EXHIBIT 10.7.3
 
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 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.
 
 
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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 in
nature and may be modified, amended, suspended or terminated by the Company at
any time unless otherwise provided in the Plan or this Agreement;
 
(ii) the grant of this Option is voluntary and occasional and does not create
any contractual or other right to receive future grants of Awards, or benefits
in lieu of Awards, even if options have been granted repeatedly in the past; or
any right of Optionee to continue as a Director;
 
(iii) Optionee’s right to exercise this Option pursuant to the vesting schedule
in Section 4 is dependent upon Optionee continuing to serve as a Director, and
that service as a Director could cease for a variety of reasons, some of which
may be involuntary such as a failure to be nominated or elected as a Director or
in connection with a Change in Control, which could result in the loss of
benefits available to Optionee under this Agreement including the right to
exercise Options; and
 
(iv) in consideration of the grant of this Option, no claim or entitlement to
compensation or damages shall arise from termination of this Option or
diminution in value of this Option or Shares purchased through exercise of this
Option resulting from Cessation of Service for any reason whatsoever, and
Optionee irrevocably releases the Company and its Affiliates from any such claim
that may arise; if, notwithstanding the foregoing, any such claim is found by a
court of competent jurisdiction to have arisen, then, by accepting the terms of
this Agreement, Optionee shall be deemed irrevocably to have waived any
entitlement to pursue such claim.
 
10. Data Transfer. Optionee explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of Optionee’s
personal data as described in this document by and among, as applicable, the
Employer and the Company and its Affiliates for the exclusive purpose of
implementing, administering and managing Optionee’s participation in the Plan.
Optionee understands that the Company and its Affiliates hold certain personal
information about Optionee, including, but not limited to, name, home address
and telephone number, date of birth, social security or insurance number (or
other identification number), salary, nationality, any shares of stock or
directorships held in the Company, details of all options or any other
entitlement to shares of stock awarded, canceled, purchased, exercised, vested,
unvested or outstanding in Optionee’s favor for the purpose of implementing,
managing and administering the Plan (“Data”). Optionee understands that the Data
may be transferred to any third parties assisting in the implementation,
administration and management of the Plan, that these recipients may be located
in Optionee’s country or elsewhere and that the recipient country may have
different data privacy laws and protections than Optionee’s country. Optionee
may request a list with the names and addresses of any potential recipients of
the Data by contacting the Cathay Bank Director of Human Resources. Optionee
authorizes the recipients to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes of implementing,
administering and managing Optionee’s participation in the Plan, including any
requisite transfer of such Data as may be required to a broker or other third
party with whom Optionee may elect to deposit any Shares acquired upon the
exercise of this Option. Optionee understands that Data will be held only as
long as is necessary to implement, administer and manage participation in the
Plan. Optionee may, at any time, view Data, request additional information about
the storage and processing of the Data, require any necessary amendments to the
Data or refuse or withdraw the consents herein, in any case without cost, by
contacting the Cathay Bank Director of Human Resources in writing. Optionee
understands that refusing or withdrawing consent may affect Optionee’s ability
to participate in the Plan. For more information on the consequences of refusing
to consent or withdrawing consent, Optionee may contact the Cathay Bank Director
of Human Resources.
 
 
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11. Copies of Plan Materials. Optionee acknowledges that Optionee has received
copies of the Plan and the Plan prospectus from the Company and agrees to
receive stockholder information, including copies of any annual report, proxy
statement and periodic report, from the Company’s website at
http://www.cathaybank.com then selecting “About Us” and “Investor Information.”
Optionee acknowledges that copies of the Plan, Plan prospectus, Plan information
and stockholder information are available upon written or telephonic request to
the Cathay Bank Director of Human Resources. If Optionee has received this or
any other document related to the Plan translated into a language other than
English and if the translated version is different than the English version, the
English version will control. Optionee acknowledges that the Plan contains
provisions that materially affect the rights and obligations of the Optionee.
 
12. Restrictions. Shares shall not be issued pursuant to the exercise of this
Option unless the exercise of this Option and the issuance and delivery of such
Shares shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such compliance. Stock
certificates evidencing any Shares may bear such restrictive legends as the
Company and the Company’s counsel deem necessary or advisable under Applicable
Laws or pursuant to this Agreement or the Plan.
 
13. Entire Agreement; Plan Controls. The Plan is incorporated herein by
reference. The Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to
Optionee’s interest except by means of a writing signed by the Company and
Optionee. In the event of any conflict between the terms and provisions of the
Plan and this Agreement, the Plan terms and provisions shall govern. Certain
other important terms governing this Agreement are contained in the Plan.
 

     
CATHAY GENERAL BANCORP
   
By
       
[Name]
[Title]

 
Optionee hereby accepts and agrees to all of the terms and conditions of this
Agreement and the Plan:
 

   
[Optionee’s Signature]

 
RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDS
 
 
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NOTICE OF EXERCISE
 
To the Plan Administrator of CATHAY GENERAL BANCORP:
 
The undersigned Optionee hereby notifies CATHAY GENERAL BANCORP (the “Company”)
that Optionee is exercising a nonstatutory (nonqualified) stock option to
purchase             shares of Common Stock of the Company, which was granted to
Optionee on             , 20        , pursuant to the Company’s 2005 Incentive
Plan (the “Plan”), at an exercise price of $            per share for aggregate
consideration of $            .
 
Payment of the exercise price and all applicable withholding or employment taxes
is being delivered to the Company together with this Notice of Exercise.
 
Optionee hereby confirms the acknowledgements and agreements made in Section 9
and other sections of the Stock Option Agreement (Nonstatutory) (Nonemployee
Director) between the Company and the Optionee dated as of                ,
20        .
 

         
Date:                    , 20       
  
 
  
   
  
 
  
Signature

 
Please issue the stock as follows:
 

         
Print Name:
             
Sign Name:
                 
Social Security Number:
                 
Office Phone:
                 
Home Address:
                 
City, State, Zip Code:
                       

 
 
For Administrator’s use only:
 
Date of receipt of Notice of Exercise                
Date Confirmation of Stock Exercise sent to Optionee                     
Date Instruction Letter sent to Transfer Agent                      
 

 
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