HANMI FINANCIAL CORPORATION (NASDAQ:HAFC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
The informational required by this Item as it relates to the Indenture (as defined below) is set forth in Item 5.02 and is hereby incorporated herein by reference in response to this Item.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On February 21, 2018, Hanmi Financial Corporation and its wholly owned subsidiary, Hanmi Bank (collectively, the “Company”), entered into employment agreements with Bonita I. Lee, the Company's Senior Executive Vice President, and Romolo C. Santarosa, the Company's Senior Executive Vice President (the “Employment Agreements”) (each, an “Executive,” and collectively, the “Executives”). The Employment Agreements generally contain the same terms except for the base salaries.
The Employment Agreements provide for a term that commences on November 1, 2017 and expires on October 31, 2020 (unless earlier terminated by either party), subject to automatic renewal for successive one-year periods unless either the Company or the Executive provides written notice of non-renewal at least sixty days prior to the expiration of the then-current term.
to the Employment Agreements, the Executives will each serve as a Senior Executive Vice President of the Company.
Ms. Lee’s current annual base salary is $352,000, and Mr. Santarosa’s current annual base salary is $320,000. Beginning in 2018, Ms. Lee's and Mr. Santarosa's annual base salaries will be reviewed at least annually and may, in the sole discretion of the Board, be increased but not reduced (other than a reduction that affects all senior executives). In addition, the Executives will be eligible to receive an annual bonus under the annual bonus plan. The amount of the bonus and the goals applicable to achievement of the bonus shall be determined in accordance with the terms of such plan or plans, based upon the recommendation of the Compensation and Human Resources Committee and consistent with the bonus opportunity (cash plus equity awards) of other similarly situated executives. Under the Employment Agreements, the Executives are entitled to participate in employee benefit plans for which they may be eligible and will receive certain perquisites, including Company-provided welfare benefits, and twenty days of paid vacation annually.
Each Employment Agreement provides that if the Executive’s employment is terminated either by the Company without “cause” or by the Executive for “good reason,” in either case, other than within eighteen months following a “change in control” (each as defined in the Employment Agreements), and subject to the Executive’s execution and non-revocation of a general release of claims, the Executive will be entitled to receive the following severance payments and benefits: (i) continued payment of the Executive’s then-current annual base salary for twelve months following the date of termination, (ii) a lump-sum payment of an amount equal to the pro-rated portion of the Executive’s prior year’s annual bonus based on the number of days worked during the year of termination, (iii) accelerated vesting of any then-unvested time-based equity awards held by the Executive with respect to the portion that would have vested if the Executive’s employment had continued for one year following the date of termination, and (iv) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months, or a monthly cash payment in lieu thereof.
In addition, each Employment Agreement provides that if, within eighteen months following a change in control, the Executive’s employment with the Company is terminated either by the Company without cause or by the Executive for good reason, in either case, and subject to the Executive’s execution and non-revocation of a general release of claims, the Executive will be entitled to receive the following severance payments and benefits: (i) a lump sum payment of an amount equal to two times the sum of the Executive’s then-current annual base salary and then-maximum annual bonus, (ii) fully accelerated vesting of any then-unvested time-based equity awards held by the Executive, and (iii) continued health insurance benefits at the Company’s expense under COBRA for up to 18 months, or a monthly cash payment in lieu thereof.
to each Employment Agreement, if the Executive’s employment terminates due to his or her death or disability, then the Executive or the Executive’s estate, as applicable, will be entitled to receive a lump-sum payment of an amount equal to the pro-rated portion of the Executive’s prior year’s annual bonus based on the number of days worked during the year of termination and accelerated vesting of any then-unvested time-based equity awards held by the Executive with respect to the portion that would have vested if the Executive’s employment had continued for one year following the date of termination.
The Executives remain subject to the confidentiality, non-solicitation and other covenants included in their restrictive covenant agreements with the Company and the non-disparagement covenant set forth in the Employment Agreements. In addition, if any payments or benefits provided to Executives in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for the Executives.
The above summary of the terms of the Executives’ employment agreements are qualified in their entirety by reference to the Executives’ employment agreements, which are attached to this Report as Exhibits 10.1 and 10.2 and incorporated in this Item 5.02 by reference.
| Item 9.01 | Financial Statements and Exhibits |
HANMI FINANCIAL CORP ExhibitEX-10.1 2 exh_101.htm EXHIBIT 10.1 Exhibit 10.1 Bonita I. Lee Re: Employment Agreement Dear Ms. Lee: This is your EMPLOYMENT AGREEMENT (the “Agreement”) with Hanmi Financial Corporation,…To view the full exhibit click here
About HANMI FINANCIAL CORPORATION (NASDAQ:HAFC)
Hanmi Financial Corporation is the holding company for Hanmi Bank (the Bank). The Bank is a community bank conducting general business banking, with its primary market encompassing the Korean-American community, as well as other ethnic communities across California, Colorado, Georgia, Illinois, New York, Texas, Virginia and Washington. The Bank’s client base reflects the multi-ethnic composition of these communities. The Bank maintains a branch network of over 40 full-service branch offices in California, Illinois, New Jersey, New York, Texas and Virginia, and loan production offices in California, Colorado, Texas, Virginia and Washington State. Its lending activities include real estate loans (commercial property, construction and residential property), commercial and industrial loans (commercial term loans, commercial lines of credit and international), and consumer loans and small business administration (SBA) loans. Its revenues are derived from interest and fees on its loans.
