Exhibit 10.6.1

APPROVAL OF SECTION 6, AS AMENDED, TO 1998 STOCK INCENTIVE PLAN

The Board of Directors, subject to approval of the Company’s stockholders, has
adopted an amendment to Section 6 of the Company’s 1998 Stock Incentive Plan
(the “Plan”) to

·    Add Commercial Business Loans, Trade Finance Loans, Demand Deposits, and
Expenses as goals

·    Delete Efficiency Ratio as a goal

Section 6 of the Plan provides for the issuance of restricted stock with vesting
subject to meeting certain performance goals determined by the shareholders and
set each year by the Compensation Committee of the Board of Directors. Shares of
performance restricted stock were awarded in 2006 and 2007 to the CEO of the
Company. The Compensation Committee would like the flexibility to be able to
continue to make grants of performance restricted stock to the CEO and possibly
other officers of the Company.

The Board of Directors has determined that it is in the best interests of the
Company to submit the Section 6 of the Plan, as amended, to the Company’s
stockholders for approval so that any performance restricted stock that may be
issued under the Plan generally will qualify as “performance-based compensation”
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code.”). Code Section 162(m) places a limit of $1 million on the amount of
compensation that may be deducted by the Company in any taxable year with
respect to each “covered employee” within the meaning of Section 162(m).
However, “performance-based compensation” within the meaning of
Section 162(m) is not subject to the deduction limit. Section 6 of the Plan is
designed to generally provide “performance-based compensation” to each
participant. Because restricted stock awarded under the Plan vests only if the
Company’s financial or other results meet or exceed certain quantifiable
performance goals established by the Compensation Committee, the Company may
deduct the expense of such performance restricted stock for Federal income tax
purposes even if the value, together with salary and bonuses paid to an
executive in any one year may exceed $1 million.

The amended Section 6 of the Plan is being submitted to the Company’s
stockholders for approval so that generally performance restricted stock awarded
to employees is fully deductible for federal income tax purposes. The Company’s
stockholders must approve Section 6, as amended, if future awards of performance
restricted stock are to be deductible.  If Section 6, as amended, is not
approved, the Company may not be able to deduct this part of the expense of the
annual compensation that may be paid to Company executives under other plans or
arrangements that may exist or may be implemented.

Section 6 of the Plan was last approved by the Company’s stockholders in 2002
but, under Code Section 162(m), must be re-approved at least every 5 years in
order that grants of performance restricted stock be fully deductible for
federal tax purposes. In addition, as discussed above, the Board of Directors
desires to amend the performance goals under the plan by adding demand deposits,
commercial business loans, trade finance loans, and expenses as goals and by
deleting efficiency ratio as a goal.

Since its adoption in 1998, the Plan has been used primarily for the Company’s
stock option incentive programs and restricted stock program. All full-time
employees of the Company have received annual grants of stock options or
restricted stock under the Company’s Spirit of Ownership Program. In addition,
most officers of the Company have received additional grants from time to time
in connection with their performance reviews. Performance restricted stock under
Section 6 has been awarded to the CEO and may in the future be awarded to other
officers as well.

The Board of Directors believes that the 1998 Stock Incentive Plan and the
ability to issue performance restricted stock helps the Company compete for,
motivate and retain high-caliber employees and more closely links the interests
of the employees and the stockholders of the Company by encouraging employees to
focus on long-range objectives.

The Board believes that the existing Stock Incentive Plan and the grants under
the Plan have contributed substantially to the success of the Company since its
listing as a public company in 1999.

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·    The Company’s stock has risen from $4.813, the closing price when it was
first listed on the NASDAQ Global Select Market (“NASDAQ”) on February 8, 1999
to $38.15 as of February 8, 2007. The compound annual rate of growth during this
period has been 30%.

·    The aggregate market value of the Company’s stock has risen from
approximately $229 million when it was first listed on NASDAQ on February 8,
1999 to $2.34 billion as of February 8, 2007.  The compound annual rate of
growth during this period has been 34%.

·    Fully diluted earnings per share have risen from $0.13 for the quarter
ended December 31, 1998 to $0.63 for the quarter ended December 31, 2006. The
compound annual rate of growth during this period has been 22%.

·    Net income has risen from $6.5 million for the quarter ended December 31,
1998 to $39.1 million for the quarter ended December 31, 2006. The compound
annual rate of growth during this period has been 25%.

·    Core non-CD deposits, have risen from $441 million as of December 31, 1998
to $3.46 billion as of December 31, 2006. The compound annual rate of growth
during this period has been 29%.

·    Loans have risen from $1.10 billion as of December 31, 1998 to $8.18
billion as of December 31, 2006. The compound annual rate of growth during this
period has been 29%.

·    Non-performing assets have been reduced from 0.99% of total assets as of
December 31, 1998 to 0.18% of total assets as of December 31, 2006.

The Board believes that approval of Section 6, as amended, to the Plan would,
among other things, enhance the long-term stockholder value of the Company by
offering opportunities to the Company’s employees, officers, consultants,
agents, and advisors to acquire, subject to performance criteria, proprietary
interest in the Company and to link their interests and efforts to the long-term
interests of the Company’s stockholders.

The Board believes in structuring the compensation of employees to increase
focus on long-term improvements in stockholder returns. For senior executives,
it is desired that a material portion of their prospective compensation be in
the “at-risk” category and dependent on stockholder returns.

Set forth below is a summary of certain important features of the amended Plan,
which summary is qualified in its entirety by reference to the full text of the
Plan, as amended, which is published in the proxy statement as Exhibit B.
Changes in the Plan are indicated in italics.

Description of the Plan

GENERAL.   Under the 1998 Employee Stock Incentive Plan, officers, directors,
employees and consultants of the Company and its subsidiaries are eligible to
receive shares of Company common stock or other securities or benefits with a
value derived from the value of Company common stock.

The purpose of the Plan is to enable the Company to attract, retain and motivate
officers, directors, employees and consultants by providing for or increasing
their proprietary interests in the Company and, in the case of non-employee
directors, to attract such directors and further align their interests with
those of the Company’s stockholders by providing or increasing their proprietary
interests in the Company.

ADMINISTRATION.   The Stock Incentive Plan is administered by a committee of two
or more non-employee directors appointed by the Board, each of whom is intended
to qualify as an “outside director” within the meaning of Section 162(m) and a
“non-employee director” under SEC Rule 16b-3.

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The Board of Directors may act in lieu of the Committee. The Compensation
Committee has a wide degree of flexibility in determining the terms and
conditions of awards and the number of shares to be issued pursuant thereto,
including conditioning the receipt or vesting of awards upon the achievement by
the Company of specified performance criteria. The expenses of administering the
Plan are borne by the Company.

The Committee decides whether and to what extent awards will be structured to
conform with Code Section 162(m) requirements applicable to performance-based
compensation. The Committee may determine that any award of restricted stock or
performance units will be granted or will vest on the basis of the achievement
of performance goals. In order for such awards to be fully deductible without
regard to the limitations of Code Section 162(m), such performance goals must be
objective and will be based solely upon one or more of the following performance
measures : return on stockholder equity; return on assets; ratio of
non-performing assets to total assets; earnings per share; deposits; demand
deposits, loans; commercial business loans; trade finance loans; non-interest
income; expenses; and stock price  (“Performance Criteria”). Performance
measures may relate to the Company and/or one or more of its subsidiaries, one
or more of its divisions or units or any combination of the foregoing, on a
consolidated or nonconsolidated basis, and may be applied on an absolute basis,
in comparison to past performance, or be relative to one or more peer group
companies or indices, or any combination thereof, all as the Committee
determines.

In order for such a performance-based award to be fully deductible without
regard to the limitations of Code Section 162(m), the Committee must establish
the performance goals no later than 90 days after the beginning of the period
for which such performance goal relates (or such later date as may be permitted
under applicable Code Section 162(m) tax regulations) and the Committee may for
any reason reduce (but not increase) any award, notwithstanding the achievement
of a specified goal. Any payment of an award granted with performance goals will
be conditioned on the written certification of the Committee in each case that
the performance goals and any other material conditions were satisfied.

TERMS OF AWARDS; PER-PERSON LIMITS.   The Plan authorizes the Company to enter
into any type of arrangement with an eligible recipient that, by its terms,
involves or might involve the issuance of Company common stock or any other
security or benefit with a value derived from the value of Company common stock.
Awards are not restricted to any specified form or structure and may include,
without limitation, sales or bonuses of stock, restricted stock, stock options,
reload stock options, stock purchase warrants, other rights to acquire stock,
securities convertible into or redeemable for stock, stock appreciation rights,
phantom stock, dividend equivalents, performance units or performance shares. An
award may consist of one such security or benefit or two or more of them in
tandem or in the alternative. Awards to any one person during any calendar year
may cover no more than 1,902,000 shares of Company common stock. If an award is
denominated in cash but paid out in shares, so that the maximum number of shares
issuable cannot be determined at the date of the grant, the award will count
against the share limit at the date of grant based on the number of shares
having a market value equal to the maximum cash amount earnable under the award,
regardless of the number of shares paid out.

An award granted under the Plan may include a provision accelerating the receipt
of benefits upon the occurrence of specified events, such as a change of control
of the Company or a dissolution, liquidation, merger, reclassification, sale of
substantially all of the property and assets of the Company or other significant
corporate transactions. The Company may grant options that either are intended
to be incentive stock options or non-qualified stock options. Awards to
consultants and non-employee directors may only be non-qualified stock options.
The Committee shall have the right to accelerate the vesting of all Awards.

AMENDMENT OR TERMINATION.   Subject to limitations imposed by law, the Board of
Directors may amend or terminate the Plan at any time and in any manner.
However, no such amendment or termination may deprive the recipient of an award
previously granted under the Plan of any rights thereunder without his consent.

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Federal Income Tax Consequences of the Plan

The following discussion is only a summary of the principal federal income tax
consequences of the Awards to be granted under the Plan, and is based on
existing federal law (including administrative regulations and rulings) which is
subject to change, in some cases retroactively. This discussion is also
qualified by the particular circumstances of individual participants, which may
substantially alter or modify the federal income tax consequences herein
discussed. Because of the wide range of Awards that may be made under the Plan,
the following discussion is confined to the most common forms of Awards likely
to be made. In addition, the following discussion does not address state, local
or foreign income taxes or any taxes other than income taxes.

INCENTIVE STOCK OPTIONS.   Generally under present law, when an option qualifies
as an incentive stock option under Section 422 of the Code: (i) an optionee will
not recognize taxable income either upon the grant or the exercise of the
option, (ii) any gain or loss upon a qualifying disposition of the shares
acquired by the exercise of the option will be treated as capital gain or loss,
and (iii) no deduction will be allowed to the Company for federal income tax
purposes in connection with the grant or exercise of an incentive stock option
or a qualifying disposition of the shares. A disposition by an optionee of stock
acquired upon exercise of an incentive stock option will constitute a qualifying
disposition if it occurs more than two years after the grant of the option, and
more than one year after the transfer of the shares to the optionee. If such
stock is disposed of by the optionee before the expiration of those time limits,
the transfer may be a “disqualifying disposition,” in which case the optionee
will recognize ordinary income equal to the lesser of (i) the aggregate fair
market value of the shares as of the date of exercise less the option price, or
(ii) the amount realized on the disqualifying disposition less the option price.
The Company would become entitled to a corresponding deduction, subject to
satisfaction of any applicable withholding or reporting obligations, in the
amount of the optionee’s ordinary income. Ordinary income from a disqualifying
disposition will constitute ordinary compensation income. Any gain in addition
to the amount reportable as ordinary income on a “disqualifying disposition”
generally will be capital gain. The Company is not entitled to a deduction for
any gain on disposition of the shares that is capital gain.

Upon the exercise of an incentive stock option, the difference between the fair
market value of the stock subject to the exercised option on the date of
exercise and the option exercise price is treated as an adjustment to taxable
income in that taxable year for alternative minimum tax purposes, as are a
number of other items specified by the Code. Such adjustments (along with tax
preference items) form the basis for the alternative minimum tax (presently at
graduated rates for individuals), which may apply depending on the amount of the
computed “regular tax” of the employee for that year. Under certain
circumstances the amount of alternative minimum tax is allowed as a carryforward
credit against regular tax liability in subsequent years. The Company does not
obtain a deduction due to an optionee’s incurrence of the alternative minimum
tax.

NON-QUALIFIED STOCK OPTIONS.   In the case of stock options which do not qualify
as an incentive stock option (non-qualified stock options), no income generally
is recognized by the optionee at the time of the grant of the option. The
optionee generally will recognize ordinary income at the time the non-qualified
stock option is exercised equal to the aggregate fair market value of the shares
acquired less the option price. Ordinary income from a non-qualified stock
option will constitute compensation for which withholding and reporting may be
required under federal and state law.

Subject to special rules applicable when an optionee uses stock of the Company
to exercise an option, shares acquired upon exercise of a non-qualified stock
option will have a tax basis equal to their fair market value on the exercise
date or other relevant date on which ordinary income is recognized and the
holding period for the shares generally will begin on the date of exercise or
such other relevant date. Upon subsequent disposition of the shares, the
optionee generally will recognize capital gain or loss. Provided the optionee
holds the shares for more than one-year prior to disposition, such gain or loss
will be long-term capital gain or loss. The maximum individual federal tax rate
on long-term capital gain currently is 15%.

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The Company generally will be entitled to a deduction equal to the ordinary
income (i.e., compensation) recognized by the optionee in connection with the
exercise of a non-qualified stock option provided that the Company complies with
any applicable withholding or reporting requirements of federal and state law.
The Company does not obtain a deduction with respect to any capital gain on
disposition of the shares.

OPTIONS TO NON-EMPLOYEE DIRECTORS.   These options are non-qualified stock
options for tax purposes, and the tax rules applicable to them are the same as
the rules for non-qualified stock options described above. However, since the
optionees are not employees, income tax withholding would not be required in
order for the Company to qualify for its income tax deduction.

STOCK APPRECIATION RIGHTS (SARS).   A recipient of a stock appreciation right
will be taxed (and the Company will receive a corresponding deduction) when the
recipient exercises the stock appreciation right. Income generated by such
exercise will be ordinary compensation income and will be measured by the amount
of cash received or the then-current fair market value of the stock received
upon such event. In the case of an SAR granted to an employee, the Company will
have withholding and reporting obligations.

RESTRICTED STOCK.   The income and deduction events in the case of restricted
stock grants generally are deferred until the restrictions on the stock lapse.
At that time, the recipient would report as ordinary compensation income the
difference between the then-current fair market value of the stock and the
amount (if any) paid for the stock. Subject to applicable withholding or
reporting obligations, the Company is entitled to a corresponding deduction. The
recipient may elect to report the income with respect to the restricted stock
upon its receipt rather than at the time of the lapse of the restrictions. In
such case, the valuation used for income and deduction purposes is the value of
the restricted stock at the time of receipt, disregarding any restrictions other
than those that will never lapse. Subject to satisfaction of any applicable
withholding or reporting obligations, the Company’s deduction also would be
accelerated in the event of such an election.

PERFORMANCE SHARES AND PERFORMANCE UNITS.   A recipient of a performance share
or performance unit will be taxed (and the Company will receive a corresponding
deduction) when the recipient receives payout at the end of the performance
period and any additional deferral period. The recipient will have ordinary
compensation income measured by the cash received and/or the then-current fair
market value of the stock received upon such event. In the case of a performance
share or performance unit granted to an employee, the Company will have
withholding and reporting obligations.

RESTRICTION ON DEDUCTIONS.   Not every amount paid as compensation for services
is currently deductible. For example, two restrictions potentially applicable to
deductions for executive compensation payments are the restriction on deduction
of so-called “excess parachute payments” and the Code Section 162(m) deduction
limit of $1,000,000 per year for certain executive compensation (discussed
earlier herein). Whether any such restrictions will apply to specific payments
of compensation by the Company cannot be predicted at this time.

Approval of the amendment to the Plan will require the affirmative vote of a
majority of the outstanding shares of stock present in person or by proxy and
entitled to vote at the meeting. If the stockholders do not approve the
amendment to the Plan, the amendment will not be adopted.

The Board has unanimously adopted resolutions approving the amendments set forth
above, declaring their advisability and directing that the proposed amendment be
submitted to the stockholders for their approval.

The Board of Directors recommends that stockholder’s vote FOR this proposal.
Proxies solicited by the Board of Directors will be so voted unless stockholders
specify otherwise in their proxies.

 

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