HEI Exhibit 10.7

HAWAIIAN ELECTRIC INDUSTRIES, INC.

LONG-TERM INCENTIVE PLAN

General Terms

The Compensation Committee of the Board of Directors of Hawaiian Electric
Industries, Inc. (HEI) establishes and adopts the following Long-Term Incentive
Plan (LTIP).

 

1. PURPOSE

The purpose of the LTIP is to encourage a high level of sustained Company
performance through the establishment of specific long-term financial 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 LTIP and will be beneficial to the owners and customers of the Company.

 

2. DEFINITIONS

The following definitions apply to the LTIP:

 

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

 

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

 

  2.3 “Deferred Account” means an account within which payments for Awards and
accrued interest may be accumulated.

 

  2.4 “Executive” means the officers and managers responsible for determining
business and strategic policies.

 

  2.5 “Participant” means an employee selected to participate in the LTIP.

 

  2.6 “Performance Goals” means the performance objectives of HEI established
for the purpose of determining the amount of any award for a Performance Period.

 

  2.7 “Performance Period” means the three-year period over which performance is
measured.

 

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3. BASIC PLAN CONCEPT

The LTIP provides an opportunity for Participants to earn incentive compensation
Awards depending on the level of HEI and individual performance. Except for the
commencement of the initial year of this LTIP, performance will be based on a
three-year period beginning January 1 of the first year of the Performance
Period and ending December 31 of the third year of the Performance Period. The
Compensation Committee will determine when the Performance Period for the first
year of the initial Performance Period shall commence. Awards may be in cash or
stock at the option of the Compensation Committee. Awards may be based on HEI
performance plus additional goals or objectives. After the Awards are approved
by the Compensation Committee, payments will be made in cash and/or HEI stock
during the year following the end of each Performance Period unless voluntarily
deferred by the Participant.

 

4. ADMINISTRATION

The Compensation Committee shall administer the Plan and will make the following
determinations:

 

  4.1 Selection of Participants.

 

  4.2 Determination of Performance Goals and LTIP for each Performance Period.

 

  4.3 Determination of the amount of the Award to be made to each Participant.

 

5. PARTICIPATION

The Compensation Committee will select Participants from those executives whose
decisions and actions contribute directly to HEI’s long-term success. No
employee will have the automatic right to be selected as a Participant in the
LTIP for any Performance Period, nor, if so selected, be entitled automatically
to an Award, nor, having been selected as a Participant for one Performance
Period, be automatically selected as a Participant in any subsequent Performance
Period.

Participants who are placed in the plan after the start of the Performance
Period who voluntarily terminate employment within the Performance or transfer
to a position that is not included in the LTIP, will be eligible to receive that
portion or the award represented by the number of complete months of eligibility
during the Performance Period divided by 36.

 

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6. PERFORMANCE GOALS AND LTIP FOR PERFORMANCE PERIOD

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

 

7. DETERMINATION OF AWARDS

Subject to the provisions of Section 6, the Compensation Committee will
determine the Awards to be made to each Participant for each Performance Period.
Awards made will be based primarily on the level of performance within the
performance range, but will also be based on each Participant’s contribution to
overall HEI performance during the Performance Period.

 

8. PAYMENT OF AWARDS

 

  8.1 Payment of Nondeferred Awards – The payment of Awards for any Performance
Period will be made in cash or stock to the Participant as soon as practical
after the close of the Performance Period 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 Compensation Committee before the beginning of the Performance Period
or before the executive begins service as a Participant for the Performance
Period.

 

  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 the
beneficiary of estate in the event of their 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 Participant’s Deferred Account shall be credited
each year with an amount equivalent to 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; provided, however, that the balance of the Participant’s Deferred
Account as of December 31, 1990 shall continue to be credited annually with
interest at the rate of ten percent (10%) per annum, compounded quarterly. Such
Deferred Account will be credited with interest from the date the Award would

 

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have been paid in cash to the date of receipt by the Participant under the
Deferral Agreement. Despite any contrary provisions in the Participant’s written
election form, the Compensation Committee, in its sole discretion, may decide to
pay the balance in a Participant’s Deferred Account in a lump sum as soon as
practical after the Participant’s employment by the Company is terminated for
any reason.

 

9. ASSIGNMENTS AND TRANSFERS

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

 

10. EMPLOYEE RIGHTS UNDER THE LTIP

 

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

 

11. WITHHOLDING TAXES

 

  11.1 HEI will make the proper withholdings of any federal, state, or local
income taxes attributable to any amounts payable under the LTIP.

 

12. OTHER PLANS

 

  12.1 The payments and benefits under this LTIP will be excluded from
considered compensation under all other Company compensation and benefit plans.

 

13. TERM

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

 

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