Exhibit 99.1
CEO EMPLOYMENT
AGREEMENT
This CEO Employment Agreement (the
“Agreement”), dated April 3, 2007, is between Nara
Bancorp, Inc. and its subsidiary Nara Bank, (collectively, the
“Company”) and Min J. Kim, an individual residing at
Northridge, California (“Executive”).
1. POSITION AND
RESPONSIBILITIES
a. Position.
Executive is employed by the Company
to render services to the Company in the position of President and
Chief Executive Officer. Executive shall report to the Board of
Directors of the Company. Executive shall perform such duties and
responsibilities as are normally assigned to such position in
accordance with the standards of the industry and any additional
duties now or hereafter assigned to Executive by the Board of
Directors. Executive shall abide by the rules, regulations, and
practices as adopted or modified from time to time in the
Company’s sole discretion. Executive will be based out of the
Company’s main office, currently located in Los Angeles, and
acknowledges that travel to other locations will be necessary.
Executive shall devote her entire working time, energy and
attention, to the best of Executive’s abilities and using
Executive’s best efforts, to the business and affairs of the
Company and its affiliates.
b. Other Activities.
Except upon the prior written
consent of the Company, Executive will not, during the term of this
Agreement, (i) accept any other employment, or
(ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that
might interfere with Executive’s duties and responsibilities
hereunder or create a conflict of interest with the
Company.
c. No Conflict.
Executive represents and warrants
that Executive’s execution of this Agreement,
Executive’s employment with the Company, and the performance
of Executive’s proposed duties under this Agreement shall not
violate any obligations with respect to proprietary or confidential
information of any other person or entity.
d. Regulatory
Approvals. This Agreement
shall be subject to the receipt of all necessary regulatory
approvals, waivers or consents (if applicable), including, but not
limited to, the receipt of all necessary approvals, waivers or
consents of Nara Bank’s regulators (if applicable), as well
as the satisfactory completion of all necessary background
checks.
2. COMPENSATION AND
BENEFITS
a. Base Salary.
In consideration of the services to
be rendered under this Agreement, in the first year of this
Agreement, the Company shall pay Executive a salary at the rate of
Three Hundred and Twenty Five Thousand Dollars ($325,000) per year
(“Base Salary”). The Base Salary shall be paid in
accordance with the Company’s regularly established payroll
practice. Executive’s Base Salary will be reviewed and may be
adjusted in the sole discretion of the Company, as directed by the
Board of Directors and/or the Human Resources &
Compensation Committee of the Company.
b. Stock Options.
The Executive shall receive an
option to purchase 90,000 shares of the Common Stock of the
Company, vesting over three (3) years (1/3 annually on each
anniversary of the grant date). The price per share of the option
shall be the closing price on the Executive’s date of hire,
November 27, 2006. Executive’s entitlement to any stock
options which have been, or may in the future be approved are
conditioned upon Executive’s signing of the Stock Option
Agreement and is subject to its terms and the terms of the Stock
Option Plan under which the options are granted, including vesting
requirements.
c. Bonus. Executive shall be entitled to be considered for
an annual cash bonus (hereinafter referred to as
“Bonus”), during the Initial Term (as defined in
Section 3 a) of this Agreement. The first Bonus opportunity
will be for the fiscal year 2007. The Bonus will be based on the
Executive’s attainment of pre-set goals (hereinafter referred
to as “Performance Goals”) over a specified period (the
“Performance Period”). The Performance Period shall
directly coincide with each fiscal year of the Company during the
Term. The Performance Goals will be set by the Board of Directors
using the Company’s compensation strategy and the philosophy
set out in the Human Resources and Compensation Committee Charter.
The Board of Directors will determine the required goal attainment
for the Bonus payments (“Goal Attainment”). The Bonus
will have a target of 50% of Base Salary if the Executive reaches
the minimum Goal Attainment set by the Board of Directors, a target
of 75% of Base Salary if the Executive achieves 100% of Goal
Attainment and a maximum of 125% of Base Salary with pre-determined
excess Goal Attainment, to be determined at the discretion of the
Board of Directors. The maximum annual Bonus payable under this
Section 2 c. is 125% of Base Salary. Notwithstanding the
foregoing, the Board of Directors shall retain discretion to adjust
the Bonus payable to Executive, depending on the Company’s
financial condition and other related factors deemed relevant by
the Board of Directors. To be eligible for a Bonus under this
Section 2 c., Executive must maintain continued employment
with the Company throughout the relevant Performance Period. No
pro-rata Bonus shall be paid if Executive’s service
terminates during a Performance Period, unless termination is due
to the Death, Disability of the Executive or a Change in Control
event (as defined in Section 8 of this Agreement).
d. Benefits.
Executive will be eligible to
participate in any life insurance benefits as well as vacation,
sick leave, medical, dental, vision, disability, 401K, ESOP, and
other employee benefits plans of Company normally provided to other
executive officers of Company.
e. Car Allowance.
Company shall provide Executive with
a car allowance of $1,200 a month.
f. Club Membership.
Company shall reimburse Executive
for initiation and monthly membership fees to the Jonathan Club.
Company will also reimburse reasonable business related expenses
incurred at the Jonathan Club, under the provisions of
Section 2 g of this Agreement. The Company’s
understanding is that the Jonathan Club membership must be in the
name of the
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Executive, as such, if there is a Termination
Event, other than due to Death, by Disability, by a Change in
Control, or an At-Will Termination, during the Initial Term of the
Agreement; Executive will agree to reimburse Company the cost of
the initiation fees in a timely manner.
g. Expenses.
The Company shall reimburse
Executive for reasonable business expenses incurred in the
performance of Executive’s duties hereunder in accordance
with the Company’s CEO Bonus and Expense Reimbursement
Policy.
3. AT-WILL EMPLOYMENT;
TERMINATION BY COMPANY
a. Term. The initial term of this Agreement shall be
three (3) years (“Initial Term”) and shall
commence on November 27, 2006. If the Agreement is not
extended by action of the Board beyond the initial term of three
years, and the Executive continues as CEO, she will be subject
solely to the policies and procedures of the Company.
b. At-Will Termination by
Company. The employment
of Executive shall be “at-will” at all times. The
Company may terminate Executive’s employment with the Company
at any time, without any advance notice, for any reason or no
reason at all, notwithstanding anything to the contrary contained
in or arising from any statements, policies or practices of the
Company relating to the employment, discipline or termination of
its employees. Upon and after such termination, all obligations of
the Company under this Agreement shall cease.
c. Severance.
Except in situations where the
employment of Executive is terminated for Cause, By Death, By
Disability (as defined in Section 4 below), or as part of a
Change in Control (as defined in Section 8 below), in the
event that the Company terminates the employment of Executive
during the Initial Term, Executive will be eligible to
receive an amount equal to twelve (12) months of the
then-current Base Salary of the Executive payable in the form of
salary continuation (i.e. in the first year of the Agreement the
combined severance amount would be $325,000), less applicable state
and federal withholdings. Except in the situations where the
employment of Executive is terminated for Cause, By Death or By
Disability, or where this Agreement is renewed or extended by
Company, in the event the Company terminates the employment of
Executive at any time after the Initial Term, Executive will
be eligible to receive an amount equal to three (3) months of
the then-current Base Salary of the Executive payable in the form
of salary continuation (i.e. a combined severance amount not
exceeding $81,250, based on the first year Base Salary), less
applicable state and federal withholdings. Such Severance shall be
reduced by any remuneration paid to Executive from any source
because of Executive’s employment or independent consulting
work during the severance period, and Executive shall promptly
report all such remuneration to the Company in writing.
Executive’s eligibility for severance is conditioned on
Executive having first signed a release agreement in the form
attached as Exhibit A . Executive shall not be entitled to
any severance payments if Executive’s employment is
terminated For Cause, By Death or By Disability or if
Executive’s terminates her own employment (in accordance with
Section 5 below).
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d. Delay of Payment.
Nothwithstanding any provision to
the contrary in this Agreement, if the Executive is deemed on the
date of termination to be a “specified employee” within
the meaning of that term under Code Section 409A(a)(2)(B) of
the Internal Revenue Code of 1986, as amended (the
“Code”), then with regard to any payment of the
provision of any benefit that is required to be delayed in
compliance with Code Section 409A(a)(2)(B), such payment or
benefit shall not be made or provided prior to the earlier of
(i) the expiration of the six (6) month period measured
from the date of Executive’s “separation of service (as
such term is defined under Code Section 409A) or (ii) the
date of Executive’s death (collectively, the “Delay
Period”). Upon expiration of the Delay Period, all payments
and benefits delayed pursuant to this section (whether they would
have otherwise been payable in a single sum or in installments in
the absence of such delay) shall be paid or reimbursed to the
Executive immediately in a lump sum less applicable withholding,
and any remaining payments and benefits due under this Agreement
shall be paid or provided in accordance with the normal payment
dates specified herein.
4. OTHER TERMINATIONS BY
COMPANY
a. Termination for
Cause. For purpose of
this Agreement, “For Cause” shall mean:
(i) Executive is convicted of a felony or commits a crime
involving dishonesty, breach of trust, or physical harm to any
person; (ii) 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; (iii) Executive commits a material breach of
this Agreement, which breach is not cured within twenty days after
written notice to Executive from the Company; (iv) Executive
willfully refuses to implement or follow a lawful policy or
directive of the Company, which breach is not cured within twenty
days after written notice to Executive from the Company; or
(v) Executive engages in misfeasance or malfeasance
demonstrated by a pattern of failure to perform job duties
diligently and professionally. The Company may terminate
Executive’s employment For Cause at any time, without any
advance notice. The Company shall pay to Executive all compensation
to which Executive is entitled up through the date of termination,
subject to any other rights or remedies of Employer under law; and
thereafter all obligations of the Company under this Agreement
shall cease.
b. By Death.
Executive’s employment shall
terminate automatically upon Executive’s death. The Company
shall pay to Executive’s beneficiaries or estate, as
appropriate, (i) any Base Salary to which Executive is
entitled up through the date of Death, (ii) the pro-rata
portion of Executive’s Bonus as if Executive reached 100% of
Goal Attainment (or other amount to be determined by the Board in
their discretion), and (iii) accrued but unused vacation pay
then due and owing. Thereafter, all obligations of the Company
under this Agreement shall cease. Nothing in this Section shall
affect any accrued entitlement of Executive’s heirs or
devisees to the benefits of any life insurance plan or other
applicable benefits.
c. By Disability.
If Executive becomes eligible for
the Company’s long term disability benefits or if, in the
sole opinion of the Company, Executive is unable to carry out the
responsibilities and functions of the position held by Executive by
reason of any physical or mental impairment for more than ninety
(90) consecutive days or more than one hundred and twenty
(120) days in any
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twelve-month period, then, to the extent
permitted by law, the Company may terminate Executive’s
employment. The Company shall pay to Executive (i) any Base
Salary to which Executive is entitled up through the date of
termination, (ii) the pro-rata portion of Executive’s
Bonus as if Executive reached 100% of Goal Attainment (or other
amount to be determined by the Board in their discretion), and
(iii) accrued but unused vacation pay, to which Executive is
entitled up through the date or termination, and thereafter all
obligations of the Company under this Agreement shall cease.
Nothing in this Section shall affect Executive’s rights under
any disability plan in which Executive is a participant.
5. TERMINATION BY
EXECUTIVE
At-Will Termination by
Executive. Executive may
terminate employment with the Company at any time for any reason or
no reason at all, upon eight (8) weeks’ advance written
notice. During such notice period Executive shall continue to
diligently perform all of Executive’s duties hereunder. The
Company shall have the option, in its sole discretion, to make
Executive’s termination effective at any time prior to the
end of such notice period as long as the Company pays Executive the
Base Salary to which Executive is entitled up through the last day
of the eight week notice period. Thereafter all obligations of the
Company shall cease. Executive shall not be entitled to severance
pay if Executive terminates employment with the Company.
6. TERMINATION
OBLIGATIONS
a. Return of Property.
Executive agrees that all property
(including, without limitation, all equipment, tangible proprietary
information, documents, records, notes, contracts, emails and Board
and Committee materials and computer-generated materials) furnished
to or created or prepared by Executive incident to
Executive’s employment belongs to the Company and shall be
promptly returned to the Company upon termination of
Executive’s employment.
b. Resignation and
Cooperation. Upon
termination of Executive’s employment, Executive shall be
deemed to have resigned from all offices and directorships then
held with the Company. Following any termination of employment,
Executive shall cooperate with the Company in the winding up of
pending work on behalf of the Company and the orderly transfer of
work to other employees. Executive shall also cooperate with the
Company in the defense of any action brought by any third party
against the Company that relates to Executive’s employment by
the Company.
7. PROPRIETARY INFORMATION ;
PROHIBITION ON THIRD PARTY INFORMATION
a. Proprietary Information and
Confidentiality. As a
condition of Executive’s employment, Executive will hold all
Company’s confidential and proprietary information in
confidence and will not disclose, use, copy, publish, summarize, or
remove from the premises of the Company any proprietary or
confidential
