Document:

exhibit102.htm

EXHIBIT 10.2

 

 

 

 

[FIFTH THIRD BANK LETTERHEAD]

May 31, 2013

Champion Industries, Inc.

Attn:  Mr. Todd Fry

2450 First Avenue

Huntington, West Virginia  25728

Re:           Credit Facilities Extended to Champion Industries, Inc. (the “Borrower”)

Ladies and Gentlemen:

Reference is hereby made to that certain First Amended and Restated Credit Agreement dated as of October 19, 2012 (as amended and otherwise modified from time to time, including by the Forbearance Agreement (defined below) the “Credit Agreement”), by and among the Borrower, the Lenders party thereto, and Fifth Third Bank, an Ohio banking corporation, as the Administrative Agent and as the L/C Issuer, and the First Limited Forbearance and Waiver Agreement and First Amendment to Amended and Restated Credit Agreement (the “Forbearance Agreement”), by and among the Borrower, Mr. Marshall Reynolds, individually (the “Shareholder”), each of the undersigned Guarantors (the “Guarantors”), the Lenders party thereto, and Fifth Third Bank, as L/C Issuer and Administrative Agent.  All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.

 

This letter is the Letter Agreement.  By countersigning this Letter Agreement below, each Lender, the Borrower, each Guarantor and the Shareholder each agree as follows:

 

Section 1.  Matters pertaining to certain sale transactions.   The parties hereto hereby agree that:

 

(a)  The Designated Transaction No. 2, as such term is defined in Section 1.1 of the Credit Agreement, shall mean the sale of all or substantially all of the assets or capital stock of Capitol Business Equipment, Inc. (dba Capitol Business Interiors) (“CBI”), a West Virginia corporation that is wholly owned by Stationers, Inc. ("Stationers"), a West Virginia corporation that is wholly owned by the Borrower.  For purposes of Section 6.31(b)(ii) of the Credit Agreement, the minimum amount of the Net Cash Proceeds to Borrower with respect to Designated Transaction No. 2 shall be $5,000,000.

 

(b)  The Borrower hereby represents and warrants to each Lender and the Administrative Agent that approval of Borrower’s shareholders is not required for Designated Transaction No. 1, whether considered separately or together with Designated Transaction No. 2; and, specifically, (i) following the consummation of Designated Transaction No. 1 and Designated Transaction No. 2, Borrower would be deemed to have retained a significant continuing business activity under the provisions of Section 31(D)-12-1202(a) of the West Virginia Code because Borrower will have retained business activity that represented at least 25% of total assets at the end of Borrower’s fiscal year 2012, and 25% of either income from continuing operations before taxes or revenues from continuing operations for such fiscal year, in each case of Borrower and its Subsidiaries on a consolidated basis, and (ii) Borrower’s governance documents (e.g., charter, articles of incorporation, by-laws, or other similar document) do not contain any provision that would require approval of Borrower’s shareholders for Designated Transaction No. 1, whether considered separately or together with Designated Transaction No. 2.

 

(c)  For purposes of Section 10(e) of the Forbearance Agreement, the reference therein to “the board of directors of each of the Borrower and certain of its Subsidiaries” shall mean the board of directors of each of Borrower, Stationers and CBI.

 

Section 2.  Matters Pertaining to Certain Expense Items.  For purposes of Section 9(f) of the Forbearance Agreement, neither Borrower nor any Guarantor shall make any payment or other transfer of value on account of expense items of the kind designated in the Summary of Cost Reductions, dated April 30, 2013, issued to the Required Lenders, as Other Items and included in the week ended May 3, 2013, or similar discretionary items. 

 

  

1

  

 

 

Section 3.  Release; Covenant Not to Sue; Acknowledgement.

 

(a)  The Borrower, each Guarantor and the Shareholder (collectively, the “Releasing Parties”) each hereby absolutely and unconditionally releases and forever discharges the Administrative Agent, the L/C Issuer and each Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents, attorneys, consultants, representatives and employees of any of the foregoing (each a “Released Party”), from any and all claims, demands or causes of action of any kind, nature or description relating to or arising out of or in connection with or as a result of any of the Obligations, the Credit Agreement, this Letter Agreement, any other Loan Documents, and the negotiation and execution of the Credit Agreement and this Letter Agreement, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which each Releasing Party has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Agreement, whether such claims, demands and causes of action are matured or unmatured or known or unknown. It is the intention of each Releasing Party in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified.  Each Releasing Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Releasing Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(b)           Each Releasing Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by such Releasing Party pursuant to the above release.  If any Releasing Party or any of its successors, assigns or other legal representations violates the foregoing covenant, such Releasing Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all reasonable attorneys’ fees and costs incurred by such Released Party as a result of such violation.

(c)           Each Releasing Party represents and warrants that, to its knowledge, there are no liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages or costs, or expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, which such Releasing Party may have or claim to have against any Released Party arising with respect to the Obligations, the Credit Agreement or any other Loan Documents, and the negotiation and execution of the Credit Agreement and this Letter Agreement, and each Releasing Party further acknowledges that, as of the date hereof, it does not have any counterclaim, set-off, or defense against the Released Parties, each of which such Releasing Party hereby expressly waives.

Section 4.  Reaffirmation of Guarantors.

(a) Each Guarantor heretofore executed and delivered to the Administrative Agent a Guaranty Agreement dated as of September 14, 2007 (the “Guaranty”).  Each of the Guarantors hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Letter Agreement and consents to the terms and conditions of the Credit Agreement (and all Obligations thereunder), this Letter Agreement and any related Loan Documents and all obligations thereunder and hereunder, and to any modification of the Loan Documents effected pursuant to this Letter Agreement.   Each Guarantor hereby confirms to the Lender Parties that, after giving effect to this Letter Agreement, the Guaranty of such Guarantor and each other Loan Document to which such Guarantor is a party continues in full force and effect and is the legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability. Each Guarantor further acknowledges, confirms and agrees that Administrative Agent and the Lenders have and shall continue to have a valid, enforceable and perfected first-priority lien (subject only to Permitted Liens) upon and security interest in the Collateral granted to Administrative Agent and the Lenders pursuant to the Loan Documents or otherwise granted to or held by Administrative Agent and the Lenders.

 

(b)           Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in the Credit Agreement, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the waivers or modifications to the Credit Agreement effected pursuant to this Letter Agreement, (ii) nothing in the Credit Agreement, this Letter Agreement or any other Loan Document shall be deemed to require the consent of such Guarantor to any future waivers or modifications to the Credit Agreement, and (iii) the Lender parties hereto are relying on the assurances provided herein in entering into this Letter Agreement and maintaining credit outstanding to the Borrower.

 

[Signature Pages Follow]

 

 

 

  

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 Fifth Third Bank, as Administrative Agent,

	  	
 as a Lender and as L/C Issuer.

	  	  
	  	
 By:  /s/ Donald K. Mitchell

	  	
Name:  Donald K. Mitchell

	 	    Title:  Vice President

 

 

  

Signature page 1 of 9 to May 31, 2013 Letter Agreement

  

	  	
THE HUNTINGTON NATIONAL BANK, as a Lender

	  	  
	  	
By:  /s/ Bruce G. Shearer

	  	
Name:  Bruce G. Shearer

	  	    Title:  SVP

 

 

 

  

Signature page 2 of 9 to May 31, 2013 Letter Agreement

  

	  	
SUNTRUST BANK, as a Lender

	  	  
	  	
By:  /s/ William S. Krueger

	  	
Name:  William S. Krueger

	 	    Title:  First Vice President

 

 

  

Signature page 3 of 9 to May 31, 2013 Letter Agreement

  

	  	
Old National Bank NA, Successor in Interest to the FDIC as Receiver of Integra Bank National Association, as a Lender

	  	  
	  	
By:  /s/ Jason L. Dunn

	  	
Name:  Jason L. Dunn

	 	    Title:  Assistant Vice President

 

 

 

 

  

Signature page 4 of 9 to May 31, 2013 Letter Agreement

  

	  	
UNITED BANK, as a Lender

	  	  
	  	
By:  /s/ Andrew Dawson

	  	
Name:  Andrew Dawson

	 	    Title:  AVP

 

 

 

  

Signature page 5 of 9 to May 31, 2013 Letter Agreement

  

	  	
SUMMIT COMMUNITY BANK, a West Virginia Banking Corporation, as a Lender

	  	  
	  	
By: /s/ Brad Ritchie

	  	
Name:  Brad Ritchie

	 	    Title:  President

 

 

 

  

Signature page 6 of 9 to May 31, 2013 Letter Agreement

  

	  	
Accepted and Agreed, by Borrower

	  	  
	  	
Champion Industries, Inc.

	  	  
	  	  
	  	
By:  /s/ Timothy D. Boates

	  	
Name: Timothy D. Boates

	  	
Title: CRO

 

 

 

  

Signature page 7 of 9 to May 31, 2013 Letter Agreement

  

	  	
Accepted and Agreed, by Each Guarantor

	  	  
	  	
The Chapman Printing Company, Inc., a West Virginia corporation

	  	
Stationers, Inc., a West Virginia corporation

	  	
Bourque Printing, Inc., a Louisiana corporation

	 	Dallas Printing of MS, Inc., a Mississippi corporation
	  	
Carolina Cut Sheets, Inc., a West Virginia corporation

	  	
Donihe Graphics, Inc., a Tennessee corporation

	  	
Smith & Butterfield Co., Inc., an Indiana corporation

	  	
The Merten Company, an Ohio corporation

	  	
Interform Corporation, a Pennsylvania corporation

	  	
CHMP Leasing, Inc., a West Virginia corporation

	  	
Blue Ridge Printing Co., Inc., North Carolina corporation

	  	
Capitol Business Equipment, Inc., a West Virginia corporation

	  	
Thompson’s of Morgantown, Inc., a West Virginia corporation

	  	
Independent Printing Service, Inc., an Indiana corporation

	  	
Diez Business Machines, Inc., a Louisiana corporation

	  	
Transdata Systems, Inc., a Louisiana corporation

	  	
Syscan Corporation, a West Virginia corporation

	  	
Champion Publishing, Inc., a West Virginia corporation

	  	  
	  	  
	  	  
	  	  
	  	
By:  /s/ Todd R. Fry

	  	
Name:  Todd R. Fry

	  	
Title:  Vice President

	 	 

  

Signature page 8 of 9 to May 31, 2013 Letter Agreement

  

	  	
 Accepted and Agreed, by Marshall T. Reynolds, Individually and as Shareholder

	  	  
	  	
Mr. Marshall Reynolds

	  	  
	  	  
	  	  
	  	
By:  /s/ Marshall T. Reynolds

	  	
Name: M-T-Reynolds

 

 

 

Signature page 9 of 9 to May 31, 2013 Letter AgreementEx 10.1 RSG 8K 012914

        

Exhibit 10.1

	
		
	NAME OF GRANTEE:
	 

	GRANT DATE:
	January 24, 2014

	NUMBER OF RESTRICTED SHARES GRANTED:
	 

BANK OF HAWAII CORPORATION 
2004 STOCK AND INCENTIVE COMPENSATION PLAN 
 
RESTRICTED STOCK GRANT AGREEMENT
This Restricted Stock Grant Agreement ("Agreement") dated as of the Grant Date specified above, between Bank of Hawaii Corporation, a Delaware corporation ("Company"), with its registered office at 130 Merchant Street, Honolulu, Hawaii 96813, and Grantee.
1.    Grant of Restricted Shares.  Effective as of the Grant Date, the Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") has granted to Grantee the number of shares of Restricted Stock (the "Restricted Shares") specified above pursuant to the Bank of Hawaii Corporation 2004 Stock and Incentive Compensation Plan, as amended ("Plan").  One-third of the Restricted Shares are hereby designated as “Service Shares”, one-third as “First-Tier Shares”, and one-third as “Second-Tier Shares”.  
2.    Restrictions During Period of Restriction.  The Restricted Shares shall be subject to forfeiture by Grantee and subject to the restrictions on transfer specified in Article 8 of the Plan until the "Period of Restriction" terminates as to such Restricted Shares.  The Period of Restriction for the Service Shares, the First-Tier Shares, and the Second-Tier Shares shall terminate in accordance with, and subject to, the terms of Appendix I hereto.
3.    Forfeiture of Unvested Restricted Shares.  Restricted Shares as to which the Period of Restriction has not terminated shall be forfeited and transferred to the Company upon the first to occur of: (a) Grantee's ceasing to be an Employee for any reason, whether voluntary or involuntary (except to the extent provided in Section 4 of Appendix I of this Agreement) and (b) March 2, 2015 unless (i) with respect to Service Shares, the Committee has, on or prior to March 2, 2015, certified that the Net Income Performance Goal (as defined in Appendix I) has been achieved, (ii) with respect to First-Tier Shares, the Committee has, on or prior to March 2, 2015, certified that the First-Tier Performance Goal (as defined in Appendix I) has been satisfied, and (iii) with respect to Second-Tier Shares, the Committee has, on or prior to March 2, 2015, certified that the Second-Tier Performance Goal (as defined in Appendix I) has been achieved.  Grantee's employment shall not be treated as terminated in the case of a transfer of employment within the Company and its subsidiaries or in the case of sick leave and other approved leaves of absence. 

4.    Issuance of Shares; Registration; Withholding Taxes.  Restricted Shares shall be issued in Grantee's name, shall bear the restrictive legend specified in Section 8.5 of the Plan (and such other restrictive legends as are required or deemed advisable by the Company under the provisions of any applicable law), and shall be held by the Company until all restrictions lapse or such shares are forfeited as provided herein.  The Restricted Shares as to which the Period of Restriction has terminated shall be delivered to Grantee upon such termination.  The Company may postpone the issuance or delivery of the Shares until (a) the completion of registration or other qualification of such Shares or transaction under any state or federal law, rule or regulation, or any listing on any securities exchange, as the Company shall determine to be necessary or desirable; (b) the receipt by the Company of such written representations or other documentation as the Company deems necessary to establish compliance with all applicable laws, rules and regulations, including applicable federal and state securities laws and listing requirements, if any; and (c) the payment to the Company in accordance with Article 17 of the Plan of any amount required by the Company to satisfy any federal, state or other governmental withholding tax requirements related to the issuance or delivery of the Shares.  Grantee shall comply with any and all legal requirements relating to Grantee's resale or other disposition of any Shares acquired under this Agreement.
5.    Share Adjustments.  The number and kind of Restricted Shares or other property subject to this Agreement shall be subject to adjustment in accordance with Section 4.2 of the Plan.
6.    Rights as Shareholder.  Unless otherwise provided herein, Grantee shall be entitled to all of the rights of a shareholder with respect to the Restricted Shares, including the right to vote such Shares and to receive dividends and other distributions (not including share adjustments as described in Section 5 above) payable with respect to such Shares from and after the Grant Date.  Grantee's rights as a shareholder shall terminate with respect to any Restricted Shares forfeited by Grantee.
7.    Amendment.  This Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations issued thereunder or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan.  Unless necessary or advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be adopted only with the consent of Grantee.
8.    Section 83(b) Election.  Grantee shall promptly deliver to the Company a copy of any election filed by Grantee in respect of the Restricted Shares pursuant to Code Section 83(b).
9.    Notices.  Any notice or other communication made in connection with this Agreement shall be deemed duly given when delivered in person or mailed by certified or registered mail, return receipt requested, to Grantee at Grantee's address shown on Company records or such other address designated by Grantee by similar notice, or to the Company at its then principal office, to the attention of the Corporate Secretary of the Company.  Furthermore, such notice or other communication shall be deemed duly given when transmitted electronically to Grantee at Grantee's electronic mail address shown on the Company records or, to the extent that Grantee is an active employee, through the Company's intranet.

2

10.    Plan Governs.    The Restricted Shares evidenced by this Agreement are subject to the terms and conditions of the Plan and of this Agreement.  In case of conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall control.  Capitalized terms used in this Agreement and not defined herein shall have the meaning assigned in the Plan unless the context indicates otherwise.  
11.    Miscellaneous.  This Agreement shall bind and benefit Grantee, the heirs, distributees and personal representative of Grantee, and the Company and its successors and assigns.  This Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument.  Capitalized terms not herein defined shall have the meanings prescribed to them under the Plan. 
BY ACCEPTING THE RESTRICTED SHARES GRANTED UNDER THIS RESTRICTED STOCK GRANT AGREEMENT, GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT AND IN THE PLAN.

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APPENDIX I

Termination of Period of Restriction For Restricted Shares
1.      Period of Restriction for Service Shares. The Period of Restriction for the Service Shares shall terminate subject to the following terms and conditions or as provided in Section 4 below:  
a.  The Period of Restriction for one-third of the Service Shares shall terminate upon the Committee certifying that the Net Income Performance Goal has been achieved, provided that Grantee is an Employee on March 2, 2015.
b. The Period of Restriction for an additional one-third of the Service Shares shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the Net Income Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the Service Shares shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the Net Income Performance Goal has been achieved.
“Net Income Performance Goal” means that the Company’s net income for calendar year 2014 as publicly announced by the Company in its earnings release for the 2014 calendar year exceeds the aggregate amount of the regular quarterly dividends paid during calendar year 2014.  
2.     Period of Restriction for First-Tier Shares.  The Period of Restriction for the First-Tier Shares shall terminate subject to the following terms and conditions or as provided in Section 4 below:
a.  The Period of Restriction for one-third of the First-Tier Shares shall terminate upon the Committee certifying that the First-Tier Performance Goal has been achieved for calendar year 2014, provided that Grantee is an Employee on March 2, 2015.
b.  The Period of Restriction for an additional one-third of the First-Tier Shares shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the First-Tier Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the First-Tier Shares shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the First-Tier Performance Goal has been achieved.
“First-Tier Performance Goal” means that the Company's "Return on Assets" or "Return on Equity" or “Tier I Capital Ratio” or "Stock Price to Book Ratio v. Peers" for 2014 falls within the top quartile of the 2014 Regional Bank Index or the 2014 U.S. Bank Index, each determined in the same manner as corresponding prior determinations made by the Committee, as applicable.  For purposes of this Appendix, the terms "Return on Assets", "Return on Equity", and "Stock Price to Book Ratio vs. Peers" shall mean such terms as determined and reported with respect to the Company for purposes of placement under the 2014 Regional Bank Index and the 2014 U.S. Bank Index.  “Tier I Capital Ratio” means Tier I capital divided by risk-weighted assets as measured at year-end and reported in the full-year financial statements of the Company and the financial institutions included in the 2014 Regional Bank Index and the 2014 U.S. Bank Index.

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APPENDIX I

3.    Period of Restriction for Second-Tier Shares.  The Period of Restriction for the Second-Tier Shares shall terminate subject to the following terms and conditions or as provided in Section 4 below:
a.  The Period of Restriction for one-third of the Second-Tier Shares shall terminate upon the Committee certifying that the Second-Tier Performance Goal has been achieved for calendar year 2014, provided that Grantee is an Employee on March 2, 2015.
b.  The Period of Restriction for an additional one-third of the Second-Tier Shares shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the Second-Tier Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the Second-Tier Shares shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the Second-Tier Performance Goal has been achieved.
“Second-Tier Performance Goal” means that the Company's "Return on Assets", or "Return on Equity", or “Tier I Capital Ratio” or "Stock Price to Book Ratio v. Peers" for 2014 falls within the top two quartiles of the 2014 Regional Bank Index or the 2014 U.S. Bank Index, each determined in the same manner as corresponding prior determinations made by the Committee. 
4.    Termination of Period of Restriction Upon Certain Terminations of Employment.  The Period of Restriction for all of the Restricted Shares shall terminate (to the extent that the Period of Restriction has not previously terminated or  the Restricted Shares have not previously been forfeited) upon the occurrence of any of the following: (a) the death of Grantee; (b) the Grantee ceasing to be an  Employee due to "disability" within the meaning of that term under Code Section 409A and the regulations promulgated thereunder; or (c) upon or after the occurrence of a "Change in Control" (as defined in Article 15 of the Plan) either (i) Grantee's employment with the Company and its subsidiaries is terminated by the Company without "Cause" or (ii) Grantee terminates employment with  the Company and its subsidiaries for "Good Reason".  
For purposes of this Section 4:
"Cause" means the occurrence of any one or more of the following:  (i) Grantee's willful failure to perform his or her duties for the Company (other than any such failure resulting from Grantee's Disability), after written demand for substantial performance has been delivered to Grantee by the Committee that specifically identifies how Grantee has not substantially performed his or her duties, and Grantee fails to remedy the situation within 15 business days of such written demand from the Committee; (ii) gross negligence in the performance of Grantee's duties; (iii) Grantee's conviction of, or plea of nolo contendere, to any felony whatsoever or any other crime involving the personal enrichment of Grantee at the expense of the Company; (iv) Grantee's willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise; (v) a material violation of any federal or state banking law or regulation; (vi) a material violation of any provision of the Company's codes of conduct; or (vii) willful violation of any of the covenants contained in Article 10 of the Company's Change-In-Control Retention Plan, as applicable.

5

APPENDIX I

"Good Reason" means the occurrence of one or more of the following after a Change in Control without Grantee's express written consent:  (i) a material diminution in Grantee's base salary; (ii) a material diminution in Grantee's authority, duties, or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom Grantee is required to report, including, to the extent applicable, a requirement that Grantee report to a corporate officer or employee instead of reporting directly to the Board; (iv) a material diminution in the budget over which Grantee retains authority; (v) a material change in the geographic location at which Grantee must perform his or her services (which for this purpose means Grantee is required to relocate to a different Hawaiian Island or a place that is more than 50 miles from where Grantee was based immediately prior to the Change in Control); or (vi) any other action or inaction that constitutes a material breach by the Company of the Company's Change-In-Control Retention Plan or a written employment agreement with Grantee (or other agreement as to the terms of employment between the Company and Grantee).  The Grantee must give the Company written notice that a "Good Reason" event has occurred within 90 days of its occurrence.  The notice must provide a reasonably detailed description of the facts that constitute a "Good Reason" event, and the Company shall have 30 business days to remedy the "Good Reason" event.
5.      Committee Determinations; Section 162(m).  The Committee shall certify whether the Net Income Performance Goal, First-Tier Performance Goal, and Second-Tier Performance Goal have been achieved on or prior to March 2, 2015.  This Agreement shall be interpreted and administered in a manner consistent with the intent that the Restricted Shares granted hereunder comply with the requirements of the performance-based compensation exception under Code Section 162(m).

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	NAME OF GRANTEE:
	 

	GRANT DATE:
	January 24, 2014

	NUMBER OF RESTRICTED STOCK UNITS GRANTED:
	 

BANK OF HAWAII CORPORATION 
2004 STOCK AND INCENTIVE COMPENSATION PLAN 
 
RESTRICTED STOCK UNITS GRANT AGREEMENT
This Restricted Stock Units Grant Agreement ("Agreement") dated as of the Grant Date specified above, between Bank of Hawaii Corporation, a Delaware corporation ("Company"), with its registered office at 130 Merchant Street, Honolulu, Hawaii 96813, and Grantee.
1.    Grant of RSUs.  Effective as of the Grant Date, the Human Resources and Compensation Committee of the Company's Board of Directors ("Committee") has granted to Grantee the number of Restricted Stock Units (the "RSUs") specified above pursuant to the Bank of Hawaii Corporation 2004 Stock and Incentive Compensation Plan, as amended ("Plan").  One-third of the RSUs are hereby designated as “Service RSUs”, one-third as “First-Tier RSUs”, and one-third as “Second-Tier RSUs”.  
2.    Period of Restriction.  The RSUs shall be subject to forfeiture by Grantee until the "Period of Restriction" terminates as to such RSUs.  The Period of Restriction for the Service RSUs, the First-Tier RSUs, and the Second-Tier RSUs shall terminate in accordance with, and subject to, the terms of Appendix I hereto.  The RSUs shall at all times be nontransferable. 
3.    Forfeiture of RSUs.  RSUs as to which the Period of Restriction has not terminated shall be forfeited upon the first to occur of: (a) Grantee's ceasing to be an Employee for any reason, whether voluntary or involuntary (except to the extent provided in Section 4 of Appendix I of this Agreement) and (b) March 2, 2015 unless (i) with respect to Service RSUs, the Committee has, on or prior to March 2, 2015, certified that the Net Income Performance Goal (as defined in Appendix I) has been achieved, (ii) with respect to First-Tier RSUs, the Committee has, on or prior to March 2, 2015, certified that the First-Tier Performance Goal (as defined in Appendix I) has been satisfied, and (iii) with respect to Second-Tier RSUs, the Committee has, on or prior to March 2, 2015, certified that the Second-Tier Performance Goal (as defined in Appendix I) has been achieved. Grantee's employment shall not be treated as terminated in the case of a transfer of employment within the Company and its subsidiaries or in the case of sick leave and other approved leaves of absence. 

        

4.    Payment of RSUs; Withholding Taxes.  With respect to RSUs for which the Period of Restriction has lapsed, the Company shall pay to Grantee an amount, in cash, equal to the product of (a) the number of RSUs as to which the Period of Restriction has terminated and (b) the Fair Market Value of a Share as of the date that the Period of Restriction has terminated.  Such payment shall be made within thirty days after termination of the Period of Restriction and, in accordance with Article 17 of the Plan, shall be reduced by the amount required to satisfy applicable federal, state, or other governmental withholding requirements.
5.    Share Adjustments.  The number of RSUs and Shares subject to the RSUs shall be subject to adjustment in accordance with Section 4.2 of the Plan.
6.    Rights as Shareholder.  Grantee shall have no rights of a shareholder with respect to the RSUs.
7.    Amendment.  This Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations issued thereunder or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan.  Unless necessary or advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be adopted only with the consent of Grantee.
8.    Notices.  Any notice or other communication made in connection with this Agreement shall be deemed duly given when delivered in person or mailed by certified or registered mail, return receipt requested, to Grantee at Grantee's address shown on Company records or such other address designated by Grantee by similar notice, or to the Company at its then principal office, to the attention of the Corporate Secretary of the Company.  Furthermore, such notice or other communication shall be deemed duly given when transmitted electronically to Grantee at Grantee's electronic mail address shown on the Company records or, to the extent that Grantee is an active employee, through the Company's intranet.
9.    Plan Governs.    The RSUs evidenced by this Agreement are subject to the terms and conditions of the Plan and of this Agreement.  In case of conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall control.  Capitalized terms used in this Agreement and not defined herein shall have the meaning assigned in the Plan unless the context indicates otherwise.  
10.    Miscellaneous.  This Agreement shall bind and benefit Grantee, the heirs, distributees and personal representative of Grantee, and the Company and its successors and assigns.  This Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument.  Capitalized terms not herein defined shall have the meanings prescribed to them under the Plan. 
BY ACCEPTING THE RESTRICTED STOCK UNITS GRANTED UNDER THIS RESTRICTED STOCK UNITS GRANT AGREEMENT, GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT AND IN THE PLAN. 

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APPENDIX I

Termination of Period of Restriction For RSUs
1.      Period of Restriction for Service RSUs. 
The Period of Restriction for the Service RSUs shall terminate subject to the following terms and conditions or as provided in Section 4 below:  
a.  The Period of Restriction for one-third of the Service RSUs shall terminate upon the Committee certifying that the Net Income Performance Goal has been achieved, provided that Grantee is an Employee on March 2, 2015.
b. The Period of Restriction for an additional one-third of the Service RSUs shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the Net Income Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the Service RSUs shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the Net Income Performance Goal has been achieved.
“Net Income Performance Goal” means that the Company’s net income for calendar year 2014 as publicly announced by the Company in its earnings release for the 2014 calendar year exceeds the aggregate amount of the regular quarterly dividends paid during calendar year 2014.
2.     Period of Restriction for First-Tier RSUs.
The Period of Restriction for the First-Tier RSUs shall terminate subject to the following terms and conditions or as provided in Section 4 below:
a.  The Period of Restriction for one-third of the First-Tier RSUs shall terminate upon the Committee certifying that the First-Tier Performance Goal has been achieved for calendar year 2014, provided that Grantee is an Employee on March 2, 2015.
b.  The Period of Restriction for an additional one-third of the First-Tier RSUs shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the First-Tier Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the First-Tier RSUs shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the First-Tier Performance Goal has been achieved.
“First-Tier Performance Goal” means that the Company's "Return on Assets" or "Return on Equity" or “Tier I Capital Ratio” or "Stock Price to Book Ratio v. Peers" for 2014 falls within the top quartile of the 2014 Regional Bank Index or the 2014 U.S. Bank Index, each determined in the same manner as corresponding prior determinations made by the Committee, as applicable.  For purposes of this Appendix, the terms "Return on Assets", "Return on Equity", and "Stock Price to Book Ratio vs. Peers" shall mean such terms as determined and reported with respect to the Company for purposes of placement under the 2014 Regional Bank Index and the 2014 U.S. Bank Index. “Tier I Capital 

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APPENDIX I

Ratio” means Tier I capital divided by risk-weighted assets as measured at year-end and reported in the full-year financial statements of the Company and the financial institutions included in the 2014 Regional Bank Index and the 2014 U.S. Bank Index.
3.    Period of Restriction for Second-Tier RSUs.
The Period of Restriction for the Second-Tier RSUs shall terminate subject to the following terms and conditions or as provided in Section 4 below:
a.  The Period of Restriction for one-third of the Second-Tier RSUs shall terminate upon the Committee certifying that the Second-Tier Performance Goal has been achieved for calendar year 2014, provided that Grantee is an Employee on March 2, 2015.
b.  The Period of Restriction for an additional one-third of the Second-Tier RSUs shall terminate on January 29, 2016 if Grantee is an Employee as of such date and the Second-Tier Performance Goal has been achieved.
c.  The Period of Restriction for the final one-third of the Second-Tier RSUs shall terminate on January 31, 2017 if Grantee is an Employee as of such date and the Second-Tier Performance Goal has been achieved.
“Second-Tier Performance Goal” means that the Company's "Return on Assets", or "Return on Equity", or “Tier I Capital Ratio” or "Stock Price to Book Ratio v. Peers" for 2014 falls within the top two quartiles of the 2014 Regional Bank Index or the 2014 U.S. Bank Index, each determined in the same manner as corresponding prior determinations made by the Committee. 
4.    Termination of Period of Restriction Upon Certain Terminations of Employment.  The Period of Restriction for all of the RSUs shall terminate (to the extent that the Period of Restriction has not previously terminated or the RSUs have not previously been forfeited) upon the occurrence of any of the following: (a) the death of Grantee; (b) the Grantee ceasing to be an  Employee due to "disability" within the meaning of that term under Code Section 409A and the regulations promulgated thereunder; or (c) upon or after the occurrence of a "Change in Control" (as defined in Article 15 of the Plan) either (i) Grantee's employment with the Company and its subsidiaries is terminated by the Company without "Cause" or (ii) Grantee terminates employment with  the Company and its subsidiaries for "Good Reason".  
For purposes of this Section 4:
"Cause" means the occurrence of any one or more of the following:  (i) Grantee's willful failure to perform his or her duties for the Company (other than any such failure resulting from Grantee's Disability), after written demand for substantial performance has been delivered to Grantee by the Committee that specifically identifies how Grantee has not substantially performed his or her duties, and Grantee fails to remedy the situation within 15 business days of such written demand from the Committee; (ii) gross negligence in the performance of Grantee's duties; (iii) Grantee's conviction of, or plea of nolo contendere, to any felony whatsoever or any other crime involving the personal enrichment of Grantee at the expense of the Company; (iv) Grantee's willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or 

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APPENDIX I

otherwise; (v) a material violation of any federal or state banking law or regulation; (vi) a material violation of any provision of the Company's codes of conduct; or (vii) willful violation of any of the covenants contained in Article 10 of the Company's Change-In-Control Retention Plan, as applicable.
"Good Reason" means the occurrence of one or more of the following after a Change in Control without Grantee's express written consent:  (i) a material diminution in Grantee's base salary; (ii) a material diminution in Grantee's authority, duties, or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom Grantee is required to report, including, to the extent applicable, a requirement that Grantee report to a corporate officer or employee instead of reporting directly to the Board; (iv) a material diminution in the budget over which Grantee retains authority; (v) a material change in the geographic location at which Grantee must perform his or her services (which for this purpose means Grantee is required to relocate to a different Hawaiian Island or a place that is more than 50 miles from where Grantee was based immediately prior to the Change in Control); or (vi) any other action or inaction that constitutes a material breach by the Company of the Company's Change-In-Control Retention Plan or a written employment agreement with Grantee (or other agreement as to the terms of employment between the Company and Grantee).  The Grantee must give the Company written notice that a "Good Reason" event has occurred within 90 days of its occurrence.  The notice must provide a reasonably detailed description of the facts that constitute a "Good Reason" event, and the Company shall have 30 business days to remedy the "Good Reason" event.
5.    Committee Determinations; Section 162(m).  The Committee shall certify whether the Net Income Performance Goal, First-Tier Performance Goal, and Second-Tier Performance Goal have been achieved on or prior to March 2, 2015.  This Agreement shall be interpreted and administered in a manner consistent with the intent that the RSUs granted hereunder comply with the requirements of the performance-based compensation exception under Code Section 162(m).

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