CATHAY GENERAL BANCORP (NASDAQ:CATY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Award of Restricted Stock Units
On December 15, 2016, the Compensation Committee (the Committee)
of the Board of Directors of the Company approved the award of
performance-based restricted stock units under the Companys 2005
Incentive Plan, as amended and restated effective May 18, 2015,
for the named executive officers. Each restricted stock unit
represents the right to receive one share of common stock of the
Company, subject to adjustment as described below. The
performance period for the restricted stock unit awards is the
period ending December 31, 2019, and the performance criteria for
the awards are diluted earnings per share (EPS), total
stockholder return (TSR), and return on assets (ROA), which are
each the subject of separate award agreements.
The target restricted stock units awarded to named executive
officers are as follows:
|
Officer |
Number of Restricted Stock Units Based on EPS |
Number of Restricted Stock Units Based on TSR |
Number of Restricted Stock Units Based on ROA |
|
Pin Tai |
19,946 |
10,384 |
9,973 |
|
Dunson K. Cheng |
11,635 |
6,057 |
5,817 |
|
Irwin Wong |
7,779 |
4,050 |
3,889 |
|
Heng W. Chen |
6,648 |
3,461 |
3,324 |
|
Donald S. Chow |
4,521 |
2,353 |
2,260 |
The number of target restricted stock units will be increased to
the extent that dividends are paid on the Companys common stock,
as if reinvested on the ex-dividend date in additional shares.
(a) Awards Based on EPS. For the awards based on EPS,
the Committee used a projected cumulative EPS for the three-year
performance period to establish a target EPS. If the actual
cumulative EPS for the three-year period equals the target, 100%
of the restricted stock units will be earned scaled up to 150% of
the units if the actual cumulative EPS is up to 15% or more than
the target. If the actual cumulative EPS is less than 100%, but
not more than 15% below the target, the number of units earned
will be scaled down to 50%. If the actual cumulative EPS is more
than 15% below the target, none of the restricted stock units
will be earned.
If a Change in Control (as defined) occurs before December 31,
2017, 100% of the target restricted stock units based on EPS will
be earned. If it occurs on or after December 31, 2017, and before
December 31, 2018, or on or after December 31, 2018, and before
December 31, 2019, no restricted stock units or up to 150% of the
target restricted stock units will be earned, depending upon the
relationship of the EPS to amounts set forth in the award
agreements for those periods.
(b) Awards Based on TSR. For the awards based on TSR,
the number of earned restricted stock units will be determined by
comparing the Companys TSR from the award date to December 31,
2019, with the TSR of each of the companies in the Comparator
Peer Group (as defined). If the Companys TSR over the performance
period is below the 30th percentile when ranked against each of
the peer companies, no restricted stock units will be earned. If
the ranking is equal to the 30th percentile, 50% of the target
restricted stock units will be earned. To the extent that the
Companys TSR is ranked above the 30th percentile up to the 70th
percentile or above, the number of earned target restricted stock
units will be scaled up to 150% of the target restricted stock
units.
If a Change in Control occurs before December 31, 2019, a number
of the target restricted stock units based on TSR will be earned
as set forth above, but based on the Companys TSR and the TSR of
each of the companies in the Comparator Peer Group through the
date of the Change in Control (and, with respect to the Company,
taking into account the consideration per share to be paid in the
Change in Control transaction).
(c) Awards Based on ROA. For the awards based on ROA,
the number of earned restricted stock units will be determined by
comparing the Companys ROA over the period commencing on January
1, 2017 and ending on December 31, 2019, with the ROA of each of
the companies in the Comparator Peer Group (as defined). ROA
means the applicable companys (whether the Company or any company
in the Comparator Peer Group) average annual consolidated return
on average assets over the performance period. If the Companys
over the performance period is below the 30th percentile when
ranked against each of the peer companies, no restricted stock
units will be earned. If the ranking is equal to the 30th
percentile, 50% of the target restricted stock units will be
earned. To the extent that the Companys ROA is ranked above the
30th percentile up to the 70th percentile or above, the number of
earned target restricted stock units will be scaled up to 150% of
the target restricted stock units.
If a Change in Control occurs before December 31, 2019, a number
of the target restricted stock units based on ROA will be earned
as set forth above, but based on the Companys ROA and the ROA of
each of the companies in the Comparator Peer Group through the
date of the Change in Control.
All the restricted stock units earned to the respective EPS, TSR,
and ROA criterion will be fully vested, and distribution of
shares will generally take place on April 1 of the year following
the year in which the award became vested, provided the executive
officer remains continuously employed by the Company or an
affiliate through December 31, 2019.
If the officer dies, incurs a Total and Permanent Disability (as
defined) or terminates employment on account of Retirement (as
defined) prior to December 31, 2019 (regardless of whether such
termination occurs prior to, coincident with, or following a
Change in Control), he or she shall continue to be entitled to
the earned restricted stock units, but the officers benefit will
be prorated to reflect the period from the date of the award
through December 31, 2019, during which he or she was actually
employed. For this purpose, Retirement means the termination of
employment after December 31, 2018, by reason of having attained
age 65, or having attained age 60 and having completed 10 or more
consecutive years of employment with the Company or its
affiliates.
Following a Change in Control, the earned restricted stock units
will remain outstanding subject to the award agreements and
vesting requirements. In the event of a Change in Control, unless
the restricted stock units are continued or assumed by a public
company, the earned restricted stock units will vest and the
shares will be distributed. If the units are continued or assumed
by a public company, then they shall continue to be contingent on
the executive officers employment through December 31, 2019,
unless the executive officers employment is terminated by the
Company for any reason other than Cause (as defined), or by the
officer for Good Reason (as defined) within two years following
the Change in Control. Death, Total and Permanent Disability, and
Retirement are not considered a termination of employment for
this purpose.
Riders to the award agreements provide for a cancellation of
restricted stock unit awards or repayment under certain
circumstances. In the event a restatement of financial results of
the Company as described in the riders occurs, up to 50% of the
aggregate awards under the award agreements for that individual
can be forfeited or cancelled, whether or not such units are
vested. If a distribution of shares has already occurred,
provision is made for the surrender of up to 50% of the total
shares received or, if shares have been sold, repayment the
proceeds, but in no event more than 50% of the aggregate fair
market value of all shares received by the employee to the award
agreements. The riders apply in addition to the requirements of
the Sarbanes-Oxley Act of 2002 and any rules and regulations
promulgated under the Dodd-Frank Wall Street Reform and Consumer
Protection Act.
Copies of the form of Restricted Stock Unit Agreement
(Performance Shares EPS), Restricted Stock Unit Agreement
(Performance Shares TSR), Restricted Stock Unit Agreement
(Performance Shares ROA), and Restricted Stock Unit Agreement
(Clawback Rider) are attached to this Form 8-K, and the foregoing
summary of the restricted stock unit awards is qualified by
reference to those Agreements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
10.1 |
Form ofRestricted Stock Unit Agreement (Performance Shares |
|
|
10.2 |
Form ofRestricted Stock Unit Agreement (Performance Shares |
|
|
10.3 |
Form of Restricted Stock Unit Agreement (Performance Shares |
|
|
10.4 |
Form of Restricted Stock Unit Agreement (Clawback Rider) |
About CATHAY GENERAL BANCORP (NASDAQ:CATY)
Cathay General Bancorp is a bank holding company. The Company holds Cathay Bank, a California state-chartered commercial bank (the Bank); approximately seven limited partnerships investing in affordable housing investments, in which the Bank is the sole limited partner; GBC Venture Capital, Inc, and Asia Realty Corp. It also owns the common stock of over five statutory business trusts created for issuing capital securities. The Bank primarily services individuals, professionals and small to medium-sized businesses in the local markets and provides commercial mortgage loans, commercial loans, small business administration (SBA) loans, residential mortgage loans, real estate construction loans, home equity lines of credit and installment loans to individuals for automobile, household and other consumer expenditures. The Bank offers passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. CATHAY GENERAL BANCORP (NASDAQ:CATY) Recent Trading Information
CATHAY GENERAL BANCORP (NASDAQ:CATY) closed its last trading session down -0.08 at 38.32 with 131,473 shares trading hands.