SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________________
SCHEDULE 14D-9
Solicitation/ Recommendation Statement Under
Section 14(d)(4) of the Securities Exchange Act of 1934
_____________________
CB BANCSHARES, INC.
(Name of Subject Company)
CB BANCSHARES, INC.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $1.00 Per Share
(Title of Class of Securities)
124785106
(CUSIP Number of Class of Securities)
_____________________
Dean K. Hirata
CB Bancshares, Inc.
201 Merchant Street
Honolulu, Hawaii 96813
(808) 535-2500
(Name, Address and Telephone Number of Person Authorized to Receive Notice and
Communications on Behalf of the Person(s) Filing Statement)
_____________________
With copies to:
Fred B. White, III
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
|X| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
This communication may be deemed to include forward-looking statements, such
as statements that relate to CB Bancshares' financial results. Forward-looking
statements are typically identified by words or phrases such as "believe,"
"expect," "anticipate," "intent," "estimate," "may increase," "may fluctuate,"
and similar expressions or future or conditional verbs such as "will,"
"should," "would," and "could." Forward-looking statements are CB Bancshares'
current estimates or expectations of future events or future results. For such
statements, CB Bancshares claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Actual results could differ materially from those
indicated by these statements because the realization of those results is
subject to many risks and uncertainties. CB Bancshares' 2002 Annual Report on
Form 10-K and other periodic reports to the Securities and Exchange Commission
contain additional information about factors that could affect actual results.
All forward-looking statements included in this communication are based on
information available at the time of the release, and CB Bancshares assumes no
obligation to update any forward-looking statement.
Subject to future developments, CB Bancshares may file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 relating to any
tender/exchange offer made by Central Pacific Financial Corp. Shareholders of
CB Bancshares are advised to read CB Bancshares' Solicitation/Recommendation
Statement on Schedule 14D-9 when such document becomes available because it
will contain important information. Shareholders of CB Bancshares and other
interested parties may obtain, free of charge, copies of the Schedule 14D-9
(when available) and other documents filed by CB Bancshares with the SEC at
the SEC's internet website at www.sec.gov. Each of these documents (when
available) may also be obtained, free of charge, by calling investor relations
at CB Bancshares at 1-808-546-8413.
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LETTER SENT ON BEHALF OF CB BANCSHARES TO INSTITUTIONAL SHAREHOLDER SERVICES
[LETTERHEAD of Kobayashi, Sugita & Goda]
May 22, 2003
BY FACSIMILE
AND ELECTRONIC TRANSMISSION
---------------------------
Shirley Westcott
Chief Policy Advisor
Institutional Shareholder Services, Inc.
2099 Gaither Road
Suite 501
Rockville, MD 20850-4045
Dear Ms. Westcott:
As a follow-up to our discussion on May 20, 2003 regarding CB
Bancshares' ("Bancshares") special shareholders meeting scheduled and noticed
for May 28, 2003 (the "May 28 Meeting"), we write on behalf of Bancshares to
provide further details as to why the meeting scheduled by Central Pacific
Financial Corp. ("CPF") for June 26, 2003 is invalid and cannot be properly
held.
As you are aware, on April 28, 2003, CPF delivered to Bancshares an
"acquiring person information statement" pursuant to the Hawaii Control Share
Acquisitions statute requesting a special meeting to be held within the time
period specified in the statute, for the purpose of voting upon CPF's proposed
acquisition of at least a majority of the outstanding shares of Bancshares
common stock pursuant to its proposed exchange offer. CPF specifically stated
in its letter to Bancshares that "[t]o avoid any misunderstanding we can
confirm that CPF will agree to a special shareholder meeting after May 27,
2003 and before June 22, 2003 -- the time period specified by law" (emphasis
added). Pursuant to that request, and in accordance with Hawaii law,
Bancshares scheduled a special meeting of shareholders to be held on May 28,
2003 to vote on CPF's "control share acquisition" proposal.
Apparently unwilling to accept the meeting date scheduled by
Bancshares, even though the date was within the statutory period and also was
specifically agreed to by CPF in advance, CPF delivered to Bancshares on May
9, 2003 a letter purporting to rescind CPF's previously delivered acquiring
person information statement and setting forth a revised merger proposal for
consideration by the Bancshares Board of Directors. The revised proposal
changed the mix of cash and stock being offered as consideration in
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CPF's proposal, but the total value of the consideration remained unchanged.
CPF's letter also stated that, as a result of the change to its proposal, the
May 28 Meeting was "moot."
On May 13, 2003, CPF delivered to Bancshares a letter purporting to
call a second special meeting of Bancshares shareholders for June 26, 2003 for
the purpose of considering and voting upon, pursuant to the Hawaii Control
Share Acquisitions statute, CPF's acquisition of a majority of Bancshares'
outstanding shares pursuant to CPF's "new offer" as set forth in an amended
acquiring person information statement that was delivered by CPF with the
letter. Bancshares responded that the "new offer" was a revision to CPF's
existing proposal for a control share acquisition and, as such, would be
considered at the May 28 Meeting and would be reflected in the proxy
statement.
In Bancshares' view, CPF's call for a June 26 Meeting is nothing but
an attempt by CPF to manipulate the process under the Hawaii Control Share
Acquisition statute, mislead Bancshares' shareholders into believing they have
two chances to vote and derail the validly scheduled and duly noticed May 28
Meeting. CPF's rescission of the "old offer" and delivery of the "new offer"
constitute merely a revision of CPF's existing proposal for purposes of the
Control Share Acquisition statute, were effected for the sole purpose of
trying to manipulate the meeting date, and are therefore invalid under the
Control Share Acquisitions statute.
CPF publicly stated previously that its purported rescission of its
previous proposal and information statement effectively mooted the May 28
Meeting and that its call of the June 26 Meeting is the only valid meeting as
to its "new offer." In furtherance of its position, CPF filed a complaint
against Bancshares seeking a temporary restraining order and preliminary
injunction to prevent Bancshares from holding the May 28 Meeting or taking any
action in furtherance of the meeting. On Friday, May 16, 2003, a Hawaii state
court denied CPF's motion for a temporary restraining order to prevent
Bancshares from soliciting in connection with the May 28 Meeting. The court
was unable to conclude that CPF was likely to prevail in the request to
invalidate the May 28 Meeting. On May 20, 2003, CPF withdrew its motion for a
preliminary injunction.
Now CPF has changed its story again and is stating that even if the
May 28 Meeting is valid, the June 26 Meeting also is valid and may be held to
consider the same proposal under the Control Share Acquisition Statute.
Bancshares believes that CPF's demand and call of the June 26 Meeting is
invalid for at least the reasons set forth below.
o The June 26 Meeting is duplicative of Bancshares' duly scheduled May
28 Meeting. Bancshares has already scheduled a shareholders meeting to
vote on CPF's "control share acquisition" proposal. CPF has falsely
stated that the May 28 Meeting relates to CPF's "original" offer. This
is clearly not the case. Indeed, as Bancshares states in the
definitive proxy materials mailed to its shareholders, the purpose of
the May 28 Meeting is to consider and vote on CPF's control share
acquisition "pursuant to CPF's proposed Offer to Exchange as set forth
in Amendment No. 2 to CPF's registration statement on Form S-4 filed
on May 9, 2003, as the same may be amended."
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o The June 26 Meeting does not comply with the requirement of the Hawaii
Control Share Acquisitions statute. The Hawaii Control Share
Acquisitions statute governs when and how a shareholders meeting may
be called to determine whether an acquiring person will be permitted
to vote any shares that it seeks to acquire above the specified
ownership limits. Under the statute, a meeting is called as follows:
Within five days after receipt of an information statement
[from the acquiring person to the issuing public
corporation] pursuant to subsection (c), a special meeting
of the shareholders of the issuing public corporation shall
be called pursuant to section 414-122, to vote on the
proposed control share acquisition.(1) (emphasis added).
The mandatory procedure requires the issuing corporation to set the
meeting date between 30 and 55 days "after receipt of an information
statement." Therefore, the issuer has the exclusive power to set the
meeting date. To read this provision to allow anyone other than the
company to call the meeting would make no sense. There is no
provision for an acquiring person or a minority group of shareholders
either to set their own meeting date or to cancel an existing meeting
date and set another date of their choice.
o CPF's special meeting request does not comply with Bancshares' Bylaws.
Bancshares' Bylaws state that a special meeting of shareholders may be
called "by a stockholder or stockholders owning not less than
twenty-five percent (25%) of the issued and outstanding capital
stock." CPF alleges its receipt of agent designations constituting
approximately 30% of the outstanding shares of Bancshares for the
purpose of calling special meetings relating to the May 9, 2003 offer.
However, even if one were to accept CPF's theory that it may call a
special meeting under the Control Share Acquisitions statute, which
Bancshares does not, the agent designation of two shareholders,
Nanboku Sangyo and TON Finance, B.V., relate to CPF's April 28, 2003
exchange offer, not CPF's so-called "new offer." If the May 9, 2003
offer constitutes a "new offer" and CPF's original offer constitutes a
"different" offer, as CPF claims, then TON's and Nanboku's agent
designations, which clearly refer to the proposal set forth in CPF's
March 17, 2003 letter, are invalid for the purpose of calling a
special meeting to vote on CPF's so-called "new " offer. Since
Nanboku's and TON's agent designations are invalid, CPF does not have
agency designations for 25% of the outstanding shares, the minimum
required to call a special shareholders meeting.(2)
_______________________
(1) Section 414E-2(d) of the Hawaii Revised Statutes.
(2) CPF has signaled that it might believe that it only needs 10% of the
outstanding shares of Bancshares to call a special meeting pursuant to
Section 414-122 of the Hawaii Business Corporation Act ("HBCA").
However, the HBCA has a "grandfather" provision, section 414-483(c),
which preserves the validity of a bylaw adopted prior to the effective
date of the chapter, including 414-122. Because Bancshares' Bylaws,
which provide for a 25% threshold to call a special meeting, were
adopted in 1983 - prior to the effective date of Section 414-122, that
section is not effective to decrease the threshold of ownership required
to call a special meeting from 25% to 10%.
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o CPF cannot set the date, time and place of the meeting. CPF's call for
the June 26 Meeting constitutes an invalid attempt to set the date,
time and place for a shareholders meeting. Bancshares' Bylaws allow
shareholders owning 25% or more of the outstanding shares to call a
special meeting, but the Bylaws give the corporation the authority to
set the date, time and place of the meeting. Article II, Section 3 of
the bylaws provide that a written notice of any shareholder meeting
stating "the place, day and hour thereof and the purpose thereof shall
be given by the secretary, the chairman of the Board of Directors or
the president, or the Board of Directors... ." This is the only
interpretation of the bylaws that is consistent with common sense. It
would be nonsensical if a select group of shareholders could alone
dictate the date, time and place of shareholder meetings without
regard to the interests or convenience of other shareholders or the
issuing corporation.
We also note that CPF's claims that its June 26 proposal is
"different" are invalid under Hawaii law. CPF has stated that Bancshares'
proxy statement for the May 28 Meeting incorrectly states CPF's proposal as
set forth in its May 13, 2003 information statement under the Control Share
Acquisitions statute because Bancshares has not included the words "or
otherwise" as part of the proposal. Bancshares did not include these words
because such a proposal would not be valid under the Hawaii Control Share
Acquisitions Statute, which require that the information statement specify,
among other things, "the terms of the proposed control share acquisition." It
would be a complete evisceration of the clear requirements of the statute to
include in the proposal to be voted upon by shareholders under the statute a
statement or implication that all of the material terms of the proposed
acquisition are not before the shareholders for their consideration.
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We appreciate your consideration of these matters and would be happy
to discuss our comments with you at your convenience. Please feel free to
contact the undersigned at (808) 535-5711 with any questions.
Very truly yours,
/s/ Lex R. Smith
LEX R. SMITH
for
KOBAYASHI, SUGITA & GODA
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