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EXHIBIT 10.9  

 
 

Central Pacific Financial Corp.
  2004 Annual Executive Incentive Plan    
    

Purpose:  

        The purpose of this plan is to reinforce the mission and corporate goals of Central Pacific Financial Corp. and its subsidiaries. The plan is designed to help the
Company attract, retain and motivate a talented executive team. This team's performance, both as a team and as individuals, contributes directly to serving the Company's customers and communities,
sustaining the Company's strong financial performance, and adding value for the shareholders. 

Definitions:  

        The following terms will have the indicated meanings throughout this document. Whenever appropriate, words used in the singular may include the plural and
vice-versa. 

        "Base
Salary" means the annual base salary (excluding, for the avoidance of doubt, any bonus, commission payments or other extra cash compensation on an annualized basis) paid to the
Participant on the last day of the Plan Year. For example, a Participant who is paid a monthly salary of $10,000 as of the last day of the Plan Year will have an annualized base salary of $120,000 for
purposes of calculating any annual incentive payment under the Plan. 

        "Board"
means the Board of Directors of Central Pacific Financial Corp. 

        "CEO"
means the Chief Executive Officer of Central Pacific Financial Corp. 

        "Company"
means Central Pacific Financial Corp. and its subsidiaries. 

        "Committee"
means the Compensation Committee of the Board. However, if a member of the Compensation Committee is not an "outside director" within the meaning of Section 162(m) of
the Code or is not a "non-employee director" within the meaning of Rule 16b-3 under the Exchange Act, the Compensation Committee may from time to time delegate some or
all of its functions under the Plan to a committee or subcommittee composed of members that meet the relevant requirements. The term "Committee" includes any such committee or subcommittee, to the
extent of the Compensation Committee's delegation. 

        "Covered
Employee" means a Participant who is a "covered employee" as defined in Section 162(m) of the Internal Revenue Code and the regulations promulgated under
Section 162(m) of the Internal Revenue Code, or any successor statute. 

        "Participant"
means the individual in a given position who is selected to participate in this Plan in accordance with the terms of the Plan. 

        "Plan"
means this 2004 Annual Executive Incentive Plan. 

        "Plan
Year" means Central Pacific Financial Corp.'s fiscal year, unless otherwise determined by the Committee or the Board. 

Administration:  

        The Plan will be administered by the Committee. The Committee may, in its sole discretion, delegate certain aspects of recordkeeping and administration to
specified individuals. 

        The
Committee is given full authority to develop such rules, regulations, procedures and communications as it deems necessary or advisable to administer the Plan and interpret its
provisions. Any determination, decision, interpretation or other action of the Committee, after ratification by the Board, will be considered final and binding upon all Participants and any person
claiming entitlement to an award under the Plan. 

 

Participation:  

        In order to be considered for participation in the Plan, an employee of the Company must have been placed on full-time active status with the
corporate title of Executive Vice President or above, no later than January 1st of the Plan Year. For each Plan Year, the CEO will recommend to the Committee the employees (by
name and/or by class) who should participate in the Plan for that Plan Year and the Committee will approve the CEO's recommended list of the Participants (with such modifications as it determines)
within the first 90 days of the Plan Year. 

        The
selected Participants will be notified in writing by April 30th of the Plan Year. This communication will notify Participants of their participation and the
target percentages of their incentive. 

        A
Participant must receive at least a "Meets Expectations" performance appraisal rating during the Plan Year in order to receive any payment under the Plan. Any exceptions from this
provision must be recommended by the CEO and approved by the Committee. 

        Participants
in this Plan are ineligible for participation in any other Company annual incentive cash bonus programs for the applicable Plan Year. 

Performance Period:  

        Unless otherwise determined by the Committee the term over which performance shall be evaluated shall be the Plan Year. 

Actual Awards:  

        Actual awards will be calculated according to the following performance measures: (a) corporate performance objectives, and (b) individual
unit/production objectives. The weight each measure is accorded for the applicable Participant is set forth on the table below. 

        Corporate Performance Objectives.    Corporate performance will be measured by one or more of the following targets selected by
the Committee: 

	•
	Earnings
per share (actual or targeted growth);

	•
	Net
income after capital costs;

	•
	Net
income (before or after taxes);

	•
	Return
measures (including, but not limited to, return on assets, risk-adjusted return on capital, or return on equity);

	•
	Efficiency
ratio;

	•
	Full-time
equivalency control;

	•
	Stock
price (including, but not limited to, growth measures and total shareholder return);

	•
	Non-interest
income compared to net interest income ratio;

	•
	Expense
targets;

	•
	Margins;

	•
	Operating
efficiency;

	•
	EVA®;

	•
	Credit
quality measures; 

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	•
	Customer
satisfaction;

	•
	Loan
growth;

	•
	Deposit
growth;

	•
	Net
interest margin;

	•
	Fee
income;

	•
	Operating
expense; and

	•
	Credit
quality. 

        The
target performance objectives will be established in writing by the Committee within the first 90 days of the Plan Year. 

        Individual Unit/Production Performance Objectives.    The individual unit/production performance will be measured by one or more
of the following targets selected by the Committee: cost per dollar loan growth; cost per dollar deposit growth; revenue per personnel; operating expense to group budget and service levels (group);
and personal performance. 

        The
target performance objectives (if applicable) will be established by the Committee within the first 90 days of the Plan Year. 

        Target Bonus and Maximum Bonus.    Within the first 90 days of the Plan Year, the Committee will establish for each
Participant a target bonus and a maximum bonus for the Plan Year, each as expressed as a percentage of the Participant's Base Salary. In all cases, the maximum bonus established by the Committee for
any participant shall be less than or equal to the maximum bonus specified in the table below, but there shall not be any expectation or requirement that the maximum bonus established by the Committee
will be the full amount of the maximum bonus specified in the table. 

        Participant Payout.    Each Participant's actual award will be based upon the extent to which the applicable performance
measures, as outlined in the table below, are achieved (i.e., if 80% of the Participant's target measures are achieved, the Participant will receive 80% of the Participant's target bonus), subject
to the Participant's achieved performance exceeding any minimum threshold established by the Committee. In no case will the actual award amount payable under the Plan to any Participant exceed the
maximum bonus established for the Participant by the Committee (in accordance with the table below). The Committee has no discretion to increase any award amount payable under the Plan but may reduce
or eliminate the amount payable under any award in its discretion (for any reason or no reason). Payment of any award amounts will be made after audited financial statements are made available, but no
later than April 1 of the year following the Plan Year. 

Performance Measure Weighting and Maximum Bonus  

	 
	 	Groups
	 
	Measures
 
	 
	 	CEO
	 	President
	 	EVP
	 
	Corporate Performance Weighting	 	100	%	100	%	60	%
	Individual Unit/Production Objectives (KPI) Weighting	 	0	%	0	%	40	%
	 	Total	 	100	%	100	%	100	%
	Maximum Bonus as a % of Base Salary	 	100	%	100	%	100	%

Termination of Employment:  

        The Participant must remain actively employed by the Company on the last day of the designated Plan Year to be considered eligible for any potential payment under
this Plan and must remain actively 

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employed
by the Company on the date the award is paid. Any exceptions to this provision must be approved by the Committee, in its sole discretion. 

Non-Transferability of Award:  

        An award, or potential award, granted under this Plan shall not be assignable or transferable by the Participant other than by will or the laws of descent and
distribution. 

No Right to Employment:  

        This Plan does not constitute a contract between the Company and its employees. Neither establishing this Plan nor taking any action as a result of the Plan shall
be construed as giving any employee the right to be retained by the Company for any period of time, or to be employed in any particular position, at any particular rate of pay, or to provide any other
job-related benefits. 

Plan is Unfunded:  

        All payments to be made under the Plan shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts. 

Amendment or Termination of Plan:  

        The Committee, with ratification from the Board, may from time to time or at any time amend or terminate the Plan without notice to Participants. 

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EXHIBIT 10.20  

 
 

CENTRAL PACIFIC FINANCIAL CORP.
  2004 STOCK COMPENSATION PLAN    
    
    NOTICE OF RESTRICTED SHARE GRANT
  TO NON-EMPLOYEE DIRECTOR    
    

        You have been granted restricted shares of common stock of Central Pacific Financial Corp. on the following terms: 

	1.	 	Name of Grantee:	 	 
	

2.	
 	

Total Number of Shares Granted*:	
 	

 
	

3.	
 	

Effective Date of Grant:	
 	
March 15, 2005
	

4.	
 	

Closing Price Per Share as of Date of Transfer, March 15, 2005:	
 	

 
	

5.	
 	

Vesting Commencement Date:	
 	
March 15, 2005
	

6.	
 	

Vesting Schedule:	
 	

Restricted Shares shall be fully vested upon continuous service through the fifth anniversary of the effective date of grant. However, if earlier, full vesting will also occur upon your death or disability, change in control of Central Pacific
Financial Corp., or termination of service following the completion of your term as a director.

	*
	The
total number of shares granted is based on a grant of $12,000 worth of CPF common stock ($6,000 of which is granted to each non-employee director of Central Pacific
Financial Corp. and $6,000 of which is granted to each non-employee director of Central Pacific Bank) divided by the closing price per share of CPF common stock on March 15, 2005,
and rounded down to the nearest whole share. 

        The
restricted shares are granted under and governed by the terms and conditions of the Restricted Share Agreement and the Central Pacific Financial Corp. 2004 Stock Compensation Plan,
both of which are attached to and made a part of this Notice. 

        Please
sign the Restricted Share Agreement and return it to Glenn Ching, as soon as possible, but no later than March 30, 2005 (CPB's March Board Meeting
date). 

        Please note that if a "Section 83(b)" income tax election is made for the restricted shares, the election must be filed with the IRS within 30 days
from the date of transfer of the restricted shares. A copy of the "Section 83(b)" election form is attached. You are urged to consult with your tax advisor to determine the effect of a
Section 83(b) election and whether such an election is appropriate for you.

 
 
 

CENTRAL PACIFIC FINANCIAL CORP.
  2004 STOCK COMPENSATION PLAN    
    
    RESTRICTED SHARE AGREEMENT
  FOR NON-EMPLOYEE DIRECTOR    
    

        Agreement dated March 15, 2005 ("Agreement") between Central Pacific Financial Corp., a Hawaii corporation
("Company") with its registered office at 220 South King Street, Honolulu, Hawaii 96813 and                        , residing
at                        ("Grantee"), a non-employee director of the Company
or its subsidiary. 

1.    Grant of Restricted Shares.    

The
Company hereby grants to Grantee effective as of March 15, 2005 ("Grant Date"),            shares ("Restricted Shares") of the Company's
common stock ("Shares"). This grant of Restricted Shares is subject to the applicable terms and conditions of the Central Pacific Financial Corp. 2004 Stock Compensation Plan ("Plan") and this
Agreement. 

2.    Restrictions during Restriction Period.    

	a.
	Service Restriction.    The Restricted Shares shall be forfeited and transferred to the Company upon the Grantee's termination
of service as a director of the Company or its subsidiary prior to the expiration of the "Restriction Period", as defined below.

	b.
	Transfer Restriction.    None of the Restricted Shares may be sold, assigned, pledged, or otherwise transferred, voluntarily
or involuntarily, by the Grantee during the Restriction Period.

	c.
	Restriction Period.    For purposes of this Agreement, the term "Restriction Period" means the period commencing on the Grant
Date and ending on the earlier of: (i) the fifth anniversary of the Grant Date; or (ii) the expiration of the Grantee's term as a director of the Company and its subsidiaries (whichever
term last expires). For this purpose, the term as a director shall mean the Grantee's current term as a director and any immediately succeeding future consecutive term or terms as a director of either
the Company or its subsidiaries that results from election, appointment, reelection, or reappointment as such a director. The Restriction Period shall not expire at the time the Grantee ceases to be a
director of the Company or one of its subsidiaries if, at that time, such Grantee continues to be a director by reason of membership on the Board of Directors of another one of the Company or its
subsidiaries.

	d.
	Lapse of Restrictions.    The restrictions set forth in the above portion of this Section 2 shall lapse and no longer
apply upon the earlier of (i) the expiration of the Restriction Period; (ii) the death of the Grantee; (iii) the termination of service of the Grantee due to "permanent and total
disability", as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"); or (iv) the occurrence of a "Change in Control", as defined in
Section 2.7 of the Plan. 

3.    Issuance of Shares; Registration; Withholding Taxes.    

As
part of the grant under this Agreement, certificates for the Restricted Shares shall be issued in the Grantee's name and shall be held in escrow by the Company until all restrictions lapse or such
shares are forfeited as provided herein. A certificate or certificates representing the Restricted Shares as to which restrictions have lapsed shall be delivered to the Grantee upon such lapse. 

The
Company may postpone the issuance or delivery of the Shares until (i) the completion of registration or other qualification of such Shares or transaction under any state or federal law,
rule or regulation, or any listing on any securities exchange, as the Company shall determine to be necessary or desirable; (ii) the receipt by the Company of such written representations or
other 

2

 

documentation
as the Company deems necessary to establish compliance with all applicable laws, rules, and regulations, including applicable federal and state securities laws and listing requirements,
if any; and (iii) the payment to the Company, upon its demand, of any amount requested by the Company to satisfy any federal, state or other governmental withholding tax requirements related to
the issuance or delivery of the Shares. Grantee shall comply with any and all legal requirements relating to Grantee's resale or other disposition of any Shares acquired under this Agreement. The
certificates representing the Shares may bear such legend as described in Section 6 below or as the Company otherwise deems appropriate to ensure compliance with applicable law. 

4.    Share Adjustments.    

The
number of Restricted Shares shall be adjusted proportionately for any increase or decrease in the number of issued shares of common stock of the Company by reason of a reorganization, merger,
recapitalization, reclassification, stock split, stock dividend, or other like change in the capital structure of the Company. The adjustment required shall be made by the Compensation Committee of
the Board of Directors of the Company (the "Committee"), whose determination shall be conclusive. 

5.    Rights as Shareholder.    

Subject
to the terms of the Plan and this Agreement, the Grantee shall be entitled to all the rights of a shareholder with respect to the Restricted Shares, including the right to vote such Shares and
to receive dividends and other distributions payable with respect to such Shares after the Grant Date. The Grantee's rights as a shareholder shall terminate in the event of the Grantee's forfeiture of
the Restricted Shares. 

6.    Legends.    

All
certificates evidencing Shares issued under this Agreement shall bear the following legend (and such other restrictive legends as are required or the Company deems advisable under the provisions
of any applicable law): 

THE
SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH
IN THE CENTRAL PACIFIC FINANCIAL CORP. 2004 STOCK COMPENSATION PLAN AND RESTRICTED SHARE AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND CENTRAL PACIFIC FINANCIAL CORP. A COPY OF THE PLAN AND
RESTRICTED SHARE AGREEMENT MAY BE OBTAINED FROM CENTRAL PACIFIC FINANCIAL CORP. 

If,
in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares sold under this Agreement is no longer required, the Grantee under such certificate
shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend. 

7.    Grantee Bound by Plan.    

Grantee
hereby acknowledges receipt of a copy of the Plan and acknowledges that Grantee shall be bound by its terms, regardless of whether such terms have been set forth in this Agreement. If there is
any inconsistency between the terms of the Plan and the terms of this Agreement, Grantee shall be bound by the terms of the Plan. 

3

 

8.    Amendment.    

This
Agreement may be amended by the Committee at any time based on its determination that the amendment is necessary or advisable in light of any addition to, or change in, the Code or regulations
issued thereunder, or any federal or state securities law or other law or regulation, or the Plan, or based on any discretionary authority of the Committee under the Plan. However, unless necessary or
advisable due to a change in law, any amendment to this Agreement which has a material adverse effect on the interest of Grantee under this Agreement shall be effective only with the consent of
Grantee. 

9.    Grantee Responsible for Taxes.    

Since
Grantee is a non-employee director of the Company or a subsidiary, the Company is not obligated to withhold or pay income or employment taxes on income arising from the Restricted
Shares. Grantee is solely responsible for the timely payment of federal and state income taxes, self-employment tax, and any other taxes, including but not limited to Hawaii's General
Excise Tax. 

10.    No Advice, Warranties, or Representations.    

The
Company is not providing Grantee with advice, warranties, or representations regarding any of the legal or tax effects to Grantee with respect to the Restricted Shares. Grantee is encouraged to
seek legal and tax advice from Grantee's own legal and tax advisers. 

11.    Continued Service.    

Neither
the Plan nor the award of Restricted Shares shall confer upon Grantee the right to continue as a Director of the Company or any of its subsidiaries. 

12.    Miscellaneous.    

This
Agreement and the Plan set forth the parties' final and entire agreement with respect to the subject matter hereof, which may not be changed or terminated orally and shall be governed by and
shall be construed in accordance with the laws of the State of Hawaii applicable to contracts made and to be performed in Hawaii. This Agreement shall bind and benefit Grantee, the heirs,
distributees, and personal representative of Grantee, and the Company and its successors and assigns. 

13.    Counterparts.    

This
Agreement may be signed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one and the same instrument. 

        IN
WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written. 

	 	 	CENTRAL PACIFIC FINANCIAL CORP.
	

 	
 	

By	
 	

 
 RONALD K. MIGITA
	 	 	Its	 	Chairman of the Board
	

 	
 	

 	
 	

"Company"
	

 	
 	

 
 "Grantee"

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CENTRAL PACIFIC FINANCIAL CORP. 2004 STOCK COMPENSATION PLAN NOTICE OF RESTRICTED SHARE GRANT TO NON-EMPLOYEE DIRECTOR

CENTRAL PACIFIC FINANCIAL CORP. 2004 STOCK COMPENSATION PLAN RESTRICTED SHARE AGREEMENT FOR NON-EMPLOYEE DIRECTOR

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