Exhibit 10.6

 

Central Pacific Financial Corp. 2013 Stock Compensation Plan

 

Key Employee Restricted Stock Unit Grant Agreement

 

This Restricted Stock Unit Grant Agreement (“Agreement”) is effective as of the
“Date of Grant” stated in the accompanying Notice of Restricted Stock Unit Grant
(“Notice”), between Central Pacific Financial Corp., a Hawaii corporation,
(“Company”) with its registered office at 220 South King Street, Honolulu,
Hawaii 96813 and the Participant stated in the Notice (the “Participant”), who
is an employee of the Company or one of its Subsidiaries.

 

1.              Grant of Restricted Stock Units.

 

(a)                 Amount.  The Company hereby grants to the Participant the
number of restricted stock units (“Restricted Stock Units”) of the Company’s
common stock stated in the Notice, where each Restricted Stock Unit represents
an unfunded and unsecured right to receive one share of common stock of the
Company (“Share”).  This grant is subject to the terms and conditions of this
Agreement and the applicable terms and conditions of the Central Pacific
Financial Corp. 2004 Stock Compensation Plan (“Plan”).  Capitalized terms not
otherwise defined in this Agreement shall have meaning ascribed to such terms in
the Plan.

 

(b)                 Vesting.  The Restricted Stock Unit shall vest and become
exercisable on the earlier of (a) pursuant to the “Vesting Date” and/or “Vesting
Schedule” set forth in the Notice or (b) as provided under section 4 below.

 

(c)                  Settlement.  Except as provided below, within 30 days
following each Vesting Date, the portion of the Restricted Stock Units that
vested on a particular Vesting Date shall be settled by the Company by
delivering one Share to the Participant for each Restricted Unit vested.

 

2.              Restrictions during Restriction Period.

 

(a)                 Service Restriction.  The Restricted Stock Units shall be
forfeited and transferred to the Company upon the Participant’s termination of
employment with the Company and its Subsidiaries, for any reason prior to the
“Vesting Dates” stated in the Notice.  In the event a Participant’s status
changes among the positions of Employee, Director and Independent Contractor,
any such change in status shall not constitute a “termination of employment” for
purposes of earning, vesting, forfeiture or otherwise.

 

(b)                 Transfer Restriction.  None of the Restricted Stock Units
may be sold, assigned, pledged, or otherwise transferred, voluntarily or
involuntarily, by the Participant during the Restriction Period.

 

(c)                  Restriction Period.  For purposes of this grant, the term
“Restriction Period” means the later of (i) with respect to all of the
Restricted Stock Units, the period commencing on the Date of Grant and ending on
the “Vesting Dates” stated in the Notice.

 

(d)                 Lapse of Restrictions.  The restrictions set forth in
Sections 2.a. and 2.b. above shall lapse and no longer apply upon the expiration
of the Restriction Period.

 

3.                      Issuance of Shares; Registration; Withholding Taxes. 
The Company may postpone the issuance or delivery of the Shares underlying the
Restricted Stock Units until: (a) the completion of registration or other
qualification of such shares or transaction under any state or federal law,
rule, or regulation, or any listing on any securities exchange, as the Company
shall determine to be necessary or desirable; (b) the receipt by the Company of
such written representations or other documentation as the Company deems
necessary to establish compliance with all applicable laws, rules, and
regulations, including applicable federal and state securities laws and listing
requirements, if any; and (c) the satisfaction of any amount necessary to
satisfy any federal, state, or other governmental tax withholding requirements
relating to the issuance of the Shares.  The Participant shall comply with any
and all legal requirements relating to the Participant’s resale or other
disposition of any Shares acquired under this Agreement.  The Company shall have
the right to withhold with respect to the payment of any Share any taxes
required to be withheld because of such payment, including the withholding of
Shares otherwise payable due to the lapse of the restrictions.  The Participant
shall comply with any and all legal requirements relating to the Participant’s
resale or other disposition of any Shares acquired under this Agreement.

 

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4.                      Change in Control.   In the event that within eighteen
(18) months following a Change of Control (as defined in Section 4(b)), the
Company or its successor causes to occur an involuntary termination of
Participant without Cause (as defined in Section 4(a)) or in the event that
Participant resigns from the Company with Good Reason (as defined in
Section 4(c)), any unvested Restricted Stock Units awarded under this Agreement
shall become immediately vested (“Accelerated Vesting”) in full.

 

(a)                 “Cause” shall mean the occurrence of any of the following:
(i) indictment for, formal admission to (including a plea of Participant’s
guilty or nolo contendere to), or conviction of a felony, or any criminal
offence involving Participant’s moral turpitude; or (ii) gross negligence or
willful misconduct by Participant in the performance of Participant’s material
duties which is likely to materially damage the Company’s financial position.

 

(b)                 “Change in Control” shall mean (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the 1934 Securities Exchange Act) or
group becomes the “beneficial owner” (as defined in Rule 13d-3 of the 1934
Securities Exchange Act) or has the right to acquire beneficial ownership,
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; (ii) the consummation of the sale, lease or other
disposition by the Company of all or substantially all of the Company’s assets
(including any equity interests in subsidiaries); or (iii) the consummation of a
merger, consolidation, business combination, scheme of arrangement, share
exchange or similar transaction involving the Company and any other corporation
(“Business Combination”), other than (x) a Business Combination which results in
both (A) the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at least
forty-five (45%) of the total voting power represented by the voting securities
of the Company or such surviving entity or its parent outstanding immediately
after such Business Combination and (B) the incumbent members of the Board
immediately prior to the Business Combination continuing to represent not less
than two thirds (2/3) of the members of the board of directors of the surviving
entity or its parent, or (y) a Business Combination which results in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent (50%)
of the total voting power represented by the voting securities of the Company or
such surviving entity or its parent outstanding immediately after such Business
Combination; or (iii) any combination of the foregoing.

 

(c)                  “Good Reason” shall mean the occurrence of any of the
following: (i) a material breach of this Agreement by the Company; (ii) a
material reduction in Participant’s base compensation, (iii) a material
reduction in Participant’s duties and/or responsibilities, or the assignment to
Participant of substantial duties inconsistent with Participant’s position; or
(iv) a requirement by the Company, without Participant’s consent, that
Participant relocate to a location greater than thirty-five (35) miles from
Participant’s place of residence.

 

5.                      Nonassignability.  The Restricted Stock Units may not be
sold, assigned, pledged, or transferred by the Participant.  Further, the
Restricted Stock Units are not subject to attachment, execution, or other
similar process.  In the event of any attempt by the Participant to alienate,
assign, pledge, hypothecate, or otherwise dispose of the Restricted Stock Units,
or the levy of any attachment, execution, or other similar process of the
Restricted Stock Units, the Committee may terminate the Restricted Stock Units
by notice to the Participant.

 

6.                      Share Adjustments.  The number of Restricted Stock Units
shall be adjusted proportionately for any increase or decrease in the number of
issued shares of common stock of the Company by reason of a reorganization,
merger, recapitalization, reclassification, stock split, stock dividend, or
other like change in the capital structure of the Company.  The adjustment
required shall be made by the Compensation Committee of the Board of Directors
(the “Committee”), whose determination shall be conclusive.

 

7.                      Shareholder Rights.  Neither the Participant nor any
other person shall be, or have any of the rights and privileges of, a
shareholder of the Company with respect to the Restricted Stock Units and,
accordingly, the Restricted Stock Units carry no voting rights.  The Restricted
Stock Units are mere bookkeeping entries that represent the Company’s unfunded
and unsecured obligation to issue Shares on a future date following satisfaction
of the applicable service condition.  The Participant shall have no rights other
than the rights of a general creditor of the Company.

 

8.                      Dividend Equivalent Rights.  The Participant shall have
the right to accrue “dividend equivalents” with respect to the Restricted Stock
Units (“Corresponding Restricted Stock Units”) in the same manner as dividends
are paid to common shareholders of the Company.  All accrued dividend
equivalents shall be subject to forfeiture while the Corresponding Restricted
Stock Units are held by the Participant.  Upon vesting of the Corresponding
Restricted Stock Units, the accrued dividend equivalents shall be paid to the
Participant.  Dividend equivalents may be paid in cash or Shares in the

 

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same manner as dividends are paid to the common shareholders of the Company
(including both ordinary dividends and extraordinary dividends).

 

9.                      Participant Bound by Plan.  The Participant hereby
acknowledges receipt of a copy of the Plan and acknowledges that the Participant
shall be bound by its terms, regardless of whether such terms have been set
forth in this Agreement.  If there is any inconsistency between the terms of the
Plan and the terms of this Agreement, the Participant shall be bound by the
terms of the Plan.

 

10.               Amendment.  This Agreement may be amended by the Committee at
any time based on its determination that the amendment is necessary or advisable
in light of any addition to, or change in, the Code or regulations issued
thereunder, or any federal or state securities law or other law or regulation,
or the Plan, or based on any discretionary authority of the Committee under the
Plan.  However, unless necessary or advisable due to a change in law, any
amendment to this Agreement which has a material adverse effect on the interest
of the Participant under this Agreement shall be effective only with the consent
of the Participant.

 

Notwithstanding the foregoing, the Company reserves the right to make any
changes and amendments to this Agreement or to withhold or recover the grants
and/or compensation hereunder (on either a retroactive or prospective basis and
whether or not earned/accrued or yet to be earned/accrued) as necessary or
required to comply with all applicable laws, regulations and restrictions.

 

11.               No Advice, Warranties, or Representations.  The Company is not
providing the Participant with advice, warranties, or representations regarding
any of the legal or tax effects to the Participant with respect to the
Restricted Stock Units or Unrestricted Stock Units.  The Participant is
encouraged to seek legal and tax advice from the Participant’s own legal and tax
advisers.

 

12.               Continued Service.  Neither the Plan nor the grant of
Restricted Stock Units confers upon the Participant the right to continue as an
employee of the Company or any of its Subsidiaries.  Subject to other applicable
agreements with the Participant, the Company or a Subsidiary may discharge the
Participant from employment at any time.

 

13.               Code Section 409A.  This grant of Restricted Stock Units is
intended to be exempt from Section 409A of the Code, and this Agreement is
intended to, and shall be interpreted, administered and construed consistent
therewith.  The Committee shall have full authority to give effect to the intent
of this Section 13.

 

14.               Miscellaneous.  This Agreement and the Plan set forth the
final and entire agreement between the parties with respect to the subject
matter hereof, which shall be governed by and construed in accordance with the
laws of the State of Hawaii applicable to contracts made and to be performed in
Hawaii.  This Agreement shall bind and benefit the Participant, the heirs,
distributees, and personal representative of the Participant, and the Company
and its successors and assigns.

 

BY ACCEPTING THIS AGREEMENT AND THe GRANT of Restricted Stock Units pursuant to
this agreement, the participant AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED
IN THIS agreement and IN THE PLAN.

 

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