SEVERANCE PAY PLAN FOR MERIT EMPLOYEES OF HAWAIIAN ELECTRIC INDUSTRIES, INC., AND AFFILIATES SEVERANCE PAY PLAN FOR MERIT EMPLOYEES OF HAWAIIAN ELECTRIC INDUSTRIES, INC., AND AFFILIATES TABLE OF CONTENTS

(a)

“ Affiliate ” means the Company and any entity which is owned or controlled by the Company, including any subsidiary and subsidiaries of subsidiaries.

(b)

“ Base Pay Rate ” means the severance pay per week that an Eligible Employee is entitled to under this Plan, as more fully detailed in Section 4.1(c), below.

(c)

“ COBRA ” means the Consolidated Omnibus Budget Reconciliation Act, which provides for continuation coverage of employees and their covered dependents under employers’ group health plans upon the occurrence of qualifying events, as codified at Section 4980B of the Code.

(d)

“ Code ” means the Internal Revenue Code of 1986, as amended.

(e)

“ Company ” means Hawaiian Electric Industries, Inc.

(f)

“ Compensation Committee ” means the Compensation Committee of the Board of Directors of Hawaiian Electric Industries, Inc.

(g)

“ Consideration Period ” means the period of calendar days in which an Eligible Employee may sign and return the Separation Agreement, Release, and Waiver. An Eligible Employee must sign, date, and return the Separation Agreement, Release, and Waiver no earlier than the first day of the Consideration Period and no later than the last day of the Consideration Period in order to participate in the Plan, as more fully detailed in Section 3.3, below.

(h)

“ Effective Date ” means September 14, 1998.

(i)

“ Eligible Employee ” means an Employee who is eligible for benefits under this Plan. Eligible Employees are limited to Employees who are Regular Merit Employees at the time of a Qualifying Termination and who meet the eligibility requirements stated in Article 3, below. Eligible Employees do not include Bargaining Unit Employees, Casual Hire Employees, Contract Employees, or Temporary Employees.

(j)

“ Employee ” means any individual who is a common law employee of an Employer and is treated as such on the payroll records of the Employer. An independent contractor or Leased Employee is not an Employee.

(1)

“ Bargaining Unit Employee ” means an Employee whose terms of employment are collectively bargained.

(2)

“ Casual Hire Employee ” means an Employee who is hired on a casual or temporary basis.

(3)

“ Contract Employee ” means an Employee who is hired pursuant to a contract, written or oral, for a specific project or undertaking.

(4)

“ Merit Employee ” means an Employee who is not a Bargaining Unit Employee.

(5)

“ Regular Merit Employee ” means an employee whose employment is not collectively bargained and who is hired for

an indefinite term and not for a specific project or undertaking or for a specific or limited duration.

(6)

“ Temporary Employee ” means an Employee who is hired on a temporary basis.

(k)

“ Employer ” means the Company and any Affiliate which is subject to the terms of this Plan. When used in conjunction with Employee, “Employer” means the Employer of such person.

(l)

“ FlexPlan ” means the Hawaiian Electric Industries, Inc. FlexPlan, as amended from time to time, or the successor thereto. The FlexPlan is intended to qualify as a cafeteria plan under Section 125 of the Code.

(m)

“ FMLA Leave ” means leave taken pursuant to the Family and Medical Leave Act.

(n)

“ Health Benefits Payment ” means the lump sum payment to an Eligible Employee on the occurrence of a Qualifying Termination intended to compensate the Employee for loss of health benefits coverage, as more fully detailed in Article 4, below. Health Benefits Payments are made only to Eligible Employees who were receiving health benefits coverage prior to notice to them of a Qualifying Termination.

(o)

“ Leased Employee ” means a person who is not a common law employee of an Employer but who performs services for such under an agreement with a third party that treats the person as the third party’s employee for payroll and withholding purposes. A Leased Employee is not an Employee and is not eligible for benefits hereunder.

(p)

“ Participating Affiliate ” means the Company and any Affiliate that adopts this Plan. As of the date of this Restatement, the Participating Affiliates are the Company, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., Maui Electric Company, Limited, and Pacific Energy Conservation Services, Inc.

(q)

“ Period of Service ” means a period of time in which an employer-employee relationship existed between an Employee and any Employer hereunder.

(r)

“ Plan Administrator ” means the Vice President – Administration of Hawaiian Electric Industries, Inc. and the Vice President for Corporate Excellence of Hawaiian Electric Company, Inc., or such other person or persons as the Company may appoint from time-to-time to administer the Plan.

(s)

“ Qualifying Termination ” means an Eligible Employee’s involuntary separation from service with an Employer (within the meaning of Section 409A of the Code) on account of restructuring, reengineering, new technology, or other business improvement strategies. The following situations are examples of terminations which are not Qualifying Terminations (but do not exhaust such situations):

(1)

An Eligible Employee’s Termination for Cause;

(2)

A termination on account of an Eligible Employee’s death, disability, or retirement;

(3)

An Eligible Employee’s change of status from a Merit Employee to a Bargaining Unit Employee;

(4)

A termination of the employment of a non-Merit Employee or of a Casual Hire, Contract, Temporary, or other non-Regular Merit Employee for any reason, including business improvement strategies;

(5)

An Eligible Employee’s resignation or transfer from one entity to another within the group of Hawaiian Electric Industries, Inc. and Affiliates, whether such transfer is voluntary or involuntary;

(6)

An Employee’s termination on account of an Employer’s being succeeded by another company, in whole or in part, whether through purchase, merger, reorganization, or other transaction. For example, and without limiting the generality of the foregoing, it is not a Qualifying Termination for an Employee if an Employer sells the department or division within which the Employee is employed to another person and the employment relationship of the Employee with the Employer is terminated incident to such sale, regardless of whether the purchaser of such department or division does or does not offer employment to the Employee; and

(7)

Any combination of one or more of the foregoing or other situations which do not count as Qualifying Terminations.

(t)

“ Revocation Period ” means the period of 7 calendar days during which an Eligible Employee is entitled to revoke his or her Separation Agreement, Release, and Waiver as more fully detailed in Sections 3.4 and 3.5, below.

(u)

“ Separation Agreement, Release, and Waiver ” means the separation agreement, release, and waiver that an Eligible Employee must sign and not revoke as a condition for participating in this Plan, as more fully detailed in Section 3.3, below.

(v)

“ Severance Pay ” means compensation to which an Eligible Employee is entitled on the occurrence of a Qualifying Termination, as more fully detailed in Article 4, below.

(w)

“ Termination Date ” means the date on which an Eligible Employee ex