1.
|
Election
of
Directors. The election of three persons as directors
for terms expiring in 2011; provided that, if proposal No. 2 is adopted,
to elect three directors for terms expiring in 2009, and in either
case, to serve until his
successors are elected and
qualified;
|
2.
|
Board
Declassification Proposal. To approve
the proposal to amend
the Company’s Certificate of Incorporation to eliminate the provisions for
the classification of the Company’s Board of Directors and thereby provide
that each person elected a Director at the Meeting and subsequent
annual
meetings of the Stockholders will be elected to a term of one year
and to
serve until his or her successors are elected and
qualified;
|
3.
|
Approval
of
Stock Incentive Plan. Approve the
East West
Bancorp Inc. 1998 Stock Incentive Plan, as
amended;
|
4.
|
Ratification
of
Auditors. Ratify the
appointment of Deloitte & Touche LLP as the Company's independent
registered public accounting firm for its fiscal year ending December
31,
2008; and
|
5.
|
Other
Business. The transaction
of such other
business as may properly come before the Meeting or any postponement
or
adjournment of the Meeting.
|
By
order of the Board of
Directors
|
|
DOUGLAS
P.
KRAUSE
Executive
Vice
President,
General
Counsel and Corporate
Secretary
|
|
Pasadena,
California
March
31,
2008
|
1.
|
Election
of
Directors. The election
of three
persons as directors for terms expiring in 2011; provided that,
if
proposal No. 2 is adopted, to elect three directors for terms expiring
in
2009, and in either case,to
serve until his or her
successors are elected and qualified. The Board of Directors’
nominees are:
|
Rudolph
I.
Estrada
Herman
Y. Li
Dominic
Ng
|
2.
|
Board
Declassification Proposal. To approve the proposal
to amend
the Company’s Certificate of Incorporation to eliminate the provisions for
the classification of the Company’s Board of Directors and thereby provide
that each person elected a Director at the Meeting and subsequent
annual
meetings of the Stockholders will be elected to a term of one year
and to
serve until his or her successors are elected and
qualified;
|
3.
|
Approval
of
Stock Incentive Plan. Approve the
East West
Bancorp Inc. 1998 Stock Incentive Plan, as
amended;
|
4.
|
Ratification
of
Auditors. Ratify the
appointment of Deloitte & Touche LLP as the Company’s independent
registered public accounting firm for its fiscal year ending December
31,
2008; and
|
5.
|
Other
Business. The transaction
of
such other business as may properly come before the Meeting or
any
postponement or adjournment of the
Meeting.
|
|
Costs
of Solicitation of
Proxies
|
·
|
“FOR”
the
election of all three nominees for the Board of Directors;
|
·
|
“FOR”
the
amendment of the Company’s Certificate of Incorporation to eliminate the
provisions for the classification of the Company’s Board of
Directors;
|
·
|
“FOR”
the
approval of the East
West Bancorp Inc. 1998 Stock Incentive Plan, as amended;
and
|
·
|
“FOR”
the
ratification of the appointment of Deloitte & Touche LLP as the
Company’s independent registered public accounting firm for its fiscal
year ending December
31, 2008.
|
Common
Stock
|
||||
Number
of
Shares
|
Percent
|
|||
Beneficially
|
of
|
|||
Name
and Address of Beneficial
Owner
|
Owned
(1)(2)
|
Class
(2)
|
||
Wachovia
Corporation
(3)
|
6,708,270
|
10.59%
|
||
One
Wachovia
Center
|
||||
Charlotte,
NC
28288
|
||||
FMR
LLC (4)
|
5,842,221
|
9.22%
|
||
82
Devonshire
Street
|
||||
Boston,
MA
02109
|
||||
Dominic
Ng
|
1,191,361
|
1.88%
|
||
Wellington
Chen
|
31,208
|
*
|
||
Peggy
Cherng
|
149,198
|
*
|
||
Donald
S.
Chow
|
80,111
|
*
|
||
Rudolph
I.
Estrada
|
10,906
|
(5)
|
*
|
|
Julia
S.
Gouw
|
208,338
|
(6)
|
*
|
|
Andrew
S.
Kane
|
-
|
|||
Douglas
P.
Krause
|
100,387
|
*
|
||
John
Lee
|
301,313
|
(7)
|
*
|
|
Herman
Y.
Li
|
42,142
|
*
|
||
Jack
C. Liu
|
24,577
|
*
|
||
Keith
W.
Renken
|
58,350
|
*
|
||
All
Directors and Named Executive
Officers, as a group (12 persons)
|
2,197,891
|
3.47%
|
*
|
Less
than
1%.
|
(1)
|
Except
as otherwise noted and
except as required by applicable community property laws, each
person has
sole voting and disposition powers with respect to the
shares.
|
(2)
|
Shares
which the person (or group)
has the right to acquire within 60 days after the Record Date
are deemed
to be outstanding in calculating the ownership and percentage
ownership of
the person (or group). Specifically, the following individuals
have the
right to acquire the shares indicated after their names upon
the exercise
of such stock options: Mr. Ng, 816,944; Mr. Chen, 10,072; Ms.
Cherng,
20,000; Mr. Chow, 28,605; Mr. Estrada, 5,000; Ms. Gouw, 56,254;
Mr.
Krause, 20,133; Mr. Li, 20,000; Mr. Liu, 17,000; and Mr.
Renken,
40,000. The aggregate number of shares issuable upon the
exercise of options currently exercisable held by the directors
and
officers as a group, is
1,034,008.
|
|
|
(3)
|
Based
on Schedule 13G filed with
the Securities and Exchange Commission on February
11, 2008by Wachovia
Corporation.
|
(4)
|
Based
on Schedule
13G/Afiled with
the
Securities and Exchange Commission on February
14, 2008by FMR
LLC.
|
(5)
|
2,414
of these shares are held in
the Summit Group Profit Sharing Plan for which Mr. Estrada has
voting and
investment power.
|
(6)
|
2,000
of these shares are owned by
family members for whom Ms. Gouw has voting and investment power;
Ms. Gouw
disclaims any beneficial interest in such
shares.
|
(7)
|
296,830
of these shares are held
in the John M. Lee Trust for which Mr. Lee has voting and investment
power.
|
Name
of
Director
|
Age
(2)
|
Year
First Elected or Appointed
(3)
|
Current
Term
to
Expire
|
Nominees
for term expiring 2011
(1):
Dominic
Ng
Rudolph
I.
Estrada
Herman
Y.
Li
|
49
60
55
|
1991
2005
1998
|
2008
2008
2008
|
Continuing
Directors:
Andrew
S. Kane
Jack
C. Liu
Keith
W.
Renken
Peggy
Cherng
Julia
S. Gouw
John
Lee
|
55
49
73
60
49
76
|
2007
1998
2000
2002
1997
2006
|
2009
2009
2009
2010
2010
2010
|
(1)
|
Nominees
shall be elected to a
three-year term expiring in 2011; provided that, if Proposal
No. 2 is
approved, members elected at the Meeting and each annual meeting
thereafter will serve one-year
terms.
|
(2)
|
Age
as of March 31,
2008.
|
(3)
|
Refers
to the earlier of the year
the individual first became a director of the Company and the
Bank.
|
·
|
Classified
boards of directors help maintain continuity of experience and
facilitate
long-term strategic planning and its
implementation.
|
·
|
Three-year
terms allow companies to attract directors for a longer commitment
and
enhances the independence of non-management (or “outside”) directors for a
reasonable period of time free from undue management and stockholder
pressures for short-term
performance.
|
·
|
A
classified board discourages efforts to change corporate policies
and
practices through the election of directors for short-term objectives
that
may have long-term disadvantages to the Company and stockholder
value.
|
·
|
A
classified board enhances the Board’s ability to negotiate better results
for stockholders in potential takeover situations by discouraging
or
slowing hostile and disruptive efforts to acquire control of
the Company
through the election of directors.
|
·
|
Director
fiduciary duties and accountability to stockholders are not reduced
by
having classes of directors and three-year
terms.
|
·
|
The
election of directors is the primary way stockholders may influence
corporate policies and practices and hold management accountable
for the
implementation of policies.
|
·
|
The
annual election of all directors allows stockholders to vote
and comment
upon the board of directors’ collective actions and their results every
year.
|
·
|
The
existence of a classified board of directors may deter tender
offers or
substantial purchases of stock that might give stockholders the
opportunity to sell their shares at a price in excess of what
they would
otherwise receive.
|
·
|
If
all of the directors are elected every year, it may be easier
for
stockholders to reject individual directors, engage in a proxy
contest or
elect a new majority of directors each
year.
|
·
|
Approving
the annual and long-term
incentive compensation programs for the CEO and other executive
management;
|
·
|
Annually,
creating performance
goals and criteria for the Company and evaluating the Company’s
performance against those
goals;
|
·
|
Annually,
establishing and
evaluating the CEO’s performance and
compensation;
|
·
|
Annually,
approving annual
compensation and grants of incentive shares to all other executive
officers;
|
·
|
Conducting
the executive
evaluation process in a manner that promotes trust and open communication
between the Board and CEO, ensuring the CEO understands the Board’s
expectations, and providing feedback to the CEO on his or her
performance;
|
·
|
As
appropriate, reviewing CEO
compensation and benefits compared to peer
companies;
|
·
|
Annually
determining the officers
of the Company who will be eligible for participation
in
the Company’s Performance-Based
Bonus Plan, establishing by no later than 90 days after the beginning
of
each fiscal year the specific goals of participants under the
Bonus Plan,
and certifying the meeting of such goals and awarding bonuses
under such
plan;
|
·
|
Reviewing
and making
recommendations to the Board of Directors with respect to the
compensation
of directors;
|
·
|
Reporting
to the Board of
Directors on the selection of goals and on the results of the
evaluation
and compensation review.
|
Name
|
Fees
Earned
or Paid in Cash ($)
|
Stock
Awards
($) (3)
|
Option
Awards
($) (4)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||
(a)
|
(b)
|
(c)
|
(d)
|
(g)
|
(h)
|
|||||
Peggy
Cherng
(1)
|
$ 17,012
|
$ 55,583
|
$ -
|
$ -
|
$ 72,595
|
|||||
Rudolph
I. Estrada (1)
(2)
|
18,012
|
52,058
|
21,682
|
60,000
|
151,752
|
|||||
Andrew
S.
Kane
|
2,012
|
-
|
-
|
-
|
2,012
|
|||||
John
Lee
(1)
|
21,012
|
45,420
|
-
|
-
|
66,432
|
|||||
Herman
Y. Li
(1)
|
35,012
|
55,583
|
-
|
-
|
90,595
|
|||||
Jack
C. Liu
(1)
|
23,012
|
55,583
|
-
|
-
|
78,595
|
|||||
Keith
W. Renken
(1)
|
30,012
|
55,583
|
-
|
-
|
85,595
|
(1)
|
This
non-employee director elected
to receive his/her annual $25,000 cash retainer in the form of
Common
Stock, at a 25% risk premium (i.e., $31,250 of common stock).
Each
director is required to hold the stock for at least one
year. The non-employee directors received the stock in lieu of
the cash retainer on July 24,
2007. Andrew
S. Kane did not receive a
cash retainer in 2007 as he was not elected a board member until
after
this date.
|
(2)
|
The
amount shown under Column (g)
as All Other Compensation for Mr. Estrada represents consulting
fees paid
during the year.
|
(3)
|
This
amount reflects the dollar
amount recognized for financial statement reporting purposes
for the
fiscal year ended December 31, 2007 in accordance with Statement
of
Financial Accounting Standards No. 123R Share-based Payment (FAS
123R).
This amount may consist of restricted stock awards granted in
and prior to
2007 and also stock received in lieu of the annual cash retainer.
As of
December 31, 2007, each director had the following restricted
stock awards
outstanding: Peggy Cherng, 2,285 shares; Rudolph I. Estrada,
2,285 shares;
Andrew S. Kane, 0 shares; John Lee, 1,698 shares; Herman Y. Li,
2,285
shares; Jack C. Liu, 2,285 shares; and Keith W. Renken, 2,285
shares.
|
(4)
|
This
amount reflects the dollar
amount recognized for financial statement reporting purposes
for the
fiscal year ended December 31, 2007 in accordance with FAS 123R.
This
amount consists of stock option awards granted in 2005 as no
stock options
were awarded to directors since 2005. As of December
31, 2007, the following
directors had the
following stock option awards outstanding: Peggy Cherng, 20,000
options;
Rudolph I. Estrada, 10,000 options; Herman Y. Li, 20,000 options;
Jack C.
Liu, 17,000 options; and Keith W. Renken, 40,000
options.
|
·
|
Oversee
the development of, and
approve, annual and long-term incentive compensation programs
for the CEO
and other executive
management;
|
·
|
On
an annual basis, establish
goals for the CEO, evaluate the performance of the CEO, and establish
the
compensation of the CEO. The Committee shall obtain input from
the full
Board and report to the Board on the selection of goals and on
the results
of the evaluation and compensation
review;
|
·
|
Receive
an annual report from the
CEO of his or her performance
assessment;
|
·
|
Approve
annual compensation and
grants of incentive shares of all executive
officers;
|
·
|
Conduct
the executive evaluation
process in a manner that promotes trust and communications between
the
Board and CEO, ensure the CEO understands the Board’s expectations; and
provide feedback to the CEO on his or her
performance;
|
·
|
As
appropriate from time to time,
review CEO compensation and benefits compared to peer
companies;
|
·
|
Annually
determine the officers of
the Company who will be eligible for participating in the
Performance-Based Bonus Plan of the Company, determining by no
later than
90 days after the beginning of each fiscal year the specific
goals of
participants under the Bonus Plan, and for certifying the meeting
of such
goals and awarding bonuses under such
plan;
|
·
|
Review
and make recommendations to
the Board of Directors with respect to the compensation of
directors.
|
·
|
The
principal objective of the
salary program is to maintain salaries that are targeted to be
in the
median range for comparable positions in similarly sized financial
institutions;
|
·
|
The
annual total cash compensation
incentives are designed to reward for overall Company success
and
individual performance when performance targets are met; above-average
compensation may be warranted when performance goals are
exceeded;
|
·
|
The
long-term stock-based
incentive plan is designed to align management’s financial interests with
those of the Company’s stockholders, provide incentive for management
ownership of the Company’s Common Stock, support the achievement of the
Company’s long-term financial objectives, and provide management with
long-term financial
opportunities.
|
Associated
Banc-Corp
Bank
of Hawaii
Corporation
CathayGeneral
Bancorp
Central
Pacific Financial
Corporation
City
National
Corporation
Commerce
Bancshares
Inc.
Cullen/Frost
Bankers
Inc.
CVB
Financial
Corporation
First
Citizens Bancshares
Inc.
|
First
Community
Bancorp
First
Midwest Bancorp
Inc.
Pacific
Capital
Bancorp
NBT
Bancorp
Inc.
SVB
Financial
Group
Wilmington
Trust
Corporation
UCBH
Holdings
Incorporated
Umpqua
Holdings
Corporation
Zions
Bancorporation
|
·
|
Profitability
|
o
|
Net
Income
|
o
|
3-Year
EPS
Growth
|
o
|
3-Year
Earnings Before Income Tax
Growth
|
·
|
Return
Measurements
|
o
|
Return
on
Assets
|
o
|
Return
on
Equity
|
o
|
3-Year
Total Shareholder
Return
|
·
|
Other
Measures
|
o
|
Debt
to Equity
Ratio
|
o
|
Non-performing
Assets (% of Total
Assets)
|
o
|
Non-Interest
Income (% of Net
Income)
|
o
|
Market
to Book
Ratio
|
·
|
Base
salary
|
·
|
Bonus
compensation (including
performance-based
incentives)
|
·
|
Long-term
stock-based incentive
compensation (stock options and/or restricted
stock)
|
·
|
Retirement
benefits
|
·
|
Deferred
compensation
|
Name
|
Base
Salary ($) (1)
|
Cash
Incentive ($) (1)
|
Total
Base Salary and Cash Incentive ($) (1)
|
Restricted
Stock Awards (#) (1) (2) (3)
|
Option
Awards (#) (1)
|
|||||
Dominic
Ng
|
$ 791,667
|
$ 1,208,000
|
$ 1,999,667
|
18,137
|
47,914
|
|||||
Julia
S. Gouw
|
286,654
|
320,000
|
606,654
|
2,032
|
8,075
|
|||||
Douglas
P. Krause
|
217,005
|
225,000
|
442,005
|
1,645
|
6,460
|
|||||
Donald
S. Chow
|
214,588
|
142,000
|
356,588
|
15,325
|
6,460
|
|||||
Wellington
Chen
|
234,380
|
162,000
|
396,380
|
2,032
|
8,075
|
(1)
|
The
amounts shown in the table
above represent base salary, restricted stock and option awards
given to
the named executive officer in 2007. The amounts shown for annual
cash
incentives represent the incentive compensation awards for fiscal
year
2007 which were paid in March
2008.
|
(2)
|
In
March 2007, the Compensation
Committee approved and determined a target performance-based
restricted
stock grant for the CEO of $1,400,000 or 36,073 shares. This
performance-based restricted stock is based on a two-year performance
period from January
1, 2007to
December
31,
2008. The
performance stock goals were
set by the Compensation Committee before the unprecedented crisis
in the
mortgage and capital markets
impacted
the Company, along with
the entire financial markets. As of April
15, 2008, based
on our current estimate of
the Company’s performance in 2008, we expect that the CEO will receive
18,037 shares from the 2007 performance-based restricted stock
grant. This
final number of shares granted to the CEO may differ from this
amount,
based on the performance of the Company for the remainder of
2008.
|
(3)
|
In
August 2007, the Compensation
Committee granted Donald S. Chow a restricted stock award of
13,680 shares
to reflect his leadership and increased responsibilities in his
new role
as the President of Desert Community Bank, a Division of East
West
Bank.
|
Name
and Principal Position
|
Year
|
Salary
($)
(1)
|
Bonus
($)
(1) (2)
|
Stock
Awards
($)
(3)
|
Option
Awards
($)
(4)
|
Non-Equity
Incentive Plan Compensation ($) (1) (2)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
(5)
|
All
Other Compensation ($) (6)
|
Total
($)
|
|||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||
Dominic
Ng
|
2007
|
$ 791,667
|
$ -
|
$ 1,138,171
|
$ 265,778
|
$ 1,208,000
|
$ 1,283,893
|
$ 50,051
|
$ 4,737,560
|
|||||||||
Chairman,
President, and
|
2006
|
740,000
|
-
|
793,644
|
629,328
|
1,280,000
|
1,118,026
|
50,718
|
4,611,716
|
|||||||||
Chief
Executive Officer
|
||||||||||||||||||
Julia
S. Gouw
|
2007
|
286,654
|
320,000
|
67,772
|
82,841
|
-
|
694,766
|
21,280
|
1,473,313
|
|||||||||
Executive
Vice President,
|
2006
|
270,838
|
220,000
|
74,927
|
63,219
|
-
|
605,006
|
27,990
|
1,261,980
|
|||||||||
Chief
Financial Officer, and
|
||||||||||||||||||
Director
|
||||||||||||||||||
Douglas
P. Krause
|
2007
|
217,005
|
225,000
|
52,318
|
62,916
|
-
|
107,656
|
9,990
|
674,885
|
|||||||||
Executive
Vice President,
|
2006
|
208,338
|
150,000
|
57,586
|
46,167
|
-
|
97,391
|
12,904
|
572,386
|
|||||||||
Chief
Risk Officer, General
|
||||||||||||||||||
Counsel
and Secretary
|
||||||||||||||||||
Donald
S. Chow
|
2007
|
214,588
|
142,000
|
72,315
|
40,360
|
-
|
125,901
|
20,100
|
615,264
|
|||||||||
President
of Desert Community
|
2006
|
205,004
|
130,000
|
40,903
|
27,307
|
-
|
116,631
|
19,680
|
539,525
|
|||||||||
Bank,
a Division of the Bank
|
||||||||||||||||||
Wellington
Chen
|
2007
|
234,380
|
162,000
|
50,988
|
62,393
|
-
|
-
|
20,084
|
529,845
|
|||||||||
Executive
Vice President and
|
2006
|
220,838
|
180,000
|
98,782
|
42,616
|
-
|
-
|
20,216
|
562,452
|
|||||||||
Director
of Corporate Banking
|
_________________
|
(1)
|
Includes
compensation deferred at
election of the executive and the year upon which such compensation
was
earned. See also “Nonqualified Deferred Compensation for the
2007 Fiscal Year Table”.
|
(2)
|
The
amounts shown for 2007
represent the incentive compensation awards for fiscal year 2007
that were
paid in March 2008. The amounts shown for 2006 represent the
incentive compensation awards for fiscal year 2006 that were
paid in March
2007.
|
(3)
|
These
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal years ended December
31, 2006 and
December 31, 2007 in accordance with FAS 123R. These amounts
consist of restricted stock awards granted in the current year
and in
prior years. Stock awards for the Chief Executive Officer
include the compensation cost recognized for stock awards containing
performance-based vesting conditions granted on March 9, 2006
and on March
20, 2007. The achievement of the performance condition was deemed
to be
probable at the grant date. Dividends accrue on all stock awards
at the
normal dividend rate.
|
(4)
|
These
amounts reflect the dollar
amount recognized for financial statement reporting purposes
for the
fiscal years ended December 31,2006 and
December 31, 2007 in
accordance with FAS 123R and consists of stock option awards
prior to
2006.
|
(5)
|
Includes
the year-to-date change
in the actuarial present value of the accumulated benefit under
the SERP
for each named executive officer only. The SERP provides supplemental
retirement benefits to certain employees whose contributions
to the 401(k)
Plan are, under applicable Internal Revenue Service regulations,
limited. See “Retirement Plans.” In 2006 and 2007, there were
no above-market or preferential earnings on non-qualified deferred
compensation. Deferred compensation earnings are only to be
included in this Summary Compensation Table if they are above-market
earnings. See “Nonqualified Deferred
Compensation”.
|
(6)
|
Represents
all other compensation
including employer contributions to the 401(k) Plan, unused vacation
pay,
and perquisites including automobile allowances and financial
planning
services. Employer contributions to the 401(k) Plan and cash
payout of unused vacation pay are benefits generally available
to all
salaried employees. The named executive officers are also
provided with certain group life, health, long-term disability
and medical
and other non-cash benefits generally available to all salaried
employees
and not included in this column pursuant to SEC rules. The costs
of all
perquisites have been calculated based on the actual expense
paid by the
Company. All other compensation that exceeds $10,000, other
than perquisites are described below. All perquisites or other
personal benefits greater than $25,000 or 10% of the total value
of all
perquisites received by the named executive are also described
below:
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
(2)
|
All
Other Stock Awards: Number of Shares of Stock or Units (#)
(3)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
(4)
|
Exercise
or Base Price of Option Awards ($/Sh)
|
Grant
Date Fair Value of Equity Award ($) (5)
|
||||||||||||||||
Name
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||||||||||||
(a)
|
(b)
|
(f)
|
(g)
|
(h)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
||||||||||
Dominic
Ng
|
02/26/07
|
47,914
|
$ 38.81
|
$ 444,992
|
|||||||||||||||||
02/26/07
|
9,018
|
36,073
|
45,091
|
700,016
|
|||||||||||||||||
02/26/07
|
$ 937,500
|
$ 1,500,000
|
$ 1,875,000
|
||||||||||||||||||
12/04/07
|
100
|
2,662
|
|||||||||||||||||||
Julia
S. Gouw
|
02/26/07
|
8,075
|
38.81
|
74,995
|
|||||||||||||||||
02/26/07
|
1,932
|
74,981
|
|||||||||||||||||||
12/04/07
|
100
|
2,662
|
|||||||||||||||||||
Douglas
P. Krause
|
02/26/07
|
6,460
|
38.81
|
59,996
|
|||||||||||||||||
02/26/07
|
1,545
|
59,961
|
|||||||||||||||||||
12/04/07
|
100
|
2,662
|
|||||||||||||||||||
Donald
S. Chow
|
02/26/07
|
6,460
|
38.81
|
59,996
|
|||||||||||||||||
02/26/07
|
1,545
|
59,961
|
|||||||||||||||||||
08/20/07
|
13,680
|
500,004
|
|||||||||||||||||||
12/04/07
|
100
|
2,662
|
|||||||||||||||||||
Wellington
Chen
|
02/26/07
|
8,075
|
38.81
|
74,995
|
|||||||||||||||||
02/26/07
|
1,932
|
74,981
|
|||||||||||||||||||
12/04/07
|
100
|
2,662
|
(1)
|
Under
the Performance-Based Bonus Plan (the “Bonus Plan”), Mr. Ng receives a
performance-based annual cash incentive. The actual cash incentive
award
Mr. Ng received was based on the Company’s achievement of specified
performance targets. The performance period for the cash
incentive was from January 1, 2007 through December 31, 2007
and the
performance criteria, established by the Compensation Committee
in early
2007, were based on EPS and ROE metrics. The Compensation Committee
determined the final amount of Mr. Ng’s cash incentive on February 19,
2008, based on the Company’s actual performance in 2007. The actual bonus
paid to Mr. Ng based upon meeting the performance criteria could
have been
paid out above the target, but below the maximum. The actual
bonus paid
for 2006 was below the target amount and is set forth in column
(g) of
“Summary Compensation Table”. See also “Compensation Discussion and
Analysis”.
|
(2)
|
Mr.
Ng was granted
performance-based restricted stock with a two-year cliff vesting
on
March 9,
2007under the
Bonus
Plan. The actual number of shares Mr. Ng will receive under this
grant
will depend on the Company’s achievement of specified performance
targets. The performance period is from January
1, 2007through
December
31, 2008. At the
end of the
performance period, the number of stock awards issued will be
determined
based on the established performance metrics. The Board of
Directors or the Compensation Committee will determine the final
amount. If the Company performs below its performance target,
the Board of Directors or the Compensation Committee may, at
its
discretion, choose not to award any shares. Shares of stock, if
any, will be issued following the end of the performance period
two years
from the date of grant. The number of shares shown in the above
table under column (f) Threshold refers to the minimum amount
payable for
a certain level of performance under the plan. Column (g)
Target refers to the amount paid if the specified performance
target is
reached. Column (h) Maximum refers to the maximum payout
possible under the Bonus Plan.
See also “Compensation
Discussion and Analysis”
and the “Summary Compensation” table and
footnotes.
|
(3)
|
Shares
of restricted stock were
granted pursuant to the 1998 Stock Incentive Plan of the
Company. The restricted stock granted on February
26, 2007to the
named executives, vests 50%
after four years and 50% after five years. All restricted stock
granted on December
4, 2007vests 100%
after three years. Dividends are paid on shares of restricted
stock at the
same time dividends are paid on outstanding shares of common
stock.
|
(4)
|
The
stock options were granted
pursuant to the 1998 Stock Incentive Plan of the Company. The
stock options vest and become exercisable over four years as
follows: 1/3
after two years, 1/3 after three years and 1/3 after four
years. The options may be exercised at any time prior to their
expiration by tendering the exercise price in cash, check or
in shares of
stock valued at fair market value on the date of exercise. The
options may be amended by mutual agreement of the optionee and
East West
Bancorp.
|
(5)
|
The
estimated present value at
grant date of options granted during fiscal year 2007 has been
calculated
using the Black-Scholes option pricing model, based upon the
following
assumptions: estimated time until exercise of 4 years; risk-free
interest
rate of 4.5%, representing the interest rate on U.S. Treasury
Strips in
effect at the time of grant equal to the stock option’s expected term; a
volatility rate of 24.1%; and a dividend yield of 1.1%, representing
the
$0.40 per share annualized dividend rate in 2007 divided by the
fair
market value of the common stock on the date of grant. The
approach used in developing the assumptions upon which the Black-Scholes
valuation was done is consistent with the requirements of FAS
123R.
|
The
grant date fair value for the
restricted stock reflects the FAS 123R value over the vesting
period for
the shares. Dividends are paid on shares of restricted stock at
the same time dividends are paid on our other outstanding shares
of common
stock.
|
The
actual number of shares Mr. Ng
will receive under the performance-based restricted stock granted
during
fiscal year 2007 is based on the Company’s achievement of specified
performance targets. The performance period is from January
1, 2007through
December
31, 2008. Although
the actual
payout Mr. Ng will receive under this grant is unknown at this
time,
because of the unprecedented crisis in the mortgage and capital
markets,
it is anticipated that the future shares Mr. Ng will receive
will be below
the target amount. As of April 15,
2008, we estimate
that Mr. Ng will
receive 18,037 shares under the February
26, 2007grant and
have used this figure to
calculate the grant date fair value of this award. This final
number of
shares granted to the CEO may differ from this amount, based
on the performance of the
Company for the remainder of
2008.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
|
Number
of Securities Underlying Options (#) Exercisable
|
Number
of Securities Underlying Options (#) Unexercisable
(1)
|
Option
Exercise Price ($)
|
Option
Expiration Date (1)
|
Number
of Shares or Units of Stock That Have Not Vested (#)
(2)
|
Market
Value of Shares or Units of Stocks That Have Not Vested
($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights That Have Not Vested (#)
(3)
|
Equity
Incentive Plan Awards:Market Value of Shares or Units of Stocks
That Have
Not Vested ($) (3)
|
||||||||
(a)
|
(b)
|
(c)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||
Dominic
Ng
|
15,250
|
$ 369,508
|
59,037
|
$ 1,430,467
|
||||||||||||
582,294
|
-
|
$ 16.92
|
7/17/2009
|
|||||||||||||
200
|
-
|
16.64
|
10/22/2009
|
|||||||||||||
1,000
|
-
|
16.63
|
2/28/2010
|
|||||||||||||
750
|
250
|
26.44
|
2/24/2011
|
|||||||||||||
400
|
-
|
11.69
|
9/17/2011
|
|||||||||||||
200,000
|
-
|
12.95
|
1/23/2012
|
|||||||||||||
8,500
|
16,500
|
37.63
|
3/10/2012
|
|||||||||||||
-
|
45,000
|
36.87
|
3/9/2013
|
|||||||||||||
-
|
47,914
|
38.81
|
2/26/2014
|
|||||||||||||
Julia
S. Gouw
|
8,907
|
215,817
|
-
|
-
|
||||||||||||
200
|
-
|
16.64
|
10/22/2009
|
|||||||||||||
1,000
|
-
|
16.63
|
2/28/2010
|
|||||||||||||
1,000
|
-
|
7.94
|
8/31/2010
|
|||||||||||||
750
|
250
|
26.42
|
3/5/2011
|
|||||||||||||
400
|
-
|
11.69
|
9/17/2011
|
|||||||||||||
40,000
|
-
|
12.95
|
1/23/2012
|
|||||||||||||
3,614
|
7,016
|
37.63
|
3/10/2012
|
|||||||||||||
-
|
16,273
|
36.87
|
3/9/2013
|
|||||||||||||
-
|
8,075
|
38.81
|
2/26/2014
|
|||||||||||||
Douglas
P. Krause
|
6,779
|
164,255
|
||||||||||||||
200
|
-
|
16.64
|
10/22/2009
|
|||||||||||||
1,000
|
-
|
16.63
|
2/28/2010
|
|||||||||||||
750
|
250
|
26.42
|
3/5/2011
|
|||||||||||||
9,050
|
-
|
12.95
|
1/23/2012
|
|||||||||||||
2,168
|
4,210
|
37.63
|
3/10/2012
|
|||||||||||||
-
|
13,561
|
36.87
|
3/9/2013
|
|||||||||||||
-
|
6,460
|
38.81
|
2/26/2014
|
|||||||||||||
Donald
S. Chow
|
18,160
|
440,017
|
||||||||||||||
200
|
-
|
16.64
|
10/22/2009
|
|||||||||||||
1,000
|
-
|
16.63
|
2/28/2010
|
|||||||||||||
5,000
|
-
|
12.09
|
1/16/2011
|
|||||||||||||
750
|
250
|
26.42
|
3/5/2011
|
|||||||||||||
16,000
|
-
|
12.95
|
1/23/2012
|
|||||||||||||
1,807
|
3,508
|
37.63
|
3/10/2012
|
|||||||||||||
-
|
5,424
|
36.87
|
3/9/2013
|
|||||||||||||
-
|
6,460
|
38.81
|
2/26/2014
|
|||||||||||||
Wellington
Chen
|
7,009
|
169,828
|
-
|
-
|
||||||||||||
3,614
|
7,016
|
37.63
|
3/10/2012
|
|||||||||||||
-
|
8,679
|
36.87
|
3/9/2013
|
|||||||||||||
-
|
8,075
|
38.81
|
2/26/2014
|
(1)
|
All
stock options listed above
vest at a rate of 1/3 after the second anniversary of the grant
date, 1/3
after the third anniversary of the grant date and 1/3 after the
fourth
anniversary of the grant
date.
|
(2)
|
The
restricted stock awards
aggregate the historic grants that have not vested. The shares
of
restricted stock for all named executive officers excluding the
Chief
Executive Officer either vests 100% after three years or 50%
after four
years and 50% after five years. On March 10,
2005Mr. Ng
was granted 25,000 shares
of restricted stock which vests 20% each year, over a five year
vesting
schedule. As of December
31, 2007, 15,000
of these shares were
still outstanding. Additionally in 2005 and 2006, all named executives
were granted 75 shares of restricted stock. In 2007, the annual
grant of restricted stock to all employees was increased to 100
shares. The annual grants of restricted stock to all employees
vests 100% after 3 years. Each named executive has 250
shares of such restricted stock outstanding. Dividends are paid
on shares of restricted stock at the same time dividends are
paid on our
other outstanding shares of common
stock.
|
(3)
|
Mr.
Ng was granted performance-based restricted stock with a two-year
cliff
vesting on March 9, 2006 and on February 26, 2007 under the Bonus
Plan.
The actual number of shares Mr. Ng will receive under these grants
will
depend on the Company’s achievement of specified performance
targets. For the performance-based restricted stock granted on
March 9, 2006, the performance period is from January 1, 2006
through
December 31, 2007. Based on the performance of the Company
during the performance period from January 1, 2006 through December
31,
2007, Mr. Ng was issued the maximum payout of 41,000 shares on
February
19, 2008. For the performance-based restricted stock granted
on February
26, 2007, the performance period is from January 1, 2007 through
December
31, 2008. At the end of the performance period, the number of
stock awards issued will be determined based on established performance
metrics. The Board of Directors or the Compensation Committee
will determine the final amount. If the Company performs below
its performance target, the Board of Directors or the Compensation
Committee may, at its discretion, choose not to award any
shares. Shares of stock, if any, will be issued following the
end of the performance period two years from the date of
grant. The number of shares shown in the above table under
column (i) reflects the maximum payout possible under the Bonus
Plan.
Although the actual
payout
Mr. Ng will receive under this grant is unknown at this time,
because of
the unprecedented crisis in the mortgage and capital markets,
it is
anticipated that the future shares Mr. Ng will receive will be
below the
target amount. As of April 15,
2008, estimate
that Mr. Ng will
receive 18,037 shares under the February
26, 2007 grant
and have used this payout
figure in the calculation of the number of shares shown in the
above table under column (i). This final number
of shares
granted to the CEO may differ from this amount, based on the
performance
of the Company for the remainder of
2008.
|
Option
Awards
|
Stock
Awards
|
|||||||
Name
|
Number
of
Shares Acquired on Exercise
(#)
|
Value
Realized on Exercise ($)
|
Number
of
Shares Acquired on Vesting (#)
|
Value
Realized on Vesting
($)
|
||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||
Dominic
Ng
(1)
|
415,180
|
$ 15,688,167
|
5,075
|
$ 187,031
|
||||
Julia
S.
Gouw
|
63,250
|
2,494,573
|
2,075
|
74,981
|
||||
Douglas
P.
Krause
|
-
|
-
|
2,075
|
74,981
|
||||
Donald
S.
Chow
|
10,000
|
407,500
|
2,075
|
74,981
|
||||
Wellington
Chen
|
-
|
-
|
75
|
2,081
|
(1)
|
Stock
option exercises for Mr. Ng
were effected pursuant to a Rule 10b5-1 trading plan entered
into on
January
27,
2006.
|
Name
|
Plan
Name
|
Number
of
Years of Credited Service (#)
|
Present
Value
of Accumulated Benefit ($) (1)
|
Payments
During Last Fiscal Year ($)
|
||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||
Dominic
Ng
|
Supplemental
Executive
Retirement Plan
|
16
|
$ 5,263,672
|
$ -
|
||||
Julia
S.
Gouw
|
Supplemental
Executive
Retirement Plan
|
18
|
2,848,382
|
-
|
||||
Douglas
P.
Krause
|
Supplemental
Executive
Retirement Plan
|
11
|
550,624
|
-
|
||||
Wellington
Chen
|
N/A
|
N/A
|
N/A
|
N/A
|
||||
Donald
S.
Chow
|
Supplemental
Executive
Retirement Plan
|
14
|
597,226
|
-
|
(1)
|
The
present value of the accumulated benefit is calculated using
an 8%
discount rate.
|
Name
|
Executive
Contribution in Last Fiscal Year ($) (1)
|
Aggregate
Earnings in Last Fiscal Year ($)
|
Aggregate
Withdrawals / Distributions ($)
|
Aggregate
Balance at Last Fiscal Year-End ($)
|
||||
(a)
|
(b)
|
(d)
|
(e)
|
(f)
|
||||
Dominic
Ng
|
$ -
|
$ 145,786
|
$ 957,950
|
$ 2,082,266
|
||||
Julia
S.
Gouw
|
405,324
|
184,494
|
-
|
3,439,416
|
||||
Douglas
P.
Krause
|
-
|
-
|
-
|
-
|
||||
Donald
S.
Chow
|
107,294
|
18,570
|
-
|
386,937
|
||||
Wellington
Chen
|
23,438
|
2,695
|
-
|
60,247
|
(1)
|
These
amounts represent executive
officer elective deferrals of 2007 base salary and cash incentive
awards
and are included in amounts reported as compensation in the “Summary
Compensation Table”.
|
·
|
reviewed
and discussed the audited
financial statements of the Company as of and for the year ended
December
31,
2007with management
and with the independent
auditors;
|
·
|
discussed
with the Company’s
independent auditors the matters required to be discussed by
Statement of
Auditing Standards No. 114 (Codification of Statements on Auditing
Standards), as may be modified or supplemented;
and
|
·
|
received
the written disclosures and the letter from the independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), as may be modified or supplemented,
and has discussed with the independent auditors the independent
auditors’
independence.
|
Dated: February
29,
2008
|
THE
2008 AUDIT
COMMITTEE
|
Herman
Y. Li,
Chairman
Andrew
Kane
John
Lee
Keith
W.
Renken
|
·
|
the
identity of the parties
involved in the transaction or
relationship
|
·
|
the
facts and circumstances of the
transaction or relationship, including the identity of the party
involved
|
·
|
the
material facts of the
transaction or relationship
|
·
|
the
benefits to the Company of the
transaction or relationship
|
·
|
the
terms of the transaction,
including whether those terms are fair to East West and are in
the
ordinary course of business and on substantially the same terms
with
transactions or relationships with unrelated third
parties
|
·
|
Extend
the term of the Plan for
another five (5) years
|
·
|
Delete
the “evergreen” provision
providing that the amount of authorized shares goes up by 2%
per
year
|
·
|
Provide
that options and other
incentive shares may be granted with a maximum term of ten (10)
years
instead of seven (7) years
|
·
|
Delete
the sublimits on how many
of the incentive shares are restricted stock or other specific
types of
incentive shares
|
·
|
The
Company’s stock has risen from
$4.813, the closing price when it was first listed on the NASDAQ
Global
Select Market (“NASDAQ”) on February
8, 1999to $21.05
as of February
8, 2008. The compound
annual
rate of growth during this period has been
18%.
|
·
|
The
aggregate market value of the
Company’s stock has risen from approximately $229 million when it was
first listed on NASDAQ on February
8, 1999to $1.33
billion as of
February
8,
2008. The
compound
annual rate of growth during this period has been
22%.
|
·
|
Fully
diluted earnings per share
have risen from $0.13 for the quarter ended December
31, 1998to $0.59
for the quarter ended
December
31,
2007. The
compound annual rate of growth
during this period has been
18%.
|
·
|
Net
income has risen from $6.5
million for the quarter ended December
31, 1998to $37.2
million for the quarter
ended December
31,
2007.The
compound annual rate of growth
during this period
has been 21%.
|
·
|
Core
non-CD deposits have risen
from $441 million as of December
31, 1998to $3.46
billion as of
December
31,
2007.The
compound annual rate of growth
during this period has been
25%.
|
·
|
Loans
have risen from $1.10
billion as of December
31, 1998to $8.18
billion as of
December
31,
2007.The
compound annual rate of growth
during this period has been
26%.
|
·
|
Non-performing
assets have been
reduced from 0.99% of total assets as of December
31, 1998to 0.57%
of total assets as of
December
31, 2007.
|
2007
|
2006
|
||||
Audit
Fees
(a)
|
$ 1,184,911
|
$ 943,690
|
|||
Audit-Related
Fees
(b)
|
-
|
22,990
|
|||
Tax
Fees
(c)
|
-
|
77,190
|
|||
All
Other Fees
(d)
|
-
|
-
|
|||
$ 1,184,911
|
$ 1,043,870
|
(a)
|
Includes
fees paid by the Company
to Deloitte & Touche LLP for professional services rendered by
Deloitte and Touche LLP for the audit of the Company’s consolidated
financial statements in the Form 10-K and review of financial
statements
included in Form 10-Qs, including examinations of management
assertions as
to the effectiveness of internal control over financial reporting
and for
services that are normally provided by an accountant in connection
with
statutory and regulatory filings or
engagements.
|
(b)
|
Includes
fees for assurance and
related services that are reasonably related to the performance
of the
audit or review of the Company’s financial
statements.
|
(c)
|
Includes
fees for tax compliance
related to the acquisitions of United National Bank and Standard
Bank.
|
(d)
|
Includes
fees for any service not
included in the first three categories
above.
|
East
West Bancorp,
Inc.
|
|
DOUGLAS
P.
KRAUSE
Executive
Vice
President,
General
Counsel and Corporate
Secretary
|
|
Pasadena,
California
March
31,
2008
|
East
West Bancorp,
Inc.
|
|
By:
DOUGLAS P.
KRAUSE
Executive
Vice
President,
General
Counsel and Corporate
Secretary
|
(a)
|
assist
in monitoring (1) the
integrity of the financial statements and internal controls of
the
Company, (2) the compliance by the Company with legal and regulatory
requirements, (3) the performance of the internal audit function
and
external auditors of the Company; and (4) the independent auditor’s
qualifications and
independence;
|
(b)
|
Decide
whether to appoint, retain
or terminate the Company’s independent auditors and to pre-approve all
audit, audit-related, tax and other services, if any, to be provided
by
the independent auditors;
and
|
(c)
|
Prepare
the report required to be
prepared by the Committee pursuant to the rules of the Securities
and
Exchange Commission (the “SEC”) for inclusion in the Company’s annual
proxy statement
|
(a)
|
The
Audit Committee shall consist
of at least three members. The members of the Audit Committee
shall be nominated by the Nominating and Corporate Governance
Committee
and appointed by the Board of the Company. The Committee may
act as a joint committee with the audit committee of the Board
of
Directors of East West Bank.
|
(b)
|
The
members of the Audit Committee
shall each be “independent,” as such term is prescribed by Nasdaq, Section
10A of the Securities Exchange Act of 1934 (the “Exchange Act”) and the
rules and regulations of the Securities and Exchange Commission
(“SEC”),
and any standards prescribed for purposes of any federal securities,
tax,
banking or other laws relating to the Committee’s duties and
responsibilities. In accordance with Nasdaq Rule
4350(d)(2)(A)(iii), members of the Committee shall not have participated
in the preparation of the financial statements of the Company
at any time
during the past three years. If the Committee is acting as a
joint
committee with the audit committee of East West
Bank, the members
shall also each be
“independent” as determined by the Board of East West Bank under Federal
Deposit Insurance Corporation Regulation
363.5.
|
(c)
|
Each
Committee member shall be
able to read and understand financial statements including the
Company’s
balance sheet, income statement, and cash flow statement. At
least one Committee member shall have past employment experience
in
finance or accounting, requisite professional certification in
accounting,
or other comparable experience resulting in financial sophistication
such
that he or she meets the definition of a “financial expert” as such term
is defined in regulations issued by the Securities and Exchange
Commission
(the “SEC”) and such rules as may be issued by the NASDAQ Global Select
Market. In addition, at least two members must have banking or
related
financial management
experience.
|
(d)
|
No
director may serve as a member
of the Committee if such director serves on audit committees
of more than
two public companies unless the Board determines that such simultaneous
service would not impair the ability of such director to serve
effectively
on the Committee.
|
(a)
|
Pursuant
the requirements of
Section 10A(m)(2) of the ’34 Act, the Audit Committee shall be directly
responsible for the compensation and oversight of the work of
the
independent auditor including resolution of disagreements between
management and the independent auditor regarding financial
reporting. The independent auditor shall report directly to the
Committee.
|
(b)
|
The
Committee
shall:
|
|
(i)
receive from the registered
public accounting firm annually, a formal written statement delineating
the relationships between the auditors and the Company consistent
with
Independence Standards Board Standard Number
1;
|
|
(ii)
discuss with the registered
public accounting firm the scope of any such disclosed relationships
and
their impact or potential impact on the independent auditor's
independence
and objectivity; and
|
|
(iii)
recommend that the Board
take appropriate action in response to the independent auditor's
report to
satisfy itself of the auditor's
independence.
|
(c)
|
The
Committee shall review and
approve the proposed scope of the annual independent audit of
the
Company's financial statements and the associated fees, as well
as any
significant variations in the actual scope of the independent
audit and
the associated fees. The Committee shall have authority to pay
all fees
and expenses of the registered public accounting firm as it deems
appropriate.
|
(d)
|
The
Committee shall review the
registered public accounting firm's report relating to reportable
conditions in the internal control structure and financial reporting
practices and any significant deficiencies and material issues
raised by
the most recent internal control review or peer review of the
auditors, or
by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one
or more
independent audits carried out by the auditors, and any steps
taken to
deal with any such issues.
|
(e)
|
The
Committee shall approve in
advance any audit and non-audit services permitted by the Act
that its
registered public accounting firm renders to the Company, unless
such
prior approval may be waived because of permitted exceptions
under the
Act. In no event shall the independent auditors perform any
non-audit services for the Company which are prohibited by Section
10A(g)
of the Act or the rules of the SEC. This approval may be delegated
to a
member of the Committee, who may act on behalf of the Committee
in this
regard and provided that they report any such matters approved
at the next
Committee meeting.
|
(f)
|
The
Committee shall ensure that
the lead audit partner assigned by the Company’s independent auditor is
changed at least every five
years.
|
(g)
The
Committee shall offer
reports as required by Item 306(a) of Regulation
S-K
|
(h)
|
The
Committee shall obtain from
the independent auditor assurance that the audit was conducted
in
compliance with Section 10A of the Securities Exchange Act of
1934.
|
(i)
|
The
Committee shall present its
conclusion with respect to the independent auditors to the Board
for its
information at least
annually.
|
|
(b)
Organization of the internal
audit department, the adequacy of its resources and the competence
of the
internal audit staff.
|
|
(c)
The audit risk assessment
process and the proposed scope of the internal audit department
for the
upcoming year and the coordination of that scope with registered
public
accounting firm.
|
|
(a)
Audited
Financial Statements.The Committee
shall review and
discuss with the registered public accounting firm the audited
financial
statements to be included in the Company's Annual Report on Form
10-K (or
the Annual Report to Shareowners if distributed prior to the
filing of
Form 10-K) and review and consider with the registered public
accounting
firm the matters required to be discussed by the applicable Statement
of
Auditing Standards ("SAS"), including critical accounting policies
and
practices, alternate treatments of financial information within
generally
accepted accounting principles that have been discussed with
management
officials of the Company, ramifications of the use of such alternative
disclosure and the treatment preferred by the registered public
accounting
firm, and other material written communications between the registered
public accounting firm and the management of the Company. The
Committee
will resolve any disagreements between management and the registered
public accounting firm of the Company. Based on these discussions,
the
Committee will advise the Board of Directors whether it recommends
that
the audited financial statements be included in the Annual Report
on Form
10-K (or the Annual Report to
Shareowners).
|
|
(b)
Interim
Financial Statements.
The Committee, through its Chairman or the Committee as a whole,
will
review, prior to the filing thereof, the Company's interim financial
results to be included in the Company's quarterly reports on
Form 10-Q and
the matters required to be discussed by the applicable SAS. The
Committee,
through its Chairman or the Committee as a whole, will also review
press
releases submitted by management in connection with the release
of
quarterly, annual, or special financial
statements.
|
|
(c)
Financial
Reporting Practices.The Committee
shall review, as
appropriate, unless already being reviewed by the
Board:
|
|
(i)
Changes in the Company's
accounting policies and practices and significant judgments that
may
affect the financial results
|
|
(ii)
The nature of any unusual or
significant commitments or contingent liabilities together with
the
underlying assumptions and estimates of
management.
|
|
(d)
Internal
Controls. The Committee
will
discuss and review management’s internal control procedures supporting its
financial reporting process and the documentation used to verify
the
controls. The Committee shall review and discuss management’s internal
controls over financial reporting separately with financial auditors,
with
management absent
|
|
(e)
Disclosures
and Certifications. The Audit
Committee will review
disclosures and certifications by the Chief Executive Officer
and Chief
Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley
Act and other specific disclosures under “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and as the
Committee otherwise deems appropriate or
necessary.
|
|
(a)
Compliance programs and
corrective actions regarding any deficiencies noted by auditors
or
examiners regarding compliance or compliance
programs.
|
|
(b)
Significant findings of any
examination by regulatory authorities or agencies and corrective
actions
regarding any deficiencies noted in regulatory
examinations.
|
|
(a)
Establish and review
procedures for the confidential, anonymous submission by employees
of the
Company of concerns regarding questionable accounting or auditing
matters.
|
|
(b)
Establish and review
procedures for the receipt, retention and treatment of complaints
received
by the Company regarding accounting, internal accounting controls
or
auditing matters.
|
|
(c)
Review and
approve all
“related party” transactions as defined in Item 404 of
Regulation S-K with the
Company.
(d)
Make
special studies of any allegations of managerial misconduct by
its
executives.
|
|
(e)
Discuss with management
periodically management’s assessment of the Company’s market, credit,
liquidity, fraud and other financial and operational risks, and
the
guidelines, policies and processes for managing such
risks.
(f)
Review
and reassess the adequacy of this Charter on an annual
basis.
|
|
(g)
Coordinate with the Nominating
and Corporate Governance Committee to monitor compliance with
the
Company’s Code of Ethics.
|