Your VOTE is important!
Notice of 20072008
Annual Meeting of Shareholders
and Proxy Statement
Meeting Date: April 27, 200725, 2008
Bank of Hawaii Corporation
130 Merchant Street
Honolulu, Hawaii 96813
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
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Your VOTE is important!
Notice of 20072008
Annual Meeting of Shareholders
and Proxy Statement
Meeting Date: April 27, 200725, 2008
Bank of Hawaii Corporation
130 Merchant Street
Honolulu, Hawaii 96813
BANK OF HAWAII CORPORATION
130 Merchant Street
Honolulu, Hawaii 96813
March 14, 20072008
Dear Shareholder:
The 20072008 Annual Meeting of shareholders of Bank of Hawaii Corporation will be held on Friday, April 27, 200725, 2008 at 8:30 a.m. on the Sixth Floor of the Bank of Hawaii Building, 111 South King Street, Honolulu, Hawaii. Each shareholder may be asked to present valid picture identification. Shareholders holding stock in brokerage accounts will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date.
The Notice of Meeting and Proxy Statement accompanying this letter describe the business we will consider and vote upon at the meeting. A report to shareholders on the affairs of Bank of Hawaii Corporation also will be given, and shareholders will have the opportunity to discuss matters of interest concerning the Company.
For reasons explained in the accompanying Proxy Statement, the Board of Directors recommends that you vote FOR all proposals.
Your vote is very important.Please complete, sign, date and return the enclosed proxy card and mail it promptly in the enclosed postage-paid return envelope, even if you plan to attend the Annual Meeting. You may also vote by telephone or electronically via the Internet. If you wish to do so, your proxy may be revoked at any time before voting occurs.
On behalf of the Board of Directors, thank you for your cooperation and support.
Sincerely, | ||
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ALLAN R. LANDON | ||
Chairman of the Board, | ||
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1 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Our Shareholders: The Annual Meeting of shareholders of Bank of Hawaii Corporation will be held on Friday, April The Board of Directors recommends that shareholders vote FOR all proposals. Shareholders of record of Bank of Hawaii Corporation common stock (NYSE: BOH) at the close of business on February We look forward to seeing you at the meeting. However, if you cannot attend the meeting, your shares may still be voted if you complete, sign, date, and return the enclosed proxy card in the enclosed postage-paid return envelope. You also may vote by telephone or electronically via the Internet. By Order of the MARK A. ROSSI Honolulu, Hawaii 2008 Please sign and return the enclosed proxy card or vote by telephone or on the Internet as promptly as possible. This will save the expense of a supplementary solicitation. Thank you for acting promptly. Important Notice Regarding the Availability of Proxy Materials The Proxy Statement and the Bank of Hawaii Corporation 2007 Annual Report to Shareholders for the year ended December 31, 2007 are available atwww.boh.com/proxymaterials. The Board of Directors (the Even if you plan to attend the annual meeting, we recommend you also submit your proxy so your vote will be counted if you later decide not to attend the annual meeting. voting site listed on the proxy card, or by signing, dating, and mailing the proxy card in the prepaid and addressed envelope we have provided you. Please refer to the summary instructions below and those on your proxy card, or, for shares held in street name, the voting instruction card sent by your broker or nominee. Mail.You may mail your proxy by signing your proxy card or, for shares held in street name, the voting instruction card included by your broker or nominee, and mailing it in the enclosed, postage prepaid and addressed envelope. If you provide specific voting instructions, your shares will be voted as you instruct. If you sign and return a proxy card without giving specific voting instructions, your shares will be voted as recommended by the Board. Internet.If you have Internet access, you may submit your proxy from anywhere, following the Telephone.If you live in the United States, you may submit your proxy by following the 2008. votes cast against the proposal. and by telephone, the Internet, facsimile, or other means. None of these employees will receive any additional or special compensation for soliciting proxies. We have retained Georgeson Shareholder Communications, Inc., 17 State Street, New York, New York 10004 to assist in the solicitation of proxies for an estimated fee of $10,000 plus reasonable out-of-pocket costs and expenses. We will, upon request, reimburse brokers or other nominees for their reasonable out-of-pocket expenses in forwarding proxy materials to their customers who are beneficial owners and obtaining their voting instructions. Proposals To Be Included In The Proxy Statement and Voted On At The Meeting.Proposals that shareholders wish to have included in the proxy statement for the Proposals To Be Voted On At The Meeting Only.Under our By-Laws, for a shareholder to bring a proposal before the PROPOSAL 1: AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION General Article VII of the Company's Certificate of Incorporation, as currently in effect, establishes three (3) classes of directors (Class I, Class II and Class III) with terms of three years each. Generally, absent the earlier resignation or removal of a Class member, the terms of the classes are staggered and one Class stands for reelection at each annual meeting of stockholders. On January 25, 2008, upon the recommendation of the Board's Nominating and Corporate Governance Committee, the Board unanimously approved an amendment of Article VII of the Company's Certificate of Incorporation to declassify the board of directors, remove the class designations for each of the director's terms and institute annual voting for each director to serve a one-year term subject to stockholder approval at the Annual Meeting. If approved and adopted by the Company's stockholders, the amendment to the Certificate of Incorporation shall be filed with the Secretary of State of the State of Delaware immediately following the vote at the Annual Meeting and will be in effect immediately upon approval by the Secretary of State of Delaware. The form of the Certificate of Amendment to the Certificate of Incorporation is set forth asAppendix A to this Proxy Statement. The amendment to Article VII will result in the reduction of the remaining terms of our Class II and Class III directors, who will each stand for election at this Annual Meeting, along with the Class I directors. Thus, all twelve members of the Board will be standing for election at this Annual Meeting if the amendment is approved. Under Delaware corporate law, directors of companies that have a classified board structure may be removed only for cause unless their certificate of incorporation provides otherwise. However, directors of companies that do not have a classified structure may be removed with or without cause by a majority vote of the stockholders at any annual or special meeting of stockholders. Accordingly, in conjunction with our proposal to declassify our Board, we are proposing to amend our Certificate of Incorporation to eliminate the provision that allows stockholders to remove our Directors only for cause. We are also proposing additional conforming changes to our Certificate of Incorporation which are reflected in the proposed amendments set forth inAppendix A. Similar to the Certificate of Incorporation, the Company's By-Laws contain provisions concerning the classification of the Board of Directors. On January 25, 2008, upon the recommendation of the Board's Nominating and Corporate Governance Committee, the Board also unanimously adopted resolutions approving an amendment to the By-Laws to be consistent with the Certificate of Incorporation, whereby the By-Laws will be amended to declassify the board of directors, remove the class designations for each of the director's terms and institute annual voting for each director to serve a one-year term. These amendments to the By-Laws were subject to, and only become effective upon, the adoption of the amendment to the Certificate of Incorporation. If this Proposal 1 is not approved, the Board will not amend the Bylaws as described above. Based upon the analysis and recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has decided that it is an appropriate time to propose declassifying the Board of Directors. This determination by the Board furthers its goal of ensuring that the Company's corporate governance policies maximize management accountability to stockholders and would, if adopted, allow stockholders the opportunity each year to more effectively register their views on the performance of the Board. If this Proposal No. 1 is not approved by Company's stockholders, then the election of the four Class I director nominees as set forth in Proposal No. 2 shall proceed under the Company's Certificate of Incorporation as currently in effect. In such case, the Class I director nominees shall be elected for a term of three years and the Class II and Class III directors shall serve their remaining terms. Required Vote and Board Recommendation This proposal will be approved upon the affirmative vote of at least a majority of the outstanding shares of common stock entitled to vote. Broker non-votes will be treated as not entitled to vote and will not affect the outcome. Abstentions will have the same effect as votes cast against the proposal. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS AND TO ALLOW FOR THE REMOVAL OF DIRECTORS WITHOUT CAUSE. The term of the Class I directors expires in 2008. The term of the Class II directors expires in 2009. The term of the Class III directors expires in 2010. On January 25, 2008, upon the recommendation of the Board's Nominating and Corporate Governance Committee, the Board of Directors unanimously approved an amendment of Article VII of the Company's Certificate of Incorporation and an amendment to the Company's By-Laws to declassify the board of directors, remove the class designations for each of the director's terms and institute annual voting for each director to serve a one-year term, subject to, in the case of the amendment to the Certificate of Incorporation, stockholder approval at the Annual Meeting. This Proposal No. 2 concerns the election of directors under two alternative scenarios: Effect of Vote for Directors Subject to Proposal No. 1 If Proposal No. 1 Is Approved: Under Proposal No. 1, the adoption of the amendment to Article VII of the Certificate of Incorporation shall shorten the current term of any member of the Board of Directors whose term, under the existing classified board structure, extends past the 2008 Annual Meeting. Accordingly, if Proposal No. 1 is approved by the Company's stockholders, the classified structure of the Board shall If Proposal No. 1 Is Not Approved: If Proposal No. 1 is not approved by the Company's stockholders, the election of Messrs. Chun, Huret, Lucien and Takaki as the four Class I director nominees shall proceed under the Company's Certificate of Incorporation as currently in effect. In such case, the Class I director nominees shall, if elected by the stockholders, continue to serve for a term of three years, expiring in 2011, and the Class II and Class III directors shall continue their service until their re-election at the 2009 and 2010 Annual Stockholder meetings, respectively. Certain information with respect to each of the nominees who will be presented at the Annual Meeting by the Board upon the recommendation of the Nominating and Corporate Governance Other Public Michael J. Chun; At the close of business on February Name Number of Right to Total Percent of Private Capital Management L.P. 4,281,340 -0- 4,281,340 8.6 %(1) Barclays Global Investors, NA. 2,851,118 -0- 2,851,118 5.7 %(1) S. Haunani Apoliona 3,514 (2) 16,436 19,950 * Mary G.F. Bitterman 16,467 (2)(3) 20,686 37,153 * Michael J. Chun 7,838 (2) 15,686 23,524 * Clinton R. Churchill 8,899 (2)(5) 16,686 25,585 * David A. Heenan 23,412 (2)(4) 18,686 42,098 * Robert Huret 11,109 (2) 12,686 23,795 * Kent T. Lucien 483 (2) -0- 483 * Martin A. Stein 2,238 (2) 15,686 17,924 * Donald M. Takaki 13,658 (2) 20,686 34,344 * Barbara J. Tanabe 10,746 (2) 16,686 27,432 * Robert W. Wo, Jr. 15,532 (2)(3) 16,686 32,218 * Allan R. Landon 131,491 242,238 373,729 * Richard C. Keene 12,767 63,316 76,083 * Peter S. Ho 39,302 57,835 97,137 * Neal C. Hocklander 23,492 0 23,492 * David W. Thomas 47,487 39,950 87,437 * Directors, nominees and executive officers as a group (19 persons) 402,261 755,610 1,157,871 2.3 % * Each of the directors and named executive officers beneficially owns less than 1 percent of the outstanding common stock. Notes to Table on Amount and Nature of Beneficial Ownership All stock is subject to sole voting and investment power unless otherwise specified. According to the information furnished by it, Private Capital Management, L.P. ("PCM") is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended. Based solely on a Schedule 13G filed with the Securities Exchange Commission on February 14, 2008, PCM, in its capacity as investment adviser, may be deemed to have beneficial ownership as of December 31, 2007 of 3,447,245 shares of Bank of Hawaii common stock owned by numerous investment advisory clients, none known to have more than 5 percent. According to the same filing, PCM has sole power to vote or direct the vote of 16,900 of those shares and sole power to dispose or to direct the disposition of 16,900 shares. PCM also has shared power to vote or to direct the vote and shared power to dispose or to direct the disposition of 3,430,345 shares. Corporate Governance Guidelines The Company and the Board have adopted Corporate Governance Guidelines Ms. Bitterman has served as the Lead Independent Director since 1999, and is Vice Chairman of the Executive Committee and Chair of the Nominating & Corporate Governance Committee. The Lead Independent Director Qualifications and Nomination Process The Nominating & Corporate Governance Committee is responsible for identifying and assessing all director candidates and recommending nominees to the Board. Potential nominees will be evaluated based on their independence, within the meaning of the Governance Guidelines and the rules of the New York Stock Exchange The criteria also include a determination of the needs of the Board and of the A shareholder may submit a candidate for consideration by the Board to be included in the Shareholders and any interested parties may communicate with the Board, Non-Management Directors or Lead Independent Director by sending correspondence c/o the Secretary, 130 Merchant Street, Dept. 232, Honolulu, Hawaii 96813. All appropriate communications received will be forwarded to the Board, Non-Management Directors or Lead Independent Director as addressed. Code of Business Conduct The Company has earned its reputation as a respected leader in the communities it serves and in the financial services industry by conducting business in an ethical, responsible and professional manner. The Company is proud of the high standards of quality and service that have been its hallmark through the years. These qualities represent fundamental business practices and apply to all directors, officers and employees. The Company and Board have adopted a Code of Business Conduct and Ethics for Directors, Officers and Employees (the The Board is comprised of a majority of independent directors as defined by the NYSE listing standards. In affirmatively determining that a director is independent of the company's consolidated gross revenues for such year, until three years after falling below such threshold. For purposes of these independence standards, an The following ten directors have been determined by the Board to be independent: Messrs. Chun, Churchill, Heenan, Huret, Lucien, Stein and Wo, and Mmes. Apoliona, Bitterman and Tanabe, and accordingly, the Board has a majority of independent directors as defined by the listing standards of the NYSE and the Governance Guidelines. There were no relationships that were considered in determining the independence of the independent directors. All of the committees, with the exception of the Executive Committee, are composed entirely of independent directors who also meet applicable committee independence standards. Mr. Landon is the CEO of the Company and therefore not independent, and Mr. Takaki has been determined not to be an independent director due to his and his Compensation Committee Interlocks and Insider Participation No member of the Compensation Committee during fiscal year The Board met The Board has four standing committees: the Audit Committee, the Human Resources & Compensation Committee (the The Board has affirmatively determined that all of the members of the Audit, Compensation and Nominating & Corporate Governance Committees Below are the members of each current standing committee. Mary G. F. Bitterman Mary G. F. Bitterman Mary G. F. Bitterman S. Haunani Apoliona Clinton R. David A. Heenan* Clinton R. Churchill Mary Robert Huret David A. Heenan Michael J. Chun Kent T. Lucien* Clinton R. Churchill David A. Heenan Robert Huret Kent T. Lucien Martin A. Stein Barbara J. Tanabe Robert W. Wo, Jr. *Committee Chairman Audit Committee: The duties of the Audit Committee are set forth in its charter, and include assisting the Board in its oversight of the following areas of the Company: regulatory and financial accounting and reporting and credit risk management; compliance with legal and regulatory requirements; independent registered public accounting Compensation Committee: The duties of the Compensation Committee are set forth in its charter, and include responsibility for compensation levels of directors and members of executive management and reviewing the performance of executive management. The Committee reviews and approves goals for incentive compensation plans and stock plans, and evaluates performance against those goals. The Compensation Committee also reviews management development and training programs and reviews succession planning for senior and executive management. The Compensation Committee charter allows for the delegation of its duties to its own subcommittee as long as in compliance with all applicable laws, rules and listing standards. The CEO, in consultation with the director of human resources, makes recommendations with respect to non-CEO executive officer compensation. Executive Committee: No Meetings Held in The Committee has power to act for the Board in between its meetings except on those matters reserved to the Board by the By-Laws or otherwise. The Committee has the authority to advise the CEO and Board on long-range strategy and monitor the Nominating & Corporate Governance Committee: The duties of the Nominating In The Company maintains The Bank of Hawaii's obligations under the Director Stock Ownership Guidelines The Board of Directors believes it is important to support an ownership culture for the guideline levels of ownership. As of The following table shows, for the year ended December 31, Name Fees Non-Equity Change in All Other Total S. Haunani Apoliona S. Haunani Apoliona 35,000 5,829 12,495 — — — 53,324 Mary G.F. Bitterman 57,500 5,829 12,495 — — — 75,824 Michael J. Chun Michael J. Chun 31,250 5,829 12,495 — — — 49,574 Clinton R. Churchill Clinton R. Churchill 46,500 5,829 12,495 — — — 64,824 David A. Heenan David A. Heenan 37,000 5,829 12,495 — — — 55,324 Robert Huret Robert Huret 43,000 5,829 12,495 — — — 61,324 Kent T. Lucien Kent T. Lucien 19,000 5,829 5,935 — — — 30,764 Martin A. Stein Martin A. Stein 31,750 5,829 12,495 — — — 50,074 Donald M. Takaki Donald M. Takaki 35,000 5,829 12,495 — — — 53,324 Barbara J. Tanabe Barbara J. Tanabe 35,750 5,829 12,495 — — — 54,074 Robert W. Wo, Jr. Robert W. Wo, Jr. 47,500 5,829 12,495 — — — 65,824 2007. The Board has determined that the Audit The Board has determined that the Audit Committee has two audit committee financial experts, Robert Huret and Kent Lucien, within the meaning of SEC regulations adopted under the Sarbanes-Oxley Act of 2002, and that all Audit Committee members are financially literate and have accounting or related financial management expertise. Two of the Audit Committee members, Ms. Bitterman and Mr. Lucien, currently serve on the audit The Audit Based on the review and discussions referred to above, the Audit Committee recommended to the As submitted by the members of the Audit Committee, Kent T. Lucien, Chairman The Compensation Committee, composed entirely of independent directors in accordance with the applicable laws, regulations, NYSE listing requirements and the Governance Guidelines, sets and administers policies that govern the As submitted by the members of the Compensation Committee David A. Heenan, Chairman EXECUTIVE COMPENSATION Compensation of our named executive officers, including the Chief Executive Officer (the The Committee believes that executive compensation should align with The Committee, consistent with its Charter, determines compensation for the named executive officers. The Committee evaluates the The Committee monitors the The Hewitt Associates, The market data included compensation information from Hewitt's proprietary database of total compensation. The Committee used this data as a "market check" to help assess the competitiveness of the Company's pay practices, but neither total compensation nor any element of compensation paid to the named executive officers is benchmarked against a subset of the companies identified by Hewitt or any other group of companies. With the knowledge of the Committee, management also separately retained Hewitt, beginning in 1983, to provide actuarial services in connection with the Company's Employees' Retirement Plan of Bank of Hawaii. In November 2007, the Committee retained and instructed Watson Wyatt Worldwide, Inc. ("Watson Wyatt"), an employee benefits and human capital consulting firm, to review its executive compensation programs and provide external information on executive compensation programs. A number, but not all, of these companies are in the The Committee Compensation Elements and Determination of Compensation Compensation elements for The measurements of corporate performance and individual performance and contribution that are used to evaluate named executive officers (other than the CEO) for each element of compensation paid to such executive officers, and the specific items of corporate performance that are taken into account in setting compensation policies and making compensation decisions, are set forth below. The CEO makes an initial recommendation to the Committee as to each element of compensation for each of the other named executive officers for their consideration. The Committee has the discretion to accept, reject, or modify the CEO's recommendations. Restricted stock awards align with the Company's focus on long term performance, contribution to overall company value, retention of key talent, and alignment with shareholder interests. Long term equity awards granted in 2007 were comprised exclusively of restricted stock. The amount of the Company's equity awards is determined independently of the value of a named executive officer's existing equity holdings and independently of the amount of his or her annual incentive award. Base Salary Base salary is based on each individual's responsibilities. The CEO may consider the compensation of named executive officers disclosed by other banking companies. The Company generally establishes base salaries in connection with recruiting or retaining qualified executive officers. The Committee reviews salary levels as part of the Consistent with the Performance Based Variable Compensation The named executive officers participate in the For awards that are intended to qualify as performance-based compensation under Internal Revenue Code Section 162(m) (see "Tax Considerations" below), the Committee establishes, at the beginning of an annual performance period, an incentive pool from which bonus awards are paid to participants. The incentive pool is expressed as a percentage of the Company's net income before taxes for the fiscal year. For performance year 2007, the incentive pool was established as an amount equal to 2% of the Company's net income before taxes for the fiscal year. At the beginning of the performance period, each participating executive is allocated a maximum percentage of the incentive pool. For 2007, the Compensation Committee allocated a maximum of 19% to Mr. Landon and 9% to each of the other named executive officers (pro rated for each of Messrs. Rossi and Stevens). The Committee exercises its discretion, however, to reduce an executive's actual bonus payment to a dollar amount based on a In evaluating the CEO's performance and For 2007, the Committee considered the criteria below and assigned the listed weights to such criteria: As indicated in the table above, the Committee assigned a score of "5" for the stock performance criteria because the Company's stock performance was in the top quartile as measured by the Mid-Cap Bank Performance Index, and a The specified criteria are generally not adjusted during the year, except, in the Committee's discretion, in the event of certain extraordinary, non-recurring transactions affecting the Company. The Committee did not make any adjustments in 2007. Certain adjustments also may be made by the Committee with respect to awards granted to individuals who are promoted or change job responsibilities during the performance period. The Committee did not make any such adjustments for In January 2007, the Company introduced its 2007+ business plan that emphasizes growth in revenues, integration of service delivery and business units, development of people, enhancement of the financial performance. Performance objectives under the 2007+ business plan include an annual return on assets above 1.7%, return on equity above 25%, and an efficiency ratio approaching 50%, assuming a stable economy and a return to a more traditional interest rate environment. The Committee The bonus amounts payable to each of Long-Term and Equity-based Compensation Long-term incentives are intended to Equity awards can be an important component of total compensation and reflect the In accordance with the The amount of the long-term incentive grant awards is subjectively determined, taking into account position and job responsibilities, individual performance, Company performance, future potential contributions to the Company, internal pay parity, market survey data, and the size of previously granted awards. In addition, the Committee may review additional factors to determine the size, frequency and type of long-term incentive grants. These factors may include the tax consequences of the grants to the individual and the Company, accounting impact, potential dilutive effects, potential future stock values and the number of shares remaining available for issuance under the Company's equity incentive plans. As determined at the discretion of the Committee, the terms and conditions of awards under the 2004 Stock and Incentive Compensation Plan, including the amount, measurement, vesting and payment of such awards, may be conditioned upon certain performance measures. In the case of awards that are intended to comprise qualified performance-based compensation to covered employees under Section 162(m) of the Internal Revenue Code, the performance measures are limited to one or more, separately or in combination, of the following performance measures: (a) earnings per share (actual or targeted growth); (b) net income after capital charge (NIACC); (c) net income (before or after taxes); (d) return measures (including, but not limited to, return on average assets, risk-adjusted return on capital, or return on average equity); (e) efficiency ratio; (f) full-time equivalency control; (g) stock price (including, but not limited to, growth measures and total shareholder return); (h) noninterest income compared to net interest income ratio; (i) expense targets; (j) margins; (k) operating efficiency; (l) EVA® (economic value added); and (m) customer satisfaction. The performance measures may apply to the Company as a whole or any subsidiary, affiliate, or business unit of the Company. Restricted stock or restricted stock unit awards generally Health, Welfare, Retirement, Perquisites and Other Compensation Executive officers are eligible to participate in health and insurance plans, retirement plans, and other benefits generally available to all Our employees who meet We believe that ongoing perquisites should be limited in scope and In 2001, the Committee adopted stock ownership guidelines applicable to the executive officers. The objective of stock ownership guidelines is to align shareholder and management interests. Under the guidelines, the CEO should own Company stock having a market value equal to at least five times base salary, and the other named executive officers should own at least 2.5 times base salary. Stock ownership includes The Company does not provide employment agreements for any of the named executive officers. The Company believes in a policy of "at will" employment arrangements. Change In Control and Termination of Employment The Committee believes that it is an important part of an executive's total compensation package to provide for protections in the event of a change in control of the Company. Change in control benefits play an important role in attracting and retaining valuable executives. The payment of such benefits ensures a smooth transition in management following a change in control by giving an executive the incentive to remain with the Company through the transition period, and, in the event the executive's employment is terminated as part of the transition, by compensating the executive with a degree of financial and personal security during a period in which he is likely to be unemployed. In 2007, the Company adopted a new Change in Control Retention Plan (the "Retention Plan"), replacing its previous Key Executive Severance Plan. The Key Executive Severance Plan provided a participant with benefits in the event that his employment was terminated for any reason (including voluntary termination) within 24 months following a change in control. The Retention Plan provides benefits only in the event that a participant's employment is terminated by the Company without cause or by the participant for "good reason" within 24 months following a change in control. The Committee believes that this change is consistent with encouraging executives to remain with the Company upon a change in control. Other changes include the following: Each of the named executive officers The terms of the Richard Keene, former Vice Chairman and Chief Financial Officer, For additional discussion of received compensation of $909,440 and $575,140, respectively, that was not deductible for purposes of Section 162(m). Section 409A SUMMARY COMPENSATION TABLE Name and Principal Salary Bonus Stock Option Non-Equity Change in Pension All Other Total Position Year ($)(1) ($) ($)(2) ($)(3) ($)(4) ($)(5) ($)(6) ($) Allan R. Landon 2006 750,001 — 779,075 — 650,000 — 95,683 2,274,759 Chairman of the Board, Chief Executive Officer & President Richard C. Keene 2006 294,539 — 169,604 — 200,000 — 39,363 703,506 Vice Chairman, Chief Financial Officer Neal C. Hocklander 2006 270,577 — 543,902 — 175,000 — 1,253,595 2,243,074 Vice Chairman, Human Services David W. Thomas 2006 447,692 — 1,087,200 — 350,000 — 55,094 1,939,986 Vice Chairman, Chief Operating Officer Peter S. Ho 2006 398,038 — 278,744 — 325,000 160 50,232 1,052,174 Vice Chairman, Chief Banking Officer (1) Mr. Landon receives no fees or compensation for his services on the Board of Directors. Mr. Thomas’ salary for 2006 includes $47,596 of deferred compensation. (2) Amounts in this column represent FAS 123R expense recognized in 2006 for restricted share grants or restricted share units awarded in prior years. Additional information regarding stock option and equity awards issued to the named executive officers is provided in the tables “Outstanding Equity Awards at Fiscal Year-End” and “Option Exercises and Stock Vested.” The FAS 123R expense was based upon the fair market value of the stock on the date of the grant, and expensed over the requisite service period. The assumptions used in the valuation of restricted stock awards is included in Note 1 “Share-Based Compensation” to the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2007. (3) Due to the acceleration of vesting of all options that occurred in December 2005, there was no FAS 123R expense associated with any option award for 2006. (4) All amounts reported under this column relate to bonuses paid under the Executive Incentive Plan for fiscal year 2006. (5) Mr. Ho is the only named executive officer who is a participant under the Employees’ Retirement Plan of Bank of Hawaii, which was frozen at the end of 1995. (6) The total value of perquisites provided by or paid for by the Company was less than $10,000 for each named executive officer during 2006 and the value of any such perquisites are not included in this column for each named executive officer. The table below shows the components comprising the All Other Compensation amount. The following table provides additional information about the amounts that appear in the "All Other Compensation" amounts in the Summary Compensation Table for 2007 and 2006, respectively. Bank of Bank of Bank of Bank of Bank of Allan R. Landon — 1,165 5,637 39,578 6,600 38,400 4,303 95,683 Richard C. Keene 8,800 1,165 5,637 8,489 6,600 8,236 436 39,363 Neal C. Hocklander 8,800 1,165 5,637 11,304 6,600 10,967 1,209,122 1,253,595 David W. Thomas 8,800 1,165 5,637 15,773 6,600 15,303 1,816 55,094 Peter S. Ho 8,800 1,165 5,637 14,008 6,600 13,591 431 50,232 Executive Deferred Compensation Program The Company's Deferred Compensation Program is a nonqualified deferred compensation plan that allows senior management (including the named executive officers) to defer up to 80% of their base salary earned for a specified year through the Executive Base Salary Deferral Plan (the "Salary Deferral Plan"), and to defer up to 100% of bonus payments under the Executive Incentive Plan. In 2007, Mr. Thomas was the only named executive officer who deferred amounts under the Executive Deferred Compensation Program. A participant is always 100% vested in his or her deferred amounts. Deferred amounts under the Deferred Compensation Program are subject to adjustment for appreciation or depreciation in value based on hypothetical investments in one or more investment funds or vehicles permitted by the Human Resources and Compensation Committee and chosen by the participant. A participant's deferred amounts are generally payable beginning on the earliest to occur of (a) a specified time chosen by the participant, or if none, the date that is six months following a separation from service, (b) the participant's death, (c) the participant's disability or (d) an "unforeseeable emergency" (generally, a severe financial hardship resulting from the illness of the participant or his or her spouse or dependent, or other extraordinary and unforeseeable circumstances arising from events beyond the control of the participant). Distributions in the event of an unforeseeable emergency are subject to restrictions and are limited to an amount that is reasonably necessary to satisfy the emergency need. For distributions upon a separation from service or at a specified time chosen by a participant, the participant may choose to receive deferred amounts as a lump sum cash payment or in annual installments over a period not to exceed five years. The amount of each installment will be calculated using the "declining balance method", under which each installment payment is determined by dividing a participant's aggregate unpaid balance by the remaining years in the payment period. For distributions on all other events, payment will be made as a cash lump sum. Bank of Hawaii's obligations with respect to deferred amounts under the Salary Deferral Plan and the Executive Incentive Plan are payable from its general assets, although the Company has established a rabbi trust to assist it in meeting its liabilities under the plans. The assets of the trust are at all times subject to the claims of the Company's general creditors. Retirement Savings Excess Benefit Plan The Excess Benefit Plan is a non-qualified supplemental retirement benefits plan that compensates participants for the amount of benefits that would otherwise be payable under the Company's Retirement Savings Plan but for limitations under Internal Revenue Code Sections 415 and 401(a)(17) as to the amount of annual contributions to, and annual benefits payable under, the Retirement Savings Plan. A participant's accrued benefits under the Excess Benefit Plan are hypothetically invested in one or more Pacific Capital funds permitted by the Committee and chosen by the participant, and are adjusted for appreciation or depreciation in value attributable to such hypothetical investments. For an individual who first becomes a participant in the Excess Benefit Plan after May 19, 2006, the plan provides that benefits are payable upon a separation from service according to a distribution schedule that is determined by reference to the total amount accrued for the individual under the plan. A participant with: In each case, the first installment will be paid on the first day of the seventh month following separation from service and subsequent installments will be paid in each subsequent January. An individual who first becomes a participant in the Excess Benefit Plan on or prior to May 19, 2006 will receive benefits upon the participant's separation from service and may elect to be paid (a) according to the distribution schedule applicable to individuals who become participants after May 19, 2006, (b) in a lump sum on the first day of the seventh month following separation from service, or (c) in annual installments (not to exceed five) commencing on the first day of the seventh following separation from service or commencing on an anniversary of the participant's separation from service (not later than the fifth anniversary). The amount of each installment will be calculated using the declining balance method. If a participant dies prior to the full distribution of his or her deferred amounts, however, any unpaid amounts remaining will be distributed in a lump sum. Name Executive Registrant Aggregate Allan R. Landon — 77,978 6,464 — 165,105 Richard C. Keene — 16,725 1,137 — 30,610 Neal C. Hocklander — 22,271 11,969 — 92,527 David W. Thomas 47,596 31,076 9,271 — 128,718 Peter S. Ho — 27,599 3,431 — 52,334 The Company's obligations under the Excess Benefit Plan are payable from its general assets, although the Company has established a rabbi trust to assist it in meeting its liabilities under the plan. The assets of the trust are at all times subject to the claims of the Company's general creditors. The Company is currently reviewing the impact of Internal Revenue Code Section 409A on the terms of its nonqualified deferred compensation plans and may amend them as necessary to ensure compliance with Section 409A. See the discussion under "Tax Considerations." Set forth below is information regarding the amounts deferred by or for the benefit of the named executive officers in 2007. Compensation Name of Fund Rate of Name of Fund Rate of Vanguard Prime Money Market Fund 4.88 % Vanguard 500 Index Fund 15.64 % Vanguard Short-Term Federal Fund 4.32 % Vanguard Growth Equity Fund 6.14 % Vanguard Target Retirement Income Fund 6.38 % Vanguard Mid-Cap Index Fund 13.60 % Vanguard Target Retirement 2005 Fund 8.23 % Vanguard Windsor Fund 19.35 % Vanguard Target Retirement 2010 Fund 10.10 % Vanguard International Growth 25.92 % Vanguard Target Retirement 2015 Fund 11.42 % Pacific Capital Growth & Income Fund 10.28 % Vanguard Target Retirement 2020 Fund 12.00 % Pacific Capital Growth Stock Fund 6.09 % Vanguard Target Retirement 2025 Fund 13.24 % Pacific Capital HG Core Fixed Income Fund 3.31 % Vanguard Target Retirement 2030 Fund 13.65 % Pacific Capital HG Short Inter. Fixed Income Fund 4.37 % Vanguard Target Retirement 2035 Fund 15.24 % Pacific Capital International Stock Fund 24.03 % Vanguard Target Retirement 2040 Fund 13.20 % Pacific Capital Mid-Cap Stock Fund 8.63 % Vanguard Target Retirement 2045 Fund 15.98 % Pacific Capital New Asia Growth Fund 31.11 % Vanguard Target Retirement 2050 Fund 13.80 % Pacific Capital Small Cap Fund 17.78 % Vanguard Wellington Fund 14.97 % Pacific Capital Value Fund 20.76 % Mr. Landon received a grant of 49,320 restricted shares on August 30, 2007. The restricted shares generally vest on the following dates: The terms of Mr. Landon's grant also provide that, on any date that a tranche of restricted shares are scheduled to vest, if the Company, for the applicable fiscal period, has not achieved at least one of the above described TSR or EPS objectives but has achieved positive net income, the number of shares that will vest will be 45 shares per day instead of 67.5 shares per day as provided above. On January 31, 2008, Mr. Landon became vested in 8,303 shares, as the Company met the TSR objective. Mr. Ho received a grant of 30,000 shares on August 30, 2007. Mr. Ho's restricted shares generally vest as to 6,000 shares on each of March 3, 2008 and the first Monday of March in each of 2009, 2010, 2011 and 2012, provided that, with respect to each vesting date, Mr. Ho is an employee of the Company on such date and the Company achieves positive net income for the fiscal year ending on the December 31 immediately preceding such date. Mr. Ho's grant also contains provisions for the acceleration of vesting of additional shares on each vesting date (in an amount equal to 50% of the shares originally scheduled to vest), provided that, for the applicable fiscal period, the same TSR and/or EPS objectives as are described above for Mr. Landon's grant are satisfied. Messrs. Rossi and Stevens each received a grant of 4,000 restricted shares on February 14, 2007 and May 21, 2007 (respectively). Messrs. Rossi's and Stevens' grants are subject to substantially the same terms. Under his respective restricted share grant, the executive Notwithstanding the general vesting schedules applicable to Mr. Landon's restricted share grants, all restrictions with respect to such shares will lapse upon the earliest to occur of a change in control of the Company, the recipient's death or the termination of the recipient's employment due to disability, by the Company without cause or by the recipient for "good reason" (as defined in the Company's Change in Control Retention Plan—see the discussion under "Change in Control, Termination and Other Arrangements"). In the case of Messrs. Ho's, Rossi's and Stevens' restricted share grants, all restrictions will, notwithstanding the general vesting schedules specified in the grants, lapse upon the earliest to occur of a change in control of the Company, the recipient's death or the termination of the recipient's employment due to disability. See the performance vesting in which the performance criteria for vesting was or will be established subsequent to the grant date. Option Awards Stock Awards Equity Equity Incentive Incentive Plan Awards: Name Number of Equity Equity Option Option Number of Plan Awards: Market or Allan R. Landon (3) 110,638 — — 18.80 3/22/11 — — — — 61,600 — — 27.01 3/22/12 — — — — 70,000 — — 29.92 2/20/13 — — — — — — — — — 20,000 1,079,000 — — — — — — — 17,500 944,125 — — Richard C. Keene (4) 17,500 — — 25.64 1/25/12 — — — — 10,000 — — 32.89 4/28/13 — — 2,625 141,619 35,816 — — 50.72 12/16/15 3,750 202,313 2,000 107,900 Neal C. Hocklander — — — — — — — — — David W. Thomas (5) 69,950 — — 21.16 4/20/11 — — — — — — — — — — — 40,000 2,158,000 Peter S. Ho (6) 2,916 — — 27.01 3/22/12 — — — — 54,919 — — 50.72 12/16/15 13,250 714,838 11,250 606,938 service-based restricted shares, with 8,750 vesting each year beginning on March 31, 2005 (8,750 service-based shares The following table includes values realized for stock options exercised, the vesting of restricted stock, and the payouts on performance-based restricted stock units. For further information on the vesting criteria for these restricted stock awards see the table OPTION AWARDS STOCK AWARDS Name Number of Shares Value Number of Shares Value Allan R. Landon (1) — — 56,250 2,998,688 Richard C. Keene (2) — — 2,875 148,834 Neal C. Hocklander (3) 169,000 4,624,057 15,000 799,650 David W. Thomas (4) — — — — Peter S. Ho (5) — — 2,000 103,560 2007. Equity Compensation Plan The following table contains information with respect to all of the Plan Category Number of Securities Weighted-average Number of securities Equity compensation plans approved by security holders 2,137,915 $ 31.04 1,378,476 The Name Plan Name Number of Years Present Value of Payments During Last Fiscal Year Peter S. Ho Peter S. Ho Employees’ Retirement 1 $ 3,976 — Bank of Under the Retention Plan, a transaction continue to own more than 60% of the total outstanding stock of the resulting entity and of the combined voting power of the entity's securities that are entitled to vote for the election of directors); or A participant is deemed to have "good reason" if one or more the following occur after a change in control without the participant's written consent: The table below sets forth the benefits that would have been payable to each of the named executive officers had a qualifying termination occurred under the terms of the Retention Plan on December 31, 2007. 3 x base, Executive Welfare Fringe Relocation Acceleration ExciseTax Total Allan R. Landon $ 6,227,866 $ 1,500,002 $ 25,606 $ 1,369 $ 150,000 $ 2,023,125 $ 2,010,308 $ 11,938,276 Peter S. Ho 3,272,434 636,861 28,067 20,496 150,000 1,321,775 1,191,052 6,620,685 Neal C. Hocklander 4,043,835 365,279 44,530 2,812 150,000 — 829,843 5,436,299 Richard C. Keene 1,516,053 397,628 22,480 — 150,000 451,831 544,830 3,082,822 David W. Thomas 4,287,727 716,308 18,661 20,154 150,000 2,158,000 1,448,411 8,799,261 termination (to the extent not reimbursed by another employer), as well as a gross-up payment as necessary for income taxes owing on such reimbursement. The maximum reimbursement for real estate The Company does not have employment agreements with its executives. However, the The Company entered into a Retention Agreement as of December 16, 2005 with David Thomas (the "Retention Agreement"). The Retention Agreement provided for certain payments to be made to Mr. Thomas subject to his remaining in the employ of the In January 2007, the Company announced Richard The terms of each of the foregoing agreements were negotiated at arms' length between management of the Company and each executive. The Committee reviewed the terms of each agreement and determined in each case that any increase in compensation over the executive's prior compensation was necessary to induce the executive to stay with the Company In accordance with the The Company and its subsidiaries are also subject to extensive federal regulations regarding certain transactions, including banking regulations relating to the extension of During The rules of the SEC require Bank of Hawaii to disclose late filings of reports of ownership (and changes in stock ownership) of Bank of Hawaii common stock by its directors and certain officers. To our knowledge, based on review of the copies of such reports received by Bank of Hawaii and the written representations of its directors and officers, the Company believes that all of its directors and officers complied timely with those filing requirements for PROPOSAL The Audit Committee has selected Ernst & Young LLP as the incorporation in 1971. We expect representatives of Ernst & Young LLP to attend the annual meeting. Ernst & Young LLP has indicated that they will have no statement to make but will be available to respond to questions. If this Proposal does not pass, the selection of independent registered public accounting firm will be reconsidered by the Audit The following table summarizes Ernst & Young LLP audit fees for Service 2006 2005 Audit Fees Audit Fees $ 1,191,100 $ 1,129,100 Audit Related Fees Audit Related Fees $ 117,500 $ 141,600 Tax Fees Tax Fees $ 17,900 $ 28,900 All Other Fees All Other Fees $ 2,500 $ 6,000 Total Total $ 1,329,000 $ 1,305,600 The Audit Fees for The Audit Related Fees for The Tax Fees for The All Other Fees category for The Board knows of no other business for consideration at the annual meeting. Your signed proxy or proper telephone or Internet vote gives authority to the proxies to vote at their discretion on other matters properly presented at the annual meeting, or adjournment or postponement of the meeting. A copy of the PROPOSED AMENDMENTS TO THE CERTIFICATE OF INCORPORATION If approved by the stockholders, the Corporation's Certificate of Incorporation would be amended by amending Article VII.B, VII.C and VII.E in their entirety as follows: B. The Board, other than those directors elected by the holders of any series of Preferred Stock as provided for or fixed pursuant to the provisions of Article V of this Certificate of Incorporation, shall be elected at each annual meeting of stockholders for a term expiring at the next annual meeting of stockholders following their election, notwithstanding that such director may have been elected for a term that extended beyond the date of such next annual meeting of stockholders. A director shall be elected to hold office until the next annual meeting of stockholders after their election and until their successors shall have been elected and qualified. C. Except as otherwise provided for or fixed pursuant to the provisions of Article V of this Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock to elect additional directors, and subject to the provisions hereof, newly created directorships resulting from any increase in the authorized number of directors, and any vacancies on the Board resulting from death, resignation, disqualification, removal, or other cause, may be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board. Any director elected in accordance with the preceding sentence shall hold office until such director's successor shall have been duly elected and qualified, subject to his earlier death, disqualification, resignation or removal. No decrease in the number of directors constituting the Board shall shorten the term of any incumbent director. E. Except for such additional directors, if any, as are elected by the holders of any series of Preferred Stock as provided for or fixed pursuant to the provisions of Article V of this Certificate of Incorporation, any director may be removed, with or without cause, with the affirmative vote of the holders of at least a majority of the combined voting power of the then-outstanding shares of Voting Stock at a meeting of stockholders called for that purpose, voting together as a single class. Electronic Voting Instructions Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. Vote by Internet Vote by telephone Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. o o o o o o o PLEASE COMPLETE SECTIONS A - E ON BOTH SIDES OF THIS CARD. Notice of THIS PROXY WILL BE VOTED AS DIRECTED. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR ALL NOMINEES AND PROPOSALS, AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. The Proxy Statement and the Bank of Hawaii (Items to be voted appear on reverse side.) Consent to Electronic Delivery: By marking this box, I consent to access future Annual Reports and Proxy Statements of Bank of Hawaii Corporation electronically over the Internet. I understand that unless I request otherwise or revoke my consent, Bank of Hawaii Corporation will notify me when any such communications are available and how to access them. I understand that costs associated with the use of the Internet will be my responsibility. To revoke my consent, I can contact Bank of Hawaii Corporation's transfer agent, Computershare Investor Services, at 1-888-660-5443. Change of Address—Please print new address below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. PLEASE COMPLETE SECTIONS A - E ON BOTH SIDES OF THIS CARD.Page 2
Questions and Answers About the Proxy Materials and the Annual Meeting
2
Proposal 1: Amendment of the Company's Certificate of Incorporation to Provide for Annual Election of All Directors
5
Proposal 2: Election of Directors5
7
Board of Directors5
7Beneficial Ownership 810 Corporate Governance 1012 Board Committees and Meetings 1415 Director Compensation—Compensation17 Director Compensation Table 1618 Audit Committee Report 1819 Compensation Committee Report 1920
Executive Compensation20
21Compensation Discussion and Analysis 2021 Summary Compensation Table 2430 Nonqualified Deferred Compensation.Compensation2533 Grants of Plan-Based Awards 2635 Outstanding Equity Awards at Fiscal Year-End 2637 Option Exercises and Stock Vested 2838 Equity Compensation Plan Information 2939 Pension Benefits 2939 Change in Control, Termination and Other Arrangements 2939
Certain Relationships and Related Transactions31
42
Section 16(a) Beneficial Ownership Reporting Compliance32
42
Proposal 2:3: Ratification of Selection of an Independent Registered Public Accounting Firm and Audit Fees
4233Other Business 43
Appendix A—Proposed Amendments to the Certificate of Incorporation of Bank of Hawaii Corporation
A-1
To be held April 27, 200725, 200827, 2007,25, 2008, at 8:30 a.m. on the Sixth Floor of the Bank of Hawaii Building, 111 South King Street, Honolulu, Hawaii, for the following purposes:III DirectorsI directors of the Company. The nominees for terms expiringelection to the Board are named in 2010.2.the attached Proxy Statement, which is part of this Notice.3.28, 200729, 2008 are entitled to attend the meeting and vote on the business brought before it. The accompanying proxy statement, also available online at www.boh.com, provides certain background information that will be helpful in deciding how to cast your vote on business transacted atmeeting.Board of Directors
By Order of the Board of Directors
MARK A. ROSSIVice Chairman and Corporate SecretaryBank of Hawaii Corporation
Vice Chairman and Corporate Secretary
Bank of Hawaii Corporation
Dated: March 14, 2007IMPORTANT Please sign and return the enclosed proxy card or vote by telephone or on the Internet as promptly as possible. This will save the expense of a supplementary solicitation.Thank you for acting promptly.1IMPORTANT
for the Annual Shareholder Meeting to be Held April 25, 2008“Board”"Board") of Bank of Hawaii Corporation (Bank of Hawaii Corporation and its subsidiaries, as appropriate, are referred to as “Bank"Bank of Hawaii”Hawaii" or the “Company”"Company") is soliciting the enclosed proxy for the Company’s 2007Company's 2008 annual meeting. The proxy statement, proxy card, and the Company’sCompany's Annual Report to Shareholders and Annual Report on Form 10-K are being distributed to the Company’sCompany's shareholders on or about March 14, 2007.2008.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGHawaii’sHawaii's common stock, par value $0.01 per share, as of the close of business on February 28, 200729, 2008 (the “Record Date”"Record Date") can attend and vote at the annual meeting. Each share of common stock is entitled to one vote. On the Record Date, there were 49,720,86048,155,113 shares of common stock issued and outstanding.“Vote"Vote by Internet”Internet" instructions on your proxy card.“Vote"Vote by Phone”Phone" instructions on the proxy card.votevote??2007.For all proposals other than the election of directors, brokerBroker non-votes will be treated as not entitled to vote and so will not affect the outcome. Abstentions will have the same effect as negative votes.year’syear's annual meeting of shareholders?20082009 shareholder meeting by presenting your proposal in writing to the Corporate Secretary at 130 Merchant Street, Honolulu, Hawaii 96813 and in accordance with the following schedule and requirements.20082009 annual meeting of shareholders must be made in accordance with U. S. Securities and Exchange Commission (“SEC”("SEC") Rule 14a-8. Proposals must be received by the Company’sCompany's Corporate Secretary on or before November 16, 200714, 2008 at the above address.20082009 annual meeting, Bank of Hawaii must receive the written proposal no later than 80 days nor earlier than 90 days before the first anniversary of the 20072008 annual meeting; in other words, no later than February 7, 20086, 2009 and no earlier than January 28, 2008.27, 2009. (Please refer to Section 1.12 of Bank of Hawaii’sHawaii's By-Laws.) The proposal also must contain the information required in the By-Laws. If you wish to make one or more nominations for election to the Board, the required information includes, among other things, the written consent of such individual to serve as director and (i) the name, age, business address and, if known, residence address of each nominee, proposed in person, (ii) the principal occupation or employment of each nominee, and (iii) the number of shares of Bank of Hawaii stock each nominee beneficially owns. These advance notice provisions are separate from the requirements a shareholder must meet to have a proposal included in the proxy statement under SEC rules. By complying with these provisions, a shareholder may present a proposal in person at the meeting, but will not be entitled to have the proposal included in the Company’sCompany's proxy statement. In addition, personsstatement unless they comply with the requirements described in the preceding paragraph. Persons holding proxies solicited by the Board may exercise discretionary authority to vote against such proposals.4
TO PROVIDE FOR ANNUAL ELECTION OF ALL DIRECTORS
PROPOSAL 2: ELECTION OF DIRECTORSThe Company’s As discussed in Proposal No. 1, the Company's Certificate of Incorporation currently provides thatfor the classification of the Company's Board of Directors. The Board of Directors, which currently is comprised of twelve (12) members, is divided into three (3) classes. Generally, absent the earlier resignation or removal of a Class member, one Class stands for re-election at each annual meeting of stockholders. The Board of Directors currently is comprised of four Class I directors (Michael J. Chun, Robert Huret, Kent T. Lucien and Donald M. Takaki), four Class II directors (S. Haunani Apoliona, Clinton R. Churchill, David A. Heenan and Allan R. Landon) and four Class III directors (Mary G.F. Bitterman, Martin A. Stein, Barbara J. Tanabe and Robert W. Wo, Jr.).consist of not less than three, nor more than fifteen persons as established from time to time by resolutionbe eliminated, and each of the Board. Thetwelve directors listed below shall be nominated for a one-year term to serve until the 2009 Annual Meeting of stockholders or until their earlier resignation or removal.has fixed the number of directors at twelve, divided into three classes, with the terms of office of one class expiring each year. NomineesDirectors for election are identifiedas a director is set forth below. Each nominee has consented to serve and all nominees are currently serving on the Company’sCompany's Board. The nominees were originally proposedeach recommended to the Board by the Company's Nominating and Corporate Governance Committee. In the event that any or all of the director nominees are unable to stand for election as director, the Board,Committee. If a nominee below is not a candidate at the time of the annual meeting, then the proxy holdersCommittee, may voteselect different nominees for the remaining nominees and other personselection as they may determine.directors.
THE BOARD RECOMMENDS A VOTE “FOR”"FOR" EACH OF THE NOMINEES.NOMINEES FOR ELECTION FOR CLASS III DIRECTORS WITH TERMS EXPIRING IN 2010Name, Age, and Year
First Elected as Director
Principal Occupation(s)
Directorships HeldS. Haunani Apoliona; 58; 2004 Chairperson and Trustee, Office of Hawaiian Affairs ("OHA") (entity established by the Constitution of the State of Hawaii to improve the conditions and protect the entitlements of Native Hawaiians) since 2000; Trustee, OHA from 1996 to 2000. —
Mary G.F.G. F. Bitterman;62; 63; 1994
President and Trustee, the Bernard Osher Foundation since 2004; Director, Osher Lifelong Learning Institutes (a non-profit organization dedicated to providing continuing education opportunities through affiliations with colleges and universities) since 2003; President and Chief Executive Officer, The James Irvine Foundation (an organization administering the assets of the charitable trust of James Irvine) from 2002 to 2003; President and Chief Executive Officer, KQED, Inc. (a public broadcasting center) from 1993 to 2002.
Barclays Global Investors FundsMartin A. Stein;66; 1999Partner, RSA Ventures (a consulting and venture capital company) since 1999; Chief Executive Officer and President, Sonoma Mountain Ventures, LLC (strategic and technology consulting and venture capital) 1998 to 2004; Vice Chair, BankAmerica Corp 1990 to 1998.—Barbara J. Tanabe;58; 2004Owner and Partner, Ho’akea Communications, LLC (a communication and community building company) since 2003; Owner and Partner, Ho’akea (a public affairs company) from 2001 to 2003; Managing Director, Pacific Century Inc. (a business consulting company) since 1995.—Robert W. Wo, Jr.;54; 2002President and Director, C.S. Wo & Sons, Ltd. (a furniture retailer) since 1984.—CLASS I DIRECTORS WHOSE CURRENT TERMS EXPIRE IN 2008Name, Age, and YearFirst Elected as DirectorPrincipal Occupation(s)Other PublicDirectorships Held63; 64; 2004
President and Headmaster of Kamehameha Schools—Kapalama (a college preparatory school serving children of Hawaiian ancestry) since 2001; President of Kamehameha Schools from 1998-2001.
Alexander & Baldwin, Inc.
Clinton R. Churchill; 64; 2001
Trustee and Chairman, The Estate of James Campbell (an organization administering the assets held in trust under the will of James Campbell) since 1992 (Chairman 1998, 2000, 2004).
—
David A. Heenan; 67; 1993
Trustee, The Estate of James Campbell (an organization administering the assets held in trust under the will of James Campbell) since 1995 (Chairman 1999, 2001).
Maui Land & Pineapple Co., Inc.
Robert Huret;
62; 2000
Managing Member of Financial Technology Ventures Management (a venture capital management company) since 1998; Senior Consultant, Financial Services Group at Montgomery Securities from 1984 to 1998.
—Name, Age, and Year
First Elected as DirectorPrincipal Occupation(s) Other Public
Directorships HeldAllan R. Landon; 59; 2004 Chairman, Chief Executive Officer and President since September 2004; President and Chief Operating Officer of the Company from April 2004 to September 2004; President, Chief Financial Officer and Treasurer of the Company from 2003 to 2004; Vice Chairman, Chief Financial Officer and Treasurer of the Company from 2001 to 2003. —
Kent T. Lucien;53; 54; 2006
Trustee, C. Brewer & Co. Ltd., (a Hawaii corporation engaged in agriculture, real estate and power production) since 2001; Chief Executive Officer, Executive Vice President and Chief Financial Officer, C. Brewer & Co. Ltd. from 1991 to 2006.
Maui Land & Pineapple Co., Inc.
Martin A. Stein; 67; 1999
Partner, RSA Ventures (a consulting and venture capital company) since 1999; Chief Executive Officer and President, Sonoma Mountain Ventures, LLC (strategic and technology consulting and venture capital) 1998 to 2004; Vice Chair, BankAmerica Corp 1990 to 1998.
—
Donald M. Takaki;
66; 1997
Chairman and Chief Executive Officer, HawkTree International, Inc. (a diversified holding company engaged in transportation, leasing, business records management and real estate) since 1999; Chairman and Chief Executive Officer, Island Movers, Inc. (a transportation service company) since 1964; President, Transportation Concepts, Inc. (a transportation leasing company) since 1988 and General Partner, Don Rich Associates (a real estate development company) since 1979.
—CLASS II DIRECTORS WHOSE CURRENT TERMS EXPIRE IN 2009Name, Age, and YearFirst Elected as DirectorPrincipal Occupation(s)Other PublicDirectorships HeldS. Haunani Apoliona;
Barbara J. Tanabe; 58; 2004Chairperson
Owner and Trustee, Office of Hawaiian Affairs (“OHA”) (entity established by the Constitution of the State of Hawaii to improve the conditionsPartner, Ho'akea Communications, LLC (a communication and protect the entitlements of Native Hawaiians)community building company) since 2000; Trustee, OHA from 1996 to 2000.—Clinton R. Churchill;63; 2001Trustee, The Estate of James Campbell (an organization administering the assets held in trust under the will of James Campbell) since 1992 (Chairman 1998, 2000, 2004).—David A. Heenan;67; 1993Trustee, The Estate of James Campbell (an organization administering the assets held in trust under the will of James Campbell) since 1995 (Chairman 1999, 2001).Maui Land & Pineapple Co., Inc.Allan R. Landon;59; 2004Chairman, Chief Executive Officer2003; Owner and President since September 2004; President and Chief Operating Officer of the Company from April 2004 to September 2004; President, Chief Financial Officer and Treasurer of the Company from 2003 to 2004; Vice Chairman, Chief Financial Officer and Treasurer of the CompanyPartner, Ho'akea (a public affairs company) from 2001 to 2003.
—
Robert W. Wo, Jr.; 55; 2002
President and Director, C.S. Wo & Sons, Ltd. (a furniture retailer) since 1984.
—713, 2007,14, 2008, Bank of Hawaii had 49,724,71148,297,405 shares of its common stock outstanding. As of February 13, 2007,14, 2008, this table shows how much Bank of Hawaii common stock was owned by (i) its directors and nominees, (ii) the executive officers named in the Summary Compensation Table (the “named"named executive officers”officers"), (iii) all executive officers and directors as a group, and (iv) entities that are known by us to own beneficially more than five percent of Bank of Hawaii’sHawaii's common stock. Unless otherwise indicated and subject to applicable community property and similar statutes, all persons listed below have sole voting and investment power over all shares of common stock beneficially owned. Share ownership has been computed in accordance with SEC rules and does not necessarily indicate beneficial ownership for any other purpose.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
Shares
Beneficially
Owned
Acquire
Within
60 Days
Outstanding
Shares as of
02-13-07
8889 Pelican Blvd.
Naples, Florida 34108
Barclays Global Fund Advisors
Barclays Global Investors, Ltd.
Barclays Global Investors Japan Trust and
Banking Company Limited
Barclays Global Investors Japan, Ltd.
45 Fremont Street
San Francisco, CA 94105Name Number of Shares
Beneficially
Owned Right to
Acquire
Within 60 Days Total Percent of Outstanding Shares as of 02-14-08 Barclays Global Investors, NA.
Barclays Global Fund Advisors
Barclays Global Investors, Ltd.
Barclays Global Investors Australia, Ltd.
Barclays Global Investors Canada, Ltd.
Barclays Global Investors (Deutschland) AG
Barclays Global Investors Japan Trust and
Banking Company Limited
Barclays Global Investors Japan, Ltd.
45 Fremont Street
San Francisco, CA 94105 3,619,309 0 3,619,309 7.4 %(1) Private Capital Management L.P.
8889 Pelican Blvd.
Naples, Florida 34108 3,447,245 0 3,447,245 7.0 %(1) S. Haunani Apoliona 4,896 (2) 16,902 21,798 * Mary G. F. Bitterman 19,189 (2)(3) 20,102 39,291 * Michael J. Chun 8,820 (2)(3) 17,102 25,922 * Clinton R. Churchill 11,161 (2)(3)(5) 17,102 28,263 * David A. Heenan 25,177 (2)(4) 20,102 45,279 * Robert Huret 13,182 (2) 14,102 27,284 * Kent T. Lucien 1,465 (2) 731 2,196 * Martin A. Stein 3,220 (2) 17,102 20,322 * Donald M. Takaki 16,964 (2) 20,102 37,066 * Barbara J. Tanabe 13,494 (2) 17,102 30,596 * Robert W. Wo, Jr 17,860 (2)(3) 17,102 34,962 * Allan R. Landon 170,301 242,238 412,539 * Peter S. Ho 67,874 57,835 125,709 * Mark A. Rossi 4,000 0 4,000 * Daniel C. Stevens 4,000 0 4,000 * David W. Thomas 7,487 19,000 26,487 * Richard C. Keene 11,700 0 11,700 * Directors, nominees and executive officers as a group (21 persons) 465,417 670,969 1,136,386 2.3 % According to the information furnished by it, Private Capital Management, L.P. (“PCM”) is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended. Based solely on a Schedule 13G filed with the Securities Exchange Commission on February 14, 2007, PCM, in its capacity as investment adviser, may be deemed to have beneficial ownership as of December 31, 2006 of 4,281,340 shares of Bank of Hawaii common stock owned by numerous investment advisory clients, none known to have more than 5 percent. According to the same filing, PCM has sole power to vote or direct the vote of 8,300 of those shares and sole power to dispose or to direct the disposition of 8,300 shares. PCM also has shared power to vote or to direct the vote and shared power to dispose or to direct the disposition of 4,273,040 shares.“Barclays”"Barclays") are either investment advisers registered with the SEC under the Investment Advisers Act of 1940, as amended, or banks as defined in section 3(a) (6) of the Securities Exchange Act of 1934. Based solely on a Schedule 13G filed with the Securities Exchange Commission on January 23, 2007,February 5, 2008, Barclays, as a group, may be deemed to have beneficial ownership as of December 31, 20062007 of 2,851,1183,619,309 shares of Bank of Hawaii common stock owned by numerous investment advisory or bank clients, none known to have more than five percent. According to the same filing, Barclays has sole power to vote or to direct the vote over 2,425,4573,301,988 of those shares, and sole power to dispose or to direct the disposition of 2,851,1183,619,309 shares.3,4984,880 shares; Ms. Bitterman, 4,8387,820 shares; Dr. Chun, 4,8385,820 shares; Mr. Churchill, 3,8385,820 shares; Mr. Heenan, 6,8387,820 shares; Mr. Huret, 1,8382,820 shares; Mr. Lucien, 4831,465 shares; Mr. Stein, 2,2383,220 shares; Ms. Tanabe, 3,8385,820 shares; Mr. Takaki, 3,8386,820 shares; and Mr. Wo, 3,8385,820 shares. Includes shares owned by directors under the Directors Deferred Compensation Plan: Messrs. Churchill, 4,0964,426 shares; Heenan, 15,99816,781 shares; Huret, 9,27110,362 shares; Takaki, 9,82010,144 shares; and Wo, 3,9444,290 shares; and Ms. Tanabe, 4,3714,876 shares.ofas to which the specified officer or director may be deemed to have shared voting or investment power as follows: Ms. Bitterman, 6,8857,044 shares, Mr. Chun, 3,000 shares, Mr. Churchill, 315 shares, and Mr. Wo, 2,400 shares.(“("Governance Guidelines”Guidelines"), which are posted on the Company’sCompany's Investor Relations website at www.boh.com.www.boh.com. Shareholders and other interested parties may receive a copy of the Governance Guidelines by writing the Corporate Secretary at 130 Merchant Street, Honolulu, Hawaii 96813. The Governance Guidelines address director qualification and independence standards, responsibilities, access to management and independent advisors, compensation, orientation and continuing education, Board committees, Chief Executive Officer evaluation, management succession, Code of Business Conduct and Ethics, shareholder communications to the Board and the Board’sBoard's annual performance evaluation.Director’sDirector's duties are set forth in the Governance Guidelines and include presiding over regularly scheduled executive sessions of the non-management directors, serving as a liaison between the non-management directors and executive management and assisting the Board and executive management to ensure compliance with the Governance Guidelines. The non-management directors meet in executive session without management in attendance for regularly scheduled meetings which are usually held five times a year. The non-management directors may also meet in executive session each time the full Board convenes for a meeting. In 2006,2007, the non-management directors met in executive session five times.(“NYSE”("NYSE"). Candidates to be nominated as a director, including those submitted by shareholders, are selected based on, among other criteria, their integrity, informed judgment, financial literacy, high performance standards, accomplishments and reputation in the community, experience, skill sets, and ability to commit adequate time to Board and committee matters and to act on behalf of shareholders.individuals’individuals' personal qualities and characteristics with those of the other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company and its shareholders. The Board should encompass a broad range of skills, expertise, industry knowledge, diversity of viewpoints, background, and business and community contacts relevant to the Company’sCompany's business.Board’sBoard's slate of director nominees. Candidates proposed by shareholders will be evaluated by the Nominating & Corporate Governance Committee under the same criteria that are applied to other candidates. The criteria are set forth above and in the Company’sCompany's By-Laws and Governance Guidelines. Candidates to be considered for nomination by the Nominating & Corporate Governance Committee at the 20082009 Annual Meeting of Shareholders must be presented in writing to the Corporate Secretary on or before November 16, 200714, 2008 at 130 Merchant Street, Honolulu, Hawaii 96813 to be included in the Company’s proxy statement for 2008.96813.Company’sCompany's Corporate&and Ethics“Code of Conduct and Ethics”"Code"), which is posted on the Investor Relations page of the Company’sCompany's website www.boh.com.www.boh.com. The Code of Conduct and Ethics addresses the professional, honest and candid conduct of each director, officer and employee; conflicts of interest, disclosure process, compliance with laws, rules and regulations (including insider trading laws); corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets; and encourages the reporting of any illegal or unethical behavior. A waiver for an executive officer or director of the Company may be made only by the Audit Committee of the Board of Directors and must be promptly disclosed as required by SEC or NYSE rules. The Company will disclose any such waivers, as well as any amendments to or waivers of, the Code, of Conduct and Ethics for directors or executive officers on the Company’sCompany's website. Shareholders may obtain a printed copy of the Code of Conduct and Ethics by contacting the Corporate Secretary at the address previously provided.Company’sCompany's management and has no material relationship with the Company, either directly or indirectly as a partner, shareholder, or officer of an organization that has a relationship with the Company, the Board applies the following categorical standards, in addition to such other factors as may be deemedthe Board deems appropriate:director’sdirector's immediate family is an executive officer of the Company until three years after the end of such employment relationship. Employment as an interim Chairman or CEO shall not disqualify a director from being considered independent following that employment.director’sdirector's immediate family receives, more than $100,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) and is not independent until three years after ceasing to receive such compensation.whosea member of the director's immediate family member is affiliated with or employed in a professional capacity by, a present or former internal or external auditor of the Company until three years after the end of the affiliation or the employment or auditing relationship.director’sdirector's immediate family is employed, as an executive officer of another company where any of the Company’sCompany's present executives serves on that company’scompany's compensation committee until three years after the end of such service or employment relationship. company’sdirector’sdirector's and the director’sdirector's immediate family members’members', or a director’sdirector's affiliated entity’s,entity's, banking relationship with the Company if such relationship does not violate paragraphs (a) through (e) above and is made in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with persons not affiliated with the Company and, with respect to extensions of credit, is made in compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve System, and do not involve more than the normal risk of collectability or present other unfavorable features.directors’directors' fees and other in-kind consideration ordinarily available to directors, as well as regular benefits that other directors receive (including any additional such fees or consideration paid to directors with respect to service on committees of the Board).Board’sBoard's judgment material, and therefore whether the affected director is independent.“immediate"immediate family member”member" includes the director’sdirector's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than a domestic employees)employee) who shares the director’sdirector's home.family’sfamily's ownership interest in Pacific Courier, Inc. (“PCI”("PCI"), a company that provides courier and armored car services among the branches for the Company. In 2006,2007, the Company paid approximately $1.63$1.99 million in courier fees, and reimbursed airfreight costs of approximately $268,000,$293,000, to PCI. PCI was selected to continue to provide courier and armored car services after a request for quote process conducted by the Company in February 2005. The Company has the right to terminate the services provided by PCI upon 30 days notice. The Audit Committee ratified and approved the terms of the services provided by PCI in January 2007.20062007 served as an officer, former officer, or employee of the Company or had a relationship discloseablethat was required to be disclosed under “Related"Related Person Transactions.”" Further, during 2006,2007, no executive officer of the Company served as:··ten10 times during 2006.2007. The Board’sBoard's policy is that directors should make every effort to regularly attend meetings of the Board and committees on which they serve and the Company’sCompany's annual shareholder meeting. Each director attended 75% or more of the aggregate of the total number of Board meetings and the total number of meetings held by the committees on which he or she served in 2006. Eleven2007. All of the Company’sCompany's directors attended the 2006 shareholders’2007 shareholders' meeting.“Compensation Committee”"Compensation Committee"), the Executive & Strategic Planning Committee (the “Executive Committee”"Executive Committee"), and the Nominating & Corporate Governance Committee. The committee charters are posted onin the Investor Relations pagesection of the Company’sCompany's website atwww.boh.com. Shareholders and any interested parties may request a printed copy of the charters and Governance Guidelines by contacting the Corporate Secretary at 130 Merchant Street, Honolulu, Hawaii 96813.(“("Board Committees”Committees") meet the independence standards of the NYSE and the Company’sCompany's Governance Guidelines. The Board Committees’Committees' charters require that each committee perform an annual evaluation of its performance and assess the adequacy of its charter. Each committee has the authority to retain consultants and advisors to assist it in its duties, including the sole authority for the retention, termination and negotiation of the terms and conditions of the engagement.Audit
Compensation
ExecutiveNominating
and GovernanceChurchill*G.F.G. F. Bitterman*Martin A. SteinClinton R. ChurchillKent T. LucienBarbara J. TanabeAllan R. Landon*Robert W. Wo, Jr. Allan R. Landon* Martin A. Stein Robert W. Wo, Jr. 76 Meetings in 20062007firm’sfirm's qualifications and independence; and overseeing the performance of the Company’sCompany's internal audit function and independent registered public accounting firm. The Board has determined that Robert Huret and Kent Lucien meet the definition of “financial expert”"financial expert" within the meaning of the SEC regulations adopted under the Sarbanes-Oxley Act of 2002. The Board has determined that all Committee members meet the NYSE standard of financial literacy and have accounting or related financial management expertise. The Committee has adopted policies and procedures governing the following: pre-approval of audit and non-audit services; the receipt and treatment of complaints regarding accounting, internalinternal controls, or auditing matters and the confidential, anonymous submission by employees of the Company regarding questionable accounting or audit matters; and restrictions on the Company’sCompany's hiring of employees of the independent registered public accounting firm. The Committee is also responsible for reviewing conflict of interest transactions involving a director or executive officer. The report of the Audit Committee is on page 18.20.59 Meetings in 20062007Hewitt AssociatesWatson Wyatt Worldwide, Inc. ("Watson Wyatt"), an employee benefits and human capital consulting firm with worldwide operations in the Americas, Europe and Asia Pacific, has been retained by the CompanyCompensation Committee to provide compensation consulting and market data information. The report of the Compensation Committee is on page 19.21.20062007Company’sCompany's progress. The Committee did not meet in 2006.2007.65 Meetings in 20062007and& Corporate Governance Committee are set forth in its charter and include reviewing the qualifications of all Board candidates and recommending qualified candidates for membership on the Board. The Committee reviews the Board’sBoard's organization, procedures and committees and makes recommendations concerning the size and composition of the Board and its committees. The Committee makes recommendations to the Board regarding standards for determining non-management director independence and reviews the qualifications and independence of the members of the Board and its committees. The Committee reviews and evaluates the Company’sCompany's compliance with corporate governance requirements and leads and oversees the Board and its committees’committees' annual performance evaluations. Further information regarding the responsibilities performed by the Committee and the Company’sCompany's corporate governance is provided in the Committee charter and the Governance Guidelines.2006,2007, each director was paid an annual retainer of $20,000, plus $750 for each Board meeting attended. The Lead Independent Director is paid an additional annual retainer fee of $10,000. The chairs of the Compensation and Audit Committees, and the vice chair of the Executive Committee, also receive an annual retainer of $5,000. The Directors are reimbursed for board-related travel expenses, and directors who are non-Hawaii residents receive an additional $5,000 to compensate them for travel time. Members of the Compensation Committee and the Executive Committee receive $750 for each meeting attended. The fee is $1,500 per meeting for members of the Audit Committee and $2,000 per meeting for the Chairman of the Audit Committee. No fees are paid for attendance at Nominating and& Corporate Governance meetings.In April 2005, the shareholders approved The Company maintains the Bank of Hawaii Corporation Amended and Restated Director Stock Compensation Plan (“Amended ("Director Stock Plan”Plan"). The purpose of the Amended Director Stock Plan is to advance the interests of the Company by encouraging and enabling eligible non-employee members of the Board to acquire and retain throughout each member’smember's tenure as director a proprietary interest in the Company by ownership of shares of Bank of Hawaii common stock. The Amended Director Stock Plan allows for the granting of stock options, restricted stock, and restricted stock units. Under the Amended Director Stock Plan, the Board has the flexibility to set the form and terms of awards. In 2006,2007, the Company issued 483982 shares of restricted common stock (“("Restricted Shares”Shares") and an option for 2,191 common shares to each non-employee director. AllUnder the Director Stock Plan, grants of the restricted share grant willstock generally vest on the third anniversary date of the grant. The exercise price of the options was based on the closing market price on the date that the options were granted. Each option expires ten years from the date of grant and vests over a 3-year period in one-third annual increments. The Amendedgrant. No options were granted under the Director Stock Plan will terminate on April 28, 2015, unlessin 2007. The Company is presently reviewing a proposal to amend grants of restricted shares (and grants of options to purchase restricted shares) that were made under the Director Stock Plan's predecessor plan. Grants of restricted stock under the predecessor plan (including restricted stock received from options granted under the predecessor plan) are currently subject to forfeiture in the event that the director who received such a grant leaves the Board terminatesprior to the plan at an earlier time.expiration of his or her last term of service.DirectorsDirectors' Deferred Compensation Plana Directorsthe Directors' Deferred Compensation Plan, under which eacha non-employee director may elect to defer the payment of either all of his or herthe director's annual retainer and meeting fees, or all of his or herthe director's annual retainer. Distribution ofDeferred amounts under the deferred amounts will begin as ofDirectors' Deferred Compensation Plan are generally payable beginning on the first day of the first month after the participating director ceases to be a director of the Company. Distribution will be madeDeferred amounts are paid to the participant in a lump sum or in approximately equal annual installments over such period of years (not exceeding 10 years) as the directorparticipant elects at the time of deferral. Under such Plan,If a participant dies, all deferred and previously unpaid amounts will be paid in a lump sum to the participant's beneficiary on the second day of the calendar year following the year of death. A participant's deferred amounts are not credited with interest, but they are valuedadjusted for appreciation or depreciation in value based on correspondinghypothetical investments in one or more Pacific Capital Fundsfunds or in shares of Bank of Hawaii common stock, as selectedmay be directed by the participants. In January 2006,participant.Director’sDirectors' Deferred Compensation Plan was amendedare payable from its general assets, although the Company has established a rabbi trust to bringassist it into compliance with certain requirements of Section 409Ain meeting its liabilities under the plan. The assets of the Internal Revenue Code, which was enacted under the American Jobs Creation Act of 2004. In general, the requirements of Section 409A impose certain new rules for non-qualified deferred compensation plans, primarily relatingtrust are at all times subject to the timingclaims of elections and distributions.the Company's general creditors.Company’sCompany's employees and shareholders. To ensure that linkage to shareholders occurs among the fiduciaries of the Company, in December 2006, the Nominating and& Corporate Governance Committee implemented stock ownership guidelines which require each non-management director to own a minimum amount of five times his or her annual cash retainer in the Company’sCompany's stock. Directors will bewere given five years to achieveFebruary 16,December 31, 2007, ten10 of the eleven11 non-management directors had satisfied the ownership guideline.2006,2007, information on compensation earned by or awarded to each non-employee director who served on the Board of Directors during 2006.2007.
Earned
or Paid in
Cash
($) (1)
Stock
Awards
($) (2)
Option
Awards
($) (3)
Incentive Plan
Compensation
($)
Pension Value
and Non-qualified
Deferred
Compensation
Earnings
($)
Compensation
($)
($) Fees
Earned
or Paid in
Cash
($)(1) Stock
Awards
($)(2) Option
Awards
($)(3) Non-Equity
Incentive Plan
Compensation
($) Change in
Pension Value
and Non-qualified
Deferred
Compensation
Earnings
($) All Other
Compensation
($) Total
($) $ 35,750 $ 21,539 $ 15,291 0 0 0 $ 72,580 Mary G. F. Bitterman $ 58,250 $ 21,539 $ 15,291 0 0 0 $ 95,080 $ 31,250 $ 21,539 $ 15,291 0 0 0 $ 68,080 $ 41,000 $ 21,539 $ 15,291 0 0 0 $ 77,830 $ 38,500 $ 21,539 $ 15,291 0 0 0 $ 75,330 $ 41,500 $ 21,539 $ 15,291 0 0 0 $ 78,330 $ 40,000 $ 21,539 $ 8,740 0 0 0 $ 70,279 $ 38,500 $ 21,539 $ 15,291 0 0 0 $ 75,330 $ 35,750 $ 21,539 $ 15,291 0 0 0 $ 72,580 $ 38,750 $ 21,539 $ 15,291 0 0 0 $ 75,580 $ 46,000 $ 21,539 $ 15,291 0 0 0 $ 82,830 Messrs.Wo and Ms.Barbara J. Tanabe elected to defer all of their respective fees earned in 2006.(“("FAS 123R”123R") expense recognized in 20062007 for restricted stock awards.awards in 2007 and prior years. On April 28, 2006,27, 2007, the Company issued a grant of 483982 shares of restricted common stock to each director, having an aggregate fair value of $26,232$52,498 based on the stock fair market value of $54.31$53.46 per share on the date of the grant and 100% of the grant will vest on the third anniversary date. The assumptions used in the valuation of restricted stock awards isare included in Note 1 “"Share-Based Compensation”" to the Company’sfinancial statements contained in Item 8 of the Company's Annual Report on Form 10-K filed with the SEC on February 22, 2007.25, 2008. As of December 31, 2006,2007, each Director had the following number of restricted stock awards accumulated in their accounts (which excludes options exercised and held as common stock in their accounts): S. Haunani Apoliona, 2,8383,820 shares; Mary G.F.G. F. Bitterman, 2,8383,820 shares; Michael J. Chun, 2,838 shares3,820 shares; Clinton R. Churchill, 2,8383,820 shares; David A. Heenan, 2,8383,820 shares; Robert Huret, 1,8382,820 shares; Kent T. Lucien, 4831,465 shares; Martin A. Stein, 2,2383,220 shares; Donald M. Takaki, 2,8383,820 shares; Barbara J. Tanabe, 2,8383,820 shares; and Robert W. Wo, Jr., 2,8383,820 shares.20062007 for stock option awards. Each director was granted options to acquire 2,191 common shares of Company common stock on April 28, 2006, having an aggregate fair value of $26,271 based on the fair value of the options on the date of the grant using a Black-Scholes option pricing model. The exercise price of $54.31 for the option award is equal to the closing market price on the date that the options were granted. The assumptions usedawarded in the valuation of option awards is included in Note 1 “Share-Based Compensation” to the Company’s audited financial statements for the fiscal year ended December 31, 2006 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2007.prior years. As of December 31, 2006,2007, each Director had outstanding options to purchase the indicated number of shares of the Company common stock: S. Haunani Apoliona, 19,998 ;19,048; Mary G. F. Bitterman, 24,248;22,248; Michael J. Chun, 20,248;19,248; Clinton R. Churchill, 20,248;19,248; David A. Heenan, 24,248;22,248; Robert Huret, 16,248; Kent T. Lucien, 2,191; Martin A. Stein, 19,248; Donald M. Takaki, 24,248;22,248; Barbara J. Tanabe, 20,248;19,248; and Robert W. Wo, Jr., 20,248.19,248.17Committee’sCommittee's five members are independent directors, in accordance with the applicable laws, regulations, NYSE listing requirements and the Governance Guidelines. The Audit Committee operates under and annually reviews a written charter that has been adopted by the Board. Audit Committee members do not accept any consulting, advisory or other compensatory fees (except director fees) and are not affiliated with the Company or any subsidiarysubsidiaries (except as a director).committeecommittees of anotherother publicly traded company.companies.Committee’sCommittee's responsibilities include providing oversight of the quality and integrity of the Company’sCompany's regulatory and financial accounting and reporting, risk management, legal and regulatory compliance and internal and external audit functions and the preparation of this Audit Committee report. The Audit Committee has reviewed and discussed with management and the independent registered public accounting firm the Company’sCompany's audited financial statements for the fiscal year 2006.2007. The Audit Committee has also discussed with management and the independent registered public accounting firm the matters required to be discussed by Statement on Accounting Standards No. 61 (Communication with Audit Committees),as amended. These discussions include the quality, not just the acceptability, of the accounting principles applied. The Company’sCompany's independent registered public accounting firm havehas provided to the Audit Committee theirits written disclosures and letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee has discussed with the independent registered public accounting firm, that firm’sfirm's qualifications and independence. The Audit Committee has adopted Pre-Approval Procedures for Audit and Non-Audit Services (the “Pre-Approval Procedures”"Pre-Approval Procedures") that requires advance approval of all audit, audit-related, tax and other services performed by the independent registered public accounting firm. The Pre-Approval Procedures provide for the Audit Committee’sCommittee's pre-approval of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent registered public accounting firm is engaged to perform such service. The Audit Committee may delegate pre-approval authority to any one of its members who shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting.Company’sCompany's Board that the audited financial statements be included in the Company’sCompany's Annual Report on Form 10-K for the year ended December 31, 20062007 for filing with the SEC.
Mary G. F. Bitterman
Clinton R. Churchill Chairman
Robert HuretMary G.F. BittermanKent T. LucienRobert W. Wo, Jr.Martin A. SteinCompany’sCompany's executive compensation programs, and various incentive and stock programs. The Compensation Committee has reviewed and discussed the Compensation Disclosure and Analysis to be included in the Company’s 2007Company's 2008 Proxy Statement with management and, based on these discussions, recommended to the Company’sCompany's Board that the Compensation Disclosure and Analysis be included in such Proxy Statement.
Mary G. F. Bitterman
Barbara J. TanabeMartin A. SteinRobert W. Wo, Jr.19
COMPENSATION DISCUSSION AND ANALYSIS“CEO”"CEO"), is the responsibility of the Compensation Committee of the Board (the “Committee”"Committee").shareholders’shareholders' interests, link to achievement of the Company’s performance goals,Company's business plan, reinforce support for the Company’sCompany's vision and be consistent with market compensation trends.trends after taking into account the unique circumstances facing the Company in light of geographic, demographic and economic conditions in the markets served by the Company. The Committee also believes that compensation should recognize short and long-term performance and may include both cash and equity components. The composition of the components may vary from year to year based on individual, market and other factors. There are no specific formulas to determine the mix of pay elements, or the allocation between cash and non-cash compensation or among non-cash forms of pay. As described below, neither total compensation nor any element of cash and non-cash compensation is formally benchmarked against a peer group of companies. In making compensation decisions, the Committee considers individual performance, experience in the position, breadth of duties, and pay parity among positions of comparable responsibility, and may request market data.In determining executive compensation, the Committee’s objectives include ensuring the ability to attract, develop and retain qualified and talented officers; compete with other organizations; and reward individual and team contributions to achieving goals of our business plans. For 2006, our corporate goals continued to be those established in our 2004-2006 business plan and included accelerating growth in our markets, better integration of our business segments, developing our management team, improving our operating efficiency, and maintaining our culture of dependable risk and capital management, in order to achieve our governing objective of maximizing shareholder value over time.CEO’sCEO's performance against the overall corporate goals and performance.business plan. With respect to compensation decisions for the other named executive officers, the Committee considersgives significant weight to the recommendations of the CEO.Company’sCompany's performance throughout the year as to both financial and non-financial performance. In January, the Committee reviews the Company’sCompany's annual results and the longer-term performance trend compared to previously announced plans.the business plan. The Committee uses this review, together with factors as described on page 25, as the basis for the annual evaluation of the CEO. The Committee’sCommittee's evaluation is discussed with the full Board and then communicated to the CEO by the Lead Independent Director.The Based on similar factors and individual objectives, the CEO annually reviews the performance of each of the other named executive officers. The conclusions reached and recommendations based on those reviews, including any recommendations for salary adjustments, and annual bonus awards and equity components, are presented to the Committee. The Committee considers the CEO's recommendations. The CEO does not attend executive sessions of the Committee where his own compensation is being reviewed and determined by the Committee or the Board. The CEO is assisted by the director of human resources (herself not a named executive officer) in formulating recommendations for the named executive officers, other than for himself. The Committee has the discretion to accept, reject or modify anythe CEO's recommendations. The Committee has discretion to determine the amount of equity and other compensation payable to executives based on its assessment of their performance. Rather than relying on formulaic models, the Committee believes that retaining discretion to assess performance of the CEO’s recommendations.CEO and other named executive officers gives the Committee members the ability to more accurately reflect individual contributions that cannot be quantified.Company retainsRole of the Compensation Consultant (“Hewitt”), a nationally recognized human resources and compensation consulting firm retained by the Company, continued to advise the Committee on executive compensation matters during 2007. For 2007, Hewitt Associates provided the Committee with market data for executive compensation.Hewitt provides the Committee with market data and alternatives to consider when makingThe focus of Watson Wyatt's engagement is on 2008 compensation decisions and, to a lesser extent, reporting on market information with respect to bonus compensation for 2007. With input from management, Watson Wyatt identified a peer group of ten financial services organizations similar in size to the CEOCompany ranging between $7.6 billion and reviewing$15.2 billion in assets and a market capitalization of $1 billion to $3.2 billion. These financial organizations were also selected on the recommendationsbasis of their relatively low risk orientation and high levels of performance as measured by return-on-assets, return-on-equity, total shareholder return, loan reserves and nonperforming assets. The ten organizations include:CEO forS&P Banking index shown on the other named executive officers.Performance Graph included in the Company's 2007 Annual Report on Form 10-K.doesdid not however, rely on atarget the elements of its compensation peer groupprogram at any specific level or otherwise target our compensation programs at specific percentiles within a peer group. Watson Wyatt conducted an analysis using the ten financial services organizations identified above and data from three national and highly regarded surveys representing financial services companies to determine competitiveness of the Company's pay practices. They reported that the Committee's historic compensation practices generally resulted in competitive pay and:20062007 included:····· PerquisitesCompany’sCompany's annual performance review process, as well as upon promotion or other changes in job responsibility. Merit-based increases to salaries for executive officers other than the CEO are determined by the Committee based on the CEO’sCEO's assessment of individual performance.As noted above, the Committee does not apply a formula or target salaries at any particular level within a peer group. Rather, In recommending base salaries are intended to reflectthe CEO considers the needs of the Company and of the executive officer, comparability within the Company, and consistency with the Company’s salary structure,pay parity among positions of comparable responsibility and individual performance in the case of executive officers employed by the Company.performance. The Committee also considers thelooks at market survey data provided by Hewitt to verify that salaries are competitive and within market ranges.Company’sCompany's practices, the Committee increased the base salary of Mr. Ho in April 2007, and again in September 2007 to reflect Mr. Ho's increasing operational responsibilities. Messrs. Rossi and Stevens joined the Company in February 2007 and May 2007, respectively. The CEO negotiated and the Committee approved base salaries of $350,000 and $350,000, respectively. At the request of Mr. Landon, wasthe Committee has not increased in connection with his promotion to CEO insalary since 2004, and remained athe has not received any other type of award in lieu of a salary increase.same level in 2005 and 2006. Mr. Keene’s base salary increased in 2006, whileBank of Hawaii Corporation Executive Incentive Plan (the "Executive Incentive Plan"), pursuant to which the salaries of Mr. Hocklander and Mr. Thomas reflected the terms of retention agreements with them. Mr. Ho’s base salary increased in connection with the assumption of expanded responsibilities as Chief Banking Officer.Performance based variable compensationThe Company paysawards annual cash bonuses to executive officers underexecutives. The purpose of the Executive Incentive Plan approved byis to optimize the shareholdersprofitability and growth of the Bank of Hawaii through incentives for each annual period. These incentives are consistent with the Company's goals and link the personal interests of participants with those of the Company's stockholders. The Executive Incentive Plan provides participants with an incentive for excellence in 2004. Cash bonusesindividual performance and to promote teamwork among participants.subjective assessmenttarget award opportunity. A target award opportunity, expressed as a percentage of base salary, is established for each named executive officer at the beginning of the Company’s overall performance,year. Each named executive officer's target opportunity takes into account the executive’s leadershipexecutive's position, scope of responsibilities, and individual contribution to the Company’sCompany's 2007+ business plan. For 2007, the target bonus opportunity for the Chief Executive Officer was 100% of his base salary, the target opportunity for Messrs. Ho and Thomas was 80% of their base salary, and the target bonus opportunity for the each of the other named executive officers was 67.5% of base salary. The potential range of annual bonus opportunities is as follows:Mr. Landon 0 - 120% Messrs. Ho and Thomas 0 - 110% Other Named Executive Officers 0 - 85% other factors. Atdetermining the amount by which the CEO's incentive pool percentage would be adjusted to arrive at his bonus, the Committee employs a scoring system that assigns to the CEO a weighted score based on satisfaction of specified criteria established at the beginning of the year,year. The CEO receives a score, possibly ranging from 1 (lowest possible score) to 5 (highest possible score) for each of the specified criteria, and the scores are then weighted according to the specified percentages. For example, the Committee setsassigns a percentagescore of base salary5 if the Company's stock performance is in the top quartile or if Total Shareholder Return (dividends and share appreciation for the calendar year) is above 12.5%; a score of 4 if the Company's stock performance is in the second quartile or if Total Shareholder Return is above 10%; and a score of 3 if the Company's stock performance is in the third quartile or if Total Shareholder Return is above 7.5%. The Company's stock performance is measured through comparison with the banking companies identified in the Mid-Cap Bank Performance Index described below. Score Weight Product Measurement Based Stock performance as defined by the 2007 Mid-Cap Bank Performance1 or Total Shareholder Return 5 25 % 1.25 Company financial performance2 2 25 % 0.5 Customer satisfaction as measured by the Company's Customer Satisfaction Survey 5 10 % 0.5 Employee satisfaction as measured by the Company's Employee Satisfaction Survey 5 10 % 0.5 Judgment Based Community and customer relations 4 10 % 0.4 Development of the management team 5 10 % 0.5 Other significant achievements or activities accomplished 5 10 % 0.5 Score 4.15 bonus objectivescore of "2" for each participantthe financial performance criteria because earnings per share growth was 4.8%. With respect to the judgment based criteria, the Committee's evaluation is based on its subjective assessment of the CEO's performance in these areas. As noted above, the Compensation Committee assigned a score of 5 in these categories, resulting in a final weighted score of 4.15 to the CEO.For 2006, those percentages wereThe Mid-Cap Bank Performance Index is subject to change on a going forward basis if stock price information is no longer available on any public exchange, as followsa result of mergers and acquisitions. The Mid-Cap Bank Performance Index consists of: Associated Banc-Corp, Bank of Hawaii Corp, BB&T Corp., Cathay General Bancorp, Central Pacific Financial Corp., Chittenden Corp., City National Corp./Beverly Hills CA, The Colonial BancGroup Inc., Comerica Inc., Commerce Bancorp Inc./NJ, Commerce Bancshares, Cullen/Frost Bankers Inc., East West Bancorp Inc., Fifth Third Bancorp, First Bancorp/Puerto Rico, First Horizon National Corp., First Midwest Bancorp Inc./IL, FirstMerit Corp., Fulton Financial Corp., Glacier Bancorp Inc., Greater Bay Bancorp, Huntington Bancshares Inc./OH, Keycorp, M&T Bank Corp., Marshall & Ilsley Corp., National City Corp., Old National Bancorp, PNC Financial Services Group Inc., Popular Inc., Prosperity Bancshares Inc., Provident Bankshares, The South Financial Group Inc., Sterling Financial Corp./WA, Susquehanna Bancshares Inc., SVB Financial Group, Synovus Financial Corp., TCF Financial Corp., Trustmark Corp., UCBH Holdings Inc., Umpqua Holdings Corp., Unionbancal Corp., United Bankshares Inc., Valley National Bancorp, Westamerica Bancorporation, Whitney Holding Corp., Wilmington Trust Corp., Wintrust Financial Corp. and Zions Bancorporation. The Mid-Cap Bank Performance Index was modified by the Committee in March 2007 due to mergers and acquisitions as follows: First Republic was replaced by Prosperity Bancshares Inc. Compass Bancshares Inc. was replaced by Comerica, and Mercantile Bankshares was replaced by Provident Bankshares.eachthe CEO or named executive officers for 2007.named executive officers:· CEO—100% of base salary· Chief Banking OfficerCompany's brand, and Chief Operating Officer—80% of base salary· Chief Financial Officerdiscipline in managing risk and Vice Chairman, Human Services—67.5% of base salaryevaluatesbelieves that Total Shareholder Return and earnings per share correlate most closely with the CEO’s annual performancefinancial objectives of the 2007+ business plan and that the more subjective elements can be assessed through survey data. The Committee determined the final bonus based on a scoring system and assigns a weighted score to each criterion. For 2006, the criteria evaluated and the weights assigned to each were:WeightTotal Shareholder Return (compared to an index)40%Community and Customer Relations15%Development of the Management Team15%Customer Satisfaction10%Employee Satisfaction10%Other Achievements10%Based on its assessment of Company and individual performance, the Committee awards the CEO a bonus. The bonus amount reflects the Committee’s subjective determination of an appropriate award andthat takes into consideration the results of the scoring system, into consideration but which is not based ondetermined by reference to a specific formula driven off the numerical score. In determining the CEO’s bonus for 2006, the Committee recognized that the Companygenerally performed well during the year, but as a result of a tax law change, net income was less than budget. The Committee also noted that the Company achieveddid not achieve all of the 20062007 goals established in the Company’s 2004-2006Company's 2007+ business plan. Based on this evaluation, the Committee awarded the CEO a bonus of $600,000 (approximately 80% of base salary), down from $650,000 (approximately 87% of base salary), down from $750,000 (100% in 2006. The CEO requested that his bonus be limited to $600,000, consistent with limitations on bonuses for other officers and employees throughout the Company.base salary) in 2005.Based onthe other named executive officers is determined by a similar factors andprocess that does not include formal scoring but takes into account individual business unit objectives, as well as the individual's performance, scope of responsibilities and market data. The CEO evaluatesmakes an initial recommendation to the performanceCommittee as to the final bonuses of each of the other named executive officers. The CEO then recommends possible bonuses toofficers for the Committee for itsCommittee's consideration. The Committee has the discretion to accept, reject, or modify the CEO’sCEO's recommendations. TheFor 2007 compensation determinations, the Committee recognized the strong performance of the business units managed by the Chief Banking Officer and Chief Operating Officer, respectively, as well as the contributions and leadership provided by the Chief Financial Officer and the Vice Chairman, Human ServicesChief Administrative Officer during 2006.2007. The Committee accepted and approved the CEO’sCEO's bonus recommendations as(as reflected in the Summary Compensation Table.To qualify bonus awards as performance-based compensation exempt fromTable) for the $1 million compensation deduction limitation described below, a contingent bonus awardother named executive officers.each Named Executive Officer is limited to a percentage of an incentive pool determined atencourage decision-making with the beginninglong-term interests of the fiscal year. The incentive pool is expressed as a percentageCompany in mind, to retain and reward management and to closely align the interests of stockholders and executives through the achievement of the Company’s net income before taxes for the fiscal year, and the total of the contingent awards for executive officers may not exceed 100 percent of the incentive pool. The incentive pool percentages do not constitute “targets,” but instead are the upper limit on final bonus amounts. Actual bonus opportunities and payments are significantly less than the amount established under the incentive pool.Company's strategic business plan.Equity Based CompensationCommittee’sCommittee's strategy of balancing short and long-term incentives in structuring executive officer compensation and aligning the interest of the executives with those of shareholders. In consideration of the grants of options and restricted stock made in late 2005 (or earlier for the CEO), the Committee made no awards to named executive officers in 2006.Company’sCompany's equity compensation plans, the Committee may grant stock options, restricted stock awards or restricted stock units. However, it currently expects to award shares of restricted stock or restricted stock units to the extent, if any, it utilizes equity compensation as part of the overall compensation program.will vest based on achievement of one or more performance goals, length of service or both. The discussion under "Grants of Plan-Based Awards" and the footnotes to the "Outstanding Equity Awards at Fiscal Year-End" table disclose the performance criteria that have been used for recent equity awards made to the named executive officers. These criteria include achievement of top quartile total shareholder return based on the Mid-Cap Bank Performance Index, Total Shareholder Return, Earnings Per Share growth, efficiency ratio, NIACC (as more fully defined in the Company's Annual Report on Form 10-K filed with the SEC on February 25, 2008), risk adjusted return on capital (RAROC), return on equity (ROE), direct expense, operating income growth, operating leverage, and credit loss management.The amount of the equity grant awards is determined by position and job responsibilities, performance, and market survey data. Additional information regarding stock option and equity awards issued, and the criteria for performance based vesting, is provided in "Grants of Plan-Based Awards" and in the tables “Outstanding"Outstanding Equity Awards at Fiscal Year-End”Year-End" and “Option"Option Exercises and Stock Vested.”"full timefull-time employees. This is consistent with our belief in offering employees basic health, welfare and retirement benefits that are competitive in our markets. All ofThe retirement programs assist our employees in planning for their retirement income needs. Benefits under our qualified health, welfare and retirement plans are not directly tied to specific Company performance. The Committee regularly reviews the value of benefits from the retirement plans. certain service requirements are eligible to participate in the Company sponsoredCompany-sponsored Retirement Savings Plan, and to receive certain contributions from the Company.a tax-qualified defined contribution pension plan.value, and the total value ofvalue. The most significant perquisites provided by or paid foras defined by the Company was less than $10,000 for each namedSEC, relate to moving and relocation expenses in connection with the hiring of new executive officer during 2006.officers.net after-taxthe value of vested stock options, stock units from qualified plans, and other stock held by the executive. The guidelines provide that executives comply with the stock ownership levels within three years of the date that they are hired or promoted to such position within the Company. At December 31, 2006,2007, each named executive officer satisfied the stock ownership guidelines.guidelines that pertain to them.ExecutiveNonqualified Deferred Compensation ProgramPlansDuring December 2005, we The Committee has adopted the Bank of Hawaii Corporation Executive Deferred Compensation Program effective January 1, 2006. The Program(the "Deferred Compensation Program"), a program that offers senior management the ability to defer up to 80% of base salary and/or 100% of bonus amounts. Amounts deferred will be distributed at the time and form elected by the participant. For 2006, Mr. Thomas was the only named executive officer who elected to defer amounts under the Executive Incentive Plan in order to allow executives to defer, along with the receipt of such bonus amounts, the income tax liability on such amounts (including any appreciation in value as a result of the deemed investment of such amounts) until payment. This program allows participants to manage their cash flow and estate planning needs. The Company also maintains the Bank of Hawaii Retirement Savings Excess Benefit Plan (the "Excess Benefit Plan"), a non-qualified supplemental retirement benefits plan that compensates participants for benefits that would otherwise be payable under the Company's Retirement Savings Plan but for certain Internal Revenue Code limitations. The Committee believes that this plan is important to ensure equitability in retirement funding amounts of which are set forth inbetween those that fall below and above the “NonqualifiedIRC limitations. See the discussion under "Nonqualified Deferred Compensation Table”. The text accompanying that table also containsCompensation" for additional information regarding the plan.Deferred Compensation Program and the Excess Benefit Plan. Benefits under the Executive Deferred Compensation Program and the Retirement Savings Excess Benefit Plan are not directly tied to specific Company performance. The value of these programs is viewed independently by the Committee from the other pay elements. Gains from longer-term incentives are not included in the determination of nonqualified deferred compensation benefits.Change-In-ControlEmployment AgreementsCompany established"three times base salary and bonus" payment under the Key Executive Severance Plan in 1983. The plan relateshas been replaced with two components under the Retention Plan: a "two times base salary and bonus" payment, and an additional "one times base salary and bonus" payment which is payable only if the executive complies with the 12-month non-competition restrictions specified under the Retention Plan.possible change-in-controlreduction of the Company"3x base salary and provides benefitsbonus" payment and other severance payments if an executive's "normal retirement date," defined as the executive's 65th birthday, were to occur within the three-year period following a change-in-control occurs. change in control.would be eligible toother than Mr. Landon participates in the Retention Plan. Mr. Landon has terminated his participation in the Key Executive Severance Plan and has not yet determined whether he will participate in the plan if employed atRetention Plan.timeCompany's 2004 Stock and Incentive Plan provide for full acceleration of vesting of restricted stock and restricted stock units upon the occurrence of a change-in-control occurs.Neal Hocklander, Vice Chairman, Human Services, fulfilled the performance and service retention objectiveschange in control of his retention arrangement with the Company. Mr. Hocklander remained employedWe believe that it is generally appropriate to fully vest equity and incentive-based awards to employees in a change in control transaction because such a transaction may often cut short or reduce the employee's ability to realize value with respect to such awards. Similarly, the Executive Incentive Plan provides that bonus awards will, upon a change in control of the Company, throughbe prorated as though the end of 2006, after which he resigned fromapplicable performance period ended on the Company after serving withchange in control date and will be calculated as an amount equal to two times a participant's bonus allocation for the Company since August 2000.original performance period.recently announced his intention to resignresigned from the Company during the first quarter of 2007 to accept employment with another company, after serving with the Company since March 2001. In December 2007, the Company determined that David Thomas, the Company's Chief Operating Officer, had completed his assigned duties with the Bank of Hawaii and, in accordance with the terms of his Retention Agreement with the Bank of Hawaii dated December 16, 2005, the Company advanced the date of Mr. Thomas' separation from service to December 31, 2007.amounts payable upon a change-in-controlthe Company's change in control and other termination events and retention arrangements, including the individual arrangements with Messrs. Hocklander,Keene and Thomas, and Keene, see “Change-In-Control,"Change In Control, Termination and Other Arrangements” of this report.Arrangements."We believe that we have structured our compensation program to comply with Under Section 162(m) of the Internal Revenue Code, Sections 162(m) and, to the extent now known, 409A. Under Section 162(m), the Company may not deduct compensation in excess of $1 million paid to the corporation’scorporation's chief executive officer and four other most highly paid executive officers if certain requirements are met. We periodically review the potential consequencesofficers. "Performance-based compensation" (as defined for purposes of Section 162(m) and may structure) is not taken into account for purposes of calculating the performance-based portion of our$1 million compensation limit. Generally, the Committee seeks to maximize executive compensation to comply with certain exemptions in Section 162(m).deductions for federal income tax purposes. However, wethe Committee may authorize compensation payments that doare not comply with the exemptions in Section 162(m)fully deductible when we believeit believes that such payments are appropriate and in the best interestssome compensation arrangements may be found not to satisfy technical requirements of the stockholders,Section 162(m) after taking into consideration changing business conditions or the officer’s performance.they have been established. In 2007, Messrs. Landon and Thomas is a relatively recent provision of the Internal Revenue Code and the implementing regulations have not yet been finalized.is a relatively new federal tax provision. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A, and such benefits do not comply with Section 409A, then the benefits are taxable inexecutive would be subject to adverse tax treatment, including accelerated income recognition (in the first year theythat benefits are notno longer subject to a substantial risk of forfeiture.forfeiture) and a 20% penalty tax pursuant to Section 409A. The Internal Revenue Service has extended the transition relief period for amending plans to comply with Section 409A through December 31, 2008. The Company is continuing to evaluate the impact of Section 409A on various of its compensation and benefits plans, programs and arrangements and may modify certain of them as a result of that evaluation.23The following tables show, for the year ended December 31, 2006, information on compensation the Company paid its “named executive officers.”Name and Principal Position Year Salary
($)(1) Bonus
($)(2) Stock
Awards
($)(3) Option
Awards
($)(4) Non-Equity
Incentive Plan
Compensation
($)(5) Change in Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($)(6) All Other
Compensation
($)(7) Total
($)Allan R. Landon
Chairman of the Board, Chief Executive Officer and President 2007
2006 750,001
750,001 —
— 1,198,019
779,075 —
— 600,000
650,000 —
— 81,554
95,683 2,629,574
2,274,759Peter S. Ho
Vice Chairman, Chief Banking Officer 2007
2006 451,539
398,038 —
— 682,457
278,744 —
— 365,000
325,000 (861
160) 65,641
50,232 1,563,776
1,052,174Mark A. Rossi
Vice Chairman, Chief Administrative Officer, General Counsel and Secretary 2007 310,961 100,000 44,873 — 220,000 — 279,442 955,276 Daniel C. Stevens
Vice Chairman, Chief Financial Officer 2007 212,692 75,000 42,865 — 100,000 — 191,743 622,300 David W. Thomas
Vice Chairman, Chief Operating Officer 2007
2006 450,000
447,692 —
—
1,087,200 —
— 316,000
350,000 —
— 1,982,541
55,094 2,748,541
1,939,986Richard C. Keene
Former Vice Chairman and Former Chief Financial Officer 2007
2006 68,077
294,539 —
— (40,711
169,604) —
— —
200,000 —
— 409,112
39,363 436,478
703,506
Awards
Awards
Incentive Plan
Compensation
Value and
Non-qualified
Deferred
Compensation
Earnings
Compensation
Hawaii
Retirement
Savings Plan
401(k)
Matching
Contribution
($) (1)
Hawaii Cash
Value
Sharing
Contribution
($) (2)
Hawaii
Retirement
Savings Plan
Non-Cash
Value Sharing
Contribution
($) (3)
Hawaii
Excess Plan
Value
Sharing
Contribution
($) (4)
Bank of
Hawaii
Retirement
Savings Plan
Company
Fixed
Contribution
($) (5)
Hawaii
Excess Plan
Company
Fixed
Contribution
($) (6)
Other
Compensa-
tion
($) (7)
Total All
Other
Compensa-
tion
($)Bank of
Hawaii
Retirement
Savings Plan
401(k)
Matching
Contribution
($)(1)Bank of
Hawaii
Value
Sharing
Contribution
($)(2)Bank of
Hawaii
Excess Plan
Value
Sharing
Contribution
($)(3)Bank of
Hawaii
Retirement
Savings Plan
Company
Fixed
Contribution
($)(4)Bank of
Hawaii
Excess Plan
Company
Fixed
Contribution
($)(5)Term Life
Insurance
($)(6)Relocation
Expenses
($)(7)Club Member
Expenses
($)(8)Other
Compensation
($)(9)Total All
Other
Compensation
($)Allan R. Landon 2007
2006—
—6,139
6,80232,062
39,5786,750
6,60032,250
38,4004,353
4,303—
——
——
—81,554
95,683Peter S. Ho 2007
20069,000
8,8006,139
6,80215,050
14,0086,750
6,60016,546
13,591501
431—
—5,220
—6,435
—65,641
50,232Mark A. Rossi 2007
2006—
——
——
——
——
—1,290
—239,560
—33,160
—5,432
—279,442
—Daniel C. Stevens 2007
2006—
——
——
——
——
—607
—157,718
—30,000
—3,418
—191,743
—David W. Thomas 2007
20069,000
8,8006,139
6,80211,187
15,7736,750
6,60012,300
15,3032,064
1,816—
—5,130
—1,929,971
—1,982,541
55,094Richard C. Keene 2007
20069,000
8,800—
6,802—
8,489—
6,600—
8,236112
436—
——
—400,000
—409,112
39,363individual’s 401(k)individual's salary deferral contributions to the Retirement Savings Plan, a qualified defined contribution pension plan, subject to the Internal Revenue Code prescribed limit (which in 2007 and 2006 was limited to $225,000 and $220,000, respectively, of eligible compensation), and is available to all eligible employees. The Company makes a matching contribution of $1.25 for each dollar of employee contribution up to 2% of eligible compensation, and a $0.50 matching contribution for every dollar of employee contribution above 2% and up to 5% of eligible compensation.Valueprofit-sharing contribution, or "Value Sharing Contribution," to the Retirement Savings Plan (columns 2 3 and 43 above) equaled 2.73% and 3.09% of eligible compensation.compensation, respectively. This column (2) represents the cash value portion, which was $1,064 in 2007 and $1,165 in 2006, of the contribution based upon a formula using 80% of the Social Security wage maximum and is available to all eligible employees.(3)For 2006, the total Value Sharing Contribution equaled 3.09% of eligible compensation. The Social Security wage maximum was $97,500 in 2007 and $94,200 in 2006. This column representsalso includes the non-cash portion paid into the Retirement Savings Plan of the value sharing contribution, which was $5,075 in 2007 and $5,637 in 2006. These payments are based on amounts in excess of the Social Security related limit set forth in (2) above,previously described, but less than the Internal Revenue Code prescribed limit (which in 2007 and 2006 was limited to $225,000 and $220,000 of eligible compensation)compensation, respectively) and is available to all eligible employees.(4)compensation.compensation, respectively. This column represents the non-cash portion paid into the Excess Plan of the value sharing contribution in excess of the Internal Revenue Code prescribed limit and is available to all eligible employees.(5)limitlimits, and is available to all eligible employees.(6)compensation.compensation, respectively. This column represents the Company Fixed Contribution in excess of the Internal Revenue Code prescribed limitlimits that is paid into the Excess Plan, and is available to all eligible employees.(7)withfor Messrs. Rossi and Thomas, and home security for Mr. Ho. Mr. Keene received a lump sum separation payment of $400,000 following his resignation from the exception ofCompany. Mr. Hocklander whoThomas also received twoa lump sum retention payment of $1,022,800 upon forfeiture of his restricted stock in 2007 and $900,000 that is payable in 36 monthly payments of $803,500 and $404,625, for a total of $1,208,125 earned in 2006 (seecommencing on July 1, 2008. See section “Change-In-Control,"Change In Control, Termination and Other Arrangements”Arrangements" of this report for further description of these retention payments).payments.
NONQUALIFIED DEFERRED COMPENSATION
Contributions In
Last Fiscal Year
($)(1)
Contributions
In Last Fiscal
Year
($) (2)
Aggregate
Earnings in
Last Fiscal
Year
($)
Withdrawals or
Distributions in Last
Fiscal Year
($)
Aggregate
Balance at Last
Fiscal Year-End
($)Name Executive
Contributions In
Last Fiscal Year
($)(1) Registrant
Contributions
In Last Fiscal Year
($)(2) Aggregate
Earnings in
Last Fiscal
Year
($) Aggregate
Withdrawals or
Distributions in Last
Fiscal Year
($) Aggregate
Balance at Last
Fiscal Year-End
($)Allan R. Landon — 13,236 — 256,320 Peter S. Ho — 2,645 — 82,578 Mark A. Rossi — — — — Daniel C. Stevens — — — — David W. Thomas 165,000 10,084 — 340,305 Richard C. Keene — 867 48,988 — 2006,2007, Mr. Thomas deferred $47,596$49,500 in base salary. PlanProgram and their annual rate of return for the calendar year ended December 31, 2006,2007, as reported by the administrator of the Executive Deferred Compensation Plan.Program.
Return
ReturnName of Fund Rate of
Return Name of Fund Rate of
ReturnVanguard Prime Money Market Fund 5.14% Vanguard 500 Index Fund 5.39% Vanguard Short-Term Federal Fund 7.43% Vanguard Growth Equity Fund 22.47% Vanguard Target Retirement Income Fund 8.17% Vanguard Mid-Cap Index Fund 6.02% Vanguard Target Retirement 2005 Fund 8.12% Vanguard Windsor Fund -3.30% Vanguard Target Retirement 2010 Fund 7.70% Vanguard International Growth 15.98% Vanguard Target Retirement 2015 Fund 7.55% Pacific Capital Growth & Income Fund 1.15% Vanguard Target Retirement 2020 Fund 7.52% Pacific Capital Growth Stock Fund 7.30% Vanguard Target Retirement 2025 Fund 7.59% Pacific Capital HG Core Fixed Income Fund 6.34% Vanguard Target Retirement 2030 Fund 7.49% Pacific Capital HG Short Inter. Fixed Income Fund 5.84% Vanguard Target Retirement 2035 Fund 7.49% Pacific Capital International Stock Fund 17.34% Vanguard Target Retirement 2040 Fund 7.48% Pacific Capital Mid-Cap Stock Fund 0.91% Vanguard Target Retirement 2045 Fund 7.47% Pacific Capital New Asia Growth Fund 40.69% Vanguard Target Retirement 2050 Fund 7.49% Pacific Capital Small Cap Fund -4.30% Vanguard Wellington Fund 8.34% Pacific Capital Value Fund -0.54% 20062007 which were paid in 20072008 and accordingly are not included in the Aggregate Balance at Last Fiscal Year-End. See columns 43 and 65 of the “All"All Other Compensation Table”Table" located in footnote 67 of the “Summary"Summary Compensation Table”Table" for additional details. Messrs. Stevens and Rossi, who joined the Company in 2007 and were not yet eligible to participate in the Retirement Savings Plan, were not eligible to participate in the Excess Benefit Plan in 2007.All OtherAll OtherStockOptionAwards;Awards;ExerciseGrantEstimated Future PayoutsEstimated PayoutsNumber ofNumber ofor BaseDate FairUnder Non-Equity Under EquityShares of SecuritiesPrice ofValue ofIncentive Plan AwardsIncentive Plan AwardsStock or UnderlyingOptionStock andGrantThresholdTargetMaximumThresholdTarget MaximumUnitsOptionsAwardsOptionNameDate($)($)(1)($)(#)(#)(#)(#)(#)($/Sh)AwardsAllan R. Landon—750,001————————Richard C. Keene—198,814————————Neal C. Hocklander—182,640————————David W. Thomas—358,154————————Peter S. Ho—318,431———————— All Other
Stock
Awards;
Number of
Shares of
Stock or
Units
(#) All Other
Option
Awards;
Number of
Securities
Underlying
Options
(#) Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards Estimated Payouts
Under Equity
Incentive Plan Awards Exercise
or Base
Price of
Option
Awards
($/Sh) Grant
Date Fair
Value of
Stock and
Option
AwardsName Grant
Date Threshold
($) Target
($)(1) Maximum
($) Threshold
(#) Target
(#) Maximum
(#)Allan R. Landon — — — — — 49,320 — — — — 2,488,687 Peter S. Ho — — — — — 30,000 — — — — 1,513,800 Mark A. Rossi — — — — — — — 4,000 — — 213,680 Daniel C. Stevens — — — — — — — 4,000 — — 218,760 David W. Thomas — — — — — — — — — — — Richard C. Keene — — — — — — — — — — — “Compensation"Compensation Discussion and Analysis—Performance based variable compensationThere were no new stock grants or options awarded to any In 2007, the Company granted restricted shares of the namedCompany's common stock to Messrs. Landon, Ho, Rossi and Stevens.officers during 2006.is eligible to become vested in up to 1,000 shares (25% of his total grant) in any one calendar year. The executive generally becomes vested as to 600 shares on the last day of February in each of 2008, 2009, 2010, 2011, 2012 and 2013 and as to 400 shares on October 31, 2013, provided that on each vesting date the recipient remains an employee of the Company. The executive will become vested in an additional 400 shares on each such vesting date (other than October 31, 2013) provided that the Company meets at least one of the following two objectives with respect to the calendar year ending immediately before such vesting date: (a) the Company's TSR either exceeds 10% or the Company's performance falls within the top quartile of the bank index approved by the Compensation Committee, or (b) the Company's EPS increases by 8% or more over the EPS for the prior calendar year.“Outstanding"Outstanding Equity Awards at Fiscal Year-End”Year-End" and “Option"Option Exercises and Stock Vested”Vested" tables for grants reported in prior years, some of which may have restricted stock awards subject to
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Securities
Underlying
Unexercised
Options
Exercisable
(#)(1)
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Exercise
Price
($)
Expiration
Date
Shares or
Units of
Stock That
Have Not
Vested
(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2)
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
(#)
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
($)(2) Option Awards Stock Awards Name Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(1) Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2) Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
(#) Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
($)(2)Allan R. Landon(3) 110,638
61,600
70,000
—
—
— —
—
—
—
—
— —
—
—
—
—
— 18.80
27.01
29.92
—
—
— 3/22/11
3/22/12
2/20/13
—
—
— —
—
—
10,000
8,750
— —
—
—
511,400
447,475
— —
—
—
—
—
49,320 —
—
—
—
—
2,522,225Peter S. Ho(4) 2,916
54,919
— —
—
— —
—
— 27.01
50.72
— 3/22/12
12/16/15
— —
9,375
— —
479,438
— —
10,567
30,000 —
540,396
1,534,200Mark A. Rossi(5) 0 — — — — 4,000 204,560 — — Daniel C. Stevens(6) 0 — — — — 4,000 204,560 — — David W. Thomas 0 — — — — — — — — Richard C. Keene 0 — — — — — — — — Hawaii’sHawaii's common stock on December 31, 20062007 was $53.95$51.14 per share. The fair market value of the stock on the date of the December 2003 grant was $41.42. Of the 75,000 restricted shares, 35,000 were performance-based vesting, and 40,000 were service-based with 10,000 shares vesting each year beginning on March 31, 2005 (10,000 service-based shares will vestvested on March 31, 2007, and the remaining 10,000 will vest on March 31, 2008). 17,500 performance-based shares vested in 2006 resulting in allAll of the performance-based shares forrestricted stock from this grant having vested at the end of 2006. The 2005 performance criteria for vesting were: (a) the achievement of a target efficiency ratio (non-interest expenses as a percentage of total revenue) of 55% or better would result in a 20% (of the initial total grant) vesting; and (b) the achievement of top quartile total shareholder return (dividends and share appreciation for the calendar year) based on the Bloomberg Bank Index or the achievement of budgeted net income after capital charge (“NIACC”) of $88 million would result in a 30% (of the initial total grant) vesting. For 2005, the Company achieved all the foregoing criteria, and accordingly 50% of the shares, or 17,500 shares, vested in 2006.award has vested. In May 2004, Mr. Landon received 75,000 restricted shares in recognition of his appointment as Chief Operating Officer. The fair market value of the stock on the date of the May 2004 grant was $41.70. Of the 75,000 restricted shares, 40,000 were performance-based vesting, and 35,000 werewill vestvested on March 31, 2007 and the remaining 8,750 will vest on March 31, 2008). The 2005 performance-based vesting criteria were the same as those described in the December 2003 performance-based vesting criteria above, and accordingly 50% of the shares, or 20,000 shares, vested in 2006, resulting in allAll of the performance-based sharesrestricted stock from this award has vested. See "Grants of Plan-Based Awards" above for this grant being vested at the end of 2006.(4)In April 2003, Mr. Keene received a grant of 7,500 restricted shares. The shares were service-based vesting over 10 years (10% annually) with performance accelerators. The two accelerators were (a) achievement of an efficiency ratio target, which for 2006 was 53% or better, and would trigger a 15% vesting, and (b) achievement of top quartile shareholder return, which would trigger a 25% vesting, with a maximum vesting in any one year of 25%. For 2005, the Company’s efficiency ratio was 53%, and therefore 15%discussion of the shares, or 1,125 shares, vested in 2006. At the end of 2006, 2,625 shares remained unvested. For 2006, the Company again achieved the efficiency ratio target of 53%, and accordingly 15%, or 1,125, shares vested in 2007. In December 2005, Mr. Keene received arestricted share grant of 7,500 restricted shares. Of these shares, 5,500 were service-based, 1,750 of which vested on December 16, 2006, 2,750 will vest on December 16, 2007, and 1,000 shares will vest on December 16, 2008. Of the 2,000 performance based vesting shares, the 2006 vesting criteria were based on two vesting components: (a) operating income growth, which equaled 2.5 multiplied by the operating income growth percent (for 2006, 3.131% growth x 2.5 = 7.83% vesting); plus (b) credit loss management, which equaled 0.125 x (100 basis points—basis point credit loss) (for 2006, credit management vesting was 0.8311 x 0.125 = 10.39% vesting). In accordance with the vesting schedule, 18.22% (7.83% + 10.39%) of the 2,000 shares, or 364 shares, vested in 2007, based on achieving 2006 performance criteria. Upon Mr. Keene’s resignation from the Company on March 14, 2007, all unvested restricted stock will be forfeited and the right to exercise any unexercised options will expire in three months from termination date with respect to the options granted in 2002 and 2003, and in twelve months with respect to the options granted in 2005.(5)In December 2005, 40,000 restricted shares were awardedmade to Mr. ThomasLandon in recognition of his appointment as Chief Operating Officer. The shares were performance-based with a two-year vesting period upon meeting certain budget and performance objectives. If the performance-based shares are not earned by 2008, they are forfeited. For 2006, the performance objectives for the vesting of 20,000 shares were (a) achievement of one or more of the following with respect to the retail segment of the Company: NIACC exceeding $73.7 million; risk adjusted return on capital (“RAROC”) exceeding 48.6%; direct expenses being $168.1 million or less; return on equity (“ROE”) being 37% or more; or the efficiency ratio being 50% or less; and (b) meeting transition performance objectives, such as identifying and developing a successor, functioning as a pro-active and positive member of the executive team, effective management of his business group and other performance objectives. The NIACC, RAROC, direct expense and ROE targets were achieved and Mr. Thomas satisfied his transition performance objectives, resulting in 20,000 shares vesting in 2007.(6)vestvested on December 16, 2007, 5,625 shares vest on December 16, 2008, and 3,750 shares vest on December 16, 2009. 11,250 were performance-based vesting. For 2006, the vesting criteria forOf these 11,250 shares, 3,750 performance-basedvested in 2007. The remaining 9,375 shares werewill vest or be forfeited based on performance. See "Grants of Plan-Based Awards" above for a discussion of the same two vesting components described in the December 2005 restricted share grant made to Mr. Ho in 2007.Mr. Keene. In accordance with the vesting schedule, 18.22%a discussion of the 3,750 shares, or 683 shares, vestedrestricted share grant made to Mr. Rossi in 2007, based on achieving 2006 performance criteria.27“Outstanding"Outstanding Equity Awards At Fiscal Year-End.”"
OPTION EXERCISES AND STOCK VESTED
Acquired on
Exercise
(#)
Realized on Exercise
($)
Acquired on
Vesting
(#)
Realized on
Vesting
($) OPTION AWARDS STOCK AWARDS Name Number of Shares
Acquired on
Exercise
(#) Value
Realized on Exercise
($) Number of Shares
Acquired on
Vesting
(#) Value
Realized on
Vesting
($)Allan R. Landon(1) 0 0 18,750 $ 986,813 Peter S. Ho(2) 0 0 4,558 $ 223,146 Mark A. Rossi 0 0 0 0 Daniel C. Stevens 0 0 0 0 David W. Thomas(3) 50,950 $ 1,578,551 20,000 $ 1,034,400 Richard C. Keene(4) 63,316 $ 844,551 1,489 $ 77,551 20062007 were comprised of 10,000 service-based shares and 17,500 performance-based shares from the December 2003 grant, and 8,750 service-based shares and 20,000 performance-based shares from the May 2004 grant. The fair market value of the Company’sCompany's stock was $53.31$52.63 on the vesting date of March 31, 2006.25, 200624, 2007 when the fair market value of the Company's stock was $52,20; and 1,750364 service-based shares from the December 2005 grant, which vested on December 16, 2006. TheFebruary 28, 2007 when the fair market value of the Company’sCompany's stock was $51.75 on January 25, 2006 and $51.78 on December 16, 2006. In January 2007, 1,125 performance-based shares vested based on achievement of the Company’s 2006 performance. The 1,125 shares are not included in this table and based on the stock price of $52.20 on January 24, 2007 had a total value of $58,725. In February 2007, 364 performance-based shares vested based on achievement of the Company’s 2006 performance. The 364 shares are not included in this table and based on the stock price of $51.72 on February 28, 2007 had a total value of $18,826.(3) Of these options exercised, 77,000 options were granted on March 22, 2001, having an exercise price of $18.80 and an average stock price of $51.05 at time of exercise for a value realized on exercise of $2,482,967; 49,000 options were granted on March 22, 2002, having an exercise price of $27.01, and an average stock price of $51.54 at the time of exercise for a value realized on exercise of $1,201,970; and 43,000 options were granted on February 20, 2003, having an exercise price of $29.92, and an average stock price of $51.76 at the time of exercise for a value realized on exercise of $939,120. The restricted stock awards were comprised of 15,000 restricted stock units which vested on March 31, 2006. The fair market value of the Company’s stock was $53.31 on March 31, 2006 resulting in a cash payout of $799,650. For further details, see the discussion of Mr. Hocklander’s retention arrangement in the section “Change-In-Control, Termination and Other Arrangements” of this report.(4) In February 2007, 20,000 performance-based shares vested based on achievement of Mr. Thomas’ and the Company’s 2006 performance. The shares are not included in this table and based on the stock price of $51.72 on February 28, 2007 had a total value of $1,034,400.(5) Shares acquired during 2006 were comprised of 2,000 service-based shares. The fair market value of the Company’s stock was $51.78 on the vesting date of December 16, 2006. In February 2007, 683 performance-based shares vested based on achievement of the Company’s 2006 performance. The 683 shares are not included in this table and, based on the stock price of $51.72 on February 28, 2007 had a total value of $35,325.Information.InformationCompany’sCompany's compensation plans (including individual compensation arrangements) under which securities are authorized for issuance as of December 31, 2006:2007.
EQUITY COMPENSATION PLAN INFORMATIONPlan Category Number of Securities
to be issued
upon exercise of
outstanding
options, warrants
and rights
A Weighted-average
exercise price of
outstanding
options, warrants and
rights
b Number of securities
remaining available
for future issuance under
equity compensation plans
(excluding securities reflected in
column(a))
cEquity compensation plans approved by security holders 1,678,299 $ 31.55 1,180,974
to be issued
upon exercise of
outstanding
options, warrants
and rights
a
exercise price of
outstanding
options, warrants and
rights
b
remaining available
for future issuance under
equity compensation plans
(excluding securities reflected in
column(a))
cEmployees’Employees' Retirement Plan of Bank of Hawaii (the “Retirement Plan”"Retirement Plan") provides retirement benefits for eligible employees based on the employee’semployee's years of service and average annual salary during the 60 consecutive months resulting in the highest average (excluding overtime, incentive plan payouts, and discretionary bonuses). The Retirement Plan was frozen as of December 31, 1995, except that for the five-year period commencing January 1, 1996, benefits for certain eligible participants were increased in proportion to the increase in the participant’sparticipant's average annual salary. As of December 31, 2000, the benefits under the Retirement Plan were completely frozen and not subject to increase for any additional years of service or increase in average annual salary. Peter S. Ho is the only named executive officer who is a participant in the Retirement Plan. A summary of his benefits is listed below:
of Credited Service
(#)
Accumulated Benefits
($)
($) Plan Name Number of Years
of Credited Service
(#) Present Value of
Accumulated Benefits
($) Payments During Last Fiscal Year
($)
Plan of Bank of Hawaii Employees' Retirement Plan of Bank of Hawaii 2 $ 3,115 0
CHANGE IN CONTROL, TERMINATION AND OTHER ARRANGEMENTSChange-In-Control, Termination and Other ArrangementsHawaii’s Key Executive SeveranceHawaii's Change in Control Retention Plan (the “Severance Plan”"Retention Plan") provides participants,a participant with benefits in the event that the participant's employment is terminated by the Company without cause or by the participant for "good reason" within 24 months following a change in control of the Company, with severance benefits under circumstances and in amounts set forth in the Severance Plan and in individual severance agreements with each participant.Company. All of the currently employed named executive officers participateexcept Mr. Landon are participants in the SeveranceRetention Plan. Two levels of benefits are payable to participants in the Retention Plan, with executives holding the position of Vice Chairperson or above being eligible for the higher tier of benefits. Each of the severance agreements with these named executive officers provides thatother than Mr. Landon is eligible for the higher tier of benefits (described in the table below). In consideration of the benefits payable under the Retention Plan, participants are, for 12 months following termination of employment, subject to non-disclosure, non-competition (generally with respect to any other financial institution doing business in Hawaii), non-solicitation of business and employees, and non-disparagement restrictions.“change"change in control”control" will be deemed to have occurred if if:total numbercombined voting power of votingthe Company's securities that are entitled to vote for the election of directors;persons who were directorssale of substantially all of its assets occurs (excluding a transaction in which beneficial owners of the Company before a cash tenderimmediately prior to the exchange offer, merger or other business combination, saleassets, or contested electionDirectors as of April 30, 2004 cease to constitute a majority of the Board, including as a result of Directorsactual or threatened election contests or through consents by or on behalf of a party of other than the Board (but disregarding directors whose nomination or election was approved by at least a majority of the directors as of April 30, 2004 or other directors approved by them).any successorthe participant's employment agreement. Base Salary
and Bonus Payment
(1) Executive Incentive Plan Payment
(2) Welfare Benefits
(3) Outplacement
(4) Relocation
Payment/ Gross-Up
(5) Acceleration
of Restricted
Stock
(6) Non-
competition
Payment
(7) Excise Tax
Gross Up
(8) Total Allan R. Landon(9) $ $ $ $ $ $ $ $ $ Peter S. Ho 1,800,000 800,000 36,101 20,000 150,000 757,026 900,000 1,492,337 5,955,464 Mark A. Rossi 1,172,500 433,125 23,998 20,000 150,000 100,022 586,250 668,844 3,154,739 Daniel C. Stevens 1,172,500 236,250 36,108 20,000 150,000 100,022 586,250 612,074 2,913,204 David W. Thomas 1,620,000 720,000 12,059 20,000 150,000 0 810,000 0 3,332,059 Richard C. Keene 0 0 0 0 0 0 0 0 0 Company. For further detailssum of (a) two times the participant's highest annual base salary in the three fiscal years preceding termination of employment (the "Highest Base Salary"), and qualifications, see(b) two times the Company’s Key Executive Severance Plan as well as the formproduct of the individual severance agreement which were filed withparticipant's annual bonus target percentage under the Company’s Annual ReportExecutive Incentive Plan in the year of termination and the participant's Highest Base Salary. Amounts would be payable in a lump sum on Form 10-K for fiscal year 2005, as Exhibits 10.1 and 10.3, respectively.Severance benefits are payable if (a) there occursthe first day of the seventh month following termination.and (b) such person voluntarily terminates employment witha participant who would otherwise be entitled to a final award for a performance period ending after the Company or is involuntarily terminated without cause within two yearsdate of athe change in control.control will be entitled to an amount equal to two times the participant's annual bonus target percentage under the plan (calculated based on the participant's annualized salary), pro-rated to the number of months elapsed in the applicable performance period. The table below represents an estimatefinal award would be paid within ten days after the end of the possible payouts should (a)shortened performance period.(b)welfare benefits, Retention Plan participants who held the position of the preceding sentence occurVice Chairperson or above as of December 31, 2006.
bonus and
profit sharing
(1)
Incentive
Plan
Payout
(2)
Benefits
(3)
Benefits
(4)
(5)
of Restricted
Stock
(6)
Gross Up(1) The paymenthis or her first date of a lump sumparticipation in the plan would be entitled to an amount equal to three yearstimes the cost of compensation, consisting of salary, bonuses,annual COBRA premiums for the medical, dental and certain profit sharing compensation, calculatedvision plan coverage that was provided to the participant immediately prior to termination (or coverage provided to employees generally if the participant was not covered by applying a multiplier of threethe Company's health plans prior to each of the highest salary, bonus, and profit sharing compensation paid in any of the preceding three years. These amounts shalltermination). Amounts would be payable in a lump sum within ninety dayson the first day of the triggering event.(2) The Executive Incentiveseventh month following termination.provides that upon dissolution, liquidation,participants who held the position of Vice Chairperson or changebelow as of his or her first date of participation in control of the Company, the executive willplan would be entitled to a lump sum payment equalreimbursement for outplacement expenses not to two timesexceed $20,000 (adjusted for inflation after 2007).annual target payout for the applicable year. These amounts shall be payable in a lump sum within ninety daysposition of the triggering event.(3) Estimated costVice Chairperson or above as of the continuation of all welfare benefits, at no cost to the executive, for a period of three years following the termination of employment (or until his or her normal retirementfirst date if earlier), such as medical, disability, and group life insurance.(4) Fringe benefits shall be continued, or equivalent benefits provided, at no cost,of participation in the plan, the Retention Plan provides for a period of three years, such as club memberships and tax planning. This represents estimated costs based on benefits for 2006.(5) This is an estimated average amount. The actual benefits could range from zero to over $250,000, depending on the benefits required. Some of the relocation benefits could include reimbursement of reasonable moving expenses incurred by the participant within 24 months following a qualifyingselling costs, shippingtransaction expenses shall not exceed $100,000 and the maximum reimbursement for all other reasonable moving costs, temporary living expenses airfare, home finding trip expenses, and certain tax gross ups.shall not exceed $50,000. A change in control also will cause the lapse of restrictions on restricted stock issued underPlan.Benefits will be reducedPlan, a change in control would accelerate the lapsing of restrictions applicable to any restricted stock granted under such plans.therethat payments to the participant in connection with a change in control are fewerdeemed to be excess parachute payments subject to the excise tax under Internal Revenue Code Section 4999 (or any similar excise tax imposed by state or local law). However, if the total benefits payable to the participant upon a change in control (disregarding any tax gross-up payment) would be less than thirty-six (36) months remaining from110% of the termination date until such person’s normal retirement date. There are no requirementsmaximum amount that the departing officer execute a non-compete, non-solicitation, non-disparagement, confidentiality or similar typeparticipant could receive without becoming subject to the above-described excise taxes (the "Maximum Amount"), then the total benefits payable to the participant shall instead be reduced to an amount that would not exceed the Maximum Amount, and no tax gross-up payment will be made to the participant.agreement in favor of the Company in order to receive his or her benefits.If a named executive dies, Company paid life insurance equal to his or her annual base salary would be payable, all restricted stock would immediately vest and he or she would remain eligibleDecember 31, 2007, elected to participate in the Executive Incentive Program atRetention Plan.discretion of the Board. If termination is for cause, no severance benefits are payable.Messrs. Hocklander and Thomas are partiesCommittee has from time to time entered into retention agreements with certain of its executives as an incentive to the Company. Material componentsexecutives to stay with the Company for a specified period of time.retention arrangement with Mr. Hocklander are as follows: (a) the right to receive payments equal to twenty-four (24) months of his salary in a lump sum if his departure occurs on or after June 30, 2006, plus an additional $103,500 for lost benefits, (b) in October 2003, Mr. Hocklander was awarded 20,000 restricted stock units (with the right to receive dividend equivalents), 50% of which vested on April 30, 2004, and the remaining 50% vested on March 31, 2005, (c) in April 2004, Mr. Hocklander received 25,000 restricted stock units (with the right to receive dividend equivalents), of which 5,000 shares vested on September 30, 2004, 5,000 shares vested on March 31, 2005, and 15,000 vested on March 31, 2006, (d) also inApril 2004, Mr. Hocklander was granted the right to receive an additional cash payment equivalent of up to 15,000 stock units (without regard to dividends) depending on his length of his stay beyond March 31, 2006, and (e) health benefits for two years. The vesting of the restricted stock above was conditioned both upon service completion as well as achieving performance criteria based on his position, responsibilities, performance and leadership impact. At the end of 2006, Mr. Hocklander fulfilled his requirements under the retention arrangement, and in February 2007, was paid a cash payment totaling $803,500, representing (a) above, and a supplemental cash payment of $404,625 representing 7,500 shares at $53.95, the closing price on December 29, 2006 as set forth in (d) above. The estimated value of Mr. Hocklander’s health benefits is $12,000 based on current rates. Also in 2006, Mr. Hocklander received an additional payment of $799,650 for the 15,000 restricted share unit value vesting on March 31, 2006, representing (c) above. Mr. Hocklander agreed to a non-compete for a period of twenty-four (24) months following termination, a non-solicitation for a period of thirty-six (36) months, and to not disparage the Company and also signed a release of claims in favor of the Company.In December 2005, the Company modified a retention agreement with Mr. Thomas (the “Retention Agreement”) in connection with his promotion to Chief Operating Officer of the Company. Pursuant to the Retention Agreement, the Company will employ Mr. Thomas as its Chief Operating Officer untilthrough February 29, 2008, (the “Separation Date”), although the Company may changeretained the Separation Dateright, under the terms of the agreement, to anyadvance or delay the date before February 29, 2008, or may extendof Mr. Thomas' separation from service. In December 2007, the Separation Date to any date within three months after February 29, 2008. IfCompany determined that Mr. Thomas performshad completed his dutiesresponsibilities for service to the Company’s satisfaction through February 29, 2008Company and, in accordance with the terms of the Retention Agreement, he willdetermined that December 31, 2007 would be his last day of employment. As provided in the Retention Agreement, Mr. Thomas became entitled, upon signing a general release of claims against the Company, to receive a payment equal to twenty-four (24)24 months of his base monthly salary as of February 29, 2008 (basedDecember 31, 2007 (which, based on Mr. Thomas’ annualThomas' monthly base salary as of December 31, 2006 of $450,000, such payments2007, would total $900,000). The payment will be made to Mr. Thomas, payable in thirty-six (36)36 monthly payments commencing on the first day of the seventh month after the Separation Date.July 1, 2008. In addition, Mr. Thomas will be entitled to certain continued health insurance coverage with the same percentage of shared premiums as prior to the Separation Datehis separation date for a period of thirty-six (36)36 months after his separation date, and will not be required to reimburse the Company for certain club membership fees. Performance-basedMr. Thomas will also receive a final bonus under the Executive Incentive Plan for the 2007 performance year. In addition, Mr. Thomas held, at the time of his separation, 20,000 restricted shares grantedthat were scheduled to vest on February 28, 2008, subject to the achievement of certain performance objectives and Mr. Thomas are further describedremaining employed by the Company through February 28, 2008. Mr. Thomas forfeited the 20,000 shares as a result of the Company's advancement of his separation date, and the Company accordingly, in recognition of his performance, agreed to pay Mr. Thomas a cash amount of $1,022,800 (based on the section “Restrictedper share closing price of the Company's shares on the New York Stock Awards and Vesting Criteria” in the “Compensation Discussion and Analysis” section of this report. Under theExchange on December 31, 2007). In exchange for benefits payable under his Retention Agreement, Mr. Thomas agreed to a non-compete restrictions for a period of twenty-four (24)24 months following termination aand non-solicitation restrictions for a period of thirty-six (36)36 months, and to not disparage the Company, and also agreed to sign a release of claims in favor of the Company.Keene’sKeene's intention to resign from the Company during the first quarter of 2007. OnIn order to retain Mr. Keene's services during a transition period preceding the hiring of a new Chief Financial Officer, on February 21, 2007, the Company and Mr. Keene entered into an agreement pursuant to which Mr. Keene would continue to receive his salary, bonus and other executive benefits through his departure date and receive a lump sum separation payment of $400,000, and in exchange$400,000. As part of his agreement with the Company, Mr. Keene would executeexecuted a release of claims against the Company, agreeagreed to a non-compete for a period of twenty-four (24) months following termination and a non-solicitation for a period of thirty-six (36) months, and to not disparage the Company. Mr. Keene’s last dayKeene completed his employment on March 14, 2007.was scheduled to be March 14, 2007.during a specified transition period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSCertain Relationships and Related TransactionsOn an annual basis in response to the annual Directors’ and Officers’ Questionnaire, each director and executive officer submits to the Corporate Secretary a description of any current or proposed related person transactions. The Company has in place various ethics and business conduct policies and procedures to monitor and approve related person transactions, including procedures related to any loans the Company makes to executive officers and directors, anddirectors. The Company also conducts regularethics training for its officers and directors. In accordance with applicable NYSE listing standards, each related party transaction is reviewed and evaluated by an appropriate group, generally the Audit Committee, to determine whether a particular relationship serves the best interest of the Company and its stockholders and whether the relationship should be continued. The Company also has adopted a Code of Business Conduct and Ethics ("Code") for all directors, officers and employees to address, among other topics, possible conflicts of interest, corporate opportunities, compliance responsibilities, and reporting and accountability. The Code stresses personal accountability. Directors, officers, or employees who become aware of conflicts of interest or are concerned that a conflict might develop are required to disclose the matter promptly.Company’sapplicable NYSE listing standards and the Code, any material transactions or relationships involving a director or executive officer that could reasonably be expected to give rise to a conflict of Conduct and Ethics and applicable listingstandards,interest must be approved by the Audit Committee monitors and reviews issuesa list of those approvals must be submitted semi-annually to the Board of Directors. The Audit Committee acts on approvals based on the facts and circumstances of each case. In addition to self-reporting, information about potential conflicts of interests involving directorsinterest is obtained as part of the annual questionnaire process. In response to the annual Directors' and Officers' Questionnaire, each director and executive officers, includingofficer submits to the Corporate Secretary a description of any current or proposed related person transactions. These descriptions are presented to the Audit Committee for review and approval or ratification.related person transactions.credit by subsidiary banks to insiders, such as executive officers, directors and entities in which these individuals have specified control positions.2006,2007, the Company and its banking and investment subsidiaries engaged in transactions in the ordinary course of business with one or more of the Company’sCompany's directors and executive officers, members of their immediate families, corporations and organizations of which one or more of them was a beneficial owner of 10% or more of a class of equity securities, certain of their associates and affiliates, and certain trusts and estates of which one or more of them was a trustee or beneficiary. All loans to such transactionspersons were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, that prevailedas those prevailing at the time for comparable transactionsloans with other persons not related to the lender, and did not involve more than the normal risk of collectibilitycollectability or present other unfavorable features.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCESection 16(a) Beneficial Ownership Reporting Compliance2006,2007, with the exception of the following reports which were not timelyMary Sellers, Donna Tanoue, and Shelley Thompson, each of whom filed due to administrative errors. On January 31, 2006, Ms. Mary E. Sellers reported she withheld 604 shares of Bank of Hawaii common stock in payment of her tax liability in connection with the January 25, 2006 vesting of restricted stock. On January 31, 2006, Mr. Brian T. Stewart reported he withheld 151 shares of Bank of Hawaii common stock in payment of his tax liability in connection with the January 25, 2006 vesting of restricted stock. On January 31, 2006, Mr. Richard C. Keene reported he withheld 453 shares of Bank of Hawaii common stock in payment of his tax liability in connection with the January 25, 2006 vesting of restricted stock. Additionally, on May 3, 2006, Form 4 reports were not timely filedone late report for S. Haunani Apoliona, Mary G. F. Bitterman, Michael J. Chun, Clinton R. Churchill, David A. Heenan, Robert Huret, Kent T. Lucien, Martin A. Stein, Donald M. Takaki, Barbara J. Tanabe, Robert W. Wo, Jr. in connection with the 483 restricted shares of Bank of Hawaii stock and 2,191 options awarded to each non-management director on April 28, 2006 under the Amended and Restated Director Stock Compensation Plan.one transaction.2:3: RATIFICATION OF SELECTION OF AN
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMCompany’sCompany's independent registered public accounting firm for 2007.2008. The Board recommends that the shareholders ratify this selection. Ernst & Young LLP has been the Company’sCompany's independent registered public accounting firm since itsCommittee and the Board.Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”"FOR" THE FOREGOING PROPOSAL20062007 and 2005.2006. 2007 2006 $ 1,225,500 $ 1,191,100 $ 149,000 $ 117,500 $ 37,800 $ 17,900 $ 28,085 $ 2,500 $ 1,440,385 $ 1,329,000 20062007 and 20052006 represent fees for professional services rendered for the audit of the Company’sCompany's annual consolidated financial statements, statutory and subsidiary audits, reports on internal controls and the reviews of the Company’sCompany's financial statements included in the quarterly reports on Form 10-Q and out-of-pocket expenses.20062007 and 20052006 include fees for benefit plan audits and other attestation reports.20062007 and 20052006 relate primarily to expatriate tax services and other tax advisory services.20062007 and 20052006 includes fees billed for copyrighted and other professional on-line publication services provided by an affiliate of Ernst & Young LLP. The All Other Fees category for 2007 includes fees related to the review of certain corporate policies.Company’sCompany's Annual Report on Form 10-K, including the related financial statements and schedules filed with the SEC, is available without charge to any shareholder who requests a copy in writing. Any exhibit to Form 10-K is also available upon written request at a reasonable charge for copying and mailing. Written requests should be made to the Corporate Secretary at 130 Merchant Street, Honolulu, Hawaii 96813.
OFBANK OF HAWAII CORPORATION
Admission Ticket
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You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on April 27, 2007.25, 2008.
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• Log on to the Internet and go towww.computershare.com/expressvote·www.investorvote.com/boh
• Follow the steps outlined on the secured website.
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• Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There isNO CHARGEto you for the call.
• Follow the instructions provided by the recorded message.
ý · Follow the instructions provided by the recorded message.For Against Abstain
1.
To approve the Amendment to the Company's Certificate of Incorporation to Provide for Annual Meeting Proxy Card
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.-------------------------------------------------------------------------------------------------------------------------------------------------------A Election of All Directors — The Board of Directors recommends a vote FOR all the nominees listed.
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oFor Withhold For Withhold For Withhold 1. Nominees:ForWithholdForWithholdForWithhold+01 - 02—Mary G. F. Bittermano02 - o 03—Michael J. Chun o o 04—Clinton R. Churchill o o 05—David A. Heenan o o 06—Robert Huret o o 07—Allan R. Landon o o 08—Kent T. Lucien o o 09—Martin A. Stein o03 - o 10—Donald M. Takaki o o 11—Barbara J. Tanabe o04 - o 12—Robert W. Wo, Jr. oFor Withhold For Withhold For Withhold
01—Michael J. Chun (Class I)
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02—Robert Huret (Class I)
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03—Kent T. Lucien (Class I)
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o04—Donald M. Takaki (Class I) o For Against Abstain B3. Other Matters — The Board of Directors recommends a vote FOR Proposal 2.ForAgainstAbstain2. Ratification of Selection of An Independent Registered Public Accounting Firm Ernst(Ernst & Young.ooo C Other Matters1. Consent to Electronic Delivery: By marking this box, I consent to access future Annual Reports and Proxy Statements of Bank of Hawaii Corporation electronically over the Internet. I understand that unless I request otherwise or revoke my consent, Bank of Hawaii Corporation will notify me when any such communications are available and how to access them. I understand that costs associated with the use of the Internet will be my responsibility. To revoke my consent, I can contact Bank of Hawaii Corporation's transfer agent, Computershare Investor Services, at 1-888-660-5443.Change of Address — Please print new address below.D Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign BelowPlease sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.Date (mm/dd/yyyy) — Please print date below.Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box.
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o 20072008 Annual Meeting Admission Ticket2007
2008 Annual Meeting of
Bank of Hawaii Corporation Shareholders
April 27, 2007,25, 2008, 8:30 a.m.
111 S. King Street, 6th floor
Honolulu, Hawaii
Upon arrival, please present this admission ticket
and photo identification at the registration desk.
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — Bank of Hawaii Corporation20072008 Annual Meeting of Shareholders
111 S. King Street, 6th floor, Honolulu, Hawaii
Proxy Solicited by Board of Directors for Annual Meeting — Meeting—April 27, 200725, 2008S. Haunani Apoliona, Clinton R. Churchill,Mark A. Rossi and David A. Heenan,Cynthia G. Wyrick, or anyeither of them, each with thefull power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of StockholdersShareholders of Bank of Hawaii Corporation to be held on April 27, 200725, 2008 at 8:30 a.m. or at any postponement or adjournment thereof.You may viewImportant Notice Regarding the Availability of Proxy Materials for the Annual Shareholder Meeting to be Held April 25, 2008:Corporation’s Proxy Statement andCorporation 2007 Annual Report to Stockholders onShareholders for the Internetyear ended December 31, 2007 are available at www.boh.com.www.boh.com/proxymaterials.Date (mm/dd/yyyy)—Please print date below. Signature 1—Please keep signature within the box. Signature 2—Please keep signature within the box.
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To be held April 25, 2008
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
PROPOSAL 1: AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO PROVIDE FOR ANNUAL ELECTION OF ALL DIRECTORS
PROPOSAL 2: ELECTION OF DIRECTORS BOARD OF DIRECTORS
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES.
BENEFICIAL OWNERSHIP
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
CORPORATE GOVERNANCE
BOARD COMMITTEES AND MEETINGS
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION TABLE
AUDIT COMMITTEE REPORT
COMPENSATION COMMITTEE REPORT
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS
NONQUALIFIED DEFERRED COMPENSATION
GRANTS OF PLAN-BASED AWARDS
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION EXERCISES AND STOCK VESTED
EQUITY COMPENSATION PLAN INFORMATION
PENSION BENEFITS
CHANGE IN CONTROL, TERMINATION AND OTHER ARRANGEMENTS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
PROPOSAL 3: RATIFICATION OF SELECTION OF AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOREGOING PROPOSAL
OTHER BUSINESS
PROPOSED AMENDMENTS TO THE CERTIFICATE OF INCORPORATION OF BANK OF HAWAII CORPORATION