EXHIBIT 10.10.6
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 Perry P. Oei (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 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
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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 second 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 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)
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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 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.
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(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) 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.
(7) 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 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:
(i) failure to perform substantially his employment
obligations (other than any such failure resulting from incapacity
due to physical or mental illness or following the
Executive’s notification of a termination for Good Reason),
after a written demand for substantial performance is delivered to
the Executive by the Board or, if the Company is not the ultimate
parent corporation of the Company and is not publicly-traded, the
board of directors of the ultimate parent of the Company (the
“ Applicable Board ”) or the Chief Executive
Officer of the Company that specifically identifies the manner in
which the Applicable Board or the Chief Executive Officer of the
Company believes that the Executive has
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not substantially performed his duties;
(ii) conviction of or guilty or nolo contendere plea to a
felony; or (iii) willful commission of an act of fraud,
dishonesty or gross misconduct which is materially and demonstrably
injurious to the Company or the Bank. 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 or the
Bank. Any act, or failure to act, based upon (x) authority
given pursuant to a resolution duly adopted by the Applicable
Board, (y) the instructions of the Chief Executive Officer of
the Company or the Bank (as applicable) or an officer of the
Company or the Bank (as applicable) senior to the Executive or
(z) the advice of counsel for the Company or the Bank (as
applicable) shall be conclusively presumed to be done, or omitted
to be done, by Executive in good faith and in the best interests of
the Company and the Bank.
(c) Good Reason . The
Executive’s employment may be terminated by the Executive for
Good Reason or by the Executive voluntarily without Good Reason.
“ Good Reason ” means: The occurrence of any of
the following events after a Change of Control, without
Executive’s prior written consent: (i) an adverse and
significant change in Executive’s position, duties,
responsibilities or status with the Company or the Bank;
(ii) a change in Executive’s principal office location
to a location further away from Executive’s home which is
more than 30 miles from Executive’s principal office;
(iii) the taking of any action by the Company or the Bank to
eliminate benefit plans in which Executive participated or was
eligible to participate immediately prior to a Change of Control
without providing substitutes therefor, to materially reduce
benefits thereunder or to substantially diminish the aggregate
value of the incentive awards or other fringe benefits applicable
to Executive; provided that if none of the Company, a
surviving entity nor its parent following a Change of Control is a
publicly-held company, the failure to provide stock-based benefits
shall not be deemed Good Reason if benefits of comparable value
using recognized valuation methodology are substituted therefor;
and provided , further that a reduction or
elimination in the aggregate of not more than 10% in aggregate
benefits in connection with across the board reductions or
modifications affecting similarly situated persons of executive
rank in the Bank shall not constitute Good Reason; (iv) any
reduction in Executive’s Annual Base Salary; or (v) any
material breach by the Company or the Bank of this
Agreement.
(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
Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified in the Notice
of Termination, as the case may be, (2) if the
Executive’s employment is terminated by the Company other
than for Cause or Disability, the date on which the Company
notifies the Executive of such termination, (3) if the
Executive resigns without Good Reason, the date on which the
Executive notifies the Company of such termination, and (4) if
the Executive’s employment is terminated by reason of death
or Disability, the date of death of the Executive or the Disability
Effective Date, as the case may be. Notwithstanding the foregoing,
in no event shall the Date of Termination occur until the Executive
experiences a “separation from service” within the
meaning of Section 409A of the Code, and the date on which
such separation from service takes place shall be the “Date
of Termination.”
Section 5. Obligations of
the Company upon Termination . (a) By the Executive for
Good Reason; By the Company Other Than for Cause, Death or
Disability . If, during the Employment Period, the Company
terminates the Executive’s employment other than for Cause,
Death or Disability or the Executive terminates employment for Good
Reason:
(1) subject to
Section 5(e) of this Agreement, the Company or the Bank (as
applicable) shall pay to the Executive, in a lump sum in cash on
the 30 th day following the Date of
Termination, the aggregate of the following amounts:
(A) the sum of (i) the
Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (ii) the
Executive’s business expenses that are reimbursable pursuant
to Section 3(b)(5) but have not been reimbursed by the Company
or the Bank (as applicable) as of the Date of Termination;
(iii) the Executive’s Annual Bonus for the fiscal year
immediately preceding the fiscal year in which the Date of
Termination occurs, if such bonus has been determined but not paid
as of the Date of Termination; (iv) any accrued vacation pay
to the extent not theretofore paid (the sum of the amounts
described in subclauses (i), (ii), (iii) and (iv), the “
Accrued Obligations ”) and (v) an amount equal to
the product of (x) the higher of (I) the Recent Annual
Bonus and (II) the Annual Bonus paid or payable, including any
bonus or portion thereof that has been earned but deferred (and
annualized for any fiscal year consisting of less than 12 full
months or during which the Executive was employed for less than 12
full months), for the most recently completed fiscal year during
the Employment Period, if any (such higher amount, the “
Highest Annual Bonus ”) and (y) a fraction, the
numerator of which is the number of days in the current fiscal year
through the Date of Termination and the denominator of which is 365
(the “ Pro Rata Bonus ”); provided, that
notwithstanding the foregoing, if the Executive has made an
irrevocable
