To: | Executive Officers and Directors of Central Pacific Bank | |
From: | Craig H. Hashimoto | |
Plan Administrator |
On May 15, 2003, the plan administrator of the Central Pacific Bank Employee Stock Ownership Plan (the “Plan”) issued a notice to all participants and beneficiaries under the Plan that the Plan will be combined with the Central Pacific Bank 401(k) Retirement Plan.
As a result of these changes, participants will not be able to make requests for final distributions for a short period. This period is known as a “blackout period.”
The blackout period: is expected to begin on June 14th and end during the week of August 3, 2003. During these weeks, you can determine whether the blackout period has started or ended by contacting a Vanguard Participant Services Representative at 800-523-1188 or the Central Pacific Bank Human Resources Department- Patty Jung, PHR at 808-544-0763.
SEC Regulations and provisions of the Sarbanes-Oxley Act of 2002 prohibit any director or executive officer of Central Pacific Bank (the “Company”) from, directly or indirectly, purchasing, selling or otherwise acquiring or transferring any equity security of the Company during a pension plan blackout period that prevents plan participants and beneficiaries from engaging in transactions involving Company equity securities held in their Plan accounts. These prohibitions apply only if the securities acquired or disposed of by you were acquired in connection with your service or employment as a director or executive officer.
This trading prohibition applies to any equity security of the Company. SEC Rules define the term “equity security” to include both equity securities and derivative securities relating to an equity security, whether or not issued by the Company. The term “derivative security” has the same meaning as under the rules of Section 16 of the Exchange Act.
The trading prohibition covers only equity securities that you have acquired in connection with your service or employment as a director or executive officer. This includes, among other things, securities acquired under a compensatory plan or contract (such as under a stock option, or a restricted stock grant), as a direct or indirect inducement to employment or joining the Board of Directors, and transactions between you and the Company. Securities acquired
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outside of your service as a director or executive officer (such as shares acquired when you were an employee but not yet and executive officer) are not covered.
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However, if you hold both covered shares and non-covered shares, any shares that you sell or otherwise transfer during a blackout period will be treated as “acquired in connection with service or employment as a director or executive officer” unless you establish that the shares were acquired from another source and this identification is consistent with the treatment of the securities for tax purposes and all other disclosure and reporting requirements.
These trading restrictions apply to indirect, as well as direct, acquisitions and dispositions of equity securities where you have a “pecuniary interest” in the transaction. “Pecuniary interest” has the same meaning as under the Section 16 rules. Accordingly, acquisitions or dispositions of equity securities by family members, partnerships, corporations, limited liability companies and trusts are deemed to be acquisitions or dispositions by you as a director or executive officer if you have a pecuniary interest in the equity securities.
Examples of transactions that you may not engage in during the blackout period include:
• Exercising stock options granted to you in connection with your service as a director or executive officer;
• Selling Company stock that you acquired by exercising options; and
• Selling Company stock that you originally received as a restricted stock grant.
Several categories of transactions that occur automatically, are made pursuant to an advance election or are otherwise outside of your control are exempt from the trading restrictions, including:
• Acquisitions of equity securities under dividend or interest reinvestment plans;
• Purchases or sales of equity securities that satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c);
• Purchases or sales of equity securities, other than “discretionary transactions” (as defined under the Section 16 rules) pursuant to certain employee benefit plans;
• Compensatory grants and awards of equity securities pursuant to programs under which grants and awards occur automatically;
• Exercises, conversions or terminations of certain derivative securities, which, by their terms, occur only on a fixed date, or are exercised, converted or terminated by a counter-party who is not subject to the influence of the director or executive officer;
• Acquisitions or dispositions of equity securities involving a bona fide gift or a transfer by will or the laws of descent and distribution;
• Acquisitions or dispositions of equity securities pursuant to a domestic relations order;
• Sales or other dispositions of equity securities compelled by the laws or other requirements of an applicable jurisdiction;
• Acquisitions or dispositions of equity securities in connection with a merger, acquisition, divestiture or similar transaction occurring by operation of law; and
• Increases or decreases in equity securities holdings resulting from a stock split, stock dividend or pro rata rights distribution.
The trading prohibition rules summarized above are complex, and a violation of these rules is a violation of the Exchange Act, subject to possible SEC enforcement action, including criminal and civil penalties. In addition, you can be required to disgorge profits realized by you from a prohibited transaction during a blackout period.
If you have any questions concerning this notice, you should contact:
Patty Jung, PHR |
Central Pacific Bank Human Resources |
220 South King Street Suite 870 |
Honolulu, Hawaii 96813 |
(808) 544-0763 |
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