exhibit10-25.htm


    Exhibit
10.25

    


    March 11,
2008

    


    Denis
Isono

    5056
Poola Street

    Honolulu,
HI 96821

    


    Re:           Change in Control Severance
Agreement

    


    Dear
Denis:

    


    This is
your Change in
Control Severance Agreement (the “Agreement”) with Central
Pacific Financial Corp., a Hawaii corporation (the “Company”) and its affiliates
(together, as constituted from time to time, the “Group”).

    


    1. Purpose and
Effectiveness.

    


    (a) Purpose. This Company desires to
provide you with protection if there is a future Change in Control of the
Company (as defined below).  You should review this Agreement
carefully for the terms and conditions that will apply.

    


    (b) Effectiveness.  If
you agree to the terms and conditions of this Agreement, please execute and
return a copy of this Agreement to the Company.  This Agreement will
become effective upon execution by both you and the Company (the “Effective
Date”).

    


    2. Term of This
Agreement.

    


    The term
of this Agreement will begin on the Effective Date and will end on the second
anniversary of the Effective Date.  However, the term of this
Agreement will be automatically extended for one additional year beginning on
the second anniversary of the Effective Date and on each subsequent anniversary,
unless the Company gives you written notice, 60 days before such anniversary, of
its determination not to extend this Agreement.  In addition, (1) if
there is a Change in Control during the term of this Agreement, the term of this
Agreement will automatically extend to the second anniversary of the Change in
Control and will automatically terminate on such anniversary and (2) if the
Company gives notice of its intention not to extend this Agreement in
anticipation of a Change in Control or at the request of a third party who had
indicated an intention or taken steps reasonably calculated to effect a Change
in Control and such Change in Control (or an alternative or competing Change in
Control) actually occurs within 6 months of the purported end of the term of
this Agreement, the Agreement will be deemed not to have been terminated and its
term will be automatically extended as set forth in clause (1) of this
sentence.

     

    3. Termination of Your
Employment Following
Change in Control.

     

    (a) Qualifying Termination.  Upon a
Qualifying Termination, you will be eligible for the payments and benefits set
forth in Section 4 below.  A “Qualifying Termination”
means, within the two years following the time when a Change in Control
occurs (1) the Company terminates your employment without Cause or (2) you
terminate your employment for Good Reason.

    


    (b) Definitions Used in This
Section:

    


    (1) “Cause” means any of the
following:

    


    (A) Your
willful failure to perform substantially the responsibilities of your position,
after demand for
substantial performance has been given by the Company’s Chief Executive Officer
that specifically identifies how you have not substantially performed your
responsibilities;

    


    (B) Your
conviction of any felony or of a misdemeanor involving fraud, dishonesty, or
moral turpitude;

     

    (C) Your
willful or intentional material misconduct in the performance of the duties of
your position that results in financial or reputational detriment to the Group
that is not de
minimis;


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (D) Your
material breach of the Group’s Code of Business Conduct and Ethics if the breach
is of a nature for which other similarly situated executives of the Group would
be terminated; or

    


    (E) Your
willful attempt to obstruct or willful failure to cooperate with any
investigation authorized by the Board of Directors (the “Board”) or any governmental
or self-regulatory entity.

    


    To
terminate your employment “for Cause,” Cause must have occurred and the Company
must comply with Section 3(c) of this Agreement.

    


    (2) “Change in Control” means
any of the following:

    


    (A) Individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least half of the Board, provided that any person
becoming a director subsequent to the Effective Date, whose election or
nomination for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without written objection to such nomination) will be an Incumbent
Director; provided
that no individual
initially elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to directors or as a result
of any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board will be deemed to be an Incumbent
Director;

    


    (B) Any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company’s then outstanding securities eligible to
vote for the election of the Board (the “Company Voting Securities”);
provided that the event described in
this paragraph (B) will not be deemed to be a Change in Control by virtue of any
of the following acquisitions:  (i) by the Company or any Subsidiary,
(ii) by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, (iii) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (C)), or (v) pursuant to any
acquisition by you or any group of persons including you (or any entity
controlled by you or any group of persons including you); or

    


    (C) The
consummation of a merger, consolidation, statutory share exchange, sale of all
or substantially all of the Company’s assets or deposits, a plan of liquidation
or dissolution of the Company or similar form of corporate transaction involving
the Company or any of its Subsidiaries that requires the approval of the
Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Transaction”),
unless immediately following such Business Transaction:  (i) more than
50% of
the total voting power of (x) the corporation resulting from such Business
Transaction (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of at least 95% of the voting
securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately
before such Business Transaction (or, if applicable, is represented by shares
into which such Company Voting Securities were converted pursuant to such
Business Transaction), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately before the Business
Transaction, (ii) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is
or becomes the beneficial owner,
directly or indirectly, of 25% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
and (iii) at least half of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Transaction were Incumbent Directors
at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Transaction (any
Business Transaction which satisfies all of the criteria specified in (i), (ii)
and (iii) above will be deemed to be a “Non-Qualifying
Transaction”).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notwithstanding
the foregoing, a Change in Control of the Company will not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided
that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company will then occur.

    


    (3) “Good Reason” means any of the
following:

    


    (A) Any
material and adverse change in your position from the position you held
immediately before the Change in Control (including by reason of removal or
failure to be elected or re-elected);

    


    (B) Any
material and adverse reduction in your authority, responsibilities and reporting
relationships within the Company as they existed at immediately before the
Change in Control (including assigning you duties materially inconsistent with
your position and responsibilities);

    


    (C) Any
reduction in your rate of annual base salary as in effect immediately before the
Change in Control with the Company that is material;

    


    (D) Any
reduction in your annual target bonus opportunity or long-term compensation
opportunity (including any adverse change in the formula for earning annual
bonuses or long-term compensation) as in effect immediately before the Change in
Control, if in the aggregate such reduction is material;

    


    (E) Any
reduction in the other employee, welfare and/or fringe benefits provided to you
immediately before Change in Control (including any increase in the cost of the
benefit that you are required to pay or contribute to), if in the aggregate
(taking into account other employee, welfare and/or fringe benefits offered to
you following the Change in Control), such reduction is material;

    


    (F) Any
failure by the Company to comply with Section 9(c); or

    


    (G) Requiring
you to be principally based at any office or location more than 30 miles from
the location of your office immediately before the Change in Control (it will
not, however, be Good Reason for the Company to require you to travel on
business to an extent consistent with your travel obligations existing before
the Change in Control).

    


    To
terminate your employment “for Good Reason”, Good Reason must have occurred and
you must comply with Section 3(c) of this Agreement.  However, (i) Good Reason will
not include any isolated, insubstantial and inadvertent failure by the Company
that is not in bad faith and is cured within 30 days on your giving the Company
notice of such event, (ii) if you do not give notice to the Company within 90
days after you have knowledge that an event constituting Good Reason has
occurred, the event will no longer constitute Good Reason, and (iii) an event
will not constitute Good Reason if you have consented to it in accordance with
Section 11(f).

    


    (c) Termination
Notice.

    


    (1) To
terminate your employment, either you or the Company must provide a Termination
Notice to the other.  A “Termination Notice” is a
written notice that states the specific provision of this Agreement on which
termination is based, including, if applicable, the specific clause of the
definition of Cause or Good Reason and a reasonably detailed description of the
facts that permit termination under that clause.  (The failure to
include any fact in a Termination Notice that contributes to a showing of Cause
or Good Reason does not preclude either party from asserting that fact in
enforcing its rights under this Agreement).


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (2) The date
your employment terminates is the “Termination
Date”.  If your employment is terminated by the Company other
than for Disability or death or you terminate your employment for Good Reason,
your Termination Date will be the date specified in the Termination
Notice.  If you terminate your employment without Good Reason, your
Termination Date will be 60 days after the Company receives the Termination
Notice (although the Company may accelerate your Termination Date by providing
you with notice).  If your employment is terminated by reason of your
death or Disability, your employment will end on the date of death or the
Disability Effective Date, as applicable.

     

    4. The Company’s
Obligations in Connection With A Qualifying Termination.


     

    (a) If
a Qualifying Termination occurs:

     

    (1) Accrued
Compensation.  The Company will pay you the following as of the
end of your employment:  (A) your
unpaid salary (B) your
salary for any accrued but unused vacation and (C) any
accrued expense reimbursements (together, your “Accrued
Compensation”).  In addition, the Company will timely pay you
any other amounts and provide you any benefits that are required, or to which
you are entitled (in each case as an active employee for any period before the
effectiveness of termination of your employment and as a terminated employee
after effectiveness), under any plan or contract of the Company or the Group
(together, the “Other Accrued
Benefits”).

    


    (2) Accrued
Bonus.  The Company will pay you your Accrued
Bonus.  Your “Accrued Bonus” means the sum
of (A) any
unpaid but vested bonus for the fiscal year ending before the Termination Notice
is given and (B) any
excess of (i) the average of the bonuses you earned for the three fiscal years
ending before the year in which the Termination Notice is given multiplied by the number of
days of your employment since the fiscal year ending before Termination Notice
is given divided by 365
over (ii) any bonus
paid to you for a fiscal year ending after Termination Notice is
given.

    


    (3) Cash Severance. The
Company will pay you a lump-sum cash payment equal to (A) the sum of (i) your
salary and (ii) the average of the bonuses you earned for the three fiscal years
ending before the year in which the Termination Notice is given multiplied by (B)
three.

    


    (4) Accelerated
Vesting.  All stock options issued by the Group to you will
vest and become immediately exercisable, and will remain exercisable for at
least 12 months after the end of your employment (or, if earlier, until they
would have expired but for your termination).  All restricted stock
and other equity-based compensation awarded by the Group to you will vest and
become immediately payable.  The benefits in this Section 4(a)(4) are
referred to as “Accelerated
Vesting”.

    


    (b) For Cause or without Good
Reason.  If the Company terminates your employment for Cause
after a Change in Control or you terminate your employment without Good Reason
after a Change in Control, the Company will pay you your Accrued Compensation
and will provide you your Other Accrued Benefits.

    


    (c) Death or Disability If your employment
terminates as a result of your death or Disability, each occurring after the
time of a Change in Control, you will be entitled to Accelerated Vesting and the
Company will pay you your Accrued Compensation and Accrued Bonus and will
provide your Other Accrued Benefits.  “Disability” means that you
(A) are unable to engage in substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (B) you are, by reason of any medically determinable physical
or mental impairment which can be expected to last for a continuous period of
not less than 12 months, receiving income replacement benefits for a period of
not less than three months under an accident and health plan covering the
Company’s employees.  If the Company determines in good faith that
your Disability has occurred, it may give you Termination Notice.  If
within 30 days of Termination Notice, you do not return to full-time performance
of your responsibilities, your employment will terminate (the “Disability Effective
Date”).  If you do return to full-time performance in that
30-day period, the Termination Notice will be cancelled.  Except as
provided in Section 3(c), any incapacity due to mental or physical illness or
injury will not affect the Company’s obligations under this
Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Form
and Time of Payment.

    


    (1) The cash
amounts provided for in this Section 4 will be paid in a single lump-sum payment
on the regularly scheduled payroll day immediately following the 15th day
after your Termination Date (but in no event later than March 15th
following the calendar year in which occurs the later of the time the legally
binding right to the payment arises or the time such right first ceases to be
subject to a substantial risk of forfeiture).  It is intended that
these payments constitute short-term deferred compensation within the meaning of
the applicable Treasury regulations pursuant to Section 409A of the
Code.  Notwithstanding the preceding two sentences, if you are a
“specified employee” at the time you separate from service with Company and any
payment or benefit under Section 4 is determined to constitute non-qualified
deferred compensation, payment of any amounts pursuant to Section 4 will be made
or such benefit will be provided on the date that is six months after your
separation from service with the Company, all as determined in accordance with
Section 409A of the Code.

    


    (2) Except as
otherwise expressly provided herein, to the extent any reimbursement under this
Agreement is determined to be subject to Section 409A of the Code, the amount of
any such expenses eligible for reimbursement in one calendar year will not
affect the expenses eligible for reimbursement in any other taxable year, in no
event will any reimbursements be paid after the last day of the calendar year
following the calendar year in which you incurred such expenses, and in no event
will any right to reimbursement be subject to liquidation or exchange for
another benefit.

    


    (e) Condition.  The
payments and benefits stated in this Section 4 are conditioned upon your signing
(and failing to revoke during any applicable revocation period), within 55 days
following termination of your employment, a general release (substantially in
the form attached as Exhibit A) in which you release
all claims that you may have against any member of the Group and any of their
respective past or present officers, directors, employees or agents other than
your rights under this Agreement, your rights under any Other Accrued Benefits,
and your rights to indemnification and continued liability insurance coverage
(under this Agreement or otherwise).

    


    (f) Resignation from Directorships and
Officerships.  Unless the Group waives this requirement, the
termination of your employment for any reason will constitute your resignation
from (1) any director, officer or employee position you then have with any
member of the Group and (2) all fiduciary positions (including as trustee) you
hold with respect to any pension plans or trusts established by any member of
the Group.  You agree that this Agreement will serve as your written
notice of resignation in this circumstance.

    


    5. Limitation
on Payments by the Company.

    


    (a) Notwithstanding
anything in this Agreement to the contrary, if it is determined that any
payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated
entities) or any entity which effectuates a Change in Control (or any of its
affiliated entities) to or for your benefit (whether pursuant to the terms of
this Agreement or otherwise) (the “Payments”) would be subject
to the excise tax (the “Excise
Tax”) under Section 4999 of the Code, then the amounts payable to you
under this Agreement will be reduced (reducing first the payments under Section
4(a)(3)) to the maximum amount as will result in no portion of the Payments
being subject to such excise tax (the “Safe Harbor
Cap”).

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) All
determinations required to be made under this Section 5 will be made by the
public accounting firm that is retained by the Company as of the date
immediately before the Change in Control (the “Accounting Firm”) which will
provide detailed supporting calculations both to the Company and you within 15
business days of the receipt of notice from the Company or you that there has
been a Payment, or such earlier time as is requested by the
Company.  Notwithstanding the foregoing, if (i) the Board will
determine before the Change in Control that the Accounting Firm is precluded
from performing such services under applicable auditor independence rules or
(ii) the Audit Committee of the Board determines that it does not want the
Accounting Firm to perform such services because of auditor independence
concerns or (iii) the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change in Control, the Board will
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm will then be referred
to as the Accounting Firm hereunder).  If payments are reduced to the
Safe Harbor Cap, the Accounting Firm will provide a reasonable opinion to you
that you are not required to report any Excise Tax on your federal income tax
return.  All fees, costs and expenses (including, but not limited to,
the costs of retaining experts) of the Accounting Firm will be borne by the
Company.  If the Accounting Firm determines that no Excise Tax is
payable by you, it will furnish you with a written opinion to such effect, and
to the effect that failure to report the Excise Tax, if any, on your applicable
federal income tax return will not result in the imposition of a negligence or
similar penalty.  If the Accounting Firm determines that the Payments
will be reduced to the Safe Harbor Cap, it will furnish you with a written
opinion to such effect.  The determination by the Accounting Firm will
be binding upon the Company and you (except as provided in Section
5(c)).

    


    (c) If it is
established pursuant to a final determination of a court or the Internal Revenue
Service (the “IRS”)
proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for your benefit by the Company, which are in excess
of the limitations provided in this Section 5 (hereinafter referred to as an
“Excess Payment”), such Excess
Payment will be deemed for all purposes to be a loan to you made on the date you
received the Excess Payment and you will repay the Excess Payment to the Company
on demand, together with interest on the Excess Payment at the applicable
federal rate (as defined in Section 1274(d) of the Code) from the date of your
receipt of such Excess Payment until the date of such repayment.  As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the determination, it is possible that Payments which will not have been
made by the Company should have been made (an “Underpayment”), consistent
with the calculations required to be made under this Section 5.  In
the event that it is determined (i) by the Accounting Firm, the Company (which
will include the position taken by the Company, or together with its
consolidated group, on its federal income tax return) or the IRS or (ii)
pursuant to a determination by a court, that an Underpayment has occurred, the
Company will pay you an amount equal to such Underpayment within 10 days of such
determination together with interest on such amount at the applicable federal
rate from the date such amount would have been paid to you until the date of
payment.  You will cooperate, to the extent your expenses are
reimbursed by the Company, with any reasonable requests by the Company in
connection with any contests or disputes with the IRS in connection with the
Excise Tax or the determination of the Excess
Payment.  Notwithstanding the foregoing, if amounts payable under this
Agreement were reduced pursuant to Section 5(a) and the value in stock options
is subsequently redetermined by the Accounting Firm within the context of
Treasury Regulation §1.280G-1 Q/A 33 that reduces the value of the Payments
attributable to such options, the Company will promptly pay to you within 10
days of such determination together with interest on such amount at the
applicable federal rate from the date such amount would have been paid to you
until the date of payment, any amounts payable under this Agreement that were
not previously paid solely as a result of Section 5(a) up to the Safe Harbor
Cap.

     

    6. Proprietary
Information.

    


    (a) Definition.  “Proprietary
Information” means confidential or proprietary information, knowledge or
data concerning (1) the Group’s businesses, strategies, operations, financial
affairs, organizational matters, personnel matters, budgets, business plans,
marketing plans, studies, policies, procedures, products, ideas, processes,
software systems, trade secrets and technical know-how, and other information
regarding the business of the Group and (2) any matter relating to clients of
the Group or other third parties having relationships with the
Group.  Proprietary Information may include information furnished to
you orally or in writing (whatever the form or storage medium) or gathered by
inspection, in each case before or after the date of this
Agreement.  However, Proprietary Information does not include
information (1) that was or becomes generally available to you on a
non-confidential basis, if the source of this information was not reasonably
known to you to be bound by a duty of confidentiality, (2) that was or becomes
generally available to the public or within the relevant trade or industry,
other than as a result of a disclosure by you, directly or indirectly, or (3)
that was independently developed by you without reference to any Proprietary
Information.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Use and
Disclosure.  You will obtain or create Proprietary Information
in the course of your involvement in the Group’s activities and may already have
Proprietary Information.  You agree that the Proprietary Information
is the Group’s exclusive property, and that, during your employment, you will
use and disclose Proprietary Information only for the Group’s benefit and in
accordance with any restrictions placed on its use or disclosure by the
Group.  After your employment, you will not use or disclose any
Proprietary Information.  Notwithstanding anything to the contrary in
this Section 6, Proprietary Information may be disclosed when required by law or
by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof), provided that (1) you will
request confidential treatment with respect to such information and/or request
matters with respect to such information be sealed and (2) you will disclose the
minimum amount required.

    


    (c) Limitations.  Nothing
in this Agreement prohibits you or the Group from providing truthful testimony
to governmental, regulatory or self-regulatory authorities.

    


    7. On-going Restrictions on Your
Activities.

    


    (a) Terms used.  This
Section uses the following defined terms:

    


    (1) “Client” means any client of
the Company to whom you provided services, for whom you transacted business, or
whose identity became known to you in connection with your employment by the
Group.

    


    (2) “Competitive Enterprise” means
(1) any business enterprise operating a banking facility in the markets in which
the Group conducts business at the time of your Qualifying Termination,
including but not limited to Bank of Hawaii, First Hawaiian Bank, American
Savings Bank, Finance Factors, Hawaii National Bank and Territorial Savings Bank
and any successors thereto or (2) any business enterprise that holds a 25% or
greater equity, voting or profit participation interest in any of the
preceding.

    


    (3) “Solicit” means any
communication, regardless of who initiates it, that invites, advises, encourages
or requests any person to take or refrain from taking any action.

    


    (4) “Restriction Period” means the
period beginning on the earlier of (A) a Change in Control or (B) your
Qualifying Termination and ending on either (i) the termination of this
Agreement if your employment terminates after the termination of this Agreement
or (ii) the second anniversary of
the termination of your employment if your employment terminates during the term
of this Agreement. For the avoidance of doubt, the provisions of this Section 7
will not apply to you unless either a Qualifying Termination occurs or you
terminate your employment following a Change in Control and during the term of
this Agreement.

    


    (b) Your Importance to the Group and the
Effect of this Section 7.  You acknowledge that, in the course
of your involvement in the Group’s activities, you will have access to
Proprietary Information and the Group’s client base and will yourself profit
from the goodwill associated with the Group.  On the other hand, in
view of your access to Proprietary Information and your importance to the Group,
if you compete with the Group for some time after your employment, the Group
will likely suffer significant harm but the amount of loss would be uncertain
and not readily ascertainable.  You understand that this Section 7
will limit your ability to earn a livelihood in a Competitive Enterprise but you
have determined that your complying with this Section 7 will not result in
severe economic hardship for you or your family. For the avoidance of doubt, the
provisions of this Section 7 will not limit in any way (i) any fiduciary or
similar duty you may have to the Group or (ii) any other non-competition and/or
non-solicitation agreements you may have with (or other such obligations you may
have to) the Group.

    


    (c) Non-Competition.  If
a Qualifying Termination occurs, you agree that you will not, directly or
indirectly, during your Restriction Period:

    


    (1) hold a 5%
or greater equity, voting or profit participation interest in a Competitive
Enterprise; or

    


    (2) associate
(including as a director, officer, employee, partner, consultant, agent or
advisor) with a Competitive Enterprise and in connection with your association
engage in Hawaii, or directly or indirectly manage or supervise personnel
engaged in Hawaii, in any activity:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (A) that is
substantially similar to any activity that you were engaged in;

     

    (B) that
calls for the application of specialized knowledge or skills substantially
similar to those used by you in your activities; or

    


    (C) that is
substantially similar to any activity for which you had direct or indirect
managerial or supervisory responsibility;

    


    in each case, for the
Group at any time during the year before the end of your
employment.

    


    (d) Non-Solicitation of
Clients.  If a Qualifying Termination occurs, you agree that
you will not, directly or indirectly, during your Restriction Period, Solicit
any Client to transact business with a Competitive Enterprise or to reduce or
refrain from doing any business with the Group.

    


    (e) Non-Solicitation of Group
Employees.  During your Restriction Period, you will not,
directly or indirectly, Solicit anyone who is then an employee of the Group (or
who was an employee of the Group within the prior six months) to resign from the
Group or to apply for or accept employment with any Competitive
Enterprise.

    


    (f) Notice to New
Employers.  Before you either apply for or accept employment
with any other person or entity while any of Section 7(c), 7(d) or 7(e) is in
effect, you will provide the prospective employer with written notice of the
provisions of this Section 7 and will deliver a copy of the notice to the
Group.

    


    (g) No
Disparagement.  You will make no public statement that would
libel, slander or disparage any member of the Group or any of their respective
past or present officers, directors, employees or agents.  The Company
agrees that it will (and will use good faith efforts to cause the Chief
Executive Officer of the Company, the Board, and its officers and employees to)
make no public statement that would libel, slander or disparage
you.

     

    (h) Survival.  Any
termination of your employment (or breach of this Agreement by you or the Group)
will have no effect on the continuing operation of this Section 7.

    


    8. Effect
on Other Agreements; Entire Agreement.

    


    This
Agreement is the entire agreement between you and the Company with respect to
the subject matter contemplated by this Agreement and supersedes any earlier
agreement, written or oral, with respect to the subject matter of this
Agreement, including, but not limited to, your Employment Agreement with the
Company dated January 1, 2003.  You agree that you are not entitled to
any severance, change-in-control or similar rights under any other plan of the
Group.  In entering into this Agreement, no party has relied on or
made any representation, warranty, inducement, promise or understanding that is
not in this Agreement.

    


    9. Successors.

    


    (a) Payments on Your
Death.  If you die and any amounts become payable under this
Agreement, the Company will pay those amounts to your estate.

    


    (b) Assignment by You. You may not assign this
Agreement without the Company’s consent.  Also, except as required by
law, your right to receive payments or benefits under this Agreement may not be
subject to execution, attachment, levy or similar process.  Any
attempt to effect any of the preceding in violation of this Section 9(b),
whether voluntary or involuntary, will be void.

    


    (c) Assumption by any Surviving
Company.  The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.  As used in this Agreement, “Company” will mean the Company as
hereinbefore defined and any successor to all or substantially all of its
business or assets.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10. Disputes.

    


    (a) Applicable
Matter.  This Section 10 applies to any controversy or claim
between you and the Group arising out of or relating to or concerning any aspect
of this Agreement (an “Applicable
Matter”).

     

    (b) Mandatory
Arbitration.  Subject to the provisions of this Section 10, any
Applicable Matter will be finally settled by arbitration in Honolulu, Hawaii
administered by the American Arbitration Association under its Commercial
Arbitration Rules then in effect.  However, the rules will be
modified in the following ways: (1) each
arbitrator will agree to treat as confidential evidence and other information
presented to the same extent as the information is required to be kept
confidential under Section 6, (2) the
optional Rules for Emergency Measures of Protections will apply, (3) you
and the Group agree not to request any amendment or modification to the terms of
this Agreement except as provided in Section 11(h), (4) a
decision must be rendered within 10 business days of the parties’ closing
statements or submission of post-hearing briefs and (5)
the arbitration will be conducted before a panel of three
arbitrators, one selected by you within 10 days of the commencement of
arbitration, one selected by the Company in the same period and the third
selected jointly by these arbitrators (or, if they are unable to agree on an
arbitrator within 30 days of the commencement of arbitration, the third
arbitrator will be appointed by the American Arbitration Association; provided that the arbitrator will be a
partner or former partner at a nationally recognized law firm.

    


    (c) Limitation on
Damages. You
and the Group agree that there will be no punitive damages payable as a result
of any Applicable Matter and agree not to request punitive
damages.

    


    (d) Injunctions and Enforcement of
Arbitration Awards.  You or the Group may bring an action or
special proceeding in a state or federal court of competent jurisdiction sitting
in Honolulu, Hawaii to enforce any arbitration award under Section
10(b).  Also, the Group may bring such an action or proceeding, in
addition to its rights under Section 10(b) and whether or not an arbitration
proceeding has been or is ever initiated, to temporarily, preliminarily or
permanently enforce any part of Sections 6 and 7.  You agree that
(1) your
violating any part of Sections 6 and 7 would cause damage to the Group that
cannot be measured or repaired, (2) the
Group therefore is entitled to an injunction, restraining order or other
equitable relief restraining any actual or threatened violation of those
Sections, (3) no
bond will need to be posted for the Group to receive such an injunction, order
or other relief and (4) no
proof will be required that monetary damages for violations of those Sections
would be difficult to calculate and that remedies at law would be
inadequate.

    


    (e) Jurisdiction and
Choice of Forum.  You and the Group irrevocably submit to the
exclusive jurisdiction of any state or federal court located in Honolulu, Hawaii
(the “Forum”)
over any Applicable Matter that is not otherwise arbitrated or resolved
according to Section 10(b).  This includes any action or
proceeding to compel arbitration or to enforce an arbitration
award.  Both you and the Group (1) acknowledge
that the Forum has a reasonable relation to this Agreement and to the
relationship between you and the Group and that the submission to the Forum will
apply even if the forum chooses to apply non-Forum law, (2) waive,
to the extent permitted by law, any objection to personal jurisdiction or to the
laying of venue of any action or proceeding covered by this Section 10(e) in the
Forum, (3) agree
not to commence any such action or proceeding in any forum other than the Forum
and (4) agree
that, to the extent permitted by law, a final and non-appealable judgment in any
such action or proceeding in any such court will be conclusive and binding on
you and the Group.  However, nothing in this Agreement precludes you
or the Group from bringing any action or proceeding in any court for the purpose
of enforcing the provisions of Sections 10(b) and this 10(e).

    


    (f) Waiver of Jury
Trial.  To the extent permitted by law, you and the Group waive
any and all rights to a jury trial with respect to any Applicable
Matter.

    


    (g) Governing
Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of Hawaii applicable to contracts made and
to be performed entirely within that State.

    


    (h) Costs. The Company will pay or
reimburse any reasonable expenses, including reasonable attorney’s fees, you
incur as a result of any Applicable Matter, provided that you substantially
prevail in the Applicable Matter.

    


    (i) Interest.  If the
Company fails to pay when due any amount required by the Agreement, it will pay
interest on such amount at a rate equal to its prime commercial lending
rate.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (j) Survival.  For the
avoidance of doubt, any termination of your employment (or breach of this
Agreement by you or the Group) will have no effect on the continuing operation
of this Section 10.

     

    11. General
Provisions.

    


    (a) Construction.

    


    (1) References (A) to
Sections are to
sections of this Agreement unless otherwise stated;
(B) to
any contract (including
this Agreement) are to the contract as amended, modified, supplemented or
replaced from time to time;
(C) to
any statute, rule or regulation are to the
statute, rule or regulation as amended, modified, supplemented or replaced from
time to time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any
statute, rule or
regulation include any successor to the section;
(D) to
any governmental
authority include any successor to the governmental authority;
(E) to
any plan include any
programs, practices and policies;
(F) to
any entity include any
corporation, limited liability company, partnership, association, business trust
and similar organization and include any governmental authority; and
(G) to
any affiliate of any
entity are to any person or other entity directly or indirectly controlling,
controlled by or under common control with the first entity.

    


    (2) The
various headings in
this Agreement are for convenience of reference only and in no way define, limit
or describe the scope or intent of any provisions or Sections of this
Agreement.

    


    (3) Unless
the context requires otherwise, (A) words
describing the singular number include the plural and vice versa, (B) words
denoting any gender include all genders and
(C) the
words “include”, “includes”
and  “including” will be deemed to
be followed by the words “without limitation”.

    


    (4) It is
your and the Group’s intention that this Agreement not be construed more
strictly with regard to you or the Group.

     

    (b) Withholding. You and the
Group will treat all payments to you under this Agreement as compensation for
services.  Accordingly, the Group may withhold from any payment any
taxes that are required to be withheld under any law, rule or
regulation.  Any amounts so withheld will be timely and properly
remitted by the Company to the appropriate taxing authority.

    


    (c) Severability. If any provision of
this Agreement (or if the application of any provision to a person or particular
circumstances) is found by any court of competent jurisdiction (or legally
empowered agency) to be illegal, invalid or unenforceable for any reason,
then (1) the
provision will be amended automatically to the minimum extent necessary to cure
the illegality or invalidity and permit enforcement and (2) the
remainder of this Agreement will not be affected.  In particular, if
any provision of Section 7 is so found to violate law or be unenforceable
because it applies for longer than a maximum permitted period or to greater than
a maximum permitted area, it will be automatically amended to apply for the
maximum permitted period and maximum permitted area.

    


    (d) No Set-off or
Mitigation/Etc.  Your and the Company’s respective obligations
under this Agreement will not be affected by any set-off, counterclaim,
recoupment or other right you or any member of the Group may have against each
other or anyone else (except as provided in Section 7).  You do not
need to seek other employment or take any other action to mitigate any amounts
owed to you under this Agreement, and those amounts will not be reduced if you
do obtain other employment (except as this Agreement specifically
states).

    


    (e) Bank Regulatory
Limitation.  If any payment or benefit under this Agreement
would otherwise be a golden parachute payment within the meaning of Section
18(k) of the Federal Deposit Insurance Act (a “Golden Parachute Payment”)
that is prohibited by applicable law, then the total payments and benefit will
be reduced to the greatest amount that could be made to you without there being
a Golden Parachute Payment.  The Company will give you the opportunity
to select the order in which payments or benefits are reduced.  To the
extent reasonably practicable, the Company will seek the approval of the Federal
Deposit Insurance Corporation and/or the State of Hawaii Division of Financial
Institutions and any other bank regulatory body, as necessary, to make any
payment to you under this Agreement that would otherwise constitute a Golden
Parachute Payment.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f) Notices. All notices, requests,
demands, consents and other communications under this Agreement must be in
writing and will be deemed given (1) on
the business day sent, when delivered by hand or facsimile transmission (with
confirmation) during normal business hours, (2) on
the business day after the business day sent, if delivered by a nationally
recognized overnight courier or (3) on
the third business day after the business day sent if delivered by registered or
certified mail, return receipt requested, in each case to the following address
or number (or to such other addresses or numbers as may be specified by notice
that conforms to this Section 11(f)):

    


    If to
you, to the address on record with the Company, and

    


    If to the
Company or any other member of the Group, to:

    


    Central
Pacific Financial Corp.

    220 South
King Street

    Honolulu,
Hawaii 96813

    Attention:  Glenn
K.C. Ching

    Facsimile:  (808)
544-6835

     

    with a
copy to:

     

    Sullivan
& Cromwell LLP

    125 Broad
Street

    New York,
New York 10004

    Attention:  Marc
Trevino

    Facsimile:  212-558-3588

     

    (g) Consideration.  This
Agreement is entered in consideration of the mutual covenants contained in this
Agreement.  You and the Group acknowledge the receipt and sufficiency
of the consideration to this Agreement and intend this Agreement to be legally
binding.

    


    (h) Amendments and
Waivers.  Any provision of this Agreement may be amended or
waived but only if the amendment or waiver is in writing and signed, in the case
of an amendment, by you and the Company or, in the case of a waiver, by the
party that would have benefited from the provision waived.  Except as
this Agreement otherwise provides, no failure or delay by you or the Group to
exercise any right or remedy under this Agreement will operate as a waiver, and
no partial exercise of any right or remedy will preclude any further
exercise.

    


    (i) Third Party Beneficiaries.
Subject to Section 9, this Agreement will be binding on, inure to the
benefit of and be enforceable by the parties and their respective heirs,
personal representatives, successors and assigns.  This Agreement does
not confer any rights, remedies, obligations or liabilities to any entity or
person other than you and the Company and your and the Company’s permitted
successors and assigns, although this Agreement will inure to the benefit of,
and confer related rights and remedies on, the Group.

     

    
      (j) Counterparts. This Agreement
may be executed as counterparts, each of which will constitute an original and
all of which, when taken together, will constitute one agreement.

       

    

    *                      *                      *

    Please
confirm your acceptance of the terms and conditions of your employment with the
Company by signing where indicated below.

    


    


    Very
truly yours,

     

    /s/ Ronald K.
Migita

    Chairman
of the Board

     

    Accepted
and Agreed:

    /s/ Denis K.
Isono

     

    Date:
March 21, 2008