Exhibit
10.6.3


APPROVAL
OF THE PERFORMANCE-BASED BONUS PLAN, AS AMENDED


The
Board of Directors and the Compensation Committee, subject to approval of the
Company’s stockholders, has adopted an amendment to the Company’s
Performance-Based Bonus Plan (as amended, the “Amended Bonus Plan”) to


·    Add
Commercial Business Loans, Trade Finance Loans, Demand Deposits, and Expenses
as goals


·    Delete
Efficiency Ratio as a goal


The
Board of Directors and the Compensation Committee have approved and adopted the
Amended Bonus Plan, effective as of March 20, 2007, subject to stockholder
approval. The purpose of the Amended Bonus Plan is to promote the interests of
the Company by providing incentive for participating executive officers who
contribute to the improvement of the operating results of the Company and to
reward outstanding performance on the part of those individuals whose decisions
and actions most significantly affect the growth, profitability and efficient
operation of the Company.


In
addition, the Compensation Committee, which is responsible for setting
compensation philosophy and administering executive compensation programs, has
determined that the interests of stockholders are best served when a
significant percentage of executives’ compensation is at risk each year. This
means that executives’ receipt of bonus compensation depends upon the Company’s
financial results.


The
Board of Directors has determined that it is in the best interests of the
Company to submit the material terms of the Amended Bonus Plan to the Company’s
stockholders for approval so that compensation paid under the Bonus Plan
generally will qualify as “performance-based compensation” under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code.”).
Code Section 162(m) places a limit of $1 million on the amount of
compensation that may be deducted by the Company in any taxable year with
respect to each “covered employee” within the meaning of Section 162(m).
However, “performance-based compensation” within the meaning of Section 162(m) is
not subject to the deduction limit. The Bonus Plan is designed to generally
provide “performance-based compensation” to each participant. Because bonuses
are paid under the Bonus Plan only if the Company’s financial or other results
meet or exceed certain quantifiable performance goals established by the
Compensation Committee, the Company may deduct such bonuses for Federal income
tax purposes even if the bonus payments, together with salary, paid to an
executive in any one year may exceed $1 million.


The
Amended Bonus Plan is being submitted to the Company’s stockholders for
approval so that generally bonuses payable to covered employees under the
Amended Bonus Plan are fully deductible for federal income tax purposes. The
Company’s stockholders must approve the Amended Bonus Plan before any bonuses
will be paid under the Amended Bonus Plan. If stockholders do not vote in favor
of this proposal, the Amended Bonus Plan will not be implemented and no
payments will be made to any of the Company’s executives under it.  If the Amended
Bonus Plan is not approved, the Company may not be able to deduct part of the
annual compensation that may be paid to Company executives under other plans or
arrangements that may exist or may be implemented.


The
original bonus plan was approved by the Company’s stockholders in 2002 but,
under Code Section 162(m), must be re-approved at least every 5 years and
so must be re-approved this year in order that bonuses payable to covered
employees remain fully deductible for federal tax purposes. In addition, the
Board of Directors desires to amend the performance goals under the plan by
adding demand deposits, commercial business loans, trade finance loans, and
expenses as goals and by deleting efficiency ratio as a goal.


The
following is a description of the material terms of the Amended Bonus Plan
including its performance goals. A copy of the Amended Bonus Plan is set forth
as Exhibit A to this Proxy Statement.


The description
below is not intended to be complete and reference should be made to the
Amended Bonus Plan as it is proposed for a complete statement of its terms and
provisions.













Eligibility
and Purposes


All
executive officers of East West Bancorp and its subsidiaries are eligible to
participate under the terms of the Amended Bonus Plan. Each year the
Compensation Committee will designate the executive officers who are to
participate in the Amended Bonus Plan for that year. It is anticipated that
initially one person, the CEO of the Company, will participate in the Amended
Bonus Plan.  The Amended Bonus Plan is intended to provide annual
incentive awards for eligible participants in the form of cash, stock,
restricted stock (or any combination of the foregoing), in order to enable the
Company to attract and retain highly qualified employees.


Administration


The
Amended Bonus Plan will be administered by a Compensation Committee which
consists solely of two or more members of the Board of Directors who are
intended to qualify as “outside directors” within the meaning of Code
Section 162(m).


Bonus
Determinations


For
each plan year, the Compensation Committee will establish in writing Company
performance goals for the plan year (in no event, later than the 90 th  day of the plan year in
question) which will be based on one or more of the following performance
measures, and which may be a fixed target, a prior year comparison or a
comparison to peer banks selected by the Compensation Committee, for each of
the following performance measures:


Company
performance criteria:


·    Return
on stockholder equity;


·    Return
on assets;


·    Ratio
of Non-performing assets to total assets;


·    Earnings
per share;


·    Deposits;


·    Demand
Deposits


·    Loans;


·    Commercial
business loans;


·    Trade
finance loans;


·    Non-interest
income


·    Expenses;
and


·    Stock
Price.


Each
of the foregoing criteria that is financial in nature is defined in the Amended
Bonus Plan by reference to the Company’s annual audited financial statements
with such adjustments as are defined in the Amended Bonus Plan. In determining
the Company’s performance under each of the above criteria that is based upon
income, earnings or profits, such income, earnings or profits will be
calculated before



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taking into
account any awards under the Plan, unless otherwise determined by the
Compensation Committee.


For
each plan year (in no event later than the 90th day of the plan year), the
Compensation Committee will establish a bonus range for each executive officer
participating in the Amended Bonus Plan and the forms in which payment of such
bonus may be made, whether in cash, stock, or restricted stock, or a
combination thereof. By the 90 th
 day of the following year, the Compensation Committee will assess and
certify in writing the extent to which the Company has achieved the performance
goals for the preceding plan year. The Compensation Committee shall then
determine each participant’s bonus award under the Plan based solely upon the
Company’s achievement of the performance goals. A participant’s bonus cannot be
increased for subjective reasons. The Compensation Committee, however, has the
discretion to reduce the amount of any award that would otherwise be payable to
a participant based solely upon the achievement of the performance goals. No
participant is eligible to receive bonus awards under the Amended Bonus Plan in
excess of $3.0 million for any calendar year. The Board of Directors or the
Compensation Committee may award bonuses outside the Amended Bonus Plan based
on subjective or other criteria.


Amendment
or Termination


The
Compensation Committee may amend or terminate the Amended Bonus Plan at any
time, subject to Board approval. No amendment which requires stockholder
approval to maintain the plan’s compliance with Code
Section 162(m) will be effective unless the necessary stockholder approval
is received.


Federal
Income Tax Consequences of Participation


Under
present federal income tax regulations, participants will realize ordinary
income equal to the amount of the award received in the year of receipt. The
amount received will be the amount of cash received and the fair market value
of any unrestricted stock received. The Company will receive a tax deduction
for the amount constituting ordinary income to the participant, provided that
the Amended Bonus Plan satisfies the requirements of Code Section 162(m),
which limits the deductibility of nonperformance-related compensation paid to
certain corporate executives. It is the Company’s intention that the Amended
Bonus Plan be construed and administered in a manner that maximizes the deductibility
of compensation for the Company under Code Section 162(m). The regulations
under Section 162(m) require that stockholders approve the material terms
of the Company’s Bonus Plan every five years in order to maintain its status as
a performance-based plan.


Approval
of the Amended Bonus Plan requires the affirmative vote of the holders of a
majority of the voting power of the shares of Company common stock present in
person or represented by proxy and entitled to vote at the Meeting.


The Board of Directors unanimously recommends a vote FOR the
approval of the Performance-Based Bonus Plan, as amended. Proxies solicited by
the Board of Directors will be so voted unless stockholders specify otherwise
in their proxies.



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