Document:

EdgarFiling

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 BWELLS FARGO & COMPANY 8-K

 

Exhibit 4.1

 

[Face
of Note]

 

Unless
this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP
NO. 95001H3G4	FACE AMOUNT: $____________

REGISTERED
NO. ___

 

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the Energy Select Sector SPDR® Fund 

due October 3, 2022

 

WELLS
FARGO FINANCE LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (hereinafter
called the “Company,” which term includes any successor corporation under and as defined in the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the
Maturity Payment Amount (as defined below), in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity Date”
shall be October 3, 2022. If the Calculation Day (as defined below) is not postponed, the Initial Stated Maturity Date will be
the “Stated Maturity Date.” If the Calculation Day is postponed, the “Stated Maturity Date”
shall be the later of (i) the Initial Stated Maturity Date and (ii) three Business Days (as defined below) after the
Calculation Day as postponed. This Security shall not bear any interest.

Any
payments on this Security at Maturity will be made against presentation of this Security at the office or agency of the Company
maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company
for such purpose. 

“Face
Amount” shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its
“Face Amount.”

    	 	 	 

    	 

    

Determination
of Maturity Payment Amount

The
“Maturity Payment Amount” of this Security will equal:

 

		•	if
                                         the Ending Price is greater than the Starting Price: the Face Amount plus the
                                         lesser of:

 

(ii)       the
Maximum Return;

 

		•	if
                                         the Ending Price is less than or equal to the Starting Price, but greater than or equal
                                         to the Threshold Price: the Face Amount; or

 

		•	if
                                         the Ending Price is less than the Threshold Price: the Face Amount minus:

 

 

 

All
calculations with respect to the Maturity Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths
rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent,
with one-half cent rounded upward.

 

The
“Fund” shall mean the Energy Select Sector SPDR® Fund.

The
“Pricing Date” shall mean March 29, 2019.

The
“Starting Price” is $66.12, the Fund Closing Price of the Fund on the Pricing Date.

The
“Ending Price” will be the Fund Closing Price of the Fund on the Calculation Day.

The
“Threshold Price” is $56.202, which is equal to 85% of the Starting Price.

The
“Participation Rate” is 150%.

The
“Maximum Return” is 44.00% of the Face Amount of this Security.

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

The
“Fund Closing Price” with respect to the Fund on any Trading Day means the product of (i) the Closing
Price of one share of the Fund (or one unit of any other security for which a Fund Closing Price must be determined) on such Trading
Day and (ii) the Adjustment Factor applicable to the Fund on such Trading Day.

    	 	2	 

    	 

    

The
“Closing Price” for one share of the Fund (or one unit of any other security for which a Closing Price must
be determined) on any Trading Day means the official closing price on such day published by the principal United States securities
exchange registered under the Securities Exchange Act of 1934, as amended, on which the Fund (or any such other security) is listed
or admitted to trading.

The
“Adjustment Factor” means, with respect to a share of the Fund (or one unit of any other security for which
a Fund Closing Price must be determined), 1.0, subject to adjustment in the event of certain events affecting the shares of the
Fund. See “—Anti-dilution Adjustments Relating to the Fund; Alternate Calculation—Anti-dilution Adjustments”
below.

The
“Underlying Index” is the Energy Select Sector Index.

A
“Trading Day” means a day, as determined by the Calculation Agent, on which the Relevant Stock Exchange (as
defined below) and each Related Futures or Options Exchange (as defined below) with respect to the Fund, or any successor thereto,
if applicable, are scheduled to be open for trading for their respective regular trading sessions.

The
“Relevant Stock Exchange” for the Fund means the primary exchange or quotation system on which shares (or other
applicable securities) of the Fund are traded, as determined by the Calculation Agent.

The
“Related Futures or Options Exchange” for the Fund means each exchange or quotation system where trading has
a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to
the Fund.

The
“Calculation Day” shall be September 26, 2022. If such day is not a Trading Day, the Calculation Day will be
postponed to the next succeeding Trading Day. The Calculation Day is also subject to postponement due to the occurrence of a Market
Disruption Event (as defined below). If a Market Disruption Event occurs or is continuing on the Calculation Day, then the Calculation
Day will be postponed to the first succeeding Trading Day on which a Market Disruption Event has not occurred and is not continuing;
however, if such first succeeding Trading Day has not occurred as of the eighth Trading Day after the originally scheduled Calculation
Day, that eighth Trading Day shall be deemed to be the Calculation Day. If the Calculation Day has been postponed eight Trading
Days after the originally scheduled Calculation Day and a Market Disruption Event occurs or is continuing on such eighth Trading
Day, the Calculation Agent will determine the Closing Price of the Fund on such eighth Trading Day based on its good faith estimate
of the value of the shares (or other applicable securities) of the Fund as of the close of trading on such eighth Trading Day.

 

“Calculation
Agent Agreement” shall mean the Calculation Agent Agreement dated as of May 18, 2018 between the Company and the Calculation
Agent, as amended from time to time.

 

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of the Maturity Payment Amount, the Starting Price and the Ending Price, which term shall, unless
the context otherwise requires, include its successors under such Calculation Agent Agreement. The

    	 	3	 

    	 

    

initial
Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a
different Calculation Agent from time to time after the initial issuance of this Security without the consent of the Holder of
this Security and without notifying the Holder of this Security.

Market
Disruption Events 

A
“Market Disruption Event” means any of the following events as determined by the Calculation Agent in its sole
discretion:

		(A)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by the Relevant Stock Exchange or otherwise relating to the shares (or other applicable
                                         securities) of the Fund or any Successor Fund (as defined below) on the Relevant Stock
                                         Exchange at any time during the one-hour period that ends at the Close of Trading on
                                         such day, whether by reason of movements in price exceeding limits permitted by such
                                         Relevant Stock Exchange or otherwise.

		(B)	The
                                         occurrence or existence of a material suspension of or limitation imposed on trading
                                         by any Related Futures or Options Exchange or otherwise in futures or options contracts
                                         relating to the shares (or other applicable securities) of the Fund or any Successor
                                         Fund on any Related Futures or Options Exchange at any time during the one-hour period
                                         that ends at the Close of Trading on that day, whether by reason of movements in price
                                         exceeding limits permitted by the Related Futures or Options Exchange or otherwise.

		(C)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, shares (or other applicable securities) of the Fund or any
                                         Successor Fund on the Relevant Stock Exchange at any time during the one-hour period
                                         that ends at the Close of Trading on that day.

		(D)	The
                                         occurrence or existence of any event, other than an early closure, that materially disrupts
                                         or impairs the ability of market participants in general to effect transactions in, or
                                         obtain market values for, futures or options contracts relating to shares (or other applicable
                                         securities) of the Fund or any Successor Fund on any Related Futures or Options Exchange
                                         at any time during the one-hour period that ends at the Close of Trading on that day.

		(E)	The
                                         closure of the Relevant Stock Exchange or any Related Futures or Options Exchange with
                                         respect to the Fund or any Successor Fund prior to its Scheduled Closing Time unless
                                         the earlier closing time is announced by the Relevant Stock Exchange or Related Futures
                                         or Options Exchange, as applicable, at least one hour prior to the earlier of (1) the
                                         actual closing time for the regular trading session on such Relevant Stock Exchange or
                                         Related Futures or Options Exchange, as applicable, and (2) the submission deadline
                                         for orders to be entered into the Relevant Stock Exchange or Related Futures or Options
                                         Exchange, as applicable, system for execution at the Close of Trading on that day.

    	 	4	 

    	 

    

		(F)	The
                                         Relevant Stock Exchange or any Related Futures or Options Exchange with respect to the
                                         Fund or any Successor Fund fails to open for trading during its regular trading session.

For
purposes of determining whether a Market Disruption Event has occurred:

		(1)	“Close
                                         of Trading” means the Scheduled Closing Time of the Relevant Stock Exchange
                                         with respect to the Fund or any Successor Fund; and

		(2)	the
                                         “Scheduled Closing Time” of the Relevant Stock Exchange or any Related
                                         Futures or Options Exchange on any Trading Day for the Fund or any Successor Fund means
                                         the scheduled weekday closing time of such Relevant Stock Exchange or Related Futures
                                         or Options Exchange on such Trading Day, without regard to after hours or any other trading
                                         outside the regular trading session hours.

Anti-dilution
Adjustments Relating to the Fund; Alternate Calculation

Anti-dilution
Adjustments 

The
Calculation Agent will adjust the Adjustment Factor as specified below if any of the events specified below occurs with respect
to the Fund and the effective date or ex-dividend date, as applicable, for such event is after the Pricing Date and on or prior
to the Calculation Day.

The
adjustments specified below do not cover all events that could affect the Fund. The Calculation Agent may, in its sole discretion,
make additional adjustments to any terms of this Security upon the occurrence of other events that affect or could potentially
affect the market price of, or shareholder rights in, the Fund, with a view to offsetting, to the extent practical, any such change,
and preserving the relative investment risks of this Security. In addition, the Calculation Agent may, in its sole discretion,
make adjustments or a series of adjustments that differ from those described herein if the Calculation Agent determines that such
adjustments do not properly reflect the economic consequences of the events specified herein or would not preserve the relative
investment risks of this Security. All determinations made by the Calculation Agent in making any adjustments to the terms of
this Security, including adjustments that are in addition to, or that differ from, those described herein, will be made in good
faith and a commercially reasonable manner, with the aim of ensuring an equitable result. In determining whether to make any adjustment
to the terms of this Security, the Calculation Agent may consider any adjustment made by the Options Clearing Corporation or any
other equity derivatives clearing organization on options contracts on the Fund.

    	 	5	 

    	 

    

For
any event described below, the Calculation Agent will not be required to adjust the Adjustment Factor unless the adjustment would
result in a change to the Adjustment Factor then in effect of at least 0.10%. The Adjustment Factor resulting from any adjustment
will be rounded up or down, as appropriate, to the nearest one-hundred thousandth.

		(A)	Stock
                                         Splits and Reverse Stock Splits

If
a stock split or reverse stock split has occurred, then once such split has become effective, the Adjustment Factor will be adjusted
to equal the product of the prior Adjustment Factor and the number of securities which a holder of one share (or other applicable
security) of the Fund before the effective date of such stock split or reverse stock split would have owned or been entitled to
receive immediately following the applicable effective date.

		(B)	Stock
                                         Dividends

If
a dividend or distribution of shares (or other applicable securities) to which this Security is linked has been made by the Fund
ratably to all holders of record of such shares (or other applicable security), then the Adjustment Factor will be adjusted on
the ex-dividend date to equal the prior Adjustment Factor plus the product of the prior Adjustment Factor and the number of shares
(or other applicable security) of the Fund which a holder of one share (or other applicable security) of the Fund before the ex-dividend
date would have owned or been entitled to receive immediately following that date; provided, however, that no adjustment will
be made for a distribution for which the number of securities of the Fund paid or distributed is based on a fixed cash equivalent
value.

		(C)	Extraordinary
                                         Dividends

If
an Extraordinary Dividend (as defined below) has occurred, then the Adjustment Factor will be adjusted on the ex-dividend date
to equal the product of the prior Adjustment Factor and a fraction, the numerator of which is the Closing Price per share (or
other applicable security) of the Fund on the Trading Day preceding the ex-dividend date, and the denominator of which is the
amount by which the Closing Price per share (or other applicable security) of the Fund on the Trading Day preceding the ex-dividend
date exceeds the Extraordinary Dividend Amount (as defined below).

For
purposes of determining whether an Extraordinary Dividend has occurred:

		(1)	“Extraordinary
                                         Dividend” means any cash dividend or distribution (or portion thereof) that
                                         the Calculation Agent determines, in its sole discretion, is extraordinary or special;
                                         and

		(2)	“Extraordinary
                                         Dividend Amount” with respect to an Extraordinary Dividend for the securities
                                         of the Fund will equal the amount per share (or other applicable security) of the Fund
                                         of the applicable cash dividend or

    	 	6	 

    	 

    

distribution
that is attributable to the Extraordinary Dividend, as determined by the Calculation Agent in its sole discretion.

A
distribution on the securities of the Fund described below under the section entitled “—Reorganization Events”
below that also constitutes an Extraordinary Dividend will only cause an adjustment pursuant to that “—Reorganization
Events” section.

		(D)	Other
                                         Distributions

If
the Fund declares or makes a distribution to all holders of the shares (or other applicable security) of the Fund of any non-cash
assets, excluding dividends or distributions described under the section entitled “—Stock Dividends” above,
then the Calculation Agent may, in its sole discretion, make such adjustment (if any) to the Adjustment Factor as it deems appropriate
in the circumstances. If the Calculation Agent determines to make an adjustment pursuant to this paragraph, it will do so with
a view to offsetting, to the extent practical, any change in the economic position of a holder of this Security that results solely
from the applicable event.

		(E)	Reorganization
                                         Events

If
the Fund, or any Successor Fund, is subject to a merger, combination, consolidation or statutory exchange of securities with another
exchange traded fund, and the Fund to which this Security is linked is not the surviving entity (a “Reorganization Event”),
then, on or after the date of such event, the Calculation Agent shall, in its sole discretion, make an adjustment to the Adjustment
Factor or the method of determining the Maturity Payment Amount or any other terms of this Security as the Calculation Agent determines
appropriate to account for the economic effect on this Security of such event, and determine the effective date of that adjustment.
If the Calculation Agent determines that no adjustment that it could make will produce a commercially reasonable result, then
the Calculation Agent may deem such event a Liquidation Event (as defined below).

Liquidation
Events

If
the Fund is de-listed, liquidated or otherwise terminated (a “Liquidation Event”), and a successor or substitute
exchange traded fund exists that the Calculation Agent determines, in its sole discretion, to be comparable to the Fund, then,
upon the Calculation Agent’s notification of that determination to the Trustee and the Company, any subsequent Fund Closing
Price for the Fund will be determined by reference to the Fund Closing Price of such successor or substitute exchange traded fund
(such exchange traded fund being referred to herein as a “Successor Fund”), with such adjustments as the Calculation
Agent determines are appropriate to account for the economic effect of such substitution on the holder of this Security.

If
the Fund undergoes a Liquidation Event prior to, and such Liquidation Event is continuing on, the date that any Fund Closing Price
of the Fund is to be determined and the

    	 	7	 

    	 

    

Calculation
Agent determines that no Successor Fund is available at such time, then the Calculation Agent will, in its discretion, calculate
the Fund Closing Price for the Fund on such date by a computation methodology that the Calculation Agent determines will as closely
as reasonably possible replicate the Fund, provided that if the Calculation Agent determines in its discretion that it is not
practicable to replicate the Fund (including but not limited to the instance in which the sponsor of the Underlying Index discontinues
publication of the Underlying Index), then the Calculation Agent will calculate the Fund Closing Price for the Fund in accordance
with the formula last used to calculate such Fund Closing Price before such Liquidation Event, but using only those securities
that were held by the Fund immediately prior to such Liquidation Event without any rebalancing or substitution of such securities
following such Liquidation Event.

If
a Successor Fund is selected or the Calculation Agent calculates the Fund Closing Price as a substitute for the Fund, such Successor
Fund or Fund Closing Price will be used as a substitute for the Fund for all purposes, including for purposes of determining whether
a Market Disruption Event exists.

If
any event is both a Reorganization Event and a Liquidation Event, such event will be treated as a Reorganization Event for purposes
of this Security unless the Calculation Agent makes the determination referenced in the last sentence of the section entitled
“—Anti-dilution Adjustments—Reorganization Events” above.

Alternate
Calculation

If
at any time the method of calculating the Fund or a Successor Fund, or the Underlying Index, is changed in a material respect,
or if the Fund or a Successor Fund is in any other way modified so that the Fund does not, in the opinion of the Calculation Agent,
fairly represent the price of the securities of the Fund or such Successor Fund had such changes or modifications not been made,
then the Calculation Agent may, at the close of business in New York City on the date that any Fund Closing Price is to be determined,
make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive
at a Closing Price of an exchange traded fund comparable to the Fund or such Successor Fund, as the case may be, as if such changes
or modifications had not been made, and calculate the Fund Closing Price and the Maturity Payment Amount with reference to such
adjusted Closing Price of the Fund or such Successor Fund, as applicable.

Calculation
Agent

The
Calculation Agent will determine the Maturity Payment Amount, the Starting Price and the Ending Price. In addition, the Calculation
Agent will (i) determine if adjustments are required to the Fund Closing Price and/or the Adjustment Factor under the circumstances
described in this Security, (ii) if the Fund undergoes a Liquidation Event, select a Successor Fund or, if no Successor Fund
is available, determine the Fund Closing Price of the Fund, and (iii) determine whether a Market Disruption Event or non-Trading
Day has occurred.

    	 	8	 

    	 

    

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall
be a broker-dealer, bank or other financial institution) with respect to this Security.

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Tax
Considerations

The
Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed
to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States
federal income tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

Redemption
and Repayment

This
Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to October
3, 2022. This Security is not entitled to any sinking fund.

Acceleration

If
an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment
Amount (calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with
the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture
will be equal to the Maturity Payment Amount hereof calculated as provided herein as though the date of acceleration was the Calculation
Day.

__________________

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature
or its duly authorized agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

[The
remainder of this page has been left intentionally blank]

 

    	 	9	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

 

DATED:

 

	 	WELLS FARGO FINANCE LLC	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	 	Its:	 
	 	 	 	 

	 	 	 	 
	 	Attest:	 	 
	 	 	 	 
	 	 	Its:	 

  

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION 

This
is one of the Securities of the

series
designated therein described

in
the within-mentioned Indenture.

 

CITIBANK,
N.A.,

as
Trustee

	 	 	 	 
	By:	 	 	 
	 	Authorized Signature	 	 

 

OR

 

WELLS
FARGO BANK, N.A., 

as
Authenticating Agent for the Trustee 

	 	 	 	 
	By:	 	 	 
	 	Authorized Signature	 	 

 

    	 	10	 

    	 

    

[Reverse
of Note]

 

 

WELLS
FARGO FINANCE LLC

 

MEDIUM-TERM
NOTE, SERIES A

Fully
and Unconditionally Guaranteed by Wells Fargo & Company

 

Principal
at Risk Securities Linked to the Energy Select Sector SPDR® Fund 

due October 3, 2022

 

This
Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an indenture dated as of April 25, 2018, as amended or supplemented from time to
time (herein called the “Indenture”), among the Company, as issuer, Wells Fargo & Company, as guarantor
(the “Guarantor”) and Citibank, N.A., as trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor,
the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series A, of the Company. The
amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-, commodity-
or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures of economic or financial
performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest at a fixed
rate or a floating rate. The Securities of this series may mature at different times, be redeemable at different times or not
at all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies.

The
Securities are issuable only in registered form without coupons and will be either (a) book-entry securities represented
by one or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities
issued to and registered in the names of, the beneficial owners or their nominees.

The
Company agrees, to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of
interest against a Holder of this Security.

Guarantee

The
Securities of this series are fully and unconditionally guaranteed by the Guarantor as and to the extent set forth in the Indenture.

Modification
and Waivers 

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture
at any time by the

    	 	11	 

    	 

    

Company,
the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders
of a majority in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the
Indenture, acting together as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company
or the Guarantor with those provisions of the Indenture. Certain past defaults under the Indenture and their consequences may
be waived under the Indenture by the Holders of a majority in principal amount of the Securities of each series at the time Outstanding,
on behalf of the Holders of all Securities of such series. Solely for the purpose of determining whether any consent, waiver,
notice or other action or Act to be taken or given by the Holders of Securities pursuant to the Indenture has been given or taken
by the Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will
be deemed to be equal to the amount set forth on the face hereof as the “Face Amount” hereof. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security
and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company or the Guarantor with certain conditions set forth therein, shall not apply to this Security. The remaining
provisions of Section 401 of the Indenture shall apply to this Security.

Authorized
Denominations

This
Security is issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000.

Registration
of Transfer

Upon
due presentment for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis,
Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for
an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject
to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental
charge imposed in connection therewith.

This
Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days
after the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines
that this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z)
an Event of Default with respect

    	 	12	 

    	 

    

to
the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant to the preceding sentence,
it shall be exchangeable for definitive Securities in registered form, having the same date of issuance, Stated Maturity Date
and other terms and of authorized denominations aggregating a like amount. 

This
Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary
or a nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior
to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall
be affected by notice to the contrary.

Obligation
of the Company Absolute

No
reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Maturity Payment Amount at the times, place and rate, and in the coin
or currency, herein prescribed, except as otherwise provided in this Security.

No
Personal Recourse

No
recourse shall be had for the payment of the Maturity Payment Amount or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or any successor corporation or of the Guarantor or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

Defined
Terms

All
terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless
otherwise defined in this Security.

Governing
Law

This
Security shall be governed by and construed in accordance with the law of the State of New York, without regard to principles
of conflicts of laws.

    	 	13	 

    	 

    

 

ABBREVIATIONS

 

 The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	TEN COM	--	as tenants in common
	 	 	 
	TEN ENT	--	as tenants by the entireties
	 	 	 
	JT TEN	--	as joint tenants with right

    of survivorship and not

    as tenants in common

 

UNIF
GIFT MIN ACT --  _____________________ Custodian _________________________

(Cust)                                                           
(Minor)

 

Under
Uniform Gifts to Minors Act

 

_____________________________

(State)

 

Additional
abbreviations may also be used though not in the above list.

 

FOR
VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

 

Please
Insert Social Security or 

Other
Identifying Number of Assignee

 

_____________________________

	 
	 
	 

(Please
print or type name and address including postal zip code of Assignee)

 

    	 	14	 

    	 

    

the
within Security of WELLS FARGO FINANCE LLC and does hereby irrevocably constitute and appoint __________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution in the premises.

 

 

Dated:
_________________________

  

	 	 	  
	 	 	 
	 	 	 
	 	 	 

 

 

NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.

 

 

    	 	15

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