Document:

Exhibit 10.6

 

September 9, 2004

 

Alwyn S. Chikamoto

 

Re:          Employment Agreement

 

Dear
Alwyn:

 

This
is your EMPLOYMENT AGREEMENT with
Central Pacific Financial Corp., a Hawaii corporation (the “Company”).

 

1.     The
Merger Agreement; Effectiveness

 

This
Agreement relates to the Agreement and Plan of Merger, dated as of April 22,
2004 (the “Merger Agreement”), between the Company
and CB Bancshares, Inc., a Hawaii corporation (“CB Bancshares”).  It
sets forth the terms of your employment with the Company and its affiliates
(together, as constituted from time to time, the “Group”) once the merger provided for in the Merger Agreement
becomes effective.  However, if the
Merger Agreement or your present employment terminates for any reason before
the merger occurs, all of this Agreement’s provisions will terminate and there
will be no liability of any kind under this Agreement.

 

2.     Terms
Schedule

 

Some
of the terms of your employment are in the attached schedule (your “Schedule”), which is part of this
Agreement.

 

3.     Your Position,
Performance and Other Activities

 

(a)           Position.  You will be employed in the position stated
in your Schedule.

 

(b)           Authority,
Responsibilities and Reporting.  You will have any reporting relationships set
forth in your Schedule.  You will have
the authority and responsibilities that correspond to your position, including
any particular authority and responsibilities that are specified in the
Schedule or that the Company’s Board of Directors (the “Board”)

 

 

or
any officer of the Group to whom you report in accordance with your Schedule
may assign to you from time to time consistent with the provisions of this
Agreement.

 

(c)           Performance.  During your employment, you will devote
substantially all of your business time and attention to the Group and will use
good faith efforts to discharge your responsibilities under this Agreement to
the best of your ability.

 

(d)           Other
Activities.  During
your employment, you may serve on
corporate, civic or charitable boards and manage personal investments, so long as these activities do not
significantly interfere with your performance of your responsibilities under
this Agreement and are consistent with the Group’s Code of Conduct and
Ethics.  The Company acknowledges that
you currently serve on, and approves your continued service on, the corporate,
civic and charitable boards listed in your Schedule.

 

4.     Term of Your
Employment

 

Your
employment under this Agreement will begin at the time the merger provided for
in the Merger Agreement becomes effective (your “Start Date”) and end on the earlier of (1) the end of the
Agreement Period stated in your Schedule or (2) the effectiveness of early
termination of your employment under Section 7(e).  References in this Agreement to “your employment” are to your employment
under this Agreement.

 

5.     Your Compensation

 

(a)           Salary.  During your employment, you will receive an
annual base salary (adjusted as provided herein from time to time, your “Salary”). 
The starting amount of your Salary is stated in your Schedule.  The Company may increase it at any time for
any reason.  The Company may not decrease
your Salary (including after any increase), and any increase in your Salary
will not reduce or limit any other obligation to you under this Agreement.  Your Salary will be paid in accordance with
the Group’s practices for similarly situated executives.

 

(b)           Bonus.  You will be entitled to receive an annual
cash bonus (your “Bonus”) for
each fiscal year of the Company ending during your employment.  The amount of your Bonus will be determined
by the Company in accordance with your Schedule, and it will be paid in
accordance with the Group’s practices for similarly situated executives of the
Group.

 

(c)           Other
Executive Compensation Plans and Additional Compensation.  During your employment, you will be entitled
to participate in all of the Group’s executive compensation plans, including
any management incentive plans, deferred compensation plans, supplemental
retirement plans and stock and stock option plans, on a basis that is at least
as favorable as that provided to similarly situated executives of the Group
(subject to the provisions of your Schedule). 
You will also receive any additional compensation provided in your
Schedule.

 

6.     Employee
Benefits.

 

(a)           Employee
Benefit Plans.  During
your employment, you will be entitled to (1) participate in each of the Group’s
employee benefit and welfare plans, including plans

 

2

 

providing
retirement benefits or medical, dental, hospitalization, life or disability
insurance, and (2) receive perquisites, in
each case on a basis that is at least as favorable as that provided
to similarly situated executives of the Group (subject to the provisions of
your Schedule).

 

(b)           Vacation.  You will be entitled to paid annual vacation
during your employment on a basis that is at least as favorable as that
provided to similarly situated executives of the Group.

 

(c)           Business
Expenses.  You will be
reimbursed for all business and entertainment expenses incurred by you in
performing your responsibilities under this Agreement.  However,
your reimbursement will be subject to the Group’s normal practices for
similarly situated executives.

 

(d)           Indemnification.  To the extent permitted by law, the Company will
indemnify you against any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative, arising by reason of
your status as a director, officer, employee and/or agent of the Group during
your employment or your status, if any, as a trustee or other fiduciary of any
employee benefit plan sponsored by any member of the Group.  In addition, to the extent permitted by law,
the Company will pay or reimburse any expenses, including reasonable attorney’s
fees, you incur in investigating and defending any actual or threatened action,
suit or proceeding for which you may be entitled to indemnification under this
Section 6(d).  However, you agree to
repay any expenses paid or reimbursed by the Company if it is ultimately
determined that you are not legally entitled to be indemnified by the
Company.  If the Company’s ability to
make any payment contemplated by this Section 6(d) depends on an investigation
or determination by the board of directors of any member of the Group, at your
request the Company will use its best efforts to cause the investigation to be
made (at the Company’s expense) and to have the relevant board reach a
determination as soon as reasonably possible.

 

(e)           Additional
Benefits.  During your
employment, you will be provided any additional benefits stated in your
Schedule.

 

7.     Early
Termination of Your Employment.

 

(a)           No Reason
Required.  You or the
Company may terminate your employment early at any time for any reason, or for
no reason, subject to compliance with Section 7(e).

 

(b)           Termination
by the Company for Cause.

 

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

 

(A)          Your
willful failure to perform substantially your responsibilities under this
Agreement, after demand for
substantial performance has been given by the Board 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,

 

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(C)           Your
willful or intentional material breach of this Agreement that results in
financial or reputational detriment to the Group that is not de minimis,

 

(D)          Your
willful or intentional material misconduct in the performance of your duties under
the Agreement that results in financial or reputational detriment to the Group
that is not de minimis,

 

(E)           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

 

(F)           Your
willful attempt to obstruct or willful failure to cooperate with any
investigation authorized by the Board or any governmental or self-regulatory
entity.

 

For
this definition, (i) no act or omission by you will be “willful” unless it is
made by you in bad faith or without a reasonable belief that your act or
omission was in the best interests of the Group and (ii) any act or omission by
you based on authority given pursuant to a resolution duly adopted by the Board
or on the advice of counsel for the Group will be deemed made in good faith and
in the best interests of the Company.

 

(2)           To
terminate your employment “for Cause”, Cause must have occurred and the Company
must comply with Section 7(e) and any other steps required in your Schedule for
termination for Cause.

 

(c)           Termination
by You for Good Reason.

 

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

 

(A)          Any
material and adverse change in your position from that provided in your
Schedule (including by reason of removal or failure to be elected or
re-elected),

 

(B)           Any
failure by the Company to provide you with authority, responsibilities and
reporting relationships as provided in Section 3(b) (including assigning you
duties materially inconsistent with your position and responsibilities),

 

(C)           Any
failure by the Company to provide you with compensation or benefits as provided
in Section 5 and Section 6,

 

(D)          Any
failure by the Company to comply with Section 12(c), or

 

(E)           The
occurrence of any additional event set forth in your Schedule as being Good
Reason.

 

(2)           To
terminate your employment “for Good Reason”, Good Reason must have occurred and
you must comply with Section 7(e) and any other steps

 

4

 

required
in your Schedule for termination for Good Reason.  However,
(A) Good Reason will not include any isolated, insubstantial and inadvertent
failure by the Company that is not in bad faith and is cured promptly on your
giving the Company notice, (B) if you do not give a Termination Notice to the
Company within 180 days after you have knowledge that an event constituting
Good Reason has occurred, the event will no longer constitute Good Reason, and
(C) an event will not constitute Good Reason if you have consented to it in
accordance with Section 14(f).

 

(d)           Termination
on Disability or Death.

 

(1)           “Disability” means your absence from your
responsibilities with the Company on a full-time basis for 130 business days in
any consecutive 12 months as a result of incapacity due to mental or physical
illness or injury.  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 this Section 7(d), any
incapacity due to mental or physical illness or injury will not affect the
Company’s obligations under this Agreement.

 

(2)           Your
employment will terminate automatically on your death.

 

(e)           Termination
Notice.

 

(1)           To
terminate your employment early, 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)           If
your employment is terminated by the Company other than for Disability or death
or you terminate your employment for Good Reason, your employment will end on
the date specified in the Notice of Termination.  If you terminate your employment without Good
Reason, your employment will end 60 days after the Company receives the
Termination Notice (although the Company may accelerate the end of your employment
by providing you with notice or, alternatively, may place you on paid leave
during such period).  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.

 

5

 

8.     The
Company’s Obligations in Connection With Your Early Termination

 

(a)           General
Effect.  On termination
in accordance with Section 7, your employment will end and the Group will have
no further obligations to you except as provided in this Section 8.

 

(b)           For Good
Reason or Without Cause. 
If the Company terminates your employment without Cause or you terminate
your employment for Good Reason:

 

(1)           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 early 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)           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 Termination Notice is given and (B) any
excess of (i) your target Bonus for the fiscal year in which 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)           The
Company will pay you (A) the sum of your Salary and your target Bonus for the
fiscal year in which Termination Notice is given multiplied by (B) the length of the Severance Period stated
in your Schedule (in years, including any fractional years).

 

(4)           All
stock options issued by the Group to you will vest and become immediately
exercisable, and, subject to your Schedule, 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 8(b)(4) are
referred to as “Accelerated Vesting”.

 

(5)           The
Company will provide any “Additional Good Reason/Without Cause Benefits”
provided in your Schedule.

 

(c)           For Cause or
without Good Reason. 
If the Company terminates your employment for Cause or you terminate
your employment without Good Reason, the Company will pay you your Accrued
Compensation and will provide you your Other Accrued Benefits.

 

(d)           Death or
Disability.  If your
employment terminates as a result of your Death or Disability, the Company will
pay you your Accrued Compensation and Accrued Bonus

 

6

 

and
will provide your Other Accrued Benefits. 
The Company will also provide any “Additional Death/Disability Benefits”
provided in your Schedule.

 

(e)           Additional
Provisions.  Your
Schedule may provide additional provisions that relate to the Company’s
obligations in this Section 8 or the Company’s obligations on your termination
generally.  These provisions are a part
of this Agreement.

 

(f)            Condition. 
Subject to your Schedule, as a condition to making the payments and
providing the benefits stated in this Section 8, the Company may require you to
execute and deliver 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).

 

(g)           Timing.  Subject to Section 8(f), the benefits
provided in this Section 8 will begin at the end of your employment, any cash
payments owed to you under this Section 8 will be paid in a lump sum amount no later than 15 business days
following the termination of your employment, and the Other Accrued Benefits
will be provided in accordance with the terms of the relevant plan or contract.

 

(h)           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.

 

9.     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

 

7

 

Information.  You agree that the Proprietary Information is
the exclusive property of the Group, 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 9(b), 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 shall request confidential treatment with respect to such
information and/or request matters with respect to such information be sealed
and (2) you shall 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.

 

10.  On-going
Restrictions on Your Activities

 

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

 

“Competitive
Enterprise” means (1) Bank of Hawaii, First Hawaiian Bank, American
Savings Bank, Finance Factors and Hawaii National 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.

 

“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.

 

“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.

 

“Restriction
Period” has the meaning set forth in the Schedule.

 

(b)           Your Importance to the Group and the Effect of this
Section 10.  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 10 will limit your ability to earn a livelihood in a Competitive
Enterprise and your relationships with Clients but you have determined that
your complying with this Section 10 will not result in severe economic hardship
for you or your family.

 

(c)           Non-Competition.  Until the end of your Restriction Period, you
will not, directly or indirectly:

 

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

 

8

 

(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;

 

(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 (or, if earlier, the
year before the date of determination).

 

(d)           Non-Solicitation
of Clients.  Until the
end of your Restriction Period, you will not, directly or indirectly, 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. 
Until the end of 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 10 (c), (d), or
(e) is in effect, you will provide the prospective employer with written notice
of the provisions of this Section 10 and will deliver a copy of the notice to
the Group.

 

(g)           No
Disparagement.  You
shall 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 shall (and shall 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) shall have no effect on the continuing
operation of this Section 10.

 

11.  Effect
on Other Agreements.

 

(a)           Prior
Employment Agreements and Severance Rights.  Beginning on your Start Date, this Agreement
will supersede any earlier employment agreement or understanding and any
earlier severance, change-in-control or similar rights you may have with any
member of the Group (including CB Bancshares or any affiliate of it).

 

(b)           Effect on
Other Agreements; Entire Agreement.This Agreement is the
entire agreement between you and the Company with respect to the relationship
contemplated by

 

9

 

this
Agreement and supersedes any earlier agreement, written or oral, with respect
to the subject matter of this Agreement. 
You agree that you are not entitled to any severance, change-in-control
or similar rights under any 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.

 

12.  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
12(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” shall mean the Company as
hereinbefore defined and any successor to all or substantially all of its
business or assets.

 

13.  Disputes.

 

(a)           Employment
Matter.  This Section
13 applies to any controversy or claim between you and the Group arising out of
or relating to or concerning any aspect of this Agreement, your employment with
the Group or the Company, the termination of that employment or your
compensation or benefits from the Group or the Company (together, an “Employment Matter”).

 

(b)           Mandatory
Arbitration.  Subject to the provisions of this Section 13,
any Employment 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 9, (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 14(c), (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 shall be a
partner or former partner at a nationally recognized law firm).

 

10

 

(c)           Limitation
on Damages.  You and the Group agree that there will be no
punitive damages payable as a result of any Employment 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 13(b).  Also, the Group may bring such an action or
proceeding, in addition to its rights under Section 13(b) and whether or not an
arbitration proceeding has been or is ever initiated, to temporarily,
preliminarily or permanently enforce any part of Sections 9 and 10.  You agree that (1) your violating any part of
Sections 9 and 10 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
Employment Matter that is not otherwise arbitrated or resolved according to
Section 13(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 13(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 13(b) and this 13(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 Employment 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 Employment Matter, provided
that you substantially prevail in the Employment Matter.

 

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

 

11

 

(j)            Survival.  For
the avoidance of doubt, any termination of your employment (or breach of this
Agreement by you or the Group) shall have no effect on the continuing operation
of this Section 13.

 

14.          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 10 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.

 

12

 

(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 10).  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 14(f)):

 

If
to you, to the address stated in your Schedule, 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

 

13

 

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 12, 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 (including for this purpose for periods before your
Start Date, the Company, CB Bancshares and their respective affiliates).

 

(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/
  Clint Arnoldus

  	
   

  
	
   

  	
  Clint
  Arnoldus

  
	
   

  	
  Chairman,
  President & CEO

  

 

	
  Accepted
  and Agreed:

  
	
   

  
	
  /s/
  Alwyn S. Chikamoto

  	
   

  
	
  Date:
  09/15/04

  

 

14

 

Terms Schedule

to Employment Agreement of

Mr. Alwyn S. Chikamoto

 

	
  Name and address for notices

  	
   

  	
  Alwyn
  S. Chikamoto

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
   

  
	
  Position

  	
   

  	
  You
  will serve as Executive Vice-President, Financial Services — Commercial Real
  Estate, of Central Pacific Bank.

  
	
   

  	
   

  	
   

  
	
  Reporting, Authority and Responsibilities

  	
   

  	
  You
  will report to the Chief Executive Officer of Central Pacific Bank.

  
	
   

  	
   

  	
   

  
	
  Other Activities

  	
   

  	
  None.

  
	
   

  	
   

  	
   

  
	
  Agreement Period

  	
   

  	
  Your
  Agreement Period begins on your Start Date and will end at the close of
  business on the third anniversary of your Start Date.

  
	
   

  	
   

  	
   

  
	
  Starting Salary

  	
   

  	
  $194,670

  
	
   

  	
   

  	
   

  
	
  Bonus

  	
   

  	
  Your
  Bonus will be determined based on the achievement of performance goals
  established by the Board (or a committee of the Board). Your minimum bonus
  target is equal to 30% of your Salary. Performance goals shall be set within
  the first 90 days of the Company’s fiscal year.

  
	
   

  	
   

  	
   

  
	
  Additional Benefits

  	
   

  	
  Vacation. You will be entitled to vacation totaling at least four weeks a year.

  

  Club Dues. The Company will
  reimburse you for your annual club membership dues up to a maximum of $6,000
  per year.

  

  Other Perquisites. The Company
  will (i) reimburse your cell-phone charges up to $60 per month, (ii) provide
  an automobile allowance of $700 per month and (iii) reimburse your parking
  fees (to the extent the Company does not provide you with a parking spot in
  the building in which you are required work).

  
	
   

  	
   

  	
   

  
	
  Cause Steps

  	
   

  	
  No
  additional steps.

  
	
   

  	
   

  	
   

  
	
  Good Reason

  	
   

  	
  The following will also constitute Good Reason:

  (1)   Requiring
  you to be principally based at any office or location more than 30 miles from
  your office at the time of this Agreement (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 at the
  time of this Agreement).

  
	
   

  	
   

  	
   

  
	
  Good Reason Steps

  	
   

  	
  You
  may not terminate your employment for Good Reason unless, you provide the Company a Termination Notice at
  least 15 days prior to the termination date and the Company is given an
  opportunity to cure before the termination date specified in such notice.

  
	
   

  	
   

  	
   

  
	
  Severance Period

  	
   

  	
  Your
  Severance Period will be the lesser of two years or the remainder of the term
  of this agreement.

  
	
   

  	
   

  	
   

  
	
  Additional Good Reason/Without Cause Benefits

  	
   

  	
  If
  during the Agreement Period the Company terminates your employment without
  Cause or you terminate your employment for Good Reason:

   

  (1)   Through
  the remainder of your Severance Period, you, your spouse and your dependents
  will continue to be entitled to participate in each of the Group’s employee
  benefit and welfare plans providing for medical, dental, hospitalization,
  life or disability insurance on a basis that is at least as favorable as that
  provided to similarly situated executives of the Group and at least as
  favorable as the basis in effect immediately before Termination Notice was
  given (the “Welfare Benefits”).
  However, if the Group’s plans do not permit you, your spouse or your
  dependents to participate on this basis, the Company will provide Welfare
  Benefits (with the same after-tax effect for you) outside of the plans. If
  you become employed during the Severance Period and are eligible for coverage
  from your new employer, the Welfare Benefits will be secondary to your new
  coverage (if the Group reimburses you for any increased cost and provides any
  additional benefits that are necessary to provide you with the full Welfare
  Benefits).

   

  (2)   The
  Company will reimburse reasonable expenses you incur within one year of
  termination for outplacement services to be provided you by an entity you
  reasonably select, subject to a
  maximum of $20,000.

  
	
   

  	
   

  	
   

  
	
  Additional Death/Disability Benefits

  	
   

  	
  If
  your employment terminates as a result of your Death or Disability, the
  Company will provide Accelerated Vesting.

  
	
   

  	
   

  	
   

  
	
  Additional Provisions Related to Section 8 of the
  Agreement.

  	
   

  	
  If
  there is a “Change in Control”, as defined in the attached Change in Control
  Annex, your Agreement Period will automatically extend to the third
  anniversary of the Change in Control, and the payments and benefits

  

 

2

 

	
   

  	
   

  	
  provided
  in the Change in Control Annex will substitute for those stated in Section 8.
  You are entitled to the additional payments set forth in the attached
  Additional Payments Annex.

  
	
   

  	
   

  	
   

  
	
  Restriction Period

  	
   

  	
  If
  the Company terminates your employment without Cause or you terminate your
  employment for Good Reason, your “Restriction Period” will be the period
  beginning on your Start Date and ending at the end of your Severance Period.

  

  If the Company terminates your employment for Cause or you terminate your
  employment without Good Reason, your “Restriction Period” will be the period
  beginning on your Start Date and ending at the end of your Agreement Period.

  

 

3

 

Change in Control Annex

to Employment Agreement of

Alwyn S. Chikamoto

1.     Change in Control

 

A “Change in Control”  means any of
the following:

 

(i)        Individuals
who, on the date of the Agreement, constitute the Board (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date of the Agreement, 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) shall be an
Incumbent Director; provided, however, 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 shall be deemed to be an Incumbent Director;

 

(ii)       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, however,
that the event described in this paragraph (ii) shall not be deemed to be
a Change in Control by virtue of any of the following
acquisitions:  (A) by the Company or any Subsidiary, (B) by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii), or (E) 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

 

(iii)      The
consummation of a merger, consolidation, statutory share exchange, sale of all
or substantially all of the Company’s assets, 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:  (A) 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
prior to 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 prior to the Business
Transaction, (B) 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 (C) at least a majority 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 (A), (B)
and (C) above shall be deemed to be a “Non-Qualifying
Transaction”).

 

Notwithstanding the foregoing, a Change in Control of the Company shall
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 shall then occur.

 

2.     Qualifying Terminations

 

The provisions of this
Change in Control Schedule apply to any “Qualifying
Termination.”  A qualifying
termination is any of the following from the time of a Change in Control until
the two-year anniversary of a Change in Control:

 

(a)       The
Company terminating your employment without Cause;

 

(b)      Your
terminating your employment for Good Reason;

 

Also, a Qualifying Termination will include any termination of your
employment before a Change in Control for reasons that would have constituted a
Qualifying Termination if they had occurred following a Change in Control if
(i) the termination (or Good Reason event) was 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 (ii) such
Change in Control (or an alternative or competing Change in Control) actually
occurs.

 

 

3.     Payments on Qualifying Termination

 

(1)           Qualifying Terminations.  If there is a Qualifying Termination, the Company
will make the payments and provide the benefits set forth in Section 8(b) of
the Agreement (as if there were a termination for Good Reason) except that your Severance Period will be
3 years (notwithstanding any contrary provision in the Agreement or your
Schedule).

 

(2)           Other Terminations.  If your employment terminates other than as a
result of a Qualifying Termination, the terms of the Agreement will continue to
apply.

 

4.     General
Provisions.

 

(1)           Part of the Agreement.  This Annex is part of your Employment Agreement (the “Agreement”) with Central Pacific Financial
Corp., a Hawaii corporation.  However, to
the extent this Annex is inconsistent with the Agreement, this Annex will
govern.

 

(2)           Defined Terms.  Terms used but not defined in this Annex are used with the meaning
assigned in the Agreement.

 

 

Additional Payments Annex

to Employment Agreement of 

Alwyn S. Chikamoto

 

1.     Gross-Up

 

Anything
in the Agreement to the contrary notwithstanding, in the event it shall be
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 the Agreement or otherwise, but determined without
regard to any additional payments required under this Annex) (the “Payments”) would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”), or any interest or
penalties are incurred by you with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”),
then the Company shall pay to you an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by you 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, you retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  For purposes of determining the amount of the
Gross-Up Payment, you shall be deemed to (i) pay federal income taxes at
the highest marginal rates of federal income taxation for the calendar year in
which the Gross-Up Payment is to be made and (ii) pay applicable state and
local income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state
and local taxes.

 

2.     Determination

 

(a)           General.  Subject to the provisions of this
Annex, all determinations required to be made under this Annex, 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 you within fifteen (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 (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 under this Annex with
respect to any Payments shall be made no later than thirty (30) days following
such Payment.  If the Accounting Firm
determines that no Excise Tax is payable by you, it shall

 

 

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.  The
Determination by the Accounting Firm shall be binding upon the Company and you.

 

(b)           Underpayment and
Overpayment.  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 you for your 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 your benefit.  In the
event the amount of the Gross-Up Payment exceeds the amount necessary to
reimburse you for your 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 you to or for the
benefit of the Company immediately after it is refunded to you by the Internal
Revenue Service.  You shall 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
Internal Revenue Service in connection with the Excise Tax.

 

(c)           Option Redetermination.  In the event that the Company
determines that the value of any accelerated vesting of stock options held by
you shall be redetermined within the context of Treasury Regulation §1.280G-1
Q/A 33 (the “Option Redetermination”),
you shall (i) file with the Internal Revenue Service an amended federal income
tax return that claims a refund of the overpayment of the Excise Tax
attributable to such Option Redetermination and (ii) promptly pay the
refundable Excise Tax to the Company.

 

3.             General
Provisions.

 

(a)           Part of the Agreement.  This Annex is part of your Employment
Agreement (the “Agreement”) with
Central Pacific Financial Corp., a Hawaii corporation.  However, to the extent this Annex is
inconsistent with the Agreement, this Annex will govern.

 

(b)           Defined Terms.  Terms used but not defined in this
Annex are used with the meaning assigned in the Agreement.

 

 

Exhibit A to Employment Agreement

Form of Release

 

This
is your RELEASE with Central Pacific Financial Corp., a Hawaii
corporation (the “Company”).

 

1.     Your Employment Agreement

 

This
Release relates to your Employment Agreement (which includes your Terms
Schedule, [Change of Control Annex and Additional Payments Annex(1)]) dated as
of June [day], 2004 and as amended
from time to time, with the Company (your “Employment
Agreement”).

 

2.     Release of Claims

 

(a)           Released Claims.  In consideration of the payments and benefits
described in your Employment Agreement, you release and discharge the Company
and its subsidiaries, affiliates, officers, directors, employees, agents and
their successors and assigns (the “Group
Released Parties”) from any and all actions, causes of action,
claims, allegations, rights, obligations, liabilities, or charges
(collectively, “Claims”) that you
may have, whether known or unknown, by reason of any matter, related to any
Employment Matter (as defined in your Employment Agreement).  Without limitation, released Claims include (1) Claims for compensation, bonuses or
benefits, (2) Claims under any
compensation plan or arrangement maintained by any member of the Group, (3) Claims for wrongful, constructive or
unlawful discharge, (4) Claims
for age and national origin discrimination, (5)
Claims for sexual harassment, (6)
Claims related to whistleblowing, (7)
Claims for emotional distress, intentional infliction of emotional distress,
assault, battery or pain and suffering, (8)
Claims for punitive or exemplary damages, (9)
Claims for violations of any of the following acts or laws:  the Equal Pay Act, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967 (“ADEA”),
the Americans with Disabilities Act of 1991, the Employee Retirement Income
Security Act of 1974, the Worker Adjustment Retraining and Notification Act,
the Family Medical Leave Act, Hawaii’s Whistle Blowers Protection Act, Hawaii’s
Employment Practices Law, Hawaii’s Payment of Wages Law, Hawaii’s Wage and Hour
Law, Hawaii’s Temporary Disability Insurance Law, Hawaii’s Prepaid Health Care
Act, Hawaii’s Dislocated Workers’ Act, Hawaii’s Occupational Safety and Health
Law and Hawaii’s Family Leave Law (including all amendments to any of these
acts or laws), or (10) Claims for
violations of any other federal, state or municipal fair employment statutes or
laws.  In addition, in consideration of
the provisions of your Employment Agreement, you further agree to waive any and
all rights under the laws of any jurisdiction in the United States, or any
other country, that limit a general release to those claims that are known or
suspected to exist in your favor as of the date of this Agreement.

 

(b)           Exceptions.  Notwithstanding Section 2(a), this Release
shall not (1) limit in any way
your ability to bring an action to enforce your rights under your Employment
Agreement, (2) release any claim
for Other Accrued Benefits (as defined in your Employment Agreement), or (3) release any claim for indemnification
and continued liability coverage (under your Employment Agreement or
otherwise).  For purposes of this

 

(1)           Include if applicable

 

 

Release, the term “Claims” as
used shall not include any claims not released by you as set forth in this
Section 2(b).

 

(c)           Representations
and Warranties.  You represent
and warrant that you have not, and as of the Effective Date (as defined in
Section 4) will not have, filed any civil action, suit, arbitration,
administrative charge, or legal proceeding against any Group Released Party nor
have you assigned, pledged, or hypothecated as of the Effective Date any Claim
to any person and no other person has an interest in the claims that you are
releasing herein.

 

(d)           No Relief for Released
Claims.  You agree that
should any person or entity file or cause to be filed any civil action, suit,
arbitration or other legal proceeding seeking equitable or monetary relief
concerning any Claim released by you, you will not seek or accept any personal
relief from or as the result of the action, suit, arbitration or proceeding.

 

3.     Your
Understanding of this Release and Your Rights

 

You
acknowledge and agree that you have read this Release in its entirety and that
this Release releases known and unknown Claims, including, without limitation,
to rights and claims arising under ADEA. 
You further acknowledge and agree that:

 

(a)                                  You are entering into this Release and
releasing, waiving and discharging rights or claims only in exchange for
consideration which you are not already entitled to receive.

 

(b)                                 You have been advised, and are being advised
by the terms of the Release, to consult with an attorney before executing this
Release.  You also acknowledge that you
chose and consulted with the counsel of your choice concerning your rights and
that your counsel negotiated this Release on your behalf.

 

(c)                                  You have been advised, and are being advised
by the terms of this Release, that you have had at least 21 days within which
to consider this Release.

 

4.     Your Ability to
Revoke this Release; Effective Date

 

You may revoke this Release within 7 days of signing
(for any reason or no reason) by complying with the following sentence.  To revoke this Release, you must deliver (or cause to be delivered)
written notice of your revocation to the Group at [Address and Contact Person] no later than 5:00 p.m. Hawaii
time on [date].  If you revoke this Release in accordance with
the preceding sentence, it will become null and void.  If you do not, this Release will become
effective at such time (the “Effective Date”).

 

2

 

5.     Your Employment
Agreement

 

For
the avoidance of doubt, your Employment Agreement will continue in full force
and effect, including, without limitation, your obligations under Sections 9
and 10 of your Employment Agreement.

 

6.     Dispute
Resolution

 

The
terms of this Release shall be governed by Section 13 of your Employment
Agreement.

 

 

	
  Accepted
  and Agreed:

  
	
   

  
	
   

  	
   

  
	
  Date:

  

 

3Exhibit 10.7

 

September 9, 2004

 

 

Blenn A.
Fujimoto

 

 

Re:       Employment
Agreement

 

Dear Blenn:

 

This is your EMPLOYMENT AGREEMENT with Central Pacific
Financial Corp., a Hawaii corporation (the “Company”).

 

1.     The Merger Agreement;
Effectiveness

 

This Agreement relates to the Agreement and Plan of Merger, dated as of
April 22, 2004 (the “Merger Agreement”), between the Company
and CB Bancshares, Inc., a Hawaii corporation (“CB Bancshares”).  It
sets forth the terms of your employment with the Company and its affiliates
(together, as constituted from time to time, the “Group”) once the merger provided for in the Merger Agreement
becomes effective.  However, if the
Merger Agreement or your present employment terminates for any reason before
the merger occurs, all of this Agreement’s provisions will terminate and there
will be no liability of any kind under this Agreement.

 

2.     Terms Schedule

 

Some of the terms of your employment are in the attached schedule (your
“Schedule”), which is part of
this Agreement.

 

3.     Your Position, Performance
and Other Activities

 

(a)      Position.  You will be
employed in the position stated in your Schedule.

 

(b)      Authority, Responsibilities and Reporting.  You will have any reporting relationships set
forth in your Schedule.  You will have
the authority and responsibilities that correspond to your position, including
any particular authority and responsibilities that are specified in the
Schedule or that the Company’s Board of Directors (the “Board”)

 

 

or any officer of the Group to
whom you report in accordance with your Schedule may assign to you from time to
time consistent with the provisions of this Agreement.

 

(c)      Performance.  During
your employment, you will devote substantially all of your business time and
attention to the Group and will use good faith efforts to discharge your
responsibilities under this Agreement to the best of your ability.

 

(d)      Other Activities. 
During your employment, you may
serve on corporate, civic or charitable boards and manage personal investments,
so long as these activities do
not significantly interfere with your performance of your responsibilities
under this Agreement and are consistent with the Group’s Code of Conduct and
Ethics.  The Company acknowledges that
you currently serve on, and approves your continued service on, the corporate,
civic and charitable boards listed in your Schedule.

 

4.     Term of Your Employment

 

Your employment under this Agreement will begin at the time the merger
provided for in the Merger Agreement becomes effective (your “Start Date”) and end on the earlier of (1)
the end of the Agreement Period stated in your Schedule or (2) the
effectiveness of early termination of your employment under Section 7(e).  References in this Agreement to “your employment” are to your employment
under this Agreement.

 

5.     Your Compensation

 

(a)      Salary.  During your
employment, you will receive an annual base salary (adjusted as provided herein
from time to time, your “Salary”).  The starting amount of your Salary is stated
in your Schedule.  The Company may
increase it at any time for any reason. 
The Company may not decrease your Salary (including after any increase),
and any increase in your Salary will not reduce or limit any other obligation
to you under this Agreement.  Your Salary
will be paid in accordance with the Group’s practices for similarly situated
executives.

 

(b)      Bonus.  You will be
entitled to receive an annual cash bonus (your “Bonus”) for each fiscal year of the Company ending during
your employment.  The amount of your
Bonus will be determined by the Company in accordance with your Schedule, and
it will be paid in accordance with the Group’s practices for similarly situated
executives of the Group.

 

(c)      Other Executive Compensation Plans and Additional Compensation.  During your employment, you will be entitled
to participate in all of the Group’s executive compensation plans, including
any management incentive plans, deferred compensation plans, supplemental
retirement plans and stock and stock option plans, on a basis that is at least
as favorable as that provided to similarly situated executives of the Group
(subject to the provisions of your Schedule). 
You will also receive any additional compensation provided in your
Schedule.

 

6.     Employee Benefits.

 

(a)      Employee Benefit Plans. 
During your employment, you will be entitled to (1) participate in each
of the Group’s employee benefit and welfare plans, including plans

 

2

 

providing retirement benefits
or medical, dental, hospitalization, life or disability insurance, and (2)
receive perquisites, in each case
on a basis that is at least as favorable as that provided to similarly situated
executives of the Group (subject to the provisions of your Schedule).

 

(b)      Vacation.  You will be
entitled to paid annual vacation during your employment on a basis that is at
least as favorable as that provided to similarly situated executives of the
Group.

 

(c)      Business Expenses. 
You will be reimbursed for all business and entertainment expenses
incurred by you in performing your responsibilities under this Agreement.  However,
your reimbursement will be subject to the Group’s normal practices for
similarly situated executives.

 

(d)      Indemnification.  To
the extent permitted by law, the Company will indemnify you against any actual
or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, arising by reason of your status as a
director, officer, employee and/or agent of the Group during your employment or
your status, if any, as a trustee or other fiduciary of any employee benefit
plan sponsored by any member of the Group. 
In addition, to the extent permitted by law, the Company will pay or
reimburse any expenses, including reasonable attorney’s fees, you incur in
investigating and defending any actual or threatened action, suit or proceeding
for which you may be entitled to indemnification under this Section 6(d).  However, you agree to repay any expenses paid
or reimbursed by the Company if it is ultimately determined that you are not
legally entitled to be indemnified by the Company.  If the Company’s ability to make any payment
contemplated by this Section 6(d) depends on an investigation or determination
by the board of directors of any member of the Group, at your request the
Company will use its best efforts to cause the investigation to be made (at the
Company’s expense) and to have the relevant board reach a determination as soon
as reasonably possible.

 

(e)      Additional Benefits. 
During your employment, you will be provided any additional benefits
stated in your Schedule.

 

7.     Early Termination of Your
Employment.

 

(a)      No Reason Required.  You
or the Company may terminate your employment early at any time for any reason,
or for no reason, subject to compliance with Section 7(e).

 

(b)      Termination by the Company for Cause.

 

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

 

(A)      Your
willful failure to perform substantially your responsibilities under this
Agreement, after demand for
substantial performance has been given by the Board 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,

 

3

 

(C)      Your
willful or intentional material breach of this Agreement that results in
financial or reputational detriment to the Group that is not de minimis,

 

(D)      Your
willful or intentional material misconduct in the performance of your duties under
the Agreement that results in financial or reputational detriment to the Group
that is not de minimis,

 

(E)       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

 

(F)       Your
willful attempt to obstruct or willful failure to cooperate with any
investigation authorized by the Board or any governmental or self-regulatory
entity.

 

For this definition, (i) no act or omission
by you will be “willful” unless it is made by you in bad faith or without a
reasonable belief that your act or omission was in the best interests of the
Group and (ii) any act or omission by you based on authority given pursuant to
a resolution duly adopted by the Board or on the advice of counsel for the
Group will be deemed made in good faith and in the best interests of the
Company.

 

(2)      To
terminate your employment “for Cause”, Cause must have occurred and the Company
must comply with Section 7(e) and any other steps required in your Schedule for
termination for Cause.

 

(c)      Termination by You for Good Reason.

 

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

 

(A)      Any
material and adverse change in your position from that provided in your
Schedule (including by reason of removal or failure to be elected or
re-elected),

 

(B)      Any
failure by the Company to provide you with authority, responsibilities and
reporting relationships as provided in Section 3(b) (including assigning you
duties materially inconsistent with your position and responsibilities),

 

(C)      Any
failure by the Company to provide you with compensation or benefits as provided
in Section 5 and Section 6,

 

(D)      Any
failure by the Company to comply with Section 12(c), or

 

(E)       The
occurrence of any additional event set forth in your Schedule as being Good
Reason.

 

(2)      To
terminate your employment “for Good Reason”, Good Reason must have occurred and
you must comply with Section 7(e) and any other steps

 

4

 

required in
your Schedule for termination for Good Reason. 
However, (A) Good Reason
will not include any isolated, insubstantial and inadvertent failure by the
Company that is not in bad faith and is cured promptly on your giving the
Company notice, (B) if you do not give a Termination Notice to the Company
within 180 days after you have knowledge that an event constituting Good Reason
has occurred, the event will no longer constitute Good Reason, and (C) an event
will not constitute Good Reason if you have consented to it in accordance with
Section 14(f).

 

(d)      Termination on Disability or Death.

 

(1)      “Disability” means your absence from your
responsibilities with the Company on a full-time basis for 130 business days in
any consecutive 12 months as a result of incapacity due to mental or physical
illness or injury.  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 this Section 7(d), any
incapacity due to mental or physical illness or injury will not affect the
Company’s obligations under this Agreement.

 

(2)      Your
employment will terminate automatically on your death.

 

(e)      Termination Notice.

 

(1)      To
terminate your employment early, 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)      If
your employment is terminated by the Company other than for Disability or death
or you terminate your employment for Good Reason, your employment will end on
the date specified in the Notice of Termination.  If you terminate your employment without Good
Reason, your employment will end 60 days after the Company receives the
Termination Notice (although the Company may accelerate the end of your employment
by providing you with notice or, alternatively, may place you on paid leave
during such period).  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.

 

5

 

8.     The Company’s Obligations in
Connection With Your Early Termination

 

(a)      General Effect.  On
termination in accordance with Section 7, your employment will end and the
Group will have no further obligations to you except as provided in this
Section 8.

 

(b)      For Good Reason or Without Cause.  If the Company terminates your employment
without Cause or you terminate your employment for Good Reason:

 

(1)      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 early 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)      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 Termination Notice is given and (B) any
excess of (i) your target Bonus for the fiscal year in which 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)      The
Company will pay you (A) the sum of your Salary and your target Bonus for the
fiscal year in which Termination Notice is given multiplied by (B) the length of the Severance Period stated
in your Schedule (in years, including any fractional years).

 

(4)      All
stock options issued by the Group to you will vest and become immediately
exercisable, and, subject to your Schedule, 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 8(b)(4) are
referred to as “Accelerated Vesting”.

 

(5)      The
Company will provide any “Additional Good Reason/Without Cause Benefits”
provided in your Schedule.

 

(c)      For Cause or without Good Reason.  If the Company terminates your employment for
Cause or you terminate your employment without Good Reason, the Company will
pay you your Accrued Compensation and will provide you your Other Accrued
Benefits.

 

(d)      Death or Disability. 
If your employment terminates as a result of your Death or Disability,
the Company will pay you your Accrued Compensation and Accrued Bonus

 

6

 

and will provide your Other
Accrued Benefits.  The Company will also
provide any “Additional Death/Disability Benefits” provided in your Schedule.

 

(e)      Additional Provisions. 
Your Schedule may provide additional provisions that relate to the
Company’s obligations in this Section 8 or the Company’s obligations on your
termination generally.  These provisions
are a part of this Agreement.

 

(f)       Condition.  Subject to
your Schedule, as a condition to making the payments and providing the benefits
stated in this Section 8, the Company may require you to execute and deliver 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).

 

(g)      Timing.  Subject to
Section 8(f), the benefits provided in this Section 8 will begin at the end of
your employment, any cash payments owed to you under this Section 8 will be
paid in a lump sum amount no later
than 15 business days following the termination of your employment, and the
Other Accrued Benefits will be provided in accordance with the terms of the
relevant plan or contract.

 

(h)      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.

 

9.     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

 

7

 

Information.  You agree that the Proprietary Information is
the exclusive property of the Group, 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 9(b), 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 shall request confidential treatment with respect to such
information and/or request matters with respect to such information be sealed
and (2) you shall 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.

 

10.  On-going Restrictions on Your
Activities

 

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

 

“Competitive
Enterprise” means (1) Bank of Hawaii, First Hawaiian Bank, American
Savings Bank, Finance Factors and Hawaii National 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.

 

“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.

 

“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.

 

“Restriction
Period” has the meaning set forth in the Schedule.

 

(b)      Your Importance to the Group and the Effect of this Section 10.  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 10 will
limit your ability to earn a livelihood in a Competitive Enterprise and your
relationships with Clients but you have determined that your complying with
this Section 10 will not result in severe economic hardship for you or your
family.

 

(c)      Non-Competition. 
Until the end of your Restriction Period, you will not, directly or
indirectly:

 

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

 

8

 

(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;

 

(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 (or, if earlier, the year before the date of
determination).

 

(d)      Non-Solicitation of Clients. 
Until the end of your Restriction Period, you will not, directly or
indirectly, 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.  Until the end of 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 10 (c), (d), or (e) is in effect, you will
provide the prospective employer with written notice of the provisions of this
Section 10 and will deliver a copy of the notice to the Group.

 

(g)      No Disparagement.  You
shall 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 shall (and shall 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) shall have no effect on the continuing operation of this Section 10.

 

11.  Effect on Other Agreements.

 

(a)      Prior Employment Agreements and Severance Rights.  Beginning on your Start Date, this Agreement
will supersede any earlier employment agreement or understanding and any
earlier severance, change-in-control or similar rights you may have with any
member of the Group (including CB Bancshares or any affiliate of it).

 

(b)      Effect on Other Agreements; Entire Agreement.  This Agreement is the entire
agreement between you and the Company with respect to the relationship
contemplated by

 

9

 

this Agreement and supersedes
any earlier agreement, written or oral, with respect to the subject matter of
this Agreement.  You agree that you are
not entitled to any severance, change-in-control or similar rights under any
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.

 

12.  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
12(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” shall
mean the Company as hereinbefore defined and any successor to all or
substantially all of its business or assets.

 

13.  Disputes.

 

(a)      Employment Matter. 
This Section 13 applies to any controversy or claim between you and the
Group arising out of or relating to or concerning any aspect of this Agreement,
your employment with the Group or the Company, the termination of that
employment or your compensation or benefits from the Group or the Company
(together, an “Employment Matter”).

 

(b)      Mandatory Arbitration.  Subject to the provisions of this Section 13,
any Employment 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 9, (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 14(c), (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 shall be a
partner or former partner at a nationally recognized law firm).

 

10

 

(c)      Limitation on Damages.  You and the Group agree that there will be no
punitive damages payable as a result of any Employment 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 13(b).  Also, the Group may bring such an action or
proceeding, in addition to its rights under Section 13(b) and whether or not an
arbitration proceeding has been or is ever initiated, to temporarily,
preliminarily or permanently enforce any part of Sections 9 and 10.  You agree that (1) your violating any part of
Sections 9 and 10 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
Employment Matter that is not otherwise arbitrated or resolved according to
Section 13(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 13(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 13(b) and this 13(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 Employment
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 Employment Matter, provided that you substantially prevail in
the Employment Matter.

 

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

 

11

 

(j)       Survival.  For the
avoidance of doubt, any termination of your employment (or breach of this
Agreement by you or the Group) shall have no effect on the continuing operation
of this Section 13.

 

14.  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 10
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.

 

12

 

(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 10).  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 14(f)):

 

If to you, to the address stated in your Schedule, 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

 

13

 

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 12, 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 (including for this purpose for periods before your
Start Date, the Company, CB Bancshares and their respective affiliates).

 

(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/ Clint Arnoldus

  	
   

  
	
   

  	
  Clint Arnoldus

  
	
   

  	
  Chairman, President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Blenn A. Fujimoto

  	
   

  	
   

  
	
  Date: 09/09/04

  	
   

  
				

 

14

 

Terms Schedule

to Employment Agreement of

Mr. Blenn A. Fujimoto

 

TERMS SCHEDULE

 

	
  Name and address for notices

  	
   

  	
  Blenn A. Fujimoto

  

  

  Facsimile:

  
	
   

  	
   

  	
   

  
	
  Position

  	
   

  	
  You will serve as Executive Vice-President, Financial Services –
  Hawaii Market, of Central Pacific Bank.

  
	
   

  	
   

  	
   

  
	
  Reporting, Authority and Responsibilities

  	
   

  	
  You will report to the Chief Executive Officer of Central Pacific
  Bank.

  
	
   

  	
   

  	
   

  
	
  Other Activities

  	
   

  	
  None.

  
	
   

  	
   

  	
   

  
	
  Agreement Period

  	
   

  	
  Your Agreement Period begins on your Start Date and will end at the
  close of business on the third anniversary of your Start Date.

  
	
   

  	
   

  	
   

  
	
  Starting Salary

  	
   

  	
  $194,670

  
	
   

  	
   

  	
   

  
	
  Bonus

  	
   

  	
  Your Bonus will be determined based on the achievement of performance
  goals established by the Board (or a committee of the Board). Your minimum
  bonus target is equal to 30% of your Salary. Performance goals shall be set
  within the first 90 days of the Company’s fiscal year.

  
	
   

  	
   

  	
   

  
	
  Additional Benefits

  	
   

  	
  Vacation. You will be entitled to vacation
  totaling at least four weeks a year.

  Club Dues. The Company will reimburse you
  for your annual club membership dues up to a maximum of $6,000 per year.

  Other Perquisites. The Company will (i)
  reimburse your cell-phone charges up to $60 per month, (ii) provide an
  automobile allowance of $700 per month and (iii) reimburse your parking fees
  (to the extent the Company does not provide you with a parking spot in the
  building in which you are required work).

  
	
   

  	
   

  	
   

  
	
  Cause Steps

  	
   

  	
  No additional steps.

  
	
   

  	
   

  	
   

  
	
  Good Reason

  	
   

  	
  The following will also constitute Good Reason:

  (1)   Requiring
  you to be principally based at any office or location more than 30 miles from
  your office at the time of this Agreement (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 at the time of this Agreement).

  
	
   

  	
   

  	
   

  
	
  Good Reason Steps

  	
   

  	
  You may not terminate your employment for Good Reason unless, you provide the Company a Termination Notice at
  least 15 days prior to the termination date and the Company is given an
  opportunity to cure before the termination date specified in such notice.

  
	
   

  	
   

  	
   

  
	
  Severance Period

  	
   

  	
  Your Severance Period will be the lesser of two years or the
  remainder of the term of this agreement.

  
	
   

  	
   

  	
   

  
	
  Additional Good Reason/Without Cause Benefits

  	
   

  	
  If during the Agreement Period the Company terminates your employment
  without Cause or you terminate your employment for Good Reason:

  (1)   Through
  the remainder of your Severance Period, you, your spouse and your dependents
  will continue to be entitled to participate in each of the Group’s employee
  benefit and welfare plans providing for medical, dental, hospitalization,
  life or disability insurance on a basis that is at least as favorable as that
  provided to similarly situated executives of the Group and at least as
  favorable as the basis in effect immediately before Termination Notice was given
  (the “Welfare Benefits”). However, if the
  Group’s plans do not permit you, your spouse or your dependents to
  participate on this basis, the Company will provide Welfare Benefits (with
  the same after-tax effect for you) outside of the plans. If you become
  employed during the Severance Period and are eligible for coverage from your
  new employer, the Welfare Benefits will be secondary to your new coverage (if
  the Group reimburses you for any increased cost and provides any additional
  benefits that are necessary to provide you with the full Welfare Benefits).

  (2)   The
  Company will reimburse reasonable expenses you incur within one year of
  termination for outplacement services to be provided you by an entity you
  reasonably select, subject to a
  maximum of $20,000.

  
	
   

  	
   

  	
   

  
	
  Additional Death/Disability Benefits

  	
   

  	
  If your employment terminates as a result of your Death or
  Disability, the Company will provide Accelerated Vesting.

  
	
   

  	
   

  	
   

  
	
  Additional Provisions Related to Section 8 of the Agreement.

  	
   

  	
  If there is a “Change in Control”, as defined in the attached Change
  in Control Annex, your Agreement Period will automatically extend to the
  third anniversary of the Change in Control, and the payments and benefits
  provided in the Change in Control Annex will substitute

  

 

2

 

	
   

  	
   

  	
  for those stated in Section 8.

  You are entitled to the additional payments set forth in the attached
  Additional Payments Annex.

  
	
   

  	
   

  	
   

  
	
  Restriction Period

  	
   

  	
  If the Company terminates your employment without Cause or you
  terminate your employment for Good Reason, your “Restriction Period” will be
  the period beginning on your Start Date and ending at the end of your
  Severance Period.

  If the Company terminates your employment for Cause or you terminate
  your employment without Good Reason, your “Restriction Period” will be the
  period beginning on your Start Date and ending at the end of your Agreement
  Period.

  

 

3

 

Change in Control Annex

to Employment Agreement of

Blenn A. Fujimoto

 

1.     Change
in Control

 

A “Change in Control”  means any of the following:

 

(i)        Individuals who, on the
date of the Agreement, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the date of the Agreement, 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) shall be an Incumbent Director; provided, however, 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 shall be deemed to be an Incumbent Director;

 

(ii)       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,
however, that the event described in
this paragraph (ii) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions:  (A) by the Company
or any Subsidiary, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (iii), or (E) 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

 

(iii)      The consummation of a
merger, consolidation, statutory share exchange, sale of all or substantially
all of the Company’s assets, 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:  (A) 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
prior to 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 prior to the Business
Transaction, (B) 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 (C) at least a majority 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 (A), (B)
and (C) above shall be deemed to be a “Non-Qualifying
Transaction”).

 

Notwithstanding the foregoing, a Change in Control of the Company shall
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 shall then occur.

 

2.     Qualifying
Terminations

 

The provisions of this Change in Control Schedule apply to any “Qualifying Termination.” 
A qualifying termination is any of the following from the time of a
Change in Control until the two-year anniversary of a Change in Control:

 

(a)       The Company terminating
your employment without Cause;

 

(b)      Your terminating your
employment for Good Reason;

 

Also, a Qualifying Termination will include any termination of your
employment before a Change in Control for reasons that would have constituted a
Qualifying Termination if they had occurred following a Change in Control if (i)
the termination (or Good Reason event) was 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 (ii) such
Change in Control (or an alternative or competing Change in Control) actually
occurs.

 

 

3.     Payments
on Qualifying Termination

 

(1)      Qualifying Terminations.  If
there is a Qualifying Termination, the Company will make the payments and
provide the benefits set forth in Section 8(b) of the Agreement (as if there
were a termination for Good Reason) except that
your Severance Period will be 3 years (notwithstanding any contrary provision
in the Agreement or your Schedule).

 

(2)      Other Terminations.  If
your employment terminates other than as a result of a Qualifying Termination,
the terms of the Agreement will continue to apply.

 

4.     General
Provisions.

 

(1)      Part
of the Agreement.  This Annex is part
of your Employment Agreement (the “Agreement”)
with Central Pacific Financial Corp., a Hawaii corporation.  However, to the extent this Annex is
inconsistent with the Agreement, this Annex will govern.

 

(2)      Defined Terms.  Terms
used but not defined in this Annex are used with the meaning assigned in the
Agreement.

 

 

Additional Payments Annex

to Employment Agreement of

Blenn A. Fujimoto

 

1.     Gross-Up

 

Anything in the Agreement to the contrary notwithstanding, in the event
it shall be 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 the Agreement or otherwise, but determined without
regard to any additional payments required under this Annex) (the “Payments”) would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”),
or any interest or penalties are incurred by you with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Company shall pay to you an
additional payment (a “Gross-Up
Payment”) in an amount such that after payment by you 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, you retain an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  For purposes
of determining the amount of the Gross-Up Payment, you shall be deemed to
(i) pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which the Gross-Up Payment is to be
made and (ii) pay applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the Gross-Up Payment
is to be made, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.

 

2.     Determination

 

(a)      General.  Subject to
the provisions of this Annex, all determinations required to be made under this
Annex, 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
you within fifteen (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 (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 under
this Annex with respect to any Payments shall be made no later than thirty (30)
days following such Payment.  If the
Accounting Firm determines that no Excise Tax is payable by you, it shall

 

 

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.  The Determination by the Accounting Firm
shall be binding upon the Company and you.

 

(b)      Underpayment and Overpayment.  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 you for your 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 your benefit.  In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse you for your 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 you to or for the benefit of the Company immediately after it
is refunded to you by the Internal Revenue Service.  You shall 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 Internal Revenue
Service in connection with the Excise Tax.

 

(c)      Option Redetermination.  In
the event that the Company determines that the value of any accelerated vesting
of stock options held by you shall be redetermined within the context of
Treasury Regulation §1.280G-1 Q/A 33 (the “Option Redetermination”),
you shall (i) file with the Internal Revenue Service an amended federal income
tax return that claims a refund of the overpayment of the Excise Tax
attributable to such Option Redetermination and (ii) promptly pay the
refundable Excise Tax to the Company.

 

3.     General
Provisions.

 

(a)      Part of the Agreement.  This
Annex is part of your Employment Agreement (the “Agreement”)
with Central Pacific Financial Corp., a Hawaii corporation.  However, to the extent this Annex is
inconsistent with the Agreement, this Annex will govern.

 

(b)      Defined Terms.  Terms
used but not defined in this Annex are used with the meaning assigned in the
Agreement.

 

 

Exhibit A
to Employment Agreement Form of Release

 

 

This is your RELEASE with Central Pacific Financial Corp., a Hawaii corporation (the “Company”).

 

1.     Your
Employment Agreement

 

This Release relates to your Employment Agreement (which includes your
Terms Schedule, [Change of Control Annex and Additional Payments Annex](1))
dated as of June [day], 2004 and as amended from
time to time, with the Company (your “Employment Agreement”).

 

2.     Release
of Claims

 

(a)      Released Claims.  In
consideration of the payments and benefits described in your Employment Agreement,
you release and discharge the Company and its subsidiaries, affiliates,
officers, directors, employees, agents and their successors and assigns (the “Group Released Parties”)
from any and all actions, causes of action, claims, allegations, rights,
obligations, liabilities, or charges (collectively, “Claims”) that you may have, whether known or
unknown, by reason of any matter, related to any Employment Matter (as defined
in your Employment Agreement).  Without
limitation, released Claims include (1) Claims for compensation, bonuses or
benefits, (2) Claims under any compensation plan or arrangement maintained by
any member of the Group, (3) Claims for wrongful, constructive or unlawful
discharge, (4) Claims for age and national origin discrimination, (5) Claims
for sexual harassment, (6) Claims related to whistleblowing, (7) Claims for
emotional distress, intentional infliction of emotional distress, assault,
battery or pain and suffering, (8) Claims for punitive or exemplary damages, (9)
Claims for violations of any of the following acts or laws:  the Equal Pay Act, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act of 1991, the
Employee Retirement Income Security Act of 1974, the Worker Adjustment
Retraining and Notification Act, the Family Medical Leave Act, Hawaii’s Whistle
Blowers Protection Act, Hawaii’s Employment Practices Law, Hawaii’s Payment of
Wages Law, Hawaii’s Wage and Hour Law, Hawaii’s Temporary Disability Insurance
Law, Hawaii’s Prepaid Health Care Act, Hawaii’s Dislocated Workers’ Act, Hawaii’s
Occupational Safety and Health Law and Hawaii’s Family Leave Law (including all
amendments to any of these acts or laws), or (10) Claims for violations of any
other federal, state or municipal fair employment statutes or laws.  In addition, in consideration of the
provisions of your Employment Agreement, you further agree to waive any and all
rights under the laws of any jurisdiction in the United States, or any other
country, that limit a general release to those claims that are known or
suspected to exist in your favor as of the date of this Agreement.

 

(b)      Exceptions.  Notwithstanding
Section 2(a), this Release shall not (1) limit in any way your ability to bring
an action to enforce your rights under your Employment Agreement, (2) release
any claim for Other Accrued Benefits (as defined in your Employment Agreement),
or (3) release any claim for indemnification and continued liability coverage
(under your Employment Agreement or otherwise). 
For purposes of this

 

(1)           Include
if applicable.

 

 

Release, the term “Claims” as
used shall not include any claims not released by you as set forth in this
Section 2(b).

 

(c)      Representations and Warranties.  You represent and warrant that you have not,
and as of the Effective Date (as defined in Section 4) will not have, filed any
civil action, suit, arbitration, administrative charge, or legal proceeding
against any Group Released Party nor have you assigned, pledged, or
hypothecated as of the Effective Date any Claim to any person and no other
person has an interest in the claims that you are releasing herein.

 

(d)      No Relief for Released Claims.  You
agree that should any person or entity file or cause to be filed any civil
action, suit, arbitration or other legal proceeding seeking equitable or
monetary relief concerning any Claim released by you, you will not seek or
accept any personal relief from or as the result of the action, suit, arbitration
or proceeding.

 

3.     Your
Understanding of this Release and Your Rights

 

You acknowledge and agree that you have read this Release in its
entirety and that this Release releases known and unknown Claims, including,
without limitation, to rights and claims arising under ADEA.  You further acknowledge and agree that:

 

(a)     You
are entering into this Release and releasing, waiving and discharging rights or
claims only in exchange for consideration which you are not already entitled to
receive.

 

(b)    You
have been advised, and are being advised by the terms of the Release, to
consult with an attorney before executing this Release.  You also acknowledge that you chose and
consulted with the counsel of your choice concerning your rights and that your
counsel negotiated this Release on your behalf.

 

(c)     You
have been advised, and are being advised by the terms of this Release, that you
have had at least 21 days within which to consider this Release.

 

4.     Your
Ability to Revoke this Release; Effective Date

 

You may revoke this Release within 7 days of signing (for any reason or
no reason) by complying with the following sentence.  To revoke this
Release, you must deliver (or cause to be delivered) written notice of your
revocation to the Group at [Address and Contact
Person] no later than 5:00 p.m. Hawaii time on [date].  If you revoke this Release in accordance with
the preceding sentence, it will become null and void.  If you do not, this Release will become
effective at such time (the “Effective Date”).

 

2

 

5.     Your
Employment Agreement

 

For the avoidance of doubt, your Employment Agreement will continue in
full force and effect, including, without limitation, your obligations under
Sections 9 and 10 of your Employment Agreement.

 

6.     Dispute
Resolution

 

The terms of this Release shall be governed by Section 13 of your
Employment Agreement.

 

 

	
  Accepted and Agreed:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]