Document:

Exhibit 4.4

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as
of [Date] (the “Date of Grant”), by and
between Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Company”)
and [Name], an employee of the Company or
of a Subsidiary of the Company (the “Employee”).  Capitalized terms not defined herein shall
have the meanings assigned to them in the 2010 Equity and Incentive Plan of
Hawaiian Electric Industries, Inc. (the “Plan”).

 

WHEREAS,
the Compensation Committee of the Company’s Board of Directors or a subcommittee
thereof (the “Committee”), appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant to the Employee an option to acquire shares of the Common
Stock of the Company pursuant to the Plan as an inducement to the Employee to
remain in the service of the Company or its Subsidiary and as a long-term
incentive for sustained high levels of performance for the Company and its
Subsidiaries; and

 

WHEREAS,
the Committee has instructed the Company to issue said option, which the
Committee has determined should be a “Non-Qualified Stock Option” as authorized
under the Plan, pursuant to the terms and conditions set forth herein (the “Option”);

 

NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I

GRANT OF OPTION

 

Section 1.1 - Grant of
Option

 

In
consideration of the Employee’s continued service to the Company or its
Subsidiaries and for other good and valuable consideration, on the Date of
Grant the Company grants to the Employee the option to purchase any part or all
of an aggregate of [Number of Shares]
shares of its Common Stock, subject to the vesting provisions and upon the
terms and conditions set forth in this Agreement.

 

Section 1.2 - Purchase
Price

 

The
purchase price of the shares of Common Stock covered by the Option shall be [share price] per share, without commission or other
charge, which is the Fair Market Value of the shares as of the Date of Grant.

 

 

Section 1.3 - Consideration
to the Company

 

In
consideration of the granting of the Option by the Company the Employee agrees
to render faithful and efficient services to the Company and/or a Subsidiary,
with such duties and responsibilities as the Company or the Subsidiary, as the
case may be, shall from time to time prescribe, from the Date of Grant to the
date of termination of employment.

 

Section 1.4 - Adjustments
to the Option

 

The
kind of securities, number of shares, purchase price and other terms and
conditions of this option are subject to adjustment by the Committee in the
event of any Change in Capitalization in accordance with the equitable adjustment
provisions of Section 6 of the Plan. 
Any such adjustment by the Committee shall be final and binding upon the
Employee, the Company and all other interested persons.

 

ARTICLE II

PERIOD OF EXERCISABILITY

 

Section 2.1 - Commencement
of Exercisability

 

(a)                                  The Option shall vest and become
exercisable in four (4) cumulative installments, as follows:

 

(i)                                     The first installment shall consist of
25% of the shares covered by the Option and shall vest and become exercisable
on the first anniversary of the Date of Grant.

 

(ii)                                  The second installment shall consist of
25% of the shares covered by the Option and shall vest and become exercisable
on the second anniversary of the Date of Grant.

 

(iii)                               The third installment shall consist of
25% of the shares covered by the Option and shall vest and become exercisable
on the third anniversary of the Date of Grant.

 

(iv)                              The fourth installment shall consist of
25% of the shares covered by the Option and shall vest and become exercisable
on the fourth anniversary of the Date of Grant.

 

(b)                                 Except as set forth in Section 2.4,
no portion of the Option which is unexercisable under the terms of this Agreement
upon the Employee’s termination of employment shall thereafter become
exercisable, unless the Committee, in its sole discretion, elects to accelerate
the vesting of all or any portion of the unvested shares on the date of
termination of employment.

 

2

 

Section 2.2- Duration
of Exercisability

 

The
installments provided for in Section 2.1 are cumulative.  Each such installment which becomes
exercisable pursuant to Section 2.1 shall remain exercisable until it
becomes unexercisable pursuant to Section 2.3.

 

Section 2.3 - Expiration
of Option

 

The
Option, to the extent vested and exercisable under Section 2.1 or Section 2.4,
shall expire and may not be exercised to any extent by anyone after the first
to occur of the following events:

 

(a)                                  The expiration of 10 years from the Date
of Grant; or

 

(b)                                 The commencement of business on the date
of the Employee’s termination of employment for Cause; or

 

(c)                                  The expiration of one year from the date
of the Employee’s termination of employment for any reason other than Retirement,
death, Disability, or Cause;

 

(d)                                 The expiration of three years from the
date of the Employee’s termination of employment as a result of the Employee’s Retirement,
death or Disability.

 

Section 2.4 — Acceleration
of Exercisability

 

(a)                                  If the Employee’s termination of
employment occurs as a result of Retirement, then upon such Retirement the
Option shall become exercisable as to all shares covered thereby,
notwithstanding that the Option may not yet have become fully exercisable under
Section 2.1(a).

 

(b)                                 Notwithstanding the provisions of Section 2.1,
in the event of a Change in Control of the Company the Option shall become
fully vested and exercisable to the extent provided, and subject to the
limitations set forth, in Section 12 of the Plan.

 

ARTICLE III

EXERCISE OF THE OPTION

 

Section 3.1 - Persons
Eligible to Exercise

 

During
the lifetime of the Employee, only the Employee (or the Employee’s guardian or
legal representative) may exercise the Option, or any portion thereof.  After the death of the Employee any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable pursuant to Section 2.3, be exercised by the
Employee’s personal representative or by any person empowered to do so under
the Employee’s will or under the then applicable laws of descent and
distribution.

 

3

 

Section 3.2 - Partial Exercise

 

Any
exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable pursuant to Section 2.3;
provided, however, that each partial exercise shall be for not less than one
thousand (1,000) shares (or minimum installment set forth in Section 2.1,
if a smaller number of shares) and shall be for whole shares only.

 

Section 3.3 - Manner of
Exercise

 

The
Option, or any exercisable portion thereof, may be exercised solely by delivery
to the Company of all of the following prior to the time when the Option or
such portion becomes unexercisable pursuant to Section 2.3:

 

(a)                                  Notice in writing signed by the Employee
or other person then entitled to exercise the Option or portion, stating that
the Option or portion is thereby exercised, such notice complying with all
applicable rules established by the Committee; and

 

(b)                                 Full payment for the shares with respect
to which the Option or portion is exercised at the time of exercise in cash or
its equivalent, including shares of Common Stock, acceptable to the Company in
its discretion; and

 

(c)                                  In the event the Option or portion shall
be exercised by any person or persons other than the Employee, appropriate
proof of the right of such person or persons to exercise the Option.

 

Section 3.4 - Manner of
Payment

 

The
purchase price for the shares of Common Stock with respect to which the Option
(or portion thereof) is exercised may be paid in cash, by check, by assignment
and delivery to the Company of unrestricted shares of Common Stock, by any
combination of the foregoing equal in value to the exercise price, by means of
a cashless exercise procedure through a broker acceptable to the Company or, to
the extent authorized by the Company, by the withholding of shares of Common
Stock that otherwise would be delivered upon exercise of the Option.  Any shares assigned and delivered to the
Company in payment or partial payment of the purchase price shall be unrestricted
and shall be valued at their Fair Market Value on the exercise date and, to the
extent determined by the Committee to be necessary to avoid unfavorable
accounting consequences, shall (x) have been owned by the Employee for
more than six (6) months on the date of surrender, and (y) have a
Fair Market Value on the date of surrender equal to the aggregate exercise
price of the shares of Common Stock as to which such Option shall be exercised.

 

4

 

Section 3.5 - Conditions
to Issuance of Shares

 

The
shares of Common Stock deliverable upon the exercise of the Option, or any part
thereof, may be either previously authorized but unissued shares or issued
shares which have been reacquired by the Company.  Such shares shall be fully paid and nonassessable.  Unless waived by the Committee, in its sole
discretion, the Company shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock purchased upon exercise
of the Option or part thereof, or record any such issuance in the book-entry
system of the Company, prior to fulfillment of all of the following conditions:

 

(a)                                  The admission of such shares to listing
on all stock exchanges on which such class of stock is then listed; and

 

(b)                                 The completion of any registration or
other qualification of such shares, or the completion of any arrangements
necessary or advisable to qualify for an exemption from any such registration
or other requirements, under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, which the Committee shall, in its sole
discretion, deem necessary or advisable, including the completion of any
reasonable action that the Committee may request the Employee to take in order
to satisfy all such regulatory requirements; and

 

(c)                                  The obtaining of any approval or other
clearance from any state or federal governmental agency which the Committee
shall, in its sole discretion, determine to be necessary or advisable; and

 

(d)                                 The lapse of such reasonable period of
time following the exercise of the Option as the Committee may from time to
time establish for reasons of administrative convenience; and

 

(e)                                  The receipt by the Company of full
payment for such shares and the conclusion of any arrangements that may be
required to satisfy the Company’s obligation to withhold taxes.

 

Section 3.6 - Rights as
Shareholders

 

The
holder of the Option shall not be, nor have any of the rights or privileges of,
a shareholder of the Company in respect of any shares purchasable upon exercise
of any part of the Option unless and until certificates representing such
shares shall have been issued by the Company to such holder or such holder’s
ownership of such shares shall be recorded in the Company’s book-entry system.

 

5

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1 - Administration

 

The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such
rules.  All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Company and all other interested
persons.  No member of the Committee
shall be personally liable for any action, determination, or interpretation
made in good faith with respect to the Plan or the Option.

 

Section 4.2 - Options
Not Transferable

 

Neither
the Option nor any interest or right therein or part thereof shall be liable
for the debts, contracts, or engagements of the Employee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 4.2 shall not
prevent transfers by will or by the applicable laws of descent and
distribution.

 

Section 4.3 - Fractional
Shares

 

Notwithstanding
any other provision of this Agreement to the contrary, no fractional shares
shall be issued upon exercise of the Option, but cash payment shall be made by
the Company in lieu of fractional shares.

 

Section 4.4 - Withholding
of Taxes

 

The
Company may make such provisions as it deems appropriate to withhold any taxes
the Company or any Subsidiary is required to withhold (including any amounts
required to be withheld in order for the Company or any Subsidiary to obtain a
tax deduction), or to require the Employee to take any action necessary to
satisfy any withholding obligations of the Company, in connection with the
grant or exercise of the Option, or in connection with the sale or other
disposition of shares acquired upon exercise of the Option, and the Employee
agrees to be bound by the same.  The
Employee may satisfy any such withholding tax obligation by tendering a cash
payment or, with the consent of the Company, by (a) authorizing the
Company to withhold from the shares of Common Stock otherwise issuable to the
Employee as a result of the exercise of the Option a number of shares having a
Fair Market Value, as of the date the withholding tax obligation arises, less
than or equal to the amount of the minimum statutory withholding tax obligation
(with the tendering of cash for any shortfall) or (b) delivering to the 

 

6

 

Company
already owned and unencumbered and unrestricted shares of Common Stock having a
Fair Market Value, as of the date the withholding tax obligation arises, not less
than or equal to the amount of the minimum withholding tax obligation.

 

Section 4.5 - Notices

 

All
notices and other communications under this Agreement shall be in writing and
shall be given by hand delivery, facsimile or first class mail and shall be deemed
to have been duly given upon hand delivery, or three days after mailing or 24
hours after transmission by facsimile.  Any
notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its Secretary and any notice to be given to
the Employee shall be addressed to him at the address given beneath his
signature hereto.  By a notice given
pursuant to this Section 4.5, either party may hereafter designate a
different address for notices to be given to such party.  Any notice which is required to be given to
the Employee shall, if the Employee is then deceased, be given to the Employee’s
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 4.5.

 

Section 4.6 - Entire
Agreement; Relationship to the Plan

 

This
Agreement and the Plan set forth the sole entire agreement and understanding
between the parties as to the subject matter hereof, and merge with and
supersede all prior and contemporaneous discussions, agreements and
understandings of every and any nature between them with respect to the subject
matter hereof.  Except to the extent
provided in Section 1.4 or 4.1 hereof or Section 8(h) of the
Plan, this Agreement may not be changed or modified, except by agreement in
writing, signed by the Company and the Employee.  In the event of any conflict or inconsistency
between this Agreement and the Plan as written on the Date of Grant, the Plan
shall govern.

 

Section 4.7 - Parties
in Interest

 

All
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors in interest.

 

Section 4.8 - Severability

 

If
one or more of the provisions of this Agreement shall be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and the invalid, illegal or unenforceable provisions shall be deemed null and
void; provided, however, to the extent permissible by law, any provisions which
could be deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Agreement to be construed so as to foster the
intent of this Agreement and the Plan and to avoid any such finding of
invalidity, illegality or unenforceability.

 

7

 

Section 4.9 - Headings

 

Headings
in this Agreement are used solely for the convenience of the parties and shall
not be deemed to be a limitation upon or descriptive of the contents of any Section hereof.

 

Section 4.10 - Counterparts

 

This
Agreement may be signed in two (2) or more counterparts, each of which
shall be deemed an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

 

Section 4.11 - Governing
Law

 

This
Agreement shall be governed by and construed according to the laws of the State
of Hawaii without regard to its principles of conflict of laws.

 

Section 4.12 - Incorporation
of Plan

 

The
Plan is hereby incorporated by reference and made a part hereof, and the Option
and this Agreement shall be subject to all terms and conditions of the Plan.

 

Section 4.13 - Agreement
Not a Contract for Services

 

Neither
the Plan, the granting of the Option, this Agreement nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Employee has a right to continue to
provide services as an officer, director, employee, consultant or advisor of
the Company or any Subsidiary or Affiliate of the Company for any period of
time or at any specific rate of compensation, or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries, which are
hereby expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without Cause.

 

Section 4.14 - Representations

 

The
Employee has reviewed with his or her own tax advisors the federal, state,
local and foreign tax consequences of the transactions contemplated by this
Agreement.  The Employee is relying
solely on such advisors and not on any statements or representations of the Company
or any of its agents.  The Employee
understands that he or she (and not the Company) shall be responsible for any
tax liability that may arise as a result of the transactions contemplated by
this Agreement.

 

8

 

Section 4.15 - Acceptance

 

The
Employee hereby acknowledges receipt of a copy of the Plan and this
Agreement.  The Employee has read and
understands the terms and provisions thereof, and accepts the Option subject to
all the terms and conditions of the Plan and this Agreement.  The Employee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan and this Agreement.

 

Section 4.16 - Committee
Action

 

Execution
of this Agreement by the Chair or other member of the Committee signifies that
this Agreement, the Option granted hereby and the conditions upon which the Option
shall vest have been approved by the Committee either at a meeting of the
Committee or by the unanimous written consent of its members.

 

Section 4.17 - No Limit
on Other Arrangements

 

(a)                                  Nothing
contained in this Agreement shall be construed to prevent the Company or any
Subsidiary thereof from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of any type of
equity-based award (subject to stockholder approval if such approval is
required).

 

(b)                                 Nothing
contained in this Agreement shall be construed to prevent the Company or any
Subsidiary thereof from taking any corporate action which is deemed by it to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Option granted under this Agreement.  No employee, beneficiary or other person
shall have any claim against the Company or any subsidiary thereof as a result
of any such action.

 

IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto effective as of the Date of Grant.

 

	
   

  	
  HAWAIIAN
  ELECTRIC INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Chair
  or Member of HEI Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President, General Counsel,

  Secretary and Chief Administrative Officer

  

 

9

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee’s
  Name: [Name]  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee’s
  Social Security Number:  [SSN]  

  
	
   

  	
   

  
	
   

  	
  Employee’s
  Address:

  
	
   

  	
   

  
	
   

  	
   

  

 

10Exhibit 4.5

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

STOCK APPRECIATION RIGHT AGREEMENT

 

THIS
STOCK APPRECIATION RIGHT AGREEMENT (“Agreement”) is made and entered into as of
[Date] (the “Date of Grant”), by and
between Hawaiian Electric Industries, Inc., a Hawaii corporation (the “Company”)
and [Name], an employee of the Company or
of a Subsidiary of the Company (the “Employee”).  Capitalized terms not defined herein shall
have the meanings assigned to them in the 2010 Equity and Incentive Plan of
Hawaiian Electric Industries, Inc. (the “Plan”).

 

WHEREAS,
the Compensation Committee of the Company’s Board of Directors or a subcommittee
thereof (the “Committee”), appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant to the Employee a stock appreciation right (“SAR”) pursuant
to the Plan as an inducement to the Employee to remain in the service of the
Company or its Subsidiary and as a long-term incentive for sustained high levels
of performance for the Company and its Subsidiaries; and

 

WHEREAS,
the Committee has instructed the Company to issue this SAR, as authorized under
the Plan, pursuant to the terms and conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I

GRANT OF SAR

 

Section 1.1 - Grant of
SAR

 

In
consideration of the Employee’s continued service to the Company or its
Subsidiaries and for other good and valuable consideration, on the Date of
Grant the Company grants to the Employee a SAR covering any part or all of an
aggregate of [Number of Shares] shares of its
Common Stock, subject to the vesting provisions and upon the terms and
conditions set forth in this Agreement.

 

Section 1.2 - Grant
Price

 

The
grant price of the shares of Common Stock covered by the SAR shall be [share price] per share, which is the Fair Market Value of
the shares as of the Date of Grant.

 

 

Section 1.3 - Consideration
to the Company

 

In
consideration of the granting of the SAR by the Company the Employee agrees to
render faithful and efficient services to the Company or a Subsidiary, with
such duties and responsibilities as the Company shall from time to time
prescribe, from the Date of Grant to the date of termination of employment.

 

Section 1.4 - Adjustments
to the SAR

 

The
kind of securities, number of shares, grant price and other terms and conditions
of the SAR are subject to adjustment by the Committee in the event of any
Change in Capitalization in accordance with the equitable adjustment provisions
of Section 6 of the Plan.  The SAR
may be modified, in the discretion of the Committee both with regard to vesting
schedule and termination, by leaves of absence, changes from full to part-time
employment, partial disability or other changes in Employee’s status.  Any such adjustment or modification by the
Committee shall be final and binding upon the Employee, the Company, and all
other interested persons.

 

ARTICLE II

PERIOD OF EXERCISABILITY

 

Section 2.1 - Commencement
of Exercisability

 

(a)                                  The SAR shall vest and become exercisable
on the fourth anniversary of the Date of Grant.

 

(b)                                 Except as set forth in Section 2.3,
no portion of the SAR which is unexercisable under the terms of this Agreement upon
the Employee’s termination of employment shall thereafter become exercisable,
unless the Committee, in its sole discretion, elects to accelerate the vesting
of all or any portion of the unvested shares on the date of termination of
employment.

 

Section 2.2 - Expiration
of SAR

 

The
SAR, to the extent vested and exercisable under Section 2.1 or Section 2.3,
shall expire and may not be exercised to any extent by anyone after the first
to occur of the following events:

 

(a)                                  The expiration of 10 years from the Date
of Grant; or

 

(b)                                 The commencement of business on the date
of the Employee’s termination of employment for Cause; or

 

2

 

(c)                                  The expiration of one year from the date
of the Employee’s termination of employment for any reason other than Retirement,
death, Disability, or Cause;

 

(d)                                 The expiration of three years from the
date of the Employee’s termination of employment as a result of the Employee’s Retirement,
death or Disability.

 

Section 2.3 — Acceleration
of Exercisability

 

(a)                                  If the Employee’s termination of
employment occurs as a result of Retirement, then upon such retirement the SAR
shall become exercisable as to all shares covered thereby, notwithstanding that
the SAR may not yet have become fully exercisable under Section 2.1(a).

 

(b)                                 Notwithstanding the provisions of Section 2.1,
in the event of a Change in Control of the Company the SAR shall become fully
vested and exercisable to the extent provided, and subject to the limitations
set forth, in Section 12 of the Plan.

 

ARTICLE III

EXERCISE OF THE SAR

 

Section 3.1 - Persons
Eligible to Exercise

 

During
the lifetime of the Employee, only the Employee (or the Employee’s guardian or
legal representative) may exercise the SAR, or any portion thereof.  After the death of the Employee any
exercisable portion of the SAR may, prior to the time when the SAR becomes unexercisable
pursuant to Section 2.2, be exercised by the Employee’s personal
representative or by any person empowered to do so under the Employee’s will or
under the then applicable laws of descent and distribution.

 

Section 3.2 - Partial Exercise

 

Any
exercisable portion of the SAR or the entire SAR, if then wholly exercisable,
may be exercised in whole or in part at any time prior to the time when the SAR
or portion thereof becomes unexercisable pursuant to Section 2.2;
provided, however, that each partial exercise shall be in respect of not less
than one thousand (1,000) shares covered by the SAR (or minimum installment set
forth in Section 2.1, if a smaller number of shares) and shall be for
whole shares only.

 

Section 3.3 - Manner of
Exercise

 

The
SAR, or any exercisable portion thereof, may be exercised solely by delivery to
the Company of all of the following prior to the time when the SAR or such
portion becomes unexercisable pursuant to Section 2.2:

 

3

 

(a)                                  Notice in writing signed by the Employee
or other person then entitled to exercise the SAR or portion, stating that the
SAR or portion is thereby exercised, such notice complying with all applicable rules established
by the Committee; and

 

(b)                                 In the event the SAR or portion shall be
exercised by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the SAR.

 

Section 3.4 - Payment
Upon Exercise

 

Upon
exercise of the SAR (or portion thereof), subject to Section 5.5, the
Employee shall be entitled to receive an amount equal to the excess of the Fair
Market Value per share as of the date of exercise over the price per share
specified in the SAR multiplied by the number of shares in respect of which the
SAR is being exercised, with such amount to be paid [in shares of Common Stock
of equivalent value on the payment date, with any fractional share to be paid
in cash] [in cash] [       % in shares of common
stock and the balance, including any fractional share, in cash].

 

Section 3.5 - Conditions
to Issuance of Shares

 

The
shares of Common Stock deliverable upon the exercise of the SAR, or any part
thereof, may be either previously authorized but unissued shares or issued
shares which have been reacquired by the Company.  Such shares shall be fully paid and
nonassessable.  Unless waived by the
Committee, in its sole discretion, the Company shall not be required to issue
or deliver any certificate or certificates for shares of Common Stock upon exercise
of the SAR or part thereof, or record any such issuance in the book-entry
system of the Company, prior to fulfillment of all of the following conditions:

 

(a)                                  The admission of such shares to listing
on all stock exchanges on which such class of stock is then listed; and

 

(b)                                 The completion of any registration or
other qualification of such shares, or the completion of any arrangements
necessary or advisable to qualify for an exemption from any such registration
or other requirements, under any state or federal law or under rulings or regulations
of the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall, in its sole discretion, deem
necessary or advisable, including the completion of any reasonable action that
the Committee may request the Employee to take in order to satisfy all such
regulatory requirements; and

 

(c)                                  The obtaining of any approval or other
clearance from any state or federal governmental agency which the Committee
shall, in its sole discretion, determine to be necessary or advisable; and

 

4

 

(d)                                 The lapse of such reasonable period of
time following the exercise of the SAR as the Committee may from time to time
establish for reasons of administrative convenience; and

 

(e)                                  The conclusion of any arrangements that
may be required to satisfy the Company’s obligation to withhold taxes.

 

Section 3.6 - Rights as
Shareholders

 

The
holder of the SAR shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares issuable upon exercise of
any part of the SAR unless and until certificates representing such shares
shall have been issued by the Company to such holder or such holder’s ownership
of such shares shall be recorded in the Company’s book-entry system.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1 - Administration

 

The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such
rules.  All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Company and all other interested
persons.  No member of the Committee
shall be personally liable for any action, determination, or interpretation
made in good faith with respect to the Plan or the SAR.

 

Section 4.2 - SAR Not
Transferable

 

Neither
the SAR nor any interest or right therein or part thereof shall be liable for
the debts, contracts, or engagements of the Employee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 4.2 shall not
prevent transfers by will or by the applicable laws of descent and
distribution.

 

5

 

Section 4.3 - Fractional
Shares

 

Notwithstanding
any other provision of this Agreement to the contrary, no fractional shares
shall be issued upon exercise of the SAR, but cash payment shall be made by the
Company in lieu of fractional shares.

 

Section 4.4 - Withholding
of Taxes

 

The
Company may make such provisions as it deems appropriate to withhold any taxes
the Company or any Subsidiary is required to withhold (including any amounts
required to be withheld in order for the Company or any Subsidiary to obtain a
tax deduction), or to require the Employee to take any action necessary to
satisfy any withholding obligations of the Company, in connection with the
grant or exercise of the SAR, or in connection with the sale or other
disposition of shares acquired upon exercise of the SAR, and the Employee
agrees to be bound by the same.  The
Employee may satisfy any such withholding tax obligation by tendering a cash
payment or authorizing the Company to withhold such cash from the amount
otherwise to be delivered to the Employee upon exercise of the SAR or, with the
consent of the Company, by (a) authorizing the Company to withhold from
the shares of Common Stock otherwise issuable to the Employee as a result of
the exercise of the SAR a number of shares having a Fair Market Value, as of
the date the statutory withholding tax obligation arises, less than or equal to
the amount of the minimum statutory withholding tax obligation (with the
tendering of cash for any shortfall) or (b) delivering to the Company
already owned and unencumbered and unrestricted shares of Common Stock having a
Fair Market Value, as of the date the withholding tax obligation arises, not less
than or equal to the amount of the minimum withholding tax obligation.

 

Section 4.5 - Notices

 

All
notices and other communications under this Agreement shall be in writing and
shall be given by hand delivery, facsimile or first class mail and shall be
deemed to have been duly given upon hand delivery, or three days after mailing
or 24 hours after transmission by facsimile. 
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary and any notice to be
given to the Employee shall be addressed to him at the address given beneath
his signature hereto.  By a notice given
pursuant to this Section 4.5, either party may hereafter designate a
different address for notices to be given to such party.  Any notice which is required to be given to
the Employee shall, if the Employee is then deceased, be given to the Employee’s
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 4.5.

 

Section 4.6 - Entire
Agreement; Relationship to the Plan

 

This
Agreement and the Plan set forth the sole entire agreement and understanding
between the parties as to the subject matter hereof, and merge with and
supersede all prior and contemporaneous discussions, agreements and
understandings of every 

 

6

 

and
any nature between them with respect to the subject matter hereof.  Except to the extent provided in Section 1.4
or 4.1 hereof, and except to the extent that provisions hereof are by their
terms subject to any subsequent amendment of the Plan, this Agreement may not
be changed or modified, except by agreement in writing, signed by the Company
and the Employee.  In the event of any
conflict or inconsistency between this Agreement and the Plan as written on the
Date of Grant, the Plan shall govern.

 

Section 4.7 - Parties
in Interest

 

All
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors in interest.

 

Section 4.8 - Severability

 

If
one or more of the provisions of this Agreement shall be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby
and the invalid, illegal or unenforceable provisions shall be deemed null and
void; provided, however, to the extent permissible by law, any provisions which
could be deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Agreement to be construed so as to foster the
intent of this Agreement and the Plan and to avoid any such finding of
invalidity, illegality or unenforceability.

 

Section 4.9 - Headings

 

Headings
in this Agreement are used solely for the convenience of the parties and shall
not be deemed to be a limitation upon or descriptive of the contents of any Section hereof.

 

Section 4.10 - Counterparts

 

This
Agreement may be signed in two (2) or more counterparts, each of which
shall be deemed an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

 

Section 4.11 - Governing
Law

 

This
Agreement shall be governed by and construed according to the laws of the State
of Hawaii without regard to its principles of conflict of laws.

 

Section 4.12 - Incorporation
of Plan

 

The
Plan is hereby incorporated by reference and made a part hereof, and the SAR
and this Agreement shall be subject to all terms and conditions of the Plan.

 

7

 

Section 4.13 - Agreement
Not a Contract for Services

 

Neither
the Plan, the granting of the SAR, this Agreement nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Employee has a right to continue to
provide services as an officer, director, employee, consultant or advisor of
the Company or any Subsidiary or Affiliate of the Company for any period of
time or at any specific rate of compensation, or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries, which are
hereby expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without Cause.

 

Section 4.14 - Representations

 

The
Employee has reviewed with his or her own tax advisors the federal, state,
local and foreign tax consequences of the transactions contemplated by this
Agreement.  The Employee is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents.  The
Employee understands that he or she (and not the Company) shall be responsible
for any tax liability that may arise as a result of the transactions
contemplated by this Agreement.

 

Section 4.15 - Acceptance

 

The
Employee hereby acknowledges receipt of a copy of the Plan and this
Agreement.  The Employee has read and
understands the terms and provisions thereof, and accepts the SAR subject to
all the terms and conditions of the Plan and this Agreement.  The Employee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan and this Agreement.

 

Section 4.16 - Committee
Action

 

Execution
of this Agreement by the Chair or other member of the Committee signifies that
this Agreement, the SAR granted hereby and the conditions upon which the SAR
shall vest have been approved by the Committee either at a meeting of the
Committee or by the unanimous written consent of its members.

 

Section 4.17 - No Limit
on Other Arrangements

 

(a)                                  Nothing
contained in this Agreement shall be construed to prevent the Company or any
Subsidiary thereof from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of any type of
equity-based award (subject to stockholder approval if such approval is
required).

 

(b)                                 Nothing
contained in this Agreement shall be construed to prevent the Company or any
Subsidiary thereof from taking any corporate action which is deemed by it to be

 

8

 

appropriate
or in its best interest, whether or not such action would have an adverse
effect on the SAR granted under this Agreement. 
No employee, beneficiary or other person shall have any claim against
the Company or any subsidiary thereof as a result of any such action.

 

IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto effective as of the Date of Grant.

 

	
  HAWAIIAN
  ELECTRIC INDUSTRIES, INC.

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Chair
  or other member of HEI Compensation Committee

  	
   

  	
  Employee’s
  Name: [Name]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Employee’s
  Social Security Number:[SSN]

  
	
   

  	
  Senior
  Vice President, General Counsel,

  	
   

  	
   

  
	
   

  	
  Secretary
  and Chief Administrative Officer

  	
   

  	
  Employee’s
  Address:

  
	
   

  	
   

  	
   

  	
   

  

 

9

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