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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-12
CB BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
M.A. SCHAPIRO & CO., INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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VOTE NOW TO PROTECT YOUR INVESTMENT!
May 15, 1996
Dear Fellow CB Bancshares Shareholder:
If you, like us, are concerned about the performance of CB Bancshares, you can
take action today by electing two Independent Nominees to the Board of Directors
at the Company's Annual Meeting. SEND A CLEAR MESSAGE TO INCUMBENT MANAGEMENT
AND THE BOARD THAT THE INTERESTS OF THE SHAREHOLDERS SHOULD COME FIRST. SIGN,
DATE AND RETURN THE WHITE PROXY CARD TODAY. Even if you have already returned a
blue proxy card to the Company, you have every legal right to change your vote.
Only your latest-dated proxy counts.
SUBSTANDARD PERFORMANCE
The recent performance of CB Bancshares has been extremely disappointing, and it
is costing you money. Even though 1995 proved a record year for profits in the
banking industry and almost all other banks enjoyed stock price increases, THE
PRICE OF YOUR CB BANCSHARES STOCK STAGNATED. YOUR ANNUAL DIVIDEN OF $1.30
REMAINS AT THE SAME LEVEL IT WAS IN 1991.
CB Bancshares' 1995 performance demonstrates downward trends which are
particularly dismaying in light of the performance of the banking industry as a
whole. For example:
. CB Bancshares' EARNINGS PER SHARE PLUNGED TO $2.26 from $3.32 in
1994, having reached $3.66 in 1992. Meanwhile the banking industry
attained record levels of profitability.
. CB Bancshares' RETURN ON ASSETS, 0.54%, WAS NOT ONLY DOWN SHARPLY
from 0.95% in 1994, 1.06% in 1993 and l.09% in 1992, it was less
than one-half that of the industry average.
. CB Bancshares' RETURN ON AVERAGE EQUITY CONTINUED ITS DECLINE TO
7.05%, down from 10.92 in 1994 and 1993, and 14.13 in 1992. Compare
this to the 13.63% return on average equity enjoyed by CB
Bancshares' peer group, as we have defined it on page 6 of our
Proxy Statement.
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We believe that these dismal results have been reflected in CB Bancshares' stock
price performance. You should know that $100 of your money invested on December
31, 1994 would have earned you ONLY $109 OF CUMULATIVE TOTAL RETURN IN CB
BANCSHARES, AS COMPARED TO $173 IF YOU HAD INVESTED IN THE DOW JONES WESTERN
REGIONAL BANK INDEX, $157 IN THE S&P MIDCAP BANKS INDEX OR $146 IN THE NASDAQ
FINANCIAL INDEX.
You should further consider that of the 225 largest publicly traded commercial
banking firms listed in the May 10, 1996 issue of American Banker, CB BANCSHARES
WAS THE ONLY COMMERCIAL BANK SELLING BELOW BOOK VALUE. Indeed, the average bank
stock trades at a price over 1.5 times book value, or more than 50% higher than
CB Bancshares stock. THE MARKET IS UNMISTAKABLY DISSATISFIED WITH OUR COMPANY'S
PERFORMANCE; WE BELIEVE YOU SHOULD ALSO BE DISSATISFIED.
GOLDEN PARACHUTES
Despite their lack of achievement in terms of shareholder value, your Board and
management have, we believe, acted with undue haste to protect their own
interests. Just two weeks after we notified the Company of our nomination of two
independent directors, the Board adopted change-in-control arrangements for 19
officers of the Company. Providing for 2.99 times salary and bonus, plus
substantial additional benefits, the golden parachutes represent, in our
opinion, an exceptionally high percentage of the Company's net worth and are
vastly disportionate to the size of the Company and its financial performance.
Under what we believe is a particularly egregious arrangement, Chairman James
Morita could receive in excess of $4.2 million in severance and additional
benefits in the event of termination of employment following this proxy
solicitation. Solely by reason of this proxy solicitation (an event which, if
successful, could not even constitute a change-in-control because it seeks only
to elect two directors out of a total of 11), Mr. Morita could receive a bonus
of approximately $200,000, nonwithstanding future performance. You should also
be aware that the Company has agreed to pay, according to our estimate, over
$600,000 of Mr. Morita's income taxes attributable to his golden parachute
payments. Most of Mr. Morita's severance and all of such taxes paid on his
behalf by the Company will not be tax-deductible, further increasing the cost to
you, the shareholder. You should also note that Caryn S. Morita, James Morita's
daughter and one of the Company's nominees for election as a Director, also
received a golden parachute agreement.
YOU DESERVE TO BE HEARD
We believe the golden parachutes adopted by the Board are only one indication of
management entrenchment at CB Bancshares. Although quick to protect the
interests of 19 officers, the Company did not respond with the same alacrity in
informing shareholders of the Independent Nominees (mentioning them only briefly
on page 18 of the Management Proxy Statement) nor in providing shareholders with
any means to vote with respect to their election. We also regret that the
Company effectively precluded any discussion or accommodation of shareholders'
interests by not filing any preliminary proxy materials with the Securities and
Exchange (?ommission under Rule 14a-6(a).
Furthermore, as detailed in our Proxy Statement, the Company's management has
apparently
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changed the voting structure for the Employee Stock Ownership Plan (the "ESOP")
in a manner which can only make it more difficult for shareholders to adopt
proposals not supported by management.
INDEPENDENT NOMINEES FOR SHAREHOLDER VALUE
We believe it is time that the shareholders -- the true owners of CB Bancshares
- -- had independent representation on the Board. Our Independent Nominees, Mr.
William M. Griffin and Mr. H. Clifton Whiteman, have agreed to stand for
election because they believe that they can bring to the Board sorely needed
financial acumen and expertise in the financial services industry. Successful
businessmen with substantial experience, they are prepared to provide valuable
guidance in a time of rapid evolution in the banking industry. They are
dedicated to supporting measures which can improve the Company's performance.
Further, they are opposed to management nepotism and programs which serve to
entrench management and provide disportionate compensation in relation to
performance. MESSRS. GRIFFIN AND WHITEMAN HAVE EACH PLEDGED TO REPRESENT THE
INTERESTS OF THE SHAREHOLDERS AS A WHOLE. THEY ARE NOT AFFILIATED WITH M.A.
SCHAPIRO & Co., INC. OR ANY OF OUR AFFILIATES, AND ARE NOT COMMITTED TO ANY
AGENDA SET BY US.
IF YOU ARE NOT SATISFIED WITH CB BANCSHARES' SUBSTANDARD PERFORMANCE AND WANT
IMPROVED PROFITABILITY AND ENHANCED SHAREHOLDER VALUE, SEND A MESSAGE TO
MANAGEMENT IT CANNOT IGNORE! ELECT THE TWO INDEPENDENT NOMINEES BY SIGNING,
DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PAID ENVELOPE
PROVIDED. If you have any questions, please contact Georgeson & Company Inc.,
who is assisting us in the solicitation, toll-free at 800-223-2064.
Sincerely yours,
M.A. Schapiro & Co., Inc.
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IMPORTANT
BY INCLUDING TWO OF THE MANAGEMENT'S NOMINEES ON OUR SLATE, WE HAVE ENABLED
SHAREHOLDERS TO VOTE FOR A FULL SLATE OF FOUR DIRECTORS BY RETURNING ONLY THE
WHITE PROXY CARD ENCLOSED WITH THIS PROXY STATEMENT. EVEN IF YOU HAVE ALREADY
RETURNED A BLUE PROXY CARD TO THE COMPANY, YOU HAVE EVERY LEGAL RIGHT TO CHANGE
YOUR VOTE. ONLY YOUR LATEST-DATED PROXY COUNTS. JUST SIGN DATE AND RETURN THE
WHITE PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
If your shares of Common Stock are held in the name of a bank or brokerage firm,
only that firm can execute a proxy card on your behalf. Please contact the
person responsible for your account and give instructions for a WHITE proxy card
to be voted FOR the Independent Nominees (Proposal 1) and FOR the two incumbent
nominees we support (Proposal 2).
If you have questions or need assistance in voting your shares, please
contact the firm assisting us in the solicitation of proxies:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
TOLL FREE: 1-800-223-2064
BANKS & BROKERS CALL: 212-440-9800
