EXHIBIT 10.7.4
CATHAY GENERAL
BANCORP
2005 INCENTIVE
PLAN
STOCK OPTION AGREEMENT
(NONSTATUTORY)
(NONEMPLOYEE
DIRECTOR)
THIS STOCK OPTION AGREEMENT (the
“Agreement”), dated
, 20
(“Grant Date”), between Cathay General Bancorp, a
Delaware corporation (the “Company”), and
<NONEMPLOYEE DIRECTOR> (“Optionee”), is entered
into as follows:
WITNESSETH:
WHEREAS, the Company has established
the 2005 Incentive Plan (the “Plan”); and
WHEREAS, the Executive Compensation
Committee or Equity Incentive Committee of the Board of Directors
of the Company or its delegates (the “Committee”) has
determined that Optionee shall be granted an option under the Plan
as hereinafter set forth;
The parties hereby agree that the
Company grants, effective as of the Grant Date, Optionee a
nonstatutory (nonqualified) stock option (this
“Option”) to purchase <SHARES> shares of its
$0.01 par value Common Stock (the “Shares”) upon the
terms and conditions set forth in this Agreement.
1. Plan Award .
This Option is granted under and pursuant to the Plan and is
subject to each and all of the provisions thereof. Capitalized
terms used but not defined in this Agreement have the meanings
assigned to them in the Plan.
2. Exercise Price
. The exercise price applicable to this Option (meaning, the
price Optionee must pay in order to purchase any Shares hereunder)
shall be $
per Share.
3. Transferability
. This Option is not transferable by Optionee otherwise than by
will or the laws of descent and distribution, and is exercisable
only by Optionee during his or her lifetime. This Option may not be
transferred, assigned, pledged or hypothecated by Optionee during
his or her lifetime, whether by operation of law or otherwise, and
is not subject to execution, attachment or similar
process.
4. Vesting and Exercise of
Option . Subject to Optionee’s not experiencing a
Cessation of Service during the following vesting term, Optionee
shall vest and earn the right to exercise this Option on the
following schedule: The Option shall become exercisable with
respect to 20% of the number of Shares covered hereby on the first
anniversary of the Grant Date, 20% of the number of Shares covered
hereby on the second anniversary of the Grant Date, 20% of the
Shares covered hereby on the third anniversary of the Grant Date,
20% of the Shares covered hereby on the fourth anniversary of the
Grant Date, and 20% of the Shares covered hereby on the fifth
anniversary of the Grant Date, so that this Option shall be fully
exercisable on the fifth anniversary of the Grant Date.
5. Expiration . This
Option will expire ten (10) years from the Grant Date, unless
sooner terminated or canceled in accordance with the provisions of
the Plan. This means that (subject to the continuing service
requirement set forth in Section 4 above and subject to
earlier termination
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upon certain other events as set forth in the
Plan) this Option must be exercised, if at all, on or before
, 20 (the “Expiration
Date”). If this Option expires on a national holiday or
weekend day, this Option will expire on the last trading day
prior to the holiday or weekend. Optionee shall be
solely responsible for exercising this Option, if at all, prior to
its Expiration Date. The Company shall have no obligation to notify
Optionee of this Option’s expiration.
6. Exercise Mechanics
. This Option may be exercised by delivering to the Company at
its principal executive office, to the attention of the officer of
the Company designated by the Committee, a written or electronic
notice stating the number of Shares as to which the Option is
exercised or by any other method the Committee has approved. The
notice must be accompanied by the payment of the full Option
exercise price of such Shares. Exercise shall not be deemed to have
occurred unless and until Optionee has delivered to the Company (or
its authorized representative) an approved notice of exercise, full
payment for the Shares with respect to which the Option is being
exercised and payment of any applicable withholding taxes in
accordance with Section 8 below. Payment of the Option
exercise price may be in cash, cashier’s check, or wire
transfer; provided, however, that any permitted method of payment
shall be in strict compliance with all procedural rules established
by the Committee.
7. Cessation of Service
. All rights of Optionee in this Option, to the extent that it
has not previously become vested and been exercised, shall
terminate upon Optionee’s ceasing to be a Director
(“Cessation of Service”) except as set forth in this
Section 7. The portion of the Option that relates to any
Shares that were unvested and unexercisable as of the date of
Optionee’s Cessation of Service shall terminate and expire
effective immediately upon such date. With respect to the vested
and exercisable portion of the Option, and subject to the following
sentence:
(i) In the event of Cessation of
Service other than as a result of Optionee’s death or
disability, Optionee shall have ninety (90) days to exercise
the Option as to the Shares subject to the Option that were vested
and exercisable as of the date of Cessation of Service;
and
(ii) In the event of Cessation of
Service as a result of Optionee’s death or disability
(including a Total and Permanent Disability), Optionee shall have
one (1) year to exercise the Option as to the Shares subject
to the Option that were vested and exercisable as of the date of
Cessation of Service.
Notwithstanding the above, in no
event may an Option be exercised, even as to vested and otherwise
exercisable Shares, after the Expiration Date set forth in
Section 5 above.
8. Tax Matters .
Optionee acknowledges and agrees that liability for all income tax,
social insurance, payroll tax, payment on account or other
tax-related items (“Tax-Related Items”) legally due by
him or her is and remains Optionee’s responsibility and that
the Company and/or the Affiliate (i) make no representations
nor undertakings regarding the treatment of any Tax-Related Items
in connection with any aspect of this Option, including the grant,
vesting or exercise of this Option, the subsequent sale of Shares
acquired pursuant to such exercise and receipt of any dividends;
and (ii) do not commit to structure the terms or the grant or
any aspect of this Option to reduce or eliminate Optionee’s
liability for Tax-Related Items. Although Optionee is being
provided in the Plan prospectus a description of certain tax
consequences of transactions related to the Option, Optionee
remains responsible for all such tax consequences and the Company
shall not be deemed to provide any individual tax advice with
respect thereto.
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9. Optionee Consents . By
accepting the grant of this Option, Optionee acknowledges and
agrees that:
(i) the Plan is established
voluntarily by the Company, it is discretionary i
