Compelling Benefits for Shareholders of Both Companies

Why?

How?

What can we accomplish together?

The Right Fit for Today’s Customers

The Right Fit For Our Employees

The Right Fit For Shareholders — Today and Tomorrow

LET’S MOVE FORWARD TOGETHER, CREATING THE RIGHT FIT IN
EVERY WAY.

The Combined Company

Terms of Our Proposal

Signature

CPB Inc. & CB Bancshares, Inc.: Creating a Stronger Locally-Based and
Locally-Managed Bank for Hawaii

Under the Securities Exchange Act of 1934
(Amendment No. )*

Under the Securities Exchange Act of 1934 (Amendment No. )*

0001104659-03-007375.txt : 20030425 0001104659-03-007375.hdr.sgml : 20030425 20030425172142 ACCESSION NUMBER: 0001104659-03-007375 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030425 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CB BANCSHARES INC/HI CENTRAL INDEX KEY: 0000316312 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 990197163 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-32483 FILM NUMBER: 03665374 BUSINESS ADDRESS: STREET 1: 201 MERCHANT ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085352500 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL PACIFIC FINANCIAL CORP CENTRAL INDEX KEY: 0000701347 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 990212597 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 220 S KING ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085440500 MAIL ADDRESS: STREET 1: P O BOX 3590 CITY: HONOLULU STATE: HI ZIP: 96811 FORMER COMPANY: FORMER CONFORMED NAME: CPB INC DATE OF NAME CHANGE: 19920703 SC 13D 1 j9895_sc13d.htm SC 13D

SEC 1746
(11-02)

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

	UNITED STATES	OMB APPROVAL
	SECURITIES AND EXCHANGE COMMISSION	OMB Number: 3235-0145
	Washington, D.C. 20549	Expires: December 31, 2005
	SCHEDULE 13D	Estimated average burden hours per response. . 11

CB BANCSHARES, INC.

(Name of Issuer)

COMMON STOCK, PAR VALUE $1.00 PER SHARE

(Title of Class of Securities)

124785 10 6

(CUSIP Number)

Central Pacific Financial Corp.
220 South King Street
Honolulu, HI 96813
Attn: Neal Kanda
(808) 544-0622

With copy to:
Gordon Bava, Esq.
Manatt, Phelps & Phillips, LLP
11355 West Olympic Blvd.
Los Angeles, CA 90064-1614
(310) 312-4000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

April 16, 2003

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 124785 10 6

	1.	Names of Reporting Persons. Central Pacific Financial Corp. I.R.S. Identification Nos. of above persons (entities only). 99-0212597

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			[ ]
		(b)			[ X ]

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC, OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] N/A

	6.	Citizenship or Place of Organization State of Hawaii

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 88,741 (2.27%)

			8.	Shared Voting Power 295,587* (7.57%)

			9.	Sole Dispositive Power 88,741 (2.27%)

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 384,328*

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) * [ ]

	13.	Percent of Class Represented by Amount in Row (11) 9.85%

	14.	Type of Reporting Person (See Instructions) CO

*348,264 shares of CB Bancshares, Inc. (the “Issuer”) common stock are subject to a voting agreement dated April 16, 2003 (“Voting Agreement”) entered into between CPB Inc. (predecessor in name to Central Pacific Financial Corp. (“CPF”) and TON Finance, B.V. in connection with a merger proposal made by CPF. In accordance with the Voting Agreement, 295,587 shares may be voted without restriction; the remaining 52,677 shares may be voted only after the shareholders of the Issuer approve CPF’s acquisition of more than a specified percentage of the Issuer’s stock under the Hawaii Control Share Acquisitions Statute. CPF expressly disclaims any beneficial ownership of any shares of the Issuer common stock covered by the Voting Agreement, and further disclaims any shared voting power with respect to the 52,677 shares discussed above. Based on the number of shares of the Issuer common stock outstanding as of March 4, 2003 (as reported by the Issuer in its proxy statement), the shares for which CPF may be deemed to share voting power represent 7.57% of the outstanding shares of common stock of the Issuer. The filing of this Schedule 13D shall not be construed as an admission by CPF that it is, for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or any other federal or state law, the beneficial owner of the shares that are subject to the Voting Agreement.

Item 1.	Security and Issuer
The name of the subject company is CB Bancshares, Inc., a Hawaii corporation (the “Issuer”), and the address of its principal executive offices is 201 Merchant Street, Honolulu, Hawaii 96813. The Issuer’s telephone number is (808) 535-2500. The class of securities to which this statement relates is the Common Stock, par value $1.00 per share, of the Issuer (the “Shares”).

Item 2.	Identity and Background
	Name: Central Pacific Financial Corp. (“CPF”) (until April 23, 2003, CPF was known as CPB Inc.)
	State of Organization: Hawaii
	Address of Principal Business: 220 South King Street Honolulu, Hawaii 96813
	Principal Business: CPF is a bank holding company for Central Pacific Bank, the third largest commercial bank in the State of Hawaii.
	Set forth on Exhibit A is the name of each of the directors and executive officers of CPF, and their citizenship, present occupation or employment, including the name, principal business and address of any corporation or other organization in which such employment is conducted, as of the date hereof to CPF’s knowledge.
	During the last five years, neither CPF, nor to CPF’s knowledge, any person named on Exhibit A, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
	During the last five years, neither CPF, nor to CPF’s knowledge, any person named on Exhibit A, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.	Source and Amount of Funds or Other Consideration
The aggregate amount of funds used by CPF to purchase 88,741 Shares owned by it was approximately $4,038,955. Such amount was derived from working capital and dividends from its subsidiaries.
Neither of the parties to the Voting Agreement (described in Item 4) paid any monetary consideration to the other for entering into such agreement.

Item 4.	Purpose of Transaction
(a)-(b) In a press release dated April 16, 2003 (“Press Release”), CPF announced that it has formally proposed (“Proposal”) a merger of the two companies (“Merger”) to the management and board of directors of the Issuer. A copy of the Proposal was attached to the Press Release. The Proposal includes a 70 percent stock and 30 percent cash offer for all outstanding Shares of the Issuer. Based on the April 14, 2003 closing stock price for CPF, the Proposal has implied value of approximately $285 million, or $70 per share, to the Issuer’s shareholders. The consideration includes $21 in cash and 1.8956 shares of CPF common stock for each Share. As a preliminary step to a negotiated merger, or as a means of acquiring up to 100% of the outstanding Shares on a non-negotiated basis, CPF may initiate a tender/exchange offer on the same financial terms proposed for the Merger (each of the Merger and/or the tender/exchange offer, “Transaction”).
The closing of the Transaction would be subject to customary regulatory and shareholder approvals, due diligence and redemption of the Issuer’s poison pill. A copy of the Press Release is attached hereto as Exhibit A and incorporated herein by reference.
In connection with the Proposal, on April 16, 2003, CPF and TON Finance, B.V. (“TON”), Issuer’s largest shareholder, entered into a voting agreement (“Voting Agreement”). Neither party received consideration in connection with the execution and delivery of the Voting Agreement. Pursuant to the Voting Agreement, TON, among other things, agreed to vote 295,587 shares of its Shares (the “TON Shares”) in favor of the Merger, a possible tender/exchange offer, and other proposals that may be made to facilitate the Transaction. Neal Kanda and Glenn Ching, in their respective capacities as officers of CPF, were appointed as TON’s revocable proxy and attorney–in–fact for the limited purposes set forth above and in the Voting Agreement at any Issuer meeting or by consent in lieu of any such meeting or otherwise. TON is free to sell or otherwise dispose of the TON Shares so long as the purchaser or transferee agrees to be governed by the Voting Agreement with respect to the limited issues covered thereby.
TON has also agreed to vote its remaining 52,677 Shares in favor of the Transaction after receipt of any required shareholder approval under the Hawaii Control Share Acquisitions Statute. Until then, except for proposals that would impede, interfere, delay, postpone, discourage or materially adversely affect the Transaction as to which TON has agreed to vote all of its Shares against, TON retains the right to vote those Shares on any matter in its discretion.
TON also designated CPF as its agent with respect to all of its Shares for the purpose of calling (but not voting at) one or more special meetings of the shareholders of the Issuer, including adjournments thereof, solely for the purpose of considering and voting upon the Transaction and any proposal intended to facilitate the Transaction.
In the event CPF commences a tender/exchange offer, TON has agreed to tender all of its Shares to CPF within five days after commencement of such Transaction.
(c) No determination has been made with respect to the sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries, but if the Transaction is consummated it is likely that bank offices outside of Hawaii will be closed and any branch office that is adjacent to a branch of CPF’s bank subsidiary and that carries other unfavorable features will be consolidated with the relevant CPF bank subsidiary branch. It is currently estimated that up to 10 branches may be closed.
(d) The Proposal contemplates discussions regarding the addition of an appropriate number of the Issuer’s directors to the board of CPF and appropriate roles for Issuer’s senior management. At this time no determination has been made whether any member of the board or senior management will be offered positions following the Transaction, but in any event any additions of the Issuer’s directors will represent a minority of the total directors of CPF following the Transaction. While CPF has no present plans or proposals to do so, it reserves the right to seek changes to the Issuer’s board of directors.
(e) In the event the Transaction is consummated, it is expected that the dividend policy of the surviving corporation will be that of CPF immediately prior to the consummation of the Transaction, until otherwise changed by the board of directors of CPF in accordance with applicable laws.
(f) No determination has been made regarding material changes in the Issuer’s business or corporate structure.
(g) In the event the Transaction is effected by means of a tender/exchange offer as a result of which CPF acquires more than 50% but less than 75% of the outstanding shares of the Issuer, CPF may seek to amend the Issuer’s Articles of Incorporation and/or bylaws to facilitate consummation of the Merger or the acquisition of control of the Issuer. In the event the Transaction is effected by means of the Merger, the Articles of Incorporation of CPF, in effect immediately prior to the Merger, shall be the Articles of Incorporation of the surviving corporation until thereafter amended as provided by Hawaii law and such Articles of Incorporation. It is also expected that the bylaws of CPF, as in effect immediately prior to the Merger, shall be the bylaws of the surviving corporation until thereafter amended.
(h)-(i) If the Transaction is consummated as planned, the Issuer’s common stock will be deregistered under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and delisted from The Nasdaq National Market.
(j) Not Applicable.
References to, and descriptions of, the Press Release and the Voting Agreement as set forth herein are qualified in their entirety by reference to the copies of the Press Release and the Voting Agreement, respectively, included as Exhibits B and C, respectively, to this Schedule 13D, and are incorporated herein in their entirety where such references and descriptions appear.

Item 5.	Interest in Securities of the Issuer
(a)-(b)	As of April 16, 2003, CPF is the beneficial owner of 88,741 Shares or 2.27% of the Shares of the Issuer (the approximate number of the Shares owned is based on 3,902,309 Shares outstanding as of March 4, 2003 as set forth in the Issuer’s proxy statement). CPF has sole voting and dispositive power with respect to these Shares.
	As a result of the Voting Agreement, CPF may be deemed to have the shared power to vote currently 295,587 Shares (the TON Shares), which constitute approximately 7.57% of the outstanding Shares. However, CPF (i) is not entitled to any rights as a stockholder of the Issuer with respect to the TON Shares and (ii) disclaims any beneficial ownership of the TON Shares, and the additional 52,677 Shares owned by TON, which are also covered by the Voting Agreement.
	TON is the record and beneficial owner of 348, 264 Shares. As a result of the Voting Agreement, TON may be deemed currently to have shared power with CPF to vote 295,587 Shares, which constitutes approximately 7.57% of the outstanding Shares. TON currently has sole power to vote 52,677 Shares until the shareholders of Issuer approve the Transaction under the Hawaii Control Share Acquisitions Statute. TON retains the sole power to dispose of the 348,264 Shares it owns subject to adherence to the terms of the Voting Agreement. CPF disclaims beneficial ownership of any of Shares owned by TON. Item 2 information regarding TON is set forth in Exhibit E attached hereto and incorporated herein by reference.
	As of April 16, 2003, the executive officers and directors of CPF owned 1,437 Shares. These Shares are not included in this Schedule 13D as CPF disclaims beneficial ownership of such Shares.
(c)	The trading dates, number of Shares purchased and sold, and the price per Share for all transactions in the Shares during the past sixty days by CPF is set forth in Exhibit D and incorporated herein by reference. All trades were effected in broker transactions.
(d)	Not applicable.
(e)	Not applicable.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Except for the Voting Agreement described in Items 4 and 5 herein, CPF is not aware of any contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

Item 7.	Material to Be Filed as Exhibits
Exhibit A:		Directors and Executive Officers of CPF.
Exhibit B:		Press Release of CPF dated April 16, 2003, including Letter from CPF to the Issuer dated April 15, 2003.
Exhibit C:		Voting Agreement between CPF and TON, dated April 16, 2003.
Exhibit D:		Schedule of Transactions in the Shares of the Issuer.
Exhibit E:		Item 2 Information for TON.

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

		Central Pacific Financial Corp.

Dated: April 24, 2003	By:	/s/ GLENN K.C. CHING
		Glenn K. C. Ching
		Senior Vice President,
		General Counsel and
		Secretary

Attention: Intentional misstatements or omissions of fact
constitutes Federal criminal violations (See 18 U.S.C. 1001)

EXHIBIT INDEX

Exhibit A		Directors and Executive Officers of CPF

Exhibit B		Press Release of CPF dated April 16, 2003, including Letter from CPF to the Issuer dated April 15, 2003

Exhibit C		Voting Agreement between CPF and TON, dated as of April 16, 2003

Exhibit D		Schedule of Transactions in the Shares of the Issuer

Exhibit E		Item 2 Information for TON

EX-99.A 3 j9895_ex99da.htm EX-99.A

Exhibit 99A

Exhibit A

Executive Officers and Directors of CPF

The following table sets forth the name, business address and present principal occupation or employment of each director and executive officer of Central Pacific Financial Corp. (“CPF”). Except as indicated below, each person is a citizen of the United States.

BUSINESS ADDRESS


NAME	ADDRESS	OCCUPATION
CLINT ARNOLDUS	Central Pacific Financial Corp. 220 S. King St. Honolulu, HI 96813	CPF — Director, Chairman, President and Chief Executive Officer

NEAL K. KANDA	Central Pacific Financial Corp. 220 S. King St. Honolulu, HI 96813	CPF — Vice President and Treasurer

GLENN K.C. CHING	Central Pacific Financial Corp. 220 S. King St. Honolulu, HI 96813	CPF-Vice President and Secretary

SHERRI Y.YIM	Central Pacific Financial Corp. 220 S. King St. Honolulu, HI 96813	CPF — Vice President, Assistant Treasurer & Assistant Secretary

JOSEPH F. BLANCO	841 Bishop St., Ste.1601 Honolulu, HI 96813	Real Estate Consultant; CPF — Director

ALICE F. GUILD	2106 Keeaumoku Street Honolulu, HI 96822	Iolani Palace —Executive Director; CPF — Director

DENNIS I. HIROTA, PH.D.	Sam O. Hirota, Inc. 864 S. Beretania St. Honolulu, HI 96813	Sam O. Hirota, Inc. — President; CPF — Director

CLAYTON K. HONBO, M.D.	3109 Huelani Place Honolulu, HI 96822	Medical Doctor (Retired) CPF — Director

STANLEY W. HONG	Waste Management of Hawaii, Inc. 7 Waterfront Plaza, Ste. 400 Honolulu, HI 96813	Waste Management of Hawaii, Inc. — President; CPF — Director

PAUL KOSASA	MNS, Ltd., dba ABC Stores 766 Pohukaina St. Honolulu, HI 96813	MNS, Ltd., dba ABC Stores — President and Chief Executive Officer; CPF — Director

GILBERT J. MATSUMOTO	The Matsumoto Group 1060 Young St., Ste. 301 Honolulu, HI 96814	The Matsumoto Group — Principal-President CPF — Director

DANIEL M. NAGAMINE	Flamingo Enterprises, Inc. 871 Kapiolani Blvd., Ste. #6 Honolulu, HI 96813	Flamingo Enterprises, Inc. — President; CPF — Director

EX-99.B 4 j9895_ex99db.htm EX-99.B

Exhibit 99B

Exhibit B

Press Release of CPF dated April 16, 2003, including
Letter from CPF to the Issuer dated April 15, 2003

Investor Contacts
Neal Kanda		Larry Dennedy
VP & Chief Financial Officer		MacKenzie Partners
(808) 544-0622		(212) 929-5239
nkanda@cpbi.com		ldennedy@mackenziepartners.com

Local Media Contacts
Ann Takiguchi		Neal Yokota
PR/Communications Officer		Stryker Weiner & Yokota
(808) 544-0685		(808) 523-8802 ext. 13
(808) 223-4434 (cell)		nyokota@strykerweiner.com
atakiguchi@cpbi.com

Financial Media Contact
Ian Campbell/Daniel Hilley
Abernathy MacGregor Group
(213) 630-6550
idc@abmac.com/dch@abmac.com

CPB Inc. Offers $70 per Share in Merger Proposal with CB Bancshares

Combination Would Create a Stronger Locally Based and Managed Bank for Hawaii

Largest CB Shareholder Expresses Support

Honolulu, Hawaii — April 16, 2003 — CPB Inc. (NYSE:CPF) (“CPB”), parent company of Central Pacific Bank, announced that it has formally proposed to the management and board of directors of CB Bancshares, Inc. (Nasdaq:CBBI) (“CB”) a merger of the two companies to create a leading, locally based and managed financial institution dedicated to serving Hawaii’s consumers and local businesses. The proposal includes a 70 percent stock and 30 percent cash offer for all outstanding shares of CB which, based on the April 14, 2003 closing stock price for CPB, is worth approximately $285 million, or $70 per share, to CB’s shareholders. The proposed combination is expected to be accretive to earnings per share in the first year following the close of the transaction.

CPB accompanied its public announcement of this proposal with a renewed call for a negotiated transaction between the two companies, but indicated it was prepared to take the proposal directly to the shareholders of both companies. CPB has attempted several times to begin collaborative discussions between the two banks about a combination that would enhance their ability to serve Hawaii’s consumers and businesses. A copy of CPB’s proposal accompanies this press release.

Jiro Shirai, Director of TON Finance, B.V. (“TON”), CB’s largest shareholder stated: “TON Finance supports the $70 per share offer made by CPB for CB. TON Finance believes the offer is an extremely attractive proposition for CB’s shareholders, and that the merger of these two Hawaii banks is a logical step forward and should create a much stronger institution.”

TON has agreed to vote 295,587 shares of its CB common stock in favor of the merger, a possible tender exchange offer, and other proposals that may be made to facilitate the transaction. Added to the 88,741 CB shares CPB owns, this represents slightly less than 9.9 percent of CB’s outstanding shares. TON has also agreed to vote its remaining 52,677 shares in favor of the transaction after receipt of any required shareholder approval under the Hawaii Control Share Acquisitions Statute. Until then, TON retains the right to vote those shares at its discretion.

“Combining our institutions is the right fit at the right time for Hawaii’s future,” said CPB’s Clint Arnoldus, Chairman of the Board, President and Chief Executive Officer. “It will be good for our shareholders, good for our customers and most importantly good for Hawaii.”

“Hawaii has a wonderful and unique culture which we must all work to preserve,” Mr. Arnoldus continued. “Hawaii needs strong and well financed local companies that will work to revive its economy and, at the same time, respect its unique values. Our combination would create a Hawaii-based bank with the strength and visibility to compete with mainland-managed and foreign-owned competitors, while maintaining our focus on personalized ‘fiercely loyal’ service. Our vision is to create the best bank for Hawaii, one whose lending, investing and contribution decisions would be made here, to benefit Hawaii, by people who know and love Hawaii.”

“We have tremendous respect for CB. Our two institutions share common roots, common values and a common market. No two banks are more intently focused on serving Hawaii’s consumers and businesses in a uniquely independent and local way. Together we can deliver more to our customers, including an expanded branch network, a broader menu of business and retail services, a particularly strong commercial real estate capability, trust and wealth management and the capital strength to increase lending limits and support our clients’ financial needs. And there is immense value in having Hawaii’s banking needs served by a stronger, local bank that is focused on our unique local market.”

“The primary driver of our proposal is growth for the future, and growth requires good people. We hope that employees of CB will be interested in positions within our combined company. Although cost savings through branch consolidations and the elimination of operational and administrative redundancies are an essential element of our proposed transaction, we believe that we can best manage the impact on staff and our customers through a cooperative, collaborative effort with CB’s management team.”

CPB said one of its core principles is to be a preferred employer in the community, and it is proud of its record of investment in and advancement of its employees.

Consistent with its strong commitment to the community, CPB is willing to commit an additional $1 million to support local community needs, while at the same time maintaining the current level of charitable contributions of both CPB and CB. CPB plans to further enhance its community support by forming an advisory committee consisting of prominent community leaders, including members of the current CB board who do not join the board of the merged company, with a specific mandate to advise the bank on matters of local economic growth and cultural integrity.

Based on the April 14, 2003 closing price of CPB stock, CPB’s proposal would give CB shareholders the equivalent of $70 per share, representing a 62 percent premium over CB’s unaffected closing price on February 25^th, the day before CPB began purchasing shares of CB in the open market, and a 54 percent premium over the April 14, 2003 closing price of CB stock. The consideration would include $21 in cash and 1.8956 shares of CPB common stock for each

CB share. CPB’s board has stated its intention to continue its current $0.16 per share quarterly dividend, thus providing CB shareholders with an effective dividend increase of approximately 290 percent, or 3.90 times CB’s current payout (assuming full reinvestment of the cash proceeds).

CPB expects double-digit accretion to earnings per share in the first year following the close of the proposed merger. CPB anticipates a one-time restructuring charge related to this combination of approximately $32 million.

“Together we can deliver extraordinary value to CB shareholders through a combination that will be accretive to earnings in less than one year, raise CB shareholders’ cash dividends by approximately 290 percent, increase trading liquidity and institutional investor interest, and give shareholders the opportunity to own a piece of a company that has been a dependable performer, year in and year out, for the past five years,” concluded Mr. Arnoldus.

The proposed merger would create an organization with a pro forma market capitalization in excess of $600 million, assets of $3.7 billion, total deposits of $2.8 billion, and a tier 1 capital base of $275 million, all as of December 31, 2002. The combined company would be known as CPB Inc., and would remain headquartered in Honolulu, Hawaii.

The closing of the merger is subject to customary regulatory and shareholder approval, due diligence, and the redemption of CB’s poison pill.

CPB Inc. is a Hawaii bank holding company with $2.0 billion in assets. Central Pacific Bank, its subsidiary, is Hawaii’s third largest commercial bank offering a full range of banking, trust and investment services with 24 branches statewide, including 5 supermarket branches, and 77 ATMs statewide.

Bear, Stearns & Co. Inc. is acting as financial adviser to CPB. Manatt, Phelps & Phillips LLP is acting as CPB’s legal counsel, and Devens, Nakano, Saito, Lee, Wong & Ching is acting as CPB’s Hawaii counsel. Sullivan & Cromwell LLP is acting as counsel to the financial adviser.

CB Bancshares, Inc. with $1.7 billion in total assets, is the fourth largest commercial bank in Hawaii and operates 21 branches in the state of Hawaii.

Note: CPB will discuss today’s announcement with analysts and investors on the company’s pre-scheduled earnings conference call tomorrow, April 17, at 10:00 a.m. Eastern Daylight Time. To participate in the question and answer session, analysts and investors may dial into the call at 1-800-838- [call in number], and international callers may dial [international number]. A listen-only live broadcast of the call also will be available on the investor relations page of the company’s website at www.CPBI.com, as well as a copy of this press release and an investor slide presentation, which management will review on the call. A replay of the call will be archived on the website and available for two weeks.

FORWARD LOOKING INFORMATION

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, (i) statements about the benefits of a merger between CPB Inc. (“CPB”) and CB Bancshares, Inc. (“CBBI”), including future financial and operating results, costs savings and accretion to reported and cash earnings that may be realized from such merger; (ii) statements with respect to CPB’s plans, objectives, expectations and intentions and other statements that are not historical facts; and (iii) other statements identified by words such as “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans”, “targets”, “projects” and other similar expressions. These statements are based upon the current beliefs and expectations of CPB’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the business of CPB and CBBI may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; (2) expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; (3) revenues following the merger may be lower than expected; (4) deposit attrition, operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the merger; (5) the regulatory approvals required for the merger may not be obtained on the proposed terms; (6) the failure of CPB’s and CBBI’s shareholders to approve the merger; (7) competitive pressures among depository and other financial institutions may increase significantly and may have an effect on pricing, spending, third-party relationships and revenues; (8) the strength of the United States economy in general and the strength of the Hawaiian economy may be different than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on the combined company’s loan portfolio and allowance for loan losses; (9) changes in the U.S. legal and regulatory framework; and (10) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on the combined company’s activities.

Additional factors that could cause CPB results to differ materially from those described in the forward-looking statements can be found in CPB’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission and available at the SEC’s Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters attributable to CPB or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. CPB does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

With respect to financial projections for CBBI contained in this document, neither CBBI nor any analyst has published any information for 2003, 2004 or 2005. In addition, CPB has not been given the opportunity to do

any due diligence on CBBI other than reviewing its publicly available information. Therefore, management of CPB has created its own financial model for CBBI based on CBBI’s historical performance and CPB’s assumptions regarding the reasonable future performance of CBBI on a stand-alone basis. These assumptions may or may not prove to be correct. The assumptions are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of CBBI. There is no assurance that these projections will be realized and actual results are likely to differ significantly from such projections.

Subject to future developments, CPB intends to file with the SEC a registration statement to register the CPB shares to be issued in the proposed transaction, including related tender/exchange offer materials, and one or more proxy statements for solicitation of proxies from CPB shareholders, and may file one or more proxy statements for solicitation of proxies from CBBI shareholders, in connection with special meetings of such shareholders at a date or dates subsequent hereto. Investors and security holders are urged to read the registration statement, related tender/exchange offer materials, and proxy statements (when available) and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain a free copy of the registration statement, related tender/exchange offer materials, and proxy statements (when available) and other relevant documents at the SEC’s Internet web site at www.sec.gov. The registration statement, related tender/exchange offer materials, and proxy statements (when available) and such other documents may also be obtained free of charge from CPB by directing such request to: CPB Inc., 220 South King Street, Honolulu, Hawaii 96813, Attention David Morimoto, (808) 544-0627.

CPB, its directors and executive officers and certain other persons may be deemed to be “participants” if CPB solicits proxies from CBBI and CPB shareholders. A detailed list of the names, affiliations and interests of the participants in any such solicitation will be contained in CPB’s preliminary proxy statement on Schedule 14A, when filed. Information about the directors and executive officers of CPB and their ownership of and interests in CPB stock is set forth in the proxy statement for CPB’s 2003 Annual Meeting of Shareholders.

# # #

April 15, 2003

Board of Directors
CB Bancshares, Inc.
201 Merchant Street
Honolulu, Hawaii 96813

Attention:		Mr. Ronald K. Migita
		President and Chief Executive Officer

Dear Mr. Migita:

We are very disappointed by CB Bancshares, Inc.’s (“CB”) lack of response to our March 17th offer to combine CPB Inc. (“CPB”) and CB Bancshares, Inc. through a cash-and-stock transaction valued at $70 per share (the “Merger”), which represents a 62.3% premium over your unaffected stock price (the price on February 25, 2003, the day before CPB began buying in the open market the 88,741, or 2.27%, of the outstanding CB shares we currently own). Our proposal also presents a unique opportunity to create a stronger Hawaii-focused bank with enhanced capability to deliver superior results for your shareholders and benefits to your customers, employees and the State of Hawaii — benefits that CB cannot realistically expect to achieve on its own in the foreseeable future.

The preservation of our unique island culture requires Hawaii-based business institutions that can compete with mainland-managed and foreign-owned banks. The resurgence of our island economy depends on strong banks focused on the small- to medium-sized businesses that will help drive economic recovery. Our combination would create a competitive Hawaii-based bank whose lending, investing and contribution decisions would be made locally, by people who know, understand and love Hawaii.

History of this Proposal

The basic terms of this offer were outlined in a meeting held between certain members of CB’s senior management and our financial advisor, Bear, Stearns & Co. Inc., on March 17, 2003. In response to your refusal to receive our written offer, or to meet with us on that day, we delivered our March 17^th offer to you on March 21, 2003. You agreed to meet with us on April 2, 2003 for the limited purpose of clarifying the proposal, but were unwilling to enter into substantive discussions. At that meeting, you also told us that your Board had not met, or scheduled a meeting, to consider our offer, and that no financial advisor had been retained by your Board.

At the conclusion of the April 2^nd meeting, you indicated that you would contact us by April 4^th to inform us of your proposed timetable. You did not contact us by that date or thereafter. As a result, on April 7^th we sent another copy of our March 17^th offer to each of your directors to eliminate any doubt that they had not received it, and requested a reply by April 11^th. While you acknowledged receipt of our letter, no reply to its terms was received. In short, despite our numerous efforts to meet and confer on this combination, we have not received any meaningful response from CB Bancshares to our offer.

We believe the merger of our banks will create a much stronger and higher performing company through:

• The financial strength to compete more effectively for customers and better address the needs of the residents and businesses of Hawaii;

• The anticipated significant accretion to earnings per share of the combined company;

• CB shareholders’ participation in future growth through their ownership of NYSE-listed CPB common stock to be received in the Merger;

• A dividend increase of approximately 290% over CB’s current payout rate;

• A strong balance sheet and high quality loan portfolio, with excellent access to the capital markets;

• A very strong management team with a record of consistent performance; and

• Additional career opportunities for high performing employees who contribute to the success of the resulting company.

Based on the significant premium we are offering and the anticipated performance of the resulting company, we believe that if given the opportunity to act on our proposal, your shareholders would enthusiastically accept it. Indeed, your largest shareholder, TON Finance, B.V., has agreed to vote 295,587 shares of its CB common stock (which, when added to the shares CPB owns, represent slightly less than 9.9% of CB’s outstanding shares) in favor of the Merger, a tender/exchange offer CPB may make prior to the Merger, and other proposals having the intended effect of facilitating such transactions, at any CB shareholders’ meeting considering or in connection with the solicitation of consents from CB shareholders for approval of such transactions. TON Finance, B.V., has further agreed to vote the remaining 52,677 of its shares under its voting agreement with us only after receipt of any required shareholder approval under the Hawaii Control Share Acquisitions Statute, but until such time retains the right to vote these shares in its discretion.

For all these reasons, we would like to review the key elements of our proposal, based upon a transaction to be negotiated with you, as follows:

1. Offer Price. We are prepared to offer 1.8956 shares of CPB’s NYSE-listed common stock plus $21 in cash for each share of CB common stock. Based on CPB’s closing price on April 14, 2003, this represents an offer of $70 per CB share, comprised of approximately 30% in cash and 70% in CPB common stock (the “Merger Consideration”). The Merger Consideration represents a premium of 62.3% over CB’s closing price as reported on the NASDAQ on February 25, 2003, the day before CPB started to buy CB’s shares on the open market, and a 54% premium over the closing price on April 14, 2003.

2. Structure. The combination will be accomplished through a merger of CPB and CB (the “Merger”) with CPB being the resulting corporation. The Merger will be structured so that the CPB stock received in the Merger should be tax-free to CB’s shareholders. Central Pacific Bank and City Bank will also be merged immediately following the Merger, with Central Pacific Bank being the resulting bank.

3. Treatment of Stock Options. Any options to acquire shares of CB that remain unexercised upon consummation of the Merger will be converted into options to acquire shares of CPB, with appropriate adjustments to reflect the Merger.

4. Employee Benefits. All CB employees will be eligible to participate in CPB’s benefit programs and will receive credit for their tenure at CB.

5. Board Representation and Management. In connection with our negotiations we would discuss what number of members of CB’s current Board of Directors would be appropriate to add to CPB’s Board of Directors following the merger. We propose that the resulting corporation establish an Advisory Board to include those current members of CB’s Board of Directors who do not join CPB’s Board of Directors following the Merger plus additional prominent community members to be selected by the resulting corporation’s Board. We would also discuss appropriate roles for CB’s current management team with the understanding that I would continue as Chairman, President, and Chief Executive Officer of CPB following the Merger.

6. Conditions. The terms of the Merger will be set forth in detail in a definitive merger agreement, which would contain representations, warranties and conditions customary for a transaction of this type, including, without limitation, all necessary determinations by your Board of Directors to exempt this transaction under your Shareholder Rights Plan and under the Control Share Acquisitions Act of the State of Hawaii. Such conditions would include, but not be limited to, satisfactory completion of due diligence, receipt of all necessary regulatory, shareholder and corporate approvals, and the absence of any material adverse changes. Customary protections for the transaction (e.g., break-up fees, non-competition agreements) will be included. We anticipate that the definitive agreement will be negotiated and prepared in conjunction with our due diligence process.

Given the significant premium that we are offering to your shareholders, and the obvious benefits the Merger would provide to all of CB’s stakeholders, we are puzzled by your failure to respond meaningfully to our offer for more than four weeks. Our strong preference is to negotiate the structure and terms of this combination and the various factors involved for a successful integration of our companies with your Board of Directors, but if you continue to refuse to discuss our proposal and prevent your shareholders from considering it, we reserve the right to bring it directly to the CB shareholders for their consideration. In view of the significance of our proposal to both companies and their shareholders, we intend to publicly announce our proposal on Wednesday, April 16, 2003.

I would like to reiterate our strong preference to work with you in a professional and constructive manner to complete this transaction so that its full potential can be realized. If you have any questions, please call me. We continue to be available — as we have been for the last month — to meet with you or any member of your management or Board of Directors to review this proposal and the benefits we see in this combination and to negotiate the terms of a definitive agreement.

The Board of Directors and I continue to believe that the transaction we are proposing is in the interests of both companies’ shareholders and all our other constituencies — the customers, the employees, the community and the State of Hawaii. We hope that you and your Board of Directors reconsider your consistent refusal to consider the merits of this combination. We are not, however, prepared to allow an indefinite amount of time to elapse. Therefore, we request that you respond to this proposal before 12 noon, Honolulu time, on April 25, 2003.

	Very truly yours,

	Clint Arnoldus
	Chairman, President and Chief Executive Officer

EX-99.C 5 j9895_ex99dc.htm EX-99.C

Exhibit 99C

Exhibit C

Voting Agreement between CPF and TON Finance, B.V. dated as of April 16, 2003

VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”) is made and entered into as of April 16, 2003, under Section 414-162 of the Hawaii Business Corporation Act, by and between CPB Inc., a Hawaii corporation (“CPB”), and TON Finance, B.V., a corporation organized under the law of The Netherlands (the “Shareholder”).

WHEREAS, the Shareholder owns 348,264 shares (the “Shares”) of common stock (the “CBBI Common Stock”), $1.00 par value per share, of CB Bancshares, Inc., a Hawaii corporation (“CBBI”);

WHEREAS, in a letter addressed to CBBI, dated as of March 17, 2003, a copy of which is attached hereto as Exhibit A, CPB proposed a strategic combination of CPB and CBBI whereby CBBI would merge with and into CPB with CPB being the resulting corporation (the “Proposed Merger”);

WHEREAS, pursuant to the Proposed Merger, each share of CBBI Common Stock, including the Shares, would receive cash and stock with a current value of U.S.$70.00, comprised of approximately 30% in cash and 70% in registered and New York Stock Exchange listed CPB common stock (the “Merger Consideration”);

WHEREAS, the Proposed Merger would be subject to the terms and conditions contained in a proposed merger agreement (the “Proposed Merger Agreement”) to be negotiated between CPB and CBBI;

WHEREAS, prior to the Proposed Merger and agreement on the terms and conditions of the Proposed Merger Agreement, CPB may directly offer to the CBBI shareholders, including the Shareholder, the Merger Consideration by means of a tender offer (the “Proposed Tender Offer”); and

WHEREAS, consummation by CPB of any of the Proposed Tender Offer, Proposed Merger or purchase of any of the Shares by CPB that would result in it owning more than 5% of the outstanding shares of CBBI Common Stock are subject to receipt of all required regulatory and shareholder approval.

NOW, THEREFORE, in consideration of the foregoing, for good and valuable consideration, the parties hereby agree as follows:

1. Representations and Warranties.

Each of the Shareholder and CPB hereby represents and warrants to the other as follows:

(a) Organization. It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.

(b) Authority. It has full corporate power and authority to execute and deliver this Agreement and to perform all of its obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by all required corporate action, and no other corporate action is necessary to authorize the execution and delivery by it or the performance of its obligations hereunder.

(c) Enforceable Obligations. This Agreement has been duly executed and delivered, and, assuming due and valid authorization, execution and delivery hereof by the other party, is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms.

(d) Ownership of Shares. The Shareholder is the record and beneficial owner of, and has the sole right to vote and dispose of, the Shares, free and clear of any encumbrances whatsoever. None of the Shares is subject to any voting trust, proxy or other agreement, arrangement or restriction with respect to voting, except as contemplated by this Agreement.

(e) No Conflicts. The execution and delivery of this Agreement and the consummation by it of its obligations hereunder will not (i) conflict with or violate any laws, rules or regulations to which it is subject, or (ii) conflict with or violate any contract, commitment, agreement, arrangement or restriction of any kind to which it is a party or by which it is bound.

(f) Third Party Consents and Approvals. The execution and delivery of this Agreement by it does not, and the performance of its obligations hereunder will not, require it to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any person or governmental entity, except with respect to the consummation of the Proposed Tender Offer and the Proposed Merger which are subject to receipt of all required shareholder and regulatory approval, including without limitation from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Commissioner of Financial Institutions of the State of Hawaii, and such filings and authorizations as may be required under the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

2. Covenants of Shareholder as to Voting. The Shareholder agrees as follows:

(a) Approval of the Proposed Tender Offer, Proposed Merger and Proposed Merger Agreement. At any duly noticed meeting of CBBI shareholders called to vote upon the Proposed Tender Offer, the Proposed Merger, the Proposed Merger Agreement, or any other proposal intended to facilitate any of such transactions, including without limitation, amendments to CBBI’s articles of incorporation, and at any adjournment thereof, or in any other circumstances upon which a vote, consent or other approval of the Proposed Tender Offer, the Proposed Merger or Proposed Merger Agreement or other such proposals is sought, subject to the provisions of subparagraph (b), the Shareholder shall vote (or cause to be voted) all of the Shares and any other shares of CBBI Common Stock subsequently acquired by the Shareholder in favor of the approval of the Proposed Tender Offer, and approval and adoption of the Proposed Merger and Proposed Merger Agreement and the transactions contemplated thereby, and any proposal intended to facilitate any of such transactions.

(b) Restriction on Voting. The parties agree that Shareholder shall vote 295,587 of the Shares pursuant to subparagraph (a) without restriction, and may vote the balance of the

Shares in its discretion until such time as the CBBI shareholders have approved either the Proposed Tender Offer or the Proposed Merger under Section 414E-2(e) of the Hawaii Business Corporation Act, or a legal opinion is delivered to Shareholder to the effect that such shareholder approval is not required, after which Shareholder shall vote its remaining Shares pursuant to subparagraph (a).

(c) Alternative Proposals. At any duly noticed meeting of CBBI shareholders or at any adjournment thereof or in any other circumstances upon which its vote, consent or other approval is sought, the Shareholder shall vote (or cause to be voted) all of the Shares and any other shares of CBBI Common Stock subsequently acquired by the Shareholder against (i) any proposal for recapitalization, merger, sale of assets or other business combination between CBBI and any other person (other than the Proposed Tender Offer and the Proposed Merger); (ii) any other action or agreement that would result in the breach of any covenant, representation or warranty or any other obligation or agreement of CBBI under the Proposed Tender Offer or the Proposed Merger Agreement or which could result in any of the conditions to CPB’s or CBBI’s obligations under the Proposed Tender Offer or the Proposed Merger Agreement not being fulfilled; and (iii) any amendment of CBBI’s articles of incorporation or bylaws or any other proposal or transaction involving CBBI or any of its subsidiaries which would (A) in any manner impede, interfere with, delay, postpone, discourage or materially adversely affect the Proposed Tender Offer or the Proposed Merger or any of the other transactions contemplated by the Proposed Merger Agreement or (B) change in any manner the voting rights of any outstanding class of capital stock of CBBI. The Shareholder further agrees not to commit or agree to take any action inconsistent with the foregoing.

3. Agent Designation; Proxy.

(a) Agent Designation. The Shareholder hereby designates and appoints CPB, with full power of substitution, the agent of the Shareholder in respect of the Shares and any additional shares of CBBI Common Stock acquired by Shareholder and hereby consents to take all action necessary to call one or more special meetings of shareholders of CBBI (each a “Special Meeting”), including any adjournments thereof, solely for the purpose of considering and voting upon the Proposed Tender Offer, the Proposed Merger and any proposal intended to facilitate consummation of the Proposed Tender Offer and Proposed Merger.

(b) Grant of Proxy. The Shareholder hereby appoints Neal Kanda and Glenn Ching, of CPB, in their respective capacities as officers of CPB, and any individual who shall succeed to any such office of CPB, as the Shareholder’s proxy and attorney-in-fact (with full power of substitution) to vote and otherwise act (by written consent or otherwise) with respect to 295,587 of the Shares which such Shareholder is entitled to vote at any meeting of CBBI shareholders (whether annual or special and whether or not at an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise and, on, and only on, the matters described in Section 2 and to duly execute and deliver any and all consents, instruments or other agreements or documents in order to take any and all such actions in connection with or in furtherance of the obligations of the Shareholder set forth in this Agreement (the “Proxy”). To the extent legally required, exercise of the Proxy is subject to receipt of all required regulatory approval. Except as provided herein, Shareholder shall be free to vote the Shares and any other shares of CBBI Common Stock acquired by it in its sole and absolute discretion. The Proxy may be revoked at

any time by the Shareholder by delivering written notice of such revocation to the persons designated above as its proxies five (5) business days prior to the effectiveness of such revocation. The Shareholder hereby grants a proxy with respect to the balance of the Shares which proxy shall be subject to the same terms as set forth above in this subsection (b); provided, however, that such proxy shall not be deemed granted or effective until such time as the CBBI shareholders approve either the Proposed Tender Offer or the Proposed Merger under Section 414E-2(e) of the Hawaii Business Corporation Act, or a legal opinion is delivered to Shareholder to the effect that such shareholder approval is not required.

(c) Revocation of Other Proxies. The Shareholder hereby revokes all other agent designations, proxies and powers of attorney with respect to the Shares that it heretofore may have appointed or granted, and no subsequent agent designation, proxy or power of attorney shall be given or written consent executed (and if given or executed, shall not be effective) by the Shareholder in connection with any resolution or proposal covering the subject matter of or contrary to the intended effect of Section 2 hereof. All authority herein conferred or agreed to be conferred shall be binding upon the successors and assigns of the Shareholder.

4. Agreement to Tender; Grant of Option. The Shareholder hereby agrees that, if CPB commences the Proposed Tender Offer for CBBI Common Stock, the Shareholder will validly tender, or cause to be validly tendered, all of the Shares then beneficially owned by the Shareholder to CPB as soon as practicable (and in any event within five (5) business days) after the commencement of the Proposed Tender Offer in accordance with the terms and conditions of such tender offer. CPB agrees to accept and pay for such Shares subject to the terms and conditions provided in the Proposed Tender Offer.

5. Covenants of the Shareholder.

(a) “No Shop”. The Shareholder agrees that it shall not, directly or indirectly, (i) initiate, solicit or encourage or otherwise facilitate, directly or indirectly, any inquiries with respect to, or the making or implementation of, any proposal or offer with respect to a merger, reorganization, share exchange, consolidation or similar transaction, or any purchase of all or substantially all of the assets of CBBI; or (ii) engage in any discussions or negotiations with, or provide any confidential information or data to, any person relating to any such proposal.

(b) Restrictions on Transfer. Until and unless this Agreement has been terminated, the Shareholder shall not, except as expressly provided for herein, (i) sell, exchange, pledge, encumber or otherwise transfer or dispose of, or agree to sell, exchange, pledge, encumber or otherwise transfer or dispose of, any of the Shares or any interest therein, unless the purchaser, assignee or pledge holder agrees to be bound by the terms of this Agreement, including an agreement to tender all Shares in the Proposed Tender Offer, evidenced by executing a counterpart of this Agreement (ii) deposit the Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Shares or grant any proxy with respect thereto, or (iii) enter into any agreement, arrangement, commitment, understanding or undertaking to do any of the foregoing.

(c) Waiver of Appraisal Rights. The Shareholder hereby waives all of its rights, whether pursuant to Section 414-342 of the Hawaii Business Corporation Act, or successor statute, or otherwise, to dissent from the Proposed Merger and/or receive the judicially appraised value of its Shares.

(d) Termination. The covenants and agreements contained herein with respect to the Shares shall terminate upon the earliest to occur of: consummation of the Proposed Tender Offer or Proposed Merger; or termination and abandonment of the Proposed Tender Offer or the Proposed Merger Agreement; or one year from the date hereof.

6. Specific Performance. The Shareholder acknowledges that damages would be an inadequate remedy to CPB for an actual or prospective breach of this Agreement and that the obligations of the Shareholder shall be specifically enforceable.

7. Miscellaneous.

(a) Definitional Matters.

(i) Unless the context otherwise requires, “person” shall mean a corporation, association, partnership, joint venture, organization, business, individual, trust, estate or any other entity or group (within the meaning of Section 13(d)(3) of the Exchange Act).

(ii) “Beneficially own” or “beneficial ownership” with respect to any securities shall mean “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 of the Exchange Act), including pursuant to any agreement, arrangement, commitment or understanding, whether or not in writing.

(iii) The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Shareholder Agreement.

(b) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

(c) Assignment. This Agreement shall not be assigned without the prior written consent of the other party hereto, except that CPB may assign, in its sole discretion, all or any of its rights, interests and obligations hereunder to any direct or indirect wholly owned subsidiary or affiliate of CPB.

(d) No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any person not a party hereto.

(e) Modifications. This Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto.

(f) Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Hawaii without regard to principles of conflicts of law.

(g) Jurisdiction and Venue. Each party hereto hereby agrees that any proceeding relating to this Agreement shall be brought in a state court in Hawaii or a United States District Court sitting in the State of Hawaii. Each party hereto hereby consents to personal jurisdiction in any such action brought in any such court, consents to service of process by registered mail made upon such party and such party’s agent and waives any objection to venue in any such court and a claim that any such court is an inconvenient forum.

(h) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, each of which shall remain in full force and effect.

(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

(j) Mutual Drafting. Each party hereto has participated in the drafting of this Agreement, which each party acknowledges is the result of extensive and informed negotiations between the parties.

(k) Notices. Any notices or other communications required or permitted hereunder shall be in writing and shall be deemed duly given upon (i) transmitter’s confirmation of a receipt of a facsimile transmission, (ii) confirmed delivery by a standard overnight carrier or (iii) the expiration of five (5) business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address as the parties hereto shall specify by like notice):

If to CPB, to:

CPB Inc.
220 South King Street
Honolulu, Hawaii 96813
Facsimile:	(808) 544-0574
Attention:	Glenn Ching, Esq.
	General Counsel

With a copy to:

Gordon M. Bava, Esq.
Manatt, Phelps & Phillips, LLP
11355 West Olympic Blvd
Los Angeles, California 90064
Facsimile:	(310) 312-4224

If to Shareholder, to:

TON Finance, B.V.
De Ruyterkade 120
1011 AB Amsterdam
Facsimile:	31+204-286-890
Attention:	Jiro Shirai
	Director

With a copy to:
Kozo Toyama
Kyo Sogo Law Offices
Shiroyama MT Building, 9th Floor
4-1-17, Toranomon, Minato-ku
Tokyo 105-0001
Facsimile:	81+3-5473-3880

(l) Best Efforts; Further Assurances. The parties shall use their respective best efforts to take such actions as may be necessary or appropriate to effectuate the purposes of this Agreement and further agree to execute and deliver all such further documents and instruments and take all such further actions as may be necessary in order to consummate the transactions contemplated hereby.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	CPB, INC.

	By:	/s/ CLINT ARNOLDUS
		Name: Clint Arnoldus
		Title: Chairman, President , CEO

	TON FINANCE, B.V.

	By:	/s/ J. SHIRAI
		Name: J. Shirai
		Title: Director

Exhibit A

March 17, 2003

Board of Directors

CB Bancshares, Inc.

201 Merchant Street

Honolulu, Hawaii 96813

Attention: Mr. Lionel Y. Tokioka, Chairman of the Board

Dear Mr. Tokioka:

Our two companies were created nearly 50 years ago to serve the unique needs of our community in Hawaii. Today, our common roots, common culture, and common market create a compelling opportunity to combine to better serve our shareholders, our customers, our employees, and our local community.

On separate occasions over the past several years, we have approached each other to propose a combination of our two companies. Clearly we both believe that a combination of the two banks would benefit our shareholders and our common constituencies. CPB Inc.’s Board and I believe that the time has come to combine the strengths of our two fine institutions.

In this spirit, I am writing to propose the combination of CPB Inc. (“CPB”) and CB Bancshares, Inc. (“CB”) through a cash-and-stock transaction representing a significant premium to your shareholders.

While each of us is proud of our own successes, combining our two companies will create much more value and liquidity for shareholders than either CPB or CB could achieve on its own. This combination will make both banks more competitive and will create a more significant, Hawaii-based presence. It is also very much in the best interests of our customers and our employees and, most especially, the State of Hawaii.

Our home state possesses a wonderful and unique culture, one which we all wish to preserve. Preservation requires Hawaii-based business institutions that can compete with mainland-based and foreign-owned newcomers. Our combination would create just such an institution, a Hawaii-based bank of competitive scale whose lending, investing and contribution decisions would be made here, by people who know, understand and love Hawaii.

For all these reasons (which we develop further in the attachment to this letter), we would like to discuss with your Board of Directors a strategic combination of CPB and CB on the following terms:

1. Offer Price. We are prepared to offer $70 for each share of CB common stock, comprised of approximately 30% in cash and 70% in registered and NYSE listed CPB common stock (the “Merger Consideration”). The Merger Consideration represents a premium of 62% over CB’s closing price as reported on the NASDAQ on February 25, 2003, the day before CPB started to buy CB’s shares on the open market, and a 47% premium over the closing price on

March 14, 2003. In addition to this attractive premium, your shareholders’ dividend will increase by approximately 3.75 times what they currently receive.

2. Structure. The combination will be accomplished through a merger of CPB and CB (the “Merger”) with CPB being the resulting corporation. The Merger will be structured so that the CPB stock received in the Merger should be tax-free to CB’s shareholders. Central Pacific Bank and City Bank will also be immediately combined following the Merger, with Central Pacific Bank being the resulting bank.

4. Employee Benefits. All CB employees will be eligible to participate in CPB’s benefit programs and will receive credit for their tenure at CB.

5. Board Representation. Following the Merger, CPB’s Board of Directors will be expanded to include up to three directors from CB’s current Board of Directors. These three directors would be identified jointly by CPB and CB. We propose that the resulting corporation establish an Advisory Board to include those current members of CB’s Board of Directors who do not join CPB’s Board of Directors following the Merger plus additional prominent community members to be selected by the resulting corporation’s Board.

6. Management. Clint Arnoldus, currently Chairman, President, Chief Executive Officer of CPB, would continue to serve in those capacities for the combined company and bank. We have high regard for your management team, and look forward to discussing with you how their talents could best be utilized by our combined company.

7. Conditions. The terms of the Merger will be set forth in detail in a definitive merger agreement, which would contain representations, warranties and conditions customary for a transaction of this type. Such conditions would include, but not be limited to, receipt of all necessary regulatory, shareholder and corporate approvals, and the absence of any material adverse changes. Customary protections for the transaction (e.g., break-up fees, non-competition agreements) will be included. We anticipate that the definitive agreement will be negotiated and prepared in conjunction with our due diligence process.

8. Due Diligence. The terms and conditions of this proposal and CPB’s willingness to enter into a definitive merger agreement are subject to the completion of due diligence. We expect you will want to conduct an appropriate level of due diligence on CPB. With your cooperation, the due diligence process could be completed very expeditiously — we believe it would take less than 4 weeks — and could proceed in parallel with the negotiation of a definitive agreement. To facilitate open communication, we propose that we enter into Confidentiality Agreements as soon as possible.

Our strong preference is to negotiate the structure and terms of this combination and the various factors involved for a successful integration of our companies with your Board of Directors.

Our Board of Directors and I feel strongly that the transaction we are proposing is in the best interests of both companies’ shareholders and all our other constituencies — the customers, the employees, the community and the State of Hawaii.

Sincerely,

/s/ CLINT ARNOLDUS

Clint Arnoldus

Chairman, President

and Chief Executive Officer

CA/ml

Attachment

cc/ Mr. Ronald Migita

Mr. Richard Lim

Mr. Dean Hirata

Attachment to Letter

Board of Directors

CB Bancshares, Inc.

March 17, 2003

The combination of CPB Inc. and Subsidiary (“CPB”) and CB Bancshares, Inc. and Subsidiaries (“CB”) is the best way to sustain and strengthen each bank’s proud heritage of serving the needs of Hawaii in a uniquely independent and local way. This is the right fit for Hawaii’s future.

Hawaii is distinct from the other 49 states. Our state has a unique tradition of preserving its culture and values. But can we do so while also reviving our economy? Yes, we can. And combining our two banks can be a key catalyst for the kind of future Hawaii wants.

Banks are essential to the business culture of our islands. A bank maintains the strength and character of a community through its lending, investment and contribution decisions. The institution behind those decisions must have the scale to make them matter. And it must have a focus on the locally-owned, small- and medium-sized businesses that are the bedrock of future growth in our state. No one is more committed to these entrepreneurs than our two banks. Together, we can do so much more.

The choice is clear: join forces and support the preservation of local culture and the resurgence of Hawaii’s economy. Or, remain apart, and let others dictate the future.

Let’s create a stronger, locally-based and locally-managed bank for Hawaii — adding resources and capabilities — while retaining a fiercely loyal commitment to our customers and community.

Together, we can provide new opportunities for future generations, just as our two banks have done for so many years. No two banks are more intently focused on serving the small- and medium-sized businesses and local community needs of Hawaii.

Together, we can create a powerhouse small- and medium-sized business banking resource in a state where jobs are powered by local business.

Together we can deliver an exceptional banking experience to consumers old and new, one that represents a brand-new choice for Hawaii, from the teller line to the trust department.

Together we can help diversify Hawaii’s economy while sustaining our tradition of serving diverse communities.

Together we can deliver extraordinary value to your shareholders. In addition to an attractive premium, we can increase your shareholders’ dividend by approximately 275 percent or 3.75 times what they currently receive. We’ll also offer your shareholders the opportunity to own a part of a company that has been a top performer during the past five years. Finally, your shareholders will benefit from a transaction that will be accretive to earnings—and from the superior growth prospects of a combined institution.

In a world increasingly dominated by large, multi-state, impersonal institutions, customers and clients want fiercely loyal and friendly service from bankers they know and trust. Our two banks know how to deliver that in a way no one else in Hawaii can deliver — from the grass roots up.

Together, we can deliver so much more, including an expanded number of branches and ATMs to choose from, and a broader menu of business and retail products and services such as trust and wealth management.

Together, we will have the capital strength to substantially increase the borrowing capacity for our clients, helping to generate economic and job growth for the local economy.

And of course, our similar cultures will enable us to continue our long tradition of high-touch service for retail customers and small- to mid-sized businesses.

In short, together we are better for every customer — especially the customer who wants to grow.

The Right Fit For Hawaii’s Community Needs

A strong, competitive banking sector is essential to fuel a rebound in Hawaii’s economy. But it takes scale and resources to compete, the kind of scale and resources we can create overnight as one company.

We also share a belief that Hawaii must be served by banks committed to improving the quality of life for our local residents and visitors. For example, our two banks worked

together to provide key support for the needs of the Japanese Cultural Center of Hawaii. A combination of our two banks would help us strengthen our leadership in serving community needs.

CPB has long been committed to our local communities, having contributed more than $250,000 to over 200 deserving organizations each year. We know CB shares our commitment to local community needs and that is why we pledge to maintain our combined level of charitable contributions, once our companies are combined.

But we should do more — because together we can do more! That’s why, upon completion of the transaction, we’re prepared to set aside a $1 million fund to benefit charitable causes in an effort to improve our communities and to create a better Hawaii for generations to come.

And we’re prepared to apply the best thinking of the best people in our two banks and the communities we serve to determine how best we can serve the resurgence of Hawaii’s economy in the years to come. The CPB board of directors will appoint a special committee with representatives of both companies’ current boards and prominent members of the community to advise the combined company on community needs, economic development and the bank’s outreach programs.

Our employees are our strongest asset and the key to our future. One of our core principles is to be a preferred employer in the community. We intend to continue this commitment as we broaden our family of employees.

A stronger, more stable and profitable institution will be as good for employees in the long run as it is for communities, customers and shareholders. Only with a strong balance sheet, solid credit quality, and a strategy clearly focused on growth can we create opportunities for our valued employees. That is what we can deliver together.

Our history is one of rewarding employees who help us grow. We are proud of our record of investment in — and advancement of employees. We would deliver those same opportunities to your employees as part of a larger, expanding organization.

We believe in attractive benefits, as well. So, we would extend our benefits to your employees with credit given for prior service with CB. These include: Employees’ Stock Ownership Plan, 401(k) and profit sharing plans and incentive bonus and recognition programs.

Clearly, putting our two companies together will create opportunities for value enhancing cost savings, through the elimination of duplicative functions and overlapping branches.

But we think the best way to achieve cost savings with the absolute minimum impact on good employees — and on our future growth prospects — is to sit down and thoughtfully discuss how best to put our two companies together. The more cooperative and collaborative we can be as we join forces, the more informed these decisions will be.

Both companies’ shareholders would gain a stake in a combined company with more than $3.7 billion in assets—the 11th largest publicly traded commercial bank headquartered in the West Coast. In addition to the benefit of owning a larger, stronger company, CB’s shareholders would receive an attractive premium. Furthermore, this combination creates the potential for substantially improved performance.

Attractive Acquisition Premium. Our offer translates into a transaction price of $70 per share and represents a 20.4 multiple of CB’s twelve-month trailing earnings, a 47 percent premium to CB’s current market value and a 79 percent premium to CB’s book value.

Significant Increased Dividend Payments. CPB’s board has stated its intention to continue its current $0.16 per share quarterly dividend after a successful combination, thus providing CB’s shareholders with an effective dividend increase of 275 percent over CB’s current payout.

Excellent Performance of CPB Stock. Over the last five years, CPB’s stock performance has been excellent, appreciating at a compounded annual rate of 24 percent and by 55 percent in the last twelve months. We believe the financial and community benefits of this combination will help sustain this positive momentum.

Enhanced Liquidity and Increased Market Capitalization. The combination should dramatically enhance the volume of trading, potentially doubling the daily trading of CPB common stock. In addition, CPB common stock trades on the NYSE, which provides greater liquidity. The resulting organization is expected to have a market capitalization in excess of $600 million or over three times CB’s current market valuation, further enhancing its attractiveness to investors.

Strong Institutional Investor Following. With CPB’s current institutional ownership of 36%, the combined organization will continue to benefit from strong institutional support. The combined organization’s increased market capitalization and its position as one of the few remaining independent banks in Hawaii creates an ideal vehicle for investors who want to participate in the future of a growing financial player poised to capitalize on Hawaii’s future.

Financial Strength of Combined Organization. The combined organization — with over $3.7 billion in total assets — will create a larger, stronger bank for customers and the community of Hawaii. In addition, the combined strength of the two companies will help the company compete against much larger banks, enhancing its ability to achieve solid and consistent results for our shareholders.

Solid Asset Quality. The combined organization will greatly benefit from CPB’s strong asset quality. CPB has focused intently and successfully on maintaining disciplined underwriting standards. As a result, for the last three years our ratio of nonperforming assets to assets has averaged less than 0.50 percent. In addition, CPB’s loan loss reserve as a percentage of loans is solid at 1.88 percent, and its ratio of allowance for loan losses to nonperforming loans was 5,512 percent as of year-end 2002.

Higher Valuation Multiples. Our combination would also create potential for revenue enhancements, cost savings, greater market and client penetration (through higher lending limits, wider product range, greater geographic coverage) that should translate into a higher valuation multiple and continued strong stock appreciation.

A seamless fit. Finally, shareholders and customers alike should be reassured that with common technology platforms and common cultures, we can execute a smooth, seamless, low-risk integration of our two banks.

Our two banks were created in the belief that there is immense value in having Hawaii’s banking needs served by Hawaii’s own banking institutions. We have a common history of doing so, we have the will to do so, and together we have the means to do so at the accelerated pace today’s economy demands.

The combination of CPB and CB will be the right fit for our customers, shareholders and community. Our vision is simple—to create the best bank for Hawaii.

EX-99.D 6 j9895_ex99dd.htm EX-99.D

Exhibit 99D

Exhibit D

Schedule of Transactions in the Shares

Date of Transaction	Number of Shares Purchased	Price of Shares*

CPF:
2/26/2003	700	$	30,282.49
2/27/2003	24,100	1,079,998.12
3/3/2003	12,800	589,306.88
3/4/2003	2,500	114,516.75
3/5/2003	8,500	388,504.40
3/6/2003	1,964	89,700.00
3/7/2003	1,244	57,240.92
3/10/2003	10,139	465,148.93
3/11/2003	8,970	413,139.36
3/12/2003	17,424	792,689.20
3/13/2003	400	18,428.00

	88,741	$	4,038,955.06

* Includes broker commissions

EX-99.E 7 j9895_ex99de.htm EX-99.E

Exhibit 99E

Exhibit E

Item 2 Information — TON Finance, B.V.

Information in this Exhibit E is based solely on TON’s Amendment No. 1 to Schedule 13D filed with the SEC on January 31, 2003.

DIRECTORS*	ADDRESS	PRINCIPAL OCCUPATION OR EMPLOYMENT AND ADDRESS OF EMPLOYMENT
Yoshiyuki Takada	1-13-13, Kokubu, Ichikawa City, Chiba Japan	Director of SMC Corporation 16-4 Shimbashi I-chome Minato-ku, Tokyo 105-8659, Japan
Yoshiki Takada	16 Telescope New Port Coast, CA	Managing Director of SMC Corporation address: same as above
Jiro Shirai	2-8-21 Nagata Minami Minami-ku, Yokohama Japan	Advisor of SMC Corporation address: same as above
Mees Pierson Trust B.V.	De Ruyterkade 120 1011 AB Amsterdam The Netherlands	Institutional Trust Company

* TON DOES NOT HAVE ANY EXECUTIVE OFFICERS AND IS MANAGED BY ITS 3 INDIVIDUAL DIRECTORS.

(d) During the last five (5) years, neither TON nor any of the directors of TON have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five (5) years, neither TON nor any of the directors of TON have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in any judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violation with respect to such laws.

Place of organization:

The Kingdom of Netherlands

Principal business:

Address of Principal Office:

De Ruyterkade 120

1011 AB Amsterdam

The Netherlands