EMPLOYMENT AGREEMENT BETWEEN
HANMI FINANCIAL CORPORATION AND HANMI BANK, ON THE ONE HAND,
AND JAY S. YOO, ON THE OTHER HAND
This Employment
Agreement (the “Agreement”) is entered into as of
June 19, 2008, by and between HANMI FINANCIAL CORPORATION and
HANMI BANK (collectively, “Hanmi”), on the one hand,
and JAY S. YOO (“Yoo”), on the other hand.
WHEREAS, Hanmi
desires to retain the services of Yoo as President and Chief
Executive Officer and Yoo desires to render services to Hanmi as
President and Chief Executive Officer; and
WHEREAS, Hanmi and
Yoo desire to set forth in this Agreement the terms and conditions
of Yoo’s employment with Hanmi;
NOW, THEREFORE, in
consideration of the mutual promises and covenants herein
contained, the parties agree as follows:
1.
Employment Terms and Duties .
(a)
Background Check . Yoo’s employment is specifically
conditioned upon Yoo providing Hanmi with acceptable evidence of
his legal right to work, and on Hanmi’s review and approval
of the result of any background and/or credit investigation of Yoo
made in conformance with California and federal law.
(b)
Term . Hanmi hereby employs Yoo as the President and Chief
Executive Officer of Hanmi for a two (2) year term beginning
on June 23, 2008 (the “Effective Date”) and ending
at 12:01 a.m. Pacific Time on June 23, 2010
(“Termination Date”), and Yoo accepts this
employment.
(c)
Yoo’s Duties . Yoo shall perform his duties of
President and Chief Executive Officer of Hanmi, subject to the
powers by law vested in the Boards of Directors of Hanmi and in
Hanmi’s shareholders. During the term of this Agreement, Yoo
shall perform his duties faithfully, diligently, and to the best of
his ability, consistent with the highest and best standards of the
banking industry and in compliance with all applicable laws and
Hanmi’s Articles of Incorporation and Bylaws. Yoo shall
devote his full business time, energy, and ability exclusively to
the business, affairs, and interests of Hanmi and its subsidiaries
and matters related thereto, and use his best efforts and abilities
to promote Hanmi’s interests.
(d)
Option . This Agreement shall automatically renew at
12:01 a.m. Pacific Time on the Termination Date, unless Hanmi,
at least forty-five (45) days prior to the Termination Date,
provides Yoo written notice to non-renewal of this Agreement.
Renewal of this agreement will be for an additional three
(3) years, subject to the parties’ agreement regarding
compensation will not be for less than compensation for the last
year of the original term as stated in paragraph 2 of this
Agreement. For purposes of this section, written notice of
non-renewal by Hanmi shall be signed by Hanmi Financial
Corporation’s then current Chairman of the Board.
Page 1 of 7
For all services
rendered by Yoo under this Agreement, Hanmi shall compensate Yoo as
follows:
(a) Base
Salary . Beginning on the Effective Date, the base salary
payable to Yoo (the “Base Salary”) shall be three
hundred thirty thousand dollars ($330,000.00) for the first year,
payable on a regular basis in accordance with Hanmi’s
standard payroll procedures. On the anniversary of the Effective
Date, Yoo’s base salary shall be automatically adjusted to
three hundred forty thousand dollars ($340,000.00). Yoo shall not
be entitled to or receive a director’s fee for his services
on the Board during his employment with Hanmi.
(b)
Incentive Compensation . For Hanmi’s fiscal year 2008
and subsequent fiscal years during Yoo’s employment with
Hanmi hereunder, Yoo shall be eligible to earn up to seventy five
percent (75%) of his annual salary as incentive compensation (the
“Incentive Compensation”) based on Yoo meeting a set of
goals set by Hanmi’s Compensation Committee. For any year of
employment that Yoo has not worked the entire previous fiscal year,
Yoo shall only receive a pro rata share of his Incentive
Compensation measured by both his achievement of such goals and the
pro rata time served during the previous fiscal year.
(c) Stock
Compensation . Pursuant to and subject to the terms of
Hanmi’s 2007 Equity Compensation Plan, Hanmi shall grant Yoo
seventy thousand (70,000) shares of Hanmi’s common stock
option (the “Stock Option”) in consideration of
Yoo’s employment under this Agreement. The Stock Option shall
become vested and exercisable over a period of two (2) years
from the Effective Date of this Agreement with 50% vesting after
first year and the remainder vesting at the end of the second year.
Should any party terminate this Agreement, with or without cause,
before the Termination Date, the unvested portion of the Stock
Option shall terminate immediately.
(d)
Yoo’s Benefits and Other Compensation . Yoo shall be
entitled to receive additional benefits and compensation, including
health insurance, automobile and cellular telephone allowances, and
paid vacation, from Hanmi in such form and to such extent as
provided to other senior executives at Hanmi. Additionally, while
Yoo is employed by Hanmi, Yoo shall be given an access to golf club
membership. Yoo shall be immediately from the date of hire be
entitled to participate in any health and welfare plan, including
participation in 401 (k) Plan, as well as any vacation, sick
days, or other employee benefit plan, without consideration to any
waiting time provision or in-service provision.
3.
Prohibition Against Other Employment .
During Yoo’s
employment with Hanmi, Yoo shall not, directly or indirectly:
(i) render services to any other individual, third party, or
entity for compensation or (ii) engage in any activity
competitive with or adverse to Hanmi’s business or interests,
whether alone, as a partner, or as an officer, director, employee,
consultant, or significant investor of or in any other entity. (An
investment of greater than one percent (1%) of the outstanding
capital or equity securities of an entity shall be deemed
significant for these purposes.)
4.
Termination; Rights on Termination .
Page 2 of 7
Notwithstanding
any and all other provisions of this Agreement to the contrary,
Executive’s employment hereunder may only be
terminated:
a.
Without Cause. If Yoo’s employment is terminated
without cause (i.e., for any other reason for cause as defined in
this Agreement, Yoo’s own voluntary termination of
employment, or Yoo’s inability to fulfill his duties due to
disability or death), Hanmi shall be liable for six (6) months
of Yoo’s base salary as defined in paragraph 2 (a) or
remaining term of the Agreement, whichever is shorter.
b. For
Cause. Hanmi may immediately terminate this Agreement without
any further obligation or liability whatsoever to You,
if:
(i) Yoo
is negligent in the performance of his material duties or engages
in misconduct (i.e., the intentional or negligent violation of any
state or federal banking law or regulation, or Hanmi’s
employment policies, including but not limited to policies
regarding honesty, conflict of interest, policies against
discrimination, and/or employee leave policies); or
(ii) Yoo
is convicted of or pleads guilty or nolo contendere to any felony,
or is convicted of or pleads guilty or nolo contendere to any
misdemeanor involving moral turpitude; or
(iii) Hanmi
is required to remove or replace Yoo by formal order or formal or
informal instruction, including a requested consent order or
agreement, from the Comptroller or Federal Deposit Insurance
Corporation (“FDIC”) or any other regulatory authority
having jurisdiction; or
(iv) Yoo
engages in any willful breach of duty during the course of his
employment, or habitually neglects his duties or has a continued
incapacity to perform; or
(v) Yoo
has failed to follow any written policy of the Board of Directors
or any resolutions of the Board adopted at a duly called meeting
intentionally and in a material way; or
(vi) Yoo
has engaged in any activity which materially adversely affects
Hanmi’s reputation in the community, provided, at the time of
engaging in such activity, Yoo knew or should have known that such
activity would materially adversely affect Hanmi’s reputation
in the community; or
(vii) Hanmi
receives a Section 8(a) Order from the FDIC or a Section 8(b) Order
from the FDIC; or
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