HEI Exhibit 10.4

 HAWAIIAN ELECTRIC INDUSTRIES, INC.

EXECUTIVE INCENTIVE COMPENSATION PLAN (EICP)

 

Pursuant to Sections 3, 5, 7, 11 and 20, of the Hawaiian Electric
Industries, Inc. 2010 Equity and Incentive Plan, effective May 11, 2010 (EIP),
the Compensation Committee of the Board of Directors of Hawaiian Electric
Industries, Inc. (HEI) establishes and adopts the following Executive Incentive
Compensation Plan (EICP).

 

1.                                    PURPOSE

 

The purpose of the EICP is to encourage a high level of performance by HEI and
its subsidiaries (the “Company”) through the establishment of specific financial
and/or nonfinancial goals, the accomplishment of which will require a high
degree of competence and diligence on the part of certain key employees of the
Company selected to participate in the EICP, and will be beneficial to the
owners and customers of the Company.

 

2.                                    DEFINITIONS

 

The following definitions apply to the EICP:

 

2.1                            “Award” means payment made in accordance with the
provisions of the EICP.

 

2.2                            “Board of Directors” means the Board of Directors
of HEI.

 

2.3                            “Committee” means the Compensation Committee of
the Board of Directors of HEI.

 

2.4                            “Deferred Account” means an unfunded account
within which a Participant’s deferred Awards and accrued interest are
accumulated.

 

2.5                            “Executives” means the senior officers and
managers responsible for determining business and strategic policies.

 

2.6                            “Fair Market Value” means, as of any given date,
with respect to any Awards granted hereunder:  (i) the closing sale price of a
share of Common Stock on such date on the national securities exchange on which
the Company’s equity securities are principally listed or traded, or, if on such
date no trade was conducted, on the most recent preceding date on which there
was such a trade; (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the average of the closing bid and asked prices for the
shares of Common Stock in such over-the-counter market for the last preceding
date on which there was a sale of such Common Stock in such market; (iii) the
fair market value of a share of Common Stock as determined in accordance with a
method prescribed in the applicable Award Agreement; or (iv) the fair market
value of a share of Common

 

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Stock as otherwise determined by the administrator in the good faith exercise of
its discretion and, as required, in compliance with Section 409A of the Internal
Revenue Code.

 

2.7                            “HEI Common Stock” means the Common Stock of HEI.

 

2.8                            “Participant” means an employee selected to
participate in the EICP.

 

2.9                            “Performance Goals” means the performance
objectives of the Company established for the purpose of determining any
incentive Award for a Plan Year.

 

2.10                    “Plan Year” means the calendar year.

 

 

3.                                    BASIC PLAN CONCEPT

 

The EICP provides an opportunity for Participants to earn annual incentive
compensation Awards depending on the level of Company and individual
performance.  Performance will be based on a twelve-month period beginning
January 1 and ending December 31.  Awards may be in cash or HEI Common Stock at
the option of the Committee.  Awards to Participants are based primarily on
Company Performance Goals and may be partially based on other factors including
individual Performance Goals.  Minimum financial performance “hurdles” may be
established that must be exceeded before any Award is made. When Awards are
granted, payments will be made in cash and/or HEI Common Stock at the sole
discretion of the Committee, and such payments will be made shortly after the
end of each Plan Year, unless voluntarily deferred by the Participant and
provided that any such election and deferral shall comply with the requirements
of Section 409A of the Code. HEI Common Stock awards are subject to the
availability of authorized shares.

 

 

4.                                    ADMINISTRATION

 

The EICP will be administered by the Committee, which shall determine:

 

4.1                            Eligible Participants;

 

4.2                            Performance Goals to which an Award will be
subject;

 

4.3                            Incentive Award levels;

 

4.4                            Performance Goal results; and

 

4.5                            Amounts of the actual Awards (if any) to be made
to each Participant and whether it should be granted in cash and/or HEI Common
Stock.

 

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5.                                    PARTICIPATION

 

The Committee will select Participants from those executives whose decisions
contribute directly to the annual success of the Company.  No employee will at
any time have the automatic right to be selected as a Participant in the EICP
for any Plan Year, nor, if so selected, to be entitled automatically to an
Award, nor, having been selected as a Participant for one Plan Year, to be
automatically selected as a Participant in any subsequent Plan Year.

 

Participants who are placed in the plan after the start of the Plan Year or who
terminate employment as a result of retirement, death or disability, within the
Plan Year or transfer to a position that is not included in the EICP will be
eligible to receive that portion of the award represented by the number of
complete months of eligibility during the plan year divided by 12, provided that
a participant must have been in a position included in the EICP for at least 6
full months during the Plan Year, unless the Committee waives or modifies such
participation requirement for a particular Participant.

 

Upon a change-in-control as defined in the EIP, and subject to the provisions of
Section 12 of the EIP, Participants shall immediately be entitled to receive an
award at the target level percentage (determined, as applicable, by reference to
the Participant’s base salary) prorated by the number of complete months of
employment during the year divided by 12.  The payment shall be made in cash as
soon as practical after the change-in-control.

 

 

6.                                    PERFORMANCE GOALS

 

The Committee will establish for each Plan Year, Performance Goals designed to
accomplish such financial and strategic objectives as it may from time to time
determine appropriate.  The Committee may make adjustments to the Performance
Goals for any Plan Year as it deems equitable in recognition of: extraordinary
or nonrecurring events experienced by the Company during the Plan Year, or
changes in applicable accounting rules or principles or changes in the Company’s
methods of accounting during the Plan Year.

 

 

7.                                    DETERMINATION OF AWARDS

 

Subject to the provisions of Section 6 of this EICP (as applicable), the
Committee will determine the Awards, if any, to be made to each Participant for
the Plan Year.  Awards will be based primarily on the level of performance
within the performance range, but may also be based on each Participant’s
contribution to overall Company performance during the Plan Year.  The Award for
each Participant will be calculated by applying an Award percentage to each
Participant’s base salary.

 

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8.                                    PAYMENT OF AWARDS

 

8.1                            Payment of Nondeferred Awards.  The payment of
Awards for any Plan Year will be made, as applicable, in cash or HEI Common
Stock to the Participant as soon as practical after the close of the Plan year
unless, in the case of a cash award, the Participant irrevocably elected to
defer payment of all or a portion of the Award, as provided in subparagraph 8.2
below by filing a written election form with the Company before the beginning of
the Plan Year or before the executive begins service as a Participant during the
Plan Year.

 

8.2                            Payment of Deferred Cash Awards.  Each deferred
Award will be credited to the Participant’s Deferred Account and will be paid to
the Participant, or to his or her beneficiary or estate in the event of his or
her death, at the end of the deferral period in cash lump sum or in
installments, as provided in the written election form.  Amounts credited to a
Participants’ Deferred Account shall be credited each year with an amount
equivalent to the interest, compounded quarterly, at the annual rate
commensurate with the prevailing interest rate on three-year certificates of
deposit at American Savings Bank, F.S.B., as of January 1 of that year.  Such
Deferred Account will be credited with interest from the date the Award would
have been paid in cash to the date of receipt by the executive under the
Deferral Agreement.

 

8.3                            In the event the payment of any portion of the
awards is in HEI Common Stock, the number of shares of stock to be issued will
be based on Fair Market Value.

 

 

9.                                    ASSIGNMENTS AND TRANSFERS

 

Participants will not assign, encumber, or transfer their rights and interests
under the EICP; any attempt to do so will render the Participants’ rights and
interests under the EICP null and void.

 

 

10.                            EMPLOYEE RIGHTS UNDER THE EICP

 

No employee or other person will have any claim or right to be granted an Award
under the EICP.  Neither the EICP nor any action taken thereunder will be
construed as giving any employee any right to be retained in the employ of the
Company or any of its affiliated companies.

 

 

11.                            WITHHOLDING TAXES

 

The Company will withhold the amount of any federal, state, or local income
taxes attributable to any amounts payable under the EICP.

 

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12.                            AMENDMENTS

 

The Committee may amend, suspend, or terminate the EICP or any portion of it at
any time.

 

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