Hawaii is the only US state to contain Union Jack in its flag.

The Union flag is at the top quarter of the flag, closest to the mast. The field of the flag is composed of eight horizontal stripes, symbolizing the eight major islands (Hawaiʻi, Oʻahu, Kauaʻi, Kahoʻolawe,Lānaʻi, Maui, Molokaʻi and Niʻihau).

Presumably, King Kamehameha I flew a British flag given to him by a British explorer as a token of friendship. Following visitors reported seeing the flag flying from places of honor. An adviser to the king noted that the Union Flag could draw Hawaii into a big conflict, as his kingdom could be seen as an ally of the UK, and afterwards he lowered the Union Flag over his home.

This somehow explains why the resulting flag of Hawaii was a deliberate hybrid of the two nations' flags, but this version is not the only one.

More Info: en.wikipedia.org