EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of November 1, 1999
by and between Hanmi Bank, a California banking corporation, located at 0000
Xxxxxxxx Xxxx., XX-X, Xxx Xxxxxxx, XX 00000 ("Bank") and Chung Hoon Youk an
individual ("Employee").
WITNESSETH:
WHEREAS, the Bank desires to obtain the services of Employee as President and
Chief Executive Officer and Employee desires to render services to the Bank as
President and Chief Executive Officer;
WHEREAS, the Bank and Employee desire to set forth in this Agreement the terms
and conditions of Employee's employment with the Bank.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties agree as follows:
1. TERM. Bank agrees to employ Employee and Employee agrees to serve Bank as
President and Chief Executive Officer, in accordance with the terms of
this Agreement, for a term of three (3) years, commencing November 1, 1999
and ending October 31, 2002 unless this Agreement is earlier terminated in
accordance with the provisions which follow.
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 Bank and
its subsidiaries and matters related thereto, shall use Employee's best
efforts and abilities to promote the Bank'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 Bank
("Board"). Employee agrees to faithfully and diligently promote the
business, affairs and interests of Bank.
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 Bank's business,
whether alone, as a partner, or as an officer, director, employee 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 Bank and Employee
agree that, subject to the provisions of this Agreement, the Bank will
employ Employee and Employee will serve Bank as the President and
Executive Officer of Bank for the duration of this Agreement. Employee
agrees to observe and comply with the rules and regulations of Bank
respecting the performance of Employee's duties and agrees to carry out
and perform orders, directions and policies of Bank 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 Bank.
For the term of this Agreement, Employee shall report to the Board.
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4. COMPENSATION.
a) BASE AND INCENTIVE COMPENSATION
During the term of this Agreement, Bank agrees to pay Employee a
base salary (the "Base Salary") at the rate of $16,666.66 per month,
payable in bi-monthly amount of $8333.33, less withholdings. If
employed in the second and third years under this Agreement, Bank
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 Bank.
b) BONUS
Employee shall be eligible for a bonus at the end of each fiscal
year of employment in the amount of four percent (4%) of the amount
of Bank's pre-tax profits which exceed twenty percent (20%) of the
primary capital of that year. In no event shall Employee's bonus
exceed fifty percent (50%) of Employee's annual Base Salary in the
year in which he is eligible for a bonus. There shall be no other
bonuses. If Employee is employed less than a full fiscal year, the
bonus will be paid to Employee on a pro-rata basis for that portion
of the fiscal year in which Employee was employed as Chief Executive
Officer.
PRE-TAX PROFIT DETERMINATION
The computation of Bank's pre-tax profit shall be determined by
Bank's outside auditors and certified public accountants as approved
by the Board. The computation of Bank's pre-tax profit shall be
conclusive and binding on Bank and Employee. In the event of a
dispute under this Section, the sole determination by the arbitrator
shall be whether the pre-tax profit was determined in conformity
with this paragraph -- i.e., whether the pre-tax profit was
determined by Bank's outside auditory and certified public
accountants, and was approved by the Board.
c) STOCK OPTIONS
Pursuant to and subject to the terms of Bank's Stock Option Plan,
for the term of this Agreement, Bank will grant Employee a stock
option consisting of a maximum total of thirty thousand (30,000)
shares of Bank's common stock at the market price at the time of
grant. The option will vest in installments of 10,000 shares on the
date of this Agreement and on the anniversary date of each of the
two years thereafter that Employee is employed under this
Agreement, and be exercisable at the time of each grant. Any such
option will be subject to all of the terms and provisions of Bank's
Stock Option Plan and the form of Stock Option Agreement to be
executed by Bank and Employee, which Stock Option Plan and Stock
Option Agreement are incorporated in full into this Agreement.
Should Employee be terminated without cause, this option shall
expire no later than thirty (30) days after such termination. Should
Employee be terminated for cause, this option shall expire
immediately. Reference should be made to the Bank's Stock Option
Plan and form of Stock Option Agreement for full and complete terms
and conditions governing stock option to be granted.
5. PERQUISITES
a) AUTOMOBILE ALLOWANCE AND INSURANCE
Bank 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
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Bank, 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 Bank. Employee shall accrue a maximum of 15
days of vacation. Once Employee accrues 15 days of vacation,
Employee shall cease accruing any additional vacation until
Employee's vacation accrual falls below 15 days.
c) INSURANCE BENEFITS
Bank shall provide Employee and Employee's spouse and dependent
children, where applicable, at Bank's expense, participation in
accident and health at no cost to Employee, and term life insurance
benefits to the maximum benefits available under Bank's Group
Insurance program, except that term life insurance shall not be
required in excess of $150,000 for Employee.
d) PROFESSIONAL SOCIETY MEMBERSHIP
Bank agrees to reimburse Employee for professional society
memberships which are related to and enhance Employee's employment
at the Bank during Employee's employment at Bank.
e) CONTINUING EDUCATION
Bank agrees to reimburse Employee for continuing education which are
related to and enhance Employee's employment at Bank during
Employee's employment at Bank.
f) COUNTRY CLUB MEMBERSHIP
Bank agrees to reimburse Employee for reasonable initiation fees and
monthly dues related to a country club membership during Employee's
employment at Bank. The country club must be located in Los Angeles
County or Orange County.
6. TERMINATION. The compensation and other benefits provided to Employee
pursuant to this Agreement, and the employment of Employee by the Bank,
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 Bank 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.
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 Bank is ordered to remove
Employee or Bank is closed or taken over by the California State
Department of Financial Institutions, the Federal Reserve. the
Federal Deposit Insurance Corporation, Bank may immediately
terminate this Agreement without further liability, compensation or
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.
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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, shall terminate upon a 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 Bank may
terminate this Agreement, including any extensions thereto, without
cause at any time.
i. If Bank terminates this Agreement without cause, upon such
termination, the Bank 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
ii. Bank shall compensate the Employee for all accrued. unused and
un-purchased vacation leave at his then current daily salary
rate.
iii. If Employee terminates this Agreement without cause,
Employee's base salary, bonus 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 Bank (whether or not fully deductible by the Bank)
for federal income tax purposes as ordinary and necessary business
expenses, Bank shall reimburse Employee promptly for reasonable business
expenditures, including travel, entertainment, parking, business meetings,
and professional dues and dues associated are maintaining club
memberships, so long as such expenses and properly documented by Employee
to the satisfaction of Bank and Board.
8. MISCELLANEOUS.
a) SUCCESSION; SURVIVAL.
This Agreement shall inure to the benefit of and shall be binding
upon Bank, 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
Bank or a similar transaction in which the successor or assignee
assumes (whether by operation of law or express assumption) all
obligations of Bank 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 Bank
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. This Agreement incorporates by reference the Stock
Option Plan.
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10. ENTIRE AGREEMENT: AMENDMENTS
This Agreement 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 Bank. No amendment or modification of the terms of this Agreement shall
be valid unless made in writing and signed by Employee and by Bank.
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 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 IN ACTION ON CONTRACT
If any litigation shall occur between Employee and the Bank which
litigation arises out of or as a result of this Agreement or the acts of
the parties hereto pursuant to this Agreement, or which seeks an
interpretation of this Agreement, the prevailing party shall be entitled
to recover all costs and expenses of such litigation, 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
Bank or any of its affiliates of which Employee may learn or be aware as
a result of Employee's employment during the Term except to the extent
such use or disclosure is (i) necessary to the performance of this
Agreement and in furtherance of Bank's best interests, or (ii) required by
applicable law. The provisions of this subsection (g) shall survive the
expiration, suspension or 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,
consisting of software, plans, formulas, patters, devices, secret
inventions, processes, customer lists, contracts, and compilations of
information, records and specifications, which are owned by Bank and
regularly used in the operation of their respective businesses and which
may give Bank 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 Bank and for its benefit.
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All records, files, documents, drawings, specifications, software,
equipment, and similar items relating to the business of Bank 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
Bank or such affiliates and shall not be removed from the premises of
Bank or its affiliates under any circumstances whatsoever without the
prior consent of the Board. Upon termination of employment, Employee
agrees to promptly deliver to Bank 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 Bank or to any
experimental work carried on by Bank, shall be the property of Bank.
Employee will promptly and fully disclose to Bank 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 Bank's ownership thereof and to assist Bank in
protecting or defending Bank's proprietary rights therein.
Employee acknowledges hereby receipt of written notice from Bank 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.
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 this Agreement shall for any reason be or become unenforceable in any
material respect by any party, this Agreement shall thereupon terminate
and become unenforceable by the other party as well. In all other
respects, if any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless remain
in full force and effect, and if any provision is held invalid or
unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances,
to the fullest extent permitted by law.
19. 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.
20. 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
Bank 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 Bank great and irreparable injury and
damage. Employee hereby expressly agrees that Bank shall be entitled to
the remedies of injunction, specific performance and other equitable
relief to prevent a breach of this Agreement by Employee. Without limiting
the generality thereof, the parties
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expressly agree that Bank shall be entitled to the equitable remedies set
forth in this paragraph 20 for any violation of paragraph 14, 15, 21, 22,
and 23. This paragraph shall not be construed as a waiver of any other
rights or remedies which Bank may have for damages or otherwise.
21. 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 Bank's business
in Los Angeles County.
22. 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
Bank 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 Bank or a Related Company, nor will Employee in any way,
directly or indirectly, as agent or otherwise, 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.
23. 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 Bank's business by soliciting,
influencing, encouraging or recruiting any employee of Bank to work for
Employee or any Employee Related Entity.
24. 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.
25. REPRESENTATION BY COUNSEL: INTERPRETATION
Bank 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.
26. ARBITRATION.
Except for any controversy or claim arising from a breach of the covenants
in paragraphs 14, 15, 20, 21, and 22 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. The
arbitration process will begin upon service of a written request of the
complaining party served on the
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other within thirty (30) calendar days of the event which forms the basis
of the controversy or claim. Service of the written request shall be made
only by certified mail, with a return receipt requested. Time is of the
essence; if the request is not served within said thirty (30) days, the
complaining party's claim(s) shall be forever waived and barred before any
and all forums, including, without limitation, arbitration or judicial
forums. The Arbitrator has no authority to alter, amend, modify or change
any of the terms of this Agreement. The decision of the Arbitrator shall
be final and binding and judgment thereon may be entered in any court
having jurisdiction thereof. The parties shall equally divide all costs,
excluding attorneys' fees, with respect to the arbitration.
The parties intend that this arbitration procedure is mandatory and shall
be the exclusive means of resolving all disputes between Employee and Bank
and/or Bank'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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DATED: November 1, 1999 /s/ CHUNG HOON YOUK
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CHUNG HOON YOUK
DATED: November 1, 1999 /s/ HANMI BANK
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HANMI BANK
By: XXXXXX X. RHO
Its: Chairman, Board of Directors
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