CENTRAL PACIFIC FINANCIAL CORP 8-K

What Happened

• Central Pacific Financial Corp. announced on July 2, 2026 (effective June 30, 2026) that each of its executive officers, including Chairman & CEO Arnold D. Martines, entered into Change‑in‑Control Agreements with the company.
• The agreements have an initial term of approximately three years (expiring June 30, 2029) and automatically renew for successive one‑year terms unless the company gives notice of nonrenewal.
• Benefits vest and severance payments become payable only if an executive is involuntarily terminated without “Cause” (within a window beginning 90 days before and ending two years after a Change in Control) or voluntarily leaves for “Good Reason” within two years after a Change in Control.

Key Details

• Severance formula for non‑CEO executives: lump sum equal to (i) 2.0× annual base salary + (ii) 2.0× average annual bonus for the prior two years + (iii) COBRA health premium for the executive and qualified beneficiaries for 18 months; plus full vesting of outstanding equity (performance awards vest at target) and up to $25,000 for outplacement.
• CEO Arnold D. Martines: same structure but with 3.0× base salary and 3.0× average annual bonus.
• No excise tax gross‑up for Section 280G; agreements use a “best net” approach (payments may be reduced to the Section 280G threshold if that produces a better after‑tax result for the executive).
• Payments are subject to the company’s clawback/recovery policies, regulatory limits, and confidentiality/nonsolicitation/release requirements; benefits are not available for termination for Cause, resignation not for Good Reason, death, or disability.

Why It Matters

• These agreements are retention and protection measures for executives in the event of a sale, merger, or other change in control. They could lead to significant one‑time cash and equity accelerations if triggered — most notably higher multiples for the CEO (3×).
• For investors, the key takeaways are the potential financial impact of triggered severance/vesting and that the company did not agree to tax gross‑ups (which limits certain added tax costs). Clawback and regulatory limits may reduce actual payouts.
• The full agreements are filed as Exhibits 10.1 and 10.2 to the 8‑K filed July 2, 2026 for anyone wanting the exact contract language.