Exhibit 10.3
CHANGE IN CONTROL
AGREEMENT
This Change in Control Agreement
(the “Agreement”), dated May 14, 2009, is between
Nara Bancorp, Inc. and its subsidiary Nara Bank, (collectively, the
“Company”) and Mark H. Lee (“Executive”).
This Agreement supersedes any currently operable change in control
agreement between Company and Executive.
I. Generally
. Executive understands and
acknowledges that Company may be merged or consolidated with or
into another entity and that such entity shall automatically be
subject to the rights and obligations of Company
hereunder.
II. “Change in
Control” shall mean :
(a) The consummation of a
merger or consolidation of Company with or into another entity or
any other corporate reorganization, if more than fifty percent
(50%) of the combined voting power of the continuing or
surviving entity’s securities outstanding immediately after
such merger, consolidation or other reorganization is owned by
persons who were not stockholders of Company immediately prior to
such merger, consolidation or other reorganization;
(b) The sale, transfer or other
disposition of all or substantially all of the Company’s
assets; or
(c) Any transaction as a result
of which any person is the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Company representing at least fifty
percent (50%) of the total voting power represented by
Company’s then outstanding voting securities. For purposes of
this Paragraph (iv), the term “person” shall have the
same meaning as when used in Sections 13(d) and 14(d) of the
Exchange Act but shall exclude: (x) A trustee or other
fiduciary holding securities under an employee benefit plan of
Company or a subsidiary of Company; and (y) A corporation
owned directly or indirectly by the stockholders of Company in
substantially the same proportions as their ownership of the common
stock of Company.
A transaction shall not constitute a
Change in Control if its sole purpose is to change the state of
Company’s incorporation or to create a holding company that
will be owned in substantially the same proportions by the persons
who held Company’s securities immediately before such
transactions.
III. Occurrence of a Change in
Control . If there is a
Change in Control (as defined in § II) during the term of the
Agreement, and either (a) Executive is involuntarily
terminated without Cause (as defined in § V) within twelve
(12) months following the date of such Change in Control, but
within the term of the Agreement; or (b) Executive terminates
voluntarily with Good Reason (as defined in § IV) within
twelve (12) months following the date of such Change in
Control, but within the term of the Agreement., in addition to any
monies already owed under other operative agreements, if
applicable, the Company will pay Executive a Severance Payment
consisting of the following: (i) one (1) year of Base
Salary, the pro-rata portion of Executive’s Bonus accrued up
to the date of separation from the Company, and (ii) all
unvested incentive equity will automatically vest.
Notwithstanding the foregoing,
during the period in which any obligation arising form financial
assistance provided under the Troubled Asset Relief Program
(“TARP”) of the Emergency Economic Stabilization Act of
2008 (“EESA”) as amended by the American Recovery and
Reinvestment Act of 2009 (“ARRA”), Executive shall not
be entitled to the Severance Payment otherwise payable to Executive
under this § III if Executive is a “senior executive
officer” or one of the next 5 most highly-compensated
employees, as defined by EESA, as amended by ARRA, or in the case
such payment is otherwise prohibited under TARP. For purposes of
this § III (b), the date of a Change in Control will be the
closing date of such transactions described in §
II.
IV. “Good Reason”
shall mean the occurrence during the Term of this Agreement of any
of the following:
(a) a material reduction in
Executive’s duties and/or responsibilities without regard to
any title given to Executive by the Company or any successor
company;
(b) a requirement by the Company or
any successor company, without Executive’s consent, that
Executive relocate their office to a location greater than fifty
(50) miles from Executive’s place of residence;
or
(c) a material breach of the
Agreement or any other material agreements between the parties by
the Company or any successor company which is not cured by the
Company or any successor company within thirty (30) days
following the Company’s receipt of written notice by
Executive to the Company describing such alleged breach.
V. Termination for
Cause . If there is a
termination “For Cause” as defined in this § V,
then it will be presumed that the Executive cannot trigger the
provisions of § III. For purpose of this Agreement, “For
Cause” shall mean: (a) Executive is convicted of a
felony or commits a crime involving dishonesty, breach of trust, or
physical harm to any person; (b) Executive willfully engages
in conduct that is in bad faith and materially injurious to the
Company, including but not limited to, misappropriation of trade
secrets, fraud or embezzlement; (c) Executive commits a
material breach of this Agreement or any other material agreements
between the parties by the Company or any succe
