<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CATHAY BANCORP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CATHAY BANCORP, INC.
777 NORTH BROADWAY
LOS ANGELES, CALIFORNIA 90012
To the stockholders of Cathay Bancorp, Inc.:
We are pleased to invite you to attend the Annual Meeting of Stockholders
of Cathay Bancorp, Inc. to be held at 777 North Broadway, Los Angeles,
California 90012, on Monday, April 17, 2000, at 5:00 p.m., local time.
The stockholders will be asked to elect four Class I directors of Cathay
Bancorp, Inc. to serve until 2003.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
Wilbur K. Woo
Secretary
<PAGE>
CATHAY BANCORP, INC.
777 NORTH BROADWAY
LOS ANGELES, CALIFORNIA 90012
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 17, 2000
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Cathay Bancorp, Inc. ("Bancorp") will be held at 777 North Broadway, Los
Angeles, California 90012, on Monday, April 17, 2000, at 5:00 p.m., local
time, to elect four Class I directors of Bancorp to serve until the 2003
annual meeting of stockholders and their successors have been elected and
qualified, and to consider such other matters as may properly come before the
Annual Meeting or any adjournments of the Annual Meeting. The Board of
Directors is not aware of any other business to come before the Annual
Meeting.
The Board of Directors has selected March 3, 2000 as the record date
(the "Record Date") for the Annual Meeting. Holders of record of Bancorp's
Common Stock at the close of business on that date will be entitled to
receive notice of, and to vote at, the Annual Meeting.
Please vote, sign and date the enclosed Proxy card and return it in
the accompanying envelope, which does not require postage if mailed in the
United States. IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY EVEN IF
YOU PLAN TO ATTEND THE ANNUAL MEETING.
You are invited to attend the Annual Meeting in person. If you
attend the Annual Meeting, you may choose to revoke your Proxy and vote in
person at the meeting. If you do so, your Proxy card will be disregarded.
By Order of the Board of Directors
Wilbur K. Woo
Secretary
Los Angeles, California
March 16, 2000
<PAGE>
CATHAY BANCORP, INC.
777 NORTH BROADWAY
LOS ANGELES, CALIFORNIA 90012
- -------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 17, 2000
- -------------------------------------------------------------------------------
GENERAL
This Proxy Statement is being furnished to the holders of record of
Common Stock of Cathay Bancorp, Inc., a Delaware corporation ("Bancorp"), in
connection with the solicitation of proxies, including the proxy granted by
the enclosed Proxy card, by the Bancorp Board of Directors for use at the
2000 Annual Meeting of Stockholders of Bancorp to be held on Monday, April
17, 2000 and at any adjournments of the Annual Meeting (the "Annual
Meeting"). At the Annual Meeting, Bancorp stockholders will be asked to elect
four Class I directors to serve until the 2003 annual meeting of stockholders
and their successors have been elected and qualified, and to consider any
other business that may properly be brought before the Annual Meeting.
Stockholders are urged to vote by completing the enclosed Proxy card
and returning it signed and dated in the enclosed postage-prepaid envelope. If
the enclosed Proxy card is properly completed and is received by Bancorp before
the voting, the shares of Common Stock represented by the Proxy card will be
voted as directed on the Proxy card. If no direction is made, the shares will be
voted FOR the election of each of the nominees named below as directors. Under
Delaware law, the inspector of elections for the Annual Meeting may consider
evidence that he deems to be reliable to reconcile proxies and ballots submitted
by banks, brokers, their nominees or similar persons that represent more votes
than the holder of a proxy is authorized by the recordholder to cast or more
votes than the stockholder holds of record.
The Bancorp Board of Directors knows of no additional proposal that
will be presented for consideration at the Annual Meeting. The persons
designated as proxy holders reserve the right to vote the shares in accordance
with their best judgment on any proposal that does properly come before the
Annual Meeting or to vote the shares for other persons if any nominee for
director becomes unavailable to serve.
A proxy may be revoked at any time before its exercise by filing a
written notice of revocation with the Secretary of Bancorp or by delivering to
the Secretary of Bancorp a later signed and dated Proxy card. A proxy may also
be revoked if the person executing the Proxy card is present at the Annual
Meeting and decides to vote in person. This Proxy Statement and the enclosed
Proxy card were first mailed to stockholders on or about March 16, 2000.
<PAGE>
QUORUM AND VOTING
The Board of Directors has fixed the close of business on March 3,
2000 (the "Record Date") as the date for determining stockholders of record
entitled to notice of, and to vote at, the Annual Meeting. On the Record
Date, there were 9,044,624 shares of Common Stock outstanding. Each
stockholder of record is entitled to one vote for each share of Common Stock
registered in the stockholder's name. Cumulative voting is NOT available for
the election of directors.
It is important that stockholders be represented in person or by
proxy at the Annual Meeting. The presence at the Annual Meeting, in person or
by proxy, of the holders of a majority of the outstanding shares of Common
Stock is necessary to constitute a quorum for the transaction of business. If
insufficient shares are represented at the Annual Meeting to constitute a
quorum or to elect the nominees for director, the Annual Meeting may be
adjourned to permit further solicitation of proxies.
Abstentions and broker non-votes (i.e., votes withheld by brokers on
non-routine proposals in the absence of instructions from beneficial owners) are
counted for purposes of establishing a quorum but will not be counted, and will
have no effect, in determining whether a nominee or the nominees have been
elected. Persons receiving a plurality of the votes cast at the Annual Meeting
will be elected directors. Plurality means that persons who receive the largest
number of votes cast are elected as directors up to the maximum number of
directors to be chosen at the Annual Meeting.
PRINCIPAL HOLDERS OF SECURITIES
Based on a Schedule 13G/A filed with Bancorp and with the Securities
and Exchange Commission (the "SEC"), the entity listed in the following table
is a beneficial owner of more than five percent of the Common Stock. Bancorp
is not aware of any other person or group who beneficially owned more than
five percent of Common Stock on the Record Date.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OF PERCENT OF
NAME AND ADDRESS OF OWNERSHIP OF COMMON STOCK
BENEFICIAL OWNER COMMON STOCK BENEFICIALLY OWNED
<S> <C> <C>
Cathay Bank Employee Stock 579,654 1/ 6.41%
Ownership Plan and Trust ("ESOPT")
777 North Broadway
Los Angeles, California 90012
</TABLE>
- ---------------------------------
1/ Shares of Common Stock beneficially owned by the ESOPT are allocated on an
annual basis among ESOPT participants. Once shares of Common Stock are so
allocated, each participant has the power to direct the vote of his or her
allocated shares; the ESOPT Committee has sole power to vote and dispose of
all unallocated shares of Common Stock beneficially owned by the ESOPT. As
of the Record Date, the ESOPT held 8,004 unallocated shares of Common
Stock. As of the Record Date, Messrs. Cheng, Chan, Ching, Poon and Tang
were members of the ESOPT Committee.
2
<PAGE>
As of the Record Date, directors and officers of Bancorp and their
affiliates (including the ESOPT) were entitled to vote approximately
1,735,848 shares of Common Stock, representing approximately 19.19% of the
outstanding shares of Common Stock. If shares held by the ESOPT that have
been allocated to persons other than directors and officers of Bancorp are
excluded from such total, as of the Record Date the directors and officers of
Bancorp were entitled to vote 1,250,548 shares of Common Stock, representing
approximately 13.83% of the outstanding shares of Bancorp. Bancorp has been
informed that the directors and officers of Bancorp intend to vote FOR each
of the nominees for director.
ELECTION OF DIRECTORS
Pursuant to Bancorp's Certificate of Incorporation, Bancorp's Board
of Directors may consist of between three and 25 directors. The Board
currently consists of eleven directors, each of whom is also a director of
Cathay Bank, a California-chartered bank and wholly owned subsidiary of
Bancorp. The Board has three classes of directors. The term of office of each
class of directors is three years. The current term of the Class I directors
will expire at the 2000 Annual Meeting of Bancorp stockholders, the current
term of the Class II directors will expire at the 2001 Annual Meeting of
Bancorp stockholders and the current term of the Class III directors will
expire at the 2002 Annual Meeting of Bancorp stockholders.
The stockholders of Bancorp are being asked to elect four Class I
directors of Bancorp, who will hold office until the 2003 Annual Meeting of
Stockholders and until their successors have been elected and qualified. It
is intended that votes will be cast pursuant to the Proxy card FOR the four
nominees named below, all of whom are currently directors of Bancorp and of
Cathay Bank and have served continuously in these capacities since the dates
indicated opposite their respective names. If any nominee named in this Proxy
Statement becomes unavailable for any reason, or if any vacancy on the
Bancorp Board of Directors should occur before the election, the shares
represented by any proxy voting for that nominee will be voted for the
person, if any, that may be designated by the Board of Directors to replace
that nominee or to fill that vacancy on the Board. The Board of Directors,
however, has no reason to believe that any nominee will be unavailable or
that any vacancy on the Board of Directors will occur. The Board of Directors
recommends a vote FOR the four nominees for director named below.
The following table sets forth the periods each current director has
served as a director of Bancorp and of Cathay Bank, and the principal
occupations of each director and each officer named in the Summary
Compensation Table below for at least the past five years. It also sets forth
information, as of the Record Date, with respect to the beneficial ownership,
as that term is defined under rules and regulations of the SEC, of the
outstanding Common Stock by each director, each officer named in the Summary
Compensation Table below and all the directors and officers of Bancorp as a
group.
3
<PAGE>
The information set forth in the following table as to shares of Common
Stock owned has been furnished by each director and named officer.
<TABLE>
<CAPTION>
COMMON
STOCK PERCENTAGE
DIRECTOR BENEFICIALLY OWNERSHIP
PRINCIPAL OF OWNED ON ON
OCCUPATIONS AND BANCORP MARCH 3, MARCH 3,
NAME AGE DIRECTORSHIP SINCE 2000 2000
<S> <C> <C> <C> <C> <C>
Nominees for Election at
Annual Meeting for the
Term Ending in 2003
(Class I):
- -------------------------
Michael M.Y. Chang 63 Director of Cathay Bank since 1990 146,424 1/ 1.62% 1/
1983; self-employed attorney at
law since 1971.
Patrick S.D. Lee 65 Director of Cathay Bank since 1990 64,886 2/ 0.72% 2/
1983; Director of Cathay
Investment Company ("CIC") since
1984; President of T.C.
Construction Corporation from
1972 through 1997 (construction
and development of commercial
and residential real estate);
Vice President of T.C. Realty,
Inc. (property management).
Anothony M. Tang 46 Executive Vice President of 1990 214,243 3/ 2.37% 3/
Bancorp since 1994; Assistant
Secretary of Bancorp since 1991;
Chief Financial Officer and
Treasurer of Bancorp since 1990;
and Senior Vice President of
Bancorp from 1990 until 1994.
Chief Lending Officer of Cathay
Bank since 1985; director of
Cathay Bank since 1986; Assistant
Secretary of Cathay Bank since
1994; and Senior Executive Vice
President of Cathay Bank since
December 1998. Senior Vice
President of Cathay Bank from 1990
until 1994; and Executive Vice
President of Cathay Bank from
1994 to December 1998.
Thomas G. Tartaglia 76 Director of Cathay Bank since 1990 17,516 4/ 0.19% 4/
1986; formerly Executive Vice
President of Cathay Bank from
1984 until 1990.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMON
STOCK PERCENTAGE
DIRECTOR BENEFICIALLY OWNERSHIP
PRINCIPAL OF OWNED ON ON
OCCUPATIONS AND BANCORP MARCH 3, MARCH 3,
NAME AGE DIRECTORSHIP SINCE 2000 2000
<S> <C> <C> <C> <C> <C>
Directors Currently
Serving Term Ending
in 20001 (Class II):
- -------------------------
Ralph Roy Buon-Cristiani 74 Director of Cathay Bank since 1990 124,037 5/ 1.37% 5/
1981; retired doctor of
veterinary medicine.
Kelly L. Chan 10/ 53 Director of Cathay Bank since 1990 90,995 6/ 1.01% 6/
1981; owner of interest in
Phoenix Bakery, Inc., a retail
bakery in Los Angeles, Cali-
fornia, since 1984.
Dunson K. Cheng 55 Chairman of the Board of 1990 166,830 7/ 1.84% 7/
Directors of each of Bancorp,
Cathay Bank and CIC since
1994; President of Bancorp
since 1990; President of Cathay
Bank since 1985 and director of
Cathay Bank since 1982; Secretary
of CIC from 1985 until 1994; President
of CIC since 1999; Chief Executive
Officer of CIC since 1995 and director
of CIC since 1984.
Chi-Hung Joseph Poon 53 Director of Cathay Bank since 1990 19,714 8/ 0.22% 8/
1981; Director of CIC since
1984; Secretary and Chief
Financial Officer of CIC from
1994 to 1998; President of Edward
Properties, Inc. since 1981
(real estate development).
Directors Currently
Serving Term Ending
in 2002 (Class III):
- ---------------------------------
George T.M. Ching 85 Vice-Chairman of the Board of 1990 103,521 9/ 1.14% 9/
Directors of Bancorp since 1990;
Vice-Chairman of the Board of
Directors of Cathay Bank since
1985, President of Cathay Bank
from 1962 until 1985 and director
of Cathay Bank since 1962;
President of CIC from 1985 until
1999 and director of CIC since 1984.
Wing K. Fat 10/ 73 Director of Cathay Bank since 1990 128,262 11/ 1.42% 11/
1972; owner of interest in a
Chinese-American restaurant in
Sacramento, California, for over
40 years.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
COMMON
STOCK PERCENTAGE
DIRECTOR BENEFICIALLY OWNERSHIP
PRINCIPAL OF OWNED ON ON
OCCUPATIONS AND BANCORP MARCH 3, MARCH 3,
NAME AGE DIRECTORSHIP SINCE 2000 2000
<S> <C> <C> <C> <C> <C>
Wilbur K. Woo 84 Secretary of Bancorp since 1990; 1990 158,329 12/ 1.75% 12/
Secretary of the Board of
Directors of Cathay Bank since
1980 and director of Cathay Bank
since 1978; Chief Financial
Officer and Secretary of CIC
since 1998 and a director of CIC
since 1987.
Other Named Officers:
- ---------------------------------
Irwin Wong 51 Executive Vice President-Branch 5,787 13/ 0.06% 13/
Administration for Cathay Bank
since 1999; Senior Vice
President-Branch Administration
of Cathay Bank from 1989 until
1999; and Vice President-Branch
Administration for Cathay Bank
from 1988 until 1989.
John Chen 65 Executive Vice President, Northern 0 --
California for Cathay Bank since
January 1998 and a consultant to
Cathay Bank from October 1997
until December 1997. Senior Vice
President-District Manager for
Bank of America, from 1993 until
1996 and a consultant to Bank of
America from 1996 until December
1997.
Elena Chan 49 Chief Financial Officer of Cathay 11,590 14/ 0.13% 14/
Bank since 1992; and Internal Auditor
of Cathay Bank from 1985 to 1992.
All directors and officers as 1,258,572 15/ 13.90% 15/
a group (19 persons)
</TABLE>
- ----------------------------
1/ Includes approximately 30,685 shares held by Mr. Chang and his wife,
approximately 31,236 shares held by Mr. Chang as custodian for his
children, approximately 32,200 shares held by Mr. Chang's wife, as
custodian for their children, 52,203 shares held by the Michael and Judy
Chang Family Trust and 100 shares issuable under currently exercisable
options.
2/ Consists of 64,786 shares held by Mr. Lee as trustee of the Lee
Trust and 100 shares issuable under currently exercisable options.
3/ Includes 23,349 shares held by Mr. Tang as custodian for his children,
approximately 56,344 shares held by Mr. Tang's wife, approximately 18,283
shares held by the ESOPT which have been allocated to Mr. Tang's account
through the Record Date, 1,082 shares issuable under currently
exercisable options and 8,004 shares
6
<PAGE>
held as unallocated shares by the ESOPT. Mr. Tang is a member
of the ESOPT Committee and, as such, may be deemed to be a beneficial
owner of unallocated ESOPT shares.
4/ Consists of 12,852 shares held by the Thomas G. Tartaglia Trust and 4,664
shares held by the ESOPT which have been allocated to Mr. Tartaglia's
account through the Record Date.
5/ Includes 15,582 shares which Dr. Buon-Cristiani holds as custodian for
his grandchildren and 100 shares issuable under currently exercisable
options.
6/ Includes approximately 14,572 shares held by the Kelly and Barbara Chan
Living Trust, 1,750 shares held by Mr. Chan's wife, approximately 4,428
shares held by Mr. Chan as custodian for his children, approximately
6,671 shares held by Chansons Properties, 50,000 shares held as Trustee
of the WHFC Chan Grandchildren Sprinkling Trust, 100 shares issuable
under currently exercisable options and 8,004 shares held as unallocated
shares by the ESOPT. Mr. Chan is a member of the ESOPT Committee and, as
such, may be deemed to be a beneficial owner of unallocated ESOPT shares.
7/ Includes approximately 58,106 shares held by the Dunson Cheng and Cynthia
Cheng Trust, approximately 21,134 shares held by the ESOPT which have
been allocated to Mr. Cheng's account through the Record Date, 3,500
shares issuable under currently exercisable options and 8,004 shares held
as unallocated shares by the ESOPT. Mr. Cheng is a member of the ESOPT
Committee and, as such, may be deemed to be a beneficial owner of
unallocated ESOPT shares.
8/ Includes 100 shares issuable under currently exercisable options and
8,004 shares held as unallocated shares by the ESOPT. Mr. Poon is a
member of the ESOPT Committee and, as such, may be deemed to be a
beneficial owner of unallocated ESOPT shares.
9/ Includes 86,557 shares held by the Ching Family Trust, approximately
3,261 shares held by Mr. Ching's wife and 8,004 shares held as
unallocated shares by the ESOPT. Mr. Ching is a member of the ESOPT
Committee and, as such, may be deemed to be a beneficial owner of
unallocated ESOPT shares.
10/ Kelly L. Chan is the nephew, by marriage, of Wing K. Fat.
11/ Includes approximately 58,389 shares held by Fat Family Trust,
approximately 64,854 shares held by Frank Fat, Inc., and approximately
4,918 shares held by Frank Fat Properties.
12/ Consists of 158,229 shares held by Mr. Woo as trustee of a living trust
established by Mr. Woo and his wife and 100 shares issuable under
currently exercisable options.
13/ Includes approximately 4,205 shares held by the ESOPT which have been
allocated to Mr. Wong's account through the Record Date and 780 shares
issuable under currently exercisable options.
14/ Includes approximately 10,782 shares held by the ESOPT which have been
allocated to Ms. Chan's account through the Record Date and 566 shares
issuable under currently exercisable options.
15/ Includes a total of 86,347 held by the ESOPT that have been allocated to
the directors and officers through the Record Date, 8,004 shares held as
unallocated shares by the ESOPT and 8,024 shares issuable under currently
exercisable options.
7
<PAGE>
THE BOARD OF DIRECTORS
Regular meetings of the Bancorp Board of Directors are generally
held on a monthly basis, while special meetings are called when necessary.
The Bancorp Board of Directors held 13 meetings during 1999. During the
fiscal year ended December 31, 1999, each director attended 75% or more of
the meetings of the Bancorp Board.
During the fiscal year ended December 31, 1999, the Bancorp Board of
Directors had four standing committees, the Audit Committee, the Executive
Committee, the ESOPT Committee and the Equity Incentive Plan Committee. The
Bancorp Board of Directors does not have a nominating committee or a
committee performing similar functions.
AUDIT COMMITTEE
During the fiscal year ended December 31, 1999, the Audit Committee
consisted of Ralph Roy Buon-Cristiani (Chairman), Kelly L. Chan, Michael M.Y.
Chang and Thomas Tartaglia. Mr. Cheng also served on the Audit Committee
ex-officio in his capacity as President and chief executive officer. This
committee oversees Bancorp's financial reporting on behalf of the Bancorp
Board of Directors; selects and recommends to the Bancorp Board of Directors
the independent auditors who will perform the annual audit; reviews with the
independent auditors the proposed scope of, fees for and results of the
annual audit; reviews the system of internal accounting controls and the
scope and results of internal audits with the independent auditors, the
internal auditors and Bancorp management; considers the audit and non-audit
services provided by the independent auditors, the proposed fees to be
charged for each type of service and the effect of non-audit services on the
independence of the independent auditors; and performs any other tasks
assigned to it by the Board of Directors. The Audit Committee met 18 times
during 1999 and each committee member attended 75% or more of the meetings of
this committee.
EXECUTIVE COMMITTEE
During the fiscal year ended December 31, 1999, the Executive
Committee consisted of Dunson K. Cheng (Chairman and serving in an ex-officio
capacity, as President and chief executive officer of Bancorp), George T.M.
Ching, Anthony M. Tang and Thomas G. Tartaglia. This committee has been
delegated authority to exercise all powers of the Bancorp Board of Directors
in the intervals between Board meetings, except those powers delegated to
other committees and those that by statute, charter or bylaws are reserved to
the full Board of Directors. The Executive Committee met 12 times during 1999
and each committee member attended 75% or more of the meetings of this
committee.
ESOPT COMMITTEE
During the fiscal year ended December 31, 1999, the ESOPT
Committee consisted of Dunson K. Cheng (Chairman), Kelly L. Chan, George
T.M. Ching, Chi-Hung Joseph Poon and Anthony M. Tang. This committee has
been delegated authority to administer the ESOPT in accordance with plan
provisions and applicable governmental regulations. It is responsible
for, among other things, the investment and management of the ESOPT's
assets. The ESOPT Committee met twice during 1999 and each committee member
attended the meeting.
8
<PAGE>
EQUITY INCENTIVE PLAN COMMITTEE
During the fiscal year ended December 31, 1999, the Equity Incentive
Plan Committee consisted of Chi-Hung Joseph Poon (Chairman), Ralph Roy
Buon-Cristiani, Michael M.Y. Chang and Wing K. Fat. This committee has the
authority to select participants, including executive officers and directors,
of Bancorp and its subsidiaries to receive awards under the Cathay Bancorp
Inc. Equity Incentive Plan (the "Equity Incentive Plan") and has broad
discretion to determine the amount and types of awards, and the terms and
conditions of individual awards. The Equity Incentive Plan Committee met four
times during 1999 and each committee member attended 75% or more of the
meetings of this committee.
COMPENSATION OF DIRECTORS
The persons currently serving as directors of Bancorp are the same
persons who currently serve as directors of Cathay Bank. As a result, the
current policy for compensation of directors is that Cathay Bank pays each
Cathay Bank director who is not also a full-time officer of Bancorp, Cathay
Bank or CIC an annual fee of $14,100 plus $200 for each Cathay Bank Board
committee meeting (other than loan committee meetings) and $250 for each
Cathay Bank Board loan committee meeting attended by the director. In 1999,
Cathay Bank also paid each Cathay Bank non-employee director a $4,860 bonus.
CIC currently pays each of its directors who is not a full-time officer of
CIC, Bancorp or Cathay Bank an fee of $200 for each of its Board of Directors
meetings attended. Bancorp, Cathay Bank and CIC reimburse directors for
out-of-pocket expenses incurred in attending meetings of the Boards of
Directors and Board committees and in traveling on company business. In
addition to director fees paid to such persons, in 1999, Cathay Bank paid
$16,858 to Mr. Woo as salary for his service as an officer, and CIC paid
$25,286 to Mr. Ching as an officer.
Directors are also eligible to receive stock option grants and
restricted stock awards under the Equity Incentive Plan. In 1998, each
non-employee director was granted nonqualified stock options to purchase 500
shares of Bancorp Common Stock at an exercise price of $33.00 per share
(which was the per share fair market value of the Bancorp Common Stock on the
date of grant). Such options become exercisable in 20% increments over a
five-year period and terminate ten years from the date of grant (subject to
early termination in the event of termination of directorship, disability or
death). There were no option grants to directors in 1999.
9
<PAGE>
INFORMATION CONCERNING MANAGEMENT COMPENSATION
REMUNERATION OF EXECUTIVE OFFICERS
The following tables sets forth information regarding the
compensation for services in all capacities paid or accrued for the calendar
year ended December 31, 1999, by Bancorp or Cathay Bank (a) to the chief
executive officer of Bancorp and (b) to the four most highly compensated
executive officers of either Bancorp or Cathay Bank.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
--------------------------------------------------------
Other
Annual Securities All Other
Compen- Underlying Compen-
Name and Principal Year Salary Bonus sation 2/ Options sation
Position ($)1/ ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dunson K. Cheng, Chairman of 1999 $393,316 $460,000 $4,208 -- $16,758 3/
the Board of Directors,
President and chief executive 1998 366,354 380,000 3,657 17,500 15,933 4/
officer of Bancorp and Cathay
Bank 1997 339,217 300,000 4,613 -- 14,818 5/
- ----------------------------------------------------------------------------------------------------------------------------
Anthony M. Tang, Executive 1999 169,361 175,237 -- -- 16,271 6/
Vice-President and Chief
Financial Officer/Treasurer 1998 160,930 133,608 -- 5,410 15,301 7/
of Bancorp and Senior
Executive Vice-President and 1997 150,500 110,000 -- -- 15,190 8/
Chief Lending Officer of
Cathay Bank
- ----------------------------------------------------------------------------------------------------------------------------
Irwin Wong, Executive 1999 115,008 106,781 966 -- 15,269 9/
Vice-President for Branch
Administration of Cathay 1998 105,773 77,992 637 3,900 14,406 10/
Bank
1997 98,636 62,465 710 -- 14,327 11/
- ----------------------------------------------------------------------------------------------------------------------------
John Chen, Executive 1999 124,500 52,898 -- -- 639 12/
Vice-President, Northern
California of Cathay 1998 120,000 36,000 -- 3,380 513 13/
Bank
1997 20,000 14/ -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Elena Chan, Senior 1999 102,405 99,718 -- -- 12,639 15/
Vice-President and Chief
Financial Officer of Cathay 1998 96,608 71,075 -- 2,830 11,827 16/
Bank
1997 90,736 61,800 -- -- 11,652 17/
</TABLE>
1/ Includes amounts deferred by the named officers under the Cathay
Bancorp's 401(k) Profit Sharing Plan (the "401(k) Plan").
10
<PAGE>
2/ The amounts reported in this column reflect the incremental cost to Bancorp
of automobiles provided to the named officers. Excludes other perquisites
and personal benefits paid to each named officer as such other perquisites
and personal benefits, in each instance, were less than the lesser of
$50,000 or 10% of the total annual salary and bonus set forth above.
3/ This amount consists of $1,191 in group life insurance premiums, $2,770 in
health insurance premiums, $7,797 in employer contribution to the ESOPT and
$5,000 in employer contribution under the 401(k) Plan.
4/ This amount consists of $1,064 in group life insurance premiums, $2,690 in
health insurance premiums, $7,313 in employer contribution to the ESOPT and
$4,866 in employer contribution under the 401(k) Plan.
5/ This amount consists of $1,758 in group life insurance premiums, $2,873 in
health insurance premiums and $7,328 in employer contribution to the ESOPT
and $2,859 in employer contribution under the 401(k) Plan.
6/ This amount consists of $1,081 in group life insurance premiums, $3,991 in
health insurance premiums, $7,821 in employer contribution to the ESOPT and
$3,378 in employer contribution under the 401(k) Plan.
7/ This amount consists of $875 in group life insurance premiums, $3,872 in
health insurance premiums, $7,335 in employer contribution to the ESOPT and
$3,219 in employer contribution under the 401(k) Plan.
8/ This amount consists of $1,570 in group life insurance premiums, $3,727 in
health insurance premiums, $7,350 in employer contribution to the ESOPT and
$2,543 in employer contribution under the 401(k) Plan.
9/ This amount consists of $1,195 in group life insurance premiums, $3,991 in
health insurance premiums, $7,783 in employer contribution to the ESOPT and
$2,300 in employer contribution under the 401(k) Plan.
10/ This amount consists of $1,120 in group life insurance premiums, $3,872 in
health insurance premiums, $7,299 in employer contribution to the ESOPT and
$2,115 in employer contribution under the 401(k) Plan.
11/ This amount consists of $1,607 in group life insurance premiums, $3,743 in
health insurance premiums, $7,314 in employer contribution to the ESOPT and
$1,663 in employer contribution under the 401(k) Plan.
12/ This amount consists of $639 in group life insurance premiums.
13/ This amount consists of $513 in group life insurance premiums.
14/ Mr. Chen became a consultant to Cathay Bank in October 1997. Amount shown
reflects his consulting fee for the period from October 1, 1997 to December
31, 1997. Mr. Chen became the Executive Vice President, Northern California
of Cathay Bank on January 1, 1998.
15/ This amount consists of $1,035 in group life insurance premiums, $1,725 in
health insurance premiums, $7,831 in employer contribution to the ESOPT and
$2,048 in employer contribution under the 401(k) Plan.
16/ This amount consists of $873 in group life insurance premiums, $1,678 in
health insurance premiums, $7,344 in employer contribution to the ESOPT and
$1,932 in employer contribution under the 401(k) Plan.
17/ This amount consists of $1,307 in group life insurance premiums, $1,738 in
health insurance premiums, $7,078 in employer contribution to the ESOPT and
$1,529 in employer contribution under the 401(k) Plan.
11
<PAGE>
OPTIONS AND STOCK APPRECIATION RIGHTS
In 1999, the Company made no option grants to the individuals named in
the above Summary Compensation Table and had no outstanding stock appreciation
rights. The following table summarizes options exercises during 1999, and the
number of all options and the value of all in-the-money options held at the end
of 1999, by the individuals named in the above Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at End of In-the-Money Options at
Shares Fiscal 1999 (#) End of Fiscal 1999 ($)(2)
Acquired on Value ----------------------------- --------------------------
NAME Exercise(#) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------- -------------- ----------------------------- --------------------------
<S> <C> <C> <C> <C>
Dunson K. Cheng -0- -0- 3,500/14,000 $28,000/$112,000
Anthony M. Tang -0- -0- 1,082/ 4,328 $ 8,656/$34,624
Irwin Wong -0- -0- 780/ 3,120 $ 6,240/$24,960
John Chen 676 $2,577 -0-/2,704 $ -0-/$21,632
Elena Chan -0- -0- 566/ 2,264 $ 4,528/$18,112
- ---------
</TABLE>
1/ Based on the market value of the underlying securities at the exercise date,
less the exercise price.
2/ Based on the market value of the underlying securities at year end, less
the exercise price.
CATHAY BANCORP, INC. 401(K) PLAN
In 1997, the Board approved the Cathay Bancorp, Inc. 401(k) Profit
Sharing Plan (the "401(k) Plan"), which began on March 1, 1997. Salaried
employees who have completed one year of service and have attained the age of
21 are eligible to participate. Enrollment dates are on January 1st and July
1st of each year. Participants may contribute up to 15% of their compensation
for the year, not to exceed the dollar limit set by the Internal Revenue
Service (the "IRS"). Participants may change their contribution election on
the enrollment dates. Bancorp matches 50% of the participants' contribution
up to 4% of their compensation. The vesting schedule for matching
contribution is 0% for less than two years of service, 25% after two years of
service and from then on, at an increment of 25% each year until 100% vested
after five years of service. In 1999, Bancorp's contribution amounted to
$186,736. The 401(k) Plan allows participants to withdraw all or part of
their vested amount in the 401(k) Plan due to certain financial hardships as
designed by the IRS. Participants may also borrow up to 50% of the vested
amount, up to a maximum of $50,000. The minimum loan amount is $1,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of Bancorp has a committee administering the
Equity Incentive Plan, but does not have a compensation committee. No
executive officer is separately compensated for services rendered to Bancorp.
With the exception of Mr. Wong, Mr. Chen and Ms. Chan, the executive officers
hold positions with both Bancorp and Cathay Bank. Accordingly, decisions
regarding the compensation of executive officers, including the President and
chief
12
<PAGE>
executive officer, other than the grant of awards under the Equity Incentive
Plan, are made by the Compensation Committee of the Board of Directors of
Cathay Bank, subject to review and approval by the Board of Directors of
Cathay Bank. Decisions regarding the grant of awards under the Equity
Incentive Plan to executive officers, including the President and chief
executive officer, are made by the Equity Incentive Plan Committee. In the
fiscal year ended December 31, 1999, the members of the Compensation
Committee of Cathay Bank were Dunson K. Cheng, Chairman, George T.M. Ching,
Chi-Hung Joseph Poon, Thomas G. Tartaglia and Kelly L. Chan, each of whom
also was a director of Bancorp during 1999. Mr. Cheng, the chairman of the
Compensation Committee of Cathay Bank, is also the Chairman, President and
chief executive officer of Cathay Bank and of Bancorp. Mr. Cheng also is a
member of the Boards of Directors of Cathay Bank and of Bancorp. Mr. Cheng
does not participate in, and excuses himself from, those portions of any
meeting of the Board of Directors or the Compensation Committee of Cathay
Bank in which his compensation is discussed or established. In the fiscal
year ended December 31, 1999, the members of the Equity Incentive Plan
Committee were Chi-Hung Joseph Poon, Chairman, Ralph Roy Buon-Cristiani,
Michael M.Y. Chang and Wing K. Fat.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee of the Board of Directors of Cathay Bank
establishes general policies on executive compensation as well as the actual
salary, bonus and discretionary benefits of the President and chief executive
officer of Bancorp and Cathay Bank, of each Executive Vice-President of Bancorp
and Cathay Bank, of the Senior Executive Vice-President of Cathay Bank, of each
Senior Vice-President of Cathay Bank, and of each Regional Vice-President of
Cathay Bank. Decisions by the Cathay Bank Compensation Committee are subject to
review and approval by the full Board of Directors of Cathay Bank. The Equity
Incentive Plan Committee selects participants, including the executive officers,
of Bancorp and its subsidiaries, including Cathay Bank, to receive awards under
the Equity Incentive Plan and has broad discretion to determine the amount and
types of awards and the terms and conditions of individual awards.
The compensation program for executive officers, including the
President and chief executive officer, currently consists of base salary, annual
cash bonus, participation in Bancorp's ESOPT (Employee Stock Ownership Plan and
Trust),1/ certain matching contributions under the
- --------
1/ Participation in the ESOPT is available to all salaried employees
who have completed at least two full years of service. Each participant's share
of Bancorp's annual contribution to the ESOPT, including the share of each
participating executive officer, is calculated by dividing the participant's
total "units" by the total "units" of all ESOPT participants for that year. Each
ESOPT participant is granted one "unit" for each year of service and one "unit"
for each one hundred dollars of eligible compensation. The Board of Directors
determines the amount of Bancorp's annual contribution to the ESOPT in light of
Bancorp's earnings in the prior plan year. Bancorp's annual contribution is made
in cash. The cash contributed by Bancorp to the ESOPT is invested by the ESOPT's
trustees in shares of Bancorp's Common Stock. Each participant's benefits under
the ESOPT consists of the cash (or cash equivalents) and shares of Bancorp's
Common Stock allocated to the participant's ESOPT account in accordance with the
above-described formula. Under the ESOPT, each participant's benefits are 100%
vested and without risk of forfeiture. Benefits under the ESOPT are distributed
to the participant in accordance with the rules of the ESOPT and generally begin
when the participant attains the age of 65 (or upon death or disability) or
after the lapse of five years following termination of employment.
13
<PAGE>
401(k) Plan, life insurance in an amount equal to three times base salary
(with a $300,000 cap) and the same medical, dental and disability benefits as
provided to other Cathay Bank employees. Such officers are also eligible to
participate in the Equity Incentive Plan.
The Cathay Bank Compensation Committee and the Bancorp Equity
Incentive Plan Committee believe that to reward, provide incentives to and
retain capable management, each of the executive officers should receive
compensation that is both competitive and reflective of Cathay Bank's and
Bancorp's performance. In addition, the Compensation Committee and the
Bancorp Equity Incentive Plan Committee believe individual compensation
should reflect the experience, performance and responsibility level of that
individual.
As a result of changes to the Internal Revenue Code adopted in 1993,
publicly held corporations generally are not permitted a federal income tax
deduction for compensation paid to certain officers to the extent that such
an officer's compensation exceeds $1 million in a taxable year. An exception
may apply to certain performance-based payments that are approved in advance
by a majority vote of the stockholders. Bancorp has not previously paid
compensation at levels that would cause this limitation to apply to Bancorp,
and has no current plans to do so in the future. The Compensation Committee
has not adopted any formal policy concerning the possible application of this
limitation, should an officer in the future appear to merit compensation in
excess of the limitation. The Compensation Committee will continue to review
the issue and monitor whether any such payments would be structured so as to
qualify as performance-based compensation that would be deductible.
BASE COMPENSATION
As part of the process of establishing base salaries, the
Compensation Committee reviews the performance of each executive officer in
relation to the overall performance of Cathay Bank and considers factors such
as the experience and responsibility of each individual, including
performance of special projects and assignments. Because the Committee
believes that the evaluation of performance should not be reduced to a
formula, the Committee considers a wide range of performance criteria,
including objective factors such as earnings and profits and subjective
factors such as individual performance. In establishing each executive
officer's base salary, the Compensation Committee generally gives the most
weight to the subjective evaluation of the performance of the individual in
relation to the performance of Cathay Bank followed by a consideration of the
officer's level of responsibility, experience and then an evaluation of
objective performance factors, without any particular magnitude being
assigned to this order of factors. The size of the base salary for each
executive officer is determined by the above-mentioned subjective evaluation
of the individual's performance, a comparison of the compensation levels paid
to the individual in past years in relation to the individual's performance
in those years and Bancorp's and Cathay Bank's general financial condition,
profitability and results from operations. Bancorp's 1998 total assets
increased by approximately 10% over 1997 levels, its 1998 stockholders'
equity grew by approximately 15% over the 1997 figure, its return on average
assets increased by 12% from 1.29% in 1997 to 1.44% in 1998, and its earnings
per diluted share increased from $2.26 in 1997 to $2.74 in 1998. The
Compensation Committee considered these financial performance data and the
level of responsibilities in giving executive officers an increase in base
salaries in April 1999 (approximately 5% to 9%). The Compensation Committee
further notes that Bancorp's financial outlook has continued to improve.
Bancorp's 1999 total assets increased by approximately 12% over 1998 levels,
its 1999 stockholders' equity
14
<PAGE>
grew by approximately 14% over the 1998 figure, its return on average assets
increased from 1.44% in 1998 to 1.63% in 1999 and its earnings per diluted
share increased from $2.74 in 1998 to $3.36 in 1999.
It should be noted that the Compensation Committee does not review
objective data on the financial condition, profitability and results from
operations of Bancorp and Cathay Bank in a vacuum. In deciding compensation
levels of executives (whether it is base salary or bonuses), the Compensation
Committee reviews objective data in light of the financial performance of
other similar banks, Bancorp's and Cathay Bank's relative advantages and
disadvantages in the banking industry and the obstacles and challenges
presented to the particular executive in attempting to achieve the goals of
Bancorp and Cathay Bank.
The Compensation Committee also reviews the base compensation of
executive officers in equivalent positions paid by banks considered
competitive with Cathay Bank and, in particular, executive officer
compensation reported in the survey issued by the California Banker's
Association (the "CBA"). The CBA survey consists of a review of executive
compensation at banks with total assets over $1 billion, all of which are
located in California. Substantially all of Bancorp's operations are located
in California and its assets were approximately $1.8 billion at December 31,
1998 and $2.0 billion at December 31, 1999. Actual base salaries (and
bonuses) paid to the executive officers in fiscal 1999 compared to the median
salaries in the CBA survey as follows: Chairman, chief executive officer and
President -- actual base salary of $393,316 compared to the median base
salary of chief executive officers in the CBA survey of $300,000 (actual
bonus of $460,000 compared to the median bonus of chief executive officers in
the CBA survey of $183,638); Senior Executive Vice-President and Chief
Lending Officer -- actual base salary of $169,361 compared to the median base
salary of chief credit officers in the CBA survey of $140,268 (actual bonus
of $175,237 compared to the median bonus of chief credit officers in the CBA
survey of $52,591); Executive Vice-President for Branch Administration --
actual base salary of $115,008 compared to the median base salary of branch
administrators in the CBA survey of $102,000 (actual bonus of $106,781
compared to the median bonus of branch administrators in the CBA survey of
$25,767); Executive Vice-President, Northern California -- actual base salary
of $124,500 compared to the median base salary of branch administrators in
the CBA survey of $102,000 (actual bonus of $52,898 compared to the median
bonus of branch administrators in the CBA survey of $25,767); and Senior
Vice-President and Chief Financial Officer -- actual base salary of $102,405
compared to the median base salary of chief financial officers in the CBA
survey of $137,000 (actual bonus of $99,718 compared to the median bonus of
chief financial officers in the CBA survey of $46,080).
In addition to these surveys, the Compensation Committee considers
data comparing the percentage change in cumulative total stockholder return
on Bancorp's Common Stock with the percentage change in cumulative total
stockholder return on the Standard & Poors 500 and the SNL Western Bank
Index. See "Comparative Stock Performance" below for a graph comparing
cumulative stockholder return data for Bancorp, the Standard & Poors 500
Index and the SNL Western Bank Index. The SNL Western Bank Index is a market
weighted index including every publicly traded bank located in the States of
Alaska, California, Hawaii, Montana, Oregon and Washington.
15
<PAGE>
ANNUAL CASH BONUS
The annual cash bonus paid to each executive officer, including the
Chairman, President and chief executive officer, is determined, in the
discretion of the Compensation Committee, on the basis of the over-all
performance and profitability of Cathay Bank and Bancorp in the fiscal year
then ending and the Committee's subjective evaluation of the individual
officer's performance and responsibility in relation to company performance.
Overall performance and profitability is determined with reference to the
following factors listed in order of importance: net income, return on
average assets, return on stockholders' equity and percentage increase or
decrease in total assets, loans and deposits. The size of the annual bonus
for each officer is determined by the above-mentioned evaluation of the
performance of Bancorp and Cathay Bank in relation to the contributions
perceived by the Compensation Committee made by the officer to achieve the
overall level of financial performance of Bancorp and Cathay Bank, and by a
comparison of the size of annual bonuses paid to the officer in past years
with respect to the individual's performance in those years, the base
salaries of the executives and the length of employment with Bancorp and
Cathay Bank and the overall performance and profitability of Bancorp and
Cathay Bank in those years. See also "CEO Compensation" below.
THE EQUITY INCENTIVE PLAN
In 1998, the Board adopted, and the stockholders approved, the
Equity Incentive Plan, which currently authorizes the issuance of up to
1,075,000 shares of Bancorp's Common Stock pursuant to awards granted
thereunder. Awards may be granted in the form of stock options or restricted
stock. The Equity Incentive Plan is intended to strengthen Bancorp by
providing selected employees and directors of Bancorp and its subsidiaries,
including Cathay Bank, an opportunity to participate in Bancorp's future by
offering them an opportunity to acquire stock in Bancorp so as to retain,
attract and motivate them. Currently, there are 40 participants in the Equity
Incentive Plan. The Equity Incentive Plan Committee has the discretion to
determine the number and type of awards granted, and awards generally
increase as a function of higher positions of responsibility in Bancorp or
its subsidiaries. Awards are made at a level calculated to be at mid-range
when compared with other companies of comparable size and complexity in the
California banking industry. Consideration is also given to the estimated
dilutive effect of such awards on Bancorp's existing stockholders. For 1999,
the Equity Incentive Plan Committee granted no stock options under the Equity
Incentive Plan.
CEO COMPENSATION
In April 1999, the Compensation Committee increased Mr. Cheng's
annual base salary by approximately 7% to $393,316 and in December 1999 the
Committee awarded Mr. Cheng a $460,000 cash bonus. Mr. Cheng's total base
salary and bonus in 1999 was $853,316, up from $746,354 in 1998. The increase
in Mr. Cheng's compensation in 1999 reflects Bancorp's and Cathay Bank's
growth and improved profits. In setting Mr. Cheng's compensation, the
Compensation Committee and the Equity Incentive Plan Committee considered Mr.
Cheng's management ability, his growing responsibilities and the fact that
Cathay Bank sustained steady growth in 1999. As an indication of such growth,
Bancorp's total assets and deposits as of December 31, 1999 were up 12% and
10%, respectively, from December 31, 1998 levels, and net income increased
23% from $24,578,883 in 1998 to $30,291,193 in 1999. Although Mr. Cheng is a
member of Cathay Bank's Compensation Committee, he does not participate in,
and
16
<PAGE>
excuses himself from, those portions of any meeting in which his compensation
is discussed or established. Mr. Cheng is not a member of the Equity
Incentive Plan Committee.
Generally, Mr. Cheng's base salary is determined primarily with
reference to a subjective evaluation made by the Compensation Committee of
his performance in the immediately preceding year, the growth of Bancorp and
Cathay Bank (a percentage increase or decrease in total assets, loans and
deposits) in the immediately preceding year, the percentage increase or
decrease in net income in the immediately preceding year, and a comparison of
his level of compensation with chief executive officers at other banks of a
similar size operating in California. The base salary and total cash
compensation paid to Mr. Cheng in fiscal 1999 was $393,316 and $853,316,
respectively, compared with the median base salary and total cash
compensation of chief executive officers listed in the CBA survey of $300,000
and $485,298, respectively. See "Base Compensation" above for a description
of the CBA survey. The bonus paid to Mr. Cheng is based generally on the
performance and management of Bancorp and Cathay Bank. Specifically, in
determining Mr. Cheng's bonus, the Compensation Committee considers the
percentage increase or decrease in net income occurring during the year in
which the bonus is paid and any growth in total assets, loans and deposits
experienced during that year. The bonus paid to Mr. Cheng in fiscal 1999 was
$460,000, compared with the median bonus/incentive compensation paid to chief
executive officers listed in the CBA survey of $183,638. See "Base
Compensation" above for a description of the CBA survey.
COMPENSATION COMMITTEE EQUITY INCENTIVE PLAN COMMITTEE
George T.M. Ching Ralph Roy Buon-Cristiani
Thomas G. Tartaglia Michael M.Y. Chang
Dunson K. Cheng Wing K. Fat
Chi-Hung Joseph Poon Chi-Hung Joseph Poon
Kelly L. Chan
17
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the percentage change in the cumulative total
stockholder return on Bancorp's Common Stock from December 31, 1994 through
December 31, 1999 with the percentage change in the cumulative total return on
the Standard & Poors 500 Index (the "S&P 500 Index") and the SNL Western Bank
index (the "SNL Western Bank Index") for the same period. Bancorp will furnish,
without charge, upon the written request of any person who is a stockholder of
record as of March 3, 2000, a list of the companies included in the SNL Western
Bank Index. Requests for this information should be addressed to Wilbur K. Woo,
Secretary, Cathay Bancorp, Inc., 777 North Broadway, Los Angeles, California
90012. This graph assumes the investment of $100 in Bancorp's Common Stock on
December 31, 1994 and an investment of $100 in each of the S&P 500 Index and the
SNL Western Bank Index on that date.
<TABLE>
<CAPTION>
Period Ending December 31,
------------------------------------------------------------------------------
Index 1994 1995 1996 1997 1998 1999
- ------------------------------------- ------------ ------------- ------------ ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cathay Bancorp Inc. $100.00 $120.26 $157.81 $301.38 $345.01 $352.39
S&P 500 100.00 137.58 169.03 225.44 289.79 350.50
SNL Western Bank Index 100.00 167.70 238.42 351.46 360.12 372.18
</TABLE>
INCORPORATION OF COMPENSATION AND PERFORMANCE INFORMATION
THE INFORMATION CONTAINED IN THE ABOVE SECTIONS OF THIS PROXY
STATEMENT CAPTIONED "INFORMATION CONCERNING MANAGEMENT COMPENSATION,"
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION," "COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION" AND "COMPARATIVE STOCK PERFOR-
18
<PAGE>
MANCE" SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE BY ANY GENERAL
STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT, OR ANY PART
HEREOF, INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "1934
ACT"), EXCEPT TO THE EXTENT THAT BANCORP EXPRESSLY INCORPORATES SUCH
INFORMATION IN SUCH FILING BY REFERENCE. THE INFORMATION CONTAINED IN THE
ABOVE SECTIONS OF THIS PROXY STATEMENT CAPTIONED "COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION" AND "COMPARATIVE STOCK PERFORMANCE" SHALL
NOT BE DEEMED TO BE SOLICITING MATERIAL OR OTHERWISE BE DEEMED TO BE FILED
UNDER THE 1933 ACT OR THE 1934 ACT, EXCEPT TO THE EXTENT THAT BANCORP
REQUESTS THAT SUCH INFORMATION BE TREATED AS SOLICITING MATERIAL OR EXPRESSLY
INCORPORATES SUCH INFORMATION IN ANY SUCH FILING BY REFERENCE.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that Bancorp's executive officers and directors and persons who own
more than ten percent of Bancorp's Common Stock timely file initial reports
of ownership of Bancorp's Common Stock and other equity securities, and
reports of changes in such ownership, with the SEC and the Nasdaq Stock
Market. Bancorp has instituted procedures to receive and review such insider
reports. After a review of such insider reports, Bancorp believes that all
required reports have been timely filed.
CERTAIN TRANSACTIONS
BANKING TRANSACTIONS
Some of the directors and officers of Bancorp or of Cathay Bank,
members of their families, and the companies with which they are associated
have been customers of, and have had banking transactions with, Cathay Bank
in the ordinary course of Cathay Bank's business since Cathay Bank began
operations, and Cathay Bank expects to have such banking transactions in the
future. All loans and commitments to lend included in these transactions were
made in compliance with applicable laws and on substantially the same terms,
including interest rates and collateral, as those prevailing in Cathay Bank
at the time for comparable transactions with other persons of similar
creditworthiness and, in the opinion of the management of Cathay Bank, did
not involve more than a normal risk of collectibility or present any other
unfavorable features. The aggregate balance of secured and unsecured loans
made or authorized to be made directly to the directors and executive
officers of Bancorp or of Cathay Bank, members of their families, and
entities with which they were associated was $12,112,453 at December 31,
1999, which represented 7% of Bancorp's stockholders' equity at that date.
OFFICE LEASE
Under a three-year lease entered into in February, 1998, T.C.
Realty, Inc., a California corporation owned by Patrick S.D. Lee's spouse,
leases to Cathay Bank approximately 8,912 square feet of office space in
downtown Los Angeles. During 1999, Cathay Bank paid T.C. Realty, Inc.
approximately $106,944 to lease this space. Annual lease payments under this
lease in 2000 are expected to be approximately $128,544.
19
<PAGE>
INDEMNITY AGREEMENTS
Bancorp's Bylaws provide for the indemnification by Bancorp of its
agents, including its directors and officers, to the maximum extent permitted
under Delaware law. In May 1991, Bancorp entered into indemnity agreements
with its directors and certain of its officers. These indemnity agreements
permit Bancorp to indemnify an officer or director to the maximum extent
permitted under Delaware law and prohibit Bancorp from terminating its
indemnification obligations as to acts of any officer or director that occur
before the termination. Bancorp believes the indemnity agreements will assist
it in attracting and retaining qualified individuals to serve as directors
and officers of Bancorp. Bancorp's Certificate of Incorporation also provides
for certain limitations on the liability of directors, as permitted by
Delaware law. The indemnifications and limitations on liability permitted by
the certificate of incorporation, bylaws and the indemnity agreements are
subject to the limitations set forth by Delaware law.
INDEPENDENT AUDITORS
KPMG LLP, independent auditors, audited Bancorp's financial
statements for the fiscal year ended December 31, 1999. Representatives of
KPMG LLP are expected to attend the Annual Meeting and will have an
opportunity to make a statement if they wish to do so. They may also respond
to appropriate questions from stockholders or their representatives. In the
ordinary course of its duties, the Audit Committee of the Bancorp Board of
Directors is in the process of considering the selection of Bancorp's
independent auditors for the year ended December 31, 2000.
ANNUAL REPORT ON FORM 10-K
On or before March 31, 2000, Bancorp will file with the SEC an
Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
together with applicable financial statements and schedules. BANCORP WILL
FURNISH, WITHOUT CHARGE, UPON THE WRITTEN REQUEST OF ANY PERSON WHO IS A
STOCKHOLDER OF RECORD AS OF MARCH 3, 2000, A COPY OF THE ANNUAL REPORT ON
FORM 10-K TOGETHER WITH THE FINANCIAL STATEMENTS AND SCHEDULES. Upon written
request, Bancorp will provide to any stockholder a copy of the exhibits to
the Annual Report on Form 10-K. REQUESTS SHOULD BE ADDRESSED TO MONICA CHEN,
ASSISTANT SECRETARY, CATHAY BANK, 777 NORTH BROADWAY, LOS ANGELES, CALIFORNIA
90012, TELEPHONE NUMBER (213) 625-4700.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be paid by Bancorp. In addition
to use of the mails, proxies may be solicited personally or by telephone,
facsimile or telegraph by officers, directors and employees of Bancorp and
its subsidiaries who will not be specially compensated for these solicitation
activities. Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for forwarding solicitation materials to
the beneficial owners of shares held of record by these persons, and Bancorp
will reimburse these persons for their reasonable expenses incurred in
forwarding the materials.
20
<PAGE>
STOCKHOLDER PROPOSALS FOR 2001
ANNUAL MEETING OF STOCKHOLDERS
Under Bancorp's Restated Bylaws, nominations for election to the
Bancorp Board of Directors and proposals for other business to be transacted
by the Bancorp stockholders at an annual meeting of stockholders may be made
by a stockholder (as distinct from Bancorp) only if the stockholder is
entitled to vote at the meeting and has given Bancorp's Secretary timely
written notice that complies with the notice requirements of the Restated
Bylaws. In addition, business other than a nomination for election to the
Board must be a proper matter for action under Delaware law and Bancorp's
Restated Certificate of Incorporation and Restated Bylaws. Among other
requirements, the written notice must be delivered to Bancorp's Secretary at
Bancorp's principal executive offices by no later than February 16, 2001, or
earlier than January 17, 2001; provided, however, that if less than 70 days'
notice or prior public disclosure of the date of the scheduled annual meeting
is given or made, the notice, to be timely, must be so delivered by the close
of business on the 10th day following the earlier of the day on which notice
of the date of the scheduled annual meeting was mailed or the day on which
such public disclosure was made.
Separate and apart from the required notice described in the
preceding paragraph, rules promulgated by the SEC under the Exchange Act (the
"SEC Stockholder Proposal Rules") entitle a stockholder in certain instances
to require Bancorp to include that stockholder's proposal (but not that
stockholder's nominees for director) in the proxy materials distributed by
Bancorp for its next annual meeting of stockholders. Any stockholder of
Bancorp who wishes to present a proposal for inclusion in Bancorp's 2001
proxy solicitation materials must set forth the proposal in writing, file it
with Bancorp's Secretary on or before November 16, 2000, and meet the other
requirements for inclusion contained in the SEC Stockholder Proposal Rules.
OTHER MATTERS
As of the date of this Proxy Statement, the Bancorp Board of
Directors knows of no other matters to be brought before the Annual Meeting
other than the proposals specifically listed in the Notice of Annual Meeting
of Stockholders. Nevertheless, if further business is properly presented, the
persons named as proxies on the accompanying Proxy card will vote the shares
in their discretion in accordance with their best judgment.
Whether or not you currently plan to attend the Annual Meeting in
person, please mark your vote on the accompanying Proxy card, then sign, date
and return the Proxy card in the enclosed postage-paid envelope as soon as
possible.
By Order of the Board of Directors
Wilbur K. Woo
Secretary
Los Angeles, California
March 16, 2000
21
<PAGE>
CATHAY BANCORP, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 17, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CATHAY BANCORP, INC.
Dunson K. Cheng, George T.M. Ching and Wilbur K. Woo, or any of
them, with full power of substitution, are hereby appointed as Proxies and
authorized to represent and to vote as designated on the reverse the
undersigned's shares of Cathay Bancorp, Inc. common stock at the Annual
Meeting of Stockholders to be held at 777 North Broadway, Los Angeles,
California, at 5:00 p.m., local time, on April 17, 2000, and at any and all
adjournments thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
<PAGE>
/x/ Please mark your votes as in this example.
WITHHOLD
FOR ALL THE AUTHORITY
NOMINEES TO VOTE FOR
LISTED AT RIGHT ALL
(EXCEPT NOMINEES
AS INDICATED TO THE LISTED AT
CONTRARY BELOW) RIGHT
(1) ELECTION OF NOMINEES:
CLASS I Michael M.Y. Chang
DIRECTORS OF Patrick S.D. Lee
CATHAY Anthony M. Tang
BANCORP, INC. Thomas G. Tartaglia
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NAME OF THAT NOMINEE ON THE LINE PROVIDED BELOW.
------------------------------------
(2) OTHER BUSINESS. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING OR ANY ADJOURNMENTS THEREOF.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 AS CLASS I
DIRECTORS OF CATHAY BANCORP, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL THE NOMINEES FOR DIRECTOR.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated March 16, 2000.
Please sign and return this Proxy even if you intend to be present at the
Annual Meeting. This Proxy may be revoked as set forth in the accompanying
Proxy Statement, and the shares may be voted by the holder at the Annual
Meeting.
PLEASE MARK ABOVE, THEN DATE AND SIGN THIS PROXY BELOW AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature of Stockholder
---------------------
Signature of Stockholder Dated , 2000
--------------------- ---------------
Note: Joint owners should each sign. Trustees and others acting in a
representative capacity should indicate the capacity in which they sign.
Please sign exactly as name appears on the Proxy.
