EXHIBIT 10.10.3
AMENDED AND
RESTATED
CHANGE OF CONTROL
EMPLOYMENT
AGREEMENT
This Amended and Restated Change of
Control Employment Agreement is made as of the 18th day of
December, 2008 (this “ Agreement ”), by and
between Cathay General Bancorp, a Delaware corporation (the “
Company ”), Cathay Bank, a California state chartered
commercial bank and a wholly owned subsidiary of the Company (the
“ Bank ”), and Heng W. Chen (the “
Executive ”).
WHEREAS, the Board of Directors of
the Company (the “ Board ”) and the Board of
Directors of the Bank (the “ Bank Board ”), have
determined that it is in the best interests of the Bank and the
Company and its stockholders to assure that the Company and/or the
Bank (as applicable) will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change of Control (as defined herein). The Board believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company in
the event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements
upon a Change of Control that ensure that the compensation and
benefits expectations of the Executive will be satisfied and that
provide the Executive with compensation and benefits arrangements
that are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
Section 1. Certain
Definitions . (a) “ Effective Date ”
means the first date during the Change of Control Period (as
defined herein) on which a Change of Control occurs.
Notwithstanding anything in this Agreement to the contrary, if
(i) the Executive’s employment with the Company is
terminated by the Company, (ii) the Date of Termination is
prior to the date on which a Change of Control occurs, and
(iii) it is reasonably demonstrated by the Executive that such
termination of employment (A) was at the request of a third
party that has taken steps reasonably calculated to effect a Change
of Control or (B) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this
Agreement the “ Effective Date ” means the date
immediately prior to such Date of Termination.
(b) “ Change of Control
Period ” means the period commencing on the date hereof
and ending on the third anniversary of the date hereof;
provided, however , that, commencing on the date one year
after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof, the “
Renewal Date ”), unless previously terminated, the
Change of Control Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless, at least 60
days prior to the Renewal Date, the Company shall give notice to
the Executive that the Change of Control Period shall not be so
extended.
(c) “ Affiliated
Company ” means any company controlled by, controlling or
under common control with the Company.
(d) “ Change of Control
” means:
(1) Any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”)) (a “ Person ”)
becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(A) the then-outstanding shares of common stock of the Company
(the “ Outstanding Company Common Stock ”) or
(B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “ Outstanding Company Voting
Securities ”); provided, however, that, for purposes of
this Section 1(d), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliated
Company or (iv) any acquisition pursuant to a transaction that
complies with Sections 1(d)(3)(A), 1(d)(3)(B) and
1(d)(3)(C);
(2) Individuals who, as of the date
hereof, constitute the Board (the “ Incumbent Board
”) cease for any reason to constitute at least a majority of
the Board; provided , however , that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board;
(3) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries
(each, a “ Business Combination ”), in each case
unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) and the combined
voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may
be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the
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case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of
the members of the board of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or
(4) Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
Section 2. Employment
Period . The Company and/or the Bank (as applicable) hereby
agrees to continue the Executive in its employ, subject to the
terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on the third anniversary of the
Effective Date (the “ Employment Period ”). The
Employment Period shall terminate upon the Executive’s
termination of employment for any reason.
Section 3. Terms of
Employment . (a) Position and Duties .
(1) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all respects with the most
significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at
the office where the Executive was employed immediately preceding
the Effective Date or at any other location less than 35 miles from
such office.
(2) During the Employment Period,
and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use
the Executive’s reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment
Period, it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that, to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b) Compensation . (1)
Base Salary . During the Employment Period, the Executive
shall receive an annual base salary (the “ Annual Base
Salary ”) at an annual rate at least equal to 12 times
the highest monthly base salary paid or payable, including any base
salary that has been
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earned but deferred, to the Executive by the
Company and the Affiliated Companies in respect of the 12-month
period immediately preceding the month in which the Effective Date
occurs. The Annual Base Salary shall be paid at such intervals as
the Company or the Bank (as applicable) pays executive salaries
generally. During the Employment Period, the Annual Base Salary
shall be reviewed at least annually, beginning no more than 12
months after the last salary increase awarded to the Executive
prior to the Effective Date. Any increase in the Annual Base Salary
shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. The Annual Base Salary shall not be
reduced after any such increase and the term “Annual Base
Salary” shall refer to the Annual Base Salary as so
increased.
(2) Annual Bonus . In
addition to the Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual
bonus (the “ Annual Bonus ”) in cash at least
equal to the Executive’s highest bonus earned under the
Company’s or the Bank’s (as applicable) annual
incentive plan or program, or any comparable bonus under any
predecessor or successor plan, for the last three full fiscal years
prior to the Effective Date (or for such lesser number of full
fiscal years prior to the Effective Date for which the Executive
was eligible to earn such a bonus, and annualized in the case of
any pro rata bonus earned for a partial fiscal year) (the “
Recent Annual Bonus ”). (If the Executive has not been
eligible to earn such a bonus for any period prior to the Effective
Date, the “ Recent Annual Bonus ” shall mean the
Executive’s target annual bonus for the year in which the
Effective Date occurs.) Each such Annual Bonus shall be paid no
later than two and a half months after the end of the fiscal year
for which the Annual Bonus is awarded, unless the Executive shall
elect to defer the receipt of such Annual Bonus pursuant to an
arrangement that meets the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “ Code
”).
(3) Incentive, Savings and
Retirement Plans . During the Employment Period, the Executive
shall be entitled to participate in all cash incentive, equity
incentive, savings and retirement plans, practices, policies, and
programs applicable generally to other peer executives of the
Company and the Affiliated Companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and the Affiliated Companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(4) Welfare Benefit Plans .
During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the
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120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and the Affiliated
Companies.
(5) Expenses . During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and the Affiliated Companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(6) Fringe Benefits . During
the Employment Period, the Executive shall be entitled to fringe
benefits, including, without limitation, tax and financial planning
services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the
Company and the Affiliated Companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and the Affiliated Companies.
(7) Office and Support Staff
. During the Employment Period, the Executive shall be entitled to
an office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and the Affiliated
Companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(8) Vacation . During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and the Affiliated Companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
Section 4. Termination of
Employment . (a) Death or Disability. The
Executive’s employment shall terminate automatically if the
Executive dies during the Employment Period. If the Company
determines in good faith that the Disability (as defined herein) of
the Executive has occurred during the Employment Period (pursuant
to the definition of “ Disability ”), it may
give to the Executive written notice in accordance with
Section 11(b) of its intention to terminate the
Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “
Disability Effective Date ”), provided that,
within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive’s duties.
“ Disability ” means the absence of the
Executive from the Executive’s duties with the Company or the
Bank (as applicable) on a full-time basis for 180 consecutive
business days as a result of incapacity due to
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mental or physical illness that is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b) Cause . The Company may
terminate the Executive’s employment during the Employment
Period with or without Cause. “ Cause ”
means:
(1) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties (as contemplated by
Section 3(a)(1)(A)) with the Company or any Affiliated Company
(other than any such failure resulting from incapacity due to
physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board
or the Chief Executive Officer of the Company believes that the
Executive has not substantially performed the Executive’s
duties, or
(2) the willful engaging by the
Executive in illegal conduct or gross misconduct that is materially
and demonstrably injurious to the Company.
For purposes of this
Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act (A) based upon authority given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company (the “ Applicable Board ”),
(B) based upon authority given by the Chief Executive Officer
of the Company or an executive officer of the Company that is
senior to Executive or (C) based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Applicable Board
(excluding the Executive, if the Executive is a member of the
Applicable Board) at a meeting of the Applicable Board called and
held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Applicable
Board), finding that, in the good faith opinion of the Applicable
Board, the Executive is guilty of the conduct described in
Section 4(b)(1) or 4(b)(2), and specifying the particulars
thereof in detail.
(c) Good Reason . The
Executive’s employment may be terminated during the
Employment Period by the Executive for Good Reason or by the
Executive voluntarily without Good Reason. “ Good
Reason ” means:
(1) the assignment to the Executive
of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a), or any other diminution in such
position, authority, duties or responsibilities (whether or not
occurring solely as a result of
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the Company’s ceasing to be a publicly
traded entity), excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
that is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(2) any failure by the Company to
comply with any of the provisions of Section 3(b), other than
an isolated, insubstantial and inadvertent failure not occurring in
bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(3) the Company’s requiring
the Executive (i) to be based at any office or location other
than as provided in Section 3(a)(1)(B) of this Agreement,
(ii) to be based at a location other than the principal
executive offices of the Company if the Executive was employed at
such location immediately preceding the Effective Date, or
(iii) to travel on Company business to a substantially greater
extent than required immediately prior to the Effective
Date;
(4) any purported termination by the
Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or
(5) any action or inaction that
constitutes a material breach by the Company or the Bank (as
applicable) of this Agreement, including any failure by the Company
to comply with and satisfy Section 10(c).
For purposes of this
Section 4(c), any good faith determination of Good Reason made
by the Executive shall be conclusive. Anything in this Agreement to
the contrary notwithstanding, a termination by the Executive for
any reason pursuant to a Notice of Termination given during the
30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason
for all purposes of this Agreement. The Executive’s mental or
physical incapacity following the occurrence of an event described
above in clauses (1) through (5) shall not affect the
Executive’s ability to terminate employment for Good Reason
and the Executive’s death following delivery of a Notice of
Termination for Good Reason shall not affect the Executive’s
estate’s entitlement to severance payments or benefits
provided hereunder upon a termination of employment for Good
Reason.
(d) Notice of Termination .
Any termination of employment by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 11(b). “ Notice of Termination ”
means a written notice that (1) indicates the specific
termination provision in this Agreement relied upon, (2) to
the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and
(3) if the Date of Termination (as defined herein) is other
than the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30
days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact
or circumstance that contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s respective rights
hereunder.
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(e) Date of Termination .
“ Date of Termination ” means (1) if the
Executive’s employment is terminated by the Company
for
