Document:

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EXHIBIT 10.4

                         BAY VIEW CAPITAL CORPORATION

                     Supplemental Phantom Stock Unit Plan

      1.  Plan Purpose.  The purpose of the Plan is to focus Participants on
          ------------
measures that will lead to the creation of value for the Corporation and its
shareholders and to provide the Participants with the opportunity to earn
significant rewards commensurate with performance and shareholder value
creation.

      2.  Definitions.  The following definitions are applicable to the Plan:
          -----------

          "Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in section 425(e) and
(f), respectively, of the Code.

          "Agreement"-- means the written agreement entered into between the
Corporation and a Participant to carry out the Plan with respect to the rights
and entitlements of a Participant to earn Awards in accordance with the Plan's
terms and conditions.

          "Award" -- means the grant by the Committee of a Phantom Stock Unit,
          as provided in the Plan.

          "Change in Control" -- means any of the events specified in the
following clauses (i) through (iii):  (i) any third person, including a "group"
as defined in section 13(d) (3) of the Securities Exchange Act of 1934, shall
become the beneficial owner of shares of the Corporation with respect to which
25% or more of the total number of votes for the election of the Board of
Directors of the Corporation may be cast, (ii) as a result of, or in connection
with, any cash tender offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing, the persons who
were directors of the Corporation shall cease to constitute a majority of the
Board of Directors of the Corporation, or (iii) the stockholders of the
Corporation shall approve an agreement providing either for a transaction in
which the Corporation will cease to be an independent publicly-owned corporation
or for a sale or other disposition of all or substantially all the assets

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of the Corporation.

          "Code" -- means the Internal Revenue Code of 1986, as amended.

          "Committee" -- means the Committee referred to in section 3 hereof.

          "Continuous Service" -- means the absence of any interruption or
termination of service as an Employee.  Service shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Corporation or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its Affiliates or any
successor.

          "Corporation" -- means Bay View Capital Corporation, a Delaware
corporation, and any successor thereto.

          "Effective Date" -- means December 7, 1998.

          "Employee" -- means an officer who is employed either (i) by the
Corporation or Bay View Bank at the level of senior vice president or above, or
(ii) by an Affiliate (other than Bay View Bank) at the level of executive vice
president or above.

          "Grant Date" -- means the last day of the Quarter in which an Award is
earned.

          "Market Value" -- means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the Nasdaq Stock Market, or any similar
system then in use, or, if no such quotations are available, the fair market
value on such date of a Share as the Committee shall determine.

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          "Net Interest Margin" -- means net interest spread after including a
factor for the excess of interest-earning assets over interest-bearing
liabilities for the three month period ending on the last day of a Quarter.  Net
interest spread represents the difference between the yield on interest-earning
assets and cost of interest-bearing liabilities adjusted for income derived from
noninterest-earning assets which are funded by interest-bearing liabilities.

          "Non-Employee Director" -- means a director who a) is not currently an
officer or employee of the Corporation or any Affiliate; b) does not receive
remuneration, directly or indirectly, from the Corporation in any capacity other
than as a director; and (c) does not possess an interest in any other
transactions or is not engaged in a business relationship for which disclosure
would be required under Item 404(a) or (b) of Regulation S-K.

          "Participant" -- means an Employee who is selected by the Committee to
participate in the Plan and with whom the Corporation enters into an Agreement.

          "Performance Target" -- means the performance criteria and the
achievement goals established pursuant to section 5 hereof for the granting of
Awards pursuant to section 6 hereof.

          "Phantom Stock Unit" -- means the right to receive on the Grant Date
the Per Unit Value multiplied by the number of hypothetical Shares earned.

          "Per Unit Value" -- means the excess of the Market Value of a Share on
the last day of the Quarter in which the Phantom Stock Unit is earned over
$21.00, but such Market Value shall be limited to $36.25 prior to the earlier of
a Change in Control or the Board of Directors of the Corporation approving a
proposal or transaction that could result in a Change in Control.

          "Plan" -- means the Supplemental Phantom Stock Unit  Plan of the
Corporation.

          "Quarter" -- means the three-month period ending on March 31, June 30,
September 30 or December 31 of each year, commencing on the Effective Date and
ending on the date that the

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Plan expires in accordance with Section 16(b) hereof.

          "Share" -- means a share of the common stock of the Corporation.

          "Tangible ROE" -- means the consolidated after-tax net income of the
Corporation (including nonrecurring and extraordinary items) determined in
accordance with generally accepted accounting principles for the twelve month
period ending on the last day of a Quarter, divided by the average tangible
equity of the Corporation for such period.

          "Transaction Account Mix" -- means transaction accounts as a
percentage of total retail deposits on the last day of a Quarter.  Transaction
accounts represent savings, checking and money market accounts including other
deposit accounts which have similar interest rate risks.

      3.  Administration.  The Plan shall be administered by a Committee
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consisting of two or more individuals, each of whom shall be a Non-Employee
Director.  The members of the Committee shall be appointed, removed and/or
substituted from time to time by the Board of Directors of the Corporation.
Except as limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion to (i) select Participants and
grant Awards; (ii) determine the number of Shares to be subject to types of
Awards generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (iv) prescribe the form and terms of the Agreements; and (v) establish
from time to time regulations for the administration of the Plan, interpret the
Plan, and make all determinations deemed necessary or advisable for the
administration of the Plan.  A majority of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
Committee without a meeting, shall be acts of the Committee.

      4.  Participation.  The Committee may select Employees from time to time
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to become Participants in the Plan.  As a condition of participation, the
Corporation and the Employee shall enter into an Agreement relating to the
entitlement of such Participant to earn Awards under this Plan.  Employees
approved for participation will be notified of their selection as soon after

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approval as practicable.

     5.   Performance Targets.  As soon as practicable after the end of each
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Quarter the Committee shall, based upon its review of the Corporation's
financial statements for such Quarter, determine whether one or more Performance
Targets were achieved during such Quarter.  The Committee shall certify in
writing whether a Performance Target was achieved during such Quarter based upon
the actual performance results for such Quarter.  There are three separate
Performance Targets that may be achieved under this Plan.  Each of the three
Performance Targets may be achieved by the Corporation's attainment during any
Quarter of a minimum level of performance in each of three applicable criteria -
Net Interest Margin, Tangible ROE (based upon the last four Quarters)and
Transaction Account Mix - as follows:

<TABLE>
<CAPTION>

Performance       Net Interest        Tangible ROE         Transaction Account
-----------       ------------        ------------         -------------------
  Target             Margin                                      Mix
  ------             ------
<S>               <C>                 <C>                  <C>
  First               3.3%               15.0%                      40%
  Second              3.7%               16.0%                      45%
  Third               4.0%               18.0%                      50%
</TABLE>

     6.   Grant of Awards.
          ----------------

          (a)  Immediately upon the Committee's certification in writing of the
satisfaction of a Performance Target during a Quarter each Employee who was a
Participant in the Plan on the last day of such Quarter shall be granted an
Award of a number of Phantom Stock Units in accordance with the terms of his or
her Agreement.

          (b)  In the event that one or more of the Performance Targets is not
achieved on or before December 31, 2000, each Participant who is an Employee on
December 31, 2000 shall be entitled to an Award of Phantom Stock Units hereunder
equal to the number of Phantom Stock Units that would have been granted to such
Participant if the next Performance Target had been satisfied, multiplied by a
fraction, the numerator of which is the level of performance of the lowest
performing of the three applicable criteria - Net Interest Margin, Tangible ROE
or Transaction Account Mix - on December 31, 2000, and the denominator of which
is the minimum level of performance of the same criteria that would have been
required in order to satisfy

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the next Performance Target.

          (c)  In the event that a Participant ceases Continuous Service for any
reason, except as otherwise provided herein, such Participant's right of
participation in this Plan shall thereupon cease and terminate.

     7.   Terms and Conditions of Phantom Stock Units.  A Phantom Stock Unit,
          -------------------------------------------
when granted, shall evidence the right of a Participant to receive in cash the
Per Unit Value, multiplied by the number of hypothetical Shares earned thereby.

     8.   Exercise of Awards.
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          (a)  The Per Unit Value shall be paid in cash within 45 days following
the end of the Quarter in which the Phantom Stock Unit is awarded, unless (1)
the Participant elects to defer receipt of such cash payment pursuant to
subsection (b) hereof, or (2) the Committee, in its discretion, elects to delay
the payment of all or a portion thereof until such time as the amount payable
would be deductible to the Corporation or its Affiliate as contemplated by
section 162(m) of the Code.

          (b)  Participants who participate in the Bay View Capital Corporation
Deferred Compensation Plan (the "BVCC Deferred Compensation Plan") may elect to
defer their receipt of cash payment for their Per Unit Value pursuant to the
Plan by their voluntary election to participate in the BVCC Deferred
Compensation Plan.  Based upon the terms and provisions of the BVCC Deferred
Compensation Plan, certain Participants may irrevocably elect to defer the
receipt of all or a portion of their Per Unit Value to a specified future date
as permitted in the BVCC Deferred Compensation Plan.  The election to defer the
Per Unit Value pursuant to the BVCC Deferred Compensation Plan must be in
writing and submitted to the Company's Human Resources Department within the
time period required for deferral under the BVCC Deferred Compensation Plan.

     9.   Effect of Change in Control.  In the event of a Change in Control,
          ---------------------------
each Participant, as soon as practicable following the Change in Control, shall
receive a cash award in lieu of the Phantom Stock Units that such Participant
could have earned in the future under the Plan. The amount of such cash award
shall be equal to the following:

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     A)   The total number of Phantom Stock Units that the Participant is
eligible to earn upon the achievement of all three Performance Targets,
multiplied by a fraction, the numerator of which is the number of days from the
Effective Date until the Change in Control, and the denominator of which is 756;
multiplied by

     B)   The Market Value of a Share at the Change in Control, minus $21.00
minus

     C)   The value under section 7 hereof of all Phantom Stock Units previously
awarded to the Participant.

     10.  Adjustments Upon Changes in Capitalization.  In the event of any
          ------------------------------------------
change in the outstanding Shares subsequent to the Effective Date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the number of Shares
underlying a Phantom Stock Unit that may thereafter be granted under the Plan,
and the calculation of the Per Unit Value, shall be appropriately adjusted by
the Committee, whose determination shall be conclusive.

     11.  Assignments and Transfers.  No right or interest of any Participant in
          -------------------------
this Plan will be assignable or transferable or subject to any lien or
encumbrance, whether directly or indirectly, by operation of law or otherwise,
including, without limitation, execution, levy, garnishment, attachment, pledge,
or bankruptcy except, in the event of the death of a Participant, by will or the
laws of descent and distribution.

     12.  Employee Rights Under the Plan.  No Employee shall have a right to be
          ------------------------------
selected as a Participant, and no Employee or other person shall have any claim
or right to be granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate.  Neither the Plan nor any
action taken hereunder shall be construed as giving any Employee any right to be
retained in the employ of the Corporation or any Affiliate.

     13.  Withholding Tax.  The Corporation shall have the right to deduct from
          ---------------
all amounts paid in cash with respect to the Per Unit

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Value under the Plan any taxes required by law to be withheld with respect to
such cash payments.

     14.  Excise Taxes.  In the event it shall be determined that any payment or
          ------------
distribution by the Corporation or its affiliates to or for the benefit of the
Participant (whether paid or payable or distributed or distributable pursuant to
the terms of the Plan or otherwise, but determined without regard to any
additional payments required under this Section) (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code (the
"Code") or any interest or penalties are incurred by the Participant with
respect to such excise tax(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Participant shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitations, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Participant retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payment.

     15.  Amendment or Termination.  The Committee, in its sole and absolute
          ------------------------
discretion, may modify or amend any or all of the provisions of this Plan at any
time and from time to time, without notice, and may suspend or terminate it
entirely.  However, no such modification, amendment, suspension, or termination
will be made prior to the Committee determining whether the approval of the
stockholders of the Corporation is required or desirable pursuant to applicable
law or regulation; provided, further, that no such amendment, suspension or
termination shall impair the rights of any Participant, without his consent, in
any Award theretofore earned pursuant to the Plan.

     16.  Effective Date and Term of Plan.
          -------------------------------

          (a)  The Plan shall become effective upon its adoption by the Board of
Directors of the Corporation, effective as of December 7, 1998.

          (b)  Unless sooner terminated under section 15 hereof, the Plan shall
expire as soon as practicable after the earliest to occur of the dates specified
below and the satisfaction of all

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of the Corporation's responsibilities and obligations with respect to all Awards
earned through such date:

     (1)  The date on which all three Performance Targets have been achieved.

     (2)  December 31, 2000.

     (3)  A Change in Control.

     17.  Beneficiary Designation.  Each Participant under the Plan may, from
          -----------------------
time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any Award under the Plan is to be paid in
case of his death before he receives any or all of such Award.  Each designation
will revoke all prior designations by the same Participant, will be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during his lifetime.  In the absence
of any such designation, benefits remaining unpaid at the Participant's death
will be paid to the Participant's estate.

     18.  No Funding.  Nothing contained in this Plan and no action taken
          ----------
hereunder will create or be construed to create a trust of any kind, or a
fiduciary relationship between the Corporation and any Participant or
beneficiary or any other person.  Amounts due under this Plan at any time and
from time to time will be paid from the general funds of the Corporation.  To
the extent that any person acquires a right to receive payments hereunder, such
right shall be that of an unsecured general creditor of the Corporation.

     19.  Indemnification of Committee.  No member of the Committee shall be
          ----------------------------
liable for any act, omission, or determination taken or made in good faith with
respect to the Plan or any Awards made hereunder; and the members of the
Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expenses (including
counsel fees) arising therefrom to the full extent permitted by law and under
any directors' and officers' liability or similar insurance coverage that may be
in effect from time to time.

     20.  Binding Effect.  The Plan shall inure to the benefit of the
          --------------
Participants hereunder and their respective heirs, devisees and legal
representatives, and it shall be binding on the

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successors of the Corporation and its Affiliates.

     21.  Expenses of the Plan.  The expenses of administering the Plan will be
          --------------------
borne by the Corporation.

     22.  Governing Law.  The Plan will be construed in accordance with and
          --------------
governed by the laws of the State of California, except to the extent that such
laws are preempted by Federal law.

                                       10<PAGE>

                                                            HECO Exhibit 10.9(a)
                                                            --------------------

                              AGREEMENT RELATING TO
                        INTER-ISLAND INDUSTRIAL FUEL OIL
                         AND DIESEL FUEL SUPPLY CONTRACT

          THIS AGREEMENT (hereinafter "Agreement") is made as of the 29th day of
October, 1999, by and between HAWAIIAN ELECTRIC COMPANY, INC. ("HECO"), a Hawaii
corporation whose principal place of business and address is 900 Richards
Street, Honolulu, Hawaii 96813, MAUI ELECTRIC COMPANY, LIMITED ("MECO"), a
Hawaii corporation whose principal place of business and address is 210
Kamehameha Avenue, Kahului, Maui, Hawaii 96732, HAWAII ELECTRIC LIGHT COMPANY,
INC. ("HELCO"), a Hawaii corporation whose principal place of business and
address is 1200 Kilauea Avenue, Hilo, Hawaii 96720, HAWAIIAN TUG & BARGE CORP.
("HTB"), a Hawaii corporation whose principal place of business and address is
Pier 21, Box 3288, Honolulu, Hawaii 96801, YOUNG BROTHERS, LIMITED ("YB"), a
Hawaii corporation whose principal place of business and address is Pier 40, Box
3288, Honolulu, Hawaii 96801, SALTCHUK RESOURCES, INC. ("Saltchuk"), a
Washington corporation whose principal place of business and address is 1111
Fairview Ave. North, Seattle, Washington 98109 and MOANA PA'A KAI, INC., a
Hawaii corporation formed or being formed by Saltchuk (referred to herein as
"Moana").

                    W   I   T   N   E   S   S   E   T   H  :
                    -   -   -   -   -   -   -   -   -   -

          WHEREAS, HECO, MECO, HELCO (collectively, the "Utilities"), HTB and YB
are parties to that certain Inter-Island Industrial Fuel Oil and Diesel Fuel
Supply Contract with Chevron U.S.A. Inc. ("Chevron"), dated as of November 14,
1997 (hereinafter the "Fuel Contract"); and

          WHEREAS, HTB, YB, and Hawaiian Electric Industries, Inc. ("HEI"), have
entered into a stock purchase agreement with Saltchuk dated August 4, 1999
whereby HTB will sell to Saltchuk all of the issued and outstanding capital
stock of YB (the "Stock Purchase Agreement") and HEI and HTB have entered into
an asset purchase agreement with Saltchuk also dated August 4, 1999, whereby HTB
will sell certain of the other assets of HTB to Saltchuk (the "Asset Purchase
Agreement"); and

          WHEREAS, under the Asset Purchase Agreement HTB will assign to Moana
the interests of HTB under the Fuel Contract (hereinafter the "Assignment"); and

          WHEREAS, it is contemplated by the Stock Purchase Agreement and the
Asset Purchase Agreement (the "Purchase Agreements") that this Agreement will be
entered into by the parties hereto, with the provisions hereof to become
effective on the closing date of the transactions contemplated by the Purchase
Agreements (the "Closing Date");

          NOW, THEREFORE, in consideration of these premises and of the mutual
promises herein contained, the parties hereto hereby agree as follows:
<PAGE>

I.  ASSIGNMENT; FURTHER ASSIGNMENT.

     Subject to obtaining such consents or approvals as shall be required from
Chevron, and subject to the terms and conditions of this Agreement, HECO, MECO
and HELCO hereby consent to the assignment of HTB's interests under the Fuel
Contract to Moana.  After such assignment, neither the Fuel Contract nor the
interests of YB and Moana thereunder shall be further assigned by YB or Moana
without the consent of the Utilities and Chevron.

II.  QUANTITIES; AMENDMENTS.

     By letter of even date herewith, (the "Notification/Consent Letter") HTB
and YB shall notify Chevron (in accordance with section 3.1 of the Fuel
Contract) that the annual physical quantities of Diesel to be purchased by YB
and Moana in the aggregate under the Fuel Contract shall be a minimum of 0
barrels and a maximum of 78,000 barrels.  Such notification shall be effective
on the Closing Date.  Thereafter, neither YB nor Moana shall (a) make any change
to the individual minimum or maximum annual physical quantities of Diesel
specified in such letter to be purchased by YB and/or Moana, nor (b) make any
other change under the Fuel Contract that is not contemplated by this Agreement,
nor (c) commence any negotiations with Chevron with respect to amendment or
other modification of the Fuel Contract,  without the express prior written
consent of the Utilities, which consent may be granted or denied in the
Utilities' sole discretion.  The Utilities may amend or otherwise modify the
Fuel Contract with the consent of Chevron and without the consent of YB or
Moana, provided they do not thereby breach any provision of this Agreement and
provided further that the consent of YB and Moana shall be required for any
amendment which materially and adversely affects their rights or obligations
under the Fuel Contract (which consent shall not be unreasonably withheld).  YB
and Moana may also negotiate a new, separate contract with Chevron, without the
consent of the Utilities, provided that such new contract shall become effective
only upon termination of YB's and Moana's interests under the Fuel Contract.

III.  FORECAST.

     Prior to the 15th day of each calendar month, YB and Moana, individually
and collectively, shall provide to HECO a forecast of monthly liftings of Diesel
(as that term is defined in the Fuel Contract) for the coming three calendar
months, in order that HECO can meet its obligations under section 3.2 of the
Fuel Contract.  YB and Moana agree to update HECO of any change in their lifting
forecast as soon as it shall become known.  Within fifteen (15) business days
after the end of each calendar month, YB and Moana shall furnish HECO a schedule
of the volume of Diesel purchased on behalf of their vessels and others for the
referenced period.

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<PAGE>

IV.  RATABILITY.

     Assignees' liftings of Diesel will occur in a reasonably ratable fashion
throughout the calendar year.  The maximum volume of Diesel purchased by YB and
Moana in any calendar quarter shall in no case exceed an amount equivalent to
35% of their total actual purchases for the calendar year in question.

V.  TERM, TERMINATION AND DEFAULT.

     Section 5.1.  Term.
     ------------------

     The term of this Agreement shall commence on the Closing Date and shall be
void and of no force or effect in the event the transactions contemplated by the
Purchase Agreements are not closed.  If this Agreement becomes effective, it
shall continue in full force and effect until the earlier to occur of (a)
December 31, 2001 or such later date as the Utilities in their sole discretion
shall agree in writing, if Chevron consents to the termination of the interest
of YB and Moana on such date as requested in the Notification/Consent Letter or
(b) termination of the interests of YB and Moana in accordance with the
provisions of Article II hereof or the provisions of the Fuel Contract;
provided, however, that any such termination shall not relieve any party of any
obligations under the Fuel Contract or this Agreement arising or accruing prior
to the date of such termination.

     Section 5.2.  Optional Termination of YB's and Moana's Interests by HECO.
     ------------------------------------------------------------------------

     Notwithstanding any other provision to the contrary, each of YB and Moana
acknowledge and agree that HECO may terminate YB's and  Moana's respective
interest in the Fuel Contract if YB and Moana is in default of any obligation
under the Fuel Contract or this Agreement.

     Section 5.3.  Mandatory Reduction of Purchases by YB and Moana.
     --------------------------------------------------------------

     YB and Moana each agrees to that if for any reason their interests under
the Fuel Contract have not been terminated on or before December 31, 2001, the
aggregate maximum annual physical quantities of Diesel to be purchased by them
during the remaining term of the Fuel Contract shall be 0 barrels unless the
Utilities shall before such date agree in writing, in their sole discretion,
that such maximum shall be a greater number of barrels.

VI.  INDEMNITY.

     Section 6.1.  No Joint and Several Liability.
     --------------------------------------------

     Each of the parties hereto acknowledges and agrees that any liability of
the parties to the Fuel Contract shall be individual and not joint and several.
Each party to the Fuel Contract shall be responsible for its own actions,
including without limitation any

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<PAGE>

negligence or breach of contract, and all direct, indirect, consequential,
special and incidental damages, losses, penalties and claims arising therefrom.

     Section 6.2.  Indemnity.
     -----------------------

     (a)  YB and Moana, jointly and severally, shall indemnify, defend and hold
harmless HECO, MECO, HELCO and each of their respective directors, officers,
employees and agents (including but not limited to affiliates and contractors
and their employees) from and against all liabilities, damages, losses,
penalties, claims, demands, suits, costs, expenses (including reasonable
attorneys' fees and costs), and proceedings of any nature whatsoever for
personal injury (including death), or property damage, including but not limited
to HECO's, MECO's or HELCO's facilities (collectively, "Injury or Damage"), that
results from non-specification or contaminated Diesel in the custody or control
of YB or Moana or that arises out of or is in any manner connected with the
delivery or receipt of Diesel when in the custody or control of YB or Moana, any
carrier for YB or Moana or subsequent buyer from YB or Moana of Diesel related
to the Fuel Contract, except to the extent that such Injury or Damage may be
attributable to the negligence or willful action of the party seeking indemnity.

     (b)  Without limiting the generality of Section 6.2.(a), YB and Moana,
jointly and severally, shall indemnify, defend and hold harmless HECO, MECO,
HELCO and each of their respective directors, officers, employees and agents
(including but not limited to affiliates and contractors and their employees)
from and against all liabilities, damages, losses, penalties, claims, demands,
suits, costs, expenses and proceedings of any nature whatsoever directly or
indirectly arising out of or attributable to the release, threatened release,
discharge, disposal or presence of Diesel or hazardous material related to the
Fuel Contract when in the custody of YB or Moana, any carrier for or subsequent
buyer from YB or Moana of Diesel related to the Fuel Contract, except to the
extent that such release, threatened release, discharge, disposal or presence of
Diesel or hazardous material may be attributable to the negligence or willful
action of the party seeking indemnity, including without limitation:  (1) all
foreseeable and unforeseeable consequential damages; (2) the reasonable costs of
any required or necessary repair, cleanup or detoxification of any area of
Diesel or hazardous material and the preparation and implementation of any
closure, remedial or other required plans; (3) the reasonable costs of
investigation of any environmental claims by the party seeking indemnity; (4)
the reasonable costs of HECO's enforcement of the Fuel Contract and this
Agreement by the party seeking indemnity; and (5) all reasonable costs and
expenses incurred by the party seeking indemnity in connection with clauses (1),
(2), (3) and (4), including without limitation reasonable attorneys' fees and
court costs.

     (c)  HECO, MECO, HELCO, jointly and severally, shall indemnify, defend and
hold harmless YB and Moana and each of their respective directors, officers,
employees and agents (including but not limited to affiliates and contractors
and their employees) from and against all liabilities, damages, losses,
penalties, claims, demands, suits, costs,

                                       4
<PAGE>

expenses (including reasonable attorneys' fees and costs), and proceedings of
any nature whatsoever for personal injury (including death), or property damage,
including but not limited to YB's or Moana's facilities (collectively, "Injury
or Damage"), that results from non-specification or contaminated Diesel in the
custody or control of HECO, MECO or HELCO or that arises out of or is in any
manner connected with the delivery or receipt of Diesel when in the custody or
control of HECO, MECO or HELCO, any carrier for HECO, MECO or HELCO or
subsequent buyer from HECO, MECO or HELCO of Diesel related to the Fuel
Contract, except to the extent that such Injury or Damage may be attributable to
the negligence or willful action of the party seeking indemnity.

     (d)  Without limiting the generality of Section 6.2.(c), HECO, MECO or
HELCO, jointly and severally, shall indemnify, defend and hold harmless YB,
Moana and each of their respective directors, officers, employees and agents
(including but not limited to affiliates and contractors and their employees)
from and against all liabilities, damages, losses, penalties, claims, demands,
suits, costs, expenses and proceedings of any nature whatsoever directly or
indirectly arising out of or attributable to the release, threatened release,
discharge, disposal or presence of Diesel or hazardous material related to the
Fuel Contract when in the custody of HECO, MECO or HELCO, any carrier for or
subsequent buyer from HECO, MECO or HELCO of Diesel related to the Fuel
Contract, except to the extent that such release, threatened release, discharge,
disposal or presence of Diesel or hazardous material may be attributable to the
negligence or willful action of the party seeking indemnity, including without
limitation:  (1) all foreseeable and unforeseeable consequential damages; (2)
the reasonable costs of any required or necessary repair, cleanup or
detoxification of any area of Diesel or hazardous material and the preparation
and implementation of any closure, remedial or other required plans; (3) the
reasonable costs of investigation of any environmental claims by the party
seeking indemnity; (4) the reasonable costs of YB's or Moana's enforcement of
the Fuel Contract and this Agreement by the party seeking indemnity; and (5) all
reasonable costs and expenses incurred by the party seeking indemnity in
connection with clauses (1), (2), (3) and (4), including without limitation
reasonable attorneys' fees and court costs.

     (e)  Nothing in this Section 6.2 is intended to diminish in any respect the
indemnity obligations of Chevron under the Fuel Contract.

VII.  CONFIDENTIALITY.

     YB and Moana shall keep the terms of this Agreement and the Fuel Contract
in strictest confidence and shall not disclose them to any other party without
the prior written consent of the Utilities, which consent may be withheld in the
Utilities' sole discretion.

                                       5
<PAGE>

VIII.  INSURANCE.

     YB and Moana shall each maintain all of the insurance specified in Article
XX of the Fuel Contract.  The insurance specified in Sections 20.1(ii),
20.1(iii) and 20.1(v) Option One shall name the Utilities as additional
insureds.  On or prior to the Closing Date, YB and Moana shall provide HECO with
certificates of insurance or other documentary evidence satisfactory to HECO of
the insurance coverages and endorsements required by Article XX of the Fuel
Contract and by this Article VIII.

IX.  MISCELLANEOUS PROVISIONS.

     Section 9.1.  Headings of Articles and Sections.
     -----------------------------------------------

     Headings of Articles and sections are for convenient reference only and are
not considered part of this Agreement.

     Section 9.2.  Entire Agreement.
     ------------------------------

     This Agreement contains the entire agreement between the parties covering
the subject matter and cancels all prior agreements of any kind covering such
subject matter and any amendments thereto.

     Section 9.3.  Notice.
     --------------------

     Except as otherwise expressly provided herein, all notices shall be given
in writing, by letter, facsimile, or electronic mail to the following addresses,
or such other address as the parties may designate by notice, and shall be
deemed given upon receipt.

     HECO, MECO, HELCO:  Manager, Power Supply Services Department
               Hawaiian Electric Company, Inc.
               P.O. Box 2750
               Honolulu, Hawaii 96840-0001
               Fax:  (808) 543-4366

     HTB:    Financial Vice President
               Hawaiian Electric Industries, Inc.
               P.O. Box 730
               Honolulu, Hawaii 96801

     YB:    President
               Young Brothers, Limited
               Pier 40, Box 3288
               Honolulu, Hawaii 96801
               Fax:  (808) 543-9458

     Saltchuk:  President
               Saltchuk Resources, Inc.
               1111 Fairview Avenue North
               Seattle, Washington 98109
               Fax:  (206) 652-1110

                                       6
<PAGE>

     Moana:    President
               Saltchuk Resources, Inc.
               1111 Fairview Avenue North
               Seattle, Washington  98109
               Fax:  (206) 652-1110

     Section 9.4.  Court Rulings.
     ---------------------------

     If any term or provision, or any part of any term or provision, of this
Agreement is held by any court or other competent authority to be illegal or
unenforceable, the remaining terms, provisions, rights and obligations shall not
be affected.

     Section 9.5.  Binding Effect.
     ----------------------------

     This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their successors and permitted assigns.

     Section 9.6.  Governing Law.
     ---------------------------

     This Agreement shall be governed by and construed in accordance with the
laws of the State of Hawaii.

     Section 9.7.  Contract Administration
     -------------------------------------

     HECO shall act as an agent of YB and Moana with respect to the compilation
of market price data, computation of the monthly price of Diesel, obtaining the
agreement of Chevron to the price of the Diesel, and other operational and
contract administration issues.  HECO shall issue a monthly notice showing the
Diesel price calculation, substantially in the same format as the current "HTB
Diesel Prices" notice.  It is expressly agreed and understood that YB and Moana
shall reimburse HECO for one-quarter of the cost of an annual subscription to
"Platt's Oilgram Price Report" or its successor publication used in the
determination of the Diesel price, and shall reimburse HECO for labor and other
non-labor costs reasonably incurred by HECO in the performance of the monthly
Diesel price determination and other administrative activities with respect to
the Fuel Contract.  YB and Moana shall promptly notify HECO of any and all
disputes with Chevron that arise relating to the Fuel Contract, including
without limitation disputes regarding delivery operations, safety issues,
pollution mitigation, Diesel quality, Diesel quantity, invoicing, payment and
the like.

     Section 9.8.  Affiliated Entity Filing.
     ---------------------------------------

     Although this Agreement shall become effective only upon the closing or the
Closing Date, after which neither YB nor Moana will be an affiliate of HECO,
MECO or HELCO, the parties hereto nevertheless agree that the Agreement shall be
submitted promptly after the date hereof to the Public Utilities Commission
under Hawaii Revised Statutes (S) 269-19.5.

                                       7
<PAGE>

     Section 9.9.  No Resale or Unauthorized Use.
     --------------------------------------------

     It is expressly understood and agreed that the Diesel is provided for the
exclusive use of YB and Moana and that its intended use is as a fuel for marine
vessels in a non-vehicular application.

          IN WITNESS WHEREOF, the parties have caused these presents to become
effective as of the day and year first written above.

HAWAIIAN ELECTRIC COMPANY, INC. ("HECO")    HAWAIIAN TUG & BARGE CORP. ("HTB")

By:  /s/ Edward Y. Hirata                   By:  /s/ Glenn K. Y. Hong
     -----------------------------             ------------------------------
     Its Vice President                          Its President

MAUI ELECTRIC COMPANY, LIMITED ("MECO")     YOUNG BROTHERS, LIMITED ("YB")

By:  /s/ Edward Y. Hirata                   By:  /s/ Glenn K. Y. Hong
     -----------------------------               ------------------------------
     Its Vice President                          Its President

HAWAII ELECTRIC LIGHT COMPANY,              SALTCHUK RESOURCES, INC.
INC. ("HELCO")                              ("Saltchuk")

By:  /s/ Edward Y. Hirata                   By:  /s/ Charles H. Kauffman
     -----------------------------               ------------------------------
     Its Vice President                          Its Vice President

                                            MOANA PA'A KAI, INC. ("Moana")

                                            By:  /s/ Glenn K. Y. Hong
                                                 ------------------------------
                                                 Its President

                                       8

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