EXHIBIT 10.2.1

AMENDMENT NO. 1

TO THE CATHAY BANK

EMPLOYEE STOCK OWNERSHIP PLAN

Cathay Bancorp, Inc. (the “Company”) hereby amends the above-named plan (the
“Plan”), effective as of January 1, 2002, as follows:

Preamble

1. Adoption and Effective Date of This Amendment. This Amendment to the Plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”). This Amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided, this
Amendment shall be effective as of the first day of the first Plan Year
beginning after December 31, 2001.

2. Supersession of Inconsistent Provisions. This Amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the
provisions of this Amendment.

Section 1. Limitations on Contributions

1. Effective Date. This Section shall be effective for limitation years
beginning after December 31, 2001.

2. Maximum Annual Addition. The annual addition that may be contributed or
allocated to a Participant’s account under the Plan for any limitation year
shall not exceed the lesser of:

(a) $40,000, as adjusted for increases in the cost-of-living under
Section 415(d) of the Code, or

(b) 100% of the Participant’s compensation, within the meaning of
Section 415(c)(3) of the Code, for the limitation year.

 

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The compensation limit referred to in (b) shall not apply to any contribution
for medical benefits after separation from service (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as
an annual addition.

 

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Section 2. Increase in Compensation Limit

The annual Compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. Annual Compensation means Compensation during
the Plan Year or such other consecutive 12-month period over which Compensation
is otherwise determined under the Plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to annual
Compensation for the determination period that begins with or within such
calendar year.

Section 3. Modification of Top-Heavy Rules

1. Effective Date. This Section shall apply for purposes of determining whether
the Plan is a top-heavy plan under Section 416(g) of the Code for Plan Years
beginning after December 31, 2001, and whether the Plan satisfies the minimum
benefits requirements of Section 416(c) of the Code for such years. This Section
amends Article VIII of the Plan.

2. Determination of Top-Heavy Status.

2.1 Key Employee. Key Employee means any Employee or former Employee (including
any deceased Employee) who at any time during the Plan Year that includes the
determination date was an officer of the Company having annual compensation
greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002), a 5% owner of the Company, or a 1%
owner of the Company having annual compensation of more than $150,000. For this
purpose, annual compensation means compensation within the meaning of
Section 415(c)(3) of the Code. The determination of who is a Key Employee will
be made in accordance with Section 416(i)(1) of the Code and the applicable
Regulations and other guidance of general applicability issued thereunder.

2.2 Determination of Present Values and Amounts. This Section 2.2 shall apply
for purposes of determining the present values of accrued benefits and the
amounts of account balances of Employees as of the determination date.

2.2.1 Distributions During Year Ending on the Determination Date. The present
values of accrued benefits and the amounts of account balances of an Employee as
of the determination date shall be increased by the distributions made with
respect to the Employee under the Plan and any plan aggregated with the Plan
under Section 416(g)(2) of the Code during the one-year period ending on the
determination date. The preceding sentence shall also apply to distributions
under a terminated

 

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plan which, had it not been terminated, would have been aggregated with the Plan
under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made
for a reason other than separation from service, death, or disability, this
provision shall be applied by substituting “five-year period” for “one-year
period.”

2.2.2 Employees not Performing Services During Year Ending on the Determination
Date. The accrued benefits and accounts of any individual who has not performed
services for the Company during the one-year period ending on the determination
date shall not be taken into account.

3. Minimum Benefits.

3.1 Matching Contributions. Company matching contributions shall be taken into
account for purposes of satisfying the minimum contribution requirements of
Section 416(c)(2) of the Code and the Plan. The preceding sentence shall apply
with respect to matching contributions under the Plan or, if the Plan provides
that the minimum contribution requirement shall be met in another plan, such
other plan. Company matching contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching contributions for
purposes of the actual contribution percentage test and other requirements of
Section 401(m) of the Code.

Section 4. Direct Rollovers of Plan Distributions

1. Effective Date. This Section shall apply to distributions made after
December 31, 2001.

2. Modification of Definition of Eligible Retirement Plan. For purposes of the
direct rollover provisions in Section 6.6 of the Plan, an Eligible Retirement
Plan shall also mean an annuity contract described in Section 403(b) of the Code
and an eligible plan under Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account
for amounts transferred into such plan from this Plan. The definition of
Eligible Retirement Plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in Section 414(p) of the
Code.

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The Company has caused this Amendment No. 1 to be signed on the date indicated
below, to be effective as indicated above.

 

  “Company” Dated: December 12, 2002   CATHAY BANCORP, INC.   By:    

/s/    DUNSON K. CHENG

      Dunson K. Cheng       President Dated: December 12, 2002   CATHAY BANK  
By:    

/s/    DUNSON K. CHENG

      Dunson K. Cheng       President

 

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