Exhibit 10.1


 


Key Executive

Change-in-Control

Severance Agreement


 


Bank
of Hawaii Corporation


 


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Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article 1.

  	
  Establishment and Purpose

  	
  3

  
	
   

  	
   

  	
   

  
	
  Article 2.

  	
  Definitions and Construction

  	
  4

  
	
   

  	
   

  	
   

  
	
  Article 3.

  	
  Severance Benefits

  	
  6

  
	
   

  	
   

  	
   

  
	
  Article 4.

  	
  Just Cause

  	
  8

  
	
   

  	
   

  	
   

  
	
  Article 5.

  	
  Form and Timing of Severance Benefits

  	
  9

  
	
   

  	
   

  	
   

  
	
  Article 6.

  	
  Parachute Payments

  	
  9

  
	
   

  	
   

  	
   

  
	
  Article 7.

  	
  Other Rights and Benefits Not Affected

  	
  9

  
	
   

  	
   

  	
   

  
	
  Article 8.

  	
  Successors

  	
  10

  
	
   

  	
   

  	
   

  
	
  Article 9.

  	
  Administration

  	
  10

  
	
   

  	
   

  	
   

  
	
  Article 10.

  	
  Legal Fees

  	
  11

  



 


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Bank of Hawaii Corporation

Key Executive

Change-in-Control Severance Agreement


 


Article 1.       Establishment
and Purpose


 


1.1         Effective Date.   This Executive Change-in-Control Severance
Agreement (the “Agreement) is made and entered
into pursuant to Bank of Hawaii Corporation’s Key Executive Severance Plan (the “Plan”), and is effective as of this 25th
day of June, 2004 (the “Effective Date”), by and
between Bank of Hawaii Corporation (“BOHC”), a
Delaware corporation, and Richard C. Keene, an executive (the “Executive”)
of BOHC and its subsidiary, Bank of Hawaii (the “Bank”).  This Agreement shall supersede and
replace any prior severance agreement entered into between BOHC and the
Executive.


 


1.2         Term of the Agreement.   The Agreement shall commence as of the
Effective Date written above, and shall continue until the Board of Directors
of BOHC (the “Board”) determines, in good faith
and in its sole discretion, that the Executive is no longer to be included in
the Plan and so notifies in writing the Executive during the term of this
Agreement of such determination.


 


Provided,
however, in the event that a Change in Control of BOHC, as defined in Section
2.1 herein, occurs during the term of this Agreement, this Agreement shall
remain irrevocably in effect for the greater of twenty-four (24) months from the date of such Change in Control, or
until all benefits have been paid to the Executive hereunder.


 


Further,
in the event that the Board has knowledge that a third party has taken steps
reasonably calculated to effect a Change in Control of BOHC, including, but not
limited to, the commencement of a tender offer for the voting stock of BOHC, or
the circulation of a proxy to BOHC’s shareholders, then this Agreement shall
remain irrevocably in effect until the Board, in good faith, determines that
such third party has fully abandoned or terminated its effort to effect a
Change in Control of BOHC.


 


1.3         Purpose of the Agreement.   The purpose of this Agreement
pursuant to the Plan, is to advance the interests of BOHC and the Bank by
assuring that BOHC and the Bank will have the continued employment and
dedication of the Executive and the availability of his advice and counsel in
the event that an acquisition or Change in Control of BOHC occurs.  This Agreement shall also assure the
Executive of equitable treatment during the period of uncertainty that
surrounds an acquisition or Change in Control, and allow the Executive to act
at all times in the best interests of BOHC and its shareholders.


 


1.4         Contractual Right to Benefits.   This Agreement establishes and
vests in the Executive a contractual right to the benefits which he or she is
entitled hereunder, enforceable by


 


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the Executive against BOHC.  However, nothing herein shall require BOHC to
segregate, earmark, or otherwise set aside any funds or other assets to provide
for any payments hereunder.


 


This
Agreement shall be considered an unfunded agreement to provide benefits to a
select group of management or highly compensated employees, and is therefore
intended to be a “top-hat” plan exempt from the requirements of the provisions
of Parts 2, 3, and 4 of Title I of ERISA.


 


Article 2.       Definitions
and Construction


 


2.1         Definitions.   Whenever used in the Agreement, the
following terms shall have the meanings set forth below and, when the meaning
is intended, the initial letter of the word is capitalized.


 


(a)           “Base Salary” means the annualized salary at the beginning
of each Year, which includes all
regular basic wages, before reduction for any amounts deferred on a tax-qualified or nonqualified basis, payable in cash
to an Executive for services rendered during the Year.  Base Salary shall exclude bonuses, incentive
compensation, special fees or awards, commissions, allowances, or any other
form of premium or incentive pay,
or amounts designated by BOHC as payment toward or reimbursement of expenses.


 


(b)           “Beneficial Owner” shall have the meaning ascribed to such term
in Rule 13d-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).


 


(c)           “Beneficiary” with respect to an Executive means the person
or entities designated or deemed
designated by an Executive pursuant to Section 8.2 herein.


 


(d)           “Board” means the Board of Directors of BOHC.


 


(e)           “Change in Control” of BOHC means any one or more of the
following occurrences:


 


(i)            Any Person, including a “group” as defined in
Section 13(d)(3) of the
Securities Exchange Act of 1934, becomes the beneficial owner of shares of BOHC having 25 percent or
more of the total number of
votes that may be cast for the election of Directors of BOHC; or


 


(ii)           As the result of, or in connection with, any
cash tender or exchange offer,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing


 


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transactions,
the person who were Directors of BOHC before the  transaction shall cease to constitute a
majority of the Board of Directors
of BOHC or any successor to BOHC.


 


(f)            “Code” means the Internal Revenue Code of 1986, as
amended.


 


(g)           “BOHC” means Bank of Hawaii Corporation, a Delaware corporation,
or any successor thereto that adopts the Agreement, as provided in Section 8.1
herein.


 


(h)           “Committee” means the Human Resources and Compensation
Committee of the Board of
Directors of BOHC or any other committee appointed by the Board to administer
this Agreement.


 


(i)            “Disability” means a physical or mental condition which
renders an Executive unable to
discharge his or her normal work responsibility with BOHC or the Bank and which, in the opinion of
a licensed physician selected by
the Executive, subject to reasonable approval by the Committee based upon sufficient medical
evidence, can be reasonably expected to continue for a period of at least one
full calendar year.  If an Executive fails to select a physician with
ten (10) business days of a written request made by BOHC, then BOHC may
select a physician for purposes
of this paragraph.


 


(j)            “Effective Date” means the date the Agreement is approved by
the Board, or such other date as
the Board shall designate in its resolution approving the Agreement, and as provided
in Section 1.1 herein.


 


(k)           “Effective Date of Termination” means the date on which a voluntary employment termination or involuntary
employment termination other than for Just Cause occurs within twenty-four (24)
months of a Change in Control
which triggers Severance Benefits hereunder.


 


(l)            “ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from
time to time, or any successor act thereto.


 


(m)          “Expiration Date” means the date the Agreement expires, as
provided in Section 1.2 herein.


 


(n)           “Just Cause” means a termination of an Executive’s
employment by BOHC for which no
Severance Benefits are payable hereunder, as provided in Article 4 herein.


 


(o)           “Normal Retirement Date” shall mean the date the Executive reaches 65
years of age.


 


(p)           “Person” shall have the meaning ascribed to such terms
in Section


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3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d)  thereof, including a “group” as defined in
Section 13(d).


 


(q)           “Plan” means the Bank of Hawaii Corporation Key
Executive Severance Plan, adopted
April 27, 1983.


 


(r)           “Severance Benefit” means the payment of severance compensation
as provided in Article 3 herein.


 


(s)           “Year” means the consecutive 12-month period beginning
each January 1 and ending
December 31.


 


2.2         Gender and Number.   Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.


 


2.3          Severability.   In the event any provision of the Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.


 


2.4         Modification.   No express provisions of this Agreement may
be modified, waived, or discharged unless such modification, waiver, or
discharge is agreed to by the Executive in writing and approved by the Human
Resources  and Compensation Committee of
the Board of Directors.


 


2.5         Applicable Law.   To the extent not preempted by the laws of
the United States, the laws of the State of Hawaii shall be the controlling law
in all matters relating to the Agreement.


 


Article 3.       Severance
Benefits


 


3.1         Right to Severance Benefits.   The Executive shall be entitled to receive
from BOHC Severance Benefits as described in Section 3.2 herein, if there has
been a Change in Control of BOHC, as defined in Section 2.1(e) herein, and if,
within twenty-four (24) months
thereafter, the Executive voluntarily terminates employment or is involuntarily
terminated without Just Cause with BOHC. 
An Executive shall not be entitled to receive Severance Benefits if the
Executive’s employment with BOHC or Bank of Hawaii ends due to an involuntary
termination by BOHC for Just Cause, as provided under Article 4 herein.


 


3.2         Description of Severance Benefits.  
In the event that an
Executive becomes entitled to receive Severance Benefits, as provided in
Section 3.1 herein, BOHC shall pay to the Executive and provide the Executive
with the following:


 


(a)           An amount equal to three (3) times
the Executive’s highest annual Base


 


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Salary
earned (i) at any time during the three (3) complete fiscal years  immediately preceding the Effective Date of
Termination, or (ii) if the Executive was not
employed during such time period, at any time thereafter; and


 


(b)           An amount equal to three (3) times
the Executive’s highest annual bonus earned under the annual incentive plan (which, for purposes of this
Agreement, means the One-Year Incentive Plan, or Key Contributor Incentive
Plan, or any successsor or alternative plan or arrangement providing for an
annual incentive bonus) during the three (3) complete
fiscal years prior to the Effective Date of Termination, or, if shorter, over
the Executive’s entire period of employment. 
However, if the Executive’s period of employment is less than one year,
the bonus shall be considered zero (0); and


 


(c)           An amount equal to three (3) times
the Executive’s highest annual incentive compensation earned under the Bank of
Hawaii Corporation Profit Sharing Plan, the Sustained Profit Growth Plan or any
successsor or alternative plan or arrangement providing for a long-term
incentive bonus, or any successor plans thereto over the three (3) complete fiscal years prior to the Effective Date of Termination, or, if
shorter, over the Executive’s entire
period of employment.  However, if the
Executive’s period of employment
is less than one year, the average incentive compensation shall be considered zero (0);
and


 


(d)           An amount equal to the excess of (i) the maximum payment the Executive would have received
under the annual incentive plan if he had continued in the employment of BOHC
and the Bank through the end of the performance period following the Effective
Date of Termination, and if the Bank had met its maximum performance goals as
provided under the terms of the Plan and the maximum amount payable to the
Executive had been paid, over (ii) the actual
payout under the annual incentive plan resulting from the Executive’s
termination of employment; and


 


(e)           A payout under the long-term incentive plan,
in accordance with the terms of
such plan; and


 


(f)            A continuation of all welfare benefits at no
direct cost to the Executive,  including medical insurance, long-term disability, and group term life insurance
for three (3) full years from the Effective Date
of Termination or until the Executive reaches his Normal Retirement Date,
whichever occurs earlier.


 


3.3         Reduction of Severance Benefits.  
In the event there
are fewer than thirty-six (36) whole or
partial months remaining from the Executive’s Effective Date of Termination
until the Executive’s Normal Retirement Date,  as
defined under the Retirement Plan, then the amounts provided for under Sections
3.2(a), (b), and (c) above shall be reduced by a fraction, the


 


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numerator
of which shall be the number of whole or partial months remaining until the
Executive’s Normal Retirement Date, and the denominator of which shall be
thirty-six (36).


 


3.4         Fringe Benefits.   The Executive’s participation in fringe
benefits prior to the Executive’s Effective Date of Termination shall be
continued, or equivalent benefits shall be provided, at no cost to the
Executive, for a period of three (3) years from
the Executive’s Effective Date of Termination (or until he
or she reaches his Normal Retirement Date, whichever occurs earlier).


 


3.5         Relocation Benefits.  Should the Executive move his residence in
order to pursue other business opportunities within two (2) years
of Executive’s Effective Date of Termination, the Executive shall be reimbursed
for any moving expenses (as defined in Section
217(b) of the Code) incurred in that relocation (including
taxes, if any, payable on the reimbursement) which are not
reimbursed by another employer.  Benefits
provided herein shall not exceed the assistance and benefits customarily
provided by BOHC to transferred employees prior to the Change in Control.


 


3.6         Incentive Compensation.  Any deferred awards previously granted to the
Executive under BOHC’s incentive compensation plans and not previously paid to
the Executive, shall immediately vest on the date of the Executive’s Effective
Date of Termination and shall be paid no later than ninety (90) calendar
days following that date, and be included as compensation in the month paid.


 


3.8         Stock Options and SARs.   Stock options (“options”),stock
appreciation rights (“SARs”) and
restricted shares, if any, granted to the
Executive by BOHC will be exercisable or payable pursuant to the terms of the
applicable plans.


 


Article 4.       Just
Cause


 


4.1         Just Cause.  Nothing in this Agreement shall be construed
to prevent BOHC or the Bank from terminating an Executive’s employment for Just
Cause.  In such case, no Severance
Benefits shall be payable to the Executive under this Agreement.


 


Just
Cause shall mean the criminal conviction of the Executive for an act of fraud,
embezzlement, theft or any other act constituting a felony.


 


The
determination that the Executive’s actions constitute Just Cause for
termination shall be made by the Board, acting in good faith.


 


Article 5.       Form
and Timing of Severance Benefits


 


5.1         Form and Timing of Severance Benefits. 
The Severance
Benefits described in Sections 3.2 (a), (b), (c), (d) and (e), shall be paid in
cash to the Executive in a single lump sum


 


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as
soon as practicable following the Executive’s Effective Date of Termination,
but in no event beyond ninety (90) calendar
days from such date.


 


The
Severance Benefits described in Section 3.2(f) and 3.5 herein shall be provided
by BOHC to the Executive immediately upon the Executive’s Effective Date of
Termination and shall continue to be provided for three (3) full
calendar years from the Executive’s Effective Date of Termination or until the
Executive reaches his or her Normal Retirement date, whichever occurs earlier.


 


5.2         Withholding of Taxes.   BOHC shall withhold from any amounts payable
under this Agreement all Federal, state, city, or other taxes as legally shall
be required.


 


Article 6.       Parachute
Payments


 


6.1         Excise Tax Cap.   In the event that a Change in Control of BOHC
shall occur and a determination is made by BOHC, pursuant to Sections 280G and
4999 of the Code (and corresponding state law provisions) that
a golden parachute excise tax is due, the Executive’s Severance Benefits under
this Plan shall be grossed up for the amount equal to and only equal to the
amount necessary to pay the excise tax.


 


6.2         Subsequent Recalculation.  In the event the Internal Revenue Service
adjusts the excise tax computation of BOHC, as provided in Section 6.1 herein,
such that the Executive is liable for the payment of a greater excise tax under
Sections 280G and 4999 of the Code, or such that the Executive does not receive
the full benefit that he or she would have received, BOHC shall reimburse the Executive
for the full amount necessary to make the Executive whole (less any
amounts received by the Executive that he or she would not have received had
the computation initially been computed as subsequently adjusted), including
the value of the excise tax and all corresponding interest and penalties due to
the Internal Revenue Service.


 


Article 7.       Other
Rights and Benefits Not Affected


 


7.1         Other Benefits.   Neither the provisions of this Agreement nor
the Severance Benefits provided for hereunder shall reduce any amounts
otherwise payable, or in any way diminish the Executive’s rights as an employee
of BOHC, whether existing now or hereafter, under any benefit, incentive,
retirement, stock option, stock bonus, stock purchase plan, or any employment
agreement, or other plan or arrangement.


 


7.2         Employment Status.   This Agreement does not constitute a contract
of employment or impose on the Executive or BOHC any obligation to retain the
Executive as an employee, to change the status of the Executive’s employment,
or to change BOHC’s policies regarding termination of employment.


 


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Article 8.       Successors


 


8.1         Successors.   BOHC will require any successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) of all or substantially all of the business and/or assets
of BOHC or of any division or subsidiary thereof to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that BOHC
would be required to perform it if no such succession had taken place.  Failure of BOHC to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from BOHC in the
same amount and on the same terms as they would be entitled hereunder if
terminated voluntarily following a Change in Control.  Except for the purposes of implementing the
foregoing, the date on which any succession becomes effective shall be deemed
the Effective Date of Termination.


 


This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. 
If an Executive should die while any amount would still be payable
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement, to the Executive’s devisee, legatee, or other designee, or if there
is no such designee, to the Executive’s estate.


 


8.2         Beneficiaries.   The beneficiary of the Executive under the
Bank of Hawaii Corporation Money Purchase Plan shall be the beneficiary of the
Executive’s benefits under this Agreement, unless a beneficiary is otherwise
designated by the Executive in the form of a signed writing acceptable to the
Committee.  An Executive may make or
change such designation at any time.


 


Article
9.       Administration


 


9.1         Administration.   This Agreement shall be administered by the
Human Resources and Compensation Committee of the Board of Directors.  The Committee is authorized to interpret this
Agreement, to prescribe and rescind rules and regulations, to provide conditions
and assurances deemed necessary and advisable, to protect the interests of
BOHC, and to make all other determinations necessary or advisable for the
Agreement’s administration.


 


In
fulfilling its administrative duties hereunder, the Committee may rely on
outside counsel, independent accountants, or other consultants to render advice
or assistance.


 


9.2         Indemnification and Exculpation.  
The members of the
Board, its agents and officers, directors, and employees of BOHC and its
affiliates shall be indemnified and held harmless by BOHC against and from any
and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which they may
be involved by reason of any action taken or failure to act under this
Agreement and against and from any and all amounts paid by them in settlement (with BOHC’s written approval) or paid by them in


 


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satisfaction
of a judgment in any such action, suit, or proceeding.  The foregoing provision shall not be
applicable to any person if the loss, cost, liability, or expense is due to
such person’s gross negligence or willful misconduct.


 


Article
10.     Legal Fees


 


10.1      Legal Fees and Expenses.  BOHC shall pay all reasonable legal fees,
costs of litigation, and other expenses incurred in good faith by the Executive
as a result of BOHC’s refusal to provide the Severance Benefits to which the
Executive becomes entitled under this Agreement, or as a result of BOHC’s
contesting the validity, enforceability, or interpretation of the
Agreement.  Provided, however, that such
payments shall not exceed the amount permitted by law and BOHC’s Restated
Articles of Incorporation.


 


IN
WITNESS WHEREOF, BOHC has caused this Agreement to be executed by a resolution
of the Board of Directors, as of the day and year first above written.


 


	
   

  	
   

  	
  Bank of Hawaii Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael E. O’Neill

  	
   

  
	
   

  	
   

  	
   

  	
  Michael E. O’Neill

  
	
   

  	
   

  	
  Its:

  	
  Chairman & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard C. Keene

  	
   

  
	
   

  	
   

  	
   

  	
  (Executive)

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Neal C. Hocklander

  	
   

  	
   

  	
   

  	
   

  
						



 


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