Document:

exhibit10-29.htm

    Exhibit
10.29

    

    FEDERAL
DEPOSIT INSURANCE CORPORATION

    

    WASHINGTON,
D.C.

    

    HAWAII
DIVISION OF FINANCIAL INSTITUTIONS

    

    HONOLULU,
HAWAII

     

    
      

      
        	
                _________________________________________________

              	 
      
	
                                                                                                                                 
      )

              	 
      
	
                                                                                                                                 
      )

              	 
      
	
                In
      the Matter
      of                                                                                     
      )

              	STIPULATION
      TO THE
	
                
                                                                                                                                 
        )

                

              	
                ISSUANCE
      OF A

              
	
                CENTRAL
      PACIFIC
      BANK                                                                
      )

              	CONSENT
      ORDER
	
                HONOLULU,
      HAWAII                                                                       
       )

              	
                 

              
	
                
                                                                                                                                 
        )

                

              	      
                FDIC-09-715b

              
	
                (INSURED
      STATE NONMEMBER
      BANK)                                  
         )

              	 
      
	
                                                                                                                               
        )

              	 
      
	
                _________________________________________________)

              	 
      

      

       

    

    Subject to the acceptance of this
Stipulation to the Issuance of a Consent Order (“Stipulation”) by the Federal
Deposit Insurance Corporation (“FDIC”) and the Hawaii Division of Financial
Institutions (“HDFI”), it is hereby stipulated and agreed by and between a
representative of the Legal Division of FDIC, a representative of the HDFI, and
Central Pacific Bank, Honolulu, Hawaii (“Bank”), as follows:

    1.           The
Bank has been advised of its right to receive a Notice of Charges and of Hearing
(“Notice”) detailing the unsafe or unsound banking practices and violations of
law and/or regulations alleged to have been committed by the Bank and of its
right to a public hearing on the alleged charges under section 8(b)(1) of the
Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b)(1), and Hawaii
Revised Statutes (“HRS”) § 412:2-303, and has waived those rights.

    2.           The
Bank, solely for the purpose of this proceeding and without admitting or denying
any of the alleged charges of unsafe or unsound banking practices and any
violations of law and/or regulations, hereby consents and agrees to the issuance
of a Consent Order (“Order”) by the FDIC and the HDFI.  The Bank
further stipulates and agrees that such Order will be deemed to be an order
which has become final under the Act and HRS § 412:2-305, and that said Order
shall become effective upon its issuance by the FDIC and the HDFI, and fully
enforceable by the FDIC and the HDFI pursuance to the provisions of the Act and
HRS §§ 412:2-300, 412:2-301, and 412:2-305.

    3.           In
the event the FDIC and the HDFI accept the Stipulation and issue the Order, it
is agreed that no action to enforce said Order in the United States District
Court will be taken by the FDIC, and no action to enforce said Order in Circuit
Courts of the State of Hawaii will be taken by the HDFI, unless the Bank or any
institution-affiliated party, as such term is defined in section 3(u) of the
Act, 12 U.S.C. § 1813(u), has violated or is about to violate any provision of
the Order.

    4.           The
Bank hereby waives:

    (a)           The
receipt of a Notice;

    (b)           All
defenses in this proceeding;

    (c)           A
public hearing for the purpose of taking evidence on such alleged
charges;

    (d)           The
filing of Proposed Findings of Fact and Conclusions of Law;

    (e)           A
recommended decision of an Administrative Law Judge; and

    (f)           Exceptions
and briefs with respect to such recommended decision.

    

    
      	
              Dated:           12/4/09

               

            	 
      
	
              FEDERAL
      DEPOSIT INSURANCE

              CORPORATION,
      LEGAL DIVISION

              BY:

            	
              CENTRAL
      PACIFIC BANK

              HONOLULU,
      HAWAII

              BY:

            
	
               

              /s/ Lori M. Honjiyo

            	
               

              /s/ Richard J.
Blangiardi

            
	
              Lori
      M. Honjiyo

            	
              Richard
      J. Blangiardi

            
	
              Counsel

            	 
      
	 
      	
              /s/ B. Jeannie Hedberg

            
	
              HAWAII
      DIVISION OF FINANCIAL

            	
              B.
      Jeannie Hedberg

            
	
              INSTITUTIONS

            	 
      
	
              BY:

            	
              /s/ Duane K. Kurisu

            
	 
      	
              Duane
      K. Kurisu

            
	
              /s/ James C. Paige

            	 
      
	
              James
      C. Paige

            	
              /s/ Mike K. Sayama

            
	
              Deputy
      Attorney General

            	
              Mike
      K. Sayama

            
	 
      	 
      
	 
      	
              /s/ Dennis I. Hirota

            
	 
      	
              Dennis
      I. Hirota

            
	 
      	 
      
	 
      	
              /s/ Colbert M. Matsumoto

            
	 
      	
              Colbert
      M. Matsumoto

            
	 
      	 
      
	 
      	
              /s/ Maurice H. Yamasato

            
	 
      	
              Maurice
      H. Yamasato

            
	 
      	 
      
	 
      	
              /s/ Jeffrey S. Cavanaugh

            
	 
      	
              Jeffrey
      S. Cavanaugh

            
	 
      	 
      
	 
      	
              /s/ Christine H.H. Camp

            
	 
      	
              Christine
      H.H. Camp

            
	 
      	 
      
	 
      	
              /s/ Ronald K. Migita

            
	 
      	
              Ronald
      K. Migita

            
	 
      	 
      
	 
      	
              /s/ Dwight L. Yoshimura

            
	 
      	
              Dwight
      L. Yoshimura

            
	 
      	 
      
	 
      	
              /s/ Earl E. Fry

            
	 
      	
              Earl
      E. Fry

            
	 
      	 
      
	 
      	
              /s/ Paul J. Kosaka

            
	 
      	
              Paul
      J. Kosaka

            
	 
      	 
      
	 
      	
              /s/ Crystal K. Rose

            
	 
      	
              Crystal
      K. Rose

            
	 
      	 
      
	 
      	
              Comprising
      the Board of Directors of

              Central
      Pacific Bank, Honolulu, Hawaiiexhibit10-30.htm

    Exhibit 10.30

    

    August 5,
2009

    

    Ronald K.
Migita

    Chairman
of the Board

    President
and Chief Executive Officer

    Central
Pacific Financial Corp.

    Central
Pacific Bank

     

    RE:  Your
Compensation For the Period July 1, 2009 to December 31, 2009.

     

    Dear Mr.
Migita:

    

    The
purpose of this letter is to confirm your compensation for serving as Chairman
of the Board, President, and Chief Executive Officer for Central Pacific
Financial Corp. (“CPF”) and Central
Pacific Bank (“CPB”) for the period
from July 1, 2009 to December 31, 2009 (the “Compensation
Period”).

     

    
      
        	
                1.

              	
                
                  For
      serving as Chairman of the Board of Directors (“Board”) of CPF
      and CPB, you will continue to receive an annual retainer fee of $160,000
      (CPF will pay $96,000 (60%) and CPB will pay $64,000 (40%)) prorated and
      paid on a monthly basis.  Since the Compensation Period is 6
      months, you will receive $80,000 (CPF will pay $48,000 (60%) and CPB will
      pay $32,000 (40%)), prorated and paid on a monthly basis during the
      Compensation Period.

                

              

      

       

    

    
      	
              2.

            	
              You
      will not receive any board or committee meeting fees for attending any
      meetings of the CPF and CPB Boards or any of their respective
      committees.

            

    

    

    
      	
              3.

            	
              For
      serving as President and Chief Executive Officer of CPF and CPB, you will
      receive an annual cash salary of $500,000.  Since the
      Compensation Period is 6 months, you will receive $250,000 (CPF will pay
      $60,000 (24%), CPB will pay $187,500 (75%), and Central Pacific HomeLoans,
      Inc. will pay $2,500 (1%)), prorated and paid on a semi-monthly basis
      during the Compensation Period.

            

    

    

    
      	
              4.

            	
              As
      an employee of CPF and CPB, you are entitled to receive all standard
      employee benefits,
      except for unrestricted vacation which we agree will not impede
      your ability to execute your duties and
  responsibilities.

            

    

    

    
      	
              5.

            	
              As
      an executive officer of CPF and CPB, you are entitled to receive
      perquisites that are extended to the highest level executives of CPF
      and/or CPB, to presently include an automobile allowance of $1,000 per
      month and payment of Waialae Country Club membership
  dues.

            

    

    

    
      	
              6.

            	
              You
      are eligible to receive the following annual performance-based incentive
      compensation:

            

    

    

    
      	
               
      

            	
              a.

            	
              Annual
      performance-based incentive equity grants in the form of restricted stock
      ranging from $110,000 annualized (Threshold), to $220,000 annualized
      (Target), to $330,000 annualized (Maximum).  Since the
      Compensation Period is 6 months, you will be eligible to receive 50% of
      the foregoing annualized amounts ($55,000 Threshold, to $110,000 Target,
      to $165,000 Maximum).

               

              The
      annual performance-based incentive equity grants of restricted stock shall
      not exceed one-third of your total annual compensation and shall be
      subject to such terms and conditions as required by all applicable laws
      and regulations.  Since the Compensation Period is 6 months,
      your performance-based incentive equity grants of restricted stock shall
      not exceed one-third of your compensation for the Compensation
      Period.

            

    

     

    
      	
               
      

            	
              b.

            	
              The
      annual performance-based incentive equity grants of restricted stock
      (referenced in “a” above) shall be awarded subject to the discretion of
      the Compensation Committee (pursuant to section “c” below), utilizing,
      however, the following performance measures and related performance
      standards (Target and Threshold) set forth below as
    guidance:

            

    

    

    
      	
              (i)  

            	
              Capital

            

    

    Target:  CPB’s
leverage capital ratio to be at 10.5% or higher throughout the Compensation
Period.

    Threshold:  CPB’s
leverage capital ratio to be at least 10.2% throughout the Compensation
Period.

    

    
      	
              (ii)  

            	
              Asset
      Quality

            

    

    Target:  CPB’s
California loan portfolio to be no higher than $705 million as of December 31,
2009.

    Threshold:  CPB’s
California loan portfolio to be at least at or under $725 million as of December
31, 2009.

    

    Target:  CPB’s total
classified assets to be no higher than $450 million as of December 31,
2009.

    Threshold:  CPB’s
total classified assets to be at least at or under $475 million as of December
31, 2009.

    

    
      	
              (iii)  

            	
              Stock
      Price

            

    

    Target:  CPF common
stock price to be $10.50 or higher as of December 31, 2009.

    Threshold:  CPF
common stock price to be at least $10.40 as of December 31, 2009.

    

    
      	
              (iv)  

            	
              Efficiency
      Ratio

            

    

    Target:  CPF’s and
CPB’s efficiency ratios to be no higher than 55% (normalized for nonrecurring
and/or credit related costs) for the quarter ended December 31, 2009, through
productivity initiatives and cost containment.

    Threshold:  CPF’s
and CPB’s efficiency ratios to at least at or under 57% (normalized for
nonrecurring and/or credit related costs) for the quarter ended December 31,
2009, through productivity initiatives and cost containment.

    

    
      	
              (v)  

            	
              Loan to Deposit
      Ratio

            

    

    Target:  CPB’s total
loan to total deposit ratio to be no higher than 95.0% as of December 31,
2009.

    Threshold:   CPB’s
total loan to total deposit ratio to be at least at or under 96.6% as of
December 31, 2009.

    

    
      	
              (vi)  

            	
              Net Interest
      Margin

            

    

    Target:  CPB’s net
interest margin to be at 3.95% or higher for the quarter ended December 31,
2009.

    Threshold:  CPB’s
net interest margin to be at least 3.70% for the quarter ended December 31,
2009.

    

    
      	
               
      

            	
              c.

            	
              The
      CPF and CPB Compensation Committees (collectively the “Committee”) has
      established minimum (Threshold) performance standards that must be
      achieved for each of the performance measures listed in this
      agreement.  If none of these Threshold levels are achieved, no
      equity grants or any portion thereof will be made.  If one or
      more of the Threshold levels are achieved, the Committee shall have the
      discretion to award equity grants.  In light of the high degree
      of uncertainty and difficulty of setting goals in this dynamic economic
      environment, the grants, if any, for performance above these Threshold
      levels will be discretionarily determined by the Committee.  The
      Threshold and Target performance levels serve as a framework from which to
      evaluate performance; however, the Committee ultimately maintains
      discretion in determining the actual awards to be granted for performance
      above Threshold.  In no event will the value of grants exceed
      $165,000.  While there is no particular weight given to each of
      the performance goals, the Committee recognizes the importance of each
      goal and will carefully consider the achievement of all the goals in its
      performance evaluation and award
decision.

            

    

    

    The use
of a discretionary performance assessment has been selected in order to allow
the Committee to take into account subjective factors and to preserve its
flexibility to act in the best interests of CPB, CPF, and its
shareholders.  Accordingly, the Committee is permitted to consider the
facts and circumstances surrounding the achievement of the listed goals,
including, but not limited to the manner in which the goals were achieved and
the resulting impact on other areas of the Company critical to its stability and
profitability.

    

    While the
above is the compensation arrangement approved by the Board of Directors, please
understand that CPF and CPB reserve the right to make any changes and amendments
to the agreement or to withhold or recover any compensation (on either a
retroactive or prospective basis, and whether or not earned/accrued or yet to be
earned/accrued) as necessary or required to comply with all applicable laws and
regulations, to include without limitation, the Emergency Economic Stabilization
Act of 2008 (“EESA”), the American Recovery and Reinvestment Act of 2009
(“ARRA”), and regulations implementing EESA and ARRA issued by the U.S.
Department of the Treasury with respect to executive compensation or
otherwise.  In addition, CPF and CPB shall have a right to recover
(“clawback”) any grants of restricted stock awarded to you under “b” and “c”
above if such compensation was based on materially inaccurate financial
statements (which includes, but is not limited to, statements of earnings,
revenues, or gains) or any other materially inaccurate performance metric
criteria.

    

    If the
foregoing is agreeable with you, please sign and return the original of this
letter to the undersigned.

    
 

    Sincerely,

     

    Central
Pacific Financial Corp.

    Central
Pacific Bank

    

     

    By /s/ Colbert M.
Matsumoto                                                                           

    Colbert
M. Matsumoto

    Chair,
Compensation Committee

    Board of
Directors

    

    

    Accepted
and agreed to by:

    

    /s/ Ronald K.
Migita                                                                                         
August 5,
2009

    Ronald K.
Migita                                                                                                Date

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