Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Senior Vice President & Chief Financial Officer
On January 24, 2022, the Board of Directors (the "Board") of BankGuam Holding
Company (the "Company") appointed Mr. Symon A. Madrazo as the Company's Chief
Financial Officer, effective February 1, 2022. Mr. Madrazo replaces
Mr. Francisco M. Atalig who on November 16, 2021 announced his intent to retire
from the Company effective at the close of business on December 31, 2021.
Mr. Madrazo, age 42, joined the Bank of Guam (the "Bank"), a subsidiary of the
Company, in May 2001 following his graduation from the University of Guam with a
Bachelor of Business Administration in Accounting degree. He has held various
positions in the Bank's Central Finance Office such as Accounting Officer,
Investment Officer, and Assistant Controller to his most current responsibility
as Vice President/Controller of the Bank of Guam, a position he has held since
February 1, 2017. Mr. Madrazo graduated from Pacific Coast Banking School in
2019.
On December 31, 2021 Mr. Madrazo entered into an Employment Agreement with the
Bank which provides for, among other things, the payment of an annual base
salary of $150,000 with annual CPI adjustments (the "Employment Agreement"). The
Employment Agreement is effective January 1, 2022 and terminates December 31,
2022 and provides for an incentive bonus equal to 1.50% of the net profits after
taxes of the Bank or $150,000 per year, whichever is less. The incentive bonus
is reduced by 5% to 100% if the Bank does not meet certain objectives, which are
set forth in the Employment Agreement, as measured by return on assets, return
on equity, Federal Deposit Insurance Corporation ratings, level of adversely
classified assets or the Bank's efficiency performance. The incentive bonus is
further subject to a minimum payment of $30,000 per year. The incentive bonus is
also subject to immediate modification to conform to the incentive bonus
structure of the President and Chief Executive Officer and Executive Vice
President and Chief Operating Officer of the Bank. Mr. Madrazo also receives
certain other personal benefits including (a) a group term life insurance policy
in the amount of $700,000 maintained by the Bank, and (b) the right to
participate in the Bank's group health insurance, accident insurance and
disability insurance plans. Upon disability, Mr. Madrazo would receive his base
salary, adjusted for the CPI increases, together with all incentive bonuses for
the remainder of the term of the Employment Agreement. The Employment Agreement
also includes a Survivor Income Plan with a death benefit of $1,060,606 and a
Supplemental Executive Retirement Plan ("SERP") which pays out for a period of
15 years the amount of $50,000 per annum after 10 years from the date of SERP
contract, at the Bank's sole expense and cost, which benefit is generally made
available to the Bank's executive employees.
The Bank has had and expects to have banking transactions in the ordinary course
of business with many of the directors and executive officers of the Bank (and
their associates), on substantially the same terms (including interest rates,
collateral and repayment terms) as those prevailing at the time for comparable
loans with persons not related to the Company. During 2021, no loan to any
director or executive officer of the Company (or their associates) involved more
than the normal risk of collectability or presented other unfavorable features.
Loans made by the Bank to directors and executive officers are subject to the
requirements of Regulation O of the Board of Governors of the Federal Reserve
System. Regulation O requires, among other things, prior approval of the Board
of Directors with any "interested" director not participating and dollar
limitations on amounts of certain loans, and prohibits any favorable treatment
being extended to any director or executive officer in any of the Bank's lending
matters. To the best knowledge of the Company, Regulation O has been complied
with in its entirety.
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