EXHIBIT 10.1

 

 

 

 

April 2, 2019

 

Bonita I. Lee

 

 

 

Re: Amended and Restated Employment Agreement

 

Dear Ms. Lee:

 

This is your AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) with
Hanmi Financial Corporation, a Delaware corporation, and Hanmi Bank, a state
chartered bank incorporated under the laws of the State of California (together,
the “Company”). It sets forth the terms of your employment with the Company,
effective as of close of business on May 3, 2019 (the “Effective Date”).
Effective as of the Effective Date, this Agreement supersedes and replaces in
its entirety that certain Employment Agreement, dated February 12, 2018, by and
between the Company and you (the “Prior Agreement”).

 

1.Your Position, Performance and Other Activities.

 

(a)                 Position. You will be employed in the position of President
and Chief Executive Officer (“CEO”) of the Company and will report directly to
the Company’s Board of Directors (the “Board”). You and the Company acknowledge
that you will become a member of the Board, effective as of the execution date
of this Agreement. The Company will use all reasonable efforts to cause you to
be nominated for re-election to the Board each time your Board term expires
during the Term (as defined in Section 2). You agree to serve as a member of the
Board, as well as a member of any Board committee to which you may be elected or
appointed. You also agree that, unless otherwise agreed to by you and the
Company, you will be deemed to have resigned from the Board and each Board
committee voluntarily, without any further action by you, as of the end of the
Term or upon a termination of your employment with the Company for any reason.

 

(b)                Authority, Responsibilities and Reporting. You will have the
authority, responsibilities and reporting relationships that correspond to your
position, including any particular authority, responsibilities and reporting
relationships consistent with your position that the Board may assign to you
from time to time and you shall perform your duties hereunder in compliance with
such policies of the Company as may be adopted from time to time.

 

(c)                 Performance. During your employment, you will devote
substantially all of your business time and attention to the Company and will
use good faith efforts to discharge your responsibilities under this Agreement
to the best of your abilities. During the Term, your place of performance will
be the headquarters of the Company or such other place as the Board determines.
Your performance will be reviewed by the Board on an on-going basis and no less
frequently than annually.

 

(d)                Other Activities. During your employment, you will not render
any business, commercial or professional services to any party other than the
Company. However, you may (i) serve on corporate, civic or charitable boards,
(ii) manage personal investments, and (iii) deliver lectures, fulfill speaking
engagements and teach at educational institutions, so long as (A) these
activities do not interfere with your performance of your responsibilities under
this Agreement, (B) any service on a corporate, civic or charitable board is
disclosed to the Board contemporaneously upon commencement and then at least
annually to the Board and (C) no such services are provided to any competitor of
the Company.

 

2.Term of Your Employment.

 

Your employment under this Agreement shall be for a term commencing on the
Effective Date and ending upon the earlier of (i) May 6, 2022 (the “End Date”),
or (ii) the close of business on the effective date of termination of your
employment pursuant to Section 5 (the “Term”). On the End Date and on each
subsequent anniversary of the End Date thereafter (each, a “Renewal Date”), the
Term shall automatically renew for an additional one (1) year period, unless
either you or the Company provides the other party with written notice of
non-renewal of the Term at least sixty (60) days prior to the End Date or such
Renewal Date, as applicable. Notwithstanding the foregoing, your employment can
be terminated by either party providing advance written notice in accordance
with Section 5(e). If you remain employed by the Company following the
expiration of the Term (including pursuant to a non-renewal thereof), except as
otherwise expressly provided herein, your employment relationship with the
Company (if any) shall cease to be governed by the terms and conditions of this
Agreement and shall be on an at-will basis on such terms as may be prescribed by
the Company, unless otherwise agreed to by you and the Company in writing;
provided, however, that the provisions of Section 7 below shall survive the
expiration or termination of the Term in accordance with their terms.

 

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3.Your Compensation.

 

(a)                 Salary. During the Term, you will receive an annual base
salary, which may be increased from time to time, but not reduced (other than a
reduction that would affect all senior executives of the Bank based on the
financial performance of the Bank, and in such case, your reduction shall not
exceed the percentage reduction of similarly situated senior executives of the
Bank) (your “Salary”) payable in accordance with the Company’s regular payroll
practices. The amount of your Salary as of the Effective Date will be $525,000.
Your Salary will be reviewed at least annually commencing in 2020 and may be
increased, but not decreased (except as noted above), in the sole discretion of
the independent members of the Board, based on the recommendation from the
Compensation and Human Resources Committee (the “CHRC”).

 

(b)                CEO Equity Grant. On the Effective Date of this Agreement,
You shall receive an award of restricted stock, the approximate value of which
will be $525,000 (to the nearest whole share) on the grant date. Consistent with
the terms of the restricted stock agreement to be entered into by the Company
and You on the grant date, the restricted stock grant will vest at the rate of
33% each, on the first and second anniversary of the grant date, and at the rate
of 34% on the third anniversary of the grant date, provided that you remain
employed as the Chief Executive Officer of the Company and the Bank on each such
anniversary of the grant date.

 

(c)                 Incentive Compensation. During the Term, You will be
eligible to receive an annual bonus (your “Bonus”) for each fiscal year of the
Company commencing with the fiscal year ending December 31, 2019, pursuant to an
annual bonus plan. The amount of the Bonus and the performance goals applicable
to the Bonus shall be determined in accordance with the terms and conditions of
said bonus plan as in effect from time to time, as determined by the independent
members of the Board in sole discretion, based on a recommendation from the
CHRC. Your total annual Bonus (cash plus equity awards) for any fiscal year
cannot exceed 100% of your Salary.

 

4.Other Employee Benefits.

 

During the Term:

 

(a)                 Vacation. You shall be entitled to twenty (20) days paid
vacation per year (prorated for partial years), and to such paid holidays as are
observed by the Company from time to time, all in accordance with the Company’s
policies and practices that are applicable to the Company’s senior executives.
Unused vacation will be carried over from year to year and/or paid out as
provided in the Company’s vacation plans and polices in effect from time to
time.

 

(b)                Business Expenses. You will be reimbursed for all reasonable
business expenses incurred by you in performing your responsibilities under this
Agreement. Reimbursements will be made pursuant to the Company’s normal
practices and procedures for senior executives.

 

(c)                 Facilities. You will be provided with office space,
facilities, secretarial support and other business services consistent with your
position on a basis that is at least as favorable as that provided to similarly
situated senior executives of the Company.

 

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(d)                Employee Benefit Plans. (i) You shall be eligible to
participate in all incentive plans, practices, policies and programs, and all
savings and retirement plans, policies and programs in effect from time to time,
in each case that are applicable generally to senior executives of the Company;
(ii) you and your eligible family members shall be eligible for participation,
at the Company’s expense, in the welfare benefit plans, practices, policies and
programs (including, if applicable, medical, dental, vision, disability,
employee life, group life and accidental death insurance plans and programs)
maintained for the Company’s senior executives from time to time; provided,
however, that if your participation in such plans and programs at the Company’s
expense would violate applicable law or would result in fines or penalties to
the Company (including, without limitation, pursuant to the Patient Protection
and Affordable Care Act or Section 2716 of the Public Health Service Act or any
other health care law), then you and the Company shall in good faith negotiate
replacement benefits and/or replacement compensation to be paid or provided to
you in lieu of such participation at the Company’s expense; (iii) the Company
shall pay directly or, at its election, reimburse you for the cost of premiums
of up to $25,000 annually for term life insurance coverage of up to One Million
Dollars ($1,000,000) on your life during the Term (or such lesser amount of
coverage as can be purchased for $25,000 annually); and (iv) you shall be
entitled to such fringe benefits and perquisites as are provided by the Company
to its senior executives from time to time, in accordance with the policies,
practices, and procedures of the Company.

 

(e)                 Country Club Membership. The Company will provide you with a
country club membership in Los Angeles, California at a country club selected by
the Company and reasonably acceptable to you and will pay or reimburse you for
any and all membership fees in connection with such membership.

 

(f)                  Automobile Allowance. The Company will provide you with a
monthly automobile allowance of Three Thousand Dollars ($3,000).

 

(g)                Professional Education. The Company shall provide up to
$25,000 per annum, or such other amount as mutually agreed to by the Board and
you, for each year during the initial Term, and in the sole discretion of the
Board for each year during the Renewal Terms, for your continuing professional
education to assist you in developing and honing the skills of your position as
Chief Executive Officer.

 

(h)                Liability Insurance. The Company shall maintain (i) a
directors’ and officers’ liability insurance policy, or an equivalent errors and
omissions liability insurance policy, and (ii) an employment practices liability
insurance policy. Each such policy shall cover you with scope, exclusions,
amounts and deductibles no less favorable to you than those applicable to the
Company’s senior executive officers and directors on the Effective Date, or any
more favorable as may be available to any other director or senior executive
officer of the Company, while you are employed with the Company.

 

5.Termination of Your Employment.

 

(a)                 No Reason Required. You or the Company may terminate your
employment at any time for any reason, or for no reason, subject to compliance
with Section 5(e).

 

(b)                Termination by the Company for Cause.

 

(i)                  “Cause” means any of the following:

 

(A)               Your continued failure, either due to willful action or as a
result of gross neglect, to substantially perform your duties and
responsibilities to the Company under this Agreement (other than any such
failure resulting from your incapacity due to physical or mental illness) that,
if capable of being cured, has not been cured within thirty (30) days after
written notice is delivered to you by the Company, which notice specifies in
reasonable detail the manner in which the Company believes you have not
substantially performed your duties and responsibilities;

 

(B)               Your engagement in conduct that is demonstrably and materially
injurious to the Company, or that materially harms the reputation or financial
position of the Company, unless the conduct in question was undertaken in good
faith on an informed basis with due care and with a rational business purpose
and based upon the honest belief that such conduct was in the best interest of
the Company;

 

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(C)               Your indictment or conviction of, or plea of guilty or nolo
contendere to, a felony or any other crime involving dishonesty, fraud or moral
turpitude;

 

(D)               Your being found liable in any SEC or other civil or criminal
securities law action or entering any cease and desist order with respect to
such action (regardless of whether or not you admit or deny liability) where the
conduct that is the subject of such action is demonstrably and materially
injurious to the Company;

 

(E)                Your material breach of your fiduciary duties to the Company;

 

(F)                Your (1) obstructing or impeding, (2) endeavoring to
influence, obstruct or impede, or (3) failing to materially cooperate with, any
investigation authorized by the Board or any governmental or self-regulatory
entity (an “Investigation”). However, your failure to waive attorney-client
privilege relating to communications with your own attorney in connection with
an Investigation shall not constitute “Cause”;

 

(G)               Your removing, concealing, destroying, purposely withholding,
altering or by any other means falsifying any material that is requested in
connection with an Investigation;

 

(H)               Your disqualification, bar, prohibition, order or similar
restriction imposed against you by any governmental or self-regulatory authority
from serving as an officer or director of any member of the Company or your loss
of any governmental or self-regulatory license that is reasonably necessary for
you to perform your responsibilities to the Company under this Agreement, if (i)
the disqualification, bar or loss continues for more than thirty (30) days and
(ii) during that period the Company uses its good faith efforts to cause the
disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during your employment, you will serve
in the capacity contemplated by this Agreement to whatever extent legally
permissible and, if your employment is not permissible, you will be placed on
leave (which will be paid to the extent legally permissible);

 

(I)                  Your unauthorized use or disclosure of confidential or
proprietary information or related materials, or your violation of any of the
terms of the Confidentiality Agreements (as defined below) or the Company’s
standard confidentiality policies and procedures, in each case, which results or
could reasonably be expected to result in reputational, economic, financial or
other injury to the Company or its subsidiaries or affiliates;

 

(J)                 Your violation, as determined by the Board in good faith, of
the Company’s (1) workplace violence policy or (2) policies on discrimination,
unlawful harassment or substance abuse; or

 

(K)               Your material breach of this Agreement that has not been cured
within thirty (30) days after written notice is delivered to you by the Company,
which notice specifies in reasonable detail the manner in which the Company
believes this Agreement has been breached.

 

For purposes of this definition, no act or omission by you will be “willful”
unless it is made by you in bad faith or without a reasonable belief that your
act or omission was in the best interests of the Company.

 

(c)                 Your Termination for Good Reason.

 

(i)                  “Good Reason” means the occurrence (without your express
written consent) of any of the following:

 

(A)               a material reduction in your Salary other than a reduction
that would affect all senior officers of the Bank based on the financial
performance of the Bank, and in such case, your reduction shall not exceed the
percentage reduction of similarly situated senior executives of the Bank;

 

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(B)               the assignment to you of duties substantially inconsistent
with your position, authority, responsibilities or status as Chief Executive
Officer of the Company (except in connection with a for Cause termination);

 

(C)               a change in the geographic location at which you must perform
the services under this Agreement outside of Los Angeles County, California,
exclusive of required business travel; or

 

(D)               material breach by the Company of this Agreement.

 

For purposes of this Agreement, Good Reason shall not be deemed to exist unless
(1) your termination of employment for Good Reason occurs within 90 days
following the initial existence of one of the conditions specified in clauses
(A) through (D) above, (2) you provide the Company with written notice of the
existence of such condition within 60 days after the initial existence of the
condition, and (3) the Company fails to remedy the condition within 30 days
after its receipt of such notice.

 

(d)                Termination on Disability or Death.

 

(i)                  If the Company determines in good faith that your
Disability has occurred, the Company may give you Termination Notice (as defined
below). If within 30 days of the Termination Notice you do not return to a
full-time performance of your responsibilities, your employment will terminate.
If you do return to full-time performance in that 30-day period, the Termination
Notice will be cancelled for all purposes of this Agreement. Except as provided
in this Section 5(d), your incapacity due to mental or physical illness or
injury will not affect the Company’s obligations under this Agreement. For these
purposes, you will be deemed to have incurred a Disability if any of the
following occur: (i) you are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or last for a continuous period of not
less than 12 months, (ii) by reason of any medically determinable physical or
mental impairment that can be expected to result in death, or last for a
continuous period of not less than 12 months, you are receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank; or (iii) you are
determined to be totally disabled by the Social Security Administration. With
respect to “(i)” above, this Disability determination must be made by a
physician, retained by the Bank for purposes of making this determination, or
retained by you and approved by the Bank (which approval shall not be
unreasonably withheld).

 

(ii)                  Your employment will terminate automatically on your
death.

 

(e)                 Advance Notice Generally Required.

 

(i)                  To terminate your employment, either you or the Company
must provide a Termination Notice to the other. A “Termination Notice” is a
written notice that states the specific provision of this Agreement on which
such termination is based, including, if applicable, the specific clause of the
definition of Cause and a reasonably detailed description of the facts that
permit termination under that clause. The failure to include any fact in a
Termination Notice that contributes to a showing of Cause does not preclude the
Company from asserting that fact in enforcing its rights under this Agreement.

 

(ii)                  You and the Company agree to provide a Termination Notice
thirty (30) days in advance of any termination, unless your employment is
terminated by the Company for Cause or because of your Disability or death.
Accordingly, the effective date of termination of your employment will be 30
days after Termination Notice is given, except that (A) the effective date will
be the date of the Company’s Termination Notice if your employment is terminated
by the Company for Cause, although the Company may provide a later effective
date in the Termination Notice, (B) the effective date will be the 30 days after
Termination Notice is given if your employment is terminated because of your
Disability, and (C) the effective date will be the date of your death if your
employment is terminated because of your death. The Company may elect to place
you on paid leave for all or part of the advance Termination Notice period.
Notwithstanding the foregoing, if you give the Company a Termination Notice, the
Company in its sole discretion may waive the 30-day notice requirement and
accelerate the effective date of termination of your employment to any earlier
date. In the event of a termination for Good Reason, the provisions of Section
5(c) above shall control over any inconsistent provisions in this Section
5(e)(ii).

 

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(f)                  Non-Renewal. Notwithstanding anything contained herein, in
no event shall the expiration of the Term or the Company’s election not to renew
or extend the Term or your employment with the Company constitute a termination
of your employment by the Company without Cause or by you for Good Reason. For
the avoidance of doubt, nothing contained in this Section 5(f) shall preclude or
limit the Company’s ability to, in its sole discretion, pay or provide you with
severance or termination pay and/or benefits in connection with a termination of
your employment upon or following the expiration of the Term or the Company’s
election not to renew or extend the Term.

 

6.The Company’s Obligations in Connection with Your Termination.

 

(a)                 General Effect. On termination, your employment will end and
the Company will have no further obligations to you except as provided in this
Section 6.

 

(b)                By the Company Without Cause or by You for Good Reason. If
the Company terminates your employment without Cause or you terminate your
employment for Good Reason, in either case, other than within eighteen (18)
months following a “Change in Control” (as defined below), subject to Section
6(f):

 

(i)                  The Company will pay you the following as of the end of
your employment: (A) your unpaid Salary through the date of termination, (B)
your Salary for any accrued but unused vacation, and (C) any accrued expense
reimbursements and other cash entitlements (together, your “Accrued
Compensation”), in each case, as and when such amounts would otherwise been paid
had your employment not been terminated or such earlier or later time as may be
required by law. In addition, the Company will timely pay you any amounts and
provide to you any benefits that are required, or to which you are entitled,
under any plan, contract or arrangement of the Company (together, the “Other
Benefits”).

 

(ii)                  The Company will pay you an amount equal to one (1) year
of your then-current annual Salary, to be paid on the Company’s regular pay
cycle and through the Company’s payroll over a 12-month period commencing on the
date of the termination of employment.

 

(iii)                  The Company will pay you an amount equal to a pro-rated
portion of your prior year’s Bonus based on the number of days worked during the
year of termination, payable in a lump-sum within thirty (30) days following the
date of termination of employment.

 

(iv)                  All outstanding and then unvested stock options,
restricted stock and other equity awards granted to you under any of the
Company’s equity incentive plans (or awards substituted therefore covering the
securities of a successor company) (each, an “Equity Award”) that are at such
time subject to vesting solely based on your continued employment with the
Company (each, a “Time-Vesting Equity Award”) shall be deemed to have vested as
if your employment has continued for one (1) year following the actual
termination date. All other outstanding and unvested Equity Awards (each, a
“Performance-Vesting Equity Award”) shall be treated in accordance with the
terms of the plan document and applicable award agreement governing such
Performance-Vesting Equity Award.

 

(v)                  If you timely elect to continue your Company-provided
health insurance coverage pursuant to federal COBRA law, the Company will pay
directly or, at its election, reimburse you for the cost of such COBRA premiums,
at the same level as you maintain as of the date of termination, through the end
of the COBRA period (18 months), or until such time as you qualify for health
insurance benefits through a new employer, whichever occurs first (the “COBRA
Period”). The reimbursement shall be for 100% of your COBRA premiums, as well as
for your eligible dependents’ COBRA premiums, and the coverage to be provided on
this basis shall be health and dental coverage. Notwithstanding the foregoing,
if (x) any plan pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) under Treasury Regulation Section 1.409A-1(a)(5), or (y)
the Company is otherwise unable to continue to cover you under its group health
plans without incurring penalties (including without limitation, pursuant to the
Patient Protection and Affordable Care Act or Section 2716 of the Public Health
Service Act or any other health care law), then, in either case, an amount equal
to each remaining COBRA premium under such plans shall thereafter be paid to you
in substantially equal monthly installments over the COBRA Period (or the
remaining portion thereof) (the benefits under this Section 6(b)(v), the “COBRA
Benefit”).

 

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(c)                 By the Company For Cause or by You for Any Reason other than
for Good Reason. If the Company terminates your employment for Cause or you
terminate your employment for any reason other than for Good Reason as set forth
in Section 6(b) or 6(e), the Company will pay your Accrued Compensation and
provide your Other Benefits, as and when such amounts would otherwise been paid
had your employment not been terminated or such earlier time as may be required
by law.

 

(d)                Your Disability or Death. If your employment terminates
because of Disability or death, the Company will pay or provide you or your
estate (1) your Accrued Compensation and your Other Benefits, as and when such
amounts would otherwise been paid had your employment not been terminated or
such earlier time as may be required by law, and (2) subject to Section 6(f), an
amount equal to a pro-rated portion of your prior year’s Bonus based on the
number days worked during the year of termination, payable in a lump-sum within
thirty (30) days following the date of termination of employment.

 

(e)                 Change in Control; Termination in Connection with a Change
in Control. If within eighteen (18) months following a Change in Control, the
Company terminates your employment without Cause or you terminate your
employment for Good Reason, in either case, subject to Section 6(f):

 

(i) The Company will pay you your Accrued Compensation and provide your Other
Benefits, as and when such amounts would otherwise have been paid had your
employment not been terminated or such earlier time required by law.

 

(ii) In lieu of the amounts set forth in Sections 6(b)(ii) and (iii) above, the
Company will pay you an amount equal to two and one-half (2.5) times the sum of
(a) your then-current annual Salary and (b) your then-maximum annual Bonus,
payable in a lump-sum within thirty (30) days following the date of termination.

 

(iii) The Company shall provide you with the COBRA Benefit on the terms and
conditions set forth in Section 6(b)(v) above.

 

(iv) In the event of any Change in Control, (a) your Time-Vesting Equity Awards
shall fully and automatically vest as of the date of such Change in Control and
(b) your Performance-Vesting Equity Awards shall be treated in accordance with
the terms of the plan document and applicable award agreement governing such
Performance-Vesting Equity Award.

 

(v) For purposes of this Agreement, a “Change in Control” shall mean any
transaction or series of related transactions as a result of which:

 

(A) the Company consummates a reorganization, merger or consolidation, or sale
or other disposition of all or substantially all of its assets (each a “Business
Combination”), in each case, unless immediately following the consummation of
such Business Combination all of the following conditions are satisfied:

 

(1) Persons, who, immediately prior to such Business Combination, were the
beneficial owners of the Outstanding Voting Securities of the Company,
beneficially own (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or
indirectly, more than 50% of the combined voting power of the then Outstanding
Voting Securities of the entity (the “Resulting Entity”) resulting from such
Business Combination (including, without limitation, an entity which as a result
of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries);

 

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(2) no Person beneficially owns (within the meaning of Rule 13d-3), directly or
indirectly, more than 50% of the then outstanding combined voting power of the
Outstanding Voting Securities of the Resulting Entity, except to the extent that
such Person’s beneficial ownership of the Company immediately prior to the
Business Combination exceeded such threshold; and

 

(3) at least one-half of the members of the board of directors of the Resulting
Entity were members of the Board at the time the Board authorized the Company to
enter into the definitive agreement providing for such Business Combination; or

 

(B) any Person acquires beneficial ownership (within the meaning of Rule 13d-3)
of more than 50% of the combined voting power (calculated as provided in Rule
13d-3 in the case of rights to acquire securities) of the then Outstanding
Voting Securities of the Company and has greater beneficial ownership than the
existing stockholders of the Company as of the date hereof; provided, however,
that for purposes of this clause, the following acquisitions shall not
constitute a Change in Control: (x) any acquisition directly from the Company,
(y) any acquisition by the Company, or (z) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
entity controlled by the Company.

 

(C) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act, which definition shall include a “person” within the meaning
of Section 13(d)(3) of the Exchange Act.

 

(D) “Outstanding Voting Securities” of any Person means the outstanding
securities of such Person entitling the holders thereof to vote generally in the
election of directors of such Person.

 

(vi) The payments and vesting provisions set forth in this Agreement, including
under this subsection (e), shall: (A) with respect to the treatment of Equity
Awards under this Section 6, take precedence over any conflicting provision
under any award agreement applicable to such Equity Awards, unless such award
agreement is more favorable to you, in which case the award agreement shall
govern; and (B) be subject to the provisions set forth in Annex A.

 

(f)                  Release. Notwithstanding anything to the contrary herein,
the Company will not be required to make the payments or provide the benefits
stated in this Section 6 (other than your Accrued Compensation and Other
Benefits) unless you execute and deliver to the Company (and do not revoke
within the applicable time period) a general release of claims substantially in
the form attached hereto as Annex B (the “Release”) within thirty (30) days
following the date of termination of your employment. If the Release is executed
and delivered and no longer subject to revocation as provided in the preceding
sentence, then the following shall apply:

 

(i)                  To the extent any such cash payment or continuing benefit
to be provided is not “deferred compensation” for purposes of Section 409A of
the Code (“Section 409A”), then such payment or benefit shall commence upon the
first scheduled payment date immediately after the date the Release is executed
and no longer subject to revocation (the “Release Effective Date”). The first
such cash payment shall include payment of all amounts that otherwise would have
been due prior to the Release Effective Date under the terms of this Agreement
had such payments commenced immediately upon the termination of your employment,
and any payments made thereafter shall continue as provided herein. The delayed
benefits shall in any event expire at the time such benefits would have expired
had such benefits commenced immediately following the termination of your
employment.

 

(ii)                  To the extent any such cash payment or continuing benefit
to be provided is “deferred compensation” for purposes of Section 409A, then
such payments or benefits shall be made or commence upon the thirty-first (31st)
day following the termination of your employment. The first such cash payment
shall include payment of all amounts that otherwise would have been due prior
thereto under the terms of this Agreement had such payments commenced
immediately upon the termination of your employment, and any payments made
thereafter shall continue as provided herein. The delayed benefits shall in any
event expire at the time such benefits would have expired had such benefits
commenced immediately following the termination of your employment.

 

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7.Confidentiality; Non-Solicitation; Non-Disparagement.

 

(a)                 You acknowledge and agree that you are bound by certain
confidentiality, non-solicitation and other covenants set forth in the
Confidentiality Agreement between you and the Company, dated August 5, 2013, and
the Non-Disclosure and Non-Solicitation Agreement and Acknowledgement between
you and the Company, dated August 5, 2013 (together, the “Confidentiality
Agreements”). You hereby reaffirm the covenants and provisions set forth in the
Confidentiality Agreements. Nothing in this Agreement, the Confidentiality
Agreements, or the Company’s standard confidentiality policies and procedures in
effect from time to time shall prevent your truthful testimony as a witness,
participation in an Investigation, or disclosure of wrongdoing to law
enforcement or regulatory agencies of competent jurisdiction, including, without
limitation, the Equal Employment Opportunity Commission (EEOC), National Labor
Relations Board (NLRB), Occupational Safety and Health Administration (OSHA),
the Securities and Exchange Commission, the Board of Governors of the Federal
Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC) or
California Department of Business Oversight (DBO), or prohibit you from
divulging confidential or proprietary information to the extent required by
order of court or agency of competent jurisdiction.

 

 

 

(b)                You agree that you will not make any public statement that
would libel, slander or disparage any member of the Company or any of their
respective past or present officers, directors, employees or agents.

 

8.Effect on Other Agreements; Entire Agreement.

 

This Agreement is the entire agreement between you and the Company with respect
to the relationship contemplated by this Agreement and supersedes any earlier
agreement, written or oral, with respect to the subject matter of this
Agreement, except for the Confidentiality Agreements, which remain in place. You
agree that, effective as of the Effective Date, this Agreement replaces,
terminates and supersedes the Prior Agreement, and that the Prior Agreement is
hereby terminated and shall be of no further force or effect. In entering into
this Agreement, no party has relied on or made any representation, warranty,
inducement, promise or understanding that is not in this Agreement. You hereby
acknowledge that you are not subject to any obligation which would in any way
restrict the performance of your duties hereunder.

 

9.Successors.

 

(a)                 Payments on Your Death. If you die and any amounts are or
become payable under this Agreement, the Company will pay those amounts to your
estate.

 

(b)                Assignment by You. You may not assign this Agreement without
the Company’s consent. Also, except as required by law, your right to receive
payments or benefits under this Agreement may not be subject to execution,
attachment, levy or similar process. Any attempt to effect any of the preceding
in violation of this Section 9(b), whether voluntary or involuntary, will be
void.

 

(c)                 Assumption by any Surviving Company. Before the
effectiveness of any merger, consolidation, statutory share exchange or similar
transaction (including an exchange offer combined with a merger or
consolidation) involving the Company (a “Reorganization”) or any sale, lease or
other disposition (including by way of a series of transactions or by way of
merger, consolidation, stock sale or similar transaction involving one or more
subsidiaries) of all or substantially all of the Company’s consolidated assets
(a “Sale”), other than a Reorganization or Sale pursuant to which this Agreement
will be assumed by the Surviving Company by operation of law, the Company will
cause (1) the Surviving Company to unconditionally assume this Agreement in
writing and (2) a copy of the assumption to be provided to you. After the
Reorganization or Sale, the Surviving Company will be treated for all purposes
as the Company under this Agreement. The “Surviving Company” means (i) in a
Reorganization, the entity resulting from the Reorganization or (ii) in a Sale,
the entity that has acquired all or substantially all of the assets of the
Company.

 

9

 

10.Disputes.

 

(a)                 Employment Matters. This Section 10 applies to any
controversy or claim between you and the Company arising out of or relating to
or concerning this Agreement or any aspect of your employment with the Company
or the termination of that employment (together, an “Employment Matter”). This
includes, but is not limited to, any and all employment-related claims or
controversies, such as breach of employment agreement, breach of the covenant of
good faith and fair dealing, negligent supervision or hiring, wrongful discharge
in violation of public policy, unpaid wages under the state and federal wage
payment laws, breach of privacy claims, intentional or negligent infliction of
emotional distress claims, fraud, misrepresentations, defamation, and any claims
that could be asserted under all state and federal anti-discrimination laws,
including, but not limited to, the California Fair Employment and Housing Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the California Labor Code, and the
Family and Medical Leave Act. You specifically agree to arbitrate all claims for
discrimination and marital status, sexual orientation, disability, political
activity, or any other statutorily-protected basis under the procedure set forth
in this Section 10 and not through a court of law. This Agreement is further
intended to apply to any claim you may have against any of the Company’s
officers, directors, employees, agents, or any of its affiliated or related
entities, and to any and all past and future employment relationships you may
have with the Company regardless of job position or title.

 

(b)                Mandatory Arbitration. Any controversy arising out of or
relating to this Agreement, its enforcement or interpretation, or because of an
alleged breach, default, or misrepresentation in connection with any of its
provisions, or any other controversy arising out of your employment, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in the County of Los Angeles, California, before a sole arbitrator
selected from Judicial Arbitration and Mediation Services, Inc., Los Angeles,
California, or its successor (“JAMS”), or if JAMS is no longer able to supply
the arbitrator, such arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure § 1280 et seq. as the exclusive forum for the
resolution of such dispute; provided, however, that in the event that
provisional injunctive relief is not available, or is not available in a timely
manner, through such arbitration, then provisional injunctive relief may, but
need not, be sought by either party to this Agreement in a court of law while
arbitration proceedings are pending, and any provisional injunctive relief
granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. Either you or the Company may initiate the
arbitration process by delivering a written request for arbitration to the other
party within the time limits that would apply to the filing of civil complaint
in state or federal district court, as applicable to the claim at issue. A late
request will be void. Final resolution of any dispute through arbitration may
include any remedy or relief that the Arbitrator deems just and equitable,
including any and all remedies provided by applicable state or federal statutes.
At the conclusion of the arbitration, the Arbitrator shall issue a written
decision that sets forth the essential findings and conclusions upon which the
Arbitrator’s award or decision is based. Any award or relief granted by the
Arbitrator hereunder shall be final and binding on the parties hereto and may be
enforced by any court of competent jurisdiction. The parties hereto acknowledge
and agree that they are hereby waiving any rights to trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in connection with any matter whatsoever arising out of or in
any way connected with this Agreement or your employment. The parties hereto
agree that the Company shall be responsible for payment of the forum costs of
any arbitration hereunder, including the Arbitrator’s fee. You and the Company
further agree that in any proceeding to enforce the terms of this Agreement, the
prevailing party shall be entitled to its or her reasonable attorneys’ fees and
costs (other than forum costs associated with the arbitration) incurred by it or
him in connection with resolution of the dispute in addition to any other relief
granted. Notwithstanding this provision, the parties hereto may mutually agree
to mediate any dispute prior to or following submission to arbitration.

 

(c)                 Enforcement of Arbitration Awards. You or the Company may
bring an action or special proceeding in a state or federal court of competent
jurisdiction sitting in the County of Los Angeles, California to enforce any
arbitration award under Section 10(b).

 

10

 

(d)                Jurisdiction and Choice of Forum. You and the Company
irrevocably submit to the exclusive jurisdiction of any state or federal court
located in the County of Los Angeles, California over any Employment Matter that
is not otherwise arbitrated or resolved according to Section 10(b). This
includes any action or proceeding to compel arbitration or to enforce an
arbitration award. Both you and the Company (i) acknowledge that the forum
stated in this Section 10(d) has a reasonable relation to this Agreement and to
the relationship between you and the Company and that the submission to the
forum will apply even if the forum chooses to apply non-forum law, (ii) waive,
to the extent permitted by law, any objection to personal jurisdiction or to the
laying of venue of any action or proceeding covered by this Section 10(d) in the
forum stated in this Section, including any objection on the grounds of forum
non conveniens or the like, (iii) agree not to commence any such action or
proceeding in any forum other than the forum stated in this Section 10(d), and
(iv) agree that, to the extent permitted by law, a final and non-appealable
judgment in any such action or proceeding in any such court will be conclusive
and binding on you and the Company.

 

(e)                 Waiver of Jury Trial. To the extent permitted by law, you
and the Company waive any and all rights to a jury trial with respect to any
Employment Matter. Notwithstanding the provisions of this Agreement, you shall
have the right to file a claim for workers’ compensation and unemployment
insurance benefits with the appropriate state agencies, unfair labor practice
charges with the National Labor Relations Board, or an administrative charge
with the Equal Employment Opportunity Commission, California Department of Fair
Employment and Housing, or any similar state agency.

 

(f)                  Governing Law. This Agreement, and all questions relating
to its validity, interpretation, performance and enforcement, as well as the
legal relations hereby created between the parties hereto, shall be governed by
and construed under, and interpreted and enforced in accordance with, the laws
of the State of California, notwithstanding any California or other conflict of
law provision to the contrary.

 

11.General Provisions.

 

(a)                 Construction. References (A) to Sections are to sections of
this Agreement unless otherwise stated; (B) to any contract (including this
Agreement) are to the contract as amended, modified, supplemented or replaced
from time to time; (C) to any statute, rule or regulation are to the statute,
rule or regulation as amended, modified, supplemented or replaced from time to
time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section; (D) to any governmental
authority include any successor to the governmental authority; (E) to any plan
include any programs, practices and policies; (F) to any entity include any
corporation, limited liability company, partnership, association, business trust
and similar organization and include any governmental authority; and (G) to any
affiliate of any entity are to any person or other entity directly or indirectly
controlling, controlled by or under common control with the first entity.

 

(i)                  The various headings in this Agreement are for convenience
of reference only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Agreement.

 

(ii)                  Unless the context requires otherwise, (A) words
describing the singular number include the plural and vice versa, (B) words
denoting any gender include all genders and (C) the words “include”, “includes”
and “including” will be deemed to be followed by the words “without limitation.”

 

(iii)                  It is your and the Company’s intention that this
Agreement not be construed more strictly with regard to you or the Company.

 

(b)                Withholding. You and the Company will treat all payments to
you under this Agreement as compensation for your employment. Accordingly, the
Company may withhold from any payment any taxes that are required to be withheld
under any law, rule or regulation.

 

(c)                 Severability. If any provision of this Agreement is found by
any court of competent jurisdiction (or legally empowered agency) to be illegal,
invalid or unenforceable for any reason, then (1) the provision will be amended
automatically to the minimum extent necessary to cure the illegality or
invalidity and permit enforcement and (2) the remainder of this Agreement will
not be affected.

 

11

 

(d)                No Set-off or Mitigation. Except if your employment is
terminated by the Company for Cause, your and the Company’s respective
obligations under this Agreement will not be affected by any set-off,
counterclaim, recoupment or other right you or any member of the Company may
have against each other or anyone else. You do not need to seek other employment
or take any other action to mitigate any amounts owed to you under this
Agreement.

 

(e)                 Notices. All notices, requests, demands and other
communications under this Agreement must be in writing and will be deemed given
(1) on the business day sent, when delivered by hand or facsimile transmission
(with confirmation) during normal business hours, (2) on the business day after
the business day sent, if delivered by a nationally recognized overnight courier
or (3) on the third business day after the business day sent if delivered by
registered or certified mail, return receipt requested, in each case to the
following address or number (or to such other addresses or numbers as may be
specified by notice that conforms to this Section 11(e)):

 

If to you, to your address then on file with the Company’s payroll department.

 

If to the Company or any other member of the Company, to:

 

Hanmi Financial Corporation

3660 Wilshire Boulevard, Penthouse Suite A

Los Angeles, California 90010

Attention: Chairman of the Board

Facsimile: (213) 384-0990

 

(f)                  Consideration. This Agreement is in consideration of the
mutual covenants contained in it. You and the Company acknowledge the receipt
and sufficiency of the consideration to this Agreement and intend this Agreement
to be legally binding.

 

(g)                Amendments and Waivers. Any provision of this Agreement may
be amended or waived but only if the amendment or waiver is in writing and
signed, in the case of an amendment, by you and the Company or, in the case of a
waiver, by the party that would have benefited from the provision waived. Except
as this Agreement otherwise provides, no failure or delay by you or the Company
to exercise any right or remedy under this Agreement will operate as a waiver,
and no partial exercise of any right or remedy will preclude any further
exercise.

 

(h)                Legal Counsel; Mutual Drafting. Each party recognizes that
this is a legally binding contract and acknowledges and agrees that they have
had the opportunity to consult with legal counsel of their choice. Each party
has cooperated in the drafting, negotiation and preparation of this Agreement.
Hence, in any construction to be made of this Agreement, the same shall not be
construed against either party on the basis of that party being the drafter of
such language. You agree and acknowledge that you have read and understand this
Agreement, are entering into it freely and voluntarily, and have been advised to
seek counsel prior to entering into this Agreement and have had ample
opportunity to do so.

 

(i)                  Golden Parachute/Bank Regulatory Limitation. The parties
understand and agree that at the time any payment would otherwise be made or
benefit provided under Section 6 of this Agreement, depending on the facts and
circumstances existing at such time, the satisfaction of such obligations by the
Company may be deemed by a regulatory authority to be illegal, an unsafe and
unsound practice, or for some other reason not properly due or payable by the
Company. Among other things, applicable banking laws, regulations and published
guidance and policies of the appropriate regulatory authorities, including, but
not limited to Section 39(a) of the Federal Deposit Insurance Act, 12 C.F.R.
Part 364 Appendix A, § III, 12 C.F.R. part 359, Guidance on Sound Incentive
Compensation Policies, 75 Fed. Reg. 36,395 (June 25, 2010) or similar
regulations or regulatory action following similar principles may apply at such
time. You understand, acknowledge and agree that, notwithstanding any other
provision of this Agreement, the Company shall not be obligated to make any
payment or provide any benefit under Section 6 of this Agreement where (i) an
appropriate regulatory authority does not approve or acquiesce as required or
objects to the making of such payment or benefit or (ii) the Company has been
informed in writing by a representative of the appropriate regulatory authority
that it is the position of such regulatory authority that making such payment or
providing such benefit would constitute an unsafe and unsound practice, violate
a written agreement with the regulatory authority, violate an applicable rule or
regulation, or would cause the representative of the regulatory authority to
recommend enforcement action against the Company.

 

12

 

(j)                  Key Employee Delay on Payments. Notwithstanding the timing
of payments set forth in Agreement, if the Company determines that you are a
“specified employee” within the meaning of Section 409A, as may be amended and
that, as a result of such status, any portion of the payment under this
Agreement would be subject to additional taxation, the Company will delay paying
any portion of such payment until the earliest permissible date on which
payments may commence without triggering such additional taxation (with such
delay not to exceed six (6) months), with the first such payment to include the
amounts that would have been paid earlier but for the above delay.

 

(k)                Third-Party Beneficiaries. Subject to Section 9, this
Agreement will be binding on, inure to the benefit of and be enforceable by the
parties and their respective heirs, personal representatives, successors and
assigns. This Agreement does not confer any rights, remedies, obligations or
liabilities to any entity or person other than you and the Company and your and
the Company’s permitted successors and assigns, although (i) this Agreement will
inure to the benefit of the Company and (ii) Section 9(a) will inure to the
benefit of the most recent persons named in a notice under that Section.

 

12.Compliance with Section 409A.

 

(a)                 General. It is the intention of both the Company and you
that the benefits and rights to which you could be entitled pursuant to this
Agreement comply with Section 409A to the extent that the requirements of
Section 409A are applicable thereto, and the provisions of this Agreement shall
be construed in a manner consistent with that intention. If you or the Company
believes, at any time, that any such benefit or right that is subject to Section
409A does not so comply, it shall promptly advise the other and shall negotiate
reasonably and in good faith to amend the terms of such benefits and rights such
that they comply with Section 409A (with the most limited possible economic
effect on you and on the Company). Notwithstanding the foregoing, the Company
does not make any representation to you that the payments or benefits provided
under this Agreement are exempt from, or satisfy, the requirements of Section
409A, and the Company shall have no liability or other obligation to indemnify
or hold harmless you or any beneficiary for any tax, additional tax, interest or
penalties that you or any beneficiary may incur in the event that any provision
of this Agreement, or any amendment or modification thereof, or any other action
taken with respect thereto, is deemed to violate any of the requirements of
Section 409A.

 

(b)                Distributions on Account of Separation from Service. If and
to the extent required to comply with Section 409A, no payment or benefit
required to be paid under this Agreement on account of termination of your
employment shall be made unless and until you incur a “separation from service”
within the meaning of Section 409A.

 

(c)                 No Acceleration of Payments. Neither the Company nor you,
individually or in combination, may accelerate any payment or benefit that is
subject to Section 409A, except in compliance with Section 409A and the
provisions of this Agreement, and no amount that is subject to Section 409A
shall be paid prior to the earliest date on which it may be paid without
violating Section 409A.

 

(d)                Treatment of Each Installment as a Separate Payment and
Timing of Payments. For purposes of applying the provisions of Section 409A to
this Agreement, each separately identified amount to which you are entitled
under this Agreement shall be treated as a separate payment. In addition, to the
extent permissible under Section 409A, any series of installment payments under
this Agreement shall be treated as a right to a series of separate payments.
Whenever a payment under this Agreement specifies a payment period with
reference to a number of days, the actual date of payment within the specified
period shall be within the sole discretion of the Company.

 

(e)                 Taxable Reimbursements and In-Kind Benefits.

 

(i)                  Any reimbursements by the Company to you of any eligible
expenses under this Agreement that are not excludable from your income for
Federal income tax purposes (the “Taxable Reimbursements”) shall be made by no
later than the earlier of the date on which they would be paid under the
Company’s normal policies and the last day of the calendar year following the
year in which the expense was incurred.

 

13

 

(ii)                  The amount of any Taxable Reimbursements, and the value of
any in-kind benefits to be provided to you during any calendar year, shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year (except for any life-term or other
aggregate limitation applicable to medical expenses).

 

(iii)                  The right to Taxable Reimbursement, or in-kind benefits,
shall not be subject to liquidation or exchange for another benefit.

 

[Signature Page Follows]

 

 

 

 

 

 

14

 

13.Counterparts.

 

This Agreement may be executed in counterparts, each of which will constitute an
original and all of which, when taken together, will constitute one agreement.
However, this Agreement will not be effective until the date both parties have
executed this Agreement.

 

 

Very truly yours,

 

HANMI FINANCIAL CORPORATION

 

 

 

_________________________________

Name: Joseph Rho

Title: Chairman

 

 

HANMI BANK

 

 

 

_________________________________

Name: Joseph Rho

Title: Chairman

 

 

ACCEPTED AND AGREED TO:

 

 

 

_________________________________

Bonita I. Lee

 

Dated: ____________, 2019

 

 

15

 

Annex A

 

Limitation on Payments Following a Change in Control

 

In the event that any payment or benefit received or to be received by Bonita I.
Lee (“Executive”) pursuant to that certain Employment Agreement (the
“Agreement”), dated April 2, 2019 and effective as of May 3, 2019, by and
between Executive, Hanmi Financial Corporation and Hanmi Bank (together, the
“Company”) or otherwise (“Payments”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) and (ii) but for this Annex A, be subject to the excise tax
imposed by Section 4999 of the Code, any successor provisions, or any comparable
federal, state, local or foreign excise tax (“Excise Tax”), then such Payments
shall be either (A) provided in full pursuant to the terms of the Agreement and
any other applicable agreements and plans, or (B) provided as to such lesser
extent which would result in no portion of such Payments being subject to the
Excise Tax (“Reduced Amount”), whichever of the foregoing amounts, taking into
account the applicable federal, state, local and foreign income, employment and
other taxes and the Excise Tax (including, without limitation, any interest or
penalties on such taxes), results in the receipt by Executive, on an after-tax
basis, of the greatest amount of payments and benefits provided for hereunder or
otherwise, notwithstanding that all or some portion of such Payments may be
subject to the Excise Tax. Unless the Company and Executive otherwise agree in
writing, any determination required under this Annex A shall be made by
independent tax counsel designated by the Company and reasonably acceptable to
Executive (“Independent Tax Counsel”), whose determination shall be conclusive
and binding upon Executive and the Company for all purposes. For purposes of
making the calculations required under this Annex A, Independent Tax Counsel may
make reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code; provided that Independent Tax Counsel shall
assume that Executive pays all taxes at the highest marginal rate unless
Executive’s actual effective marginal tax rate at the relevant time is less than
the highest marginal rate, in which case such lower rate shall be used by
Independent Tax Counsel. The Company and Executive shall furnish to Independent
Tax Counsel such information and documents as Independent Tax Counsel may
reasonably request in order to make a determination under this Annex A. The
Company shall bear all costs that Independent Tax Counsel may reasonably incur
in connection with any calculations contemplated by this Annex A. In the event
that (ii)(B) above applies, then based on the information provided to Executive
and the Company by Independent Tax Counsel, and notwithstanding any other
provision of the Agreement or any other plan, arrangement or agreement to the
contrary, the reduction of such Payments shall be made as follows: (A) if none
of the Payments constitute non-qualified deferred compensation (within the
meaning of Section 409A of the Code), then such reduction and/or repayment shall
occur in the manner the Executive elects in writing prior to the date of
Payment; or (B) if any Payment constitutes non-qualified deferred compensation
or if the Executive fails to elect an order in the event that none of the
Payments constitutes non-qualified deferred compensation (within the meaning of
Section 409A of the Code), then the Payments to be reduced will be determined in
a manner which maximizes the Executive’s economic position and, to the extent
the economic cost is equivalent between one or more Payments, such Payments will
be reduced in the inverse order of when payment would have been made to the
Executive, until the aggregate Payments payable to the Executive equal the
Reduced Amount.

 

 

 

 

Annex A

 

 

Annex B

 

General Release

 

For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of Hanmi Financial Corporation, a Delaware
corporation, and Hanmi Bank, a state chartered bank incorporated under the laws
of the State of California (together, the “Company”), and their partners,
associates, parents, subsidiaries, affiliates, successors, heirs, assigns,
agents, directors, officers, employees, equityholders, representatives, lawyers,
insurers, and all persons acting by, through, under or in concert with them, or
any of them, of and from any and all manner of action or actions, cause or
causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liability, claims, demands, damages, losses, costs,
attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed
or contingent (hereinafter called “Claims”), which the undersigned now has or
may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
hereof.  The Claims released herein include, without limiting the generality of
the foregoing, any Claims in any way arising out of, based upon, or related to
the employment or termination from employment of the undersigned by the
Releasees, or any of them; any claim for benefits under any stock option or
other equity-based incentive plan of the Releasees (or any related agreement to
which any Releasee is a party); any alleged breach of any express or implied
contract of employment; any alleged torts or other alleged legal restrictions on
Releasee’s right to terminate the employment of the undersigned; and any alleged
violation of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, and the Americans With Disabilities Act. Notwithstanding the
foregoing, this General Release (“Release”) shall not operate to release any
Claims which the undersigned may have with respect to (i) payments and other
express obligations of the Company under that certain Employment Agreement,
dated as of April 2, 2019 and effective as of May 3, 2019 between the Company
and the undersigned (“Employment Agreement”); (ii) accrued and vested benefits
the undersigned may have, if any, as of the date hereof under any employee
benefit plan of the Company or, with respect to any outstanding equity awards
held by the undersigned, under any equity incentive plan, stock award or option
agreement, as any such stock award or option agreement may be amended by the
Employment Agreement, if such amendment is more favorable to the undersigned;
(iii) payments and other obligations of the Company with respect to
indemnification of the undersigned under the Company’s Amended and Restated
Certificate of Incorporation, Amended and Restated Bylaws, and under any
indemnification agreement between the Company and the undersigned. Additionally,
notwithstanding the foregoing, the undersigned understands that nothing in this
Release limits the undersigned’s ability to file a charge or complaint with the
Equal Employment Opportunity Commission (the “EEOC”), the Securities and
Exchange Commission or any other federal, state or local governmental agency or
commission (“Government Agencies”). The undersigned further understand that this
Release does not limit the undersigned’s ability to communicate with any
Government Agencies or otherwise participate in any investigation or proceeding
that may be conducted by any Government Agency, including providing documents or
other information, without notice to the Company. This Release does not limit
the undersigned’s right to receive an award for information provided to any
Government Agencies, and except, to the extent permissible by applicable law,
the undersigned hereby agrees to waive the right to any monetary relief or
recovery, including attorneys’ fees and costs, granted by the EEOC in connection
with any complaint and/or charge brought against the Releasees arising out of
the employment relationship or the termination of the employment relationship
with the Company, regardless as to who brought or brings any such complaint or
charge, whether in the nature of an individual action, class, or otherwise.

 

THE UNDERSIGNED ACKNOWLEDGES THAT SHE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

Annex B

 

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS SHE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON
LAW PRINCIPLES OF SIMILAR EFFECT.

 

IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:

 

(1)       SHE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
RELEASE;

 

(2)       SHE HAS THE RIGHT TO SEEK A JUDICIAL DETERMINATION OF THE VALIDITY OF
THE RELEASE OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT;

 

(3)       SHE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING
IT; AND

 

(4)       SHE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND
THIS RELEASE SHALL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION
PERIOD.

 

The undersigned represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which she may have against
Releasees, or any of them, and the undersigned agrees to indemnify and hold
Releasees, and each of them, harmless from any liability, Claims, demands,
damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of
them, as the result of any such assignment or transfer of any rights or Claims
under any such assignment or transfer.  It is the intention of the parties that
this indemnity does not require payment as a condition precedent to recovery by
the Releasees against the undersigned under this indemnity.

 

The undersigned represents and warrants that she is not aware of or has already
fully disclosed in writing to the Board any information that could give rise to
a claim or cause of action against the Company or any other Releasee by the
undersigned or others claiming through him, including without limitation any
knowledge of fraud or suspected fraud, overpayments or suspected overpayments,
false or misleading statements or suspected false or misleading statements,
improper or erroneous financial reporting, violations or suspected violations of
any law or regulation, or other irregularities, or any violations of Company
policies, procedures, or the Company Code of Conduct. This includes any matters
for which the undersigned is responsible or that came to her attention, whether
in her capacity as an employee, member of the Board, or any other capacity. The
undersigned further represents and warrants that she has not initiated, nor is
she a party to, any proceeding in any court or government agency involving
claims against the Company or any other Releasee. The undersigned further agrees
that she has not been requested, directly or indirectly by the Company, to
provide misleading information to an external person or to conduct himself in a
manner inconsistent with the Company’s Code of Conduct, nor has she been
discouraged or prevented from reporting possible violations of law to the Board.
Notwithstanding the foregoing, no provision of this General Release or any other
agreement with the Company prohibits the undersigned from reporting or
disclosing any actual, possible or potential violation of any federal, state or
local law or regulation to any governmental agency or entity, or making other
reports or disclosures that are protected under the whistleblower provisions of
any federal, state or local law or regulation, in each such case without any
prior authorization of, or prior, contemporaneous or subsequent notice to, the
Company.

 

The undersigned agrees that if she hereafter commences any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
other than those related to the validity of the release under the Age
Discrimination in Employment Act, then the undersigned agrees to pay to
Releasees, and each of them, in addition to any other damages caused to
Releasees thereby, all attorney’s fees incurred by Releasees in defending or
otherwise responding to said suit or Claim.

 

Annex B

 

The undersigned further understands and agrees that neither the payment of any
sum of money nor the execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by the Releasees, or any of them,
who have consistently taken the position that they have no liability whatsoever
to the undersigned.

 

IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of
___________, ____.

 

 

_________________________________

Bonita I. Lee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex B