Document:

exhibit10-7.htm

    Exhibit
10.7

    

    Amendment
No. 2008-1 to the Central Pacific Financial Corporation

    2004
Stock Compensation Plan

    

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

    

    WHEREAS, the Company maintains the 2004
Stock Compensation Plan (the “Plan”) for the
benefit of certain participants (“Participants”);

    

    WHEREAS, the Company desires to amend
certain provisions of the Plan in order to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”);
and

    

    WHEREAS, the Company has reserved the
right to amend or modify the Plan.

    

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

    

    
      	
              1.  

            	
              The
      following sentence shall be added to the end of the third paragraph in
      Section 4.2:

            

    

     

    “Notwithstanding
anything to the contrary, any adjustments, modifications, amendments or changes
of any kind made pursuant to this Section 4.2 shall be made in a manner
compliant with Section 409A of the Code.”

     

    
      	
              2.  

            	
              The
      following proviso shall be added to the end of the final sentence in
      Section 8.7:

            

    

     

    “,
provided that such dividends or dividend equivalents shall be paid or provided
in a manner compliant with Section 409A of the Code”

     

    
      	
              3.  

            	
              Section 9.4
      shall be amended to read as
follows:

            

    

     

    “Payment
of earned Performance Shares/Performance Units shall be as determined by the
Committee and as evidenced in the Award Agreement.  Subject to the
terms of the Plan, the Committee, in its sole discretion, may pay earned
Performance Shares/Performance Units in the form of cash or in Shares (or in a
combination thereof) equal to the value of the earned Performance
Shares/Performance Units as soon as practicable after the end of the applicable
Performance Period, but in no event later than 2 1⁄2 months following the end of
the calendar year in which such Performance Period ends; provided, however, that
any Shares may be granted subject to restrictions deemed appropriate by the
Committee, but only if the terms of such restrictions are compliant with
Section 409A of the Code.  The determination of the Committee
with respect to the form of payout of such Awards shall be set forth in the
Award Agreement pertaining to the grant of the Award.”

    

    
      	
              4.  

            	
              The
      following proviso shall be added to the end of the final sentence in
      Section 9.5:

            

    

     

    “,
provided that such dividends or dividend equivalents shall be paid or provided
in a manner compliant with Section 409A of the Code”

     

    
      	
              5.  

            	
              The
      following proviso shall be added to the end of the final sentence in
      Section 10.7:

            

    

     

    “,
provided that such dividends or dividend equivalents shall be paid or provided
in a manner compliant with Section 409A of the Code”

     

    
      	
              6.  

            	
              The
      following proviso shall be added to the end of the final sentence in
      Article 13:

            

    

     

    “,
provided that such rules and procedures for any deferrals or deferral elections
pursuant to this Article 13 shall comply in all respects with
Section 409A of the Code”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              7.  

            	
              The
      first sentence of Article 15 shall be amended to read as
      follows:

            

    

     

    “Upon the
occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges, or unless the Committee
shall determine otherwise in the Award Agreement:”

     

    
      	
              8.  

            	
              The
      following proviso shall be added to the end of the first sentence in
      Section 16.1:

            

    

     

    “,
provided that any such alteration, amendment, modification, suspension or
termination of the Plan pursuant to this Article 16 shall be effected in a
manner compliant with Section 409A of the Code”

     

    
      	
              9.  

            	
              The
      following sentence shall be added as the final sentence of
      Section 16.2:

            

    

     

    “Notwithstanding
anything to the contrary, any adjustments pursuant to this Section 16.2
shall be effected in a manner compliant with Section 409A of the
Code.”

     

    
      	
              10.  

            	
              A
      new Section 20.6 shall be added to the Plan as
    follows:

            

    

     

    “Section 409A of the
Code.  It is the Company’s intent that payments under the Plan
are exempt from, and do not constitute “deferred compensation” subject to,
Section 409A of the Code and that the Plan be administered
accordingly.  If and to the extent that any payment is determined by
the Company to constitute “non-qualified deferred compensation” subject to
Section 409A of the Code and is payable hereunder to a Participant by reason of
his termination of employment, then (a) such payment or benefit shall be made or
provided to the Participant only upon a “separation from service” as defined for
purposes of Section 409A of the Code under applicable regulations and (b) if the
Participant is a “specified employee” (within the meaning of Section 409A of the
Code and as determined by the Company), such payment shall not be made or
provided before the date that is six months after the date of the Participant’s
separation from service (or his earlier death).  Neither the Company
nor its affiliates shall have any liability to any Participant, Participant’s
spouse or other beneficiary of any Participant’s spouse or other beneficiary of
any Participant or otherwise if the Plan or any amounts paid or payable
hereunder are subject to the additional tax and penalties under Section 409A of
the Code.”

    

    IN
WITNESS WHEREOF, the Compensation Committee has caused this Amendment 2008-1 to
the Plan to be duly executed on this 31st day of
December, 2008.

    

    

    CENTRAL
PACIFIC FINANCIAL CORPORATION

    

    

    By:           /s/ Karen K.
Street

    Executive Vice President and Director
of Human Resourcesexhibit10-9.htm

    Exhibit
10.9

    
      
      

    

    
      
        
          	 
      	
                  P.O.
      Box 3590

                  Honolulu,
      HI 96811-3590

                  Telephone
      (808) 544-0500

                

        

      

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      January
      28, 2009

                                    	 
      
	 
      	 
      
	
                                      Ronald
      K. Migita

                                      Chairman
      of the Board

                                      President
      and Chief Executive Officer

                                      Central
      Pacific Financial Corp.

                                      Central
      Pacific Bank

                                    	
                                      CONFIDENTIAL PORTION OMITTED:

                                       

                                      An
      asterisk has been placed in this Exhibit to indicate the confidential
      portions of this document that have been omitted pursuant to a request for
      confidential treatment.  This document including said
      confidential portions has been filed separately with the
      Commission.

                                    
	
                                      RE:Your
      Compensation

                                    	 
      
	 	 
	 
      	 
      
	 
      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”).

    

    
      	
               
      

            	
              1.

            	
              For
      serving as Chairman of the Board of Directors (“Board”) of CPF and CPB,
      effective August 1, 2008, you will 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; which annual retainer fee had been
      reduced by 20% (from $200,000 to $160,000) on July 30, 2008, with an
      effective date of August 1, 2008, as part of an overall 20% reduction in
      CPF and CPB Board annual retainers.

            

    

    

    
      	
               
      

            	
              2.

            	
              Effective
      August 1, 2008, 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 $1.00, which will be effective August 1,
      2008, being the date of your employment as said President and Chief
      Executive Officer.

            

    

    

    
      	
               
      

            	
              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.

            	
              An
      annual performance-based incentive cash payment ranging from $250,000 (if
      Target is achieved) to $375,000 (if Maximum is achieved). The cash payment
      will be prorated for performance achieved between Target and Maximum. No
      cash payment or any portion thereof will be made if the Target is not
      achieved.

            

    

    

    
      	
               
      

            	
              b.

            	
              Annual
      performance-bused incentive equity grants of:  (i)
      appreciation-based equity grants (stock options and/or stock appreciation
      rights) ranging from $375,000 (if Target is achieved) to $562,500 (if
      Maximum is achieved); and (ii) full-value equity grants (restricted stock
      and/or performance shares) ranging from $375,000 (if Target is achieved)
      to $562,500 (if Maximum is
      achieved).  The equity grants will be prorated for performance
      achieved between Target and Maximum. No equity grants or any portion
      thereof will be made if the Target is not
  achieved.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              c.

            	
              The
      annual performance-based incentive cash payment and equity grants in “a”
      and “b” respectively, above, shall be subject to the following Target
      performance measures, weighted as set forth
  below:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Raising
      a minimum of $75 million in new capital through the issuance of CPF convertible
      preferred stock and/or common stock by December 31, 2008; and,
      maintaining
      a “well-capitalized” regulatory designation through June 30, 2009.
      Weight: 25%

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Reducing
      the California loan portfolio to      *     
      million or lower as of June 30, 2009. Weight:
  15%

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Increasing
      the total shareholder return (adjusted for the effect of any capital
      raise) by at least     *     as of June 30,
      2009, over the closing CPF stock price on August 27, 2008 ($11.13).
      Weight: 15%

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Reducing
      the Efficiency Ratio for CPF and CPB to      *     
      or lower as of June 30, 2009. Weight:
15%

            

    

    

    
      	
               
      

            	
              (v)

            	
              Reducing
      the Total Loans to Total Deposits Ratio to      *     
      or lower as of June 30, 2009. Weight:
15%

            

    

    

    
      	
               
      

            	
              (vi)

            	
              Increasing
      the Net Interest Margin to      *     
      or higher as of June 30, 2009. Weight:
15%

            

    

    

    
      	
               
      

            	
              d.

            	
              The
      annual performance-based incentive cash payment and equity grants in “a”
      and “b” respectively, above, shall be subject to the following Maximum
      performance measures, weighted as set forth
  below:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Raising
      a minimum of $75 million in new
      capital through the issuance of CPF convertible preferred stock and/or
      common stock by December 31, 2008; and, maintaining a “well-capitalized”
      regulatory designation through June 30,
      2009.  Weight:  These (i) requirements must be met in
      order to qualify for and receive any Maximum
  awards.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Reducing
      the California loan portfolio to      *     
      million or lower as of June 30, 2009. Weight:
  20%

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Increasing
      total shareholder return (adjusted for the effect of any capital raise) by
      at least      *     
      as of June 30, 2009, over the closing CPF stock price on August 27,
      2008 ($11.13). Weight: 20%

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Reducing
      the Efficiency Ratio for CPF and CPB to      *     
      or lower as of June 30, 2009. Weight:
20%

            

    

    

    
      	
               
      

            	
              (v)

            	
              Reducing
      the Total Loans to Total Deposits Ratio to      *     
      or lower as of June 30. 2009. Weight:
20%

            

    

    

    
      	
               
      

            	
              (vi)

            	
              Increasing
      the Net Interest Margin to      *     
      or higher as of June 30, 2009. Weight:
20%

            

    

     

    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

    Compensation
Committee Chair

    Board of
Directors

    
 

    Accepted
and agreed to by:

    

    
    
/s/ Ronald K.
Migita                             1/28/2009                                

    Ronald K.
Migita                                                                                   Date

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