Exhibit 10.2


 


RETENTION
AGREEMENT

Between Bank of Hawaii and David W. Thomas dated December 16, 2005


 


This Retention Agreement (“Agreement”) is between
David W. Thomas (“you”) whose mailing address is P.O. Box 3886, Honolulu,
Hawaii 96812, and Bank of Hawaii Corporation and Bank of Hawaii (collectively,
the “Bank”) of 130 Merchant Street, Honolulu, Hawaii 96813.  The purpose of this Agreement is to describe
the terms of your retention and transition from employment with the Bank.


 


1.                                       Duties and compensation until your Separation Date.  Effective January 1, 2006, you will
assume the new position of Chief Operating Officer with an annual base salary
of $450,000.  You agree to work
diligently in your new position (or in any higher position to which you may be
promoted) through February 29, 2008 (the “Separation Date”), at which time
you will be relieved of all duties and responsibilities.  The Bank may advance your Separation Date to
any date before February 29, 2008, or may extend your Separation Date to
any date within three months after February 29, 2008.  Any Separation Date after May 31, 2008,
will require mutual agreement of the parties in writing.


 


a.                                       You
will be paid your salary and benefits through the Separation Date.  You will participate in the Executive
Incentive Plan for calendar years 2006, 2007, and 2008, with the amount payable
for 2008 pro-rated based on your Separation Date.  On December 16, 2005, you will receive a
restricted stock grant.  You will not
participate in any other incentive, retention, bonus, or stock plan in 2006,
2007, 2008, or thereafter.


 


b.                                      In
the event you voluntarily terminate employment prior to the Separation Date,
you will receive only your salary and vested benefits through the date of your
termination of employment.


 


c.                                       You
acknowledge and agree that no compensation or other payment except as specified
in this Agreement and in the restricted stock grant on December 16, 2005,
will be owed to you after the Separation Date.


 


2.                                       Return of Bank materials upon termination of employment
and resignation from positions. 
On or prior to the Separation Date, you:


 


a.                                       Will
return to the Bank any information you have about the Bank’s practices,
customers, strategies, procedures, or trade secrets, including but not limited
to, customer data, lists and accounts, growth plans, business plans, and
marketing strategies (collectively, the “Bank Information”).  You will not retain any copies of the Bank
Information in any form or medium.


 


b.                                      You
will also return any Bank property you have, including American Express card,
keys, cell phone, or other Bank equipment.


 


c.                                       You
will resign any positions you hold as a director, officer, or other management
official of any Bank affiliate or subsidiary, or as trustee or fiduciary of any
Bank benefit plan or trust, effective on the Separation Date.


 





















 


d.                                      You
understand that effective on the Separation Date, there will be no further
reimbursements for expenses you incur at the Oahu Country Club.  Additional income to partially offset your
periodic membership dues will end on your Separation Date.  If you elect to discontinue your membership
prior to that date, you must notify the Bank’s Director of Human Resources in
writing, at least thirty (30) days prior to the date of discontinuance.  Upon timely receipt of your written notice,
the Bank will consider your membership discontinued, and the additional income
related to club dues will no longer be paid. 
You are responsible for abiding by your club’s specific procedures for
membership discontinuance and ensuring that no additional business expenses are
incurred.


 


e.                                       In
the event your employment is terminated prior to your Separation Date (1) voluntarily,
or (2) for “cause” pursuant to Paragraph 5, you will comply with these
requirements as of your termination date (“Termination Date”).


 


3.                                       Retention Payment and other benefits.  If you perform your duties to the Bank’s
satisfaction through February 29, 2008, (including your compliance with
the requirements in Paragraph 2, above, and if you comply with the requirements
of this Paragraph and Paragraphs 6, 8, and 9, below, and Exhibit “A” to
the Agreement), you will receive a Retention Payment equal to twenty-four (24)
months of your base monthly salary as of February 29, 2008, and the
additional benefits described in this Paragraph 4.


 


a.                                       The
Retention Payment will be paid in thirty-six (36) monthly payments and will
commence on the first day of the seventh month after your Separation Date.  The first payment will be in an amount equal
to seven monthly payments; single monthly payments will continue thereafter for
twenty-nine months.


 


b.                                      You
will be entitled to health insurance coverage under an insured preferred
provider plan with the same percentage of shared premiums as prior to your
Separation Date (except that there will be no pre-tax employee premiums) for a
period of thirty-six (36) months after your Separation Date.  If you are employed elsewhere before the thirty-six
month period ends, the health insurance coverage will terminate at the time of
your new employment.  When the health
insurance coverage ends under this paragraph, you will receive notice of your
right to COBRA continuation coverage. 
After the Separation Date, you will no longer be eligible for
contributions or benefit accruals under any of the Bank’s tax-qualified
retirement plans or nonqualified deferred compensation plans.  Any outstanding stock option(s) will expire
in accordance with the terms of the option(s).


 


c.                                       The
Bank will waive your obligation to reimburse the Bank for the remaining balance
of the initial membership fee at the Oahu Country Club.  This will result in imputed income to you in
2008.  You are responsible for the
payroll taxes on this income, and the Bank will withhold the appropriate
amounts from your 2008 earnings.


 


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4.                                       Effect of this Agreement on other severance
arrangements.  Unless your
employment is terminated for “cause” as defined in the next Paragraph, it will
be terminated by way of resignation.  You
understand and agree that you are not entitled to benefits under our Basic
Staff Severance Plan for termination by resignation.  By acceptance of this Agreement and in
consideration of the monetary consideration provided to you under this
Agreement (“Monetary Consideration”), you are waiving and releasing any claim
for benefits under that Plan.  In
addition, the Key Executive Change-in-Control Severance Agreement entered into
by and between you and the Bank effective June 22, 2001, shall be deemed
to have been terminated as of the Separation Date.  Furthermore, if a Change in Control occurs
prior to your Separation Date and you become entitled to benefits under the Key
Executive Change-in-Control Severance Agreement, you will receive the benefits
under the Change-in-Control Severance Agreement, but will not be entitled to
any of the benefits provided under this Agreement.  The Bank makes no representation to you
concerning your possible entitlement to unemployment insurance benefits, and
will truthfully report, should unemployment compensation authorities ask, that
the termination of your employment was voluntary (or involuntary, if
termination was for “cause”).


 


5.                                       When your employment may be terminated for cause.  You agree and understand that your employment
with the Bank may be terminated for “cause” at any time on or before the
Separation Date.


 


a.                                       “Cause”
is defined to include:  (1) your
violation of the Bank’s Employee Handbook, to include the Bank’s Code of Ethics
and Conduct (the “Code”), a copy of which has been provided to you; (2) your
breach of the terms of this Agreement; (3) your failure to successfully
complete your transition objectives or to make satisfactory progress toward
your annual performance objectives through the Separation Date, as determined
by the Bank’s Chief Executive Officer; or (4) your violation of the Code
of Business Ethics and Conduct of the New York Stock Exchange (the “NYSE Code”),
a copy of which has been provided to you. 
You understand and acknowledge that the provisions of the Code or the
NYSE Code may be changed from time to time between the date on which you sign
this Agreement (its “Execution Date”) and the Separation Date, and you agree
that your violation of any of those changed provisions prior to the Separation
Date will constitute grounds for terminating your employment for “cause”.


 


b.                                      Termination
for “cause” may be with or without notice. 
In the event that you are terminated for “cause,” you will forfeit all
Monetary Consideration that has not been paid to you as of the Termination
Date.


 


c.                                       Your
duties under this Agreement, including the information disclosure restrictions
in Paragraph 9.a and the release of all claims in Paragraph 6.a, shall remain
in the event you are terminated for “cause”. 
You agree that the payment to you of salary and benefits and/or other
consideration on or after the date you sign this Agreement (the “Execution Date”)
shall be good and sufficient consideration to require your adherence to the
promises you have made in this


 


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Agreement even if
you are terminated for “cause” and forfeit any unpaid or unvested Monetary
Consideration.


 


6.                                       Waiver of any claims you may have.  You waive, release, and forego any and all
claims that you have or might have through the Execution Date of this Agreement
against the Bank and any of its predecessors, subsidiaries, related entities,
officers, directors, shareholders, agents, attorneys, employees, successors, or
assigns (the “Bank Releasees”), including without restriction any claims
arising from or related to your employment with the Bank and/or your separation
from employment with the Bank.


 


a.                                       The
released 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, 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, 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); and claims for attorneys’ fees and/or costs.  THIS RELEASE COVERS ALL
CLAIMS THAT ARE BASED UPON ANY EVENT THAT OCCURRED THROUGH THE EXECUTION DATE
OF THIS AGREEMENT.


 


b.                                      You
further agree that you will execute upon your Separation Date a further Release
covering claims from the Execution Date through your Separation Date in the
form attached hereto as Exhibit A. 
The Release is expressly incorporated into this Agreement as part of the
Agreement.


 


7.                                       How we will respond to employment verification
requests.  The Bank and
you agree that any inquiries regarding verification of your employment will be
handled through Bank of Hawaii, Human Resources.  As is its practice, Human Resources will only
release information confirming your dates of employment and position title to
requesters or if we are required to report further information by law,
regulation, or court order.


 


8.                                       Neither of us will make negative comments about
the other.  The Bank agrees
that neither its executive officers nor its directors will make any
disparaging, negative, or derogatory statements about you.  You agree that you will not make any
disparaging, negative, or derogatory comments about the Bank or the Bank
Releasees.


 


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9.                                       Your agreement to keep secrets and not to compete.  You further agree as follows:


 


a.                                       Unless
required or otherwise permitted by law, you will not disclose to others or use
the Bank Information or any summary or derivative of that information.


 


b.                                      You
acknowledge that your services under this Agreement are of a special, unique,
unusual, extraordinary, and intellectual character and that you will have
access to Bank Information of extremely confidential and sensitive nature
crucial to the Bank’s success.  You
further acknowledge and agree that if you were to engage in the conduct
prohibited by Subparagraphs 9.c, 9.d, or 9.e, the Bank would be irreparably
harmed.


 


c.                                       In
consideration of your acknowledgements, our mutual promises and the Monetary
Consideration, you agree that — for the duration of the term of your active
employment by the Bank and for a period of twenty-four (24) full months
following the earlier of your Separation Date or Termination Date (the “Non-Compete
Period”) — you will not, either directly or indirectly, engage in or invest in,
own, manage, operate, finance, control, be employed by, work as a consultant or
contractor for, or otherwise be associated with any Financial Institution doing
business in the state of Hawaii; provided, however, that you may purchase or
otherwise acquire up to one percent of any class of securities of any such
Financial Institution (but without otherwise participating in the activities of
such enterprise) if such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of
the Securities Exchange Act of 1934.  The
term “Financial Institution” is defined as any commercial bank, savings
institution, securities brokerage, mortgage company, insurance broker, or other
company or organization that competes in the state of Hawaii with the Bank or
any of its subsidiaries or related companies or entities (the “Bank or Related
Entities”).


 


d.                                      You
agree that at any time following the Execution Date of this Agreement through
twelve (12) full months following the end of the Non-Compete Period you will
not solicit business of the same or similar type being carried on by the Bank
or Related Entities from any company, person, or entity known by you to be a
customer of the Bank or Related Entities, whether or not you had personal
contact with such company, person, or entity by reason of your employment with
the Bank.


 


e.                                       You
will not, whether for your own account or the account of any other person at
any time following the Execution Date of this Agreement through twelve (12)
full months following the end of the Non-Compete Period solicit, employ, or
otherwise engage as an employee, independent contractor, or otherwise, any
person who is an employee of the Bank or in any manner induce or attempt to
induce any employee of the Bank to terminate his or her employment with the
Bank.


 


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f.                                         You
agree to notify the Bank in writing if you accept employment at any time
between the Execution Date of this Agreement and one year following the end of
the Non-Compete Period.  You further
agree that the Bank may notify your new employer of the terms of Paragraphs 8, 9,
and 11 of this Agreement and, at the Bank’s election, furnish the employer with
a copy of this Agreement or relevant portions thereof.


 


10.                                 Where notices are to be sent.  Any notice required or permitted by this
Agreement shall be in writing sent to the following addressees:  For you, P.O. Box 3886, Honolulu, Hawaii
96812; for the Bank, Bank of Hawaii, Human Resources #320, P. O. Box 2900,
Honolulu, HI 96846-6000.


 


11.                                 Enforcing this Agreement.  To the extent permitted by law, if you breach
any of your obligations under this Agreement, the Bank will be entitled to
recover the benefits paid under this Agreement and to obtain all other relief
provided by law or equity.  You
acknowledge and agree that your breach of Paragraphs 2, 8, or 9 will result in
irreparable harm to the Bank for which it will have no adequate remedy at law
and for which the Bank will be entitled to immediate injunctive relief.


 


12.                                 Interpretation of this Agreement.  In deciding any question about the parties’
intent in creating this Agreement, the following rules will be applied:


 


a.                                       If
any covenant of Paragraph 9 is held by a court to be unreasonable, arbitrary,
or against public policy, the covenant will be considered to be divisible with
respect to scope, time, and/or geographic area, and enforced to the greatest
extent permissible under law.  If any
provision of this Agreement is deemed to be unlawful, the provision will be
deemed deleted from this Agreement and the remainder of the Agreement will
continue in effect.


 


b.                                      The
paragraph headings and other guides in this Agreement, as well as any cover
letter or other documents accompanying it, are only intended to improve the
readability of the Agreement, and not to alter its substance.


 


c.                                       This
Agreement is formed at Honolulu, Hawaii, and is to be interpreted and enforced
under the applicable federal and Hawaii state laws.


 


d.                                      This
Agreement represents the complete agreement of the parties and supersedes any
and all prior agreements.  Specifically,
in consideration for this new Agreement and the benefits provided hereunder,
you waive all rights and forever forfeit any benefits under the Retention
Agreement entered into between you and the Bank on May 3, 2004.


 


e.                                       This
Agreement may only be amended in writing signed by both you and the Bank.


 


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f.                                         This
Agreement is not intended to be and is not an admission of any fact or
wrongdoing or liability by any of the parties.


 


13.                                 Older Workers Benefit Protection Act notice.  The following is required by the Older
Workers Benefit Protection Act (“OWBPA”):


 


This Agreement includes a waiver of any claims you may have under the
Age Discrimination in Employment Act (“ADEA”) through the Execution Date of the
Agreement.  You have up to 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 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 21
days, you will need to indicate your waiver of the 21-day consideration period
by signing in the space indicated below.


 


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To accept this Agreement, please date, sign, and
return it to the Bank’s Executive Vice President & Director of Human
Resources.  (An extra
copy for your file is provided). 
Once you do so, pursuant to the OWBPA, you will still have an additional
seven days in which to revoke your acceptance. 
To revoke, you must send the Bank’s Executive Vice President &
Director of Human Resources a written statement of revocation by registered
mail, return receipt requested.  If you
revoke your acceptance of this Agreement, the Agreement will be void, and you
will not receive the Monetary Consideration provided under the Agreement.


 


	
  BANK OF HAWAII CORPORATION and

  BANK OF HAWAII

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Allan R. Landon

  	
   

  	
   

  
	
   

  	
  Allan R. Landon

  	
   

  
	
   

  	
  Chairman of the Board, CEO, and President

  	
   

  
				



 


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.


 


	
  Dated: December 22,
  2005

  	
  /s/ David W. Thomas

  	
   

  
	
   

  	
  David W. Thomas

  



 


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)).


 


	
  Dated: December 22,
  2005

  	
  /s/ David W. Thomas

  	
   

  
	
   

  	
  David W. Thomas

  



 


 


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EXHIBIT A

[TO BE SIGNED ON THE SEPARATION DATE]


 


RELEASE OF CLAIMS


 


In consideration of the
payments and other consideration provided for by the agreement (“Agreement”)
dated December 16, 2005, which is attached hereto and expressly
incorporated herein, I hereby voluntarily and knowingly waive, release, and
forever forego any and all claims, whether or not now known, suspected or
claimed, that I ever had, now have, or may later claim to have had against Bank
of Hawaii (the “Bank”) and any of its predecessors, subsidiaries, related
entities, officers, directors, shareholders, agents, insurers, attorneys,
employees, successors, or assigns (the “Bank Releasees”) through the date of my
signature below (the “Release Date”), including without limitation all claims
arising from or related to my employment with the Bank and/or the separation of
my employment with the Bank.


 


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, 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, 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); and claims for attorneys’ fees
and/or costs.  This Release covers all
claims that are based upon any event, action, or inaction that occurred or was
to have occurred through the Release Date.


 


I hereby acknowledge (I)
that I have been advised to consult with an attorney prior to signing this
Release, (2) that I have been given more than twenty-one days prior to signing
in which to consider this Release, (3) that I have been advised that this
Release covers ALL CLAIMS (including employment-related claims generally and
ADEA claims specifically) I might have against the Bank or the Bank Releasees
through the date of this Release; and (4) that I have seven days after
signing this Release (“the Revocation Period”) in which to revoke my agreement
to this Release.  I understand that I may
revoke my agreement by notifying the Bank at any time during the Revocation
Period.  If I elect to revoke my
agreement to this Release, the Agreement will be void, and I will not receive
the Monetary Consideration provided under the Agreement.


 


	
  UNDERSTOOD AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  David W. Thomas

  	
  Date

  	
   

  
				



 


Pursuant to 29 C.F.R. § l625.22(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)(l)(F)(i)).


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  David
  W. Thomas