Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of July 3, 2003
by and between HANMI FINANCIAL CORPORATION, a Delaware corporation and HANMI
BANK, a California banking corporation, located at 0000 Xxxxxxxx Xxxx., XX-X,
Xxx Xxxxxxx, XX 00000 (collectively referred to as the "Company") on one hand
and XXX XXXX XXX, an individual ("Employee") on the other hand.
WITNESSETH:
WHEREAS, the Company desires to retain the services of Employee as
President and Chief Executive Officer and Employee desires to render services to
the Company as President and Chief Executive Officer;
WHEREAS, the Company and Employee desire to set forth in this Agreement
the terms and conditions of Employee's employment with the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties agree as follows:
1. Term. Company agrees to employ Employee and Employee agrees to serve
Company as President and Chief Executive Officer, in accordance with the
terms of this Agreement, for a term of three (3) years, commencing July 1,
2003 and ending June 30, 2006, unless this Agreement is earlier terminated
in accordance with the provisions of Paragraph 6, below.
2. Services and Exclusivity of Services. So long as this Agreement shall
continue in effect, Employee shall devote his full business time, energy
and ability exclusively to the business, affairs and interests of Company
and its subsidiaries and matters related thereto, shall use Employee's
best efforts and abilities to promote the Company's interests, and shall
perform the services contemplated by this Agreement in accordance with
policies established by and under the direction of the Board of Directors
of Company ("Board"). Employee agrees to faithfully and diligently promote
the business, affairs and interests of Company.
Without the prior express written authorization of the Board, Employee
shall not, directly or indirectly, during the term of this Agreement: (a)
render services to any other person or firm for compensation or (b) engage
in any activity competitive with or adverse to the Company's business,
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 1% of the outstanding capital or equity
securities of an entity shall be deemed significant for these purposes.)
3. Specific Position; Duties and Responsibilities. The Company and Employee
agree that, subject to the provisions of this Agreement, the Company will
employ Employee and Employee will serve Company as the President and Chief
Executive Officer of Company for the duration of this Agreement. Employee
agrees to observe and comply with the rules and regulations of Company
respecting the performance of Employee's duties and agrees to carry out
and perform orders, directions and policies of Company and its Board as
they may be, from time to time, stated either orally or in writing.
Employee shall have such corporate power and authority as shall reasonably
be required to enable the discharge of duties as President and Chief
Executive Officer of Company.
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For the term of this Agreement, Employee shall report to the Board.
4. Compensation.
a) Base and Incentive Compensation
During the term of this Agreement, beginning July 1, 2003, Company
agrees to pay Employee a base salary (the "Base Salary") at the
annual rate of $250,000.00, less withholdings. If employed in the
second and third years under this Agreement, Company will provide
Employee with a cost-of-living increase in an amount not to exceed
five (5%) percent of Employee's previous year's base salary in each
of the second and third years of employment. Employee shall not be
entitled to or receive a director's fee for his services on the
Board during the term of his employment at Company.
b) Bonus
Employee and the Company agree that they will continue to negotiate
with regard to a bonus plan and stock option plan for Employee. Both
parties agree to negotiate in good faith with regard to these two
issues in an effort to reach a mutually agreeable resolution. If the
parties are not able to reach a mutually agreeable resolution
regarding Employee's bonuses and stock options within 60 days from
the date of this Agreement, the entirety of this Agreement is
voidable at the will of either party. If either party exercises his
or its right to void this Agreement pursuant to this paragraph, then
the other party shall have no further obligations to the party
voiding the Agreement from that date forward.
c) Stock Options
Employee and the Company agree that they will continue to negotiate
with regard to a bonus plan and stock option plan for Employee. Both
parties agree to negotiate in good faith with regard to these two
issues in an effort to reach a mutually agreeable resolution. If the
parties are not able to reach a mutually agreeable resolution
regarding Employee's bonuses and stock options within 60 days from
the date of this Agreement, the entirety of this Agreement is
voidable at the will of either party. If either party exercises his
or its right to void this Agreement pursuant to this paragraph, then
the other party shall have no further obligations to the party
voiding the Agreement from that date forward.
5. Perquisites
a) Automobile Allowance and Insurance
Company will provide Employee with a suitable automobile for his use
in the performance of his duties and shall pay all reasonable costs
and expenses of maintaining and operating said automobile, including
automobile liability insurance. Upon the termination of Employee's
employment with Company, Employee shall return the automobile in
good working condition, less normal wear and tear for reasonable
usage of the automobile.
b) Vacation
Employee shall accrue 15 days of paid vacation annually. Employee
shall take at least two consecutive weeks vacation during each year
of his employment by the Company. Employee
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shall accrue a maximum of 22 & 1/2 days of vacation. Once Employee
accrues 22 & 1/2 days of vacation, Employee shall cease accruing any
additional vacation until Employee's vacation accrual falls below 22
& 1/2 days.
c) Insurance Benefits
Company shall provide Employee and Employee's spouse and dependent
children, where applicable, at Company's expense, participation in
accident and health insurance at no cost to Employee, and term life
insurance benefits for Employee to the maximum benefits available
under Company's Group Insurance program, except that term life
insurance shall not be in excess of $150,000 for Employee.
d) Professional Society Membership
Company agrees to reimburse Employee for professional society
memberships which are related to and enhance Employee's employment
at the Company during Employee's employment at Company.
e) Continuing Education
Company agrees to reimburse Employee for continuing education which
are related to and enhance Employee's employment at Company during
Employee's employment at Company.
f) Country Club Membership
Company agrees to reimburse Employee for reasonable initiation fees
and monthly dues related to a country club membership during
Employee's employment at Company. The country club must be located
in Los Angeles County or Orange County.
6. Termination. The compensation and other benefits and perquisites provided
to Employee pursuant to this Agreement, and the employment of Employee by
the Company, shall be terminated prior to expiration of the term of this
Agreement as provided in this Section:
a) Disability. In the event that Employee shall fail, because of
illness, incapacity or injury which is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to Employee or Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably) to
render for three consecutive months or shorter periods aggregating
60 or more business days in any twelve (12)-month period, the
services contemplated by this Agreement, Employee's employment
hereunder may be terminated, as allowed by law.
b) Death. In the event of Employee's death during the term of this
Agreement, Employee's Base Salary and any other right or benefit
shall terminate.
c) Action by Supervisory Authority. If Company is ordered to remove,
suspend, or take any other action against Employee (by an order
issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act [12 U.S.C. 1818(e)(3) or (e)(4) or (g)(1)]), or
Company is closed or in default (as defined in Section 3(x)(1) of
the Federal Deposit Insurance Act [12 U.S.C. 1813(x)(1)]) or Company
is taken over by the California State Department of Financial
Institutions, the Federal Reserve, or the Federal Deposit Insurance
Corporation, Company may immediately terminate this Agreement
without further liability, compensation or
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obligation to Employee, except that Employee shall be entitled to
his rights, if any, under Paragraph 4(c) hereof and the Stock Option
Plan referred to therein.
d) For Cause
Employee's employment hereunder shall be terminated and all of his
rights to receive Base Salary, Bonus or Stock Options under
Paragraph 4 of the Agreement or any other benefit or perquisite
provided to Employee under this Agreement except the payment of
accrued but unused vacation, shall terminate upon a good faith
determination by the Board that Employee is or has been personally
dishonest, incompetent, or is engaging or has engaged in willful or
negligent misconduct.
e) Without Cause
Notwithstanding any other provision in this Agreement to the
contrary, the parties agree that either the Employee or the Company
may terminate this Agreement, including any extensions thereto,
without cause at any time.
i. If Company terminates this Agreement without cause, upon such
termination and upon Employee's execution of a general release
agreement, the Company shall pay Employee his Base Salary,
excluding any bonuses, for a period of six (6) months or for
the remaining duration of the term of this Agreement,
whichever is lesser. In no event will Employee be entitled to
more than six months of his base salary upon termination.
During this six-month period or the remainder of the term of
the Agreement, whichever is less, Employee shall not be
entitled to any other benefits or perquisites provided by this
Agreement.
ii. If the Company terminates this Agreement without cause,
Employee shall also be entitled to all of his accrued but
unused vacation leave at his then current daily salary rate.
iii. If Employee terminates this Agreement without cause,
Employee's base salary, bonus and all other benefits or
perquisites provided by this Agreement shall immediately
terminate on the date Employee terminates this Agreement.
7. Business Expenses. During the term of this Agreement, to the extent that
such expenditures satisfy the criteria under the Internal Revenue Code for
deductibility by Company (whether or not fully deductible by the Company)
for federal income tax purposes as ordinary and necessary business
expenses, Company shall reimburse Employee promptly for reasonable
business expenditures, including travel, entertainment, parking, business
meetings, and professional dues and dues associated with maintaining club
memberships, so long as such expenses are properly documented by Employee
to the satisfaction of Company and Board.
8. Miscellaneous.
a) Succession; Survival.
This Agreement shall inure to the benefit of and shall be binding
upon Company, its successors and assigns, but without the prior
written consent of Employee this Agreement may not be assigned other
than in connection with a merger or sale of substantially all the
assets of Company or a similar transaction in which the successor or
assignee assumes
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(whether by operation of law or express assumption) all obligations
of Company hereunder. The obligations and duties of Employee
hereunder are personal and otherwise not assignable. Employee's
obligations and representatives under this Agreement will survive
the termination of Employee's employment, regardless of the manner
of such termination.
9. Incorporation by Reference of Employee Handbook Policies and Stock Option
Plan. This Agreement incorporates by reference all policies of Company
contained in its Employee Handbook. Employee has acknowledged in writing
the receipt of a copy of the Employee Handbook and agrees to comply with
all such policies. To the extent that the terms of the Employee Handbook
contradict or conflict with the terms of the Agreement, the terms of this
Agreement shall prevail. This Agreement incorporates by reference the
Stock Option Plan.
10. Entire Agreement: Amendments
This Agreement, along with any documents incorporated herein by reference,
contains the entire agreement of the parties relating to the subject
matter hereof and it supersedes any prior agreements, undertakings,
commitments and practices relating to Employee's employment by Company. No
amendment or modification of the terms of this Agreement shall be valid
unless made in writing and signed by Employee and by Company.
11. Waiver
No failure on the part of any party to exercise or delay in exercising any
right hereunder shall be deemed a waiver thereof or of any other right,
nor shall any single or partial exercise preclude any further or other
exercise of such right or any other right.
12. Choice of Law
This Agreement, the legal relations between the parties and any action,
whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with
or in respect of this Agreement, the relationship of the parties as
employer and employee or the subject matter hereof shall be governed by
and construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without
regard to conflicts of law doctrines, to the extent permitted by law.
13. Attorneys' Fees
If any dispute shall occur between Employee and the Company which arises
out of an alleged breach of this Agreement or which seeks an
interpretation of this Agreement, the prevailing party in any such dispute
shall be entitled to recover all costs and expenses associated with such
dispute, including reasonable attorneys' fees and costs.
14. Confidentiality; Proprietary Information
Employee agrees to not make use of, divulge or otherwise disclose,
directly or indirectly any trade secret or other confidential or
proprietary information concerning the business (including but not limited
to its products, employees, services, practices or policies) of Company or
any of its affiliates of which Employee may learn or be aware as a result
of Employee's employment during the Term of this Agreement except to the
extent such use or disclosure is (i) necessary to the performance of this
Agreement and in furtherance of Company's best interests, or (ii) required
by applicable law. The provisions of this Paragraph 14 shall survive the
expiration, suspension or
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termination, for any reason, of this Agreement.
15. Trade Secrets
Employee, prior to and during the term of employment, has had and will
have access to and become acquainted with various trade secrets including,
but not limited to, software, plans, formulas, patterns, devices, secret
inventions, processes, customer lists, employee information, contracts,
and compilations of information, records and specifications, which are
owned by Company and regularly used in the operation of their respective
businesses and which may give Company an opportunity to obtain an
advantage over competitors, who do not know or use such trade secrets.
Employee agrees and acknowledges that Employee has been granted access to
these valuable trade secrets only by virtue of the confidential
relationship created by Employee's employment. Employee shall not disclose
any of the aforesaid trade secrets, directly or indirectly, or use them in
any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of employment by Company and
for its benefit.
All records, files, documents, drawings, specifications, software,
equipment, and similar items relating to the business of Company or its
affiliates, including without limitation all records relating to customers
(the "Documents"), whether prepared by Employee or otherwise coming into
Employee's possession, shall remain the exclusive property of Company or
such affiliates and shall not be removed from the premises of Company or
its affiliates under any circumstances whatsoever without the prior
consent of the Board. Upon termination of employment for any reason,
Employee agrees to promptly deliver to Company all Documents in the
possession or under the control of Employee.
16. Inventions and Patents
Except as may be limited by Section 2870 of the California Labor Code, all
inventions, designs, improvements, patents, copyrights, and discoveries
conceived by Employee during the term of this Agreement which are useful
in or directly or indirectly related to the business of Company or to any
experimental work carried on by Company, shall be the property of Company.
Employee will promptly and fully disclose to Company all such inventions,
designs, improvements, and discoveries (whether developed individually or
with other persons) and shall take all steps necessary and reasonably
required to assure Company's ownership thereof and to assist Company in
protecting or defending Company's proprietary rights therein.
Employee acknowledges hereby receipt of written notice from Company
pursuant to Labor Code Section 2872 that this Agreement (to the extent it
requires an assignment or offer to assign rights to any invention of
Employee) does not apply fully to an invention which qualifies fully under
California Labor Code Section 2870. The full text of Section 2870 is
attached hereto as Exhibit "A."
17. Place of Employment
The principal place of employment and the location of Employee's principal
office shall be in Los Angeles, California.
18. Severability
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under existing or
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future laws effective during the term of this Agreement, such provisions
shall be fully severable, the Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision had never comprised a
part of this Agreement, and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal and enforceable.
19. Material Breach
If Employee commits a material breach of this Agreement, all of Company's
obligations to Employee pursuant to this Agreement shall immediately
cease.
20. Section Headings
Section and other headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
21. Unique Services: Specific Performance
The parties hereto agree that the services to be rendered by Employee
pursuant to this Agreement, and the rights and privileges granted to the
Company pursuant to this Agreement, and the rights and privileges granted
to Employee by virtue of his position, are of a special, unique,
extraordinary and intellectual character, which gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in any action at law, and that a breach by Employee of any of the
terms of this Agreement will cause Company great and irreparable injury
and damage.
Employee and Company hereby expressly agree that either Employee or
Company shall be entitled to the remedies of injunction, specific
performance and other equitable relief to prevent a breach of this
Agreement by the other. Without limiting the generality thereof, the
parties expressly agree that Company and Employee shall be entitled to the
equitable remedies set forth in this paragraph 20 for any violation of
paragraphs 14, 15, 22, 23, and 24. This paragraph shall not be construed
as a waiver of any other rights or remedies which Company or Employee may
have for damages or otherwise.
22. Non-Competition
Employee agrees that for a period of one (1) year after the termination of
Employee's employment, Employee will not, directly or indirectly, compete
against, or in any manner be connected with or employed by any individual,
association or other entity that is in competition with Company's business
in Los Angeles County.
23. Non-Solicitation
Employee agrees that for a period of one (1) year after the termination of
employment, Employee will not, on behalf of Employee or on behalf of any
other individual, association or entity, call on any of the customers of
Company for the purpose of soliciting or inducing any of such customers to
acquire (or providing to any of such customers) any product or service
provided by Company or a Related Company, nor will Employee in any way,
directly or indirectly, as agent or otherwise,
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in any other manner solicit, influence or encourage such customers to take
away or to divert or direct their business to Employee or any other person
or entity by or with which Employee is employed, associated, affiliated or
otherwise related.
24. No-Raiding of Employees
Employee agrees that for a period of one (1) year after the termination of
Employee's employment, Employee will not, directly or indirectly, disrupt,
damage, impair, or interfere with Company's business by soliciting,
influencing, encouraging or recruiting any employee of Company to work for
Employee or any entity with which Employee is affiliated or related.
25. Counterparts
This Agreement and any amendment hereto may be executed in one or more
counterparts. All of such counterparts shall constitute one and the same
agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
26. Representation By Counsel; Interpretation
Company and Employee each acknowledge that each party to this Agreement
has been represented by counsel in connection with this Agreement and the
matters contemplated by this Agreement. Accordingly, any rule of law,
including but not limited to Section 1654 of the California Civil Code, or
any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intent of the
parties.
27. Arbitration.
Except for any controversy or claim arising from a breach of the covenants
in paragraphs 14, 15, 22, 23, and 24 of this Agreement, any controversy or
claim arising out of or relating to this Agreement or the breach thereof,
or arising out of or relating to Employee's employment or termination of
employment shall be submitted and resolved by final and binding
arbitration under the terms of the Federal Arbitration Act and in a manner
consistent with the California Code of Civil Procedure (and the California
Arbitration Act). Any arbitration shall be in accordance with and under
the auspices and rules of the American Arbitration Association. The
arbitrator shall be selected by mutual agreement of the parties. The
arbitrator shall have exclusive authority to resolve any dispute relating
to the interpretation, applicability, enforceability, or formation of this
Agreement including but not limited to any claim that all or any part of
this Agreement is void or voidable. The arbitration process will begin
upon service of a written request of the complaining party served on the
other within the appropriate statute of limitations as prescribed by law.
Service of the written request shall be made only by certified mail, with
a return receipt requested at the addresses listed below. The Arbitrator
shall be neutral and shall have no authority to alter, amend, modify or
change any of the terms of this Agreement. Upon conclusion of the
arbitration, the arbitrator shall issue a written decision setting forth
the reasons for his or her award. The decision of the Arbitrator shall be
final and binding and judgment thereon may be entered in any court having
jurisdiction thereof. Should Employee initiate an action in arbitration
pursuant to this Paragraph, Employee shall be required to pay a fee no
greater than what he would be required to pay to file an action in court.
The remaining arbitration fees and costs shall be borne by the Company,
except as allowed by law. Attorneys' fees shall be awarded to the
prevailing party
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pursuant to paragraph 13 of this Agreement for any and all contractual
claims. Otherwise, each party shall bear his or its own attorneys' fees,
unless otherwise provided for by applicable law.
The parties intend that this arbitration procedure is mandatory and shall
be the exclusive means of resolving all disputes between Employee and
Company and/or Company's employees, directors, officers or managers
involving or arising out of this Agreement, the parties' employment
relationship and/or the termination of that relationship including, but
not limited to any controversies or claims pertaining to wrongful
discharge and alleged violations of the covenant of good faith and fair
dealing, implied contracts and/or public policies or anti-discrimination
statutes. Employee and Company expressly acknowledge and understand that,
as a result of this agreement to arbitrate, they are giving up their right
to trial by a jury.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DATED: July 3, 2003 /s/ Xxx Xxxx Xxx
---------------------------------
XXX XXXX YOO
DATED: July 3, 2003 /s/ Xxxxx Xxx Park
---------------------------------
HANMI FINANCIAL CORPORATION
HANMI BANK
By: XXXXX XXX PARK
Its: Chairman, Board of Directors
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