SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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o | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
CPB INC. |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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CPB INC.
220 South King Street
Honolulu, Hawaii 96813
(808) 544-0500
March , 2003
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the 2003 Annual Meeting of Shareholders of CPB Inc. The Annual Meeting will be held on April 22, 2003, at 5:30 p.m., Hawaii time, in the South Pacific Ballroom of the Hilton Hawaiian Village Hotel, 2005 Kalia Road, Honolulu, Hawaii.
The accompanying Notice of Annual Meeting of Shareholders and Proxy Statement describe matters to be acted upon at the Annual Meeting. We ask that all shareholders read these documents and sign and return the enclosed Proxy Card in the enclosed postage-paid envelope to ensure that your shares are voted accordingly. Shareholders who attend the meeting may withdraw their proxy and vote in person if they wish to do so.
We appreciate your continued interest in CPB Inc. and are confident that, as in the past, you will continue to vote your shares.
Sincerely, | ||
![]() CLINT ARNOLDUS Chairman of the Board, President and Chief Executive Officer |
CPB INC.
220 South King Street
Honolulu, Hawaii 96813
(808) 544-0500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 2003
TO THE SHAREHOLDERS OF CPB INC.:
NOTICE IS HEREBY GIVEN that, pursuant to its Bylaws and the call of its Board of Directors, the Annual Meeting of Shareholders (the "Meeting") of CPB Inc. (the "Company") will be held in the South Pacific Ballroom of the Hilton Hawaiian Village Hotel, 2005 Kalia Road, Honolulu, Hawaii, on April 22, 2003, at 5:30 p.m., Hawaii time, for the purpose of considering and voting upon the following matters:
Only those shareholders of record at the close of business on February 28, 2003 shall be entitled to notice of and to vote at the Meeting.
SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY IN THE POSTAGE PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT THEY PLAN TO ATTEND THE MEETING IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY WITHDRAW THEIR PROXY AND VOTE IN PERSON IF THEY WISH TO DO SO.
By order of the Board of Directors, | ||
![]() NEAL K. KANDA Vice President, Secretary and Treasurer |
Dated: March , 2003
CPB INC.
220 South King Street
Honolulu, Hawaii 96813
(808) 544-0500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 2003
This Proxy Statement is furnished in connection with the solicitation of proxies ("Proxies") by the Board of Directors of CPB Inc. (the "Company") for use at the Annual Meeting of Shareholders (the "Meeting") of the Company to be held in the South Pacific Ballroom of the Hilton Hawaiian Village Hotel, 2005 Kalia Road, Honolulu, Hawaii, on April 22, 2003, 5:30 p.m., Hawaii time, and at any and all adjournments thereof. This Proxy Statement and accompanying Notice was mailed to shareholders on or about March , 2003.
Matters to be Considered
The matters to be considered and voted upon at the Meeting will be:
Voting and Revocability of Proxies
A Proxy for use at the Meeting is enclosed. Any shareholder who executes and delivers such Proxy has the right to revoke it at any time before it is exercised by filing with the Secretary of the Company an instrument revoking it or a duly executed Proxy bearing a later date. It may also be revoked by attendance at the Meeting and election to vote in person at the Meeting. Subject to such revocation, all shares represented by a properly executed Proxy received in time for the Meeting will be voted by the Proxy Holders in accordance with the instructions on the Proxy. If no instructions are specified with respect to matters to be acted upon, the shares represented by the Proxy will be voted "FOR" the election of all nominees as directors, "FOR" ratification of the appointment of KPMG LLP as the Company's independent accountants for the fiscal year ending December 31, 2003, and "FOR" approval of the amendment to the Company's Articles of Incorporation that will change the name of the Company from "CPB Inc." to "Central Pacific Financial Corp.". It is not anticipated that any matters will be presented at the Meeting other than as set forth in the accompanying Notice of the Meeting. If any other matters are
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presented properly at the Meeting, however, the Proxy will be voted by the Proxy Holders in accordance with the recommendations of the Board of Directors.
If you hold your shares of the Company's common stock, no par value ("Common Stock"), in "street name" and you fail to instruct your broker or nominee as to how to vote your Common Stock, your broker or nominee may, in its discretion, vote your Common Stock "FOR" the election of the Board of Directors' nominees, "FOR" the proposal to ratify the appointment of KPMG LLP as the Company's independent accountants for the fiscal year ending December 31, 2003 and "FOR" approval amendment to the Company's Articles of Incorporation that will change the name of the Company from "CPB Inc." to "Central Pacific Financial Corp.".
Costs of Solicitation of Proxies
This solicitation of Proxies is made on behalf of the Board of Directors of the Company (the "Board") and the Company will bear the costs of solicitation. The expense of preparing, assembling, printing and mailing this Proxy Statement and the materials used in this solicitation of Proxies also will be borne by the Company. It is contemplated that Proxies will be solicited principally through the mail, but directors, officers and regular employees of the Company or its subsidiary, Central Pacific Bank (the "Bank"), may solicit Proxies personally or by telephone. Although there is no formal agreement to do so, the Company may reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding these proxy materials to their principals. The Company does not intend to utilize the services of other individuals or entities not employed by or affiliated with the Company in connection with the solicitation of Proxies.
Outstanding Securities and Voting Rights
The close of business on February 28, 2003 has been fixed as the record date (the "Record Date") for the determination of the shareholders of the Company entitled to notice of and to vote at the Meeting. There were 16,006,748 shares of Common Stock issued and outstanding on the Record Date. Abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present for the purposes of conducting business.
Each holder of Common Stock will be entitled to one vote, in person or by proxy, for each share of Common Stock standing in the holder's name on the books of the Company as of the Record Date on any matter submitted to the vote of the shareholders, except that in connection with the election of directors, the shares are entitled to be voted cumulatively, provided that not less than forty-eight (48) hours prior to the time fixed for the Meeting, a written request for such cumulative vote has been delivered to the Secretary of the Company. If a shareholder has given such request, all shareholders may cumulate their votes for candidates in nomination. Cumulative voting entitles a shareholder to give one nominee as many votes as is equal to the number of directors to be elected multiplied by the number of shares of Common Stock owned by such shareholder, or to distribute the shareholder's votes on the same principle between two or more nominees as the shareholder sees fit. Nominees receiving the highest number of votes on the foregoing basis up to the total number of directors to be elected will be elected directors. Accordingly, abstentions from voting or votes withheld from the election of directors will have no effect in an uncontested election. Discretionary authority to cumulate is hereby solicited by the Board of Directors and return of the Proxy shall grant such authority.
The proposal to ratify the appointment of KPMG LLP as the Company's independent accountants requires the affirmative vote of shareholders holding not less than a majority of the shares of Common Stock represented and entitled to vote at the Meeting. Accordingly, an abstention from voting on the proposal to ratify the appointment of KPMG LLP will have the effect of a vote "AGAINST" the proposal.
The proposal to approve the amendment to the Company's Articles of Incorporation that will change the name of the Company from "CPB Inc." to "Central Pacific Financial Corp." requires the affirmative
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vote of shareholders holding not less than sixty-six and two-thirds percent (66 2/3%) of the shares of Common Stock entitled to vote at the Meeting. Accordingly, an abstention from voting on the proposal to approve the amendment to the Company's Articles of Incorporation will have the effect of a vote "AGAINST" the proposal.
Principal Shareholders
As of the Record Date, the following were the only persons known to management of the Company to beneficially own more than five percent of the Company's outstanding Common Stock.
Title of Class |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percent of Class |
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Common | The Committee of the Central Pacific Bank Employee Stock Ownership Plan 220 South King Street Honolulu, Hawaii 96813 |
1,649,064 | 10.30 | % | |||
Common | Private Capital Management 3003 9th Street North Naples, Florida 34103 |
1,574,086 | 9.83 | % | |||
Common | Wellington Management Company LLP 75 State Street, 19th Floor Boston, Massachusetts 02109 |
1,060,678 | 6.63 | % |
Under the Company's Restated Articles of Incorporation and Bylaws, which provide for a "classified" Board, three directors (out of a present total of nine) are to be elected at the Meeting to serve three-year terms expiring at the 2006 Annual Meeting of Shareholders and until their respective successors are elected and qualified. The Company's Bylaws currently provide for nine directors, three each serving as Class I, Class II and Class III directors. The nominees to serve as Class III directors for the election at the Meeting are Clayton K. Honbo, Stanley W. Hong, and Paul J. Kosasa, who are all currently directors of the Company.
All nominees have indicated their willingness to serve and unless otherwise instructed, Proxies will be voted for all of the nominees. However, in the event that any of them should be unable to serve, the Proxy
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Holders named on the enclosed Proxy Card will vote in their discretion for such persons as the Board of Directors may recommend.
There are no family relationships among directors or executive officers of the Company, and, except as set forth below, as of the date hereof, no directorships are held by any director with a company which has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
The following table sets forth certain information, as of the Record Date, with respect to each of the directors, nominees and Named Executive Officers (as defined below under the heading "Compensation of Directors and Executive Officers: Executive Compensation"), as well as all directors and executive officers, as a group:
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Common Stock Beneficially Owned on February 28, 2003(2) |
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First Year Elected or Appointed as Officer or Director of the Company(1) |
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Name |
Principal Occupation for the Past Five Years |
Age |
Number |
Percent of Class(3) |
Term Expires |
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Nominees for Class III Director | ||||||||||||
HONBO, Clayton K., M.D. | Retired; Doctor of Obstetrics and Gynecology, Clayton K. Honbo, M.D., Inc. (19771999) | 63 | 1999 | 486,818 | (4) | 3.04 | % | 2003 | ||||
HONG, Stanley W. | President, Waste Management of Hawaii, Inc. (2002-present); Trustee, King Lunalilo Trust Estate (2001present); President and Chief Executive Officer, The Chamber of Commerce of Hawaii (19962001); Attorney-at-Law | 66 | 1993 | 16,400 | (5) | 0.10 | % | 2003 | ||||
KOSASA, Paul J. | President and Chief Executive Officer of MNS, Ltd., dba ABC Stores (1999-present); Executive Vice President and District Manager of MNS Ltd., dba ABC Stores (1997-1998) | 45 | 2002 | 15,600 | (6) | 0.10 | % | 2003 | ||||
Class I Directors | ||||||||||||
ARNOLDUS, Clint | Chairman, President and Chief Executive Officer of the Company (2002-present); President and Chief Operating Officer of the Bank (2002); Chairman, President and Chief Executive Officer, Community Bank (1998-2001); Chairman, President and Chief Executive Officer, The Bank of New Mexico (1996-1998) | 55 | 2002 | 40,400 | (7) | 0.25 | % | 2004 | ||||
BLANCO, Joseph F. | Real Estate Consultant (2003present): Executive Assistance to the Governor and Special Advisor for Technology Development, State of Hawaii (2000-2002); Executive Assistant to the Governor, State of Hawaii (1994-1999) | 49 | 2002 | 17,200 | (9) | 0.11 | % | 2004 |
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HIROTA, Dennis I., Ph.D. | President, Sam O. Hirota, Inc. Engineering and Surveying (1986present); Registered Professional Engineer and Licensed Professional Land Surveyor | 62 | 1980 | 26,000 | (8) | 0.16 | % | 2004 | ||||
Class II Directors | ||||||||||||
GUILD, Alice F. | Executive Director, The Friends of Iolani Palace (1998present) | 68 | 1980 | 19,824 | (10) | 0.12 | % | 2005 | ||||
MATSUMOTO, Gilbert J. | Certified Public Accountant; Principal-President, The Matsumoto Group, Certified Public Accountants (1979present) | 59 | 2002 | 45,504 | (11) | 0.28 | % | 2005 | ||||
NAGAMINE, Daniel M. | President, Flamingo Enterprises, Inc. (1985present); General Partner, Flamingo Pearl City, a limited partnership (1998present); Certified Public Accountant (Inactive) | 61 | 1983 | 28,120 | (12) | 0.18 | % | 2005 | ||||
Named Executive Officers(13) | ||||||||||||
KANDA, Neal K. | Vice President, Secretary and Treasurer of the Company (2002present) Vice President and Treasurer of the Company (1991-2001); Executive Vice President and Chief Financial Officer of the Bank (2002-present); Executive Vice President of the Bank (1996-2001) | 54 | 1991 | 40,540 | (14) | 0.25 | % | N/A | ||||
CHIKAMOTO, Alwyn S. | Executive Vice President and Chief Credit Officer of the Bank (2002present); (Senior Vice President and Group Manager of the Bank (1997-2002) | 49 | 2002(1 | ) | 32,912 | (15) | 0.21 | % | N/A | |||
FUJIMOTO, Blenn A. | Executive Vice President and Chief Financial Services Officer of the Bank (2002present); Senior Vice President and Retail Division Manager of the Bank (2000-2002); Vice President and District Manager, Bank of Hawaii (1998-2000) | 44 | 2002(1 | ) | 11,525 | (16) | 0.07 | % | N/A |
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ISONO, Denis K. | Executive Vice President and Chief Operations Officer of the Bank (2002-present); Executive Vice President of Operations, Bank of Hawaii (2000-2002); Senior Vice President and Controller, Bank of Hawaii/Pacific Century Financial Corp. (1988-2000) | 51 | 2002(1 | ) | 1,000 | 0.01 | % | N/A | ||||
SAITO, Joichi(17) | Chairman and Chief Executive Officer of Company and Bank (19962002) | 67 | 1989 | 39,407 | 0.25 | % | N/A | |||||
All Directors and Executive Officers, as a Group (13 persons) |
781,843 | (18) | 4.88 | % |
Messrs. Chikamoto, Fujimoto and Isono are officers of the Bank and not officers of the Company; therefore, the year included in the column labeled "First Year Elected or Appointed as Officer or Director of the Company" indicates the year that each was first appointed as an officer of the Bank.
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Section 16(a) Beneficial Ownership Reporting Compliance
The Company's directors, executive officers and the beneficial holders of more than 10% of the Common Stock are required to file certain reports with the Securities and Exchange Commission regarding the amount of and changes in their beneficial ownership of the Company's stock. Based on its review of copies of those reports, the Company is required to disclose failures to report shares beneficially owned or changes in such beneficial ownership, or to timely file required reports during the previous year. To the best knowledge of the Company, there were no such failures to file or timely file required reports during 2002, except for Mr. Arnoldus who did not file one such report in a timely manner.
The Board of Directors and Committees
The Board has various standing committees, including an Audit Committee, a Compensation & 1997 Stock Option Plan Committee (the "Compensation Committee"), an Executive Committee, and a Nominating Committee.
Audit Committee
The Audit Committee of the Board is composed of four (4) members and operates under a written charter adopted by the Board. The responsibilities of the Audit Committee are contained in the Audit Committee Report. The Audit Committee during fiscal year 2002 consisted of Mr. Nagamine, as chairperson, and Mrs. Guild and Messrs. Hong and Blanco, as members. The Audit Committee is comprised of independent directors as defined by the Sarbanes-Oxley Act of 2002 and as set forth in the New York Stock Exchange listing standards. The Audit Committee held six (6) meetings during fiscal year 2002.
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filings under the Securities Act of 1933 or under the Securities Act of 1934, except to the extent we specifically incorporate this Report by reference.
The Audit Committee reports to the Board and is responsible for overseeing and monitoring financial accounting and reporting, the system of internal controls established by management and the audit process of the Company.
The Audit Committee Charter adopted by the Board sets out the responsibilities, authority and specific duties of the Audit Committee. A copy of the Audit Committee Charter has previously been attached to the Company's proxy statement within the past three fiscal years.
Pursuant to the charter, the Audit Committee has the following responsibilities:
In discharging its oversight responsibility the Audit Committee has met and held discussions with management and KPMG LLP, the independent auditors for the Company. Management represented to the Audit Committee that all consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit Committee discussed with
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the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees).
The Audit Committee also obtained from the independent auditors a formal written statement describing all relationships between the Company and the auditors that bear on the auditors' independence consistent with Independence Standards Board Standard No. 1, (Independence Discussions with Audit Committee). The Audit Committee has received and discussed with independent auditors the matters in the written disclosures required by the Independence Standards Board and as required under the Sarbanes-Oxley Act of 2002. The Audit Committee discussed with the independent auditors any relationships that may impact on the firm's objectivity and independence and satisfied itself as to the auditors' independence.
The Audit Committee discussed with the Company's internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the internal controls, and the overall quality of the financial reporting.
Based on these discussions and reviews, the Audit Committee recommended that the Board of Directors approve the inclusion of the Company's audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, for filing with the Securities and Exchange Commission.
Management is responsible for the Company's financial reporting process including its system of internal controls, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. The Company's independent auditors are responsible for auditing those financial statements. Our responsibility is to monitor and review these processes. It is not our duty or our responsibility to conduct auditing or accounting reviews or procedures. We are not employees of the Company and we may not all be, and we may not all represent ourselves to be or to serve as, accountants or auditors by profession or experts in the fields of accounting or auditing. Therefore, we have relied, without independent verification, on management's representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the representations of the independent auditors included in their report on the Company's financial statements. Our oversight does not provide us with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, our considerations and discussions with management and the independent auditors do not assure that the Company's financial statements are presented in accordance with generally accepted accounting principles, that the audit of our Company's financial statement has been carried out in accordance with generally accepted auditing standards or that our Company's independent accountants are in fact "independent."
Respectfully submitted by the members of the Audit Committee of the Board of Directors:
DANIEL
M. NAGAMINE, CHAIR
ALICE F. GUILD
STANLEY W. HONG
JOSEPH F. BLANCO
Compensation Committee
The Compensation Committee held six (6) meetings during 2002. The committee is chaired by Mr. Hong, and Messrs. Kosasa and Nagamine are members. The Compensation Committee's primary functions include determining individuals to whom options will be granted and their terms, approving
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recommendations related to employee compensation and benefit programs, and determining the Chief Executive Officer's compensation.
Executive Committee
The Executive Committee, which held no meetings during 2002, is chaired by Mr. Arnoldus, and Dr. Hirota, Dr. Honbo and Mr. Blanco are members. The purpose of the Executive Committee is, among other things, to manage the business affairs of the Company while not in conflict with specific law or directives that may be given by the Board.
Nominating Committee
The Nominating Committee held one (1) meeting during 2002. The committee is chaired by Mrs. Guild, and Dr. Hirota, Dr. Honbo and Messrs. Nagamine and Matsumoto are members. It is responsible for recommending nominees for directors of the Company. It will consider nominees for election at the 2004 Annual Meeting of Shareholders recommended by shareholders if such recommendations are received in writing prior to December 15, 2003. Shareholder recommendations should be addressed to the Company's Secretary, P.O. Box 3590, Honolulu, Hawaii 96811.
During the fiscal year ended December 31, 2002, the Board held a total of five (5) meetings. All of the persons who were directors of the Company during 2002 attended at least seventy-five percent (75%) of the aggregate of (i) the total number of such Board meetings, and (ii) the total number of meetings held by all committees of the Board on which they served during the year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE BOARD OF DIRECTORS' NOMINEES.
Compensation of Directors and Executive Officers
Executive Compensation
Summary of Cash and Certain Other Compensation. The following table sets forth certain summary information concerning compensation paid or accrued by the Company to or on behalf of any person who served as the Company's Chief Executive Officer during the last fiscal year and each of the four (4) other most highly compensated executive officers of the Company or the Bank (given such executive officer of the Bank performed a policy making function for the Company) (determined as of the end of the last fiscal year) whose annual salary and bonus exceeded $100,000 in 2002 (the "Named Executive Officers") for each of the fiscal years ended December 31, 2002, 2001 and 2000:
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Long Term Compensation |
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Annual Compensation |
Awards |
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Payouts |
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Restricted Stock Award ($) |
Securities Underlying Options/SARs (#)* |
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Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
LTIP** Payout ($) |
All Other Compensation ($) |
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Clint Arnoldus Chairman, President and Chief Executive Officer |
2002 2001 2000 |
452,972 N/A N/A |
505,218 N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
482,500 N/A N/A |
(1) |
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Joichi Saito(2) |
2002 2001 2000 |
274,235 446,168 405,344 |
253,113 119,130 |
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82,334 26,635 21,345 |
(3) (4) (5) |
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Neal K. Kanda Vice President, Secretary and Treasurer |
2002 2001 2000 |
210,002 195,170 180,667 |
126,073 74,458 52,725 |
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28,112 24,852 19,556 |
(6) (7) (8) |
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Alwyn S. Chikamoto, Executive Vice President and Chief Credit Officer of the Bank |
2002 2001 2000 |
165,673 132,667 120,000 |
72,000 38,250 19,994 |
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27,942 19,880 13,521 |
(9) (10) (11) |
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Blenn A. Fujimoto, Executive Vice President and Chief Financial Services Officer of the Bank |
2002 2001 2000 |
157,670 112,172 81,301 |
110,000 31,763 10,028 |
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26,695 14,027 |
(12) (13) |
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Denis K. Isono, Executive Vice President and Chief Operations Officer of the Bank |
2002 2001 2000 |
116,022 N/A N/A |
100,000 N/A N/A |
N/A N/A |
N/A N/A |
N/A N/A |
25,000 N/A N/A |
(14) |
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Option Grants. No stock appreciation rights were granted during 2002 to the Named Executive Officers. Messrs. Kanda, Chikamoto, Fujimoto were granted stock options, 16,338, 11,192 and 6,924 respectively, during 2002 at the exercise price of $16.84.
Option Exercises and Holdings. The following table provides information with respect to the Named Executive Officers concerning the exercise of options during the fiscal year ended December 31, 2002 and unexercised options held by the Named Executive Officers as of December 31, 2002:
AGGREGATED OPTION(1) EXERCISES IN 2002
AND YEAR-END OPTION VALUES
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Number of Unexercised Options at 12/31/01 |
Value of Unexercised In-the- Money Options(2) at 12/31/02 ($) |
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Name |
Shares Acquired on Exercise (#) |
Value Realized($) |
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Exercisable |
Unexercisable |
Exercisable |
Unexercisable |
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ARNOLDUS, Clint | | | 40,000 | | 494,400 | | ||||||
SAITO, Joichi | | | | | | | ||||||
KANDA, Neal K. | | | | 16,338 | | 234,859 | ||||||
CHIKAMOTO, Alywn S. | | | | 11,192 | | 160,885 | ||||||
FUJIMOTO, Blenn A. | | | 9,280 | 20,844 | 133,400 | 273,564 | ||||||
ISONO, Denis K. | | | | | | |
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Defined Benefit Pension Plan. The table below shows estimated annual retirement benefits at age 65 for various levels of executive compensation and service under the Bank's Defined Benefit Pension Plan.
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Annualized Final Average Compensation |
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15 Years |
20 Years |
25 Years |
30 Years |
35 Years |
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$ | 50,000 | $ | 5,625 | $ | 7,500 | $ | 9,375 | $ | 11,250 | $ | 13,125 | |||||
100,000 | 11,250 | 15,000 | 18,750 | 22,500 | 26,250 | |||||||||||
150,000 | 16,875 | 22,500 | 28,125 | 33,750 | 39,375 | |||||||||||
200,000 | 22,500 | 30,000 | 37,500 | 45,000 | 52,500 | |||||||||||
250,000 | 28,125 | 37,500 | 46,875 | 56,250 | 65,625 | |||||||||||
300,000 | 33,750 | 45,000 | 56,250 | 67,500 | 78,750 | |||||||||||
350,000 | 39,375 | 52,500 | 65,625 | 78,750 | 91,875 | |||||||||||
400,000 | 45,000 | 60,000 | 75,000 | 90,000 | 105,000 | |||||||||||
450,000 | 50,625 | 67,500 | 84,375 | 101,250 | 118,125 | |||||||||||
500,000 | 56,250 | 75,000 | 93,750 | 112,500 | 131,250 |
Under the Defined Benefit Pension Plan, benefits are based upon the employee's years of service and highest average annual salary in the final 60-consecutive month period of service. The benefits attributable to contributions made to the Money Purchase Plan during the period between June 30, 1986 and January 1, 1991, when the Defined Benefit Pension Plan was curtailed, are included in the amounts shown above. The Defined Benefit Pension Plan was curtailed again effective December 31, 2002. To be eligible, an executive must be hired prior to December 2, 2001.
The Company has a non-qualified, unfunded Supplemental Executive Retirement Plan ("SERP") for executive officers. To be eligible, an executive must have had benefits under the Defined Benefit Pension Plan that are limited by certain laws or regulations governing such plan and its benefits. The SERP provides the difference between an unrestricted benefit and the restricted benefit allowed under the Defined Benefit Pension Plan.
The credited years of service as of December 31, 2002 for Messrs. Saito, Kanda, Chikamoto and Fujimoto are 15, 13, 25 and 2, respectively.
Director Compensation
The Company and the Bank each has a policy of paying fees to directors for their attendance at Board and committee meetings. The Company and the Bank pay each of their non-employee directors $800 per Board meeting attended and $600 per Board committee meeting attended. In addition, the Company pays $5,000 annually to each non-employee director, and the Bank pays $12,000 annually to each non-employee director.
Non-employee directors of the Company and the Bank are also eligible to participate in the Company's 1997 Stock Option Plan. During 1997, non-employee directors received grants of stock options to purchase, in the aggregate, 294,000 shares of Common Stock at an exercise price of $8.9375 per share. Options vest at a rate of 3,000 shares per year until the earlier of the director's retirement at age 70 or 10 years from the date of grant.
The Company maintains a Directors Deferred Compensation Plan effective as of January 1, 2001, under which each non-employee director of the Company and the Bank may elect to defer all or a portion of his or her annual retainer and meeting fees. Distribution of the deferred compensation account will be made in the form of a lump sum payment within ten years following termination from service or annual installment payments over a period no greater than ten (10) years following termination from service, in accordance generally with the director's election made at the time of the deferral. A withdrawal from the deferred compensation account is also available in the case of an unforeseeable emergency. Under the
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Directors Deferred Compensation Plan, deferred amounts are valued based on corresponding investments in certain investment funds offered by the Bank's Trust Division which may be selected by the director. The Directors Deferred Compensation Plan is a nonqualified deferred compensation plan under which distributions are made from the general assets of the Company and under the direction and oversight of the Compensation Committee.
The 1997 Stock Option Plan allows for the discretionary grant of Common Stock to non-employee directors of the Company and its subsidiaries (the "Director Restricted Shares Program"), and requires retention of the Common Stock for all or a portion of the director's tenure as a director. Under the Director Restricted Shares Program, eight non-employee directors were granted 300 shares each on November 14, 2002.
Employment Arrangements
Effective June 28, 2002, the Bank entered into a Supplemental Retirement Agreement with Joichi Saito, the former Chairman and Chief Executive Officer of the Company and the Bank. In consideration for Mr. Saito's years of service to the Bank, the Bank will pay the annual benefit of $75,000 (which may be increased by the Bank's Board of Directors, in its sole discretion) to Mr. Saito, paid out in 12 equal monthly installments commencing on the month following Mr. Saito's normal retirement date and through his remaining lifetime, or to his beneficiary for her remaining lifetime, or until June 2020, whichever comes first. Mr. Saito's normal retirement date was , 2003. Mr. Saito's beneficiary is Ms. Yoko Saito. Notwithstanding the agreement to pay the annual benefit upon normal retirement, the Bank shall not pay any annual benefit under the agreement if while paying the lifetime annual benefit the Bank determines that Mr. Saito committed one of the following acts while in the employ of the Bank prior to the normal retirement date: (a) gross negligence or gross neglect of duties; (b) commission of a felony or of a gross misdemeanor involving moral turpitude; or (c) fraud, disloyalty, dishonestly or willful violation of any law or significant Bank policy committed in connection with Mr. Saito's employment and resulting in an adverse effect on the Bank.
Effective January 1, 2003, the Bank entered separate Executive Employment Agreement with each of (a) Clint Arnoldus, Chairman, President and Chief Executive Officer of the Company and the Bank, (b) Neal K. Kanda, Executive Vice President and Chief Financial Officer of the Bank, (c) Denis K. Isono, Executive Vice President and Chief Operations Officers of the Bank, (d) Blenn A. Fujimoto, Executive Vice President and Chief Financial Services Officer of the Bank, and (e) Alwyn S. Chikamoto, Executive Vice President and Chief Credit Officer of the Bank. The terms of each of the Executive Employment Agreements are the same; therefore for purposes of describing the terms of these agreements, each of Messrs. Arnoldus, Kanda, Isono, Fujimoto and Chikamoto, are referred to below as the "Executive".
The term of each Executive Employment Agreement is at the will of the Bank and is subject to termination, in accordance with the terms of the agreement, by (a) the Bank for cause and without cause (b) the Executive and (c) upon termination of employment as a result of a change in control of the Bank. Under the terms of the Executive Employment Agreement, the Executive shall continue to have the same compensation and the same benefits as paid to him as of the date of the agreement (which may be changed from time to time at the discretion of the Bank). The Executive agrees to regard and preserve as confidential certain non-public, confidential, privileged and/or other propriety information of the Bank. In addition, the Executive agrees to certain non-competition agreements during his employment with the Bank and for a period of twenty-four (24) months after the termination of the Executive Employment Agreement or the termination of his employment with the Bank, whichever is later.
If the Executive Employment Agreement is terminated for cause by the Bank, without cause by the Bank or by the Executive, then the Executive shall be entitled to the Executive's base salary and accumulated and unused vacation time earned by the Executive and computed pro rata up to and including the date of termination and the Bank shall have not further obligation to the Executive. If the Executive's
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employment is terminated as a result of and within twelve (12) months of a "Change in Control", the Executive shall be entitled to the immediate vesting of an nonvested stock options granted and accumulated up to the date of termination and a severance pay in the amount equal to three (3) times the Executive's annual base salary and annual cash bonus. A "Change in Control" is defined as the occurrence of any of the following events: (i) a merger where the Bank and or the Company is not the surviving corporation; (ii) the transfer of all or substantially all of the assets of the Bank to another corporation; (iii) the acquisition by any person, group of related or affiliated persons (excluding, however, affiliates of the Bank) or group of persons acting in concert in one or more transactions of equity securities of the Bank and/or the Company of fifty percent (50%) or more of the outstanding voting power of the Bank and/or the Company after such transaction or transactions.
Report of the Compensation Committee to Shareholders
The Compensation Committee reviews and recommends to the Board the terms of employment agreements and compensation plans for executives, reviews and adopts (subject to ratification by the entire Board) the terms of the Company's stock option plans and other performance-based compensation plans for employees of the Company, determines eligibility to participate in and grants of awards to employees under the Company's stock option plans and performance-based compensation plans and otherwise performs functions related to the administration of the Company's stock option plans and performance-based compensation plans. The Compensation Committee is chaired by Mr. Hong, and Messrs. Nagamine and Kosasa are members. Each member of the Compensation Committee is a non-employee director of the Company and the Bank.
Set forth below is a report of the Compensation Committee addressing the Company's compensation policies for 2002 applicable to the Company's executives, including the Named Executive Officers.
The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filings under the Securities Act of 1933 or under the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate this Report of the Compensation Committee by reference.
Report of the Compensation Committee on Executive Compensation
The Company's compensation programs reflect the philosophy that executive compensation levels should be linked to Company performance, yet be competitive and consistent with that provided to others holding positions of similar responsibility in the banking and financial services industries. The Company's compensation plans are designed to assist the Company in attracting and retaining qualified employees critical to the Company's long-term success, while enhancing employees' incentives to perform to their fullest abilities to increase profitability and maximize shareholder value. With the exception of the Annual Executive Incentive Plan (the "Annual Incentive Plan") and the SERP, the Company's compensation plans are generally available to all employees, subject to certain hours and years of service requirements. In addition, the Board has granted the chief executive officer the authority to give discretionary awards to individual employees where he deems it appropriate.
Salary Compensation
The Company pays cash salaries to its executive officers which are competitive with salaries paid to executives of other companies in the banking and financial services industries based upon the individual's experience, performance and responsibilities and past and potential contribution to the Company. In determining the market rate, the Company obtains information regarding executive salary levels for other companies in the banking and financial services industries, especially among the larger Hawaii banks. The relative asset size and profitability levels of these institutions are also considered. On , 2002, the
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Company's Board approved the compensation for all executive officers for the ensuing year, effective , 2002.
In recommending the increase in compensation for the Company's Chief Executive Officer, the Compensation Committee considered salary level relative to competitors, the Company's financial performance relative to the previous year, and the relative increases in salaries received by other officers of the Company. Each of these factors was weighted relatively equally. Net income in 2001 increased by % over 2000, return on average assets increased to % in 2001 from % in 2000, and return on average stockholders' equity increased to % in 2001 from % in 2000. Net charge-offs in 2001 decreased to % of average loans compared to % in 2000, and nonperforming assets declined to % of year-end loans in 2001 compared to % in 2000. Total assets of $ billion at year-end 2001, increased by % over year-end 2000. In assessing the Company's performance, the Compensation Committee also took into account economic conditions in Hawaii. In addition, the other Named Executive Officers received salary increases.
Incentive Compensation
During 2002, the Bank had three programs whereby compensation for the Named Executive Officers was directly linked to the Company's performance: the Profit Sharing Plan, the ESOP and the Annual Incentive Plan.
Profit Sharing Plan and ESOP. The Bank makes annual contributions (the "Plan Contribution") to the Profit Sharing Plan and ESOP (collectively, the "Plans") as determined by the Bank's Board of Directors depending on the profitability of the Bank during the year, subject to certain limitations on contributions under the Internal Revenue Code and the Plans.
The assets of the Plans are held in trust for the exclusive benefit of the participants. Employees with not less than one year of service with the Bank are eligible to participate in the Plans. The portion of the Plan Contribution to each Plan is allocated among participating employees, including the Named Executive Officers, in the proportion which each participant's compensation for the fiscal year bears to the total compensation for all participating employees for such year. Benefits vest at a rate of twenty percent (20%) per year and participants receive a distribution of vested amounts allocated to their accounts only upon retirement or termination of employment with the Bank.
The Bank's Board of Directors makes its determination of the amount of the Plan Contribution based upon management's recommendation at the end of the fiscal year. For 2002, the Plan Contribution equaled five (5%) of the pre-tax income of the Bank (excluding the effect of the Plan Contribution expense), less the amount of cash dividends paid by the Bank during the fiscal year. The Plan Contribution is allocated between the Profit Sharing Plan and the ESOP by the Bank's Board of Directors in its discretion based upon management's recommendation. In determining the allocation of the Plan Contribution, the Bank's Board of Directors considers the countervailing concerns of investment diversification through the Profit Sharing Plan and employee Common Stock ownership through the ESOP. In 1994, the Bank's Board of Directors approved the Cash or Deferred Arrangement ("CODA") program which allows each employee who is a participant in the Profit Sharing Plan to elect to receive one-half of the current year's profit sharing contribution in cash with the other half being allocated to such employee's account under the Profit Sharing Plan. Elections not made would be deferred into that employee's 401(k) Plan account. For 2002, fifty (50%) of the Plan Contribution was allocated to the Profit Sharing Plan and 50% to the ESOP. In 2002, the Bank contributed $1,164,000 to the CODA and Profit Sharing Plan and $1,164,000 to the ESOP, which equaled 6.5% and 6.5%, respectively, of total compensation paid to all participating employees for the year.
Annual Incentive Plan. The Annual Incentive Plan was adopted by the Bank's Board of Directors for the 2002 fiscal year. Full-time employees of the Company or its subsidiaries who have been granted the title of vice president or above prior to October 1, 2001, were eligible to participate in the Annual
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Incentive Plan. In addition, a participant must have received a performance appraisal rating of "accomplished" or above during the calendar year to be considered eligible for an award. During 2002, executives and division managers, including each of the Named Executive Officers, were eligible to participate in the Annual Incentive Plan.
Subject to review by the Bank's Board of Directors, participants were eligible to receive a cash bonus under the Annual Incentive Plan, provided certain corporate objectives for financial performance, as measured by the Company's return on equity, efficiency ratio and revenue growth were met. Based on the corporate objectives set for 2002, participants were eligible to receive cash bonuses. After assessing the Company's 2002 financial performance, the Bank's Board of Directors, upon management's recommendation, awarded cash bonuses to the Named Executive Officers in the amounts noted for 2002 in the "Summary Compensation Table."
Stock-Based Compensation
The Company also believes that stock ownership by employees, including the Named Executive Officers, provides valuable long-term incentives for such persons who will benefit as the Common Stock price increases and that stock-based performance compensation arrangements are beneficial in aligning employees' and shareholders' interests. To facilitate these objectives, the Company adopted the 1997 Stock Option Plan.
1997 Stock Option Plan. The 1997 Stock Option Plan was adopted in 1997 to replace the 1986 Stock Option Plan which expired on November 7, 1996. The 1997 Stock Option Plan was amended on April 24, 2001, to provide for the grant of Common Stock to non-employee directors of the Company and its subsidiaries, and to require retention of the Common Stock for all or a portion of the director's tenure as a director. The 1997 Stock Option Plan is administered by the Compensation Committee. The 1997 Stock Option Plan provides for stock options to be granted to key employees, generally at a level of vice president and above, including the Named Executive Officers, and to non-employee directors of the Company and the Bank.
Other Compensation
The Company's executives are eligible to participate in the Bank's Defined Benefit Pension Plan (the "Pension Plan"), SERP and the Split Dollar Life Insurance Plan (the "Insurance Plan"). The Pension Plan is a qualified defined benefit plan which provides for monthly annuity payments upon retirement. Benefits are based upon the employee's years of service and highest average annualized compensation in a sixty (60) consecutive month period of employment.
In 1995, the maximum annual compensation allowable for determining benefits payable under the Pension Plan was reduced to $150,000, subject to future adjustments based on increases in the cost of living. The reduction had the effect of decreasing the benefits payable under the Pension Plan to the Company's executive officers whose annualized compensation was likely to exceed $150,000. See "ELECTION OF DIRECTORSCompensation of Directors and Executive OfficersExecutive CompensationDefined Benefit Pension Plan." SERP was adopted by the Board of Directors effective January 1, 1995 as a means of supplementing the benefits provided under the Pension Plan in light of imposed salary limitations. Under the Insurance Plan, the Bank provides life insurance coverage for certain senior officers, including the Named Executive Officers. The Insurance Plan agreements provide death benefits of approximately two times the officers' normal annual salary during employment and an amount approximating the officers' final normal annual salary upon retirement.
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The Named Executive Officers also participate in the Company's broad-based employee benefit plans, such as the 401(k) Plan, medical, supplemental disability and term life insurance.
THE COMPENSATION COMMITTEE | ||
STANLEY W. HONG, CHAIR DANIEL M. NAGAMINE PAUL KOSASA |
Compensation Committee Interlocks and Insider Participation
Some of the directors and executive officers of the Company and the Bank and the companies with which they are associated were customers of and had banking transactions with the Bank in the ordinary course of the Bank's business during 2002, and the Bank expects to conduct similar banking transactions in the future. All such loans and commitments were made on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with other persons of similar creditworthiness, and in the opinion of management of the Bank, did not involve more than a normal risk of collectibility or present other unfavorable features.
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Performance Graph
The following graph compares the yearly percentage change in the Company's cumulative total shareholder return on Common Stock with (i) the cumulative total return of the Nasdaq market index and (ii) the cumulative total return of banks and bank holding companies listed on the Nasdaq over the period from December 31, 1997 through December 31, 2002. The graph assumes an initial investment of $100 at the end of 1997 and reinvestment of dividends during the ensuing five-year period. The graph is not necessarily indicative of future price performance.
The following Performance Graph does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filings under the Securities Act of 1933 or under the Securities Exchange Act of 1934, as amended, except to the extent we specifically incorporate this Performance Graph by reference.
Comparison of Five Year Cumulative Total Return
Among Nasdaq U.S. Companies, Nasdaq Banks/Bank Holding Companies, and CPB Inc.
On December 31, 2002, the Company began listing its securities on the New York Stock Exchange, Inc. under the trading symbol "CPF". For the fiscal years 1997 through 2002, the Company's securities were listed on the Nasdaq; therefore for purposes of this Performance Graph comparative data related to the Nasdaq is provided.
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DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD OF DIRECTORS
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors recommends the election as directors the three (3) nominees listed below, to serve a three-year term expiring at the 2006 Annual Meeting of Shareholders and until their respective successor are elected and qualified or until their earlier death, resignation or removal.
Clayton
K. Honbo
Stanley W. Hong
Paul J. Kosasa
For more information regarding the background of each of the nominees for director, see the tables on page under the section titled "Election of Directors". The person named as "Proxy" in the enclosed form of proxy statement will vote the shares represented by all valid returned proxies in accordance with the specifications of the shareholders returning such proxies. If at the time of the Annual Meeting of Shareholders that any of the nominees named below should be unable to serve, which event is not expected to occur, the discretionary authority provided in the proxy statement will be exercised to vote for such substitute nominee or nominees, if any, as shall be designated by the Board of Directors.
As described on page under the section titled "Outstanding Securities and Voting Rights", cumulative voting is possible in connection with the election of Directors. The three (3) nominees who receive the most votes cast by holders of Common Stock will be elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL 3 NOMINEES.
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PROPOSAL 2:
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board has appointed KPMG LLP as the Company's independent accountants for the fiscal year ending December 31, 2003. KPMG LLP audited the Company's financial statements for the fiscal year ended December 31, 2002, and has audited the Company's financial statements since the Company's inception in 1982. Representatives of KPMG LLP are expected to attend the Meeting. The representatives are expected to be available to respond to appropriate questions and will have an opportunity to make a statement, if they desire to do so.
Independent Auditors
Fees
The following table sets forth the aggregate fees the Company has incurred for audit and non-audit services provided by KPMG LLP who acted as independent auditors for the fiscal year ending 2002 and performed the Company's audit services in fiscal year 2002. The table lists audit fees, financial information systems design and implementation fees, and other fees.
Audit Fees. The audit fees include only fees that are customary under generally accepted auditing standards and are the aggregate fees the Company incurred for professional services rendered for the audit of the Company's annual financial statements for fiscal year 2002 and the reviews of the financial statements included in the Company's Quarterly Reports on Forms 10-Q for fiscal year 2002.
Financial Information Systems Design and Implementation Fees. The financial information systems design and implementation fees include fees billed for non-audit services performed during fiscal year 2002 such as directly or indirectly operating, or supervising the operation of, the Company's information system or managing our local area network. These non-audit services also include services such as designing or implementing a hardware or software system that aggregates source data underlying the Company's financial statements or generates information that is significant to our financial statements taken as a whole.
All Other Fees. All other fees include the aggregate fees billed for services rendered by KPMG LLP other than those services covered above.
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Year Ended December 31, 2002 |
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Audit Fees | $ | 194,600 | |
Financial Information Systems Design and Implementation Fees | | ||
Other Fees | $ | 120,271 |
The Audit Committee of the Board did consider whether the provision of financial information systems design and implementation services and other non-audit services is compatible with maintaining the independence of KPMG LLP.
The Board has submitted its appointment of KPMG LLP for ratification by the Company's shareholders. The affirmative vote of the holders of at least a majority of the outstanding shares of Common Stock represented and entitled to vote at the Meeting will be required for passage of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
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PROPOSAL 3:
APPROVAL OF NAME CHANGE
The Board of Directors has approved, subject to the approval of our shareholders, an amendment to the Company's Articles of Incorporation that would change the name of "CPB Inc." to "Central Pacific Financial Corp."
The primary reason for the proposed name change is that the Company's business and strategy has developed from more than a bank that makes loans and gathers deposits to a facilitator of financial transactions. On December 31, 2002, the Company began listing its securities on the New York Stock Exchange, Inc. under the trading symbol "CPF". The proposed name would bring the Company's name in better alignment with its new trading symbol. The Board of Directors believes that the proposed name better describes and reflects the operations and overall strategy of the Company going forward.
The Board of Directors believes that the proposed name change is in the best interests of Company and its shareholders. The affirmative vote of at least a sixty-six and two-thirds percent 66 2/3% of the shares of our Common Stock entitled to vote at the Meeting will be required for passage of this proposal
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
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The 2004 Annual Meeting of Shareholders will be held on or about April 23, 2004. Proposals of shareholders intended to be presented at the 2004 Annual Meeting must be received by the Company's Secretary, Post Office Box 3590, Honolulu, Hawaii 96811, no later than November 23, 2003.
In addition, in the event a shareholder proposal is not submitted to the Company by November 23, 2003, the proxy to be solicited by the Board for the 2004 Annual Meeting of Shareholders will confer authority on the holders of the proxy to vote the shares in accordance with their best judgment and discretion, if the proposal is presented at the 2004 Annual Meeting of Shareholders, without any discussion of the proposal in the proxy statement for such meeting.
The Board knows of no other business that will be presented for consideration at the Meeting other than as stated in the Notice of Meeting. If, however, other matters are properly brought before the Meeting, it is the intention of the persons named in the accompanying form of Proxy to vote the shares represented thereby on such matters in accordance with the recommendation of the Board.
WHERE YOU CAN FIND MORE INFORMATION
The Company's Common Stock is traded on the New York Stock Exchange under the symbol "CPF." The Company files annual, quarterly and current reports with the SEC. You may read and copy such reports, statements and other information that is in the SEC's public reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC at 1.800.SEC.0330 for further information about their public reference rooms. Our public filings are also available from commercial document retrieval services and via the SEC's Internet website, at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into this Proxy Statement. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement. This document incorporates by reference the Annual Report on Form 10-K for fiscal year ended December 31, 2002 filed with the SEC and mailed in conjunction with this Proxy Statement. The Annual Report contains important information about the Company and its finances.
SHAREHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K INCLUDING FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 BY WRITING TO THE COMPANY'S SECRETARY, CPB INC., POST OFFICE BOX 3590, HONOLULU, HAWAII 96811.
Dated: March , 2003 | CPB INC. | ||
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CLINT ARNOLDUS Chairman of the Board, President and Chief Executive Officer |
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CPB INC.
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 22, 2003
This Proxy is solicited on behalf of the Board of Directors
The undersigned shareholders of CPB Inc. (the "Company") hereby nominate, constitute and appoint Messrs. Clint Arnoldus, Neal K. Kanda and Glenn K.C. Ching, or any one of them, each with full power of substitution, as the lawful attorneys, agents and proxies of the undersigned, for the Annual Meeting of Shareholders of CPB Inc. (the "Annual Meeting") to be held in the South Pacific Ballroom of the Hilton Hawaiian Village Hotel, 2005 Kalia Road, Honolulu, Hawaii, on Tuesday, April 22, 2003 at 5:30 p.m., Hawaii time, and at any and all adjournments thereof, to represent the undersigned and to cast all votes to which the undersigned would be entitled to cast if personally present, as follows:
This proxy will be voted "FOR" the election of all nominees unless authority to do so is withheld for all nominees or for any other nominee. Unless "AGAINST" or "ABSTAIN" is indicated, this proxy will be voted "FOR" approval of the appointment of KPMG LLP as the Company's independent accountants. PLEASE SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
IMPORTANT: Continued and to be signed on the reverse side.
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
CPB INC.
April 22, 2003
- Please Detach and Mail in the Envelope Provided -
A | ý | Please mark your votes as in this example. |
FOR ALL NOMINEES (EXCEPT AS INDICATED TO THE CONTRARY) |
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED |
FOR | AGAINST | ABSTAIN | ||||||||
1. | ELECTION OF DIRECTORS. Class III. Terms will expire in 2006. | o | o | Nominees: Clayton K. Honbo Stanley W. Hong Paul J. Kosasa |
2. | RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS. To ratify the appointment of KPMG LLP as the Company's independent accountants for fiscal year ending December 31, 2003. | o | o | o | |||
FOR |
AGAINST |
ABSTAIN |
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(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below.) | 3. | NAME CHANGE. To approve an amendment to the Company's Articles of Incorporation that will change the name of the Company from "CPB Inc." to "Centeral Pacific Financial Corp." | o | o | o | |||||||
4. |
OTHER BUSINESS. To transact such other business as may properly come before the Meeting and at any and all adjournments thereof. The Board of Directors at present knows of no other business to be presented by or on behalf of the Company or the Board of Directors at the Annual Meeting. |
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The Board of Directors recommends a vote "FOR" the election of all nominees for director and "FOR" ratification of the appointment of KPMG LLP as the Company's independent accountants. If any other business is properly presented at such meeting, this proxy shall be voted in accordance with the recommendations of the Board of Directors. |
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The undersigned hereby ratifies and confirms all that said attorneys and Proxy Holders, or any of them, or their substitutes, shall lawfully do or cause to be done by virtue hereof, and hereby revokes any and all proxies heretofore given by the undersigned to vote at the Annual Meeting. The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy Statement accompanying said notice. |
Signature | Signature if held jointly | Date: | , 2003 | |||||
NOTE: | Please date this proxy and sign above as your name(s) appear(s) on this Proxy. Joint owners should each sign personally. Corporate proxies should be signed by an authorized officer. Partnership proxies should be signed by
an authorized partner. Personal representatives, executors, administrators, trustees or guardians should give their full titles. |