<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CPB INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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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<PAGE>
[LOGO]
CPB INC.
220 South King Street
Honolulu, Hawaii 96813
(808) 544-0500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
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 on the third floor of the Central Pacific
Plaza Building, 220 South King Street, Honolulu, Hawaii 96813, on Tuesday, April
21, 1998, at 10:00 a.m., Hawaii time, for the purpose of considering and voting
upon the following matters:
1. ELECTION OF DIRECTORS. To elect three persons to the Board of Directors for
a term of three years and to serve until their successors are elected and
qualified, as more fully described in the accompanying Proxy Statement.
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS. To ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent
accountants for the fiscal year ending December 31, 1998.
3. OTHER BUSINESS. To transact such other business as may properly come before
the Meeting and at any and all adjournments thereof.
Only those shareholders of record at the close of business on February 27,
1998 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,
[SIGNED]
AUSTIN Y. IMAMURA
Vice President and Secretary
Dated: March 25, 1998
<PAGE>
CPB INC.
220 South King Street
Honolulu, Hawaii 96813
(808) 544-0500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
INTRODUCTION
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 on the third floor of the Central Pacific Plaza Building, 220 South King
Street, Honolulu, Hawaii 96813, on Tuesday, April 21, 1998, at 10:00 a.m.,
Hawaii time, and at any and all adjournments thereof. This Proxy Statement and
accompanying Notice will be mailed to shareholders on or about March 25, 1998.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Meeting will be:
1. ELECTION OF DIRECTORS. To elect three persons to the Board of Directors for
a term of three years and to serve until their successors are elected and
qualified.
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS. To ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent
accountants for the fiscal year ending December 31, 1998.
3. OTHER BUSINESS. To transact such other business as may properly come before
the Meeting and at any and all adjournments thereof.
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 thereat. 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, and "FOR" ratification of the
appointment of KPMG Peat Marwick LLP as the Company's independent accountants
for the fiscal year ending December 31, 1998. 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 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 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'
-1-
<PAGE>
nominees and "FOR" the proposal to ratify the appointment of KPMG Peat Marwick
LLP as the Company's independent accountants for the fiscal year ending December
31, 1998.
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 27, 1998 has been fixed as the record date
("Record Date") for the determination of the shareholders of the Company
entitled to notice of and to vote at the Meeting. There were 10,585,184 shares
of Common Stock issued and outstanding on the Record Date.
Each holder of Common Stock will be entitled to one vote, in person or by
proxy, for each share of Common Stock standing in his or her 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 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 his or her votes on the same principle between two or more
nominees as he or she 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 Peat Marwick LLP as the
Company's independent accountants requires the affirmative vote of shareholders
holding not less than a majority of the shares of the Company's Common Stock
represented and entitled to vote at the Meeting. Accordingly, an abstention from
voting on the proposal to ratify the appointment of KPMG Peat Marwick LLP will
have the effect of a vote "AGAINST" the proposal.
-2-
<PAGE>
PRINCIPAL SHAREHOLDERS
As of February 27, 1998, the following entities were the only entities known
to management of the Company to beneficially own more than five percent of the
Company's outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
TITLE OF NAME AND ADDRESS OF BENEFICIAL PERCENT OF
CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------- ------------------------------------------------- ------------------- -----------
<S> <C> <C> <C>
Common The Sumitomo Bank, Limited 1,423,500(1) 13.73%(2)
6-5 Kitahama 4-Chome
Chuo-Ku
Osaka, Japan
Common The Committee of the Central Pacific Bank 1,062,091(3) 10.03%
Employee Stock Ownership Plan
220 South King Street
Honolulu, Hawaii 96813
</TABLE>
- ------------------------------
(1) Includes 34,148 additional shares which may be issued pursuant to the
exercise of warrants granted pursuant to a Share Purchase Agreement between
the Company and The Sumitomo Bank, Limited ("Sumitomo") and based upon the
exercise of stock options by participants of the 1986 Stock Option Plan. See
"ELECTION OF DIRECTORS--Certain Transactions."
(2) This percentage is computed as if the 34,148 shares described in footnote 1
were outstanding. However, the 34,148 shares are not deemed to be
outstanding for the purpose of computing the percentage of Common Stock
owned by any other person.
(3) Under the terms of the Employee Stock Ownership Plan of Central Pacific Bank
("ESOP"), shares of the Common Stock of the Company are held in trust by
Central Pacific Bank, the trustee under the ESOP Trust ("Trustee"), for the
exclusive benefit of the participants. The Trustee is the recordholder of
the Common Stock held by the ESOP; however, the Committee of the ESOP (the
"ESOP Committee"), which consists of five members, gives the Trustee
investment instructions with respect to all of the ESOP assets and voting
instructions with respect to those shares held by the ESOP for which the
voting rights have not passed through to participants. At February 27, 1998,
all of the shares of Common Stock held by the ESOP had been allocated to the
accounts of participants. Although the members of the ESOP Committee share
among themselves as committee members dispositive power, subject to the
terms of the ESOP, over all of the shares held by the ESOP and, therefore,
pursuant to the applicable regulations promulgated pursuant to the
Securities and Exchange Act of 1934, as amended, are technically the
beneficial owners of such shares, the actual beneficial owners are the
employees who participate in the ESOP. The members of the ESOP Committee,
therefore, disclaim beneficial ownership of such shares held in trust which
are otherwise attributable to them by virtue of serving on such ESOP
Committee.
-3-
<PAGE>
ELECTION OF DIRECTORS
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
Year 2001 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.
Nominees for the election at the Meeting will serve as Class I directors.
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. Mr. Stanley W. Hong, a director of the
Company, serves as director of the following companies: Capital Investment of
Hawaii, Inc., First Insurance Company of Hawaii, Ltd., Hawaiian Tax Free Trust;
Pacific Capital Funds, Kerr Pacific Corporation and Lanihau Management
Corporation.
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 Holders named on the
enclosed Proxy Card will vote in their discretion for such persons as the Board
of Directors may recommend. Dr. Dennis I. Hirota and Messrs. Shunichi Okuyama
and Joichi Saito, who are currently serving as Class I directors, are nominees.
The following table sets forth certain information, as of February 27, 1998,
with respect to each of the directors, nominees and Named Executives (as defined
below), as well as all continuing directors and executive officers, as a group:
<TABLE>
<CAPTION>
FIRST YEAR
ELECTED OR COMMON STOCK BENEFICIALLY OWNED
APPOINTED AS
PRINCIPAL OFFICER OR ON FEBRUARY 27, 1998(2)
OCCUPATION DIRECTOR OF ---------------------------------
FOR THE PAST THE PERCENT OF TERM
NAME FIVE YEARS AGE COMPANY(1) NUMBER CLASS(3) EXPIRES
- ----------------------------------------------- --- ------------ -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
DEVENS, Paul Vice Chairman of the Board of 66 1980 4,442 (4) * 2000
(Class III Company; Attorney at Law; Of
Director) Counsel (1994-present),
Partner (1975-1994), Devens,
Lo, Nakano, Saito, Lee & Wong
GUILD, Retired, former Managing 63 1980 2,112 * 1999
Alice F. (Class Director, Iolani Palace
II Director) (1986-1991)
HIROTA, Dennis President, Sam O. Hirota, Inc. 57 1980 5,200 (6) * 1998
I., Ph.D. (Class -Engineering and Surveying
I Director, (1986-present); Registered
Nominee) Professional Engineer and
Licensed Professional Land
Surveyor(5)
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
FIRST YEAR
ELECTED OR COMMON STOCK BENEFICIALLY OWNED
APPOINTED AS
PRINCIPAL OFFICER OR ON FEBRUARY 27, 1998(2)
OCCUPATION DIRECTOR OF ---------------------------------
FOR THE PAST THE PERCENT OF TERM
NAME FIVE YEARS AGE COMPANY(1) NUMBER CLASS(3) EXPIRES
- ----------------------------------------------- --- ------------ -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
HONG, Stanley W. President and Chief Executive 61 1993 400 (7) * 2000
(Class III Officer, The Chamber of
Director) Commerce of Hawaii
(1996-present); Consultant to
HRT, Ltd. (1994-1996); Senior
Vice President - McCormack
Properties, Ltd. (1993-1994);
President and Chief Executive
Officer, Hawaii Visitors
Bureau (1984-1993); Attorney
at Law
NAGAMINE, Daniel President, Flamingo 56 1983 10,260 (8) * 1999
M. (Class II Enterprises, Inc.
Director) (1985-present); General
Partner, Flamingo Downtown, a
limited partnership
(1981-present); Certified
Public Accountant
OKUYAMA, Shunichi Managing Director, 54 1997 -- (9) * 1998
(Class I International Banking Group,
Director, The Sumitomo Bank, Limited
Nominee) (1997-present); Managing
Director, Europe, Middle East
and Africa Region, The
Sumitomo Bank, Limited
(1996-1997); Director and
General Manager, London
Branch, The Sumitomo Bank,
Limited (1993-1996)
SAITO, Joichi Chairman of the Board and 62 1989 36,642 (11) * 1998
(Class I Chief Executive Officer of
Director, Company (1996-present);
Nominee) President of Company
(1992-1995); Chairman of the
Board and Chief Executive
Officer of Bank
(1996-present); President and
Chief Operating Officer of
Bank (1989-1995)(5)(10)
SATOH, Yoshiharu Retired; Chairman of the Board 69 1975 60,450 (13) * 2000
(Class III and Chief Executive Officer of
Director) Company (1992-1995); Chairman
of the Board and Chief
Executive Officer of Bank
(1988-1995)(5)(12)
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
FIRST YEAR
ELECTED OR COMMON STOCK BENEFICIALLY OWNED
APPOINTED AS
PRINCIPAL OFFICER OR ON FEBRUARY 27, 1998(2)
OCCUPATION DIRECTOR OF ---------------------------------
FOR THE PAST THE PERCENT OF TERM
NAME FIVE YEARS AGE COMPANY(1) NUMBER CLASS(3) EXPIRES
- ----------------------------------------------- --- ------------ -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
SHIBUYA, Naoaki President of Company 56 1995 9,522 (15) * 1999
(Class II (1996-present); Executive Vice
Director) President of Company
(1993-1995); President and
Chief Operating Officer of
Bank (1996-present); Executive
Vice President of Bank
(1993-1995); Executive Vice
President, The Sumitomo Bank
of California
(1989-1993)(5)(14)
IMAMURA, Austin Vice President and Secretary 51 1991 12,502 (16) * N/A
Y. of Company (1991-present);
Executive Vice President and
Secretary of Bank
(1991-present)
KANDA, Vice President and Treasurer 49 1991 18,032 (17) * N/A
Neal K. of Company (1991-present);
Executive Vice President of
Bank (1996-present); Executive
Vice President and Controller
of Bank (1993-1996); Senior
Vice President and Controller
of Bank (1990-1993)
All Directors and 159,562 (18) 1.49%
Executive
Officers, as
a Group
(11 persons)
</TABLE>
- ------------------------------
* Less than 1%.
(1) All directors of the Company are also directors of the Bank. Dates prior to
the formation of the Company in 1982 indicate the year first appointed
director of the Bank. Dr. Hirota, Mrs. Guild and Messrs. Devens, Nagamine
and Satoh commenced service as directors of the Company on February 1,
1982, the date of formation of the Company. Dr. Hirota, Mrs. Guild and Mr.
Nagamine served as directors of the Company until April 23, 1985 when the
Company's shareholders adopted a classified Board and reduced the number of
directors to nine. However, Dr. Hirota, Mrs. Guild and Mr. Nagamine
continued to serve on the Bank's Board until they were reelected to the
Company's Board in 1986, 1990, and 1990, respectively. Mr. Hong has been a
director of the Bank since 1985. Mr. Saito has been a director of the Bank
since 1988. Mr. Shibuya has been a director of the Bank since 1994.
(2) Except as otherwise noted below, each person has sole voting and investment
powers with respect to the shares listed.
(3) In computing the percentage of shares beneficially owned, the number of
shares which the person (or group) has a right to acquire within 60 days
after February 27, 1998 are deemed outstanding for the purpose of computing
the percentage of Common Stock beneficially owned by that person (or group)
but are not deemed outstanding for the purpose of computing the percentage
of shares beneficially owned by any other person.
(4) Includes 2 shares held of record by Devens, Lo, Nakano, Saito, Lee & Wong,
a partnership for which Mr. Devens is of counsel.
-6-
<PAGE>
(5) Messrs. Saito, Satoh and Shibuya, and Dr. Hirota are also directors of CPB
Properties, Inc., a wholly-owned subsidiary of the Bank.
(6) Includes 1,760 shares for which Dr. Hirota has shared voting and investment
powers with his wife, Kathryn Hirota.
(7) Includes 400 shares for which Mr. Hong has shared voting and investment
powers with his wife, Karen Ho Hong.
(8) Includes 10,260 shares for which Mr. Nagamine has shared voting and
investment powers with his wife, Maxine Nagamine.
(9) Does not include 1,423,500 shares held of record by Sumitomo, of which Mr.
Okuyama is a Managing Director, or 34,148 shares which Sumitomo has the
right to acquire by the exercise of warrants. With respect to shares
described in the preceding sentence, Mr. Okuyama disclaims any beneficial
ownership.
(10) Mr. Saito was formerly an officer of Sumitomo, from which he is now
retired.
(11) Includes 7,000 shares for which Mr. Saito has shared voting and investment
powers with his wife, Yoko Saito, 15,360 shares which Mr. Saito has the
right to acquire by the exercise of stock options vested pursuant to the
Company's 1986 Stock Option Plan and 14,282 shares allocated to Mr. Saito's
account under the Bank's ESOP.
(12) Mr. Satoh was formerly an officer of Sumitomo, from which he is now
retired.
(13) Includes 46,642 shares held in the name of Yoshiharu Satoh Revocable Living
Trust, Yoshiharu Satoh Trustee, and 13,808 shares held in the name of Ikuko
Satoh Revocable Living Trust, Ikuko Satoh Trustee, for which Mr. Satoh has
shared voting and investment powers with his wife, Ikuko Satoh.
(14) Mr. Shibuya is on indefinite leave of absence from Sumitomo.
(15) Includes 400 shares for which Mr. Shibuya has shared voting and investment
powers with his wife, Tsuneko Shibuya, 7,600 shares which Mr. Shibuya has
the right to acquire by the exercise of stock options vested pursuant to
the Company's 1986 Stock Option Plan and 1,522 shares allocated to Mr.
Shibuya's account under the Bank's ESOP.
(16) Includes 12,502 shares allocated to Mr. Imamura's account under the Bank's
ESOP.
(17) Includes 12,600 shares which Mr. Kanda has the right to acquire by the
exercise of stock options vested pursuant to the Company's 1986 Stock
Option Plan and 5,032 shares allocated to Mr. Kanda's account under the
Bank's ESOP.
(18) Includes 33,630 shares for which certain directors and officers have shared
voting and investment powers, 69,708 shares which members of the group have
the right to acquire by the exercise of stock options vested pursuant to
the Company's 1986 Stock Option Plan and 33,338 shares allocated to the
accounts of executive officers under the Bank's ESOP.
-7-
<PAGE>
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company has various standing committees,
including an Executive Committee, a Nominating Committee, an Audit Committee and
a Compensation & 1997 Stock Option Plan Committee (the "Compensation
Committee").
The Executive Committee, which held one meeting during 1997, is chaired by
Mr. Devens, and Messrs. Saito and Satoh, and Dr. Hirota 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 directives that may
be given by the Board of Directors.
The Nominating Committee held one meeting during 1997. The committee is
chaired by Mr. Satoh, and Mrs. Guild, Dr. Hirota and Mr. Saito are members. It
is responsible for recommending nominees for directors of the Company. It will
consider nominees for election at the 1999 Annual Meeting of Shareholders
recommended by shareholders if such recommendations are received in writing
prior to December 15, 1998. Shareholder recommendations should be addressed to
the Company's Secretary, P.O. Box 3590, Honolulu, Hawaii 96811.
The Audit Committee held one meeting during 1997. The committee is chaired
by Mrs. Guild, and Messrs. Devens and Nagamine, and Dr. Hirota are members. The
primary functions of the Audit Committee are to review various financial and
audit reports and to make recommendations concerning the appointment of
independent accountants.
The Compensation Committee held two meetings during 1997. The committee is
chaired by Mr. Hong, and Messrs. Devens and Nagamine, and Dr. Hirota are
members. The committee's primary functions include determining individuals to
whom options will be granted and their terms, approving recommendations related
to employee compensation and benefit programs, and determining the Chief
Executive Officer's compensation.
During the fiscal year ended December 31, 1997, the Board of Directors of
the Company held a total of seven meetings. All of the persons who were
directors of the Company during 1997 attended at least 75% of the aggregate of
(1) the total number of such Board meetings and (2) the total number of meetings
held by all committees of the Board on which they served during the year, except
for Mr. Okuyama.
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 the Company's
Chief Executive Officer and each of the three other executive officers of the
Company (determined as of the end of the last fiscal year) whose annual salary
and bonus exceeded $100,000 in 1997 (the "Named Executives") for each of the
fiscal years ended December 31, 1997, 1996 and 1995:
-8-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
---------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS(#) COMPENSATION
- -------------------------------------------------- --------- ----------- --------------- --------------
<S> <C> <C> <C> <C>
Joichi Saito 1997 $ 310,000 -- $ 20,020(1)
Chairman of the Board and 1996 292,336 -- 19,213(2)
Chief Executive Officer 1995 244,992 -- 19,273(3)
Naoaki Shibuya 1997 210,000 -- 23,317(4)
President 1996 196,667 -- 19,535(5)
1995 160,000 19,000 18,648(6)
Austin Y. Imamura 1997 176,667 -- 22,069(7)
Vice President and 1996 163,333 -- 18,267(8)
Secretary 1995 150,000 -- 18,447(9)
Neal K. Kanda 1997 144,000 -- 19,976(10)
Vice President and 1996 125,333 -- 16,100(11)
Treasurer 1995 112,000 -- 13,761(12)
</TABLE>
- ------------------------------
(1) Includes contributions to the Bank's Cash or Deferred Arrangement
("CODA")/Profit Sharing Plan, the Bank's ESOP and the Bank's Split Dollar
Life Insurance Plan for the account of Mr. Saito of $7,507, $11,146 and
$1,367, respectively.
(2) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Saito of $7,262, $10,691 and $1,260, respectively.
(3) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Saito of $7,294, $10,879 and $1,100, respectively.
(4) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP, the Bank's Split Dollar Life Insurance Plan and the Bank's 401(k)
Plan for the account of Mr. Shibuya of $7,507, $11,146, $464 and $4,200,
respectively.
(5) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP, the Bank's Split Dollar Life Insurance Plan and the Bank's 401(k)
Plan for the account of Mr. Shibuya of $7,262, $10,691, $540 and $1,042,
respectively.
(6) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Shibuya of $7,294, $10,879 and $475, respectively.
(7) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP, the Bank's Split Dollar Life Insurance Plan and the Bank's 401(k)
Plan for the account of Mr. Imamura of $7,507, $11,146, $437 and $2,979,
respectively.
(8) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Imamura of $7,262, $10,691 and $314, respectively.
(9) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Imamura of $7,294, $10,879 and $274, respectively.
(10) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP, the Bank's Split Dollar Life Insurance Plan and the Bank's 401(k)
Plan for the account of Mr. Kanda of $6,756, $10,032, $308 and $2,880,
respectively.
(11) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP, the Bank's Split Dollar Life Insurance Plan and the Bank's 401(k)
Plan for the account of Mr. Kanda of $6,068, $8,933, $219 and $880,
respectively.
(12) Includes contributions to the Bank's CODA/Profit Sharing Plan, the Bank's
ESOP and the Bank's Split Dollar Life Insurance Plan for the account of Mr.
Kanda of $5,467, $8,131 and $163, respectively.
OPTION GRANTS
No options or stock appreciation rights were granted during 1997 to the
Named Executives.
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<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 1997 and unexercised options held by the Named Executives as of
December 31, 1997:
AGGREGATED OPTION(1) EXERCISES IN 1997
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-THE-
NUMBER OF UNEXERCISED MONEY OPTIONS (2) AT
SHARED OPTIONS AT 12/31/97 12/31/97
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------- ----------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
SAITO, Joichi 4,000 $ 40,360 15,360 -- $ 205,824 --
SHIBUYA, Naoaki -- N/A 7,600 11,400 57,152 $ 85,728
IMAMURA, Austin Y. -- N/A -- -- -- --
KANDA, Neal K. -- N/A 12,600 -- 98,658 --
</TABLE>
- ------------------------------
(1) The Company has no compensation plans pursuant to which stock appreciation
rights may be granted.
(2) The value of unexercised "in-the-money" options is the difference between
the market price of the Common Stock on December 31, 1997 ($20.56 per share)
and the exercise price of the option, multiplied by the number of shares
subject to the option.
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.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
ANNUALIZED FINAL ---------------------------------------------------------------
AVERAGE COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$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 39,370
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 50,250 75,000 93,750 112,500 131,250
</TABLE>
Under the Defined Benefit Pension Plan, benefits are based upon the
employee's years of service and highest average annual salary in a
60-consecutive-month period of service, excluding the period between June 30,
1986 and January 1, 1991, when the Defined Benefit Pension Plan was curtailed.
Benefits based on the highest average annual salary in a 60-consecutive-month
period of service in excess of the qualified plans maximum compensation limit of
$150,000 for 1997 would be payable to eligible employees pursuant to the
Supplemental Executive Retirement Plan. The credited years of service as of
December 31, 1997 for Messrs. Saito, Shibuya, Imamura and Kanda are 10, 4, 11,
and 7, respectively.
-10-
<PAGE>
COMPENSATION OF DIRECTORS
The Company and the Bank each has a policy of paying fees to directors for
their attendance at board meetings and committee meetings. The Company and the
Bank pay $800 per board meeting to all directors and $600 per board committee
meeting to non-employee directors. In addition, the Company pays $4,000 annually
to each non-employee director, and the Bank pays $10,000 annually to each
non-employee director. CPB Properties, Inc. pays $600 per board meeting to its
directors.
Non-employee directors of the Company and the Bank are eligible to
participate in the Company's 1997 Stock Option Plan (the "1997 Plan"). During
1997, non-employee directors received grants of stock options to purchase, in
the aggregate, 147,000 shares of Common Stock at an exercise price of $17.875
per share. Options vest at a rate of 1,500 shares per year until the earlier of
the director's retirement at age 70 or 10 years from the date of the grant.
REPORT OF THE COMPENSATION COMMITTEE TO SHAREHOLDERS
The Compensation Committee reviews and recommends to the Board of Directors
the terms of employment agreements and compensation plans for executives,
reviews and adopts (subject to ratification by the entire Board of Directors)
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. Devens and Nagamine, and Dr. Hirota are members. Each
member of the Compensation Committee is a non-employee director of the Company
and/or the Bank.
Set forth below is a report of the Compensation Committee addressing the
Company's compensation policies for 1997 applicable to the Company's executives,
including the Named Executives.
THE REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") OR UNDER THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
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 industry. 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
1997 Annual Executive Incentive Plan (the "Annual Incentive Plan") and the
Supplemental Executive Retirement Plan (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 of Directors has the
authority to grant discretionary awards to individual employees where it deems
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 industry 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
-11-
<PAGE>
other companies in the banking and financial services industry, especially among
the larger Hawaii banks. The relative asset size and profitability levels of
these institutions are also considered. On April 22, 1997, the Company's Board
of Directors approved the compensation for all executive officers for the
ensuing year, effective May 1, 1997.
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. Although the
overall level of nonperforming assets, past due loans and charge-offs increased
during 1996, the Company's 1996 net income increased by 2.0% over 1995. Return
on average assets was 1.04% in 1996, compared with 1.00% in 1995. Furthermore,
total assets increased by 2.3% in 1996, compared with a 0.7% decrease in 1995.
In assessing the Company's performance, the Compensation Committee also took
into account economic conditions in Hawaii. In addition, the other Named
Executives also received salary increases.
INCENTIVE COMPENSATION
During 1997, the Bank had three programs whereby compensation for the Named
Executives 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
contributed to each Plan is allocated among the participating employees,
including the Named Executives, 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 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 1997, the Plan Contribution equaled 10% of the pre-tax income
of the Bank and CPB Properties, Inc. (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 1997, approximately 40% of the Plan Contribution was allocated
to the Profit Sharing Plan and 60% to the ESOP. In 1997, the Bank contributed
$855,000 to the CODA and Profit Sharing Plan and $1,283,000 to the ESOP, which
equaled 4% and 11%, 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 1996 fiscal year. Full-time employees of the Company
or its subsidiaries who have been granted the title of senior vice president or
above prior to October 1, 1996, were eligible to participate in the Annual
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<PAGE>
Incentive Plan. In addition, a participant must receive a performance appraisal
rating of "accomplished" or above during the calendar year to be considered
eligible for an award. During 1996, eleven executives, including each of the
Named Executives, 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 return on
equity, growth in average assets and the ratio of the Company's return on
average assets to that of Hawaii bank holding companies, were met. Based on the
corporate objectives set for 1996, participants were eligible to receive cash
bonuses payable in 1997. However, assessment of the Company's 1996 financial
performance resulted in management's recommendation to the Bank's Board of
Directors that cash bonuses for the Named Executives would not be warranted.
Accordingly, no cash bonuses were paid to the Named Executives in 1997.
STOCK-BASED COMPENSATION
The Company also believes that stock ownership by employees, including the
Named Executives, 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 Plan.
1997 PLAN. The 1997 Plan was adopted in 1997 to replace the 1986 Stock
Option Plan which expired on November 7, 1996. The 1997 Plan is administered by
the Compensation Committee. The 1997 Plan provides for stock options to be
granted to key employees, generally at a level of vice president and above,
including the Named Executives, and to non-employee directors of the Company and
the Bank. However, no stock options were granted to the Named Executives during
1997.
OTHER COMPENSATION
The Company's executives are eligible to participate in the Bank's Defined
Benefit Pension Plan (the "Pension Plan"), the 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 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, which had the effect of reducing 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
DIRECTORS-- Compensation of Directors and Executive Officers-- Executive
Compensation--Defined Benefit Pension Plan."
The 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 the recently imposed salary limitations. Under the Insurance Plan, the Bank
provides life insurance coverage for certain senior officers, including the
Named Executives. The Split Dollar 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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<PAGE>
The Named Executives also participate in the Company's broad-based employee
benefit plans, such as the 401(k) Plan, medical, supplemental disability and
term life insurance.
Dated: March 25, 1998 THE COMPENSATION COMMITTEE
PAUL DEVENS
DENNIS I. HIROTA, Ph.D.
STANLEY W. HONG
DANIEL M. NAGAMINE
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
1997, 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.
Paul Devens, a director of the Company and a member of the Bank's
Compensation Committee, is of counsel to the law firm of Devens, Lo, Nakano,
Saito, Lee & Wong. The Company and the Bank retained the legal services of Mr.
Devens' law firm during 1997. Management is of the opinion that the fees paid to
Mr. Devens' law firm are comparable to those fees that would have been paid for
comparable legal services from a law firm not affiliated with the Company or the
Bank. It is anticipated that Mr. Devens' law firm will perform certain legal
services for the Company and the Bank during 1998.
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<PAGE>
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 Nasdaq over the period from December
31, 1992 through December 31, 1997. The graph assumes an initial investment of
$100 at the end of 1992 and reinvestment of dividends during the ensuing
five-year period. The graph is not necessarily indicative of future price
performance.
THE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL
STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER
THE SECURITIES ACT OR UNDER THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NASDAQ U.S. COMPANIES, NASDAQ BANKS/BANK HOLDING COMPANIES, AND CPB INC.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ-U.S. NASDAQ-BANKS CPB INC.
<S> <C> <C> <C>
1992 $100 $100 $100
1993 116 146 97
1994 134 166 102
1995 131 165 130
1996 185 246 124
1997 227 325 176
</TABLE>
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<PAGE>
CERTAIN TRANSACTIONS
On June 21, 1991, the ESOP Committee filed a Notice of Change in Bank
Control ("Notice") with the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") pursuant to 12 U.S.C. Section 1817(j) to permit
the acquisition (the "Acquisition") on behalf of the ESOP of 125,000 shares of
Common Stock, which at that time would have resulted in the ESOP Committee
beneficially owning more than 10% of the outstanding voting securities of the
Company. The Federal Reserve Board notified the ESOP Committee on August 30,
1991 that it would not disapprove the Acquisition, and on May 18, 1992, the
Trustee on behalf of the ESOP consummated the Acquisition. The ESOP Committee
owned beneficially 1,062,091 shares of Common Stock or 10.03% of the total
outstanding Common Stock, as of February 27, 1998. Pursuant to applicable
regulations of the Federal Reserve Board, the Committee may acquire up to 25% of
the outstanding voting stock of the Company on behalf of the ESOP without
additional notification to the Federal Reserve Board.
On December 16, 1986, the shareholders of the Company ratified an agreement
("Share Purchase Agreement") dated November 20, 1986 between the Company and
Sumitomo (see "PRINCIPAL SHAREHOLDERS"), which provides that the Company will
not issue or reissue shares of any class of the Company's authorized capital
stock, or issue any obligations or securities convertible into shares of capital
stock of the Company without first giving written notice to Sumitomo describing
the securities to be sold and offering Sumitomo the opportunity to purchase an
amount of securities which will allow it to maintain its 13.734% level of
ownership of the Company's capital stock. Pursuant to the Share Purchase
Agreement, warrants are issued giving Sumitomo the right to purchase from the
Company shares of Common Stock upon the exercise of stock options at a price
equal to the fair market value of the Common Stock at the time Sumitomo
exercises the warrant, contingent upon the exercise of stock options held by
optionees and subject to the approval of the Federal Reserve Board. At December
31, 1997, Sumitomo held exercisable warrants for 34,148 shares and warrants for
40,533 shares which will become exercisable, all of which will expire on or
before June 14, 2006.
CKSS Associates (the "Partnership"), a limited partnership in which CPB
Properties, Inc., a wholly-owned subsidiary of the Bank, is a general partner
and 50% owner, entered into loan agreements with Sumitomo and the Bank for the
development of office building complexes in Honolulu known as Central Pacific
Plaza, part of which serves as the Company's headquarters, and Kaimuki Plaza, in
which one of the Bank's branches is located. At December 31, 1997, notes payable
by the Partnership totaling $9,301,000 to Sumitomo and due on June 18, 2001,
were secured by a mortgage on Central Pacific Plaza. A note payable of
$10,700,000 to the Bank, due on August 10, 2001, is secured by a mortgage on the
leasehold interest in the Kaimuki Plaza. As part of the development of the
Kaimuki Plaza, the Partnership entered into a lease agreement with CPB
Properties, Inc., which owns the land, effective from January 1, 1993 to
December 31, 2047. The Partnership also has a $200,000 note payable to the Bank,
due on April 10, 2001, which is secured by second mortgages on the Central
Pacific Plaza and Kaimuki Plaza properties. All loans are priced at 0.75% above
the London Interbank Offered Rate. The weighted average rate on these notes was
6.947% at December 31, 1997. Management of the Company believes that the terms
of such loans are as favorable as could be negotiated with unaffiliated third
parties.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP has audited the Company's consolidated financial
statements since the Company's inception in 1982 and has been the independent
accountants for the Bank since 1975. Accordingly, the Board of Directors has
appointed KPMG Peat Marwick LLP as the Company's independent accountants for the
fiscal year ending December 31, 1998 and the shareholders are being asked to
ratify such appointment. Representatives of KPMG Peat Marwick LLP will be
present at the Meeting to respond to appropriate questions and will have an
opportunity to make a statement if they desire to do so.
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<PAGE>
All services provided to the Company and the Bank by KPMG Peat Marwick LLP
were approved in advance or ratified by the Company's and Bank's Boards of
Directors, and the possible effect on the independence of KPMG Peat Marwick LLP
by rendering such services was considered. All professional services rendered by
KPMG Peat Marwick LLP during 1997 were furnished at customary rates and terms.
The affirmative vote of the holders of at least a majority of the
outstanding shares of the Company's 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.
OTHER BUSINESS
Management 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 of Directors.
PROPOSALS OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders will be held on or about April 27,
1999. Proposals of shareholders intended to be presented at the 1999 Annual
Meeting must be received by the Secretary of the Company, Post Office Box 3590,
Honolulu, Hawaii 96811, no later than November 25, 1998.
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, 1997 BY WRITING TO AUSTIN Y.
IMAMURA, VICE PRESIDENT AND SECRETARY, CPB INC., POST OFFICE BOX 3590, HONOLULU,
HAWAII 96811.
<TABLE>
<S> <C>
Dated: March 25, 1998 CPB INC.
[SIGNED]
Joichi Saito
Chairman of the Board and
Chief Executive Officer
</TABLE>
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<PAGE>
CPB INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
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. Paul Devens, Naoaki Shibuya and Austin Y.
Imamura, 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 on the third floor of
the Central Pacific Plaza Building, 220 South King Street, Honolulu, Hawaii
96813, on Tuesday, April 21, 1998 at 10:00 a.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:
IMPORTANT: CONTINUED AND TO BE SIGNED ON REVERSE SIDE.
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 Peat Marwick LLP as the Company's
independent accountants. PLEASE SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS
POSSIBLE IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
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<PAGE>
<TABLE>
<CAPTION>
<S><C>
Please mark
your votes as
indicated in
this example
FOR ALL NOMINEES WITHHOLD AUTHORITY
(EXCEPT AS INDICATED TO VOTE FOR ALL
TO THE CONTRARY) NOMINEES LISTED
1. ELECTION OF DIRECTORS.
Class 1, Term will expire in 2001. / / / /
Nominees: Dennis I. Hirota, Shunichi Okuyama and Joichi Saito
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
- -----------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
To ratify the appointment of KPMG Peat Marwick LLP as the Company's / / / / / /
independent accountants for fiscal year ending December 31, 1998.
3. OTHER BUSINESS. In their discretion, the Proxy Holders are authorized to transact such other
business as may properly come before the meeting and any and all adjournments thereof. The Board of
Directors at present knows of no other business to be presented at the Annual Meeting.
The Board of Directors recommends a vote "FOR" the election of all nominees for
director and "FOR" ratification of the appointment of KPMG Peat Marwick 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.
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.
Date: , 1998
--------------------
- -------------------------------
Signature
- -------------------------------
Signature if held jointly
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.
</TABLE>
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