exhibit10-17.htm


    Exhibit
10.17

    


    


    Amendment
No. 1 to the Supplemental Executive Retirement Plan

    Between
Central Pacific Financial Corporation and Dean K. Hirata

    


     

    THIS
AMENDMENT (the “Amendment”) is made
by Central Pacific Financial Corporation (the “Company”) to be
effective as of December 31, 2008.

    


    WHEREAS, the Company has entered into a
Supplemental Executive Retirement Plan (the “SERP”), dated as of
July 1, 2005, for the benefit of Dean K. Hirata (the “Executive”);

    


    WHEREAS, the Company desires to amend
certain provisions of the SERP in order to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”), to
remove certain references to the Executive’s expired employment agreement, and
to combine the documentation of the Executive’s supplemental retirement
agreement with CB Bancshares, Inc. with the SERP; and

    


    WHEREAS, the Company and the Executive
have reserved the right to amend or modify the SERP.

    


    NOW, THEREFORE, the SERP is hereby
amended as follows:

     

    
      	
              1.  

            	
              The
      second through fifth recitals shall be amended to read as
      follows:

            


    

     

    “The
Executive was an employee of CB Bancshares, Inc. (“CBBI”) prior to the merger of
CBBI into the Company effective September 15, 2004.  Effective June 1,
2002, CBBI and the Executive entered into a supplemental executive retirement
agreement (the “CBBI SERP”).  The Executive is continuing to accrue
benefits under the CBBI SERP.

    


    Effective
July 1, 2005, the Company and the Executive entered into a further supplemental
executive retirement agreement (the “CPF SERP”) which provided that the
Executive was entitled to the greater of the benefits under the CBBI SERP or the
benefits under the CPF SERP. The Executive is continuing to accrue benefits
under the CPF SERP.

     

    
      	 	
              The
      Company and the Executive desire to combine the CBBI SERP and the CPF SERP
      into this Agreement, and to make clarifying amendments following the
      expiry of the Executive’s Employment Agreement with the Company. The
      Company and the Executive also intend to amend this Agreement to comply
      with Section 409A of the Internal Revenue Code of 1986, as amended (the
      “Code”).

            


    

     

    
      	 	
              This
      Agreement is intended to be an unfunded, nonqualified deferred
      compensation arrangement for purposes of the Code and the Employee
      Retirement Income Security Act of 1974, as amended
      (“ERISA”).  All benefits payable under this Agreement shall be
      paid out of the general assets of the
Company.”

            


    

     

    
      	
              2.  

            	
              Section 1.3,
      clauses (a), (c) and (d) shall be amended to read as
    follows:

            


    

     

    
      	 	
              “(a) the
      Executive’s willful failure to perform substantially all of the
      Executive’s responsibilities of the Executive’s position, after demand for
      substantial performance has been given by the Board of Directors that
      specifically identifies how the Executive has not substantially performed
      the Executive’s responsibilities;”

            


    

     

    
      	 	
              “(c) the
      Executive’s willful or intentional material breach of the Executive’s
      duties that results in financial or reputational detriment to the Company
      or its affiliates that is not de
minimis;”

            


    

     

    
      	 	
              “(d) the
      Executive’s willful or intentional material misconduct in the performance
      of the Executive’s duties that results in financial or reputational
      detriment to the Company or its affiliates that is not de
      minimis;”

            


    

     

    
      	
              3.  

            	
              Section 1.11
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Separation
      from Service” is as defined in Treas.
    Reg. §1.409A-1(h).

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.  

            	
              Section 2.1
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Normal Retirement
      Benefit.  Following the Executive’s Separation from
      Service on or after his Normal Retirement Date for reasons other than
      death, the Company shall pay to the Executive, in lieu of any other
      benefit under this Agreement, the greater of (1) the “Normal Retirement
      Benefit” described in this Section 2.1 and (2) the actuarial equivalent of
      $19,708.58 per month payable in equal monthly installments over a 20-year
      term commencing on the first day of the month following the Executive’s
      65th birthday (the “Minimum Termination
  Benefit”).”

            


    

     

    
      	
              5.  

            	
              Section 2.1.1(a)(i)
      shall be amended to read as
follows:

            


    

     

    
      	  	
              “The
      amounts specified in Exhibit C as of the Executive’s Normal
      Retirement Date; and”

            


    

     

    
      	
              6.  

            	
              Section 2.1.1(b)
      shall be deleted in its entirety.

            


    

     

    
      	
              7.  

            	
              Section 2.2
      shall be amended to read as
follows:

            


    

    


    
      	 	
              “Early Termination
      Benefit.  Following the Executive’s Separation from
      Service on an Early Termination Date, the Company shall pay to the
      Executive, in lieu of any other benefit under this Agreement, the greater
      of (1) the “Early Termination Benefit” described in this Section 2.2 and
      (2) the Minimum Termination
Benefit.”

            


    

     

    
      	
              8.  

            	
              Section 2.3
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Disability
      Benefit.  Following the Executive’s termination of
      employment due to Disability prior to the Executive’s Normal Retirement
      Date, the Company shall pay to the Executive, in lieu of any other benefit
      under this Agreement, the greater of (1) the “Disability Benefit”
      described in this Section 2.3 and (2) the Minimum Termination
      Benefit.”

            


    

     

    
      	
              9.  

            	
              Section 2.4
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Change-in-Control
      Benefit.  Upon the Executive’s Involuntary Termination of
      Employment or Termination for Good Reason prior to his Normal Retirement
      Date and within 36 months following the occurrence of a Change in Control,
      the Company shall pay to the Executive, in lieu of any other benefit under
      this Agreement, the greater of (1) the “Change-in-Control Benefit”
      described in this Section 2.4 and (2) the Minimum Termination
      Benefit.”

            


    

     

    
      	
              10.  

            	
              The
      second sentence of Section 2.4.2 shall be amended to read as
      follows:

            


    

     

    
      	 	
              “Alternatively,
      prior to December 31, 2008, the Executive may elect that the
      Change-in-Control Benefit be paid (or commence to be paid) on the first
      day of the month after the date that is six months following the
      Executive’s Involuntary Termination of Employment or Termination for Good
      Reason within 36 months after the Change in
  Control.”

            


    

     

    
      	
              11.  

            	
              Section 2.4.3
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Excess Parachute
      Payment.  If any benefit payable under this Agreement
      (determined without regard to any payment under this Section 2.4.3) (the
      “Benefit”) would be subject to the excise tax under Section 4999 of the
      Code (such excise tax, together with any such interest and penalties,
      collectively referred to as the “Excise Tax”), then the provisions of
      Section 2.4.4 shall be applied to determine the amount and timing of
      a “Gross-Up Payment” that the Company shall pay to the
      Executive.  The Gross-Up Payment shall be in such amount that,
      after payment by the Executive of all taxes (including, without
      limitation, any income taxes and any interest and penalties imposed with
      respect thereto and any excise tax) imposed upon the Gross-Up Payment, the
      Executive will retain an amount of the Gross-Up Payment equal to the
      Excise Tax imposed on the Benefit.”

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              12.  

            	
              A
      new Section 2.4.4 shall be added to the SERP, to read as
      follows:

            


    

     

    “Gross-Up Payment
Determination.  All determinations required to be made
including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment, the amount of any Option Redetermination (as defined below)
and the assumptions to be utilized in arriving at such determinations, shall be
made by the public accounting firm that is retained by the Company as of the
date immediately prior to the Change in Control (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Company and the
Executive within fifteen (15) business days of the receipt of notice from the
Company or the Executive that there has been a Benefit, or such earlier time as
is requested by the Company (collectively, the
“Determination”).  Notwithstanding the foregoing, in the event (i) the
Board shall determine prior to the Change in Control that the Accounting Firm is
precluded from performing such services under applicable auditor independence
rules, (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 person(s) effecting the Change in Control, the Board shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder).  All fees and expenses of the Accounting Firm shall
be borne solely by the Company and the Company shall enter into any agreement
requested by the Accounting Firm in connection with the performance of the
services hereunder.  The Gross-Up Payment with respect to any Benefit
shall be made no later than thirty (30) days following such
Benefit.  If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
to such effect, and to the effect that failure to report the Excise Tax, if any,
on the Executive’s applicable federal income tax return will not result in the
imposition of a negligence or similar penalty.  The Determination by
the Accounting Firm shall be binding upon the Company and the
Executive.  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
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”) or Gross-Up Payments are made by the Company which should
not have been made (“Overpayment”), consistent with the calculations required to
be made hereunder.  In the event the amount of the Gross-Up Payment is
less than the amount necessary to reimburse the Executive for the Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to
or for the Executive’s benefit (but in any event no later than by the end of the
Executive’s taxable year next following the taxable year in which the Excise Tax
is remitted).  In the event the amount of the Gross-Up Payment exceeds
the amount necessary to reimburse the Executive for the Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been made
and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by the Executive to or for the
benefit of the Company immediately after it is refunded to the Executive by the
Internal Revenue Service.  The Executive shall cooperate, to the
extent the Executive’s expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes
with the Internal Revenue Service in connection with the Excise
Tax.”

    


    
      	
              13.  

            	
              Section 2.5
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Form of Lifetime
      Benefits.  The Company shall pay the lifetime benefits
      under this Article II, to the Executive in the form elected by the
      Executive in accordance with the attached Exhibit A.  The
      Executive’s election as to the form of benefit must be made prior to
      December 31, 2008.  Except as provided in Section 409A of
      the Code and related Treasury Regulations and as permitted by the Company,
      the Executive may not change the election, and no acceleration of the time
      or schedule of any payment under this Agreement shall be
      permitted.”

            


    

     

    
      	
              14.  

            	
              Section 3.1
      shall be amended to read as
follows:

            


    

     

    
      	 	
              “Death during Active
      Service.  If the Executive dies while in the active
      service of the Company, the Company shall pay to the Executive’s
      Beneficiary, in lieu of any other benefit under this Agreement, the
      greater of (1) the “Preretirement Death Benefit” described in this Section
      3.1 and (2) the Minimum Termination Benefit.  The Company shall
      not pay any Preretirement Death Benefit under this Section 3.1 if the
      Executive has received any lifetime benefit payment provided under Article
      2.”

            


    

     

    
      	
              15.  

            	
              The
      third sentence of Section 3.2 shall be amended to read as
      follows:

            


    

     

    
      	 	
              “If
      the Executive was receiving a Normal Retirement Benefit, Early Termination
      Benefit, Change-in-Control Benefit or Minimum Termination Benefit, any
      death benefit would depend on the form of lifetime benefit
      chosen.”

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              16.  

            	
              The
      first sentence of Section 3.3 shall be amended to read as
      follows:

            


    

     

    
      	 	
              “If
      the Executive is entitled to a lifetime benefit under Article II, but dies
      prior to the commencement of such benefit, the Company shall pay to the
      Executive’s Beneficiary the greater of (1) the Executive’s vested Normal
      Retirement Benefit determined as of the date of the Executive’s death
      without projection for increases in Final Average Compensation or service
      credit to the Executive’s Normal Retirement Date and (2) the Minimum
      Termination Benefit.”

            


    

     

    
      	
              17.  

            	
              Section 5.3
      shall be amended to read as
follows:

            


    

     

    “Section
409A.  Notwithstanding any other provision of this Agreement,
to the extent that any amount payable to the Executive pursuant to the Agreement
is determined by the Company to constitute “non-qualified deferred compensation”
subject to Section 409A of the Code (“Section 409A”) and is payable to the
Executive by reason of the Executive’s termination of employment, then (i) such
payment shall be made to the Executive only upon a Separation from Service and
(ii) if the Executive is a “specified employee” (within the meaning of Section
409A as determined by the Company), such payment shall not be made before the
date that is six months after the date of the Executive’s Separation from
Service (or, if earlier than the expiration of such six-month period, the date
of death).  Neither the Company nor its affiliates shall have any
liability to the Executive or Beneficiary or otherwise if the Agreement or any
amounts paid or payable hereunder are subject to the additional tax and
penalties under Section 409A of the Code.”

    


    
      	
              18.  

            	
              Section 5.4
      shall be deleted in its entirety.

            


    

     

    
      	
              19.  

            	
              Exhibit
      C shall be amended by amending the text under the heading, “Section
      2.1.1(a)(i) Offset Assumptions” to read as
  follows:

            


    

     

    
      
        
          
            
              
                
                  
                    	
                            Dean Hirata

                          
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                            Change
      in

                          	 
      	 
      	
                            All
      Other

                          
	
                            Termination

                          	 
      	
                            Control

                          	 
      	 
      	
                            Benefit

                          
	
                            Year

                          	 
      	
                            Offset
      ($)

                          	 
      	 
      	
                            Offset
      ($)

                          
	 
      	 
      	 
      	 
      	 
      	 
      
	
                            1/1/2008

                          	 
      	
                            1,751

                          	 
      	 
      	
                            4,670

                          
	
                            1/1/2009

                          	 
      	
                            2,019

                          	 
      	 
      	
                            5,032

                          
	
                            1/1/2010

                          	 
      	
                            2,310

                          	 
      	 
      	
                            5,381

                          
	
                            1/1/2011

                          	 
      	
                            2,625

                          	 
      	 
      	
                            5,716

                          
	
                            1/1/2012

                          	 
      	
                            2,967

                          	 
      	 
      	
                            6,038

                          
	
                            1/1/2013

                          	 
      	
                            3,339

                          	 
      	 
      	
                            6,349

                          
	
                            1/1/2014

                          	 
      	
                            3,741

                          	 
      	 
      	
                            6,649

                          
	
                            1/1/2015

                          	 
      	
                            4,176

                          	 
      	 
      	
                            6,937

                          
	
                            1/1/2016

                          	 
      	
                            4,647

                          	 
      	 
      	
                            7,214

                          
	
                            1/1/2017

                          	 
      	
                            5,156

                          	 
      	 
      	
                            7,481

                          
	
                            1/1/2018

                          	 
      	
                            5,707

                          	 
      	 
      	
                            7,738

                          
	
                            1/1/2019

                          	 
      	
                            6,301

                          	 
      	 
      	
                            7,985

                          
	
                            1/1/2020

                          	 
      	
                            6,943

                          	 
      	 
      	
                            8,222

                          
	
                            1/1/2021

                          	 
      	
                            7,636

                          	 
      	 
      	
                            8,452

                          
	
                            1/1/2022

                          	 
      	
                            8,384

                          	 
      	 
      	
                            8,672

                          
	
                            7/1/2022

                          	 
      	
                            8,897

                          	 
      	 
      	
                            8,897

                          
	 
      	 
      	 
      	 
      	 
      	 
      
	
                            Note:  Monthly
      offsets.

                          


                  

                

              

            

          

        

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this First Amendment to the SERP to be
duly executed on this 31st day of
December, 2008.

     

    CENTRAL
PACIFIC FINANCIAL CORPORATION

     

    By:           /s/ Karen K.
Street

     Executive Vice President and
Director of Human Resources

     

    /s/ Dean K.
Hirata

    DEAN K.
HIRATA