false 0000046195 0000046195 2021-03-26 2021-03-26

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report	March 26, 2021
(Date of earliest event reported)

 

BANK OF HAWAII CORP

(Exact name of registrant as specified in its charter)

 

Delaware	1-6887	99-0148992
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

130 Merchant Street	Honolulu	Hawaii	96813
(Address of principal executive offices)	(City)	(State)	(Zip Code)

 

(888) 643-3888

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class			Trading Symbol		Name of each exchange on which registered
Common Stock	$.01 Par Value		BOH		New York Stock Exchange

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

---

 

 

Item 5.02(e).  Compensatory Retention Arrangements of Certain Officers.

 

Bank of Hawaii’s success largely depends on maintaining stability among its senior executives, both in terms of continuing the Company’s recent levels of high performance, as well as properly executing the Company’s well-defined succession planning objectives. Specifically, creating an overlap of experience between the current executive team and the next generation of Bank of Hawaii leadership provides the Company with the highest probability of maintaining long-term sustainable success.  

 

To that end, on March 26, 2021, the Human Resources and Compensation Committee of the Board of Directors of the Company approved a Select Executive Retention Program (the "Retention Program") for certain members of the Company’s senior leadership team, including the following named executive officers:

 

•

Mary E. Sellers, Vice Chair and Chief Risk Officer;

•

Sharon M. Crofts, Vice Chair and Senior Executive Director of Operations & Technology;

•

James C. Polk, Vice Chair and Chief Commercial Officer; and

•

Dean Y. Shigemura, Vice Chair and Chief Financial Officer.

 

The Retention Program will consist of two plans: 1) a Special Retention Incentive Plan (“SRIP”); and 2) a Supplemental Restricted Stock Grant Program (“SRSGP”).  

The following named executive officers were selected to participate in the SRIP:

Participant		Retention Amount				Cash				Restricted Stock Grants
Mary E. Sellers		$	4,500,000			$	2,250,000				24,158
Sharon M. Crofts		$	3,000,000			$	1,500,000				16,105

 

As more fully set forth in the SRIP Letter Agreement and SRIP Restricted Stock Grant Agreement, forms of which are attached hereto as Exhibits 10.1 and 10.2, and incorporated herein by reference, each SRIP participant is granted a performance-based award, 50% in the form of cash and 50% in the form of restricted stock with vesting following a three-year performance period, pursuant to the Bank of Hawaii Corporation 2014 Stock and Incentive Plan ("2014 Stock and Incentive Plan").  For the award to vest, the participant must remain employed with the Bank through March 29, 2024, and perform at a level that meets expectations.  

The final award amount will depend upon the Bank's performance relative to regional bank comparators, as measured by certain performance metrics over the three-year performance period of 2021-2023.  Going forward, participants in the SRIP will be eligible for annual payouts under the Bank of Hawaii Corporation Executive Incentive Plan (“EIP”), but will not be eligible for future equity incentive awards.

The following named executive officers were selected to participate in the SRSGP:

GRANTEE	Retention Amount			Restricted Stock Grants
James C. Polk	$	1,000,000			10,737
Dean Y. Shigemura	$	1,000,000			10,737

 

As more fully set forth in the SRSGP Restricted Stock Grant Agreement (Performance Based), a form of which is attached hereto as Exhibit 10.3 and incorporated herein by reference, each SRSGP participant is granted a performance-based award in the form of restricted stock with vesting following a five-year performance period, pursuant to the 2014 Stock and Incentive Plan.  For the award to vest, the participant must remain employed with the Bank through March 31, 2026, and perform at a level that meets expectations.  

The final award amounts will also depend upon the Bank's performance relative to regional bank comparators, as measured by certain performance metrics, over the five-year performance period of 2021-2026.  SRSGP participants will remain eligible for annual equity incentive awards as well as EIP payouts.

 

---

 

As the below chart illustrates, the vesting of all awards under the Retention Program will depend upon the Bank’s performance relative to S&P Supercomposite Regional Bank Index comparator companies (excluding banks with assets > $50.0 billion). The percentile rank is determined as the average of the numerical measures with respect to return on equity and stock price to book ratio over the three- and five-year vesting periods of the SRIP and SRSGP, respectively.

 

Return on Equity and Stock Price to Book Ratio
Financial Performance Criteria Average Percentile Rank	Applicable Percentage
75th and Above (Maximum)	100%
62.5th – 74.99th	75%
50th - 62.49th	50%
Below 50th	0%

 

---

 

Item 9.01.   Financial Statements and Exhibits.

(d)

Exhibits

 

Exhibit No.
10.1	Bank of Hawaii Corporation 2014 Stock and Incentive Plan – SRIP Letter Agreement
10.2	Bank of Hawaii Corporation 2014 Stock and Incentive Plan – SRIP Restricted Stock Grant Agreement
10.3	Bank of Hawaii Corporation 2014 Stock and Incentive Plan – SRSGP Restricted Stock Grant Agreement
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

---

 

 

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 31, 2021	Bank of Hawaii Corporation
	By:	/s/ Patrick M. McGuirk
		Patrick M. McGuirk
		Senior Executive Vice President and Corporate Secretary

 

 

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 1 of 11 

EXHIBIT 10.1

###GRANT_DATE###

 

 

###PARTICIPANT_NAME###

###PARTICIPANT_POSITION###

###PARTICIPANT_ADDRESS###

 

Dear ###PARTICIPANT_FIRST NAME###:

 

As you know, Bank of Hawaii (the "Bank") is in the process of transitioning leadership over the next three to five years and a seamless transition would be optimal.  To achieve this, management believes it is critical to retain key longstanding staff over this transition period.

 

To incentivize key employees, the Bank has established the Bank of Hawaii Corporation Select Executive Retention Program (the "Retention Program").  You are a very valuable member of our team and are needed to assist the Bank during this period.  Therefore, we are pleased to offer you the following retention bonus opportunity as a Special Retention Incentive Plan (SRIP) participant under the terms of the Retention Program, subject to the terms and conditions described in this letter agreement (the "Agreement").

 

 

 

 

a.Vesting  Upon Completion of Retention Period and Bank's Performance.

 

In order for any portion of the Retention Payment to become vested pursuant to this Section 3.a, you must continue to work in your current position, or any other position as designated by the Chairman and President/Chief Executive Officer of the Bank, through the end of the Retention Period, and you must also continue to perform at a Meets Expectations or better level, as determined by the Chairman and President/Chief Executive Officer of the Bank, throughout the Retention Period (these requirements are together referred to herein as the "Employment and Performance Requirements").

 

For purposes of this Section 3.a, Fifty percent (50%) of the Retention Payment is hereby designated as the "First Category Retention Amount", and fifty percent (50%) as "Second Category Retention Amount".  

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 2 of 11 

The portion of the Retention Payment eligible for vesting pursuant to this Section 3.a shall be based upon the level of achievement of specified financial performance criteria, where the First Category Retention Amount shall be conditioned upon "Return on Equity", and the Second Category Retention Amount shall be conditioned upon "Stock Price to Book Ratio" ("Financial Performance Criteria").  In this regard, the "Applicable Vesting Percentage" of the First Category Retention Amount and Second Category Retention Amount will be eligible for vesting, based upon the Bank of Hawaii Corporation's ("Company") achievement of the respective Financial Performance Criteria in accordance with the following schedule:

 

 

For purposes of this Agreement, the terms "Return on Equity" and "Stock Price to Book Ratio" (as defined by the Federal Reserve Bank) shall mean such terms as determined for the banks that comprise the S&P Supercomposite Regional Bank Index (where for the applicable year, Return on Equity shall be measured as of December 31 of such year, and Stock Price to Book Ratio shall be measured based on stock price as of December 31 and book value as of September 30 of such year).  With respect to the given Financial Performance Criteria, the "Three Year Average Percentile" shall mean the Company's percentile level on the S&P Supercomposite Regional Bank Index for the average of the numerical measures over the three year period commencing on January 1, 2021, and ending on December 31, 2023.  The Financial Performance Criteria shall be determined based on references to measures and percentiles for the peer group banks that comprise the S&P Supercomposite Regional Bank Index (with peer group banks determined by excluding banks with assets >$50B) as of January 4, 2021.

 

Committee and People Services Determinations.  The Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") shall certify whether the Financial Performance Criteria for the First Category Retention Amount and Second Category Retention Amount have been achieved for the three year performance period commencing on January 1, 2021, and ending on December 31, 2023, as soon as administratively practicable following the completion of the performance period.

 

People Services shall confirm whether you have satisfied the Employment and Performance Requirements, as soon as administratively practicable following the completion of the Retention Period.

 

Vesting of First Category Retention Amount.  The amount equal to the Applicable Vesting Percentage multiplied by the First Category Retention Amount shall become vested provided that: (i) the Committee shall have certified the Three Year Average Percentile level for the Company's "Return on Equity" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed your fulfillment of the Employment and Performance Requirements.

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 3 of 11 

Vesting of Second Category Retention Amount.  The amount equal to the Applicable Vesting Percentage multiplied by the Second Category Retention Amount shall become vested provided that: (i) the Committee shall have certified the Three Year Average Percentile level for the Company's "Stock Price to Book Ratio" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed your fulfillment of the Employment and Performance Requirements.

 

 

 

Payment of any portion of the Retention Payment is also expressly conditioned upon your (or your estate's) agreement to waive and release claims arising out of or related to your employment up to the earlier of your termination of employment or the end of the Retention Period.

 

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 4 of 11 

The payment of all or any portion of the Retention Payment is intended to be in accordance with the "short term deferral" exception under Treasury Regulation Section 1.409A-1(b)(4)(i)(A).  However, such amount will be credited to, and thereafter treated as amounts under, the Bank of Hawaii Corporation Executive Base Salary Deferral Plan ("Base Salary Deferral Plan") to the extent that you make a valid deferral election for such Payment by the Effective Date, which deferral election shall constitute a valid initial deferral election with respect to a forfeitable right as described in Treasury Regulation Section 1.409A-2(a)(5).  

 

Any Retention Payment amount credited to the Base Salary Deferral Plan will be maintained and administered under the terms of the Base Salary Deferral Plan (e.g., participant investment direction) to the extent not otherwise determined in this Agreement or valid deferral elections for such Payment.  The deferred payment of any Retention Payment amount is intended to meet the requirements of Code Section 409A, and in particular the deferral election for any such Payment is intended to constitute a valid initial deferral election with respect to a forfeitable right as described in Treasury Regulation Section 1.409A-2(a)(5).  This Agreement shall constitute an incentive payment agreement as described in Article 10B(b) of the Base Salary Deferral Plan.

 

 

 

Your participation in any other benefit plan or program in which you participated immediately prior to the Effective Date (e.g., the Bank of Hawaii Corporation Executive Incentive Plan), will not be affected under this Agreement.

 

Any Retention Payment amount that becomes payable to you hereunder will not be taken into account in computing your salary or other compensation for purposes of determining any benefits or compensation payable to you or your beneficiaries or estate under any benefit arrangement or other agreement between you and the Bank, with the exception of the Base Salary Deferral Plan to the extent that you make a valid deferral election for such Payment.

 

 

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 5 of 11 

9.Waiver and Release of Claims.

 

 

These claims include, but are not limited to, claims arising under statutory or common law in the United States (including federal, state or local jurisdictions) or any foreign country.  The released claims include, but are not limited to, damage claims under anti-discrimination statutes such as Title VII of the Civil Rights Act, the federal Age Discrimination in Employment Act ("ADEA"), and Hawaii's civil rights laws (Hawaii Revised Statutes Chapter 368 and 378); claims under wage and hour laws; claims under the laws of contract and tort (such as claims for breach of contract, infliction of emotional distress, defamation, fraud, misrepresentation, unfair or deceptive trade practices, invasion of privacy, wrongful termination, etc.); claims based upon the Hawaii Whistleblowers' Protection Act, H.R.S. § 378-61, et seq.; claims under the Sarbanes-Oxley Act of 2002, including Section 806 (18 U.S.C. § 1514A) of the Corporate and Criminal Fraud Accountability Act of 2002 (Title VIII of Sarbanes-Oxley Act of 2002); whistleblower claims based upon the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act; and claims for attorneys' fees and/or costs.  Unless otherwise stated herein, this Release covers all claims that are based upon any event, action, or inaction that occurred or was to have occurred through the Effective Date of this Agreement.

 

You understand that nothing contained in this Agreement limits your ability to communicate with, file a charge or complaint with, participate in any investigation or proceeding with, provide documentary or other information to, or receive an award for information provided to, any governmental agency such as the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local governmental agency or commission, without notice to the Bank.

 

 

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 6 of 11 

 

 

 

 

 

 

 

 

This Agreement includes a waiver of any claims you may have under the Age Discrimination in Employment Act ("ADEA") through the Effective Date of the Agreement.  You have up to twenty-one (21) days from the date of this letter to accept the terms of this Agreement, although you may accept it at any time within those twenty-one (21) days.  To properly weigh the advantages and disadvantages of signing this Agreement and waiving your ADEA claims, you are advised to consult an attorney about this Agreement prior to signing.  If you want to accept the Agreement prior to the expiration of the twenty-one (21) days, you will need to indicate your waiver of the twenty-one (21) day consideration period by signing in the space indicated below.

 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 7 of 11 

To accept this Agreement, please date, sign and return it to me.  (An extra copy for your file is provided).  Once you do so, pursuant to the OWBPA, you will still have an additional seven (7) days in which to revoke your acceptance.  To revoke, you must send me a written statement of revocation by registered mail, return receipt requested.  If you do not revoke, the eighth (8th) day after the date of your acceptance will be the "Effective Date" of this Agreement.  The Agreement will not be effective and enforceable until the revocation period has expired.

 

BANK OF HAWAII CORPORATION and

BANK OF HAWAII

 

 

By:  _________________________________________________

Ed Hudson

Senior Executive Vice President

Chief People Officer

 

By signing this Agreement, I acknowledge that I have had the opportunity to review it carefully with an attorney of my choice; that I have read and understand its terms; and that I voluntarily agree to them.  I further understand that, as a condition for receiving the Retention Payment, set forth in this Agreement, I will be required to affirm, as set forth in Exhibit A, that as of March 29, 2024, the waiver and release agreement set forth above applies to the time period between the Effective Date of this Agreement and March 29, 2024.

 

 

________________________________

###PARTICIPANT_NAME###Dated

 

Pursuant to 29 C.F.R. § 1625.22(e)(6), I hereby knowingly and voluntarily waive the twenty-one (21) day pre-execution consideration period set forth in Older Workers Benefit Protection Act (29 U.S.C. § 626(f)(1)(F)(i)).

 

 

________________________________

###PARTICIPANT_NAME###Dated

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 8 of 11 

EXHIBIT A

 

[To be executed on or after March 29, 2024]

 

WAIVER AND RELEASE OF CLAIMS THROUGH MARCH 29, 2024

 

 

I agree that all applicable terms and conditions in my Waiver and Release of Claims set forth in Section 9 of the Agreement dated ###GRANT_DATE###, apply with respect to the period of my employment with the Bank from the Effective Date of the Agreement through March 29, 2024.

 

 

UNDERSTOOD AND AGREED:

 

 

_____________________________________ _________________________________

###PARTICIPANT_NAME###Dated

 

 

 

Pursuant to 29 C.F.R. § 1625.22(e)(6), I hereby knowingly and voluntarily waive the twenty-one (21) day pre-execution consideration period set forth in Older Workers Benefit Protection Act (29 U.S.C. § 626(f)(1)(F)(i)).

 

 

_____________________________________ _________________________________

###PARTICIPANT_NAME###Dated

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 9 of 11 

Bank of Hawaii Corporation
Executive Base Salary Deferral Plan
deferral election

 

The attached form constitutes a deferral election for all or a portion of the Retention Payment described in Section 3 of the Select Executive Retention Program Agreement ("Agreement") between ###PARTICIPANT_NAME###, and Bank of Hawaii Corporation ("BOHC") and Bank of Hawaii, dated ###GRANT_DATE###, and made pursuant to the Bank of Hawaii Corporation Select Executive Retention Program.  

 

As approved and designated by BOHC, the Agreement constitutes an "other incentive payment agreement" as described in Article 10B(b) of the Bank of Hawaii Corporation Executive Base Salary Deferral Plan ("Base Salary Deferral Plan"), and amounts deferred will be credited to, and thereafter treated as an amount under, the Base Salary Deferral Plan.

 

The deferred payment of any Retention Payment amount is intended to meet the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and this deferral election is intended to constitute a valid initial deferral election with respect to a forfeitable right as described in Treasury Regulation Section 1.409A-2(a)(5).

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 10 of 11 

 

---

###PARTICIPANT_NAME###

Select Executive Retention Program Agreement (SRIP)

###GRANT_DATE###

Page 11 of 11 

 

 

 

 

 

 

Exhibit 10.2

BANK OF HAWAII CORPORATION
2014 STOCK AND INCENTIVE PLAN

RESTRICTED STOCK grant AGREEMENT (Performance Based)
pursuant to THE
BANK OF HAWAII Corporation
SELECT EXECUTIVE RETENTION PROGRAM

 

This Restricted Stock Grant Agreement ("Agreement") dated ###GRANT_DATE### ("Grant Date"), between Bank of Hawaii Corporation, a Delaware corporation ("Company"), with its registered office at 130 Merchant Street, Honolulu, Hawaii 96813, and ###PARTICIPANT_NAME### ("Grantee"), an executive of the Company or subsidiary of the Company who as of the Grant Date is an Eligible Person under the Bank of Hawaii Corporation 2014 Stock and Incentive Plan ("Plan"), is made pursuant to the Plan and the Bank of Hawaii Corporation Select Executive Retention Program ("Retention Program").

1.Grant of Restricted Shares.  Pursuant to the Plan, and effective as of the Grant Date, the Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") has granted to Grantee ###TOTAL_AWARDS### shares of Restricted Stock ("Restricted Shares").  Fifty percent (50%) of the Restricted Shares are hereby designated as "First Category Shares", and fifty percent (50%) as "Second Category Shares".

The Restricted Shares serve as the restricted stock award granted to Grantee as a Special Retention Incentive Plan (SRIP) participant under the Retention Program.  In accordance with the terms of the Retention Program, the performance period applicable with respect to the Restricted Shares shall be the three year period commencing on January 1, 2021, and Grantee must satisfy the following employment and performance requirements in order for the Restricted Shares to become vested: (a) from the Grant Date until March 29, 2024, Grantee must remain employed in Grantee's current position, or any other position as designated by the Chairman and President/Chief Executive Officer of Bank of Hawaii; and (b) from the Grant Date until March 29, 2024, Grantee must continue to perform at a Meets Expectations or better level, as determined by the Chairman and President/Chief Executive Officer of Bank of Hawaii (these requirements are together referred to herein as the "Employment and Performance Requirements").

2.Restrictions During Period of Restriction.  The given category of Restricted Shares shall be subject to forfeiture by Grantee and shall be nontransferable until the "Period of Restriction" terminates as to such Restricted Shares.  The Restricted Shares shall vest in Grantee upon termination of the Period of Restriction (to the extent that the Restricted Shares have not previously been forfeited).  For purposes of this Agreement, the term "Period of Restriction" shall mean the period that commences on the Grant Date and terminates on the later of: (a) the date of certification of achievement of service and financial performance objectives by the Committee; and (b) the date of confirmation by People Services of Grantee's fulfillment of the Employment and Performance Requirements (the later of which is the "Date of Certification"), as described in Section 2.d below (or which Period of Restriction otherwise terminates as provided in Section 2.c below).  In the event the later of the Committee's certification or the confirmation by People Services is completed after the close of the New York Stock Exchange on the actual date of such certification (i.e., the date of the Committee meeting) or confirmation, the Date of Certification shall be deemed to be, and the Period of Restriction shall instead terminate, on the next business day.  

 

 

---

 

As described below, the Period of Restriction shall terminate based upon the level of achievement of specified financial performance criteria, where the First Category Shares shall be conditioned upon "Return on Equity", and the Second Category Shares shall be conditioned upon "Stock Price to Book Ratio" ("Financial Performance Criteria").  In this regard, the Period of Restriction shall terminate with respect to the "Applicable Vesting Percentage" of the First Category Shares and Second Category Shares, as the case may be, based upon the Company's achievement of the respective Financial Performance Criteria in accordance with the following schedule:

For purposes of this Agreement, the terms "Return on Equity" and "Stock Price to Book Ratio" (as defined by the Federal Reserve Bank) shall mean such terms as determined for the banks that comprise the S&P Supercomposite Regional Bank Index (where for the applicable year, Return on Equity shall be measured as of December 31 of such year, and Stock Price to Book Ratio shall be measured based on stock price as of December 31 and book value as of September 30 of such year).  With respect to the given Financial Performance Criteria, the "Three Year Average Percentile" shall mean the Company's percentile level on the S&P Supercomposite Regional Bank Index for the average of the numerical measures over the three year period commencing on January 1, 2021, and ending on December 31, 2023.  The Financial Performance Criteria shall be determined based on references to measures and percentiles for the peer group banks that comprise the S&P Supercomposite Regional Bank Index (with peer group banks determined by excluding banks with assets >$50B) as of January 4, 2021.

a.Termination of Period of Restriction For First Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the First Category Shares, provided that: (i) the Committee shall have certified the Three Year Average Percentile level for the Company's "Return on Equity" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

b.Termination of Period of Restriction Second Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the Second Category Shares, provided that: (i) the Committee shall have certified the Three Year Average Percentile level for the Company's "Stock Price to Book Ratio" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

2.

---

 

c.Termination of Period of Restriction Upon Certain Terminations of Employment

In addition to the termination of the Period of Restriction based on the achievement of the service and financial performance objectives as described in Sections 2.a-2.b above, the Period of Restriction shall terminate in connection with certain terminations of Grantee's employment with the Company and its subsidiaries as described in this Section 2.c.  Specifically, the Period of Restriction for all of the Restricted Shares shall terminate (to the extent that the Period of Restriction has not previously terminated or the Restricted Shares have not previously been forfeited) upon the occurrence of any of the following: (i) the death of Grantee; (ii) the Grantee ceasing to be an Employee due to "disability" within the meaning of that term under Section 409A of the Internal Revenue Code of 1986, as amended ("Code"), and the regulations promulgated thereunder; or (iii) upon or after the occurrence of a "Change in Control" (within the meaning of Section 2.5 of the Bank of Hawaii Corporation Change-in-Control Retention Plan, restatement effective December 17, 2009 ("Change-in-Control Plan")) either (A) Grantee's employment with the Company and its subsidiaries is terminated by the Company without "Cause" (within the meaning of Section 2.4 of the Change-in-Control Plan) or (B) Grantee terminates employment with the Company and its subsidiaries for "Good Reason" (within the meaning of Section 2.15 of the Change-In-Control Plan).

d.Committee and People Services Determinations.  The Committee shall certify whether the Financial Performance Criteria for the First Category Shares and Second Category Shares have been achieved as soon as administratively practicable following the completion of the three year performance period commencing on January 1, 2021, and ending on December 31, 2023.  To the extent that the satisfaction of the Financial Performance Criteria is certified, and People Services has confirmed Grantee's fulfillment of the Employment and Performance Requirements (the date of the later to occur is the Date of Certification), the Restricted Shares subject to vesting shall vest on the Date of Certification (i.e., the Period of Restriction shall be terminated on the Date of Certification).

3.Forfeiture of Unvested Restricted Shares.  Restricted Shares as to which the Period of Restriction has not terminated shall be forfeited and transferred to the Company upon the first to occur of: (a) Grantee's ceasing to be an Employee for any reason, whether voluntary or involuntary (other than for a termination of employment described in Section 2.c), and (b) the date the Committee determines the Financial Performance Criteria were not met (to the extent that the Restricted Shares do not become vested based on the Applicable Vesting Percentages).  However, as described in Section 2 above with respect to the termination of the Period of Restriction on the Date of Certification, the Applicable Vesting Percentage of the given category of Restricted Shares shall not be forfeited, to the extent that:  (a) with respect to such Applicable Vesting Percentage of such category of Restricted Shares, the Committee has certified that the corresponding Three Year Average Percentile level for such Applicable Vesting Percentage has been achieved; and (b) the Grantee is an Employee on the Date of Certification.  Grantee's employment shall not be treated as terminated in the case of a transfer of employment within the Company and its subsidiaries or in the case of sick leave and other approved leaves of absence.

3.

---

 

4.Issuance of Shares; Registration; Withholding Taxes.  Restricted Shares shall be issued in Grantee's name, shall bear the restrictive legends as are required or deemed advisable by the Company under the provisions of any applicable law, and shall be held by the Company until all restrictions lapse or such shares are forfeited as provided herein.  Upon the lapsing of all restrictions with respect to a portion of the Restricted Shares, the Company shall deliver to the Grantee (or, if applicable, to the Grantee's legal representatives, beneficiaries or heirs) those Shares that vested upon the lapsing of restrictions through the Direct Registration System or Electronic Share Transfer. The Shares as to which all restrictions have lapsed shall be free of the restrictive legends referred to in this Section 4 above.  The Company may postpone the issuance or delivery of the Shares until (a) the completion of registration or other qualification of such Shares or transaction under any state or federal law, rule or regulation, or any listing on any securities exchange, as the Company shall determine to be necessary or desirable; (b) the receipt by the Company of such written representations or other documentation as the Company deems necessary to establish compliance with all applicable laws, rules and regulations, including applicable federal and state securities laws and listing requirements, if any; and (c) the payment to the Company of any amount required by the Company to satisfy any federal, state or other governmental withholding tax requirements related to the issuance or delivery of the Shares.  Grantee shall comply with any and all legal requirements relating to Grantee's resale or other disposition of any Shares acquired under this Agreement.

5.Share Adjustments.  The number and kind of Restricted Shares or other property subject to this Agreement shall be subject to adjustment in accordance with Section 13 of the Plan.

6.Rights as Shareholder.  Unless otherwise provided herein, Grantee shall be entitled to all of the rights of a shareholder with respect to the Restricted Shares, including the right to vote such Shares and to receive dividends and other distributions (not including share adjustments as described in Section 5 above) payable with respect to such Shares from and after the Grant Date.  Grantee's rights as a shareholder shall terminate with respect to any Restricted Shares forfeited by Grantee.

7.Employment Rights.  Neither the Plan nor the granting of the Restricted Shares shall be a contract of employment of Grantee by the Company or any of its subsidiaries.  Grantee may be discharged from employment at any time by the employing Company or subsidiary, subject to any employment contract that may otherwise apply to Grantee.

8.Amendment.  This Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations issued thereunder or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan.  Unless necessary or advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be adopted only with the consent of Grantee.

9.Section 83(b) Election.  Grantee shall promptly deliver to the Company a copy of any election filed by Grantee in respect of the Restricted Shares pursuant to Code Section 83(b).

4.

---

 

10.Notices.  Any notice or other communication made in connection with this Agreement shall be deemed duly given when delivered in person or mailed by certified or registered mail, return receipt requested, to Grantee at Grantee's address shown on Company records or such other address designated by Grantee by similar notice, or to the Company at its then principal office, to the attention of the Corporate Secretary of the Company.  Furthermore, such notice or other communication shall be deemed duly given when transmitted electronically to Grantee at Grantee's electronic mail address shown on the Company records or, to the extent that Grantee is an active employee, through the Company's intranet.

11.Plan Governs.  The Restricted Shares evidenced by this Agreement are subject to the terms and conditions of the Plan and of this Agreement.  In case of conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall control.  Capitalized terms used in this Agreement and not defined herein shall have the meaning assigned in the Plan unless the context indicates otherwise.

12.Miscellaneous.  This Agreement shall bind and benefit Grantee, the heirs, distributees and personal representative of Grantee, and the Company and its successors and assigns.  This Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument.  Capitalized terms not herein defined shall have the meanings prescribed to them under the Plan.

BY ACCEPTING THE RESTRICTED SHARES GRANTED UNDER THIS RESTRICTED STOCK GRANT AGREEMENT, GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT AND IN THE PLAN.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

 

 

5.

 

EXHIBIT 10.3

BANK OF HAWAII CORPORATION
2014 STOCK AND INCENTIVE PLAN

RESTRICTED STOCK grant AGREEMENT (Performance Based)
pursuant to THE
BANK OF HAWAII Corporation
SELECT EXECUTIVE RETENTION PROGRAM

 

This Restricted Stock Grant Agreement ("Agreement") dated ###GRANT_DATE### ("Grant Date"), between Bank of Hawaii Corporation, a Delaware corporation ("Company"), with its registered office at 130 Merchant Street, Honolulu, Hawaii 96813, and ###PARTICIPANT_NAME### ("Grantee"), an executive of the Company or subsidiary of the Company who as of the Grant Date is an Eligible Person under the Bank of Hawaii Corporation 2014 Stock and Incentive Plan ("Plan"), is made pursuant to the Plan and the Bank of Hawaii Corporation Select Executive Retention Program ("Retention Program").

1.Grant of Restricted Shares.  Pursuant to the Plan, and effective as of the Grant Date, the Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") has granted to Grantee ###TOTAL_AWARDS### shares of Restricted Stock ("Restricted Shares").  Fifty percent (50%) of the Restricted Shares are hereby designated as "First Category Shares", and fifty percent (50%) as "Second Category Shares".

The Restricted Shares serve as the restricted stock award granted to Grantee as a Supplemental Restricted Stock Grant Program (SRSGP) participant under the Retention Program.  In accordance with the terms of the Retention Program, the performance period applicable with respect to the Restricted Shares shall be the five year period commencing on January 1, 2021, and Grantee must satisfy the following employment and performance requirements in order for the Restricted Shares to become vested: (a) from the Grant Date until March 31, 2026, Grantee must remain employed in Grantee's current position, or any other position as designated by the Chairman and President/Chief Executive Officer of Bank of Hawaii; and (b) from the Grant Date until March 31, 2026, Grantee must continue to perform at a Meets Expectations or better level, as determined by the Chairman and President/Chief Executive Officer of Bank of Hawaii (these requirements are together referred to herein as the "Employment and Performance Requirements").  

2.Restrictions During Period of Restriction.  The given category of Restricted Shares shall be subject to forfeiture by Grantee and shall be nontransferable until the "Period of Restriction" terminates as to such Restricted Shares.  The Restricted Shares shall vest in Grantee upon termination of the Period of Restriction (to the extent that the Restricted Shares have not previously been forfeited).  For purposes of this Agreement, the term "Period of Restriction" shall mean the period that commences on the Grant Date and terminates on the later of: (a) the date of certification of achievement of service and financial performance objectives by the Committee; and (b) the date of confirmation by People Services of Grantee's fulfillment of the Employment and Performance Requirements (the later of which is the "Date of Certification"), as described in Section 2.d below (or which Period of Restriction otherwise terminates as provided in Section 2.c below).  In the event the later of the Committee's certification or the confirmation by People Services is completed after the close of the New York Stock Exchange on the actual date of such certification (i.e., the date of the Committee meeting) or confirmation, the Date of Certification shall be deemed to be, and the Period of Restriction shall instead terminate, on the next business day.  

 

 

---

 

As described below, the Period of Restriction shall terminate based upon the level of achievement of specified financial performance criteria, where the First Category Shares shall be conditioned upon "Return on Equity", and the Second Category Shares shall be conditioned upon "Stock Price to Book Ratio" ("Financial Performance Criteria").  In this regard, the Period of Restriction shall terminate with respect to the "Applicable Vesting Percentage" of the First Category Shares and Second Category Shares, as the case may be, based upon the Company's achievement of the respective Financial Performance Criteria in accordance with the following schedule:

For purposes of this Agreement, the terms "Return on Equity" and "Stock Price to Book Ratio" (as defined by the Federal Reserve Bank) shall mean such terms as determined for the banks that comprise the S&P Supercomposite Regional Bank Index (where for the applicable year, Return on Equity shall be measured as of December 31 of such year, and Stock Price to Book Ratio shall be measured based on stock price as of December 31 and book value as of September 30 of such year).  With respect to the given Financial Performance Criteria, the "Five Year Average Percentile" shall mean the Company's percentile level on the S&P Supercomposite Regional Bank Index for the average of the numerical measures over the five year period commencing on January 1, 2021, and ending on December 31, 2025.  The Financial Performance Criteria shall be determined based on references to measures and percentiles for the peer group banks that comprise the S&P Supercomposite Regional Bank Index (with peer group banks determined by excluding banks with assets >$50B) as of January 4, 2021.

a.Termination of Period of Restriction For First Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the First Category Shares, provided that: (i) the Committee shall have certified the Five Year Average Percentile level for the Company's "Return on Equity" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

b.Termination of Period of Restriction Second Category Shares

The Period of Restriction shall terminate with respect to the amount equal to the Applicable Vesting Percentage multiplied by the Second Category Shares, provided that: (i) the Committee shall have certified the Five Year Average Percentile level for the Company's "Stock Price to Book Ratio" that corresponds to such Applicable Vesting Percentage; and (ii) People Services shall have confirmed Grantee's fulfillment of the Employment and Performance Requirements.

2.

---

 

c.Termination of Period of Restriction Upon Certain Terminations of Employment

In addition to the termination of the Period of Restriction based on the achievement of the service and financial performance objectives as described in Sections 2.a-2.b above, the Period of Restriction shall terminate in connection with certain terminations of Grantee's employment with the Company and its subsidiaries as described in this Section 2.c.  Specifically, the Period of Restriction for all of the Restricted Shares shall terminate (to the extent that the Period of Restriction has not previously terminated or the Restricted Shares have not previously been forfeited) upon the occurrence of any of the following: (i) the death of Grantee; (ii) the Grantee ceasing to be an Employee due to "disability" within the meaning of that term under Section 409A of the Internal Revenue Code of 1986, as amended ("Code"), and the regulations promulgated thereunder; or (iii) upon or after the occurrence of a "Change in Control" (within the meaning of Section 2.5 of the Bank of Hawaii Corporation Change-in-Control Retention Plan, restatement effective December 17, 2009 ("Change-in-Control Plan")) either (A) Grantee's employment with the Company and its subsidiaries is terminated by the Company without "Cause" (within the meaning of Section 2.4 of the Change-in-Control Plan) or (B) Grantee terminates employment with the Company and its subsidiaries for "Good Reason" (within the meaning of Section 2.15 of the Change-In-Control Plan).

d.Committee and People Services Determinations.  The Committee shall certify whether the Financial Performance Criteria for the First Category Shares and Second Category Shares have been achieved as soon as administratively practicable following the completion of the five year performance period commencing on January 1, 2021, and ending on December 31, 2025.  To the extent that the satisfaction of the Financial Performance Criteria is certified, and People Services has confirmed Grantee's fulfillment of the Employment and Performance Requirements (the date of the later to occur is the Date of Certification), the Restricted Shares subject to vesting shall vest on the Date of Certification (i.e., the Period of Restriction shall be terminated on the Date of Certification).

3.Forfeiture of Unvested Restricted Shares.  Restricted Shares as to which the Period of Restriction has not terminated shall be forfeited and transferred to the Company upon the first to occur of: (a) Grantee's ceasing to be an Employee for any reason, whether voluntary or involuntary (other than for a termination of employment described in Section 2.c), and (b) the date the Committee determines the Financial Performance Criteria were not met (to the extent that the Restricted Shares do not become vested based on the Applicable Vesting Percentages).  However, as described in Section 2 above with respect to the termination of the Period of Restriction on the Date of Certification, the Applicable Vesting Percentage of the given category of Restricted Shares shall not be forfeited, to the extent that:  (a) with respect to such Applicable Vesting Percentage of such category of Restricted Shares, the Committee has certified that the corresponding Five Year Average Percentile level for such Applicable Vesting Percentage has been achieved; and (b) the Grantee is an Employee on the Date of Certification.  Grantee's employment shall not be treated as terminated in the case of a transfer of employment within the Company and its subsidiaries or in the case of sick leave and other approved leaves of absence.

3.

---

 

4.Issuance of Shares; Registration; Withholding Taxes.  Restricted Shares shall be issued in Grantee's name, shall bear the restrictive legends as are required or deemed advisable by the Company under the provisions of any applicable law, and shall be held by the Company until all restrictions lapse or such shares are forfeited as provided herein.  Upon the lapsing of all restrictions with respect to a portion of the Restricted Shares, the Company shall deliver to the Grantee (or, if applicable, to the Grantee's legal representatives, beneficiaries or heirs) those Shares that vested upon the lapsing of restrictions through the Direct Registration System or Electronic Share Transfer. The Shares as to which all restrictions have lapsed shall be free of the restrictive legends referred to in this Section 4 above.  The Company may postpone the issuance or delivery of the Shares until (a) the completion of registration or other qualification of such Shares or transaction under any state or federal law, rule or regulation, or any listing on any securities exchange, as the Company shall determine to be necessary or desirable; (b) the receipt by the Company of such written representations or other documentation as the Company deems necessary to establish compliance with all applicable laws, rules and regulations, including applicable federal and state securities laws and listing requirements, if any; and (c) the payment to the Company of any amount required by the Company to satisfy any federal, state or other governmental withholding tax requirements related to the issuance or delivery of the Shares.  Grantee shall comply with any and all legal requirements relating to Grantee's resale or other disposition of any Shares acquired under this Agreement.

5.Share Adjustments.  The number and kind of Restricted Shares or other property subject to this Agreement shall be subject to adjustment in accordance with Section 13 of the Plan.

6.Rights as Shareholder.  Unless otherwise provided herein, Grantee shall be entitled to all of the rights of a shareholder with respect to the Restricted Shares, including the right to vote such Shares and to receive dividends and other distributions (not including share adjustments as described in Section 5 above) payable with respect to such Shares from and after the Grant Date.  Grantee's rights as a shareholder shall terminate with respect to any Restricted Shares forfeited by Grantee.

7.Employment Rights.  Neither the Plan nor the granting of the Restricted Shares shall be a contract of employment of Grantee by the Company or any of its subsidiaries.  Grantee may be discharged from employment at any time by the employing Company or subsidiary, subject to any employment contract that may otherwise apply to Grantee.

8.Amendment.  This Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations issued thereunder or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan.  Unless necessary or advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be adopted only with the consent of Grantee.

9.Section 83(b) Election.  Grantee shall promptly deliver to the Company a copy of any election filed by Grantee in respect of the Restricted Shares pursuant to Code Section 83(b).

4.

---

 

10.Notices.  Any notice or other communication made in connection with this Agreement shall be deemed duly given when delivered in person or mailed by certified or registered mail, return receipt requested, to Grantee at Grantee's address shown on Company records or such other address designated by Grantee by similar notice, or to the Company at its then principal office, to the attention of the Corporate Secretary of the Company.  Furthermore, such notice or other communication shall be deemed duly given when transmitted electronically to Grantee at Grantee's electronic mail address shown on the Company records or, to the extent that Grantee is an active employee, through the Company's intranet.

11.Plan Governs.  The Restricted Shares evidenced by this Agreement are subject to the terms and conditions of the Plan and of this Agreement.  In case of conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall control.  Capitalized terms used in this Agreement and not defined herein shall have the meaning assigned in the Plan unless the context indicates otherwise.

12.Miscellaneous.  This Agreement shall bind and benefit Grantee, the heirs, distributees and personal representative of Grantee, and the Company and its successors and assigns.  This Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument.  Capitalized terms not herein defined shall have the meanings prescribed to them under the Plan.

BY ACCEPTING THE RESTRICTED SHARES GRANTED UNDER THIS RESTRICTED STOCK GRANT AGREEMENT, GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT AND IN THE PLAN.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

 

 

5.