CHANGE IN CONTROL AGREEMENT
This
AGREEMENT is made effective as of
by and among United Commercial Bank (the “Bank”), a
California bank, with its principal administrative office at 555
Montgomery Street, San Francisco, California 94111, UCBH Holdings,
Inc. (the “Holding Company”), a corporation organized
under the laws of the State of Delaware which is the holding
company of the Bank (any reference to the Company shall be deemed
to include the Holding Company and the Bank) and
(“Executive”).
In
consideration of the contribution and responsibilities of
Executive, and upon the other terms and conditions hereinafter
provided, the parties hereto agree as follows:
The period of
this Agreement shall be deemed to have commenced as of the date
first above written and shall continue for a period of thirty-six
(36) full calendar months thereafter. Commencing on the first
anniversary date of this Agreement and continuing at each
anniversary date thereafter, the board of directors of the Company
(the “Board”) may extend the Agreement for an
additional year. The Board will review the Agreement and
Executive’s performance annually for purposes of determining,
within its sole discretion, whether to extend this Agreement, and
the results thereof shall be included in the minutes of the
Board’s meeting.
(a) For
purposes of this Agreement, a “Change in Control” of
the Company shall mean an event or series of event of a nature that
at such time: (i) any “person” (as the term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) is or becomes the “beneficial owner”
(as determined under Rule 13d of such Act), directly or
indirectly, of voting securities of the Bank or the Holding Company
representing fifty percent (50%) or more of the Bank’s or the
Holding Company’s outstanding voting securities or right to
acquire such securities except for any voting securities of the
Bank purchased by the Holding Company and any voting securities
purchased by any employee benefit plan of the Bank or the Holding
Company, or (ii) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Bank or the Holding Company or similar transaction occurs in which
the Bank or the Holding Company is not the resulting entity.
(b) If
a Change in Control has occurred pursuant to Section 2(a),
Executive shall be entitled to the benefits provided in paragraph
(c) of this Section 2 upon his subsequent termination of
regular employment within thirty-six (36) months following the
Change in Control due to: (i) termination of Executive’s
employment (other than Termination for Cause as defined below) or
(ii) Executive resigns following any material adverse change in or
loss of title, office or significant authority or responsibility,
material reduction in base salary or benefits (excluding bonus) or
relocation of his principal place of employment by more than 25
miles from its location at the time of the Change in Control
(“Change of Duties”). No
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benefits shall be provided to the Executive
pursuant to this Agreement if the Executive is terminated for
reasons other than those specified in this paragraph 2(b).
(c) Upon
Executive’s entitlement to benefits pursuant to
Section 2(b), (i) the Company shall pay Executive, or in
the event of his subsequent death or disability, his beneficiaries,
his estate or other representative, as the case may be, a sum equal
to three (3) times the highest annual compensation (defined as
base salary) due to the Executive for the last three years
immediately preceding the Change in Control or such lesser number
of years in the event that Executive shall been employed by the
Company for less than three years, less all required and applicable
withholding; and (ii) any unvested stock options and related
rights and unvested awards granted to Executive under any stock
option and similar plans shall immediately vest and shall be
exercisable within one (1) year. Within ten (10) days of
Executive’s entitlement of benefits pursuant to
Section 2(b), the Executive can elect to receive a lump sum
payment for the compensation benefits set forth in subsection
(c)(i) above. In the event that no election is made, payment to
Executive shall be made on a monthly basis over a period of
thirty-six (36) months.
(d) Upon
the occurrence of a Change in Control followed by Executive’s
termination of employment or resignation (other than Termination
for Cause), the Company and its successors or assigns shall cause
to be continued life, medical and disability coverage substantially
identical to the coverage maintained by the Company for the
Executive prior to Executive’s termination or resignation.
Such coverage and payments shall cease upon the expiration of
thirty-six (36) full calendar months from the date of
termination or resignation.
(e) As
used in this Section 2, the term “Termination for
Cause” shall mean termination because of an act or acts of
gross misconduct, willful neglect of duties or conviction of a
felony or equivalent violation of law or any other act or failure
to act that materially damages the reputation of the Company as
determined by the Board in its sole discretion after a good faith
investigation. For the purposes of this Section, no act, or the
failure to act, on Executive’s part shall be
“willful” unless done, or omitted to be done, without
reasonable belief that the action or omission was in the best
interests of the Company or its affiliates. Notwithstanding the
foregoing, Executive shall not be deemed to have been Terminated
for Cause unless and until there shall have been delivered to him a
Notice of Termination which shall include a copy of a resolution
duly adopted by the affirmative vote of not less than seventy five
percent (75%) of the members of the Board at a meeting of the Board
called and held for that purpose, finding that in the good faith
opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the relevant facts supporting
the Termination for Cause. Executive shall not have the right to
receive compensation or other benefits for any period after the
Date of Termination. The Date of Termination shall be the date on
which the Notice of Termination is delivered to Executive or, in
the event the Company is unable to reasonably locate Executive,
three (3) business days after delivery of such Notice of
Termination to Executive at his last known address.
(f) Company
expressly acknowledges and agrees that Executive shall have a
contractual right to the full benefits of this Agreement, and
Company and any successor expressly waives any rights it may have
to deny liability for any breach of its contractual
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commitment hereunder upon the grounds of lack
of consideration, accord and satisfaction or similar defense. In
any dispute arising after a Change of Control as to whether
Executive is entitled to the benefits of this Agreement and all
incentive plans, there shall be a presumption that the Executive is
entitled to such benefits and the burden of proving otherwise shall
be on the Company or any successor.
3. LIMIT IN
PAYMENTS BY THE COMPANY.
(a) In
the event that any amount or benefit paid or distributed to the
Executive pursuant to this Agreement, taken together with any
amounts or benefits otherwise paid or distributed to the Executive
by the Company (the “Covered Payments”), would be an
“excess parachute payment” as defined in
Section 280G of the Internal Revenue Code of 1986 (the
“ Code”) and would thereby subject the Executive
to the tax (the “Excise Tax”) imposed under
Section 4999 of the Code (or any similar tax that may
hereafter be imposed), the provisions of this Section 3 shall
apply to determine the amounts payable to Executive pursuant to
this Agreement.
(b) Immediately
following delivery of any Notice of Termination, the Company shall
notify the Executive of the aggregate present value of all
termination benefits to which the Executive would be entitled under
this Agreement and any other plan, program or arrangement as of the
Date of Termination, together with the projected maximum payments,
determined as of such projected Date of Termination that could be
paid without the Executive being subject to the Excise Tax.
(c) If
the aggregate value of all compensation payments or benefits to be
paid or provided to the Executive under this Agreement and any
other plan, agreement or arrangement with the Company exceeds the
amount which can be paid to the Executive without the Executive
incurring an Excise Tax and the Executive would receive a greater
net after-tax amount (taking into account all applicable taxes
payable by the Executive, including any Excise Tax) by applying the
limitation contained in this Section 3(c), then the amounts
payable to the Executive under this Section 3 shall be reduced
(but not below zero) to the maximum amount which may be paid
hereunder without the Executive becoming subject to such an Excise
Tax (such reduced payments to be referred to as the “Payment
Cap”). In the event that the Executive receives reduced
payments and benefits hereunder, the Executive shall have the right
to designate which of the payments and benefits otherwise provided
for in this Agreement that he will receive in connection with the
application of the Payment Cap. If it shall be determined that
Executive would not receive a net after-tax benefit (taking into
account income, employment and any Excise Tax) resulting from
application of the Payment Cap, then no reduction shall be made
with respect to the pay or benefits due to Executive.
(d) For
purposes of determining whether any of the covered Payments will be
subject to the Excise Tax and the amount of such Excise Tax:
(i) such
Covered Payments will be treated as “parachute
payments” within the meaning of Section 280G of the
Code, and all “parachute payments” in excess of the
“base amount” (as defined under Section 280G(b)(3)
of the Code) shall be treated as subject to the Excise Tax, unless,
and except to the extent that, in the good faith
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judgment of the Company’s independent
certified public accountants or tax counsel selected by such
accountants (the “Accountants”), relying on the best
authority available at the time of such determination (including,
but not limited to, any proposed Treasury Regulations upon which
taxpayers may rely), that the Company has a reaso
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