
1.5 "Committee" means the Executive Compensation Committee of the
Board.
1.6 "Company" means First Hawaiian, Inc.
1.7 "Disability" means Disability as defined in the First
Hawaiian, Inc. Profit Sharing Plan.
1.8 "IPKE" means the First Hawaiian, Inc. Incentive Plan for Key
Executives, as amended from time to time.
1.9 "LTIP" means the First Hawaiian, Inc. Long-Term Incentive
Plan, as amended from time to time.
1.10 "Memorandum Account" means an account recording the amount
allocated to a Participant pursuant to Article III of this Plan, as adjusted
from time to time pursuant to the provisions of this Plan.
1.11 "Participant" means any person selected for participation
pursuant to Article II.
1.12 "Participating Employer" means the Company or
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any other employer which, with the Company's permission, elects to adopt the
Plan.
1.13 "Plan" means the First Hawaiian, Inc. Deferred Compensation
Plan, as set forth herein and as amended from time to time.
1.14 "Special Deferral" means a deferral pursuant to Section 3.2
that is payable on a specified date other than the Participant's termination of
employment.
ARTICLE II
PARTICIPATION
The Committee shall select the employees of a Participating Employer
eligible to be Participants. Participants shall be selected from executive and
other key employees who because of their management or staff positions have the
principal responsibility for the management, direction, and success of the
Company or a Participating Employer. A director of a Participating Employer
who is a full-time employee of the Participating Employer shall be eligible to
participate in the Plan.
ARTICLE III
DEFERRALS
Section 3.1 Deferral Election.
(a) A Participant may elect one or more of the following deferrals
for which he is eligible.
(1) On a date prior to December 1 of each year, a
Participant who is eligible for IPKE may elect to defer the payment of all or a
portion of his IPKE cash bonus for the
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then current fiscal year.
(2) On a date that is at least three months before the
end of a "Performance Period" under the LTIP, a Participant who may become
entitled to receive payment of an award for such period under such plan may
elect to defer all or part of any payment of such award.
(3) On a date prior to January 1, a Participant may elect
to defer the payment of a percentage (not in excess of 25 percent) of his base
salary for the next calendar year.
(b) The deferral election shall be irrevocable and shall be made
on a form prescribed by the Committee. Any annual cash bonus under IPKE, any
base salary, and any award under the LTIP for which a Participant has not
elected to defer under this Plan shall be paid without regard to this Plan.
(c) The amount to be credited to a Memorandum Account shall be
subject to reduction by the amount the Participating Employer is required by
law to pay to a governmental taxing authority as the Participant's portion of
any withholding taxes, including taxes imposed on employees by the Federal
Insurance Contributions Act of Chapter 21 of the Internal Revenue Code. The
Committee may authorize a Participant to satisfy such withholding tax payment
in a manner that does not reduce the amount credited to his Memorandum Account.
Section 3.2 Length of Deferrals.
(a) If a deferral is elected, the period of deferral shall (except
as provided in Section 3.2(b)) end with the Participant's retirement, death,
Disability, resignation, or
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other termination of employment with the Company, the Participating Employers,
and the Affiliates.
(b) The Committee may, in its sole discretion, approve Special
Deferrals. Such Special Deferrals shall be subject to the same rules as in
Section 3.1 above, except for the time of payment.
Section 3.3 Memorandum Account.
(a) The Committee shall cause a Participating Employer to
establish a Memorandum Account for each Participant employed by it who has
elected a deferral under this Plan. A Participant shall be fully vested in his
Memorandum Account at all times. A separate Memorandum Account shall be kept
for any deferral that may be paid in a different manner or may be paid
commencing on a different date from other deferrals. The Memorandum Account
balances of a Participant shall represent the Participating Employer's
obligation to pay the deferred amount to the Participant or his Beneficiary.
(b) A Memorandum Account shall be credited with assumed earnings
in accordance with this Section 3.3(b). In general, assumed earnings shall be
credited once annually, as of December 31 of each year, so that the earnings
for the current year are part of the opening balance of the next calendar year.
The Committee may, however, authorize the crediting of assumed earnings at
other dates during a calendar year, provided that any later calculation of
earnings during or at the end of the same calendar year shall be made in a
manner designed to produce approximately the same total earnings for the year
as would a one-time, December 31 calculation. Notwithstanding the foregoing,
earnings for a partial year
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shall be credited for the period up to the distribution date for a payment that
is made at any date during a year other than in January.
(c) In determining the balances on which earnings are credited,
once-a-year deferrals, such as deferrals of IPKE or LTIP awards, shall be
credited to the Memorandum Account as of the first of the month coinciding with
or following the cash payment date that would have applied absent the deferral.
Recurring deferrals, such as for base salary, shall be deemed to occur evenly
throughout the year (or the portion thereof) during which such deferrals are
occurring, and for purposes of crediting assumed earnings, 50% of the total of
such deferrals for the period may be treated as having been in the Memorandum
Account for the entire deferral period.
(d) The rate to be used in crediting assumed earnings for each
calendar year or partial year shall be the First Hawaiian Bank Prime Rate as in
effect at the beginning of the calendar year. When earnings are credited
during a year in conjunction with a payment at a time other than in January of
less than the entire remaining Memorandum Account balance, the determination of
such interim earnings shall be made in an administratively feasible manner that
prevents or minimizes the possibility of crediting additional earnings on the
interim earnings at the end of the year.
Section 3.4 Discretionary Investment by Company.
(a) The deferred amounts to be paid to Participants constitute an
unfunded obligation of the Participating Employer. The Committee may, however,
annually direct that an amount equal to the deferred amounts for that year be
invested
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by the Participating Employers as the Committee, in its sole discretion, shall
determine.
(b) The Committee may, in its sole discretion, determine that all
or a portion of the deferred amounts be paid into one or more grantor trusts
that may be established by the Participating Employer for the purpose of
providing a potential source of funds to pay Plan benefits. Moreover, such
payment of all previously deferred amounts to a grantor trust shall be required
in connection with a Change in Control.
(c) The Committee may designate an investment advisor to direct
the investment of funds that may be used to pay benefits, including the
investment of the assets of any grantor trusts hereunder.
Section 3.5 Change in Control.
If the terms of a Change in Control provide that this Plan shall be
assumed by the successor organization, then this Plan shall (subject to Section
3.4(b)) continue in accordance with its terms. If, however, the terms of a
Change in Control do not so provide, then immediately prior to the occurrence
of such a Change in Control, the Plan shall automatically terminate and each
Participant shall receive immediately prior to such Change in Control a lump
sum distribution of his Memorandum Account or Memorandum Accounts.
Section 3.6 Payment.
(a) Upon the retirement, death, Disability, resignation, or other
termination of employment of a Participant or upon a
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Special Deferral payment date, the Participant, or in the case of his death,
his Beneficiary, shall be paid an amount equal to the balance of the
Participant's Memorandum Account, plus assumed earnings (determined pursuant to
Section 3.3) to the date of distribution.
(b) Payment shall be made in cash in (i) a single lump sum or (ii)
installments payable once each calendar year over a specified period of up to
12 years. The first installment shall be paid as soon as practicable after the
Participant's termination of employment and each subsequent installment shall
be paid in the January following the immediately preceding payment. Such
installments shall be in substantially equal payments, except that the first
installment shall be prorated so that it bears the same proportion to a full
annual installment as the remainder of the year following the calculation date
bears to the full year.
(c) (1) Payment of a Special Deferral shall be made in a lump
sum on the specified payment date; installment payment of a Special Deferral
shall not be permitted.
(2) The Committee shall determine the form of payment of
any other deferrals, and prior to doing so, may consider an expression of the
Participant's preference that is made at any time up to one year before the
triggering event for the payment. Payment of such other deferrals shall be
made or commence as soon as practicable following the Participant's retirement,
death, Disability, resignation, or other termination of employment.
(d) The Committee, in its sole discretion, may accelerate
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the payment of the unpaid balance of a Participant's Memorandum Account in the
event of the Participant's retirement, death, Disability, resignation, or
termination of employment or upon its determination that the Participant (or
his Beneficiary in the case of his death) has incurred a severe, unforeseeable
financial hardship creating an immediate and heavy need for cash that cannot
reasonably be satisfied from sources other than an accelerated payment from
this Plan. The Committee in making its determination may consider such factors
and require such information as it deems appropriate.
(e) All payments under the Plan shall be subject to withholding
taxes that the Participating Employer is required by law to withhold.
ARTICLE IV
NO CONTRIBUTIONS
Section 4.1 No Contributions By Participating Employers.
No contributions to a trust fund shall be required of or made by any
Participating Employer.
Section 4.2 Benefits Payable From General Assets.
The amount of any Memorandum Account payable to a Participant shall
remain part of the general funds of the Participating Employers. No
Participant or Beneficiary shall acquire any property interest in his
Memorandum Account or any other assets of any Participating Employer. A
Participant's or Beneficiary's right hereunder shall be limited to receiving
from the Participating Employer deferred payments measured as set forth in this
Plan. To the extent that any Participant or
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Beneficiary acquires a right to receive benefits under this Plan, such right
shall be no greater than the right of any unsecured general creditor of a
Participating Employer.
ARTICLE V
ADMINISTRATION
Section 5.1 Committee.
Subject to the limitations of this Plan and unless otherwise
determined by the Board, the Committee shall have the power and the duty to
take all actions and to make all decisions necessary or proper to administer
this Plan, including:
(1) To require as a condition to receiving any benefits
under this Plan, any person to furnish such information that the Committee may
reasonably request for the purpose of the proper administration of this Plan;
(2) To make and enforce such rules and regulations and
prescribe the use of such forms as it shall deem necessary for the efficient
administration of this Plan;
(3) To decide questions concerning the interpretation of
this Plan, including the eligibility of any person for benefits under this
Plan;
(4) To determine the amount of benefits that shall be
payable to any person in accordance with the provisions of this Plan;
(5) To delegate responsibility for performance of
ministerial functions necessary for the administration of the
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Plan to such employees of the Company or a Participating Employer, including
Participants, as the Committee shall deem appropriate; and
(6) To employ the services of such other persons as the
Committee may deem necessary or desirable in connection with this Plan,
including but not limited to an actuary, legal counsel, an independent
accountant, agents, and such clerical, medical, and accounting services as it
may require in carrying out the provisions of this Plan or in complying with
the requirements of ERISA.
Section 5.2 Indemnification, Insurance.
The Participating Employers shall indemnify and save harmless and/or
insure each fiduciary who is an employee or a director of a Participating
Employer or an Affiliate 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.
Section 5.3 Claims Procedure.
(a) The procedure for claiming benefits under this Plan shall be
as follows:
(1) The Committee shall determine the benefits due
hereunder to a Participant or his beneficiary or beneficiaries, but a
Participant or his beneficiary or beneficiaries may file a claim for benefits
by written notice to the Committee.
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(2) If a claim is denied in whole or in part, the
Committee shall give the claimant written notice of such denial, within a
reasonable period of time following the filing of the claim. Such notice shall
(i) specify the reason or reasons for the 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 (3)
hereof.
(3) The claimant may then appeal the denial of the claim
to the Committee 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 the notice of appeal,
review any documents pertinent to the claim and submit issues and comments in
writing. The Committee shall make its decision on such appeal within 60 days
after receipt of the appeal (unless a longer period is requested by the
claimant), and shall forthwith give written notice of such decision.
(b) (1) Notwithstanding Section 5.3(a), in the event of a
Change in Control a Participant may submit any claim for payment to arbitration
as follows. On or after the second day following the termination of the
Participant's employment or other event triggering a right to payment, a claim
may be filed orally with an arbitrator of the Participant's choice and
thereafter the Company shall be notified orally.
(2) The arbitrator must be (i) a member of the National
Academy of Arbitrators or a person who currently appears on arbitration panels
issued by the Federal Mediation
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and Conciliation Service or the American Arbitration Association or (ii) a
retired judge of the State of Hawaii who served at the appellate level.
(3) The arbitration hearing shall be held within 24 hours
(or as soon thereafter as possible) after filing of the claim unless the
Participant and the Company agree to a later date. No continuance of said
hearing shall be allowed without the mutual consent of the Participant and the
Company. Absence from or nonparticipation at the hearing by either party shall
not prevent the issuance of an award. Hearing procedures that expedite the
hearing may be ordered at the arbitrator's discretion, and the arbitrator may
close the hearing in his sole discretion upon deciding he has heard sufficient
evidence to satisfy issuance of an award. In reaching a decision, the
arbitrator shall be limited to interpreting this Plan; he shall have no
authority to ignore, change, modify, add to, or delete from any provision of
this Plan.
(4) The arbitrator's award shall be rendered as
expeditiously as possible, and in no event, later than seven days after the
close of the hearing. If the arbitrator finds that any payment is due to the
Participant under the Plan, the arbitrator shall order the Company or
Participating Employers to pay that amount to the Participant within 48 hours
after the decision is rendered. The award of the arbitrator shall be final and
binding upon the Participant and the Company and the Participating Employers.
Judgment upon the award rendered by the arbitrator may be entered in any court
in the State of Hawaii or in any other court of competent jurisdiction.
(5) In the case of any arbitration regarding this
Agreement, the Participant shall be awarded the Participant's
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costs, including attorney's fees. The Company shall pay the arbitrator's fee
and all necessary expenses of the hearing, including any stenographic reporter
so employed.
ARTICLE VI
AMENDMENT, TERMINATION, MERGER
Section 6.1 Amendment.
The Board may at any time amend this Plan. No Plan amendment shall
decrease the amount of a Participant's Memorandum Account or his right thereto.
Section 6.2 Termination or Suspension.
The Board may at any time terminate or suspend further deferrals to
this Plan. No termination or suspension shall decrease the Participant's
Memorandum Account or his right thereto.
Section 6.3 Merger or Consolidation.
If this Plan is merged into or consolidated with, or if its assets or
liabilities are transferred to, any other plan, the provisions of such
subsequent plan must provide that each Participant of this Plan would, if the
subsequent plan then terminated, receive a benefit immediately after the
merger, consolidation, or transfer, that is equal to or greater than the
benefit he would have been entitled to immediately before the merger,
consolidation, or transfer.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Rights of Participants.
(a) No Participant shall, by reason of his participation in this
Plan, have any interest in (i) any specific asset or assets of a Participating
Employer or an Affiliate or (ii) any stock rights of any kind.
(b) Neither the adoption of this Plan, the making of any deferrals
under this Plan, nor any action of the Board or the Committee in connection
with the Plan shall be held or construed to confer upon any person any legal
right to be continued as an officer or employee of a Participating Employer or
an Affiliate.
(c) No Participant shall have the right to assign, pledge,
encumber, or otherwise dispose of (except to a Beneficiary upon his death) any
of his interest in this Plan; nor shall his interest be subject to garnishment,
attachment, transfer by operation of law, or any legal process.
Section 7.2 Misc. Rules.
(a) Wherever used herein the masculine gender shall include the
feminine and the singular number shall include the plural, unless the context
clearly indicates otherwise.
(b) 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.
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(c) Wherever a Participating Employer, the Company, or the Board
is permitted or required to do or perform any act, matter, or thing under the
terms of the Plan, it may be done and performed by any officer of a
Participating Employer or the Company thereunto duly authorized.
(d) 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.
(e) All consents, elections, applications, designations, etc.
required or permitted under the Plan must be made on forms prescribed by the
Committee, and shall be recognized only if properly completed, executed, and
filed with the Committee.
(f) (1) Every person receiving or claiming benefits under the
Plan shall be conclusively presumed to be mentally competent and of age until
the date on which the Committee receives a written notice, in a form and manner
acceptable to the Committee, that such person is incompetent or a minor for
whom a guardian or other person legally vested with the care of his person or
estate has been appointed. If, however, the Committee finds that any person to
whom a benefit is payable under the Plan is unable to care for his affairs
because of incompetency or because he or she is a minor, any payment due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative) may be paid to the spouse, a child, a parent, a brother or
sister, or to any person or institution considered by the Committee to have
incurred expense for such person otherwise entitled to payment. To the extent
permitted by law, any such payment so made shall be a complete discharge of
liability therefor under the Plan.
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(2) If a guardian of the estate of any person receiving
or claiming benefits under the Plan is appointed by a court of competent
jurisdiction, benefit payments may be made to such guardian provided that
proper proof of appointment and continuing qualification is furnished in a form
and manner acceptable to the Committee. In the event a person claiming or
receiving benefits under the Plan is a minor, payment may be made to the
custodian of an account for such person under the Uniform Gifts to Minors Act.
To the extent permitted by law, any such payment so made shall be a complete
discharge of any liability therefor under the Plan.
TO RECORD the adoption of this document, First Hawaiian, Inc. has
executed this document this 15th day of February, 1996.
FIRST HAWAIIAN, INC.
By /s/ HERBERT E. WOLFF
-------------------------------------
Its Senior Vice President & Secretary
By
-------------------------------------
Its
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EXHIBIT I
FORM OF BENEFICIARY DESIGNATION
FIRST HAWAIIAN, INC.
DEFERRED COMPENSATION PLAN
I hereby direct that, if I die prior to the payment in full of my
vested interest in my Memorandum Account in the First Hawaiian, Inc. Deferred
Compensation Plan (hereinafter the "Plan"), any unpaid balance be paid to:
Name: ______________________________
Address: ______________________________
______________________________
This beneficiary designation revokes any and all other
beneficiary designations under the Plan made prior to the date of this
designation.
Dated:__________________ _________________________
Participant
Receipt acknowledged:
Committee
By______________________
Dated:__________________
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