Fill and Sign the Bancorp Hawaii Inc Form

§20.110 PROXY STATEMENTS : STRATEGY & FORMS 20-161F© 1997 Jefren Publishing Company, Inc EXHIBIT B BANCORP HAWAII, INC. EXECUTIVE OFFICER ONE-YEAR INCENTIVE PLAN Effective January 1, 1994 Section 1. Establishment and Purposes. 1.01 Bancorp Hawaii, Inc. hereby establishes the Executive Officer One-Year Incentive Plan. 1.02 The purpose of this Plan is to advance the interests of Bancorp Hawaii, Inc. by (i) motivating special achievement by Eligible Employees upon whose judgment, initiati ve and efforts Bancorp Hawaii, Inc. is largely dependent for the successful conduct of its business through a compensation program emphasizing performance objectives; (ii) supplementing other compensation plans; and (iii) assisting Bancorp Hawaii, Inc. in retaining and attrac ting such employees. Section 2. Definitions. As used herein, the following terms shall have the following meanings unless a different meaning is plainly required in the context: 2.01 "Board" shall mean the Board of Directors of the Holding Company. 2.02 "Committee" shall mean the Compensation Committee of the Holding Company. 2.03 "Contingent Award" shall mean an award to an Eligible Employee expressed as a percentage of Salary for the Incentive Period. 2.04 "Earnings Growth" shall mean the percentage change in Earnings Per Share for the Incentive Period as compared to the year immediately prior to the Incentive Period. 2.05 "Earnings Per Share" (EPS) shall mean fully diluted Earnings Per Share as reported by the Holding Company in its annual report (or as otherwise reported to shareholders) adjusted as described in this Section 2.05. The Holding Company's reported net income shall be adjusted for the following in computing EPS: (a) Any extraordinary or unusual gain or loss transactions, (b) Securities gains or losses, (c) Incentive Salary Expense, and (d) Dividends on preferred shares, if any, of the Holding Company. The Committee will, in its sole discretion, determine any adjustments to be made pursuant to this Section 2.05. In the event of a stock dividend or stock split during the Incentive Period, Earnings Growth shall be recomputed to take into account the effects of such stock dividend or stock split. 2.06 "Eligible Employees" shall mean Key Employees of the Holding Company or of a Subsidiary who, in the opinion of the Committee, are or give promise of becoming of exceptional importance to the Holding Company or any Subsidiary, and of making substantial contributions to the success, growth and profit of the Holding Company and its Subsidiaries. 2.07 "Ending Value Multiplier", with respect to any Contingent Award, shall mean an INCENTIVE COMPENSATION PLANS§20.110 July 199720-161G amount determined by the Financial Performance Factor. 2.08 "Financial Performance Factor" shall mean an amount ranging from zero to 2.0 as determined by applying the Performance Matrix as described in Section 6 (or, in cert ain events, of Section 8.02) of the Plan. 2.09 "Holding Company" shall mean Bancorp Hawaii, Inc. 2.10 "Incentive Period", with respect to any Contingent Award, shall mean the Holding Company's fiscal year. 2.11 "Incentive Salary Expense" shall mean the pre-tax amount accrued for this Plan during the Incentive Period. 2.12 "Key Employees" shall mean officers or other employees of the Holding Company or any Subsidiary, including directors who are also officers or other employees of the Holding Company or of a Subsidiary. 2.13 "Net Income" shall mean the Holding Company's consolidated net income for the Incentive Period, as reported in the annual report to shareholders (or as otherwise reported to shareholders) adjusted in the same manner as EPS. 2.14 "Participant" shall mean a person that the Committee, in its sole discretion, selects from among the Eligible Employees to be awarded a Contingent Award. 2.15 "Performance Matrix" shall mean the matrix shown in Section 6 by which the FinanCial Performance Factor under this Plan is calculated. 2.16 "Plan" shall mean this Executive Officer One-Year Incentive Plan, as it may be amended from time to time. 2.17 "Return on Average Equity" (ROAE) shall mean Net Income of the Holding Company for the Incentive Period divided by Average Total Equity for the Incentive Period. Average Total Equity shall be as reported in the Holding Company's annual report to shareholders (or as otherwise reported to shareholders) less the average amount of any preferred stock. 2.18 "Salary" shall mean actual base salary for the Incentive Period. 2.19 "Subsidiary" or "Subsidiaries" shall mean any corporation(s) in which the Holding Company or any Subsidiary (as defined hereby) owns, at the time of making a Contingent Award hereunder, stock possessing 50% or more of the total combined voting power of all classes of stock in such corporation. Section 3. Eligibility 3.01 Contingent Awards may be made only to Eligible Employees. 3.02 Neither members of the Committee nor any member of the Board who is not an employee of the Holding Company or of a Subsidiary shall be an Eligible Employee. Section 4. Administration 4.01 The Plan shall be administered by the Committee. 4.02 The Committee shall be vested with full authority to make such rules and §20.110 PROXY STATEMENTS : STRATEGY & FORMS 20-161H© 1997 Jefren Publishing Company, Inc regulations as it deems necessary to administer the Plan and to interpret the provisions of the Plan. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive and binding upon all Eligible Employes, Participants and any and all persons claiming under or through any Eligible Employee or Participant, unless otherwise determined by the Board. 4.03 Any determination, decision or action of the Committee provided for in this Plan may be made or taken by action of the Board if the Board so determines with the same force and effect as if such determination, decision or action had been made or taken by the C ommittee. No member of the Committee or Board shall be liable for any determination, decision or action made in good faith with respect to the Plan or any Contingent Award. The fact that a member of the Board shall at the time be, or shall theretofore have been or thereafter ma y be, an Eligible Employee or a Participant shall not disqualify him or her from taking part in and voting at any time as a member of the Board in favor of or against any amendment of the Plan. Section 5. Contingent Awards 5.01 The Committee may, from time to time, in its sole discretion, award to each Participant a Contingent Award. The Committee shall cause notice to be given to each Participant of his or her selection as soon as practicable following the making of a Contingent Award. 5.02 The Contingent Award that may be awarded to any Participant shall be a percentage of his or her Salary, which percentage shall be no greater than the amounts set out in the table below. Bank of Hawaii Officers Contingen t Award As a % of Salary__ Chairman of the Board/CEO .......................................... 50% President or Vice Chairman ............................................ 40% 5.03 The Contingent Award shall be determined by multiplying the Participant's Salary times the percentage specified for him or her by the Committee. In any event, t he maximum payout under this Plan shall be two times the Contingent Award. For example, if the Pa rticipant has a Salary of $80,000 and the Contingent Award awarded to such Participant is 30%, the Contingent Award is $24,000. In this example, the maximum payout under this Plan is two times the Contingent Award, or $48,000. 5.04 For the named executive officers, assessment of individual performance may result in a downward adjustment of the maximum award, or the entire elimination of thi s award. No upward adjustments based on discretion are permitted beyond the maximum award for the named executive officers. Section 6. Ending Value of Contingent Award 6.01 The Ending Value of a Contingent Award shall be determined by multiplying the INCENTIVE COMPENSATION PLANS§20.110 July 199720-161I Contingent Award by the Ending Value Multiplier. 6.02 The Ending Value Multiplier is the Financial Performance Factor (determined from the Performance Matrix in this Section 6). 6.03 The maximum Ending Value Multiplier under all circumstances is 2.000.6.04 Performance Matrix: FINANCIAL PERFORMANCE FACTOR R 16% 0.98 1.1 1.3 1.7 2.0 O 15% 0.72 1.06 1.2 1.6 2.0 A 14% 0.55 0.77 1.0 1.4 1.9 E 12% 0.4 0.5 0.88 1.2 1.9 2% 4% 6% 7% 8% EARNINGS GROWTH 6.05 Interpolation shall be made on a straight line basis, rounded to three decimal places. For example, if ROAE is 13% and Earnings Growth is 5%, the Financial Performance Factor is 0.725. (In certain unusual cases, either ROAE or Earnings Growth may be below 12% and 2% respectively. Proration will still be performed if at least one of these fact ors is within the range indicated on the Performance Matrix.) Section 7. Determination and Payment of Awards 7.01 If the Ending Value as computed and adjusted in accordance with Section 6 is zero, no payment shall be made, any Contingent Awards shall terminate and all rights thereunder shall cease. 7.02 Subject to the provisions of Section 8 hereof, the Ending Value, if any, of the Contingent Award for each Participant shall be determined as per Section 6. The amount determined for each Participant shall be paid in cash in a lump sum (subject t o withholding requirements, if applicable) as soon as practicable after determination thereof. However, a Participant may make a request, on a form approved by the Committee, for t he deferral of all or part of any payment he or she may receive, provided that such request is delivered to the Human Resources Division no later than November 1 of the Incentive Period. The Committee may accept or reject any such request for a deferral and may determine the conditions of such deferral at the Committee's sole discretion. Section 8. Termination of Employment 8.01 Except as otherwise provided in Section 8.02 below, if a Participant does not remain continuously in the employ of the Holding Company or a Subsidiary until the expiration of the Incentive Period with respect to any Contingent Award, such Contingent Award shall terminate and all rights thereunder shall cease. 8.02 If the employment of a Participant with the Holding Company or a Subsidiary terminates during the Incentive Period due to his or her death, disability or retirement , the Committee shall determine the cash payment to be made with respect to such Participant under §20.110 PROXY STATEMENTS : STRATEGY & FORMS 20-161J© 1997 Jefren Publishing Company, Inc the following method: Salary shall be annualized based on the number of whole months of the Incentive Period prior to the Participant's death, disability or retirement. The Ending Value of the C ontingent Award calculated under Sections 6 and 7 shall be multiplied by a fraction, the nume rator of which shall be the number of full months of the Incentive Period during which Participant was an employee of the Holding Company or Subsidiary, and the denominator of which shall be 12. This calculation and the payment of any award necessarily must be paid in accorda nce with Section 7.02. Section 9. Non-Transerability of Contingent Awards No Contingent Award shall be sold, assigned, transferred, encumbered, hypothecated Or otherwise anticipated by a Participant, and during the lifetime of a Participant, any payment shall be payable only to the Participant. The Committee shall, if it so determi nes, adopt rules for the designation by a Participant of a beneficiary to receive cash payments, if any, t hat may become due pursuant to this Plan after the death of the Participant. Section 10. Amendment or Termination of the Plan The Board or the Committee may, at any time, terminate or at any tim e and from time to time amend, modify or suspend this Plan provided that no such amendment, modification, suspension or termination of the Plan shall in any manner adversely affect any Contingent Award t heretofore made under the Plan without the consent of the Participant. Section 11. Changes in Capitalization In the event of a dissolution or liquidation of the Holding Company, or a merger or consolidation in which the Holding Company is not the surviving corporation, the amount of cash payable with respect to any Contingent Award for an Incentive Period that will end after such event shall be determined and payable as if the Incentive Period ended on the da te of such event and an Ending Value Multiplier of 2.00 shall be used in calculating payments under this Plan, notwithstanding any other provisions of this Plan. All Contingent Awards shall be calculated based on annualized salary for such shortened Incentive Period and shall be pai d to such participants within ten days of the end of the shortened Incentive Period. Bancorp Hawaii, Inc. 3/10/94