-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZ17l36mL0fv8Sn2PQXvCPRfD1jSW8fyn2xElMkt2H0phpJGQdPNszgLnc2xemai tVbigjTVN2MEfstz8uPw3A== 0000898430-98-000204.txt : 19980123 0000898430-98-000204.hdr.sgml : 19980123 ACCESSION NUMBER: 0000898430-98-000204 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980122 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN ELECTRIC INDUSTRIES INC CENTRAL INDEX KEY: 0000354707 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 990208097 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-44737 FILM NUMBER: 98511243 BUSINESS ADDRESS: STREET 1: 900 RICHARDS ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085435662 MAIL ADDRESS: STREET 1: 900 RICHARDS STREET CITY: HONOLULU STATE: HI ZIP: 96813 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1998 REGISTRATION NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- HAWAIIAN ELECTRIC INDUSTRIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) HAWAII 99-0208097 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
900 RICHARDS STREET, HONOLULU, HAWAII 96813 (808) 543-5662 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) -------------- ROBERT F. MOUGEOT 900 RICHARDS STREET, HONOLULU, HAWAII 96813 (808) 543-7750 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) -------------- COPY TO: DAVID J. REBER, ESQ. GOODSILL ANDERSON QUINN & STIFEL P.O. BOX 3196 HONOLULU, HAWAII 96801 -------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [_] -------------- CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- PROPOSED PROPOSED AMOUNT MAXIMUM MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE - ------------------------------------------------------------------------------------------------------ Common Stock (without par value)......................... 2,000,000 Shares(1)(2) $39 1/32(3) $78,062,500(3) $23,029(2) - ------------------------------------------------------------------------------------------------------ Common Stock Rights............. (4) (4) (4) (4) - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------
(1) This Registration Statement also covers an indeterminate number of shares as may become issuable due to adjustments for changes resulting from stock dividends, stock splits and similar changes. (2) Pursuant to Rule 429 under the Securities Act of 1933, this Registration Statement also relates to 596,857 shares of Common Stock of the Registrant registered pursuant to Registration Statement No. 33-56561. A registration fee of $6,303 relating to said 596,857 shares was paid at the time of the filing of Registration No. 33-56561. The registration fee paid herewith relates only to the 2,000,000 additional shares of Common Stock registered pursuant hereto. (3) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(h) based upon the average of the high and low prices reported in the consolidated reporting system for the New York Stock Exchange for January 20, 1998. (4) Common Stock Rights are initially carried and traded with the Common Stock of the Registrant. Value attributable to such rights, if any, is reflected in the market price of the Common Stock. Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus constituting part of this Registration Statement also relates to 596,857 shares of Common Stock of the Registrant registered pursuant to the Securities Act of 1933 in Registration Statement No. 33-56561. -------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED JANUARY 22, 1998 PROSPECTUS [LOGO OF HAWAIIAN ELECTRIC INDUSTRIES] HAWAIIAN ELECTRIC INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN ---------- 2,596,857 SHARES OF COMMON STOCK (WITHOUT PAR VALUE) ---------- Hawaiian Electric Industries, Inc. (the "Company") is offering a convenient method of purchasing additional shares of the Company's Common Stock pursuant to the Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock Purchase Plan (the "Plan") with dividends paid on the Company's common stock ("Common Stock"), with dividends paid on the preferred stock ("Preferred Stock") of its electric utility subsidiaries, and with optional cash payments. Any person or entity, whether or not a holder of Common Stock or Preferred Stock, is eligible to join the Plan, subject to applicable laws and regulations and the requirements of the Plan. The Company's electric utility subsidiaries are Hawaiian Electric Company, Inc. and its subsidiaries Maui Electric Company, Limited and Hawaii Electric Light Company, Inc. PARTICIPANTS IN THE PLAN MAY: . Reinvest all or a portion of cash dividends on Common Stock or Preferred Stock registered in their names or in their Plan accounts. . Purchase Common Stock with an initial cash payment of at least $250. . Make additional optional purchases of Common Stock of at least $25 up to a maximum of $120,000 per calendar year, including any initial purchase. . Receive, upon written request, certificates for whole shares of Common Stock credited to their Plan accounts. . Deposit certificates representing Common Stock into the Plan for safekeeping. . Sell shares of Common Stock credited to their Plan accounts through the Plan. Shares of Common Stock will, at the option of the Company, be newly issued shares purchased from the Company or shares purchased on the open market. Purchases on the open market will be effected through an independent agent appointed by the Company. The Common Stock is listed on the New York Stock Exchange and Pacific Exchange. The Company is in the process of withdrawing the listing of its Common Stock from the Pacific Exchange. The closing price of the Common Stock on January 16, 1998 on the New York Stock Exchange was $39. The purchase price of newly issued shares of Common Stock purchased under the Plan will be the average of the high and low sales prices for Common Stock on the composite tape for stocks listed on the New York Stock Exchange on the business day prior to the purchase. The purchase price of Common Stock purchased on the open market will be the weighted average price per share (adjusted for brokerage fees and commissions, any service charges and applicable taxes) of the aggregate number of shares purchased during the applicable investment period. Plan participants bear the cost of brokerage fees and commissions, any related service charges and applicable taxes relating to shares of Common Stock purchased or sold on the open market, and the Company currently charges participants who reinvest Common Stock or Preferred Stock dividends a fee of $0.50 per quarter (subject to change with prior notice) to defray in part the administrative costs of the Plan incurred by the Company. The Company reserves the right to charge fees to participants to recover up to the actual costs of the Plan. (See Question 10.) To the extent required by applicable law in certain jurisdictions, shares of Common Stock offered under the Plan to persons not presently record holders of Common Stock may be offered only through a registered broker/dealer in such jurisdictions. This Prospectus relates to 596,857 shares of Common Stock registered under the Plan and unissued as of December 12, 1997, and to an additional 2,000,000 shares of the Company's authorized but unissued Common Stock, and describes the Plan as amended to date. Please retain it for future reference. ---------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------- The date of this Prospectus is February , 1998. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-3 (herein, together with all amendments and exhibits, collectively referred to as the "Registration Statement") with respect to the securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement, which may be inspected without charge at the principal office of the Commission in Washington, D.C. and copies of all or parts of which may be obtained from the Commission upon payment of the prescribed fees. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements, and other information with the Commission. Such reports, proxy statements and other information may be inspected at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following Regional Offices of the Commission: Midwest Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and the Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can also be obtained from the Commission at prescribed rates. Written requests for such material should be addressed to the Public Reference Section, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. If available, reports, proxy and information statements and other information regarding registrants that file electronically with the Commission, including those of the Company, may also be accessed through the Commission's electronic gathering, analysis and retrieval system ("EDGAR") via electronic means, including the Commission's Web Site on the Internet (http://www.sec.gov). Such reports, proxy statements and other information can also be inspected and copied at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Exchange, 301 Pine Street, San Francisco, California 94104, on which Exchanges the Company's Common Stock is listed. The Company is in the process of withdrawing the listing of its Common Stock from the Pacific Exchange. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission (File No. 1-8503) under the Exchange Act are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 1996; (2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997; (3) The Company's Current Reports on Form 8-K dated January 3, 1997, January 27, 1997, February 4, 1997, February 26, 1997, March 10, 1997, March 27, 1997, May 26, 1997, May 30, 1997, October 16, 1997 and December 6, 1997; (4) The description of the Common Stock of the Company contained in the Registration Statement for such Common Stock filed under Section 12 of the Exchange Act, and in past and future amendments thereto and in those portions of periodic reports filed under the Exchange Act for the purpose of updating such description, as such description was most recently updated in the Company's Current Report on Form 8-K dated March 30, 1994 and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997; (5) The description of the rights to purchase shares of the Company's Series A Junior Participating Preferred Stock contained in the Company's Registration Statement on Form 8-A filed with the Commission on November 5, 1997; and (6) All reports and other documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all Common Stock offered hereby has been sold or which deregisters all securities then remaining unsold. The documents incorporated herein by reference are sometimes hereinafter called the "Incorporated Documents." Any statement contained herein or in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement in this Prospectus or in any subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this Prospectus. 2 The Company will provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, upon the written or oral request of any such person, a copy of any or all of the Incorporated Documents, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests for such copies should be directed to Shareholder Services Division, Hawaiian Electric Industries, Inc., P.O. Box 730, Honolulu, Hawaii 96808-0730, telephone: (808) 532-5841. 3 THE COMPANY Hawaiian Electric Industries, Inc. ("HEI" or the "Company") is a holding company with subsidiaries engaged in the electric utility, savings bank, freight transportation, real estate development and other businesses, primarily in the State of Hawaii, and in the pursuit of independent power projects in Asia and the Pacific. HEI was incorporated under the laws of the State of Hawaii in July 1981. As a result of a 1983 corporate reorganization, HEI became the parent of Hawaiian Electric Company, Inc. ("HECO"), which had been incorporated under the laws of the Kingdom of Hawaii in 1891, and the common stockholders of HECO became the stockholders of HEI. HEI's executive offices are located at 900 Richards Street, Honolulu, Hawaii 96813, and its telephone number is (808) 543-5662. HECO and its subsidiaries, Maui Electric Company, Limited ("MECO") and Hawaii Electric Light Company, Inc. ("HELCO"), are regulated operating electric public utilities providing the only electric public utility service on the islands of Oahu, Maui, Hawaii, Lanai and Molokai, on which islands reside approximately 95 percent of the population of the State. The Company's other activities are carried out by its other direct and indirect subsidiaries. American Savings Bank, F.S.B. ("ASB"), acquired in 1988, was the third largest financial institution based on deposits of $2.2 billion, at June 30, 1997. Effective December 6, 1997, ASB acquired certain of Bank of America, FSB ("BoA") assets (including Hawaii-based loans and cash) and assumed certain BoA liabilities (primarily Hawaii deposits). The total purchase price amounted to approximately $1.7 billion. Hawaiian Tug & Barge Corp., acquired in 1986, provides ship assist and charter towing services and owns Young Brothers, Limited, a regulated interisland cargo carrier of waterborne freight among the Hawaiian Islands. Malama Pacific Corp., formed in 1985, and its subsidiaries develop and invest in real estate either directly or through joint ventures and currently have no plans to invest in new projects. HEI Investment Corp. was formed in 1984 to make long-term, passive, financial investments and currently plans no new investments. HEI Power Corp. was formed in 1995 to pursue independent power projects in Asia and the Pacific. HEI is a legal entity separate and distinct from its various subsidiaries. As a holding company with no significant operations of its own, the principal sources of its funds are dividends or other distributions from its operating subsidiaries, borrowings and sales of equity. The ability of certain of the Company's subsidiaries to pay dividends or make other distributions to the Company is subject to contractual and regulatory restrictions, including the provisions of an agreement with the Hawaii Public Utilities Commission and the capital distribution regulations of the Office of Thrift Supervision, as well as restrictions and limitations set forth in debt instruments, preferred stock resolutions and guarantees. DESCRIPTION OF THE PLAN The following is a summary in question and answer form of the principal provisions of the Plan. This summary does not purport to be complete nor to modify the Plan, and is qualified in its entirety by reference to the provisions of the Plan. In case of any conflict, the provisions of the Plan will govern. PURPOSE OF THE PLAN 1. What is the purpose of the Plan? The purpose of the Plan is to provide holders of record of Common Stock and/or Preferred Stock, and any other individual of legal age and any entity ("Non-holder"), with a convenient method of buying Common Stock using their cash dividends and/or making optional cash purchases. CERTAIN FEATURES OF THE PLAN 2. What are some of the important features of the Plan? --A participant may elect to have cash dividends on all or a portion of the participant's shares of Common Stock or Preferred Stock automatically reinvested. (See Question 9.) 4 --A participant may purchase Common Stock each month with optional cash payments of not less than $25 per payment and not more than an aggregate of $120,000 per calendar year. (See Questions 18 and 19.) --Any individual of legal age or entity may join the Plan by making a minimum initial cash investment of $250 (maximum of $120,000). (See Questions 6 and 7.) --A participant may have the Administrator sell all or any of his or her Plan shares, subject to certain charges. (See Questions 10 and 32-36.) --Full investment of funds is possible under the Plan (subject to minimum and maximum purchase requirements) because both full and fractional shares will be credited to the participant's Plan account. (See Question 14.) --A participant may deposit any or all the participant's shares of Common Stock with the Administrator for safekeeping and will receive credit to the participant's Plan account for such shares. (See Question 23.) --No interest is paid on reinvested dividends or optional cash payments received by the Plan. (See Question 15.) --Certain participants will receive periodic statements of account. (See Questions 20 and 21.) ADMINISTRATION OF THE PLAN 3. Who administers the Plan? The administrator of the Plan (the "Administrator") keeps records, sends periodic statements to participants and performs other clerical and administrative duties relating to the Plan. The Shareholder Services Division of the Company presently serves as the Administrator. The Company believes that the Shareholder Services Division's position as Administrator, as compared to that of a registered broker-dealer or federally insured banking institution, poses no additional material risks to participants. The Company believes this because the Shareholder Services Division's duties are limited to clerical and administrative tasks such as keeping records and sending periodic statements, because the Company has an errors and omissions policy which covers the Shareholder Services Division, and because the Company has established an escrow with a bank to hold optional cash payments pending investment pursuant to the Plan, thereby reducing the risk to participants. (See Question 18.) 4. Who should I contact with questions concerning the Plan and its administration? For all communications about the Plan, please contact: HAWAIIAN ELECTRIC INDUSTRIES, INC. ATTENTION: DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN P.O. BOX 730 HONOLULU, HI 96808-0730 TELEPHONE: (808) 532-5841 FACSIMILE: (808) 532-5868 5. Who holds the shares credited to participants' Plan accounts? Shares of Common Stock purchased under the Plan are registered in the name of an independent trustee (the "Trustee"). Pacific Century Trust, a division of Bank of Hawaii, currently serves as Trustee under the Plan. Should it become necessary or desirable to replace Pacific Century Trust as Trustee, the Company may appoint a successor Trustee. 5 PARTICIPATION IN THE PLAN 6. Who is eligible to participate? Any person or entity, whether or not a holder of Common Stock or Preferred Stock, is eligible to join the Plan, provided that (i) such person or entity fulfills the prerequisites for participation described under Question 7, and (ii) participation would not violate securities or other laws of the state, territory or country where the participant resides that are applicable to the Company, the Plan or the participant. A beneficial owner of Common Stock and/or Preferred Stock whose shares are registered in the name of another (e.g., a broker or bank nominee), if the owner would like such shares to participate in the Plan, must first either have the shares transferred into such beneficial owner's name or, in the case of Common Stock only, to the Trustee for safekeeping. The Company reserves the right to restrict participation in the Plan if it believes that such participation may be contrary to the general intent of the Plan or in violation of applicable law. A participant must maintain at least one whole share in the Plan to maintain a Plan account. 7. How do I enroll? Current participants will automatically be participants in the Plan as amended to date, and need do nothing to continue their participation. After receiving a copy of this Prospectus, eligible applicants may join the Plan by completing and signing a "Shareholder Authorization Form" (for holders of Common Stock or Preferred Stock) or a "Non-holder Enrollment Form" (for Non-holders). Holders of Common Stock or Preferred Stock may elect in the Form to have dividends reinvested in whole or in part, to make an initial cash investment or to make optional cash investments only. If a participant signs a Shareholder Authorization Form, dividends on all shares of Common Stock and Preferred Stock registered in the participant's name will be reinvested under the Plan, unless the participant elects to receive dividends in whole or in part on the Form. If such a holder does not select an option, all dividends on Common Stock and Preferred Stock in such holder's name, and on Common Stock held under the Plan for the holder, will be reinvested in shares of Common Stock pursuant to the Plan. The execution of a Non-holder Enrollment Form will result in the reinvestment of all dividends held under the Plan for the participant, unless the participant submits a Shareholder Authorization Form and selects a different investment option in that Form. Non-holders must make an initial cash investment of not less than $250 and not more than $120,000. Participants may change any of the designations in a Form by signing a new form and submitting it to the Administrator. Any election to reinvest dividends or to change any option with respect thereto will be effective on the next record date after the Administrator receives the new form. 8. Where can I get Shareholder Authorization Forms and Non-holder Enrollment Forms? The Forms may be obtained from the Administrator at the address or by calling the telephone number noted under Question 4. 9. What investment options are available to participants? Each participant must elect one of the following investment options: FULL DIVIDEND REINVESTMENT--Participant automatically reinvests cash dividends on all shares of Common Stock and Preferred Stock. PARTIAL DIVIDEND REINVESTMENT--Participant specifies the number of shares of Common Stock, and the number and class and series of shares of Preferred Stock, as to which the participant wishes to receive cash dividends, and automatically reinvests the remainder of the cash dividends. OPTIONAL CASH INVESTMENTS ONLY/NO DIVIDEND REINVESTMENT--Participant receives cash dividends on all shares of Common Stock and Preferred Stock. 6 Under any of the investment options, a participant may make optional cash payments of a minimum of $25 (or a minimum of $250 for the initial investment by a Non-holder) and a maximum of $120,000 per calendar year (including the initial investment) towards the purchase of additional shares of Common Stock. (See Questions 18 and 19.) FEES AND CHARGES 10. Are there any fees or charges to a participant in connection with purchases or sales under the Plan? Participants in the Plan will bear the cost of brokerage fees and commissions, any service charges and applicable taxes related to shares purchased or sold on the open market. Brokerage fees and commissions will be at competitive rates. Under the Plan, the Company may also charge participants fees to recover up to the actual administrative costs of the Plan. To defray in part the costs the Company incurs in administering the Plan, the Company currently charges each participant who reinvests Common Stock or Preferred Stock dividends an administrative fee of $0.50 per quarter. This fee does not apply to participants who do not reinvest dividends. A service fee is also charged in connection with the sale of shares through the Plan. (See Question 35.) The Company reserves the right at any time to change these fees or to charge participants (including those who do not reinvest dividends) other fees, including but not limited to administrative, setup and handling fees. Notices of such future changes or additional fees will be sent to participants at least 30 days prior to their effective date. PURCHASES UNDER THE PLAN 11. What is the source of shares purchased under the Plan? Common Stock will be obtained through purchases of newly-issued shares from the Company or through open market purchases of shares. The Company will not change the method of acquiring shares of Common Stock more than once in any three-month period. 12. How will open market purchases of Common Stock be made under the Plan? Open market purchases of Common Stock will be made through an independent agent selected by the Company (the "Broker"). The Company will not control or influence the prices or timing of open market purchases made by the Broker, the amount of shares to be purchased (other than specifying the aggregate dollar amount to be invested), the manner of purchase of shares or the selection of any broker or dealer through which purchases will be made. 13. What will be the price of shares of Common Stock purchased under the Plan? The price of newly-issued shares purchased directly from the Company will be the average of the high and low sales prices of the Common Stock on the composite tape for stocks listed on the New York Stock Exchange on the business day prior to the Investment Date (as defined under Question 15) or the next preceding day on which the Company's Common Stock is traded if there is no trade reported on that business day. The price of Common Stock purchased on the open market will be the weighted average price per share (adjusted for brokerage fees and commissions, any service charges and applicable taxes) of the aggregate number of shares purchased during the applicable Investment Period. 14. How many shares of Common Stock will be purchased by the Plan? The number of shares to be purchased by the Plan for each participant will equal the amount of the participant's reinvested dividends and optional cash payments, less administrative fees and amounts required to be withheld for tax purposes, divided by the purchase price of the shares (adjusted for brokerage fees and commissions, any service charges and applicable taxes). Both whole shares and fractional shares (computed to four decimal places) will be credited by the Plan to the accounts of its participants. 7 15. When will purchases be made under the Plan? Newly-issued shares will be purchased from the Company on the applicable Investment Date and shares acquired on the open market will be purchased during an investment period commencing on the applicable Investment Date and ending thirty (30) days thereafter (each, an "Investment Period"). Dividends not invested in shares of Common Stock within 30 days of the dividend payment date, optional cash payments not invested in shares of Common Stock within 35 days of receipt, and any funds not invested within an Investment Period, will be promptly returned, without interest, to the participant. Funds to be invested during any Investment Period will be invested to the extent possible before funds from any subsequent Investment Period are invested, and funds related to different Investment Periods will not be pooled for purposes of computing per share prices. Investment Dates for optional cash payments shall occur twice a month on the 15th and 30th days of each month (except that the second Investment Date for February will be the last day of the month). Investment Dates for Common Stock dividends and Preferred Stock dividends shall be on the dividend payment date or within three (3) business days prior to the dividend payment date (with settlement in such case occurring on or after the dividend payment date). The dividend payment date for Common Stock dividends is normally expected to be the 10th day of March, June, September and December each year, and for Preferred Stock is normally expected to be the 15th day of January, April, July and October each year, but the actual dates could vary. If an Investment Date would not be a business day based on the foregoing, the Investment Date will be the next succeeding business day. If the Broker is unable to invest all cash dividends or optional cash payments in shares of Common Stock on the open market, the shares purchased by the Broker shall be allocated to participants on a pro rata basis based, first, on reinvested dividends and, if any shares are remaining, then based on optional cash payments, and any remaining funds will be returned to participants. PARTICIPANTS MAY NOT SELECT THE PRECISE TIME FOR PURCHASES AND A NUMBER OF DAYS MAY ELAPSE BEFORE DIVIDENDS AND OPTIONAL CASH PAYMENTS ARE INVESTED IN SHARES OF COMMON STOCK. INTEREST WILL NOT BE PAID ON CASH DIVIDENDS OR OPTIONAL CASH PAYMENTS PRIOR TO OR AFTER THEIR INVESTMENT IN COMMON STOCK OR IF FOR ANY REASON SUCH DIVIDENDS AND PAYMENTS ARE NOT SO INVESTED. ANY INTEREST EARNED ON DIVIDENDS OR OPTIONAL CASH PAYMENTS WILL BE THE PROPERTY OF THE COMPANY. DIVIDEND REINVESTMENT 16. How does the dividend reinvestment feature of the Plan work? Cash dividends to be reinvested will remain with the Company if reinvested on the dividend payment date in shares newly issued by the Company. To the extent shares will not be so purchased on the dividend payment date or are to be purchased by the Plan on the open market, cash dividends will be delivered to an escrow account or to the Broker pending investment concurrently with payment of cash dividends to non-participating shareholders. Such dividends will be credited to each participant's account under the Plan and will be automatically reinvested to purchase additional Common Stock on behalf of the participants during the applicable Investment Period in the manner described under Question 15. The amount of any United States income tax withholding and any administrative fees will be deducted from the amount of dividends on Common Stock and/or Preferred Stock to determine the amount of dividends to reinvest. 17. Will participants be credited with dividends on fractional shares? Yes. Plan accounts will be credited on the payment dates with dividends on whole shares and fractional shares of Common Stock held in participants' accounts as of the applicable record dates. OPTIONAL CASH PAYMENTS 18. How are optional cash payments made? Optional cash payments by a participant cannot be less than $25 per payment nor more than a total of $120,000 per calendar year (including for purposes of this limitation the initial payment made by a Non-holder 8 upon enrollment in the Plan). In the case of Non-holders, the initial cash investment with the Non-holder Enrollment Form must be at least $250. Optional cash payments may be made by sending either a check or money order in U.S. Dollars payable to HEI/DRIP, addressed to Hawaiian Electric Industries, Inc., Attn: Dividend Reinvestment and Stock Purchase Plan, P.O. Box 730, Honolulu, HI 96808-0730. CHECKS PAYABLE TO A PARTY OTHER THAN HEI/DRIP WILL NOT BE ACCEPTED BY THE PLAN EVEN IF ENDORSED FOR PAYMENT TO THE PLAN. OPTIONAL CASH PAYMENTS MUST NOT BE INCLUDED IN REMITTANCES FOR PAYMENT OF UTILITY SERVICE BILLINGS. If a participant wishes to make one cash payment of the same amount each month, the participant may use the Plan's automatic debit option. This allows a participant to make one cash payment of the same amount each month by automatic deduction of that amount from the participant's designated bank account. Employees of the Company and certain of its subsidiaries may also make cash payments through payroll deductions or by other means, subject to approval by the Treasurer of the Company or the Administrator. The forms to accompany optional cash payments, and to authorize such automatic deduction of optional cash payments, may be obtained from the Administrator at the address noted under Question 4. Optional cash payments will be promptly forwarded to a segregated escrow account at a bank designated by the Company ("Escrow Agent") to be held for the benefit of the participants pending investment in shares of Common Stock. Any interest earned on such funds prior to their investment is the property of the Company. The current Escrow Agent is First Hawaiian Bank. Should it become necessary or desirable to replace First Hawaiian Bank as Escrow Agent, the Company may appoint a successor Escrow Agent. 19. When must optional cash payments be received? Optional cash payments must be received by the Administrator at least 5 days before the applicable Investment Date in order to be invested on or commencing on that Investment Date. (See Question 15.) ACCOUNT RECORDS AND REPORTS TO PARTICIPANTS 20. What records are maintained of a participant's ownership of Common Stock under the Plan? The Administrator will maintain an individual account for each participant recording the participant's ownership interests in the Plan. 21. What kind of reports will be sent to participants in the Plan? Participants who have reinvested dividends during a quarterly period will receive quarterly statements of account. A participant who has not reinvested any dividends during a quarter will not receive such a statement of account for that quarter but will be notified with each dividend check as to the number of shares held for such participant under the Plan. Monthly statements will also be sent to participants who have made optional cash payments or have had other activity (other than reinvestment of dividends) in the account during the month. In addition, participants will receive copies of the same communications sent to other holders of Common Stock, including the Company's annual report, notices of meetings of shareholders, proxy statements and information for income tax reporting purposes. REGISTRATION OF SHARES 22. Will certificates be issued to participants for shares of Common Stock purchased under the Plan? Unless a participant withdraws shares from the Plan or terminates participation in the Plan (see Questions 24-31), certificates for shares of Common Stock purchased under the Plan will not be issued to participants. Instead, shares of Common Stock will be registered in the name of the Trustee as agent for participants in the Plan. 9 SAFEKEEPING OF SHARES 23. Does the Plan offer a safekeeping service for shares? Yes. A holder of record of Common Stock who submits a Shareholder Authorization Form may elect to transfer such holder's shares without charge to the Trustee for credit to the holder's Plan account and for safekeeping under the Plan. The Trustee also holds for safekeeping the shares purchased through the Plan unless the shares are withdrawn by or distributed to the participant upon termination. (See Question 22.) These safekeeping arrangements protect against loss, theft and destruction of stock certificates. Shares of Preferred Stock may not be transferred to the Trustee for safekeeping. TERMINATION OF PARTICIPATION IN THE PLAN 24. When and how may a participant terminate participation in the Plan? A participant may terminate participation in the Plan as to all (but not less than all) Common Stock and Preferred Stock by written notification to the Administrator. Any notice of termination received on or after an ex-dividend record date will be processed as soon as practicable after the dividends payable as of the record date have been paid and reinvested in accordance with the Plan. The "ex-dividend record date" for purposes of the Plan is three (3) business days before the dividend record date. A participant must also maintain at least one whole share in the Plan to keep an active account. If a participant does not do so, the participant's participation in the Plan may be terminated, in which case the participant will receive a cash payment for the fractional shares based on market prices on the business day prior to the date of payment. 25. What occurs following receipt by the Administrator of a participant's written notice of termination of participation in the Plan? Within 10 business days after receipt of the notice (or the reinvestment of dividends if the notice is received between the ex-dividend record and payment dates), certificates for shares of Common Stock will be issued to the participant and a cash payment will be made for any fractional share. If a participant's account has less than 5 shares, the Company may elect to issue a cash payment for all the shares. The purchase price for purposes of such cash payments will be the average of the high and low sales prices for Common Stock on the composite tape for stocks listed on the New York Stock Exchange on the last business day prior to the date of payment on which Common Stock is traded. IN NO CASE WILL FRACTIONAL SHARES BE ISSUED. 26. Will a participant be allowed to re-enroll in the Plan after terminating participation? Termination of participation in the Plan will not preclude re-enrollment, except that the Company reserves the right to reject re-enrollment where in its sole discretion it deems there have been excessive terminations and re- enrollments. WITHDRAWAL OF SHARES FROM THE PLAN 27. How does a participant withdraw shares from the Plan? To withdraw shares of Common Stock from the Plan, a participant must so notify the Administrator in writing and specify the whole number of shares to be withdrawn. 28. When may a participant withdraw shares from the Plan? A participant may withdraw whole shares of Common Stock from the Plan at any time. However, any notice of withdrawal received by the Administrator between the ex-dividend record and payment dates will not be effective until after the dividends have been paid and reinvested in accordance with the Plan. 10 29. How soon after notice of withdrawal of shares is given will the participant receive certificates for shares? Certificates for shares will be issued within 10 business days after receipt of the notice (or after the reinvestment of dividends if the notice is received between the ex-dividend record and payment dates). IN NO CASE WILL CERTIFICATES FOR FRACTIONAL SHARES BE ISSUED. 30. May a participant who withdraws shares from the Plan continue to participate in the Plan? Yes. Shares of Common Stock withdrawn from the Plan and registered in the participant's name will continue to participate in the Plan if the participant has so instructed the Administrator pursuant to a Shareholder Authorization Form and has not terminated participation in the manner described under Question 24. 31. May a participant who requests the withdrawal of shares under the Plan have the withdrawn shares issued in the name of another person? Yes. A participant may do so by submitting a properly completed and executed stock power, with a medallion signature guarantee, and by complying with such other procedures as the Company or Administrator shall establish. The forms necessary to effect any such transfer may be obtained from the Administrator at the address noted under Question 4. SALE AND OTHER TRANSFER OF SHARES 32. May a participant sell, pledge, encumber, or otherwise transfer shares of Common Stock credited to such participant's account under the Plan? No. A participant wishing to pledge, encumber or otherwise dispose of such shares must first have those shares registered in the participant's or another person's name by withdrawing the shares from the Plan. (See Question 31.) 33. May a participant receive cash in lieu of shares of Common Stock upon termination of participation in the Plan or withdrawal of shares from the Plan? Yes. The participant must submit a request to the Administrator to sell such shares of Common Stock and to distribute to the participant the net cash proceeds from such sale in lieu of shares. The Company may retain a broker- dealer not affiliated with the Company to effect such sales. 34. If a participant requests a distribution of cash in lieu of certificates for shares, when will the Common Stock be sold? If the shares will be sold on the open market, the sale will occur generally within the same period of time that would be required if shares rather than cash were to be distributed. (See Questions 25 and 29.) Delays in selling shares are possible, however, and interest will not be paid to a participant for any such delays and the participant assumes the risk of any price fluctuations. 35. What amount will be distributed to a participant who requests a distribution of cash in lieu of shares? A check representing the selling price of the shares, less the brokerage fees and commissions, any withholding required under applicable tax laws and a $15 service fee for the handling of each such request, will be sent to the participant at the end of the settlement period. 36. What happens if a participant sells or transfers all of the shares registered in the participant's name? Until the shares are withdrawn from the Plan or the participant terminates participation in the Plan, such shares will continue to participate in the Plan and dividends thereon will continue to be reinvested in accordance with the participant's instructions. 11 VOTING OF SHARES IN THE PLAN; TENDER OFFERS 37. How will a participant's shares of Common Stock be voted at meetings of shareholders of the Company? Participants will be sent notices of meetings, proxy statements and proxy forms for each shareholders' meeting. Shares registered in a participant's name will be voted directly by the participant. Shares held by the Trustee for a participant will be voted in accordance with the participant's instructions on a proxy form duly signed by the participant. In the absence of such instructions, the Trustee will be deemed instructed to vote shares the same way the participant votes shares registered in the participant's name. In the absence of any such instructions, the Trustee will vote shares in the same proportion as it votes shares as to which it has received instructions from other participants. 38. What arrangements will be made in the event of the commencement of a tender offer for shares of Common Stock held in the Plan? The Company or the Trustee will notify each participant of the commencement of the tender offer and will provide a means by which participants may direct the Trustee whether or not to tender the Company's Common Stock credited to their accounts. STOCK DIVIDENDS AND STOCK SPLITS 39. What happens to participants' accounts if the Company issues a stock dividend or declares a stock split? Any stock dividends or split shares distributed by the Company on shares of Common Stock credited to the account of a participant under the Plan will be added to the participant's account. ADJUSTMENT OF NUMBER AND KIND OF REGISTERED SECURITIES 40. Under what circumstances may the Company adjust the number and/or kind of registered securities? The Company may make appropriate and proportionate adjustments to the number or kind of securities registered with the Commission if there is a decrease in the number of outstanding shares of Common Stock, an exchange of such shares or a distribution with respect to such shares as a result of any merger, recapitalization, stock dividend, stock split, reverse stock split or other distribution. Any such adjustment will be subject to federal and state securities laws requirements. INTERPRETATION, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN 41. To what extent may the Plan be modified, suspended or terminated by the Company? The Company reserves the right to suspend, modify or terminate, or make additions to, the Plan at any time, and the Treasurer of the Company may interpret the Plan and make additions thereto which are not inconsistent with its provisions. All participants will receive notice of any such suspension, modification, or termination. Upon termination of the Plan by the Company, certificates for whole shares credited to a participant's account under the Plan will be issued and cash payments will be made in the same manner as if each participant had terminated participation in the Plan. LIMITATION OF LIABILITY 42. What limitations of liability exist under the Plan? Neither the Company nor the Administrator nor the Trustee nor any of their respective officers, directors, representatives, employees or agents shall be liable for any damages resulting from any act or omission in 12 connection with the Plan in the absence of bad faith or gross negligence, including, without limitation, any claim of liability arising out of failure to terminate a participant's account upon the participant's death, the price or timing at which shares are purchased for participants' accounts or fluctuations in the market value of shares. However, the foregoing in no way affects a participant's right to bring a cause of action based on alleged violations of federal securities laws. PARTICIPANTS SHOULD RECOGNIZE THAT NEITHER THE COMPANY, THE ADMINISTRATOR, THE BROKER NOR THE TRUSTEE CAN ASSURE THEM OF A PROFIT OR PROTECT THEM AGAINST A LOSS ON SHARES PURCHASED FOR THEIR ACCOUNT UNDER THE PLAN. FEDERAL INCOME TAX CONSIDERATIONS The following is a brief summary, under the Internal Revenue Code of 1986, as amended (the "Code"), of certain applicable federal income tax aspects of participating in the Plan. IN ADDITION, THERE MAY BE FOREIGN, STATE AND LOCAL LAWS APPLICABLE TO PARTICIPATION IN THE PLAN. SINCE INDIVIDUAL TAX SITUATIONS MAY VARY, AND SINCE PROVISIONS OF THE CODE AND OTHER TAX LAWS MAY BE MODIFIED BY SUBSEQUENT AMENDMENTS, PARTICIPANTS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS FOR ADVICE ON APPLICABLE FEDERAL, FOREIGN, STATE AND LOCAL TAX CONSEQUENCES OF THEIR PARTICIPATION IN THE PLAN. A participant will be required to include in income for federal income tax purposes Common Stock dividends whether cash is received or such amount is applied to the purchase of shares or to payment of administrative costs of the Plan. A participant's tax basis for shares of Common Stock purchased pursuant to the Plan will be equal to the amount of reinvested dividends or optional cash payments used to purchase such shares. A participant's holding period for shares purchased with optional cash payments or Preferred Stock dividends will begin on the date after the shares are purchased. A participant's holding period for shares purchased with Common Stock dividends will begin on the date following the date of distribution of the dividends. In the event shares are purchased on the open market, the holding period for the shares will begin no later than the day after the date such shares are credited to the participant's account. A participant will not realize any taxable income upon receipt of certificates for shares credited to the participant's account. Gain or loss will be recognized when the shares of Common Stock from the participant's account are sold pursuant to the terms of the Plan. In the case of participants whose dividends are subject to tax withholding, such as United States income tax withholding on foreign shareholders or 31% backup withholding, the amount of such tax withholding is deducted from the dividends and the balance is reinvested. Statements of account for those participants indicate the amount withheld. 13 USE OF PROCEEDS It is anticipated that the Common Stock offered hereby will be sold by the Company over a period of approximately two years from the date hereof, but the Company does not know precisely the number of shares that will ultimately be sold under the Plan or the prices at which shares will be sold. The net proceeds from the direct sale by the Company to the Plan of authorized but unissued shares of Common Stock will broaden and strengthen the equity base of the Company and are expected to be used primarily to help finance the capital expenditure and growth programs of its subsidiaries and for working capital and general corporate purposes, including the reduction or deferral of short- term borrowings (in the case of commercial paper bearing interest at prevailing market rates and with maturities varying between 1 and 270 days) that might otherwise be required. PLAN OF DISTRIBUTION The Company may from time to time inform the general public about the Plan through announcements, newspaper advertisements, circulars, notices and investor fairs. The Company may also from time to time inform those prospective participants with whom the Company has a pre-existing, continuing relationship, such as shareholders, customers and employees of the Company or its subsidiaries, about the Plan by including information with other regular written communications with them, such as billing statements, annual reports and payroll stubs. VALIDITY OF COMMON STOCK Counsel for the Company, Goodsill Anderson Quinn & Stifel, Honolulu, Hawaii, has rendered an opinion (filed as an Exhibit to the Registration Statement of which this Prospectus is a part) to the effect that the Common Stock offered hereby, when purchased by the Plan in the manner described in this Prospectus, will be duly and validly issued, fully paid and nonassessable. EXPERTS The consolidated financial statements and schedules of HEI and its subsidiaries as of December 31, 1996 and 1995, and for each of the years in the three-year period ended December 31, 1996, which financial statements and schedules have been incorporated by reference and included, respectively, in HEI's Annual Report on Form 10-K for the year ended December 31, 1996, have been incorporated by reference herein and in the Registration Statement of which this Prospectus is a part in reliance upon the reports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 14 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN AS CONTAINED IN THIS PROSPECTUS AND IN OTHER DOCUMENTS RELATING TO THE PLAN DELIVERED TO ELIGIBLE PARTIES AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IN CONNECTION WITH THIS OFFER, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES TO WHICH THIS PROSPECTUS RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE. --------------- TABLE OF CONTENTS
PAGE ---- Cover Page of Prospectus................................................... 1 Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 2 The Company................................................................ 4 Description of the Plan.................................................... 4 Purpose of the Plan....................................................... 4 Certain Features of the Plan.............................................. 4 Administration of the Plan................................................ 5 Participation in the Plan................................................. 6 Fees and Charges.......................................................... 7 Purchases under the Plan.................................................. 7 Dividend Reinvestment..................................................... 8 Optional Cash Payments.................................................... 8 Account Records and Reports to Participants............................... 9 Registration of Shares.................................................... 9 Safekeeping of Shares..................................................... 10 Termination of Participation in the Plan.................................. 10 Withdrawal of Shares from the Plan........................................ 10 Sale and Other Transfer of Shares......................................... 11 Voting of Shares in the Plan; Tender Offers............................... 12 Stock Dividends and Stock Splits.......................................... 12 Adjustment of Number and Kind of Registered Securities.................... 12 Interpretation, Modification, Suspension or Termination of the Plan....... 12 Limitation of Liability................................................... 12 Federal Income Tax Considerations.......................................... 13 Use of Proceeds............................................................ 14 Plan of Distribution....................................................... 14 Validity of Common Stock................................................... 14 Experts.................................................................... 14
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- [LOGO OF HAWAIIAN ELECTRIC INDUSTRIES] HAWAIIAN ELECTRIC INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN FEBRUARY , 1998 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND REGISTRATION.* Securities and Exchange Commission Registration Fee................. $23,029 Printing expenses................................................... 10,000 Legal fees and expenses............................................. 15,000 Accounting fees and expenses........................................ 6,000 Blue Sky fees and expenses.......................................... 5,000 Other............................................................... 971 ------- Total............................................................. $60,000 =======
- -------- * All amounts other than SEC registration fee are estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Restated Articles of Incorporation of HEI provide that HEI will indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding to which such person is a party or is threatened to be made a party by reason of being or having been a director, officer, employee or agent of HEI, provided that such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of HEI, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. With respect to an action brought by or in the right of HEI in which such person is adjudged to be liable for negligence or misconduct in performance of that person's duty to HEI, indemnification may be made under the Restated Articles of Incorporation only to the extent deemed fair and reasonable in view of all the circumstances of the case by the court in which the action was brought or any other having jurisdiction. The indemnification provisions in the Restated Articles of Incorporation were authorized at the time of their adoption by the applicable provisions of the Hawaii Revised Statutes, and substantially similar authorizing provisions are currently set forth in Section 415-5 of the Hawaii Revised Statutes. At HEI's annual meeting of stockholders held on April 18, 1989, the stockholders adopted a proposal authorizing HEI to enter into written indemnity agreements with its officers and directors. Pursuant to such authority, HEI has entered into agreements of indemnity with certain of its officers and directors. The agreements provide for mandatory indemnification of officers and directors to the fullest extent authorized or permitted by law, which could among other things protect officers and directors from certain liabilities under the Securities Act of 1933. Indemnification under the agreements may be provided without a prior determination that an officer or director acted in good faith or in the best interests of the Company, and without prior court approval of indemnification of an officer or director adjudicated liable in a shareholder's derivative action. The agreements provide for indemnification against expenses (including attorneys' fees), judgments, fines and settlement amounts in connection with any action by or in the right of the Company. Under a directors' and officers' liability insurance policy, directors and officers are insured against certain liabilities, including certain liabilities under the Securities Act of 1933. II-1 ITEM 16. EXHIBITS. The exhibits designated by an asterisk (*) are filed herein. The exhibits not so designated are incorporated by reference to the indicated filing. 4(a) Restated Articles of Incorporation of Hawaiian Electric Industries, Inc. (previously filed as Exhibit 4(b) to Registration Statement on Form S-3, Regis. No. 33-7895) 4(b) Articles of Amendment of Hawaiian Electric Industries, Inc. filed June 30, 1990 (previously filed as Exhibit 4(b) to Registration Statement on Form S-3, Regis. No. 33-40813) 4(c) Restated By-Laws of Hawaiian Electric Industries, Inc. (previously filed as Exhibit 3(ii) to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, File No. 1-8503) *4(d) Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock Purchase Plan 4(e) Trust Agreement between Hawaiian Electric Industries, Inc. and Hawaiian Trust Company, Limited (now known as Pacific Century Trust, a division of Bank of Hawaii) dated as of October 6, 1989 (previously filed as Exhibit 4(e) to Registration Statement on Form S-3, Regis. No. 33-31449) *4(f) Escrow Agreement between Hawaiian Electric Industries, Inc. and First Hawaiian Bank dated as of November 30, 1995. 4(g) Rights Agreement dated as of October 28, 1997 by and between Hawaiian Electric Industries, Inc. and Continental Stock Transfer & Trust Company, as Rights Agent (with the form of Rights Certificates attached as Exhibit B) (previously filed as Exhibit 1 to Registration Statement on Form 8-A dated October 28, 1997, File No. 1-8503). *5 Opinion of Goodsill Anderson Quinn & Stifel (including consent) *8 Opinion of Goodsill Anderson Quinn & Stifel re tax matters *23(a) Consent of KPMG Peat Marwick LLP *23(b) Consent of Goodsill Anderson Quinn & Stifel (included in Exhibit 5) *24 Power of Attorney
ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933, unless the information required to be included in such post-effective amendment is contained in a periodic report filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and incorporated by reference in this Registration Statement; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement, unless the information required to be included in such post-effective amendment is contained in a periodic report filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and incorporated by reference in this Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in the Registration Statement; II-2 (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the provisions described under Item 15 above, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and County of Honolulu, State of Hawaii, on the 22nd day of January, 1998. HAWAIIAN ELECTRIC INDUSTRIES, INC. /s/ Robert F. Mougeot By: _________________________________ Robert F. Mougeot Financial Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE ---------- ----- ---- Robert F. Clarke* President and Director January 22, 1998 ____________________________________ (Chief Executive Officer) Robert F. Clarke Robert F. Mougeot* Financial Vice President and January 22, 1998 ____________________________________ Chief Financial Officer Robert F. Mougeot (Principal Financial Officer) Curtis Y. Harada* Controller (Principal January 22, 1998 ____________________________________ Accounting Officer) Curtis Y. Harada Don E. Carroll* Director January 22, 1998 ____________________________________ Don E. Carroll Edwin L. Carter* Director January 22, 1998 ____________________________________ Edwin L. Carter Richard Henderson* Director January 22, 1998 ____________________________________ Richard Henderson Victor Hao Li* Director January 22, 1998 ____________________________________ Victor Hao Li T. Michael May* Director January 22, 1998 ____________________________________ T. Michael May
II-4
SIGNATURE TITLE DATE --------- ----- ---- Bill D. Mills* Director January 22, 1998 ____________________________________ Bill D. Mills A. Maurice Myers* Director January 22, 1998 ____________________________________ A. Maurice Myers Diane J. Plotts* Director January 22, 1998 ____________________________________ Diane J. Plotts James K. Scott* Director January 22, 1998 ____________________________________ James K. Scott Oswald K. Stender* Director January 22, 1998 ____________________________________ Oswald K. Stender Kelvin H. Taketa* Director January 22, 1998 ____________________________________ Kelvin H. Taketa Jeffrey N. Watanabe* Director January 22, 1998 ____________________________________ Jeffrey N. Watanabe
/s/ Robert F. Mougeot *By: __________________________ Robert F. Mougeot For himself and as Attorney-In-Fact for the above mentioned officers and directors II-5 EXHIBIT INDEX The exhibits designated by an asterisk (*) are filed herein. The exhibits not so designated are incorporated by reference to the indicated filing.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4(a) Restated Articles of Incorporation of Hawaiian Electric Industries, Inc. (previously filed as Exhibit 4(b) to Registration Statement on Form S-3, Regis. No. 33-7895) 4(b) Articles of Amendment of Hawaiian Electric Industries, Inc. filed June 30, 1990 (previously filed as Exhibit 4(b) to Registration Statement on Form S-3, Regis. No. 33-40813) 4(c) Restated By-Laws of Hawaiian Electric Industries, Inc. (previously filed as Exhibit 3(ii) to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, File No. 1-8503) *4(d) Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock Purchase Plan 4(e) Trust Agreement between Hawaiian Electric Industries, Inc. and Hawaiian Trust Company, Limited (now known as Pacific Century Trust, a division of Bank of Hawaii) dated as of October 6, 1989 (previously filed as Exhibit 4(e) to Registration Statement on Form S-3, Regis. No. 33-31449) *4(f) Escrow Agreement between Hawaiian Electric Industries, Inc. and First Hawaiian Bank dated as of November 30, 1995. 4(g) Rights Agreement dated as of October 28, 1997 by and between Hawaiian Electric Industries, Inc. and Continental Stock Transfer & Trust Company, as Rights Agent (with the form of Rights Certificates attached as Exhibit B) (previously filed as Exhibit 1 to Registration Statement on Form 8-A dated October 28, 1997, File No. 1-8503). *5 Opinion of Goodsill Anderson Quinn & Stifel (including consent) *8 Opinion of Goodsill Anderson Quinn & Stifel re tax matters *23(a) Consent of KPMG Peat Marwick LLP *23(b) Consent of Goodsill Anderson Quinn & Stifel (included in Exhibit 5) *24 Power of Attorney
EX-4.(D) 2 COMPANY'S DIVIDEND REINVESTMENT AND STOCK PUR. PLN EXHIBIT 4(D) HAWAIIAN ELECTRIC INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN (AS AMENDED THROUGH , 1998) SECTION 1. NAME AND NUMBER OF SHARES The plan shall be known as the "Dividend Reinvestment and Stock Purchase Plan" (the "Plan"). The Plan permits (i) holders of record of the Common Stock of Hawaiian Electric Industries, Inc. (the "Company"), (ii) holders of record of the preferred stock ("Preferred Stock") of any class or series of Hawaiian Electric Company, Inc., Maui Electric Company, Limited and Hawaii Electric Light Company, Inc., each of which is a direct or indirect subsidiary of the Company, and (iii) any other individual of legal age or any entity, to purchase common stock of the Company ("Common Stock"). The number of shares of Common Stock which may be issued pursuant to the Plan shall be fixed from time to time by the Board of Directors of the Company. SECTION 2. ADMINISTRATION AND COSTS The administrator of the Plan (the "Administrator") shall administer the Plan for participants, keep records, send statements of accounts to participants, and perform other clerical and ministerial duties relating to the Plan. The Administrator may be one or more officers or employees of the Company or of its subsidiaries and shall be appointed from time to time by the President, the Financial Vice President or the Treasurer of the Company. If the Administrator is one or more employees of the Company, an independent trustee (the "Trustee") shall be appointed by the President, the Financial Vice President or the Treasurer of the Company, and shares under the Plan shall be registered in the name of the Trustee. The initial Administrator shall be the Shareholder Services Division of the Company. Participants in the Plan will bear the cost of brokerage fees and commissions, any service charges and applicable taxes related to shares purchased or sold on the open market. The Company may also charge each participant fees up to amounts that are reasonably related to the actual administrative costs of the Plan, the amounts, frequency and manner of payment of which shall be determined from time to time by the President, Financial Vice President and Treasurer of the Company, or any of them. SECTION 3. ELIGIBILITY AND ENROLLMENT The following persons shall be eligible to participate in the Plan (the "participants") in accordance with the following enrollment procedures: (a) Each holder of record of Common Stock and/or Preferred Stock shall be eligible to participate in the Plan. In order to participate in the Plan, owners of Common Stock and/or Preferred Stock whose shares are registered in names other than their own (e.g., broker, bank nominee) must first either become holders of record by having shares of Common Stock and/or Preferred Stock, as the case may be, transferred into their own names or transfer shares of Common Stock to the name of the Administrator (or the Trustee, if there is a Trustee) for safekeeping under the Plan. In addition, an eligible stockholder must complete and sign the Company- approved authorization form ("Shareholder Authorization Form") for Common Stock and/or Preferred Stock, as the case may be, and return it to the Administrator in the manner prescribed on the Shareholder Authorization Form or in the current prospectus for the Plan. A Shareholder Authorization Form must be received by the Administrator by the dividend record date in order for the dividends for which the record is taken to be reinvested under the Plan. The execution of a Shareholder Authorization Form will result in the participation in the Plan of all Common Stock and all classes and series of Preferred Stock registered in the participant's name unless the participant indicates on the Form the number and kind of shares on which the participant wishes to receive cash dividends. If a participant does not select an option on the Shareholder Authorization Form, all dividends for all shares of Common Stock and Preferred Stock held in the participant's name, and on all shares held under the Plan for the participant, will be reinvested. A participant may change any of the designations set forth in a Shareholder Authorization Form by completing, signing and returning to the Administrator a new Shareholder Authorization Form in the manner described above, which new Form shall supersede the prior Form, or may make such changes in such other manner as may be permitted by the Administrator. (b) Any other individual of legal age or entity shall be eligible to participate in the Plan. In order to participate in the Plan, each such individual or entity must complete and sign the Company's enrollment form (the "Non-holder Enrollment Form") and return it to the Administrator along with a check or money order made payable to HEI/DRIP for an initial stock purchase of not less than $250 and not more than $120,000. The execution of Non-holder Enrollment Form will result in the reinvestment of all dividends held under the Plan for the participant, unless the participant submits a Shareholder Authorization Form and selects a different investment option in that Form. (c) Each participant may, pursuant to the Shareholder Authorization Form and/or such other forms as the Administrator may from time to time prescribe, elect one of the following three investment options: (1) under the "full dividend reinvestment" option, a participant may reinvest cash dividends on all shares of Common Stock and Preferred Stock registered in the name of a participant and on all shares of Common Stock held under the Plan for the participant to purchase additional shares of Common Stock; (2) under the "partial dividend reinvestment" option, a participant may receive cash dividends on a portion of the shares of Common Stock and/or Preferred Stock registered in such participant's name and/or on a portion of the shares of Common Stock held under the Plan for the participant, and reinvest the remainder of cash dividends on such shares to purchase Common Stock; and (3) under the "optional cash investment only/no dividend reinvestment" option, a participant may receive cash dividends on all shares of Common Stock and/or Preferred Stock registered in the participant's name and on shares of Common Stock held under the Plan for the participant. Under any of the investment options, a participant may purchase additional shares of Common Stock under the Plan by making optional cash payments to the Plan as provided under Section 5. A participant may change such participant's investment option by following the procedures under Section 3(a) for changing the designations set forth in a Shareholder Authorization Form and/or such other procedures as the Administrator may from time to time prescribe. (d) Shareholder Authorization and Non-holder Enrollment Forms shall be made available by the Administrator. (e) Each participant will remain a participant in the Plan until participation is terminated pursuant to Section 12 hereof or until the Plan itself is terminated. (f) The Company reserves the right to restrict participation in the Plan if it believes that such participation may be contrary to the general intent of the Plan or in violation of applicable law. SECTION 4. CASH DIVIDEND PURCHASES If a participant has elected full or partial dividend reinvestment on the shares of Common Stock or Preferred Stock registered in such participant's name or on the shares of Common Stock held under the Plan for such participant, such cash dividends will be credited to each participant's account under the Plan and will be automatically reinvested to purchase Common Stock on behalf of the participants during the applicable Investment Period as described in Section 7. Until participation in the Plan is terminated pursuant to Section 12 hereof, Common Stock and/or Preferred Stock participating in the Plan shall include (1) all shares of each class or series of shares of Common Stock and/or Preferred Stock, as the case may be, designated by registered holders of such shares in Shareholder Authorization Forms which have been received by the Company by the record date for the payment of a cash dividend, including all such shares purchased after receipt of said form, and all shares received as a result of a stock dividend or stock split, (2) all shares of Common Stock transferred to the Administrator (or the Trustee) for safekeeping under the Plan, and (3) all shares of Common Stock purchased 2 under the Plan for the accounts of shareholders and non-holder investors, including all shares purchased with reinvested dividends and optional cash payments, unless said shares have been withdrawn pursuant to Section 13 hereof and are held in the name of a person who has not signed a Shareholder Authorization Form. In the case of participants whose dividends on Common Stock and/or Preferred Stock are subject to United States income tax withholding, the amount of tax to be withheld will be deducted from the amount of dividends on Common Stock and/or Preferred Stock to determine the amount of dividends to reinvest. The Administrator will credit dividends for all shares of Common Stock and/or Preferred Stock participating in the Plan (other than dividends paid on shares as to which the participant has elected to receive cash dividends) to the participants' accounts on the basis of full and fractional shares held in these accounts and will automatically reinvest such dividends (less any administration fees and any amounts required to be withheld by United States income tax law) in additional shares of Common Stock. SECTION 5. CASH PURCHASES All participants, whether or not they have authorized the reinvestment of cash dividends on Common Stock or Preferred Stock, shall be eligible to make optional cash payments for purchases of additional shares of Common Stock under the Plan. Optional cash payments shall be made by check or money order in U.S. Dollars payable to HEI/DRIP (or may be made by electronic funds transfer from a bank account designated by a participant, by payroll deduction, or by such other means, in each case subject to approval by the Treasurer of the Company or the Administrator) and any such payment may not be less than $25, nor may such payments exceed $120,000 in any calendar year (including for purposes of this limitation the initial payment made by a non- holder investor upon enrollment in the Plan). Optional cash payments must be received by the Administrator at least five (5) days before an Investment Date (as defined below) in order to be invested on or commencing on that Investment Date. The Administrator will send the participant a statement recording receipt and transmittal of the total optional payments received for the Investment Period. Checks payable to a party other than HEI/DRIP will not be accepted by the Plan even if endorsed for payment to the Plan. SECTION 6. METHOD OF PURCHASE OF SHARES The Plan will satisfy its requirements for shares of Common Stock through purchases from the Company of authorized but unissued shares, through open market purchases of shares. Open market purchases under the Plan, if any, will be made through an independent agent that is a registered "broker-dealer" or "bank," as such terms are defined in Section 3(a)(6) of the Securities Exchange Act of 1934 ("Broker"). Neither the Administrator nor the Company, nor any affiliate thereof, shall exercise any direct or indirect control or influence over the times when or the prices at which the Broker may purchase the Company's Common Stock for the Plan, the amounts of shares to be purchased (other than the aggregate dollar amount acquired by the Plan), the manner in which the shares are to be purchased, or the selection of a broker or dealer through which purchases may be executed. The Company shall not change the method of acquiring shares of Common Stock to satisfy the Plan's requirements, including any change from purchases from the Company of authorized but unissued shares of Common Stock to open market purchases, or vice versa, more than once in any three-month period. The method of acquiring shares will be determined only at the direction of the Board of Directors or the Chief Financial Officer of the Company. Any change to the method of acquiring shares must be based on a recorded determination by the Board of Directors or the Chief Financial Officer of the Company that the Company's need to raise additional capital has changed, or that there is another valid reason for such change. All dividend payments (unless invested in shares of Common Stock issued by the Company on the dividend payment date) and optional cash payments will be transmitted to a segregated escrow account or to the Broker: (1) if the funds are received before noon, by the opening of business on the next business day following the day of receipt of funds, or (2) if the funds are received at or after noon, by end of the next business day following the day of receipt of funds. 3 SECTION 7. TIMING OF PURCHASES Optional cash payments and dividend payments will be invested in shares of Common Stock on or after the applicable Investment Date. The "Investment Dates" for optional cash payments shall be the 15th and 30th days of each month (except that the Investment Date for February shall be the last day of the month). The "Investment Date" for Common Stock dividends and for Preferred Stock dividends shall be on or within three business days prior to the applicable dividend payment date. If any date for investment of dividends or optional cash payments as stated above is not a business day, the "Investment Date" shall be the next succeeding business day. Interest will not be paid on optional cash payments or on reinvested dividends prior to or after their investment in Common Stock or if for any reason such payments and dividends are not invested pursuant to the Plan. Shares purchased from the Company shall be purchased on the applicable Investment Date. Shares purchased on the open market shall be purchased during the period (each, an "Investment Period") commencing on each applicable Investment Date and ending thirty (30) days thereafter; provided, however, that optional cash payments not invested within 35 days of receipt, and dividend payments not invested within 30 days of the dividend payment date, shall be promptly returned, without interest, to the participants. In addition, funds that are not invested during the applicable Investment Period will be promptly returned, without interest, to the participants. Shares of Common Stock purchased directly from the Company will be credited to participants' accounts on the date purchased, except that if any shares are purchased on the open market, all of the shares purchased during the applicable Investment Period will be credited to participants' accounts as of the day of purchase of the last share. The Broker will be instructed prior to the commencement of each Investment Period regarding the amount of funds to be used to purchase shares of Common Stock on the open market during such Investment Period. If the Broker is directed but unable to purchase sufficient shares in the open market with cash dividends and/or optional payments during any Investment Period, the Common Stock that is purchased on the open market will be allocated among participants' accounts (on a pro rata basis if necessary) according to the amount each participant had contributed in cash dividends and, if there are any shares remaining, on a pro rata basis according to the amount each participant had contributed in optional cash payments. Any remaining funds will be returned to participants on a pro rata basis. If a participant has elected full or partial dividend reinvestment on the shares of Common Stock or Preferred Stock registered in such participant's name or on shares of Common Stock held under the Plan for such participant, the cash dividends to be reinvested for such participant will remain with the Company if reinvested on the dividend payment date in shares of Common Stock purchased from the Company or will be delivered by the Company to the escrow account or the Broker as described in Section 6 concurrently with payment of cash dividends to nonparticipating shareholders. Optional cash payments will be made by participants directly to the Administrator. The Administrator will deliver or cause the Company to deliver funds to the escrow account or the Broker as described in Section 6. SECTION 8. PURCHASE PRICE OF SHARES The purchase price per share of Common Stock purchased for the accounts of participants directly from the Company will be 100% of the average of the high and low sales prices for the Common Stock on the composite tape for stocks listed on the New York Stock Exchange on the business day prior to the applicable Investment Date or such later date as such stock is purchased (or the last prior day on which the Common Stock is traded if there is no trade reported on the business day prior to the applicable Investment Date or such later date). The purchase price per share of Common Stock purchased on the open market will be the weighted average price per share (adjusted for brokerage fees and commissions, any service charges and applicable taxes) of the aggregate 4 number of shares acquired on the open market by the Broker during the applicable Investment Period. Amounts to be invested in shares of Common Stock during any Investment Period will not be pooled with amounts to be invested during another Investment Period for purposes of computing per share prices. Amounts to be invested in any Investment Period will be invested to the extent possible before any purchases are executed for any subsequent Investment Period. SECTION 9. REGISTRATION OF SHARES Shares of Common Stock purchased under the Plan will be registered in the name of the Administrator (or the Trustee, if there is a Trustee) as agent for the participants. Shares will not be issued to participants unless requested pursuant to Section 13 hereof. For safekeeping or other purposes, holders of record of Common Stock who submit Shareholder Authorization Forms may elect to transfer their shares of Common Stock to the Administrator (or the Trustee, if there is a Trustee), without charge, to the credit of their account under the Plan, pursuant to such procedures as the Company and the Administrator shall establish. SECTION 10. PARTICIPANTS' ACCOUNTS The Administrator shall keep an individual account for each participant recording the participant's interest in the Plan. Each participant's account will be credited with that number of shares, including fractions computed to four decimal places, equal to the total amount of cash dividends or optional cash payments to be invested, less administrative fees and amounts required to be withheld for tax purposes, divided by the applicable purchase price per share. SECTION 11. REPORTS TO PARTICIPANTS Participants who reinvest dividends and/or make optional cash payments will receive periodic statements of account showing amounts invested, purchase prices, shares purchased, and/or other relevant information. In addition, each participant shall receive copies of the Company's annual report to stockholders, notices of annual meetings, proxy statements, and information for income tax reporting purposes. SECTION 12. TERMINATION OF PARTICIPATION A participant may terminate participation in the Plan as to all (but not less than all) Common Stock and Preferred Stock participating in the Plan at any time by written notification to the Administrator. Any notice of termination received on or after an ex-dividend record date will not be effective until dividends have been paid, credited to the participant's Plan account and reinvested in additional shares of Common Stock in accordance with the Plan. Within ten business days after the later to occur of (a) the receipt of notice of termination and (b) reinvestment of dividends as to participants whose notice of termination is received after an ex-dividend record date, certificates for whole shares of Common Stock credited to the participant's Plan account will be issued and a cash payment will be made for any fraction of a share; provided, however, that if a participant's account is credited with less than five shares, the participant will receive cash in lieu of shares unless the Company otherwise elects. Cash payments for any fraction of a share or for less than five shares will be based on the market price per share (determined in the manner provided in Section 8 hereof for shares purchased directly from the Company) on the last business day prior to the date of payment to the terminating participant. In no case will certificates for fractional shares be issued. A participant must maintain at least one whole share of Common Stock in the Plan to keep an active account. If a participant does not maintain at least one whole share in the Plan, the participant's participation in the Plan may be terminated, in which case the participant will receive a cash payment based on the market price per share (determined in the manner provided in Section 8 hereof for shares purchased directly from the Company) on the business day prior to the date of payment to the terminating participant. 5 Termination of participation in the Plan will not preclude re-enrollment, provided that the Company reserves the right to reject re-enrollment where in its sole discretion it deems there have been excessive terminations and re- enrollments. The term "ex-dividend record date" for purposes of the Plan is three (3) business days prior to the dividend record date. SECTION 13. WITHDRAWAL OF SHARES A participant may withdraw all or a portion of shares of Common Stock from the participant's account by notifying the Administrator in writing to that effect and specifying the whole number of shares to be withdrawn. Withdrawal of shares must be in full shares only. Fractional shares will be liquidated upon termination of participation as described under Section 12. Any notice of withdrawal received on or after an ex-dividend record date will not be effective until dividends have been paid, credited to the participant's Plan account and reinvested in additional shares of Common Stock in accordance with the Plan. Within ten business days after the later to occur of (a) receipt of notice of withdrawal and (b) reinvestment of dividends as to participants whose notice of withdrawal is received on or after an ex-dividend record date, certificates for whole shares of Common Stock so withdrawn will be issued. In no case will certificates for fractional shares be issued. Shares withdrawn from the Plan and registered in the participant's name will continue to participate in the Plan if the participant has so instructed the Administrator pursuant to a Shareholder Authorization Form and has not terminated participation pursuant to Section 12 hereof. Accounts are maintained in the names used by participants at the time they entered the Plan. However, a participant who wishes to withdraw shares and have the stock certificates issued in the name of another person may do so by submitting a properly completed and executed stock power, with a medallion signature guarantee, and complying with such other procedures as the Company or Administrator shall establish. SECTION 14. SALE AND TRANSFER OF SHARES Unless the participant satisfies the requirements specified in Section 13 for the issuance of certificates in the name of another person, shares of Common Stock credited to a participant's account under the Plan or otherwise registered in the Administrator's (or Trustee's) name may not be pledged, encumbered, sold or otherwise transferred by a participant. Absent satisfaction of said requirements, a participant wishing to sell, pledge, encumber or otherwise dispose of shares must have those shares registered in his name by terminating participation in the Plan pursuant to Section 12 or withdrawing the shares pursuant to Section 13. A participant who wishes to receive cash in lieu of shares of Common Stock upon termination of participation or withdrawal of shares may request the Administrator to sell such shares and to deliver the net proceeds to the participant. The net proceeds shall equal the selling price of the shares less the brokerage fees and commissions, any withholding required under applicable tax laws and a fee of $15 for the handling of each such request. SECTION 15. VOTING OF SHARES Each participant will be sent a notice of meeting and proxy statement and form of proxy for each meeting of shareholders of the Company. Each participant will vote directly the shares registered in such participant's name. The Administrator (or the Trustee, as the case may be) shall be deemed instructed to vote the shares of Common Stock it holds in the Plan for a participant who has shares registered in such participant's own name in the same way that said participant votes the shares of Common Stock registered in the participant's name, unless the participant instructs that the shares held in the Plan are to be voted in another way, in which event said shares shall be voted as instructed. If no shares of Common Stock are registered in a participant's name, the Administrator (or the Trustee, as the case may be) shall vote the shares it holds in the Plan for the participant in 6 accordance with instructions of the participant given on the proxy form duly signed and returned by the participant. In the absence of any of the foregoing types of instructions, the Administrator (or the Trustee, as the case may be) will vote the shares registered in its name in the same proportion on each issue as it votes those shares as to which it has received instructions. SECTION 16. LIMITATION OF LIABILITY Neither the Company nor the Administrator nor the Trustee nor the Broker nor any of their respective officers, directors, representatives, employees or agents shall be liable for any damages resulting from any act or omission in connection with the Plan in the absence of bad faith or gross negligence. SECTION 17. COMMON STOCK ADJUSTMENT PROVISIONS If the outstanding shares of common stock of the Company are decreased or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to such shares of common stock or other securities, through merger, consolidation, sale of all or substantially all of the property of the Company, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other distribution with respect to such shares of common stock or other securities, an appropriate and proportionate adjustment may, subject to the requirements of federal and state securities laws and regulations, be made by the Company to the maximum number and kind of shares of common stock or other securities issuable under the Plan which are subject to an effective registration statement filed with the Securities Exchange Commission pursuant to the Securities Act of 1933, as amended. SECTION 18. OTHER MATTERS The Board of Directors, Chief Financial Officer or Treasurer of the Company shall determine the effective date of the Plan as most recently amended hereby. The Company intends to continue the Plan indefinitely, but reserves the right to suspend or terminate the Plan at any time. The Company also reserves the right to make any additions or modifications to the Plan. The Treasurer of the Company may interpret the Plan and may make additions thereto which are not inconsistent with the above provisions of the Plan. In the event any stock dividends or split shares are distributed by the Company on shares of Common Stock credited to the account of a participant under the Plan, such shares will be added to the participant's account. Stock dividends or split shares distributed on any shares of Common Stock registered in the name of a participant will be distributed to the participant in the same manner as to shareholders who are not participating in the Plan. In the event that the number of shares of Common Stock to be purchased by the participants in the Plan exceeds the balance of the shares authorized by the Board of Directors to be sold pursuant to the Plan, then the Plan shall be automatically suspended with respect to future purchases until such time as the Board of Directors of the Company has authorized additional shares of Common Stock to be sold pursuant to the Plan. In the event of any such automatic suspension of the Plan, then (1) on the date of such automatic suspension of the Plan, the number of shares of Common Stock to be sold shall be prorated among the participants purchasing shares on such date, and (2) the Treasurer of the Company shall determine the date the suspension is to be lifted after the Board of Directors has authorized the sale of additional shares of Common Stock pursuant to the Plan. The Company will notify each participant of the commencement of any tender offer for securities which include the Company's Common Stock held in participants' accounts. The Company will use its best efforts to distribute to participants in a timely manner the same information that is distributed to all of the Company's shareholders in connection with the tender offer. After consulting with the Trustee, the Company will provide a means by which participants may direct the Trustee whether or not to tender the Company's Common Stock credited to their accounts. The Trustee will not tender shares held in any participant's account for which it 7 receives no direction from the participant. A participant may, at any time prior to a tender offer withdrawal date, direct the Trustee to withdraw shares of the Company's Common Stock previously directed by the participant to be tendered. The Company or the Administrator shall provide participants with prompt notice of any modification, suspension or termination of the Plan. Certificates for whole shares issued to a participant upon termination of participation in the Plan pursuant to Section 12, or upon withdrawal of shares pursuant to Section 13, or upon termination of the Plan by the Company, shall be registered in the names used by participants at the time they enrolled in the Plan, except as otherwise provided pursuant to Section 13. The Hawaiian Electric Industries Retirement Savings Plan and any other plans of the Company or its direct or indirect subsidiaries may participate in the Plan on such terms and in such manner as may be determined by the Treasurer of the Company. 8 EX-4.(F) 3 ESCROW AGRMNT BETWEEN COMPANY AND FIRST HAWAIIAN EXHIBIT 4(f) ESCROW AGREEMENT THIS ESCROW AGREEMENT dated as of November 30, 1995, between HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation (the "Company") for itself and on behalf of the Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock Purchase Plan, as in effect from time to time (the "Plan"), and FIRST HAWAIIAN BANK, a corporation having trust powers (the "Bank"), as escrow agent hereunder (the "Escrow Agent"). As used in the Escrow Agreement, the term "Administrator" shall mean the Stock Transfer Division of the Company or any other person or entity designated by the Company from time to time. RECITALS: WHEREAS, the Securities and Exchange Commission (the "SEC") requires that funds deposited with an issuer for the purchase of shares under a dividend reinvestment and stock purchase plan be placed in an independent account to protect those funds from any liens and creditor claims against the issuer; WHEREAS, the Company has revised the Plan to comply with this SEC directive and desires to establish with the Escrow Agent, subject to the terms of this Agreement, a segregated account to comply with the SEC's requirements; and WHEREAS, the Escrow Agent is willing to serve as escrow agent for such account, subject to the terms of this Agreement; NOW, THEREFORE, In consideration of the premises, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Creation of Escrow Account. The Company and the Administrator hereby create with the Escrow Agent an escrow account for the benefit of the participants in the Plan, consisting of dividends (other than dividends reinvested in shares of common stock issued by the Company on the dividend payment date), initial and optional cash payments and other property deposited by the Administrator from time to time in that certain interest bearing escrow account no. 85-1168-05 with the Bank, and all proceeds of any of the foregoing and any property of any character whatsoever into which any of the foregoing may be converted which is deposited into said account, together with all rights and privileges with respect thereto (collectively, the "Escrow Account"). Section 2. Status of Escrow Agent. The Escrow Agent represents and warrants to the Company and the Plan and covenants that (i) it is, and shall remain at all times during the term of this Escrow Agreement, a "bank" as that term is defined in Section 3(a)(6) of the Securities Exchange Act of 1934, and (ii) the Escrow Account will be held for the benefit of participants, will not be subject to any liens, creditor claims, or other claims against the Company, the Administrator, or the Escrow Agent, and will not be subject to bankruptcy proceedings if the Company files for bankruptcy under federal or state law. Section 3. Holding of Escrow Account; Rights to Principal and Interest. The Escrow Agent hereby covenants that it will hold the Escrow Account for the benefit of participants in the Plan in accordance with this Escrow Agreement. Neither the Company nor the Administrator will have any beneficial interest or other interest in principal amounts deposited by the Administrator in the Escrow Account. Any interest earned on such principal amounts shall belong to the Company and shall be used in part to pay the costs owed by the Company to the Escrow Agent under Section 11. Section 4. Instructions to Escrow Agent. The Company shall certify to the Escrow Agent from time to time the names and specimen signatures of any person who shall have authority to give instructions to the Escrow Agent hereunder on behalf of the Administrator. Instructions may be given substantially in the form attached hereto as Exhibit A or B. Section 5. General Duties and Powers of the Escrow Agent. The Escrow Agent shall keep accurate and detailed records of receipts and disbursements and other transactions affecting the Escrow Account, and shall make such records available for review from time to time at the request of the Administrator. The Escrow Agent shall furnish to the Company such information regarding the Escrow Account as may be reasonably requested by the Company from time to time. Upon instructions from the Administrator, the Escrow Agent shall invest the funds in the Escrow Account as directed by the Administrator. The Escrow Agent shall make disbursements from the Escrow Account at such times, to such persons (including the Administrator and the Company), and in such amounts as the Administrator shall direct. The Administrator agrees that all directions given to the Escrow Agent hereunder shall be consistent with and for the exclusive purposes provided in the Plan. The Escrow Agent shall have no responsibility for monitoring compliance with this covenant. Section 6. Liability of Escrow Agent. The Escrow Agent shall use ordinary care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. The Escrow Agent shall not be liable or responsible for any loss sustained for acting without question on the direction of, or failing to act in the absence of any direction from, the Administrator or any person with authority to act on behalf of the Administrator, unless the Escrow Agent knows that by such action or failure to act it will be in breach of its fiduciary duties or this Agreement. The Escrow Agent shall not be responsible in any respect for the administration of the Plan. The duties and obligations of the Escrow Agent hereunder shall be governed solely by the terms of this Escrow Agreement, and no implied covenants or obligations shall be read into this Escrow Agreement against the Escrow Agent. Section 7. Resignation of Escrow Agent. The Escrow Agent may resign its duties hereunder by delivering its written resignation to the Administrator. Such resignation shall take effect upon the appointment of a successor escrow agent, as provided below. Section 8. Removal of Escrow Agent. The Escrow Agent may be removed by the Administrator at any time, with or without cause, upon thirty (30) days' notice to the Escrow Agent, but such notice may be waived by the Escrow Agent. Such removal shall be effected by delivering to the Escrow Agent a written notice of removal executed by the Administrator and by giving notice to the Escrow Agent of the appointment of a successor escrow agent in the manner hereinafter set forth. Section 9. Appointment of Successor Escrow Agent. The appointment of a successor escrow agent hereunder shall be accomplished by and shall take effect upon the delivery to the resigning or removed Escrow Agent, as the case may be, of (i) an instrument in writing appointing such successor escrow agent, executed by the Administrator, and consented to by the Company and (ii) an acceptance in writing of the office of successor escrow agent hereunder executed by the successor so appointed. Any successor escrow agent hereunder may be either a corporation authorized and empowered to exercise trust powers or one or more individuals. All of the provisions set forth herein with respect to the Escrow Agent shall relate to each successor escrow agent so appointed with the same force and effect as if such successor escrow agent had been originally named herein as the escrow agent hereunder. If within sixty (60) days after notice of resignation or removal shall have been given under the provisions of this Escrow Agreement a successor escrow agent shall not have been appointed, the resigning or removed Escrow Agent or the Administrator may apply to any court of competent jurisdiction for the appointment of a successor escrow agent. Section 10. Transfer of Escrow Account to Successor. Upon the appointment of a successor escrow agent, the resigning or removed Escrow Agent shall transfer and deliver control over the Escrow Account and all records relating to the Escrow Account to such successor escrow agent. 2 Section 11. Expenses and Compensation; Indemnification. The Company shall pay to the Escrow Agent reasonable compensation for all services rendered by it hereunder, and reasonable expenses incurred by it hereunder, as agreed to by the Company and the Escrow Agent from time to time. The Company assumes liability for and agrees to indemnify and hold harmless the Escrow Agent from and against, all claims that may be imposed on, incurred by, or asserted against the Escrow Agent relating to or arising from the administration of the Escrow Account pursuant to this Escrow Agreement except as provided in the next sentence below. The Escrow Agent shall be liable only for its own acts or omissions (and those of its officers, employees and agents) occasioned by the breach of this Escrow Agreement or wilful misconduct or negligence of the Escrow Agent and its officers and employees. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 12. Modification and Termination. This Escrow Agreement may not be amended or modified except by a writing signed by the parties hereto. To the extent not inconsistent with the Plan, this Escrow Agreement may be terminated at any time by notice given to the Escrow Agent by the Administrator with instructions as to disposition of any funds or other property then remaining in the Escrow Account. Section 13. Governing Law. This Escrow Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of Hawaii. Section 14. Notices. Notices and other communications may be given in writing and sent by telecopy or other wire transmission with receipt verified in a manner typical of communications of that type, registered or certified mail, or delivery service with receipt verified, and shall be addressed (i) if to Escrow Agent, at the address indicated on the signature page below, and (ii) if to the Company, at 900 Richards Street, Honolulu, Hawaii 96813 Attention: Treasurer, and (iii) if to the Administrator, at P.O. Box 730, Honolulu, Hawaii 96808-0730 Attention: Stock Transfer Agent, or to such other address designated by a party upon written notice to the other parties. Such notices and communications shall be deemed given when mailed or if given by telecopy or other electronic transmission or by delivery service, upon verification of receipt. Section 15. Successors and Assigns; Headings. This Agreement shall be binding on the parties' successors and assigns. The headings of the sections hereof are included for convenience of reference only and do not form a part of this Agreement. Section 16. Entire Agreement. This Agreement contains the complete agreement of the parties hereto with respect to the subject matter hereof and supersedes and replaces any previously made proposals, representations, warranties or agreements with respect thereto by either of the parties hereto. Section 17. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision of this Agreement. Section 18. No Waiver. A failure or delay by either party hereto in exercising any right, power or remedy under this Agreement shall not operate as a waiver of that right, power or remedy, nor shall the single or partial exercise of any right, power or remedy preclude any other or further exercise of that right, power or remedy or the exercise of any other right, power or remedy. Section 19. Counterpart Execution. This Escrow Agreement may be executed in any number of counterparts and by each of the parties hereto on separate counterparts; all such counterparts shall together constitute but one and the same instrument. 3 IN WITNESS WHEREOF, the parties have entered into this Escrow Agreement as of the date first above written. HAWAIIAN ELECTRIC INDUSTRIES, INC. By /s/ Robert F. Mougeot ------------------------- Robert F. Mougeot Financial Vice President and Chief Financial Officer By /s/ Constance H. Lau ------------------------- Constance H. Lau Treasurer FIRST HAWAIIAN BANK By /s/ Mark M. Yoshida ------------------------- Its Vice President Address: P.O. Box 3200 Honolulu, Hawaii 96847 Attention: Trust Operations 4 EX-5 4 OPINION OF GOODSILL ANDERSON QUINN & STIFEL EXHIBIT 5 [Letterhead of Goodsill Anderson Quinn & Stifel] January 22, 1998 Hawaiian Electric Industries, Inc. 900 Richards Street Honolulu, Hawaii 96813 Ladies and Gentlemen: Hawaiian Electric Industries, Inc., a Hawaii corporation (the "Company"), has filed Registration Statement on Form S-3 under the Securities Act of 1933 (the "Registration Statement"), covering an additional 2,000,000 shares of Common Stock, without par value (the "Shares"), together with certain rights (the "Rights") to purchase shares of the Company's Series A Junior Participating Preferred Stock, pursuant to the terms of the Rights Agreement, dated as of October 28, 1997 (the "Rights Agreement"), by and between the Company and Continental Stock Transfer & Trust Company, as Rights Agent. One Right will be attached to each share of Common Stock of the Company. The Shares, together with the Rights attached thereto, will be offered and sold in connection with the Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan"). In connection with this opinion, we have examined originals or copies of: (i) the Registration Statement; (ii) the Company's Registration Statement on Form 8-A, which was filed with the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended, on November 5, 1997; (iii) the Rights Agreement; (iv) the Restated Articles of Incorporation and By-Laws of the Company, each as amended to the date hereof; and (v) resolutions of the Board of Directors of the Company dated October 28, 1997 relating to, among other things, the adoption of the Rights Agreement and the issuance of the Rights. To the extent that we have deemed appropriate or necessary as a basis for the opinions set forth herein, we have also examined originals or copies of records of the Company and other documents, including certificates of public officials, and certificates of officers or other representatives of the Company and others. In our examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. As to any facts material to the opinions expressed herein which were not independently verified or established, we have relied upon statements and representations of officers and other representatives of the Company, and others. We are members of the Bar of the State of Hawaii and we do not hold ourselves out as experts on the laws of any other jurisdiction. This opinion is limited in all respects to matters governed by the laws of the State of Hawaii and federal laws of the United States of America to the extent specifically referred to herein. We express no opinion concerning compliance with the laws or regulations of any other jurisdiction or jurisdictions (including but not limited to the Blue Sky or other securities laws of such jurisdictions), or as to the validity, meaning or effect of any act or document under the laws of any other jurisdiction or jurisdictions. Based upon and subject to the foregoing, and the other qualifications, limitations and assumptions stated below, we are of the opinion that: 1. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Hawaii. 2. When the Shares have been duly issued and sold as contemplated in the Registration Statement, the Shares will be validly issued, fully paid and nonassessable. 1 3. The execution of the Rights Agreement and the issuance and listing of the Rights have been duly authorized by the Board of Directors on October 28, 1997. 4. When distributed in accordance with the Rights Agreement, the Rights will be validly issued. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the references to our firm under the caption "Validity of Common Stock" in the Registration Statement, and to the filing of our opinion of this date concerning tax matters as Exhibit 8 to the Registration Statement. Very truly yours, /s/ Goodsill Anderson Quinn & Stifel 2 EX-8 5 OPINION OF GOODSILL ANDERSON QUINN RE:TAX MATTERS EXHIBIT 8 [LETTERHEAD OF GOODSILL ANDERSON QUINN & STIFEL] January 22, 1998 Hawaiian Electric Industries, Inc. 900 Richards Street Honolulu, Hawaii 96813 RE: DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN Gentlemen: This is written with reference to the treatment for federal income tax purposes of participants in the Dividend Reinvestment and Stock Purchase Plan (the "Plan") of Hawaiian Electric Industries, Inc. ("HEI"). The Plan provides participants with a method for purchasing shares of HEI common stock ("Common Stock") with reinvested dividends and optional cash payments. The persons eligible to participate in the plan include (i) any holder of record of Common Stock, (ii) any holder of record of preferred stock of any class or series ("Preferred Stock") of HEI's electric utility subsidiaries--Hawaiian Electric Company, Inc. and its subsidiaries Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited, and (iii) any other individual of legal age or entity. Shares of Common Stock purchased under the Plan will be purchased directly from HEI or on the open market. All such purchases will be made at 100% of the market price for Common Stock calculated according to a specified formula. All brokerage fees and commissions, service charges and applicable taxes in connection with purchases and sales of Common Stock made under the Plan will be paid by the participants. HEI will pay all costs of administration of the Plan, but may charge participants fees to recover the actual administrative costs of the Plan. At present, the Company charges each participant who reinvests dividends an administrative fee of $0.50 per quarter, which fee is deducted from dividends before they are reinvested. The Company reserves the right at any time to change such fees or to charge other fees, including but not limited to administrative, setup and handling fees. The dividend reinvestment aspect of the Plan allows each holder of Common Stock and/or Preferred Stock to reinvest dividends on all or any part of his or her Common Stock and/or Preferred Stock in additional shares of Common Stock. The optional payment aspect of the Plan allows eligible participants to purchase shares of Common Stock by making optional cash payments to the Plan. Generally, a participant's optional cash payments cannot be less than $25 per payment (or a minimum of $250 for the initial investment) nor more than a total of $120,000 per calendar year. Cash dividends on shares of Common Stock purchased with optional cash payments may be reinvested under the Plan in the manner described above. Shares of Common Stock purchased on behalf of a participant under the Plan (through reinvested dividends, cash payments, or both, and including fractional shares) will be credited to that participant's account in the Plan. Upon termination of participation, certificates for whole shares of Common Stock credited to a participant's account will be issued to the participant. However, if a participant seeks to withdraw less than 5 shares, HEI may elect to issue a cash payment in lieu of shares. Cash payments also will be made for any fractional shares credited to the participant's account in the Plan. All such cash payments (i) are made out of cash received by the Plan from other participants (and not out of cash provided by HEI), and (ii) are based on the then current market price per share. In no event will HEI contribute cash to the Plan for the purpose of purchasing shares of (or fractional share interests in) Common Stock. The Plan also allows a participant to request that whole shares credited to his or her account be sold and that the net cash proceeds of the sale be distributed from the Plan in lieu of shares. In such a case, a cash adjustment for any fractional share interest in the participant's account will be made as described above. A. Optional Cash Purchases Under the Internal Revenue Code of 1986, as amended (the "Code"), the federal income tax consequences to a participant in the optional payment aspect of the Plan will depend upon whether the shares of Common Stock are purchased directly from HEI or on the open market. If the shares are purchased directly from HEI, the participant will not realize any taxable income or loss upon such purchase. The shares of Common Stock so purchased will have a tax basis equal to the amount of the optional cash payment. Code (S)1012. The holding period for such shares will begin on the day following the date of purchase. Rev. Rul. 70-598, 1970-2 C.B. 168. If the shares of Common Stock are purchased on the open market and all of the brokerage commissions are paid by the participant, the participant will not realize any taxable income or loss upon such purchase. Shares of Common Stock purchased on the open market will have a tax basis equal to the amount of the optional cash payment of the participant. See, e.g., Rev. Rul. 78-375, 1978-2 C.B. 130. The holding period for such shares will begin no later than the day after the date such shares are credited to the participant's account in the Plan. B. Reinvested Dividends Section 301(a) of the Code provides that a distribution of property made by a corporation to a shareholder with respect to its stock shall be included in the gross income of the shareholder to the extent the amount distributed is treated as a dividend under Section 316 of the Code. For purposes of Section 301(a), the term "property" means money, securities and any other property, except that such term does not include stock in the corporation making the distribution (or rights to acquire such stock). Code (S)317(a). Section 305(a) of the Code provides that, with certain exceptions, gross income does not include the amount of any distribution of the stock of a corporation by such corporation to its shareholders with respect to such stock. However, Section 305(b)(1) of the Code provides that Section 305(a) will not apply, and the distribution will be treated as a dividend distribution to which Section 301 of the Code applies, if the distribution is, at the election of any shareholder (whether exercised before or after the declaration), payable either in the stock of the distributing corporation or in property. See Treas. Reg. (S)1.305-2(a). As noted, the Plan allows holders of Preferred Stock to reinvest dividends on such stock in shares of Common Stock. In this situation, the corporation that issued the Preferred Stock (i.e., the electric utility subsidiary of HEI) is distributing only cash dividends, and certain participating shareholders are electing to use the cash dividends distributed to them to purchase shares of Common Stock either from HEI or on the open market. See Rev. Rul. 77-149, 1977-1 C.B. 82. Accordingly, the cash dividend distribution is treated as a distribution of property to which Section 301 of the Code applies. Section 305 of the Code is not applicable to the transaction because the subsidiary paying the dividend is not distributing any of its own stock. Id. With respect to the reinvestment of dividends paid on Common Stock in additional shares of Common Stock, the transaction is properly treated as a distribution by HEI payable either in stock or in cash within the meaning of Section 305(b)(1) of the Code. See, e.g, Rev. Rul. 79-42, 1979-1 C.B. 130; Rev. Rul. 78-375, 1978-2 C.B. 130; Rev. Rul. 77-149, 1977-1 C.B. 82; Rev. Rul. 76-53, 1976-1 C.B. 87. Accordingly, all such distributions (whether paid in cash or in stock) will be treated as dividend distributions taxable under Section 301 of the Code. Id. The amount of the dividend distribution to a participating holder of Preferred Stock will be the amount of the cash dividend paid on the Preferred Stock by the HEI subsidiary. Code (S)301(b)(1). The amount of the dividend distribution to a participating holder of Common Stock (including a participating corporate shareholder) will be the fair market value of the Common Stock received on the date of the distribution plus the amount of any administrative fee deducted from the participant's dividends before they are reinvested. Treas. Reg. (S)1.305-1(b); Rev. Rul. 78-375, supra; Rev. Rul. 76- 53, supra. The amount of the distribution to nonparticipating shareholders under Section 301 of the Code will be the amount of cash received by such shareholders. Rev. Rul. 76-53, supra. 2 Under currently effective law and subject to certain limitations contained in Sections 246 and 246A of the Code, the full amount of dividend income received by a corporate shareholder will be eligible for a dividends-received deduction of 70% (or 80% in the case of a corporate shareholder which owns 20% or more (by vote and value) of the stock of the corporation paying the dividend). Code (S)243. No corresponding deduction exists for individual shareholders. The tax basis of shares of Common Stock that are purchased with reinvested dividends will be equal to the amount of the reinvested dividend (measured by the amount of the cash dividend received on shares of Preferred Stock and/or the fair market value of the shares received in respect of Common Stock on the dividend payment date plus any administrative fee deducted prior to the reinvestment, as applicable). Code (S)301(d); Treas. Reg. (S)(S)1.30-1(h)(1), (2)(i); Rev. Rul. 78-375, supra. The holding period for shares that are purchased with reinvested dividends on Common Stock will begin on the day following the date of distribution. See Rev. Rul. 76-53, supra. The holding period for shares that are purchased with reinvested dividends on Preferred Stock will begin on the day following the date of purchase. See Rev. Rul. 70- 598, supra. In the event shares are purchased on the open market, the holding period for such shares will begin no later than the day after the date such shares are credited to participants' accounts under the Plan. C. Withdrawal of Shares A participant will not realize any taxable income upon receipt of certificates for whole shares credited to his or her account upon withdrawal from the Plan. Rev. Rul. 76-53, supra. However, upon withdrawal from or termination of the Plan, a participant who receives a cash adjustment, either for a fraction of a share credited to his or her account or for a cash payment in lieu of shares, may recognize gain or loss with respect to such cash payment. Code (S)1001. The amount of such gain or loss will be the difference between the amount the participant receives and the participant's tax basis for the shares (or fractional share) to which the cash payment relates. Id. A participant also will recognize gain or loss when shares of Common Stock are sold on behalf of the participant upon a participant's withdrawal from the Plan, or when the participant sells the shares after his or her withdrawal from the Plan. Code (S)1001. The amount of such gain or loss will be the difference between the amount the participant receives for the shares and the participant's tax basis in such shares. Id. Any gain or loss on the sale of shares of Common Stock generally will be treated as a long-term or mid-term capital gain or loss if the shares have been held by the participant as a capital asset and the holding period for such shares is more than eighteen (18) months or twelve (12) months, respectively. Code (S)(S)1(h), 1201, 1202, 1221. Under currently effective law, the maximum tax rate imposed on individuals receiving long-term capital gains is 20 percent and the maximum tax rate imposed on individuals receiving mid-term capital gains is 28 percent (as opposed to 39.6 percent maximum tax rate of ordinary income). Code (S)1(h). In addition, any net capital gain which otherwise would be taxed at a 15-percent rate is taxed at a rate of 10 percent. Code (S)1(h). For corporate participants, the maximum rate on capital gains is 35 percent. Code (S)(S)11, 1201(a). Additionally, characterization of income as long-term capital gains remains significant because this type of income can be fully offset by capital losses. Code (S)1222. The maximum amount of ordinary income which can be offset by capital losses in any year is currently $3,000 for individual taxpayers. Code (S)1211(b). There is currently no such offset against ordinary income available for corporations. Code (S)1211(a). Very truly yours, Goodsill Anderson Quinn & Stifel /s/ Lant A. Johnson _____________________________________ Lant A. Johnson 3 EX-23.(A) 6 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23(a) [LETTERHEAD OF KPMG PEAT MARWICK LLP] The Board of Directors Hawaiian Electric Industries, Inc.: We consent to the use of our reports incorporated herein by reference and to the reference to our Firm under the heading "Experts" in the prospectus. /s/ KPMG Peat Marwick LLP Honolulu, Hawaii January 22, 1998 EX-24 7 POWER OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY KNOW ALL PEOPLE BY THESE PRESENTS that the undersigned, HAWAIIAN ELECTRIC INDUSTRIES, INC., a Hawaii corporation, and the officers and directors of said corporation whose names are signed hereto, hereby constitute and appoint ROBERT F. CLARKE, ROBERT F. MOUGEOT, CONSTANCE H. LAU, DAVID J. REBER and GREGORY R. KIM of Honolulu, Hawaii, and each of them, with full power of substitution in the premises (with full power to each of them to act alone), their true and lawful attorneys and agents, and in its and their name, place and stead, to do any and all acts and things and to execute any and all instruments and documents which said attorneys and agents or any of them may deem necessary or advisable to enable Hawaiian Electric Industries, Inc. to comply with the Securities Act of 1933, as amended (the "Securities Act"), and any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, in connection with: (i) the registration under said Act of up to an additional 2,000,000 shares of Common Stock without par value of Hawaiian Electric Industries, Inc. for issuance pursuant to the Hawaiian Electric Industries, Inc. Dividend Reinvestment and Stock Purchase (the "Plan"), together with, if necessary or appropriate, the related rights to purchase shares of the Company's Series A Junior Participating Preferred Stock pursuant to the terms of the Rights Agreement, dated as of October 28, 1997 (the "Rights Agreement"), by and between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (said rights to be issued pursuant to the Rights Agreement referred to herein as the "Rights"), and to include in such registration statement pursuant to Rule 429 promulgated under the Securities Act a combined prospectus covering such 2,000,000 shares of Common Stock, plus the shares of Common Stock registered but not yet sold pursuant to Registration Statement No. 33-56561 together with the related Rights if necessary or appropriate, including specifically but without limiting the generality of the foregoing, power and authority to sign the name of Hawaiian Electric Industries, Inc. and the names of the undersigned officers and directors thereof, in the capacities indicated below, to the registration statement to be filed with the Securities and Exchange Commission in respect of the aforementioned securities, to any and all amendments (including pre- and post-effective amendments) and supplements to said registration statement (including specifically and without limiting the generality of the foregoing, any amendment or amendments changing the amount of shares for which registration is being sought) and to any instruments or documents filed as a part of or in connection with said registration statement or amendments or supplements thereto, and each of the undersigned hereby ratifies and confirms all of the aforesaid that said attorneys and agents or any of them shall do or cause to be done by virtue hereof; and (ii) the current registration under said Act of up to 2,500,000 shares of the Common Stock of Hawaiian Electric Industries, Inc. for issuance pursuant to the Plan (Regis. No. 33-56561), together with the related Rights if necessary or appropriate, including specifically but without limiting the generality of the foregoing, power and authority to sign the name of Hawaiian Electric Industries, Inc. and the names of the undersigned officers and directors thereof, in the capacities indicated below, to any and all post-effective amendments and supplements to said registration statement (including specifically and without limiting the generality of the foregoing, any amendment or amendments changing the amount of shares for which registration is being sought) and to any instruments or documents filed as a part of or in connection with said registration statement or amendments or supplements thereto and/or which operate pursuant to Rule 429 to amend said registration statement or amendments or supplements thereto, and each of the undersigned hereby ratifies and confirms all of the aforesaid that said attorneys and agents or any of them shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, Hawaiian Electric Industries, Inc. has caused this Power of Attorney to be executed in its name by its President and its Financial Vice President and attested by its Secretary, and the undersigned officers and directors of Hawaiian Electric Industries, Inc. have hereunto set their hands, as of the 18th day of December, 1997. This Power of Attorney may be executed in any number of counterparts by the corporation and by any one or more of the officers and directors named below. HAWAIIAN ELECTRIC INDUSTRIES, INC. ATTEST: By /s/ Robert F. Clarke /s/ Betty Ann M. Splinter ----------------------- - ----------------------- Robert F. Clarke Betty Ann M. Splinter President and Principal Secretary Executive Officer By /s/ Robert F. Mougeot ----------------------- Robert F. Mougeot Financial Vice President and Principal Financial Officer /s/ Robert F. Clarke President, Principal Executive Officer and Director ______________________________________ Robert F. Clarke /s/ Robert F. Mougeot Financial Vice President and Principal Financial Officer ______________________________________ Robert F. Mougeot /s/ Curtis Y. Harada Controller and Principal Accounting Officer ______________________________________ Curtis Y. Harada /s/ Don E. Carroll Director ______________________________________ Don E. Carroll /s/ Edwin L. Carter Director ______________________________________ Edwin L. Carter /s/ Richard Henderson Director ______________________________________ Richard Henderson /s/ Victor Hao Li Director ______________________________________ Victor Hao Li /s/ T. Michael May Director ______________________________________ T. Michael May /s/ Bill D. Mills Director ______________________________________ Bill D. Mills /s/ A. Maurice Myers Director ______________________________________ A. Maurice Myers
2 /s/ Diane J. Plotts Director ______________________________________ Diane J. Plotts /s/ James K. Scott Director ______________________________________ James K. Scott /s/ Oswald K. Stender Director ______________________________________ Oswald K. Stender /s/ Kelvin H. Taketa Director ______________________________________ Kelvin H. Taketa /s/ Jeffrey N. Watanabe Director ______________________________________ Jeffrey N. Watanabe
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