UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2014
CATHAY
GENERAL BANCORP
(Exact name of registrant as specified in its charter)
| Delaware | 0-18630 | 95-4274680 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 777 North Broadway, Los Angeles, California | 90012 |
| (Address of principal executive offices) | (Zip Code) |
| Registrant’s telephone number, including area code: | (213) 625-4700 |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXPLANATORY NOTE
This Current Report on Form 8-K/A (“Form 8-K/A”) amends the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by Cathay General Bancorp (the “Company”) on March 19, 2014 (the “Original Form 8-K”). The Original Form 8-K is being amended by this Form 8-K/A to correct an error contained in the Original Form 8-K relating to the deferral of the cash bonus awarded to Dunson K. Cheng by the Compensation Committee (the “Committee”) of the Board of Directors of the Company. The Original Form 8-K incorrectly stated that the deferral of the bonus was as a result of an agreement of Mr. Cheng with the Company and Cathay Bank, whereas the deferral was actually made part of, and imposed as a condition to, the award of the cash bonus by the Committee. The terms of the bonus deferral are as set forth in the Original Form 8-K. The Bonus Deferral Agreement, filed as Exhibit 10.2 to the Original Form 8-K, did not become effective.
No other amendments to the Original Form 8-K are being made by this Form 8-K/A. Except for the caption “Bonus Deferral Agreement,” the disclosure thereunder and the removal of Exhibit 10.2 from Item 9.01(d), the Original Form 8-K remains unchanged. In accordance with Rule 12b-15 of the SEC under the Securities Exchange Act of 1934, as amended, the complete text of Item 5.02, together Item 9.01(d), of the Original Form 8-K, as amended by this Form 8-K/A, is set forth below.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Officer Annual Cash Bonus Program
On March 13, 2014, the Compensation Committee (the “Committee”) of the Board of Directors of Cathay General Bancorp (the “Company”) adopted an Executive Officer Annual Cash Bonus Program (the “Program”) pursuant to which executive officers of the Company and its subsidiary, Cathay Bank, may be entitled to cash bonus awards that constitute cash awards under the Company’s 2005 Incentive Plan.
To determine a participant’s bonus award, the Compensation Committee may establish, for a “program year,” Company-wide financial criteria, including the achievement of quantifiable financial metrics, and metric and/or non-metric individual or department-wide performance goals. Following completion of a program year, the Compensation Committee is to determine the extent to which the financial criteria and performance goals for each participant have been achieved or exceeded and the amount of the bonus award to be paid. The Program sets forth factors the Compensation Committee should take into account in determining financial criteria and performance goals and the circumstances in which the results and bonus awards may be adjusted. Any bonus awards are subject to a three-year clawback provision, whereby under specified circumstances some or all the amounts paid may be recovered or the value recouped. The Program has an effective date of January 1, 2014.
This description of the Program is qualified in its entirety by reference to the full text of the Program, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Equity Incentive Director Compensation for Anthony M. Tang
On March 13, 2014, the Committee awarded 1,369 shares of common stock of the Company to Anthony M. Tang as part of the equity incentive component of the target annual compensation for directors. On October 1, 2013, Mr. Tang was appointed Executive Vice Chairman of the Company and Cathay Bank, prior to which he had served as Executive Vice President of the Company and Senior Executive Vice President and Chief Lending Officer of Cathay Bank.
Bonus Deferral
On March 13, 2014, the Committee awarded Dunson K. Cheng, Chairman of the Board, President, and Chief Executive Officer, a cash bonus in the amount of $300,000 for the quarter ended December 31, 2014, and provided as part of the award that payment of the bonus would be deferred until the later of: (i) January 1 of the first year following Mr. Cheng's separation from service; or (ii) the first day of the seventh month following Mr. Cheng's separation from service. The Committee’s award further provided that the deferred amount accrues interest at the rate of 5.02% per annum compounded quarterly, will be increased each quarter by the amount of interest computed for that quarter, and, beginning on the fifth anniversary, the interest rate will equal 350 basis points above the then prevailing interest rate on a five-year U.S. Treasury note.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
| 10.1 | Executive Officer Annual Cash Bonus Program |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: March 28, 2014
| CATHAY GENERAL BANCORP | ||
| By: | /s/ Heng W. Chen | |
| Heng W. Chen | ||
| Executive Vice President and Chief Financial Officer | ||
EXHIBIT INDEX
| Number | Exhibit |
| 10.1 | Executive Officer Annual Cash Bonus Program |
Exhibit 10.1
Cathay General Bancorp
2005 Incentive Plan
Executive Officer Annual Cash Bonus Program
This Executive Officer Annual Cash Bonus Program (this “Program”) is adopted pursuant to Section 12 of the Cathay General Bancorp 2005 Incentive Plan (the “2005 Plan”) and the policy of Cathay General Bancorp (the “Company”) to attract, motivate, and retain capable executive management and other key personnel by providing incentives that are commensurate with prudent risk taking, that does not pose a threat to the safety and soundness of the Company, and that seeks to link compensation to the Company’s overall strategic goals.
| 1. | Eligibility |
Eligibility to participate in this Program shall be limited to executive officers of the Company or of its subsidiary, Cathay Bank, if such an executive officer’s participation for a calendar year (or portion of a calendar year) (a “Program Year”) is approved by the Compensation Committee of the Company’s Board of Directors (the “Committee”). Executive officers so approved by the Committee shall be referred to herein as “Participants.”
| 2. | Determination of Bonus Award |
For each Program Year, each Participant may be eligible to receive a payment in cash (a “Bonus Award”) in accordance with the terms provided herein and any other terms established by the Committee. Bonus Awards under this Program shall constitute Cash Awards under Section 12 of the 2005 Plan.
To determine a Participant’s potential Bonus Award, the Committee may in its sole discretion establish, for a Program Year, Company-wide financial criteria, including, without limitation, achievement of quantifiable metrics such as targeted diluted earnings per share, return on average assets, loan growth, deposit growth, and efficiency ratio (the “Financial Criteria”), and metric and/or non-metric individual or department-wide performance goals (the “Performance Goals”).
In determining the Financial Criteria and the Performance Goals, the Committee should consider whether the arrangements provided in this Program are appropriately balanced and consistent with the Company’s and Cathay Bank’s safety and soundness, and whether they are compatible with effective controls and risk-management. For example, Bonus Awards to risk-management and control officers should be based primarily on the achievement of their functions (e.g., adherence to internal controls) and should not be based substantially on the financial performance of the business units they review. The weighting between the Financial Criteria and Performance Goals will be individually set for each Participant from time to time and may relate to the Company and/or its subsidiaries, one or more of its departments or units, or any combination of the foregoing, on a consolidated or nonconsolidated basis, as the Committee may determine in its sole discretion. The Financial Criteria and Performance Goals should also, to the extent appropriate, be linked to the goals and objectives of the Company’s strategic plan for the Program Year.
Without limiting the generality of the foregoing, the Committee may adjust the performance results for the Financial Criteria to the extent the Committee deems they may have been affected by material events outside the ordinary course of business, such as one-time acquisition charges. In addition, if the Committee deems that the Financial Criteria and/or the Performance Goals may encourage Participants to expose the Company or Cathay Bank to imprudent risks, the Committee may modify such criteria or goals and the Program as needed to ensure that they are appropriately sensitive to risk and risk outcomes, balanced in terms of size, type, and time horizon of the inherent risks of the Participant’s activities, and consistent with safety and soundness. Also, the Committee may adjust the amount of the Bonus Award based on measures that take into account the risk the Participant’s activities may pose. Such measures may be quantitative, or the size of a risk adjustment may be set judgmentally, subject to appropriate oversight.
In determining Financial Criteria and Performance Goals for a Participant who is a “covered employee” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), the Committee may take into consideration whether such criteria and compensation thereon qualifies as “performance-based compensation” under Section 162(m) of the Code and under the 2005 Plan. Any determination of eligibility or the declaration of a Bonus Awards under this Program to a Participant who is a “covered employee” under Section 162(m) of the Code shall be administered in accordance with the applicable provisions of Sections 4 and 13 of the 2005 Plan.
| 3. | Timing and Payment of Bonus Awards |
Following completion of a Program Year, the Committee shall determine the extent to which the Financial Criteria and Performance Goals for each Participant have been achieved or exceeded and the amount of the Bonus Award to be paid. The Committee shall not only determine the amount of Bonus Awards to be paid, but reserves the right in its discretion to reduce or eliminate any Bonus Awards.
A Participant shall not have a legally-binding right to a Bonus Award under this Program until the Committee has made the determinations set forth above and declared that a Bonus Award is payable under the Program. In accordance with Treasury Regulation 1.409A-1(b)(4), all Bonus Awards shall be distributed as soon as administratively practicable following the Committee’s declaration of a Participant’s Bonus Award, but in no event will such a distribution be made later than 2-1/2 months following the end of the year in which such a declaration is made.
| 4. | Additional Terms and Conditions |
Adoption of this Plan. This Program has become effective January 1, 2014, and shall continue in effect until amended, modified, suspended, or terminated. This Program may be amended, modified, suspended, or terminated by the Committee in its sole discretion without prior notice to the Participants.
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No Right of Employment. This Program shall not constitute a contract of employment between the Company or its subsidiaries and any person eligible for participation in this Program or the 2005 Plan. Nothing contained in this Program, the 2005 Plan, or any Bonus Award made pursuant to this Program shall confer upon any eligible Participant any right to continue in the employment of the Company or any of its subsidiaries, or any guarantee of the award of future bonuses or other incentives, or shall interfere with, affect, or restrict in any way the right of the Company and its subsidiaries, which are expressly reserved, to discharge any employee at any time for any reason whatsoever, with or without cause.
Clawback. By accepting a Bonus Award made under this Program, each Participant agrees that the Company may recover some or all of the amounts paid with respect to a Bonus Award, or recoup some or all of the value thereof by offset from other amounts owed to the Participant by the Company or its subsidiaries, at any time during the three calendar years following payment hereunder, if and to the extent that the Committee determines that (i) federal or state law or the listing requirements of the exchange on which the Company’s stock is listed for trading so require, (ii) the Financial Criteria and Performance Goals required for the Bonus Award were not met, or not met to the extent necessary to support the amount of the Bonus Award that was paid, or (iii) the payment of the Bonus Award was based on the achievement of financial results, as reported in an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q, or other report filed with the Securities and Exchange Commission, that were subsequently the subject of a restatement due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws (other than as a result of a change in accounting principles).
The right of recovery under this paragraph shall be subject to any general clawback policy that is or may be adopted by the Company, the terms of which shall be incorporated herein to the extent applicable.
Miscellaneous. Subject to the terms of any such plan, no Bonus Award shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of the Company, unless the Committee, in its sole discretion, shall determine otherwise.
The Company shall make available copies of this Program and all amendments and any administrative rules or procedures to all Participants at reasonable times upon request.
This Program and the payment of Bonus Awards shall be subject to all applicable federal and state laws, rules, and regulations, including the withholding of any federal, state, local, or foreign taxes and to such approvals by any government or regulatory agency as may be required. The terms of this Program shall be binding upon the Company and its successors.
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