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EXHIBIT 10.1
NARA BANK, N.A.
2000 LONG TERM INCENTIVE PLAN
Nara Bank, N. A. (the "Company"), by action of its Board of Directors,
hereby adopts the Nara Bank, N.A. 2000 Long Term Incentive Plan (the "Plan")
with the following provisions:
1. PURPOSE. The purpose of the Plan is to promote and advance the interests
of the Company and its shareholders by enabling the Company and its Subsidiaries
to attract, retain and reward senior executives, key employees and directors,
and to strengthen the mutuality of interests between such executives, employees
and directors and the Company's shareholders. The Plan is designed to meet this
intent by offering performance-based stock and cash incentives and other
equity-based incentive awards, thereby providing a proprietary interest in
pursuing the long-term growth, profitability and financial success of the
Company.
2. DEFINITIONS. For purposes of this Plan, the following terms shall have
the meanings set forth below:
(A) "Administrator" means the Board or the Committee.
(B) "Award or "Awards" means an award or grant made to a Participant
under Sections 6 through 10, inclusive, of the Plan.
(C) "Board" means the Board of Directors of the Company.
(D) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time or any successors thereto, together with rules, regulations and
authoritative interpretations promulgated thereunder.
(E) "Committee" means a committee of two or more Independent Directors
appointed by the Board to administer the Plan.
(F) "Common Stock" means the Common Stock of the Company or any
security of the Company issued in substitution, exchange or lieu thereof.
(G) "Company" means Nara Bank, a national association, or a Subsidiary
or successor entity, or any holding company for Nara Bank which is a parent of
the Company within the meaning of Code Section 424(e).
(H) "Date of Grant" means the date of the Administrator takes formal
action designating that a Participant shall receive an Award, notwithstanding
the date the Participant accepts the Award, the date the Company and the
Participant enter into a written agreement with respect to the Award, or any
other date.
(I) "Disability" means permanent and total disability as determined by
the Administrator in accordance with the standards under Section 22(e)(3) of the
Code.
(J) "Effective Date" means the date the Plan is approved by the
holders of a majority of the outstanding shares of common stock, provided such
approval of the shareholders of the company occurs within twelve (12) months
before or after the Board adopts the Plan. In the event the Company does not
obtain shareholder approval of the plan, any Awards granted pursuant to the Plan
shall be rescinded automatically.
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(K) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in the effect from time to time, or any successor statute.
(L) "Fair Market Value" means on any given date, the closing price for
the Common Stock on such date, or, if the Common Stock was not traded on such
date, on the next preceding day on which the Common Stock was traded, determined
in accordance with the following rules.
(I) If the Common Stock is admitted to trading or listing on a
national securities exchange registered under the Exchange Act, the closing
price for any day shall be the last reported sale price regular way, or in the
case no such reported sale takes place on such date, the average of the last
reported bid and ask prices regular way, in either case on the principal
national securities exchange on which the Common Stock is admitted to trading or
listed, or
(II) If not listed or admitted to trading on any national
securities exchange, the last sale price of the Common Stock on the National
Association of Securities Dealers Automated Quotation National Market System
("NMS") or, in case no such reported sale takes place, the average of the
closing bid and ask prices on such date, or
(III) If not quoted on the NMS, the average of the closing bid
and ask prices of the Common Stock on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or any comparable system, or
(IV) If the Common Stock is not listed on NASDAQ or any
comparable system, the closing bid and ask prices as furnished by any member of
the National Association of Securities Dealers, Inc., selected from time to time
by the Company for that purpose.
(M) "Incentive Stock Option" means any Stock Option granted pursuant
to the provisions of Section 6 of the plan that is intended to be and is
specifically designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(N) "Independent Director" means persons who qualify as "nonemployee
directors" as such term is defined in Securities and Exchange Commission Rule
16b-3 under the 1934 Act ("Nonemployee Directors") and who qualify as "outside
directors" within the meaning of Section 162(m)(4)(C)(i) of the Code and
Treasury Regulations 1.162-27(c)(3) ("Outside Director"). The Board shall have
the authority to appoint and remove members of the Committee, provided, however,
that any attempted appointment to the Committee of a person who does not qualify
as an Outside Director and Nonemployee Director shall be null and void. Any
Committee member who loses the status of an Outside Director and Nonemployee
Director shall automatically and without further action cease to be a member of
the Committee as soon as such status is lost.
(O) "Non-Qualified Stock Option" means any Stock Option granted
pursuant to the provisions of Section 6 of the Plan that is not an Incentive
Stock Option.
(P) "Participant" means any person to whom an Award is granted
pursuant to the Plan.
(Q) "Performance Award" means an Award granted pursuant to the
provisions of Section 9 of the Plan, the vesting of which is contingent on the
attainment of specified performance criteria.
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(R) "Performance Share Grant" means an Award of units representing
shares of Common Stock granted pursuant to the provisions of Section 9 of the
Plan.
(S) "Performance Unit Grant" means an Award of monetary units granted
pursuant to the provisions of Section 9 of the Plan.
(T) "Plan" means the Nara Bank, N.A. 2000 Long Term Incentive Plan, as
set forth herein and as it may be hereafter amended and from time to time in
effect.
(U) "Restricted Award" means an Award granted pursuant to the
provisions of Section 8 of the Plan.
(V) "Restricted Stock Grant" means an Award of shares of Common Stock
granted pursuant to the provisions of Section 8 of the Plan.
(W) "Restricted Unit Grant" means an Award of units representing
shares of Common Stock granted pursuant to the provisions of Section 8 of the
Plan.
(X) "Retirement" means retirement from active employment with the
Company and its Subsidiaries on or after the normal retirement date specified in
the Company's retirement plan or such earlier retirement date as approved by the
Administrator for purposes of this Plan.
(Y) "Stock Appreciation Right" means an Award to benefit from the
appreciation of Common Stock granted pursuant to the provisions of Section 7 of
the Plan.
(Z) "Stock Option" means an Award to purchase shares of Common Stock
granted pursuant to the provisions of Section 6 of the Plan.
(AA) "Subsidiary" means any corporation or entity that is a subsidiary
of the Company within the meaning of Section 424(f) of the Code (or successor
sections.)
(BB) "Ten Percent Shareholder" means a person who owns (after taking
into account the constructive ownership rules of Section 424(d) of the Code or
successor sections) more than ten percent (10%) of the stock of the Company.
3. ADMINISTRATION OF PLAN.
(A) Administration. The Board shall administer the Plan unless and
until the Board delegates administration to a Committee. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. The Board may abolish the Committee at any time.
(B) Powers of Administrator. The Administrator shall have the power,
subject to, and within the limitations of, the express provisions of the Plan:
(I) To determine from time to time which of the persons eligible
under the Plan shall be granted Awards; when and how each Award shall be
granted; what type or combination of types of Awards shall be granted; the
provisions of each Award granted (which need not
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be identical), including the time or times when a person shall be permitted to
receive stock pursuant to an Award; and the number of shares with respect to
which an Award shall be granted to each such person.
(II) To construe and interpret the Plan and Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Administrator, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Award agreement, in
a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective. All decisions and interpretations of the Administrator shall be
binding on all persons, including the Company and Participants.
(III) To amend the Plan or an Award as provided in Section 18.
(IV) Generally, to exercise such powers and to perform such acts
as the Administrator deems necessary or expedient to promote the best interests
of the Company that are not in conflict with the provisions of the Plan.
4. DURATION OF AND COMMON STOCK SUBJECT TO THE PLAN.
(A) Term. The Plan shall terminate automatically on the tenth (10th)
anniversary date of the date of adoption of the Plan by the Board or the tenth
(10th) anniversary date of the date of shareholder approval of the Plan,
whichever is earlier (subject to earlier termination by action of the Board),
except with respect to Awards then outstanding.
(B) Shares of Common Stock Subject to the Plan. The maximum total
number of shares of Common Stock with respect to which aggregate stock Awards
may be granted under the Plan shall be Seven Hundred Thousand (700,000).
(I) In no event shall more than Five Hundred Thousand (500,000)
shares of Common Stock be available for awards of Incentive Stock Options under
the Plan.
(II) All of the amounts stated in this paragraph (b) are subject
to adjustment as provided in Section 16 below and are subject to the rules of
Section 6(g).
(III) For the purpose of computing the total number of shares of
Common Stock available for Awards under the Plan, there shall be counted against
the foregoing limitations the number of Shares of Common Stock subject to
issuance upon exercise or used for payment or settlement of Awards. For purposes
of administering the foregoing sentence, shares subject Incentive Stock Options
shall reduce the maximum number of shares available for Incentive Stock Options
on a share for share basis, but shares subject to other types of Awards shall
first reduce the maximum number of shares without affecting the Incentive Stock
Option portion until the amount available for Awards other than Incentive Stock
Options is reduced to zero, and only then shall reduce the amount reserved for
Incentive Stock Options.
(IV) Except in the case of Incentive Stock Options granted under
the Plan (for which each share Award may be used only once), if any Awards are
forfeited, terminated, expire unexercised, settled or paid in cash in lieu of
stock or exchanged for other Awards, the shares of Common Stock which were
theretofore subject to such Awards shall again be available for Awards under the
Plan to the extent of such forfeiture or expiration of such Awards.
(V) Except in the case of shares acquired through exercise of an
Incentive Stock Option granted under the Plan, any shares of Common Stock which
are used as full or
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partial payment to the Company by a Participant of the purchase price of shares
of Common Stock upon exercise of a Stock Option shall again be available for
Awards under the Plan, as shall any shares covered by Stock Appreciation Rights
which are not issued as payment upon exercise.
(C) Source of Common Stock. Common Stock that may be issued under the
Plan may be either authorized and unissued shares or issued shares which have
been reacquired by the Company. No fractional shares of Common Stock shall be
issued under the Plan.
5. ELIGIBILITY. Persons eligible for Awards under the Plan shall consist of
senior executives and other employees who hold positions of significant
responsibilities or whose performance or potential contribution, in the judgment
of the Administrator will benefit the Company or its Subsidiaries, and directors
of the Company or its Subsidiaries.
6. STOCK OPTIONS. Stock Options granted under the Plan may be in the form
of Incentive Stock Options or Non-Qualified Stock Options (collectively referred
to as "Stock Options"). Stock Options shall be subject to the terms and
conditions set forth below. Each written Stock Option agreement shall contain
such additional terms and conditions, not inconsistent with the express
provisions of the Plan, as the Administrator shall deem desirable.
(A) Grant. Stock Options shall be granted under the Plan on such terms
and conditions not inconsistent with the provisions of the Plan and pursuant to
written agreements with the optionee in such form as the Administrator may from
time to time approve in its sole and absolute discretion. The terms of
individual Stock Option agreements need not be identical. Each Stock Option
agreement shall state specifically whether it is intended to be an Incentive
Stock Option agreement or a Non-Qualified Stock Option agreement. Stock Options
may be granted alone or in addition to other Awards under the Plan. Only common
law employees may receive grants of Incentive Stock Options. No person may be
granted (in any calendar year) options to purchase more than one hundred
thousand (100,000) shares of Common Stock (subject to adjustment pursuant to
Section 16). The foregoing sentence is an annual limitation on grants and not a
cumulative limitation.
(B) Stock Option Price. The exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Administrator at the
time of grant. In no event shall the exercise price of a Stock Option be less
than one hundred percent (100%) of the Fair Market Value of the Common Stock on
the date of the grant of such Stock Option; provided, however, in the case of a
Ten Percent Shareholder, the exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value of the Common Stock on the date of
its grant.
(C) Option Term. The term of each Stock Option shall be fixed by the
Administrator. However, the term of any Stock Option shall not exceed ten (10)
years after the date such Stock Option is granted. Furthermore, the term of an
Incentive Stock Option granted to a Ten Percent Shareholder shall not exceed
five (5) years after the date of its grant.
(D) Exercisability. A Stock Option shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Administrator at the date of grant and set forth in the written Stock Option
agreement; provided, however, no Stock Option shall be exercisable during the
first six (6) months after the date such Stock Option is granted. A written
Stock Option agreement may, if permitted pursuant to its terms, become
exercisable in full upon the occurrence of events selected by the Administrator
that are beyond the control of the Participant (including, but not limited to, a
Change in Control of the Company as set forth in Section 17 below).
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(E) Method of Exercise. A Stock Option may be exercised, in whole or
in part, by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by payment in
full of the purchase price (i) in cash or (ii) if acceptable to the
Administrator, in shares of Common Stock already owned by the Participant. The
Administrator may also permit Participants, either on a selective or aggregate
basis, to simultaneously exercise Options and sell the shares of Common Stock
thereby acquired, pursuant to a brokerage or similar arrangement, approved in
advance by the Administrator, and use the proceeds from such sale as payment of
part or all of the purchase price of such shares.
(F) Special Rule for Incentive Stock Options. With respect to
Incentive Stock Options granted under the Plan, the aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the number
of shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this Plan and all
other incentive stock option plans of this Company or its Subsidiaries) shall
not exceed one hundred thousand dollars ($100,000) or such other limit as may be
required by the Code.
7. STOCK APPRECIATION RIGHTS. The grant of Stock Appreciation Rights under
the Plan shall be subject to the following terms and conditions. Furthermore,
the Stock Appreciation Rights shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the
Administrator shall deem desirable. The terms of each Stock Appreciation Right
granted shall be set forth in a written agreement between the Company and the
Participant receiving such grant. The terms of such agreements need not be
identical.
(A) Stock Appreciation Rights. A Stock Appreciation right is an Award
determined by the Administrator entitling a Participant to receive an amount
equal to the excess of the Fair Market Value of a share of Common Stock on a
fixed date, which shall be the date concluding a measuring period set by the
Administrator upon granting the Stock Appreciation Right, over the Fair Market
Value of a share of Common Stock on the date of grant of the Stock Appreciation
Right, multiplied by the number of shares of Common Stock subject to the Stock
Appreciation Right. No Stock Appreciation Rights granted in any year to any
person may be measured by an amount of shares of Common Stock in excess of on
hundred thousand (100,000) shares, subject to adjustment under Section 16 below.
The foregoing sentence is an annual limitation on grants and not a cumulative
limitation.
(B) Grant. A Stock Appreciation Right may be granted in addition to or
completely independent of a Stock Option or any other Award under the Plan. Upon
grant of a Stock Appreciation Right, the Administrator shall select and inform
the Participant regarding the number of shares of Common Stock subject to the
Stock Appreciation Right and the date that constitutes the close of the
measuring period.
(C) Measuring Period. A Stock Appreciation Right shall accrue in value
from the date of grant over a time period established by the Administrator,
except that in no event shall a Stock Appreciation Right be payable within the
first six (6) months after the date of grant. In the written Stock Appreciation
Right agreement, the Administrator may also provide (but is not required to
provide) that a Stock Appreciation Right shall be automatically payable on one
or more specified dates prior to the normal end of the measuring period upon the
occurrence of events selected by the Administrator (including, but not limited
to, a Change in Control of the Company as set forth in Section 17 below) that
are beyond the control of the Participant. The Administrator may provide (but is
not required to provide) in the Stock Appreciation Right agreement that in the
case of a cash payment such acceleration in payment shall also be subject to
discounting of the payment to reasonably reflect the time value of money using
any reasonable discount rate selected by the Administrator in accordance with
Treasury Regulations under Code Section 162(m).
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(D) Form of Payment. Payment pursuant to a Stock Appreciation Right
may be made (i) in cash, (ii) in shares of Common Stock, or (iii) in any
combination of the above, as the Administrator shall determine in its sole and
absolute discretion. The Administrator may elect to make this determination
either at the time the Stock Appreciation Right is granted, at the time of
payment or at any time in between such dates. However, any Stock Appreciation
Right paid upon or subsequent to the occurrence of a Change in Control (as
defined in Section 17) shall be paid in cash.
8. RESTRICTED AWARDS. Restricted Awards granted under the Plan may be in
the form of either Restricted Stock Grants or Restricted Unit Grants. Restricted
Awards shall be subject to the following terms and conditions. Furthermore, the
Restricted Awards shall be pursuant to a written agreement executed both by the
Company and Participant, which agreement shall contain such additional terms and
conditions, not inconsistent with the express provisions of the Plan, as the
Administrator shall deem desirable in its sole and absolute discretion. The
terms of such written agreements need not be identical.
(A) Restricted Stock Grants. A Restricted Stock Grant is an Award of
shares of Common Stock transferred to a Participant subject to such terms and
conditions as the Administrator deems appropriate, as set forth in paragraph (d)
below.
(B) Restricted Unit Grants. A Restricted Unit Grant is an Award of
units (with each unit having a value equivalent to one share of Common Stock)
granted to a Participant subject to such terms and conditions as the
Administrator deems appropriate, including, without limitation, the requirement
that the Participant forfeit all or a portion of such units upon termination of
employment for specified reasons within a specified period of time, and
restrictions on the sale, assignment, transfer or other disposition of such
units.
(C) Grants of Awards. Restricted Awards may be granted under the Plan
in such form and on such terms and conditions as the Administrator may from time
to time approve. Restricted Awards may be granted alone or in addition to other
Awards under the Plan. Subject to the terms of Plan, the Administrator shall
determine the number of Restricted Awards to be granted to a Participant and the
Administrator may impose different terms and conditions (including performance
goals) on any particular Restricted Award made to any Participant. Each
Participant receiving a Restricted Stock Grant shall be issued a stock
certificate in respect of such shares of Common Stock. Such certificate shall be
registered in the name of such Participant, shall be accompanied by a stock
power duly executed by such Participant, and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Award.
The certificate evidencing the shares shall be held in custody by the Company
until the restrictions imposed thereon shall have lapsed or been removed.
(D) Restriction Period. Restricted Awards shall provide that in order
for a Participant to vest in such Awards, the Participant must continuously
provide services to the Company or its subsidiaries, subject to relief for
specified reasons, for a period commencing on the date of the Award and ending
on such later date or dates, as the Administrator may designate at the time of
the Award ("Restriction Period"). If the Administrator so provides in the
written agreement with the Participant, a Restricted Award may also be subject
to satisfaction of such performance goals as are set forth in such agreement.
During the Restriction Period, a Participant may not sell, assign, transfer,
pledge, encumber, or otherwise dispose of shares of Common Stock received under
a Restricted Stock Grant. The Administrator, in its sole discretion, may provide
for the lapse of restrictions during the Restriction Period upon the occurrence
of events selected by the Administrator that are beyond the control of the
Participant (including, but not limited to, a Change in Control of the Company
under Section 17). The Administrator may provide (but is not required to
provide) in the written agreement with the recipient that in the case of a cash
payment such acceleration in payment shall also be subject to discounting of the
payment to
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reasonably reflect the time value of money using any reasonable discount rate
selected by the Administrator in accordance with Treasury Regulations under Code
Section 162(m). Upon expiration of the applicable Restriction Period (or lapse
of restrictions during the Restriction Period where the restrictions lapse in
installments or by action of the Administrator), the Participant shall be
entitled to receive his or her Restricted Award or portion thereof, as the case
may be.
(E) Payment of Awards. A Participant who receives a Restricted Stock
Grant shall be paid solely by release of the restricted shares at the
termination of the Restriction Period (whether in one payment in installments or
otherwise). A Participant shall be entitled to receive payment for a Restricted
Unit Grant (or portion thereof) in an amount equal to the aggregate Fair Market
Value of the shares of Common Stock covered by such Award upon the expiration of
the applicable Restriction Period. Payment in settlement of a Restricted Unit
Grant shall be made as soon a practicable following the conclusion of the
specified Restriction Period (i) in cash, (ii) in shares of Common Stock equal
to the number of units granted under the Restricted Unit Grant with respect to
which such payment is made, or (iii) in any combination of the above, as the
Administrator shall determine in its sole and absolute discretion. The
Administrator may elect to make this determination either at the time the Award
is granted, at the time of payment or at any time in between such dates.
(F) Rights as a Shareholder. A Participant shall have, with respect to
the shares of Common Stock received under a Restricted Stock Grant; all of the
rights of a shareholder of the Company, including the right to vote the shares,
and the right to receive any cash dividends. Such cash dividends shall be
withheld, however, until their release upon lapse of the restrictions under the
Restricted Award. Stock dividends issued with respect to the shares covered by a
Restricted Grant shall be treated as additional shares under the Restricted
Grant and shall be subject to the same restrictions and other terms and
conditions that apply to shares under the Restricted Grant with respect to which
the dividends are issued.
9. PERFORMANCE AWARDS. Performance Awards granted under the Plan may be in
the form of either Performance Share Grants or Performance Unit Grants.
Performance Awards shall be subject to the terms and conditions set forth below.
Furthermore, the Performance Awards shall be subject to written agreements that
shall contain such additional terms and conditions, not inconsistent with the
express provisions of the Plan, as the Administrator shall deem desirable in its
sole and absolute discretion. Such agreements need not be identical.
(A) Performance Share Grants. A Performance Share Grant is an Award of
units (with each unit equivalent in value to one share of Common Stock) granted
to a Participant subject to such terms and conditions as the Administrator deems
appropriate, including, without limitation, the requirement that the Participant
forfeit such units (or a portion of such units) in the event certain performance
criteria are not met within a designated period of time. The shares of stock
subject to Performance Share Grants authorized under the Plan shall consist of
not more than one hundred thousand (100,000) shares.
(B) Performance Unit Grants. A Performance Unit Grant is an Award of
units (with each unit representing such monetary amount as designated by the
Administrator) granted to a Participant subject to such terms and conditions as
the Administrator deems appropriate, including, without limitation, the
requirement that the Participant forfeit such units (or a portion of such units)
in the event certain performance criteria are not met within a designated period
of time.
(C) Grants of Awards. Performance Awards shall be granted under the
Plan pursuant to written agreements with the Participant in such form as the
Administrator may from time to time approve. Performance Awards may be granted
alone or in addition to other Awards under the Plan.
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Subject to the terms of the Plan, the Administrator shall determine the number
of Performance Awards to be granted to a Participant and the Administrator may
impose different terms and conditions on any particular Performance Award made
to any Participant.
(D) Performance Goals and Performance Periods. Performance Awards
shall provide that, in order for a Participant to vest in such Awards, the
Company must achieve certain performance goals ("Performance Goals") over a
designated performance period ("Performance Period"). The Performance Goals and
Performance Period shall be established by the Administrator, in its sole and
absolute discretion. The Administrator shall establish Performance Goals for
each Performance Period before the commencement of the Performance Period and
while the outcome is substantially uncertain. The Administrator shall also
establish a schedule or schedules for such Performance Period setting forth the
portion of the Performance Award which will be earned or forfeited based on the
degree of achievement of the Performance Goals actually achieved or exceeded. In
setting Performance Goals, the Administrator may use such measures as return on
equity, earnings growth, revenue growth, comparisons to peer companies, or such
other measure or measures of performance in such manner as it deems appropriate.
(E) Payment of Awards. In the case of a Performance Share Grant, the
Participant shall be entitled to receive payment for each unit earned in an
amount equal to the aggregate Fair Market Value of the shares of Common Stock
covered by such Award as of the end of the Performance Period. In the case of a
Performance Unit Grant, the Participant shall be entitled to receive payment for
each unit earned in an amount equal to the dollar value of each unit times the
number of units earned. The Administrator, pursuant to the written agreement
with the Participant, may make such Performance Awards payable in whole or in
part upon the occurrence of events selected by the Administrator that are beyond
the control of the Participant (including, but not limited to, a Change in
Control of the Company as set forth in Section 17 below). The Administrator may
provide (but is not required to provide) in the written agreement with the
recipient that, in the case of a cash payment, acceleration in payment of a
Performance Award shall also be subject to discounting to reasonably reflect the
time value of money using any reasonable discount rate selected by the
Administrator in accordance with Treasury Regulations under Code Section 162(m).
Payment in settlement of a Performance Award shall be made as soon as
practicable following the conclusion of the Performance Period (i) in cash, (ii)
in shares of Common Stock, or (iii) in any combination of the above, as the
Administrator may determine in its sole and absolute discretion. The
Administrator may elect to make this determination either at the time the Award
is granted, at the time of payment, or at any time in between such dates.
10. OTHER STOCK-BASED AND COMBINATION AWARDS.
(A) The Administrator may grant other Awards under the Plan pursuant
to which Common Stock is or may in the future be acquired, or Awards denominated
in stock units, including ones valued using measures other than market value.
Such Other Stock-Based Grants may be granted either alone or in addition to any
other type of Award granted under the Plan.
(B) The Administrator may also grant Awards under the Plan in
combination with other Awards or in exchange of Awards, or in combination with
or as alternatives to grants or rights under any other employee plan of the
Company, including the plan of any acquired entity.
(C) Subject to the provisions of the Plan, the Administrator shall
have authority to determine the individuals to whom and the time or times at
which the Awards shall be made, the number of shares of Common Stock to be
granted or covered pursuant to such Awards, and any and all other conditions
and/or terms of the Awards.
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11. RESERVED.
12. DEFERRAL ELECTIONS. The Administrator may permit a Participant to elect
to defer his or her receipt of the payment of cash or the delivery of shares of
Common Stock that would otherwise be due to such Participant by virtue of the
exercise, earn out or vesting of an Award made under the Plan. If any such
election is permitted, the Administrator shall establish rules and procedures
for such payment deferrals, including the possible (a) payment or crediting of
reasonable interest on such deferred amounts credited in cash, and (b) the
payment or crediting of dividend equivalents in respect of deferrals credited in
units of Common Stock. The Company and the Administrator shall not be
responsible to any person in the event that the payment deferral does not result
in deferral of income for tax purposes.
13. DIVIDEND EQUIVALENTS. Awards of Stock Options, Stock Appreciation
Rights, Restricted Unit Grants, Performance Share Grants, and other stock-based
Awards may, in the sole and absolute discretion of the Administrator, earn
dividend equivalents. In respect of any such Award which is outstanding on a
dividend record date for Common Stock, the Participant may be credited with an
amount equal to the amount of cash or stock dividends that would have been paid
on the shares of Common Stock covered by such Award had such shares been issued
and outstanding on such dividend record date. The Administrator shall establish
such rules and procedures governing the crediting of dividend equivalents,
including the time, form of payment, and payment contingencies of such dividend
equivalents, as it deems appropriate or necessary.
14. TERMINATION OF EMPLOYMENT. The terms and conditions under which an
Award may be exercised after a Participant's termination of employment shall be
determined by the Administrator and reflected in the written agreement with the
Participant concerning the Award, except that in the event a Participant's
employment with the Company or a Subsidiary terminates for any reason within six
(6) months of the date of grant of any Award held by the Participant, the Award
shall expire as of the date of such termination of employment and the
Participant and the Participant's legal representative or beneficiary shall
forfeit any and all rights pertaining to such Award.
15. NON-TRANSFERABILITY OF AWARDS. No Award under the Plan, and no rights
or interest therein, shall be assignable or transferable by a Participant except
by will or the laws of descent and distribution. During the lifetime of a
Participant, Awards are exercisable only by, and payments in settlement of
Awards will be payable only to, the Participant or his or her legal
representative.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
(A) The existence of the Plan and the Awards granted hereunder shall
not affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Company's Common Stock or the rights thereof, the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding.
(B) In the event of any change in capitalization affecting the Common
Stock of the Company after the Effective Date, such as a stock dividend, stock
split, recapitalization, merger, consolidation, split-up, combination, exchange
of shares, other form of reorganization, or any other change affecting the
Common Stock, such proportionate adjustments, if any, as the Board in its
discretion may deem appropriate to reflect such change shall be made with
respect to (i) the aggregate number of shares of Common Stock for which Awards
in respect thereof may be granted under the Plan, (ii) the maximum number of
shares of Common Stock which may be sold or awarded to any Participant, (iii)
the
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number of shares of Common Stock covered by each outstanding Award, and (iv) the
price per share in respect of outstanding Awards.
(C) The Administrator may also make such adjustments in the number of
shares covered by, and the price or other value of any outstanding Awards in the
event of a spin-off or other distribution (other than normal cash dividends) of
Company assets to shareholders. In the event that another corporation or
business entity is being acquired by the Company, and the Company agrees to
assume outstanding employee stock options and/or stock appreciation rights
and/or the obligation to make future grants of options or rights to employees of
the acquired entity, the aggregate number of shares of Common Stock available
for Awards under Section 4 of the Plan may be increased accordingly, except that
no change shall be made to the maximum number of shares eligible for Incentive
Stock Options under Section 4(b)(i) based solely upon such an event.
17. CHANGE IN CONTROL.
(A) In the event of a Change in Control (as defined in paragraph (b)
below) of the Company, and except as otherwise provided in Award agreements:
(I) All Stock Options or Stock Appreciation Rights then
outstanding shall become fully exercisable as of the date of the Change in
Control (and shall terminate at such time as specified in the Award agreements);
(II) All restrictions and conditions of all Restricted Stock
Grants and Restricted Unit Grants then outstanding shall be deemed satisfied as
of the date of the Change in Control; and
(III) All Performance Share Grants and Performance Unit Grants
shall be deemed to have been fully earned as of the date of the Change in
Control;
Subject to the limitation that any Award which has been outstanding less
than six (6) months on the date of the Change in Control shall not be afforded
such treatment.
(B) A "Change in Control" shall be deemed to have occurred upon the
occurrence of any one (or more) of the following events:
(I) Any person, including a group as defined in Section 13(d)(3)
of the Exchange Act, becomes the beneficial owner of shares of the Company with
respect to which 25% or more of the total number of votes for the election of
the Board may be cast;
(II) As a result of, or in connection with, any cash tender
offer, exchange offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, persons who were directors
of the Company just prior to such event shall cease to constitute a majority of
the Board;
(III) The stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease to be an
independent publicly owned corporation or for a sale or other disposition of all
or substantially all the assets of the Company; or
(IV) A tender offer or exchange offer is made for shares of the
Company's Common Stock (other than one made by the Company) and shares of Common
Stock are
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acquired thereunder ("Offer"). However, the acceleration of the exercisability
of outstanding options upon the occurrence of an Offer shall be within the
discretion of the Administrator.
(V) Formation of a holding company for the Company in which the
shareholdings of the holding company after its formation are substantially the
same as for the Company prior to the holding company formation does not
constitute a Change in Control for purposes of this Plan.
(C) In the event that any payment under this Plan (alone or in
conjunction with other payments) would otherwise constitute an "excess parachute
payment" under Section 280G of the Code (in the sole judgment of the Company),
such payment shall be reduced or eliminated to the extent the Company determines
necessary to avoid deduction disallowance under Section 280G of the Code or the
imposition of excise tax under Section 4999 of the Code. The Company may consult
with a Participant regarding the application of Section 280G and/or Section 4999
to payments otherwise due to such Participant under the Plan, but the judgment
of the Company as to applicability of those provisions, the degree to which a
payment must be reduced to avoid those provisions, and which Awards shall be
reduced, is final. The Administrator shall act on behalf of the Company in
interpreting and administering this limitation.
18. AMENDMENT AND TERMINATION. Without further approval of the
stockholders, the Board may at any time terminate the Plan, or may amend it from
time to time in such respects as the Board may deem advisable. However, the
Board may not, without approval of the shareholders, make any amendment which
would (a) increase the aggregate number of shares of Common Stock which may be
issued under the Plan (except for adjustments pursuant to Section 16 of the
Plan), (b) materially modify the requirements as to eligibility for
participation in the Plan, or (c) materially increase the benefits accruing to
Participants under the Plan. Notwithstanding the above, the Board may amend the
Plan to take into account changes in applicable securities laws, federal income
tax laws and other applicable laws. Further, should the provisions of Rule
16b-3, or any successor rule, under the Exchange Act be amended, the Board may
amend the Plan in accordance with any modifications to that rule without the
need for shareholder approval.
19. MISCELLANEOUS MATTERS.
(A) Tax Withholding. The Company shall have the right to deduct from
any payment, including the delivery of shares, made under the Plan any federal,
state, or local taxes of any kind required by law to be withheld with respect to
such payments or to take such other action as may be necessary in the opinion of
the Company to satisfy all obligation for the payment of such taxes. If Common
Stock is used to satisfy tax withholding, such stock shall be valued based on
the Fair Market Value when the tax withholding is required to be made.
(B) No Right to Employment. Neither the adoption of the Plan nor the
granting of any Award shall confer upon any employee of the Company or any
Subsidiary any right to continued employment with the Company or any Subsidiary,
as the case may be, nor shall it interfere in any way with the right of the
Company or a Subsidiary to terminate the employment of any of its employees at
any time, with or without cause.
(C) Unfunded Plan. The Plan shall be unfunded and the Company shall
not be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of the Company to any person with respect
to any Award under the Plan shall be based solely upon any written contractual
obligations that may be effected pursuant to the Plan. No such obligation of the
Company shall be deemed to secured by any pledge of, or other encumbrance on,
any property of the Company.
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(D) Annulment of Awards. The grant of any Award under the Plan payable
in cash is provisional until cash is paid in settlement thereof. The grant of
any Award payable in Common Stock is provisional until the Participant becomes
entitled to the certificate in settlement thereof. Payment under any Awards
granted pursuant to the Plan is wholly contingent upon shareholder approval of
the Plan. Where approval for an award sought pursuant to Section
162(m)(4)(c)(ii) is not granted by the Company's shareholders, the Award shall
be annulled automatically. In the event the employment of a Participant is
terminated for cause (as defined below), any Award which is provisional shall be
annulled as of the date of such termination for cause. For purposes of the Plan,
the term "terminated for cause" means any discharge because of personal
dishonesty, willful misconduct, breach of fiduciary duty involving personal
profit, continuing intentional or habitual failure to perform stated duties,
violation of any law (other than minor traffic violations or similar misdemeanor
offenses not involving moral turpitude), or rule or regulation adopted by the
Comptroller of Currency, Federal Deposit Insurance Corporation or other
regulatory body with supervisory control over the Company or any of its
Subsidiaries, or material breach of any provision of an employment agreement
with the Company.
(E) Other Company Benefit and Compensation Programs. Payments and
other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law of
any state. Furthermore, such benefits shall not be included in, nor have any
effect on, the determination of benefits under any other employee benefit plan
or similar arrangement provided by the Company or a Subsidiary unless expressly
so provided by such other plan or arrangement, or except where the Administrator
expressly determines that inclusion of an Award or portion of an Award should be
included. Awards under the Plan may be made in combination with or in addition
to, or as alternatives to, grants, awards or payments under any other Company or
Subsidiary plans. The Company or any Subsidiary may adopt such other
compensation programs and additional compensation arrangements (in addition to
this Plan) as it deems necessary to attract, retain, and reward employees and
directors for their service with the Company and its Subsidiaries.
(F) Securities Law Restrictions. No shares of Common Stock shall be
issued under the Plan unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable federal and state securities
laws. Certificates for shares of Common Stock delivered under the Plan may be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law. The Administrator may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(G) Award Agreement. Each Participant receiving an Award under the
Plan shall enter into a written agreement with the Company in a form specified
by the Administrator agreeing to the terms and conditions of the Award and such
related matters as the Administrator shall, in its sole and absolute discretion,
determine.
(H) Costs of Plan. The costs and expenses of administering the Plan
shall be borne by the Company.
(I) Governing Law. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
California.
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CERTIFICATE OF SECRETARY
The undersigned, being the Corporate Secretary of Nara Bank, N.A., hereby
certifies that the foregoing Nara Bank, N.A. 2000 Long Term Incentive Plan was,
pursuant to the Articles and Bylaws of the Corporation, duly adopted by the
Board of Directors on June 21, 2000 and approved by the shareholders of the
Corporation on August 16, 2000.
Date: August 17, 2000 /s/ Bon T. Goo
------------------------ ---------------------------
Corporate Secretary
[Seal of Nara Bank, N.A.]
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