HEI Exhibit 10.20

 

ID# 4287t

 

AMERICAN SAVINGS BANK

SUPPLEMENTAL RETIREMENT, DISABILITY,

AND DEATH BENEFIT PLAN

 

Effective January 1, 1996

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PROLOGUE

 

American Savings Bank, F.S.B., (“ASB”) sponsors the American Savings Bank
Supplemental Retirement, Disability, and Death Benefit Plan (the “Plan”) in
order to assist ASB in attracting and retaining senior management personnel (who
by reason of training, education, experience, and ability are capable of
materially affecting ASB’s profitability and performance). This document is a
restatement of the Plan, effective January 1, 1996.

 

The Plan is unfunded and maintained for a select group of management employees.
It is not intended to meet or be subject to the qualification requirements of
Section 401(a) of the Internal Revenue Code of 1986, as amended.

 

This Plan, as restated, applies to participants who become entitled to benefits
under this Plan on or after January 1, 1996. For participants who became
entitled to benefits before January 1, 1996, the provisions of the Plan as then
in effect shall apply.

 

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ARTICLE I

DEFINITIONS

 

The following terms as used herein shall have the indicated meaning, unless a
different meaning is clearly required by the context. Whenever appropriate,
words used in the singular may include the plural and vice versa, and the
masculine gender shall always include the feminine gender.

 

1.1 Actuarial Equivalent means an amount and form of benefit certified by an
actuary to be mathematically equivalent in value to a given amount and form of
benefit on the basis of uniform procedures and actuarial assumptions adopted by
the Committee. Plan benefits that are deemed to be “actuarially reduced,”
“actuarially increased,” or “actuarially adjusted” shall be computed as the
Actuarial Equivalent of the benefit being replaced.

 

1.2 Associated Company means (i) a corporation (other than a Participating
Employer) that is a member of the same controlled group of corporations (within
the meaning of Section 1563(a) of the Code, determined without regard to Section
1563(a)(4) and (e)(3)(C) of the Code) as a Participating Employer, (ii) an
entity (other than a Participating Employer) under common control (within the
meaning of Section 414(c) of the Code) with a Participating Employer, or (iii) a
member (other than a Participating Employer) of an affiliated service group
(within the meaning of Section 414(m) of the Code) with a Participating
Employer.

 

1.3 Bonus means the award(s) earned under the Hawaiian Electric Industries, Inc.
Executive Incentive Compensation Plan, whether deferred or nondeferred, and
whether paid in the form of cash or stock.

 

1.4 Code means the Internal Revenue Code of 1986, as amended.

 

1.5 Committee means the Hawaiian Electric Industries, Inc. Pension Investment
Committee appointed pursuant to resolutions of the Board of Directors of the
Company.

 

1.6 Company means Hawaiian Electric Industries, Inc.

 

1.7 Compensation Committee means the Compensation Committee of the Board of
Directors of Hawaiian Electric Industries, Inc.

 

1.8 Effective Date means July 1, 1984.

 

1.9 ERISA means the Employee Retirement Income Security Act of 1974, as amended.

 

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1.10 Final Average Compensation means “Final Average Compensation” as defined in
the Retirement Plan modified as follows: (1) expressed as a monthly average, (2)
calculated without regard to the maximum compensation limits and family
aggregation rules contained in Sections 401(a)(17) and 414(q)(6) of the Code,
and (3) calculated by including only 50% of the Bonus paid to the Participant
during the applicable Plan Year. Final Average Compensation is used to calculate
the Supplemental Retirement Benefit under Section 4.1, hereinbelow, and the
Termination Retirement Benefit under Section 4.4, hereinbelow.

 

1.11 Final Pay means the sum of (1) a Participant’s monthly salary at the time
of termination of employment because of disability or death plus (2) 50% of the
average annual Bonus paid to such Participant in the thirty-six (36) months
preceding the month in which the Participant terminates employment, such average
annual bonus to be divided by twelve (12) to yield a monthly amount. Final Pay
is used to calculate the Pre-Retirement Death Benefit under Section 4.2,
hereinbelow, and the Disability Benefit under Section 4.3, hereinbelow.

 

1.12 Normal Retirement Date means the first day of the first calendar month next
following the Participant’s 65th birthday.

 

1.13 Participant means an executive officer of a Participating Employer who has
been selected to be a Participant by the Compensation Committee, in accordance
with Article II, hereinbelow.

 

1.14 Participating Employer means American Savings Bank, F.S.B., and any other
corporation that is a member of the same controlled group of corporations (as
defined in Section 415(b) of the Code) as the Company and to which participation
in the Plan is extended.

 

1.15 Plan means the American Savings Bank Supplemental Retirement, Disability,
and Death Benefit Plan, as described in this instrument, including all
amendments hereto.

 

1.16 Plan Year means the calendar year or any other twelve-month period
hereinafter adopted by the Company.

 

1.17 Primary Social Security Benefit means the monthly amount of primary old age
insurance benefits available to a Participant at the Participant’s Normal
Retirement Date under the provisions of Title II of the Social Security Act as
in effect for the year during which the Participant terminates employment with
the Participating Employer or an Associated Company, without regard to any
increases in the wage base or benefit levels or any other change in the law that
takes effect thereafter and, if the Participant retires prior to reaching his or
her Normal Retirement Date, assuming the Participant’s salary would have
remained constant to his or her Normal Retirement Date.

 

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1.18 Retirement Plan means the American Savings Bank Retirement Plan.

 

1.19 Spouse means a person married to a Participant as of the earlier of the
date the Participant begins to receive benefits under this Plan or the date the
Participant dies. A person who marries a Participant after the Participant’s
benefit commencement date shall not be a Spouse for purposes of this Plan and
shall have no Spousal rights to benefits hereunder.

 

1.20 Year of Service means each 12 months during the period of time beginning
with the date the Participant commences employment with the Participating
Employers or the Associated Companies to the date the Employee terminates
employment with all of the Participating Employers and Associated Companies. If
a Participant was previously so employed, separated from such employment, and is
subsequently rehired by a Participating Employer or an Associated Company, the
Committee in its sole discretion may disregard the Years of Service earned by
such Participant prior to his separation from employment with the Participating
Employers and Associated Companies.

 

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ARTICLE II

ELIGIBILITY

 

Each employee of a Participating Employer who has attained the rank of Senior
Vice President, or an equivalent or higher rank, to be determined by the
Compensation Committee, shall be included in a pool of executives from whom the
Compensation Committee shall designate Participants. An executive shall become a
Participant only if designated as such by the Compensation Committee. A
Participant shall commence participation at the time specified by the
Compensation Committee, but if no time is specified by the Compensation
Committee, the Participant’s participation shall commence as of the first day of
the Plan Year for which the Compensation Committee approved the executive as a
Participant. Thereafter, participation in the Plan shall continue until such
time as the Participant terminates employment with the Participating Employers
and the Associated Companies.

 

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ARTICLE III

NO CONTRIBUTIONS

 

No separate trust fund shall be established in connection with this Plan. The
benefits paid hereunder shall be paid as and when necessary from the general
assets of the Participating Employers. Accordingly, no Participating Employer
shall be required or expected to make any contributions to fund the benefits
offered under the Plan. Furthermore, no contributions to this Plan from
Participants shall be permitted or required.

 

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ARTICLE IV

BENEFITS

 

Section 4.1 Supplemental Retirement Benefit

 

(a) If a Participant retires or terminates employment with the Participating
Employers and the Associated Companies on or after attaining age 65, the
Participant shall be entitled to receive the supplemental retirement benefit
specified in Section 4.1(b), payable in the form and in the manner specified in
Section 4.1(c).

 

(b) (1) A Participant’s monthly supplemental retirement benefit shall equal the
product of (X) times (Y), where:

 

(X) is an amount equal to 60% of a Participant’s Final Average Compensation,
less 100% of the Participant’s Primary Social Security Benefit, less the
Participant’s normal or postponed retirement benefit under the Retirement Plan;
and

 

(Y) is a fraction, the numerator of which is the Participant’s Years of Service
(but not more than 20) and the denominator of which is 20.

 

In calculating a Participant’s monthly supplemental retirement benefit under
this Plan, the Committee shall calculate the Participant’s normal or postponed
retirement benefit under the Retirement Plan using the Participant’s actual
Years of Service.

 

(2) If the supplemental retirement benefit calculated under Section 4.1(b)(1),
above, is less than the supplemental benefit the Participant would receive under
the Hawaiian Electric Industries, Inc. Excess Pay Supplemental Executive
Retirement Plan (the “Excess Pay SERP”) if the Participant were a participant in
the Excess Pay SERP, the Participant shall be entitled to receive a benefit
under this Plan equal to the supplemental benefit that would be payable under
the terms of the Excess Pay SERP, calculated as though the Participant were a
participant in the Excess Pay SERP. The supplemental benefit of a participant
under the Excess Pay SERP is the amount the participant would receive under the
Excess Pay SERP in excess of the benefits payable under the Retirement Plan.

 

(c) Subject to Section 4.5, hereinbelow, payment of a Participant’s supplemental
retirement benefit under this Section 4.1 shall commence at the same time and be
paid in the same form as the Participant’s normal or postponed retirement
benefit under the Retirement Plan.

 

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Section 4.2 Pre-Retirement Death Benefit

 

(a) If a Participant dies while employed by a Participating Employer or an
Associated Company and prior to the date payment of his supplemental retirement
benefit commences under Section 4.1, the Participant’s Spouse shall be entitled
to receive, as an immediate death benefit, a monthly payment for a ten-year
period certain that is equal to the greater of:

 

(1) 40% of the Participant’s Final Pay from a Participating Employer; or

 

(2) The Actuarial Equivalent of the monthly supplemental retirement benefit
under Section 4.1 such Participant would have, as of the date of his death, been
entitled to receive as of his Normal Retirement Date.

 

(b) Upon the death of the Participant’s Spouse no further benefits shall be paid
under this Section 4.2. No one other than a Spouse may be a beneficiary under
this Plan.

 

Section 4.3 Disability Benefits

 

(a) If a Participant becomes disabled while employed by a Participating Employer
or an Associated Company and before attaining age 65, the Participant shall
receive as a disability payment a monthly benefit equal to the difference of (X)
minus [(Y) plus (Z)], where:

 

(X) = 60% of the Participant’s Final Pay from a Participating Employer as of the
date it is determined the Participant first became disabled,

 

(Y) = the monthly disability benefit available to the Participant under the
Social Security Act as in effect on the date it is determined by the Social
Security Administration the Participant first became disabled, and

 

(Z) = all monthly disability benefits payable to the Participant under any other
plan or program maintained by a Participating Employer or an Associated Company.

 

(b) Payment of such monthly disability benefit shall commence within 60 days
after the Participant is determined to be disabled and shall continue until the
earlier of the Participant’s death, the date the Participant ceases to be
disabled, or the date the Participant attains age 65.

 

(c) A Participant shall be considered disabled for purposes of this Section 4.3
if, in the opinion of a licensed physician approved by the Committee, (i) the
Participant is determined to be suffering from a physical or mental condition
that arises after the Effective Date and prevents the Participant from engaging
in any occupation or

 

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employment for remuneration or profit comparable to the position the Participant
held as of the date the Participant became disabled and (ii) such condition, in
the opinion of such physician, appears likely to be permanent or of a long or
continuous duration. The foregoing notwithstanding, in no event shall any
self-inflicted injury or intentionally induced sickness or any injury or
sickness arising from the commission of any unlawful act or enterprise by the
Participant constitute a disability for purposes of this Section 4.3.

 

(d) If a Participant recovers from any disability prior to attaining age 65, all
disability payments made under this Section 4.3 shall cease. If such Participant
returns to active employment with a Participating Employer or an Associated
Company upon the cessation of disability prior to attaining age 65, the
Participant shall be eligible for the benefits provided under Sections 4.1 and
4.2, provided the requirements thereof are satisfied. If a Participant does not
return to active employment with a Participating Employer or an Associated
Company after termination of disability prior to the Participant attaining age
65, the Participant shall be entitled only to the termination benefit, if any,
the Participant qualifies for under Section 4.4.

 

(e) A Participant who continues to be disabled until age 65 shall be entitled to
receive, as of the Participant’s Normal Retirement Date, the supplemental
retirement benefit provided under Section 4.1 based upon the Participant’s Final
Average Compensation and Years of Service as of the date the Participant most
recently became disabled.

 

Section 4.4 Termination Retirement Benefit.

 

(a) If a Participant terminates employment after meeting the requirements for
vesting set forth in Section 4.4(b), below, but prior to the date the
Participant attains age 65, the Participant shall be entitled to receive a
termination benefit described in Section 4.4(b), below.

 

(b) Amount, Timing, and Form of Termination Benefit.

 

(1) Participants Qualifying for an Early Retirement Income. If the Participant
is eligible to receive an Early Retirement Income under Section 5.2(a) of the
Retirement Plan, the Participant shall be entitled to a termination benefit
under this Plan equal to the product of (X) times (Y) where:

 

  (X) is the monthly supplemental retirement benefit such Participant would have
been entitled to receive under Section 4.1(b) as of his Normal Retirement Date,
but calculated based upon the Participant’s Final Average Compensation and Years
of Service as of his severance date; and

 

  (Y) is the percentage under the early retirement reduction factors applicable
to the Participant under Section 5.2(a) of the Retirement Plan, using

 

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the factor applicable to the age at which the Participant begins to receive
benefits.

 

In calculating the Retirement Plan offset in (X), above, the Retirement Plan
benefit shall be determined without regard to the early retirement reduction
factors used in the Retirement Plan. In other words, the Retirement Plan offset
will be 100% of the accrued Normal Retirement Income under the Retirement Plan.

 

Subject to Section 4.5, hereinbelow, a Participant’s termination retirement
benefit under this Section 4.4(b)(1) shall commence at the same time and be paid
in the same form as the Participant’s benefit under the Retirement Plan.

 

(2) Participants Qualifying for a Benefit under Section 5.2(c) of the Retirement
Plan. If the Participant is eligible to receive a benefit under Section 5.2(c)
of the Retirement Plan, the Participant shall be entitled to a termination
benefit under this Plan equal to the product of (X) times (Y) where:

 

  (X) is the monthly supplemental retirement benefit such Participant would have
been entitled to receive under Section 4.1(b) as of his Normal Retirement Date,
but calculated based upon the Participant’s Final Average Compensation and Years
of Service as of his severance date; and

 

  (Y) is the percentage under the early retirement reduction factors applicable
to the Participant under Section 5.2(c) of the Retirement Plan, using the factor
applicable to the age at which the Participant begins to receive benefits.

 

In calculating the Retirement Plan offset in (X), above, the Retirement Plan
benefit shall be determined without regard to the early retirement reduction
factors used in the Retirement Plan. In other words, the Retirement Plan offset
will be 100% of the accrued Normal Retirement Income under the Retirement Plan.

 

Subject to Section 4.5, hereinbelow, a Participant’s termination retirement
benefit under this Section 4.4(b)(2) shall commence at the same time and be paid
in the same form as the Participant’s benefit under the Retirement Plan.

 

(3) Participants not Qualifying for a Benefit under Section 5.2 of the
Retirement Plan. If the Participant is not eligible for a benefit under Section
5.2 of the Retirement Plan but is 100% vested under the vesting schedule set
forth below, the Participant shall be entitled to a termination benefit equal to
the monthly supplemental retirement benefit such Participant would have been
entitled to receive under Section 4.1(b) as of his Normal Retirement Date, but
calculated based upon the Participant’s Final Average Compensation and Years of
Service as of his severance date.

 

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Years of Service

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   Vesting
Percentage

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    Percentage
Forfeited

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Less than 4 years

   0 %   100 %

4 or more years

   100 %   0 %

 

Any termination retirement benefit under this Section 4.4(b)(3) shall commence
when the Participant reaches his or her Normal Retirement Date and, subject to
Section 4.5, hereinbelow, shall be paid in the same form as the benefit received
by the Participant from the Retirement Plan.

 

(c) Spousal Termination Death Benefit. If a terminated, vested Participant has
attained age 55 and dies prior to the date payment of such Participant’s
termination benefit under this Section 4.4 begins, the Participant’s Spouse, if
any, shall be entitled to receive an immediate death benefit, in the form of a
monthly payment, for a ten-year period certain equal to the Actuarial Equivalent
of the termination benefit the Participant would have been entitled to receive
under Section 4.4(b).

 

Section 4.5 Settlement of Benefits

 

Any provision of this Article IV to the contrary notwithstanding, the Committee,
in its sole discretion, may direct that any benefit which is otherwise payable
to a Participant or Spouse of a Participant under this Article IV be paid to
such person in a single lump-sum that is the Actuarial Equivalent of the normal
form of benefit provided by this Plan. In determining Actuarial Equivalence
under this Section 4.5, there shall be used (1) an interest rate or rates
reflecting then current market rates on high-quality, fixed income investments
with maturities approximating such payments and (2) the UP-1984 Mortality Table
applied on a unisex basis. Payment of any benefit in such a lump-sum shall fully
discharge the Participating Employers and the Associated Companies of any
further liability to the Participant, his Spouse, and any person claiming
benefits through either of such persons.

 

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ARTICLE V

ADMINISTRATION

 

Section 5.1 The Committee To Be Named Fiduciary

 

(a) The Committee shall be the “Named Fiduciary’” (within the meaning of ERISA)
of the Plan with all responsibility for the operation and administration of the
Plan. The Committee shall have the power to delegate specific fiduciary
responsibilities of the Participating Employers to any person or group of
persons, and such person or group may serve in more than one such delegated
capacity. Such delegations must be in writing and may be to employees of the
Participating Employers or Associated Companies or to other individuals, all of
whom shall serve at the pleasure of the Committee, and if full-time employees of
the Participating Employers or Associated Employers, without compensation. Any
such person may resign by delivering a written resignation to the Committee.

 

(b) The Committee may adopt rules for the administration of the Plan as it
considers desirable, provided such rules do not conflict with the Plan.

 

(c) Except as otherwise expressly provided herein, the Committee may interpret
and construe the Plan, or reconcile inconsistencies to the extent necessary to
effectuate the Plan, and such action shall be binding upon all persons.

 

(d) The Committee may contract for legal, actuarial, medical, accounting,
clerical, and other services to carry out the administration of the Plan.

 

(e) The Committee shall adopt from time to time actuarial tables and actuarial
methods for use in all actuarial calculations, if any, required in connection
with the determination of benefit payments under the Plan.

 

(f) The Committee shall be responsible for the maintenance of all employee,
Participant, and beneficiary records for the Plan. The Committee shall also be
responsible for the maintenance of records, appropriate notifications, and
filings in connection with the interest of all Participants or their spouses or
contingent annuitants.

 

(g) The Committee shall be responsible for complying, to the extent necessary,
with the reporting and disclosure requirements of ERISA.

 

(h) By appropriate resolution, the Committee may appoint an agent or agents to
represent and act for the Committee with respect to any or all of the foregoing
matters.

 

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Section 5.2 Expenses

 

The Participating Employers shall pay all expenses of administering the Plan.
Such expenses shall include any expenses incurred by a Participating Employer,
the Committee, or the designated agent of the Committee, including, but not
limited to the payment of professional fees of consultants.

 

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ARTICLE VI

CLAIMS PROCEDURE

 

The procedure for claiming benefits under the Plan shall be as follows:

 

(a) The Committee shall determine the benefits due hereunder to a Participant,
or the Participant’s spouse or contingent annuitant, but a person may file a
claim for benefits by written notice to the Committee.

 

(b) If a claim is denied in whole or in part, the Committee shall give the
claimant written notice of such denial within 30 days of the filing of the
claim. Such notice shall (i) specify the reason or reasons for 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 (c) hereof.

 

(c) The claimant may then appeal the denial of the claim by filing written
notice of such appeal with the Committee within 90 days after receipt of the
notice of denial. The claimant or any authorized representative may, before or
after filing notice of appeal, review any documents pertinent to the claim and
submit issues and comments in writing. The Committee shall render a decision on
such appeal within 30 days after receipt of the appeal (unless a longer period
is requested by the claimant), and shall forthwith give written notice of such
decision.

 

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ARTICLE VII

AMENDMENT AND TERMINATION

 

Section 7.1 Amendment

 

(a) (1) Subject to the provisions hereinafter set forth, the Company reserves
the right to amend the Plan at any time, and (to the extent permitted by ERISA
and the Code) give any such amendment retroactive effect.

 

(2) The Committee may approve any technical amendments to the Plan (i) necessary
to comply with federal law and regulations thereunder or (ii) that do not have a
substantial impact on the cost or terms of the Plan. All other amendments must
be approved by the Board of Directors of the Company.

 

Section 7.2 Termination

 

The Plan is adopted with the expectation that it shall be continued
indefinitely, but the continuation of the Plan is not assumed as a contractual
obligation by the Company or any Participating Employer. Each Participating
Employer reserves the right to terminate the Plan with respect to its
participation at any time. If the Plan is terminated (in full or in part), the
then accrued benefit under this Plan of each affected Participant shall become
100% vested.

 

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ARTICLE VIII

MISCELLANEOUS

 

Section 8.1 No Right To Employment

 

(a) Nothing contained in the Plan shall be deemed to give any Participant a
right to remain in the employ of the Participating Employers.

 

(b) Nothing contained in the Plan shall be deemed to give any Participant,
retired Participant, Spouse, or anyone else any right or claim to any benefit
except as expressly provided in the Plan.

 

Section 8.2 Inalienability

 

No Participant or any person having or claiming to have any interest of any kind
or character in or under this Plan shall have any right to sell, assign,
transfer, convey, hypothecate, anticipate, or otherwise dispose of such
interest, and such interest shall not be subject to any liabilities or
obligations of, or any bankruptcy proceedings, claims of creditors, attachment,
garnishment, execution, levy, or other legal process against such person or such
person’s property.

 

Section 8.3 Facility of Payment

 

If any Participant, retired Participant, Spouse, or contingent annuitant
eligible to receive payments under this Plan is, in the opinion of the
Committee, legally, physically, or mentally incapable of personally receiving
and receipting for any payment under this Plan, the Committee may direct
payments in installments not to exceed the amount of monthly pension to which
the Participant was otherwise entitled, to such other person, persons, or
institutions who, in the opinion of the Committee, are then maintaining or
having custody of such payee, until claims are made by a duly appointed guardian
or other legal representative of such payee. Such payments shall constitute a
full discharge of the liability of the Plan to the extent thereof.

 

Section 8.4 Construction Of Plan

 

(a) The headings of articles and sections are included herein solely for the
convenience of reference, and if there is any conflict between such headings and
the text of this Plan, the text shall be controlling.

 

(b) To the extent not preempted by ERISA, the Plan shall be governed, construed,
and administered and regulated according to the laws of the State of Hawaii.

 

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Section 8.5 Forms

 

All consents, elections, applications, designations, etc. required or permitted
under the Plan must be made on forms prescribed and furnished by the Committee,
and shall be recognized only if properly completed, executed, and returned to
the Committee.

 

TO RECORD the adoption of this amended and restated Plan, the Company has
authorized and directed the Committee to execute this document on the Company’s
behalf, and the Committee has caused this document to be executed this 26th day
of February, 1996.

 

HAWAIIAN ELECTRIC INDUSTRIES, INC. By   HAWAIIAN ELECTRIC INDUSTRIES, INC.    
PENSION INVESTMENT COMMITTEE     By  

/s/ Constance H. Lau

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        Its Secretary and member     By  

/s/ Peter C. Lewis

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        Its member

 

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