BANCORP HAWAII, INC. DIRECTORS' DEFERRED COMPENSATION PLAN

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Exhibit 10.7

BANCORP HAWAII, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
(Restatement Effective as of January 1, 1996)

        Article 1.     Purpose.     This Bancorp Hawaii, Inc. Directors' Deferred Compensation Plan ("Plan") is intended to advance the interests of Bancorp Hawaii, Inc. ("Company") by providing deferred compensation benefits to the non-employee members of the Board of Directors of the Company and the Bank of Hawaii ("Bank") ("Directors") and thereby strengthening the ability of the Company to attract and retain valued Directors upon whose judgment, initiative, and efforts the successful conduct and development of the Company depends.

        Article 2.     Effective Date.     This Plan shall become effective as of January 1, 1996 ("Effective Date"), upon adoption by the Board of Directors of the Company, and shall operate on the basis of the calendar year ("Plan Year"). This Plan constitutes a restatement in its entirety and continuation of the prior version of the Plan.

        Article 3.     Eligibility.     Any Director entitled to compensation by the Company or the Bank for service as a Director ("Eligible Director"), other than a Director who is also a salaried officer or employee of the Company or any of its subsidiaries, may elect to become a participant ("Participant") under the Plan by written notice to the Company.

        Article 4.     Election of Deferral.     Each Participant may elect to defer receipt of either all of his annual retainer fees and meeting fees, or all of his annual retainer fees, which are earned for the Plan Year commencing after the date of the election ("Deferral Election"). The Deferral Election for a Plan Year shall be irrevocable as to the designated fees earned for the Plan Year.

        By written notice to the Company on or before any December 31, any Participant may elect to terminate future deferrals with respect to fees earned for the succeeding Plan Year commencing after the December 31. In such event, the amount accumulated pursuant to the Plan prior to the effective date of his termination election shall continue to be subject to the provisions of the Plan. An Eligible Director who elects to terminate his participation shall not be permitted to make a new Deferral Election under the Plan until one year from the effective date of the termination election.

        Article 5.     Deferred Compensation Account.     A separate account shall be established and maintained on behalf of each Participant under the Plan ("Account"), which Account shall reflect the balance of the Deferral Election amounts credited to the Participant as provided in Article 4 above. The deferred fees of each Participant shall be credited to the Participant's Account as soon as reasonably practicable following the date on which such fees would be otherwise payable to the Participant.

        The amounts credited to the Participant's Account, including that portion of the Account comprising the preexisting Account balance under the prior version of the Plan, shall be invested and reinvested in one or more of the Pacific Capital Funds as may be directed by the Participant. Each Account shall be appropriately increased or decreased, as the case may be, to reflect the appreciation or depreciation in value of the Account, the net income or loss attributable to funds credited to the Account, and distributions and expenses that may be charged to the Account. The Participant agrees on behalf of himself and any designated beneficiary to assume all risks and responsibilities for his investment directions under his Account, and the Company shall not be liable for any investment losses that may be incurred under the Account.

        Article 6.     Vesting.     Except as provided in Article 11, a Participant shall have a 100% vested and nonforfeitable interest in the balance of his Account.

        Article 7.     Distribution Due to Termination.     The amount credited to the Account of a Participant shall be paid to the Participant in a single lump sum or in equal annual installments over a period of years, not exceeding ten years, as the Participant may elect. Such distribution shall commence on the

first day of the first calendar month after the Participant ceases to be a Director of the Company. Each Participant shall file with the Company at the time of his Deferral Election an irrevocable election regarding the method of distribution of that portion of his Account derived from the Deferral Election.

        Article 8.     Distribution Due to Death.     Upon the death of an active Participant, or terminated Participant prior to expiration of the period during which his Account is payable, the balance of his Account shall be paid in a single lump sum to his designated beneficiary. The Account shall be paid in full on the second day of the Plan Year following the year of death. The Participant's designated beneficiary shall be designated or changed by the Participant (without the consent of any prior beneficiary) through written notice delivered to the Company. If no such beneficiary is designated, or if no designated beneficiary survives the Participant, the amount payable due to the Participant's death shall be payable to the Participant's estate.

        Article 9.     Incapacity.     If the Compensation Committee of the Board of Directors finds that any person to whom payment is payable under this Plan is unable to care for his affairs because of illness or accident, or is a minor, any payment due (unless a prior claim for such payment has been made by a duly appointed guardian, committee, or other legal representative) may be paid to the spouse, a child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment.

        Article 10.     Funding.     The amounts payable under this Plan shall be paid in cash or in kind from the general funds of the Company, as the Compensation Committee of the Board of Directors may determine, and a Participant shall have no right, title, or interest whatsoever in or to investments, if any, which the Company may make to aid it in meeting its obligations under this Plan. Title to and beneficial ownership of any such investments shall at all times remain in the Company. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and the Participant and any other person. To the extent that any person acquires a right to receive a payment from the Company under this Plan, such right shall be no greater than the right of any unsecured creditor.

        Article 11.     Legal Status.     This Plan is intended to constitute a nonqualified deferred compensation plan not subject to the qualification requirements of Section 401(a) of the Internal Revenue Code or the Employee Retirement Income Security Act of 1974 ("ERISA"). Specifically, prior to the actual payment of the amounts credited to an Account, there is no transfer of any assets to a Participant or for the benefit of the Participant under this Plan, and the Plan is intended to confer no current benefit that would be immediately taxable to the Participant under the constructive receipt rule or economic benefit doctrine under the tax laws. Further, this Plan is intended to benefit non-employee Directors exclusively, and not employees of the Company, and is thereby not subject to the requirements of ERISA.

        Article 12.     Continued Service.     Nothing contained in this Plan shall be construed as conferring upon a Participant the right to continue in the service of the Company as a Director or in any other capacity. Further, nothing contained in this Plan shall be deemed to create an obligation on the part of the Board to nominate any Director for reelection by the Company stockholders.

        Article 13.     Nonassignment.     The interests of a Participant hereunder may not be sold, transferred, signed, pledged, or hypothecated. No Participant may borrow against his Account.

        Article 14.     Administration.     The Compensation Committee of the Board of Directors shall have full power and authority to interpret, construe, and administer this Plan, in its sole and absolute discretion, and the Committee's interpretation and construction of this Plan, including any valuation of an Account, or the amount or recipient of any payment, shall be binding and conclusive on all persons. The Committee may at its sole discretion determine the costs of implementing and administering the Plan, and it may charge all or a portion of such costs to Participants either by charging their respective Accounts or by direct charge.

        Article 15.     Amendment and Termination.     The Plan may, at any time or from time to time, be amended, modified, or terminated at the sole and complete discretion of the Board of Directors.

However, no amendment, modification, or termination of the Plan shall adversely affect such Participant's rights with respect to amounts then accrued in his Account.

        Article 16.     Enforceability and Controlling Law.     If any provision of this Plan is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. The provisions of this Plan shall be construed, administered, and enforced according to the laws of the State of Hawaii.

        Article 17.     Gender.     Wherever any words are used under the Plan in the masculine, feminine, or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply.

        IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officers on this 13th day of December, 1995.

AMENDMENT NO. 96-1 TO
THE BANCORP HAWAII, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN

        In accordance with the provisions of its Article 15, the Bancorp Hawaii, Inc. Directors' Deferred Compensation Plan ("Plan") is amended, effective as of September 1, 1996, as follows:

        1.     The second paragraph of Article 5 of the Plan shall be revised to read as follows:

        For purposes of determining the value of the balance of each Participant's Account, the amount allocated to the Participant's Account shall be treated as if such amount were invested and reinvested in one or more of the Pacific Capital Funds or shares of Company common stock ("Company Stock") as may be directed by the Participant. Each Account shall be appropriately increased or decreased, as the case may be, to reflect the appreciation or depreciation in the value attributable to the Funds or Company Stock, the net income or loss attributable to the Funds or Company Stock, and distributions and expenses that may be charged to the Account. The Participant agrees on behalf of himself and any designated beneficiary to assume all risks and responsibilities for his investment directions under his Account, and the Company shall not be liable for any deemed investment losses that may be incurred under the Account. However, notwithstanding the preceding portion of this paragraph, in order to meet the requirements for exemption from the short-swing profit recovery provisions of Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), the Participant's investment direction in Company Stock shall be subject to the limitations described below in Article 5A.

        2.     New Article 5A of the Plan shall be inserted at the end of Article 5 as follows:

        Article 5A.     Rule 16b-3 Requirements.     With respect to Directors who are subject to the provisions of Section 16 of the Exchange Act, the provisions of the Plan and all transactions hereunder are intended and shall be construed and applied so as to comply with all applicable requirements and conditions for exemption under Rule 16b-3 or any successor Rule under the Exchange Act.

        In this regard, a Participant's investment election directing the investment, disinvestment, or reinvestment of his Account in Company Stock as allowed under Article 5 shall meet the requirements of a "discretionary transaction" under Code of Federal Regulation Section 240.16b-3(f). Specifically, a Participant shall be allowed to make such investment election with respect to the acquisition or disposition of Company Stock only if such election is made on or after the date that is six months following the date of the most recent investment election for an "opposite way" transaction under any employee benefit plan sponsored by the Company. For this purpose, an "opposite way" transaction means, a previous acquisition if the current transaction is a disposition, and vice versa.

        Further, with respect to a Participant's Account, an acquisition or disposition of Company Stock resulting from an election to receive, or defer the receipt of, Company Stock or cash in connection with the death, disability, retirement, or termination of service of the Participant shall be made only if such acquisition or disposition is approved in advance by the Committee, or other qualifying approval is obtained, pursuant to Rules 16b-3(d) and (e).

        3.     The following provision shall be inserted at the end of Article 7:

        Subject to the limitations of Article 5A, the form of the distribution under this Article 7 and Article 8 below shall be in cash or in kind as the Participant (or beneficiary) may elect at the time of distribution.

        To record the adoption of this amendment to the Plan, Bancorp Hawaii, Inc. has executed this document this 26th day of July, 1996.

TRUST AGREEMENT
FOR THE BANCORP HAWAII, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN

(Effective as of September 1, 1996)

TRUST AGREEMENT
FOR THE BANCORP HAWAII, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

TRUST AGREEMENT
FOR THE BANCORP HAWAII, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN

        THIS AGREEMENT, between Bancorp Hawaii, Inc., a Hawaii corporation ("Company"), and Hawaiian Trust Company, Ltd., a Hawaii trust company ("Trustee"), shall be effective as of September 1, 1996.

W I T N E S S E T H:

        WHEREAS, the Company maintains the Bancorp Hawaii, Inc. Directors' Deferred Compensation Plan ("Plan"), restatement effective as of January 1, 1996, as a nonqualified deferred compensation agreement for the benefit of non-employee Directors eligible to participate in the Plan ("Participants") and their beneficiaries.

        WHEREAS, the Plan is maintained as a deferred compensation plan exclusively for non-employee Directors and falls outside the coverage of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

        WHEREAS, it is the intention of the Company to make contributions to this trust ("Trust") to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan, and it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for purposes of providing benefits not covered under Title I of ERISA.

        WHEREAS, the Trust hereby created is intended to be a grantor trust (as that term is defined in Section 671 of the Internal Revenue Code of 1986, as amended), and the Company shall include all items of Trust income and expenses in its income tax return for the year in which such income is earned and such expenses are incurred.

        WHEREAS, the Company has, concurrent with the execution and delivery of this Trust Agreement, delivered to the Trustee certain