UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
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(Name of Registrant as Specified In Its Charter)
HANMI FINANCIAL CORPORATION
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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HANMI FINANCIAL CORPORATION
3660 WILSHIRE BOULEVARD
PENTHOUSE SUITE "A"
LOS ANGELES, CALIFORNIA 90010
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
The 2001 Annual Meeting of Stockholders of HANMI FINANCIAL CORPORATION (the
"Company") will be held at the Sheraton Universal Hotel, located at 333
Universal Terrace Parkway Universal City, California, on Wednesday, April 18,
2001, beginning at 10:30 A.M. local time, for the following purposes:
1. To elect three nominees to serve as directors of the Company for
three-year terms and until respective successors shall be elected and
qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Our agenda for the Annual Meeting will also include an overview of the Company's
business operations and recent performance results of Hanmi Financial
Corporation.
The Board of Directors has fixed the close of business on March 1, 2001 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof.
You are cordially invited to attend the Annual Meeting. However, you must be
a stockholder of record at the close of business on March 1, 2001 to vote at the
meeting. Regardless of whether or not you will attend, please vote by signing,
dating and returning the enclosed proxy card.
By Order of the Board of Directors
/s/ Chung Hoon Youk
Chung Hoon Youk
President and Chief Executive Officer
Los Angeles, California
March 26, 2001
HANMI FINANCIAL CORPORATION
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PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 18, 2001
------------------------
This Proxy Statement is furnished to the stockholders of Hanmi Financial
Corporation (the "Company") in connection with the solicitation of proxies for
use at the Annual Meeting of Stockholders to be held at the Sheraton Universal
Hotel located at 333 Universal Terrace Parkway, Universal City, California, on
Wednesday, April 18, 2001, beginning at 10:30 A.M. local time, and at any
adjournment thereof.
RECORD DATE; SOLICITATION OF PROXIES
The close of business on March 1, 2001 has been selected as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting. Each holder of common stock is entitled to one vote per share of
such stock held. At that date, there were approximately 7,443,589 outstanding
shares of the Company's common stock entitled to vote at the annual meeting.
In addition to soliciting proxies by mail, officers, directors and employees
of the Company, without receiving any additional compensation, may solicit
proxies by telephone, fax, in person or by other means. Arrangements will also
be made with brokerage firms and other custodians, nominees and fiduciaries to
forward proxy solicitation materials to the beneficial owners of the Company's
common stock held of record by such persons, and the Company will reimburse such
brokerage firms, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in connection therewith. The Company
will pay all expenses related to the solicitation of proxies.
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of the Company's common stock entitled to vote at the
Annual Meeting. Shares voted in a matter are treated as being present for
purposes of establishing a quorum. Abstentions and broker nonvotes will be
counted for determining a quorum, but will not be counted for purposes of
determining the number of votes cast "FOR" or "AGAINST" any matter. If no
directions are given, the shares represented by the proxies will be voted in FOR
the election of the nominees for director. The named proxies may vote in their
discretion upon such matters as may properly come before the meeting.
REVOCABILITY OF PROXIES
Any holder of the Company's common stock may revoke a proxy at any time
before it is voted by filing with the secretary of the Company an instrument
revoking the proxy or by returning a duly executed proxy bearing a later date,
or by attending the annual meeting and voting in person. Any such filing should
be made to the attention of the Secretary, Hanmi Financial Corporation,
Penthouse Suite "A", 3660 Wilshire Boulevard, Los Angeles, California 90010.
Attendance at the Annual Meeting will not by itself constitute revocation of a
proxy.
The Company intends to cause this Proxy Statement to be mailed to
stockholders on or about March 26, 2001.
1
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following tables set forth information pertaining to beneficial
ownership (as defined below) of the Company's common stock, by (i) persons known
to the Company to own more than five percent of the outstanding shares of the
Company's common stock, (ii) each director and nominee for election, (iii) each
Named Executive Officer of the Company, and (iv) all directors and executive
officers of the Company as a group. The information contained herein has been
obtained from the Company's records and from information furnished to the
Company by each individual or entity. Management knows of no person who own,
beneficially or of record, either individually or with associates, more than
five percent of the Company's common stock, except as set forth below.
The number of shares "beneficially owned" by a given stockholder are
determined under Securities and Exchange Commission Rules, and the designation
of ownership set forth below is not necessarily indicative of ownership for any
other purpose. In general, the beneficial ownership as set forth below includes
shares over which a director, director nominee, principal stockholder or
executive officer has sole or shared voting or investment power and certain
shares which such person has a vested right to acquire, under the stock options
or otherwise, within 60 days of the date hereof. Except as otherwise indicated
the address for each of the following persons is the Company's address. The
following information is as of March 1, 2001.
COMMON STOCK
BENEFICIARY OWNED
----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ------------------------------------ --------- ----------
Eung Kyun Ahn(1)(2).................................... 254,512 3.37%
Director
I Joon Ahn(1)(2)....................................... 296,521 3.93%
Director
Stuart S. Ahn(1)(2).................................... 111,478 1.48%
Director
Jung Chan Chang(3)..................................... 9,916 0.13%
Senior Vice President and Chief Retail Lending
Officer
George S. Chey(1)...................................... 82,108 1.09%
Director
Yong Ku Choe(4)........................................ 45,097 0.60%
Sr. Vice President and Chief Financial Officer
Wun Hwa Choi(5)........................................ 9,468 0.13%
Sr. Vice President and Chief Commercial
Lending Officer
Ki Tae Hong(1)(2)...................................... 84,271 1.12%
Director
David Kim(8)........................................... 2,863 0.04%
Sr. Vice President and Chief Credit Administration
Officer
Joon H. Lee(1)......................................... 597,906 7.92%
Director
Richard B. C. Lee(1)(6)................................ 227,447 3.01%
Director
Chang Kyu Park(1)(2)................................... 288,516 3.82%
Director
Joseph K. Rho(1)(2).................................... 304,410 4.03%
Chairman of the Board
2
COMMON STOCK
BENEFICIARY OWNED
----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ------------------------------------ --------- ----------
Won R. Yoon(1)(2)...................................... 416,665 5.52%
Director
Chung Hoon Youk(7)..................................... 37,670 0.50%
President and Chief Executive Officer and Director
John H. Ahn(9)......................................... 549,551 7.38%
All directors and executive officers................... 2,768,848 36.67%
as a group (15 in number)
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(1) Includes 4,312 shares issuable upon exercise of options issued under the
Company's 2000 Stock Option Plan at an exercise price of $12.48.
(2) Shares beneficial ownership with his spouse.
(3) Includes 9,670 shares issuable upon the exercise of options issued under the
Company's 2000 Stock Option Plan at an exercise price of $11.45.
(4) Includes 9,670 shares issuable upon exercise of options issued under the
Company's 2000 Stock Option Plan at an exercise price of $11.45.
(5) Includes 9,275 shares issuable upon exercise of options issued under the
Company's 2000 Stock Option Plan at an exercise price of $11.45 (4,835
shares) and $14.86 (4,440) shares.
(6) Includes 10,832 shares held in the names of his children under the Uniform
Trust for Minor Act over which he exercises sole investment power.
(7) Includes 31,870 shares issuable upon exercise of options issued under the
Company's 2000 Stock Option Plan at exercise price of $13.29 (22,200 shares)
and $11.45 (9,670 shares).
(8) Includes 2,686 shares issuable upon exercise of options issued under the
Company's 2000 Stock Option Plan at an exercise price of $11.45.
(9) Mr. Ahn's address is 8592 Los Coyotes Dr., Buena Park, CA 90621.
3
ELECTION OF DIRECTORS
The Company's Bylaws provide for a Board of Directors consisting of no less
than nine and no more than fifteen members, the exact number within this range
being determined by the Board of Directors. The Board of Directors has set the
number of directors at eleven. The Board of Directors is classified into three
classes with each director serving a three-year term. George S. Chey, Ki Tae
Hong and Chung Hoon Youk are serving terms that expire at the Annual Meeting of
Stockholders to be held in 2001. Eung Kyun Ahn, Stuart S. Ahn, Richard B.C. Lee
and Chang Kyu Park are serving terms that will expire at the Annual Meeting of
Stockholders to be held in 2002. I Joon Ahn, Joon H. Lee, Joseph K. Rho and Won
R.Yoon are serving terms that expire at the Annual Meeting of Stockholders to be
held in 2003. At each Annual Meeting of Stockholders, directors are elected for
a full term of three years to succeed those directors whose terms are expiring.
Company officers are elected annually by the Board of Directors and serve at the
Board's discretion.
The Board of Directors has nominated George S. Chey, Ki Tae Hong and Chung
Hoon Youk for reelection to the Board of Directors for three-year terms that
will expire at the Annual Meeting of Stockholders to be held in the year 2004.
The nominees have indicated their willingness to serve and, unless otherwise
instructed, proxies will be voted for the election of such nominees unless
instructions are given on the proxy to withhold authority to vote for them.
Nominations for the election of directors, other than by the Board of
Directors, must be made by a stockholder entitled to vote for the election of
directors by giving timely written notice to the secretary of the Company at the
Company's principal offices in compliance with the Company's Bylaws. Such notice
must be received not less than 60 calendar days nor more than 90 calendar days
prior to the Annual Meeting; provided that, if in the event that notice or prior
public disclosure of the date of the Annual Meeting is given or made to the
stockholders for a meeting date that is not within 30 days before or after the
anniversary of the immediately preceding Annual Meeting of Stockholders, notice
by the stockholder will be timely if received not later than the close of
business on the tenth calendar day following the day on which such notice was
mailed or such public disclosure was made, whichever occurs first. Such
stockholder's notice must be in writing and must set forth as to each proposed
nominee all information relating to such person that is required to be disclosed
in solicitations of proxies pursuant to Regulation 14A under the Securities
Exchange Act of 1934 ("Exchange Act") including, but not limited to, such
person's written consent to being named in the Proxy Statement as a nominee and
to serving as a director if elected. Such stockholder notice must also set forth
the name and address, as they appear on the Company's books, of the nominating
stockholder, the class and number of shares of Common Stock beneficially owned
by such stockholder, a description of all arrangements or understandings between
the stockholder and each proposed nominee and any other information required to
be disclosed in solicitations of proxies pursuant to Regulation 14A of the
Exchange Act.
The following table sets forth certain information with respect to the
nominees for director and the other directors of the Company. Each of the
following was elected initially to the Company's Board in connection with the
reorganization of Hanmi Bank into a wholly owned subsidiary of the Company in
June 2000.
PRINCIPAL OCCUPATION
NAME AND POSITION AGE FOR PAST FIVE YEARS
- ----------------- -------- -------------------------------------------
Eung Kyun Ahn ............................. 65 President, Ahn's Music Inc., a musical
Director instrument dealer
I Joon Ahn ................................ 61 President, Ace Fashion Co., a garment
Director manufacturing company
Stuart S. Ahn ............................. 55 Architect and Principal of Ko-Am Co. Inc.,
Director an architectural and construction firm
George S. Chey ............................ 71 Chairman, Pan International Realty, Inc., a
Director real estate brokerage and management firm
4
PRINCIPAL OCCUPATION
NAME AND POSITION AGE FOR PAST FIVE YEARS
- ----------------- -------- -------------------------------------------
Ki Tae Hong ............................... 56 President, Pacom International, Inc.,
Director international trade of computer-related
products
Joon H. Lee ............................... 57 President, Bacco, a real estate investment
Director and development company
Richard B. C. Lee ......................... 42 President, B C Textiles, Inc., an
Director international trading co.
Chang Kyu Park ............................ 59 Pharmacist and Principal of Olympia
Director Pharmacy
Joseph K. Rho ............................. 60 President, Olympic Golf School and Range,
Chairman of the Board golf school and range
Won R. Yoon ............................... 65 Chief Surgeon, Olympic Western Medical
Director Group
Chung Hoon Youk ........................... 52 President and Chief Executive Officer Hanmi
Director Bank
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has two standing committees, the Audit Committee and
the Compensation Committee. All of the members of the Audit and Compensation
Committees are directors independent of management who are not and never have
been officers or employees of the Company.
The Audit Committee recommends to the Board of Directors a firm of
independent certified public accountants to conduct the annual audit of the
Company's books and records. The Audit Committee also reviews with such
accounting firm the scope and results of the annual audit, the performance by
such accountants of professional services in addition to those related to the
annual audit and the adequacy of the Company's internal controls. The members of
the Audit Committee are Stuart S. Ahn, Ki Tae Hong, Joon H. Lee, Richard B.C.
Lee, Chang K. Park, Joseph K. Rho and Won R. Yoon. After the reorganization of
the Company in June 2000, the Audit Committee held 3 meetings in fiscal 2000.
See "Report of the Audit Committee of the Board of Directors."
The Compensation Committee reviews and recommends to the Board of Directors
the levels of compensation for the Company's executive officers and approves and
administrates the Company's incentive compensation programs, including but not
limited to the Company's 2000 Stock Option Plan. The members of the Compensation
Committee are Eung K. Ahn, I Joon Ahn, George S. Chey, Joseph K.Rho, Won R.Yoon,
and Chung H. Youk. After the reorganization of the Company in June 2000, the
Compensation Committee held 1 meeting in fiscal 2000. See "Report of the
Compensation Committee of the Board of Directors on Executive Compensation."
MEETINGS, ATTENDANCE AND FEES
During fiscal 2000, the Board of Directors held 12 meetings. No member of
the Board attended fewer than 75% of the aggregate number of meetings of the
Board of Directors and the Committees on which he served.
Each director who is not an employee of the Company were paid for attendance
at board meetings at the rate of $1,500 for each regular board meeting attended
and $500 for each special meeting and committee meeting attended thereafter up
to a maximum of $2,500 per month. In addition, the Chairman of the Board
received an additional $500 each month.
Directors also participate under the Company's 2000 Stock Option Plan.
Nonemployee directors were granted an aggregate of 250,000 options under the
Plan in 2000 at an average exercise price of $14.25.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation limits the personal liability of a director of the
Company for monetary damages for
5
breach of fiduciary duty of care as a director. Liability is not eliminated for
(a) any breach of the director's duty of loyalty to the Company or its
stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) unlawful payment of
dividends or stock purchases or redemptions pursuant to Section 174 of the
Delaware General Corporation Law, or (d) any transaction from which the director
derived an improper personal benefit.
COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16 OF THE EXCHANGE ACT
Under Section 16(a) of the Exchange Act, the Company's directors, executive
officers and any persons holding ten percent or more of the Company's Common
Stock are required to report their ownership of Common Stock and any changes in
that ownership to the Securities and Exchange Commission (the "SEC") and to
furnish the Company with copies of such report. Specific due dates for these
reports have been established and the Company is required to report in this
Proxy Statement any failure to file on a timely basis by such persons. Based
solely upon a review of copies of reports filed with the SEC during fiscal 2000,
all persons subject to the reporting requirements of Section 16(a) filed all
required reports on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No directors other than those identified above served as members of the
Compensation Committee during the last completed fiscal year. No member of that
Committee was an officer or employee of the Company or any of its subsidiaries
during the year. None of the Named Executive Officers have served on the board
of directors or on the compensation committee of any other entity, any of whose
officers served either on the Board of Directors or on the Compensation
Committee of the Company.
EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company during the
last two fiscal years to the Company's chief executive officer and the Company's
four most highly compensated executive officers ("Named Executive Officers") at
December 31, 2000.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------------- ------------
FISCAL OTHER ANNUAL STOCK
NAME & PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS #
- ------------------------- -------- --------- -------- ------------------ ------------
Chung Hoon Youk............................ 2000 $201,667 $16,667 $ 3,525 --
President and Chief Executive 1999 $120,483 $19,643 $ 2,488 30,000
Officer
Jung Chan Chang............................ 2000 $108,144 $20,312 $10,800 --
Sr. Vice President and Chief 1999 $104,784 $21,521 $10,800 --
Retail Lending Officer
Yong Ku Choe............................... 2000 $112,476 $24,006 $ 855 --
Sr. Vice President and Chief 1999 $110,916 $21,892 $ 1,005 --
Financial Officer
Wun Hwa Choi............................... 2000 $ 92,776 $21,141 $ 8,400 --
Sr. Vice President and Chief 1999 $ 80,766 $ 9,563 $ 8,400 10,000
Commercial Lending Officer
David Kim.................................. 2000 $ 83,464 $19,709 $ 8,400 --
Sr. Vice President and Chief
Credit Administration Officer
- --------------------------
(1) The Company furnishes and plans to continue furnishing to certain officers
the use of company-owned automobiles which are used primarily for the
Company's business purposes. The Company has provided and plans to continue
to provide certain officers with certain specified life and medical
insurance benefits. Since the portions of the automobile expenses, insurance
premiums attributable to personal use, and other perquisites did not exceed
the lower of $50,000 or ten percent (10%) of the total annual salary
reported in the table per individual, such amounts have not been included in
the foregoing figures.
6
EMPLOYMENT AGREEMENTS
Hanmi Bank entered into a three (3) year employment agreement with Chung
Hoon Youk effective November 1, 1999. Under the terms of the agreement,
Mr. Youk serves as President and Chief Executive Officer of Hanmi Bank at a base
annual salary of $200,000. In addition, Mr. Youk receives an annual bonus equal
to four percent (4%) of Hanmi Bank's profit before taxes which profits exceed a
20% return on the beginning primary capital for that year. The total bonus,
however, may not exceed 50% of his annual salary. Mr. Youk also participates in
accident, health and life insurance benefits provided for all employees as well
as an additional term life insurance policy in the amount of $150,000. Either
Mr. Youk or Hanmi Bank may terminate the employment agreement without cause at
any time. If Hanmi Bank terminates the agreement without cause, upon such
termination, Hanmi Bank must pay Mr. Youk his base salary, excluding any
bonuses, for a period of six (6) months or for the remaining duration of the
term of the agreement, whichever is less. Hanmi Bank must also compensate
Mr. Youk for all accrued and unused vacation leave at this then current daily
salary rate. If Mr. Youk terminates the agreement without cause, his base salary
and bonus will immediately terminate on the date the agreement is terminated.
STOCK OPTION PLAN
In 2000, the Company's Board of Directors adopted the Hanmi Financial Year
2000 Stock Option Plan ("2000 Stock Option Plan") which was approved by
stockholders in May 2000. The purpose of the 2000 Stock Option Plan is to enable
the Company to attract, retain and motivate officers, directors, and employees
by providing for or increasing their proprietary interests in the Company and,
in the case of non-employee directors, to attract such directors and further
align their interests with those of the Company's stockholders by providing or
increasing their proprietary interests in the Company.
In 1992, the Board of Directors and stockholders of Hanmi Bank adopted the
Hanmi Bank 1992 Stock Option Plan in 1992 (the "1992 Plan"). Pursuant to the
1992 Plan, officers, directors and employees of Hanmi Bank were eligible to
receive shares of Hanmi Bank common stock upon the exercise of options granted
under the plan. After the reorganization of Hanmi Bank was completed, all
obligations of the Company under the 1992 Plan became obligations of Hanmi
Financial on the same terms and conditions, with the exception that the terms of
options and the common stock issued upon the exercise of the options will be in
accordance with the 2000 Stock Option Plan.
The maximum number of shares of the Company's common stock that may be
issued pursuant to options granted under the 2000 Plan is 977,399 (subject to
adjustment to prevent dilution). As of the date of this proxy statement, 505,411
shares of Hanmi Financial common stock were subject to options under the 2000
Plan.
During the year ended December 31, 2000 no new options were granted to any
of the Named Executive Officers. No options were exercised by any of the Named
Executive Officers during the year ended December 31, 2000.
7
OPTIONS OUTSTANDING AS OF THE END OF THE YEAR
The following table sets forth certain information regarding stock options
held as of December 31, 2000 by each of the Named Executive Officers.
FISCAL YEAR-END OPTION VALUE
---------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 2000(#) DECEMBER 31, 2000($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Chung Hoon Youk................................ 22,200 11,100 $71,262 $35,631
Chung Hoon Youk................................ 9,670 2,417 $48,834 $12,206
Jung Chan Chang................................ 9,670 2,417 $48,834 $12,206
Yong Ku Choe................................... 9,670 2,417 $48,834 $12,206
Wun Hwa Choe................................... 4,440 6,660 $ 7,282 $10,922
Wun Hwa Choe................................... 4,835 1,208 $24,417 $ 6,100
David Kim...................................... 2,686 671 $13,564 $ 6,389
- ------------------------
(1) Calculated by determining the difference between the exercise price of such
option and the fair market value of the Company's common stock at December
31, 2000, multiplied by the total number of shares subject to the option.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the Company's directors and executive officers and their immediate
families, as well as the companies with which they are associated, are customers
of, or have had banking transactions with, Hanmi Bank in the ordinary course of
Hanmi Bank's business, and Hanmi Bank expects to have banking transactions with
such persons in the future. In management's opinion, all loans and commitments
to lend included in such transactions were made in the ordinary course of
business, in compliance with applicable laws on substantially the same terms,
including interest rates and collateral, as those prevailing for comparable
transactions with other persons of similar creditworthiness and, in the opinion
of management, did not involve more than a normal risk of repayment or presented
other unfavorable features. The total amount of indebtedness owed to Hanmi Bank
by the principal officers and current directors of Hanmi Bank (including
associated companies) as of December 31, 2000 was approximately $7 million.
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The report of the Compensation Committee shall not be deemed incorporated by
reference to any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the Exchange
Act, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of outside directors and is responsible for developing and
making recommendations to the Board with respect to the Company's and Hanmi
Bank's executive compensation policies. In addition, the Committee, pursuant to
authority delegated by the Board, determines the compensation to be paid to the
Chief Executive Officer and each of the other executive officers of the Company
and Hanmi Bank. The Committee is also responsible for setting and administering
the policies which govern the Hanmi Financial 2000 Employee Stock Option Plan
("2000 Stock Option Plan").
8
There are two key elements in the Company's and Hanmi Bank's executive
compensation program, all determined by individual and corporate performance:
- Annual base salary;
- Annual bonus program; and
- Long-term incentive compensation.
The Company's executive compensation program is designed to enable it to
attract, retain and motivate the highest quality of management talent available.
Furthermore, the Committee believes that the value of the program should
reflect, in large part, the value created for stockholders. The key objectives
of the program are as follows:
- To offer fair and competitive annual base salaries consistent with
similarly situated companies in the banking industry;
- To reward executives for corporate and individual performance through
annual incentive bonus programs; and
- To encourage future performance through the use of long-term incentives
such as stock options that align the interests of employees and
stockholders.
ANNUAL BASE SALARIES
Annually, the Committee establishes the base salaries to be paid to the
executive officers of the Company and Hanmi Bank during the coming year, subject
to the approval of the Board of Directors. In setting base salaries, the
Committee takes into account several factors including, but not limited to, the
executive's experience, responsibilities, management abilities and job
performance, as well as the performance of the Company as a whole and current
market conditions.
BONUS PROGRAM
The Committee on an annual basis reviews the performance of the executive
officers of the Company and Hanmi Bank to determine whether the performance
should be rewarded with a discretionary cash bonus.
LONG-TERM INCENTIVE COMPENSATION
The Committee believes that employee stock ownership is a significant
incentive in building stockholder wealth and aligning the interests of employees
and stockholders. Stock options will only have value if the Company's stock
price increases. Stock options utilize vesting periods to encourage key
employees to continue in the employ of the Company.
The 2000 Stock Option Plan authorizes the Committee to award stock options
to employees at exercise prices, vesting schedules and on other terms
established by the Committee.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Compensation for the Chief Executive Officer, Mr. Youk, was made in
accordance with a three (3) year employment agreement with Chung Hoon Youk
effective November 1, 1999. Under the agreement Mr. Youk earns a base salary of
$200,000. In addition, Mr. Youk receives an annual bonus equal to four percent
(4%) Hanmi Bank's profit before taxes for profits that exceed a 20% return on
the beginning primary capital for that year. The total bonus may not exceed 50%
of his annual salary. The Chief Executive Officer received stock options as set
forth in the Summary Compensation Table. No new options were granted in 2000 to
Mr. Youk. All of the options granted have an exercise price equal to the fair
market value on the date of grant. The Committee believes the terms of Mr. Youk
9
contract are commensurate with the compensation paid to Chief Executive Officers
of banks of similar size and markets.
POLICY WITH RESPECT TO SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1987, as amended (the
"Code"), generally limits the corporate deduction for compensation paid to
executive officers named in the Proxy Statement to $1,000,000, unless the
compensation qualifies as "performance based" and has been approved in advance
by a vote of its stockholders. Neither the Company nor Hanmi Bank is currently
compensating any named executive officers at levels that would cause this
limitation on corporate tax deductions to apply and has no current plans to do
so. The Compensation Committee has accordingly not adopted a formal policy
concerning the application of the Section 162(m) limitation on tax deductions.
The Compensation Committee will continue to monitor the applicability of
Section 162(m). The Compensation Committee will, if it appears that any named
executive officer will likely be approaching the $1,000,000 compensation
limitation in the near future, review whether such payments should be structured
so as to qualify as deductible performance-based compensation.
Compensation Committee
Eung K. Ahn
I Joon Ahn
George S. Chey
Joseph K. Rho
Won R. Yoon
10
PRICE PERFORMANCE GRAPH
Set forth below is a graph comparing stockholder return on the Company's
common stock valued on the market price of common stock with the cumulative
total returns for companies on an indexed basis of a $100 investment in the
Company's common stock, the Nasdaq Composite-Registered Trademark- (US) Index
and the S & P Financial. Periods prior to June 2000 represent trading in the
common stock of Hanmi Bank prior to the reorganization of the Company into a
bank holding company. The Company's common stock was accepted for listing on
Nasdaq on January 29, 2001.
COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTMENT
AMONG THE COMPANY, NASDAQ COMPOSITE-REGISTERED TRADEMARK- (US) INDEX, AND S & P
FINANCIALS INDEX
COMPARATIVE RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Total Returns
Date
HANMI NASDAQ COMOSITE INDEX S& P FINANCIALS
Jun-96 0 0 0
Jul-96 4.55 -8.8 -2.03
Aug-96 7.58 -3.64 1.27
Sep-96 27.27 3.59 8.18
Oct-96 39.39 3.15 16.27
Nov-96 39.39 9.17 27.45
Dec-96 45.45 9.06 22.84
Jan-97 57.58 16.58 32.99
Feb-97 59.09 10.61 38.2
Mar-97 79.95 3.26 28.4
Apr-97 86.68 6.61 37.63
May-97 108.55 19.49 44.05
Jun-97 135.45 22.08 52.04
Jul-97 132.09 34.97 70.18
Aug-97 132.09 34.45 57.49
Sep-97 142.18 42.82 70.2
Oct-97 169.09 35.06 66.68
Nov-97 153.95 35.7 73.25
Dec-97 142.18 33.22 81.93
Jan-98 148.91 37.41 76.77
Feb-98 145.55 50.28 93.4
Mar-98 200.64 55.89 104.41
Apr-98 202.48 58.72 107.8
May-98 229.97 51.16 102.78
Jun-98 189.64 61.06 111.27
Jul-98 173.14 59.2 111.3
Aug-98 134.65 27.53 62.61
Sep-98 119.98 44.14 65.89
Oct-98 97.97 50.77 85.95
Nov-98 116.32 65.99 98.66
Dec-98 94.32 86.76 102.73
Jan-99 112.65 113.45 106.98
Feb-99 119.98 94.95 109.71
Mar-99 121.82 109.81 117.74
Apr-99 125.87 116.8 132.56
May-99 125.87 110.69 119.64
Jun-99 156.39 129.15 128.73
Jul-99 170.63 125.14 114.54
Aug-99 170.63 133.79 104.67
Sep-99 176.74 134.43 93.87
Oct-99 148.25 153.28 125.82
Nov-99 140.11 184.91 115.05
Dec-99 144.18 247.6 110.8
Jan-00 123.83 236.61 103.97
Feb-00 132.64 301.27 82.13
Mar-00 116.83 290.75 115.58
Apr-00 122.48 229.93 108.94
May-00 146.19 190.69 123.06
Jun-00 147.32 239.05 109.78
Jul-00 148.45 222.06 131.38
Aug-00 155.23 259.67 153.31
Sep-00 150.71 214.11 159.45
Oct-00 162 188.21 158.68
Nov-00 156.36 122.26 143.77
Dec-00 198.14 111.42 165.79
1-Jan 243.32 137.31 165.07
1-Feb 243.32 84.21 147.68
11
INDEPENDENT ACCOUNTANTS
The firm of Deloitte & Touche, LLP ("Deloitte") served as the Company's
independent accountants for the year ended December 31, 2000. This firm has
advised the Company that it has no direct or indirect financial interest in the
Company. Representatives of this firm are expected to be present at the Annual
Meeting of Stockholders, with the opportunity to make a statement should they
desire to do so, and will be available to respond to appropriate questions from
stockholders.
AUDIT FEES
The aggregate fees billed by Deloitte for professional services rendered for
the audit of the Company's annual financial statements for the fiscal year ended
December 31, 2000 and for the reviews of the financial statements included in
the Company's Quarterly Reports on Form 10-Q for that fiscal year were $94,055.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by Deloitte for professional services rendered for
information technology services relating to financial information systems design
and implementation for the fiscal year ended December 31, 2000.
ALL OTHER FEES
The aggregate fees billed by Deloitte for services rendered to the Company,
other than the services described above under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees", for the fiscal year ended
December 31, 2000 were $115,209, which includes fees related to the preparation
of the Company's Registration Statement on Form S-4 filed with Securities and
Exchange Commission for the Company's reorganization. The Audit Committee has
considered whether the provision of non-audit services is compatible with
maintaining the principal accountant's independence.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors maintains an Audit Committee comprised of seven of
the Company's outside directors. The Board of Directors and the Audit Committee
believe that the Audit committee's current member composition satisfies the rule
of the National Association of Securities Dealers, Inc. ("NASD") that governs
audit committee composition, including the requirement that audit committee
members all be "independent directors" as that term is defined by NASD
Rule 4200(a)(15).
The Audit Committee oversees the Company's financial process on behalf of
the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements. The Board of Directors has adopted a
written Charter of the Audit Committee, a copy of which is attached as an
Appendix A hereto.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the committee under generally accepted auditing standards, including
Statement on Auditing Standards No. 61. In addition, the Audit Committee has
discussed with the independent auditors the auditors' independence from
management
12
and the Company including the matters in the written disclosures and the letter
from the independent auditors required by the Independence Standards Board,
Standard No. 1.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examination, their evaluation of the Company's internal
controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 for filing with the
Securities and Exchange Commission.
The Audit Committee
Stuart S. Ahn
Ki Tae Hong
Joon H. Lee
Richard B.C. Lee
Chang K. Park
Joseph K. Rho
Won R. Yoon
13
OTHER MATTERS
The Board of Directors knows of no business other than that described herein
that will be presented for consideration at the Annual Meeting of Stockholders.
If, however, other business shall properly come before the meeting, the persons
named in the enclosed form of proxy intend to vote the shares represented by
said proxies on such matters in accordance with their judgment in the best
interests of the Company.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Any stockholder proposal intended to be included in the Company's Proxy
Statement for the 2002 Annual Meeting of Stockholders must be received by the
Company for inclusion in the Proxy Statement and form of proxy for that meeting
no later than November 26, 2001. Under the Company's Bylaws any other
stockholder proposal to be presented at the Annual Meeting must be submitted in
writing to the Company's secretary at the Company's principal offices no later
than February 17, 2002 and no earlier than January 18, 2002.
AVAILABILITY OF FORM 10-K
THE COMPANY WILL PROVIDE TO ANY STOCKHOLDER WITHOUT CHARGE, UPON THE WRITTEN
REQUEST OF THAT STOCKHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE ADDRESSED TO: YONG KU CHOE, CHIEF
FINANCIAL OFFICER AT HANMI FINANCIAL CORPORATION, 3660 WILSHIRE BOULEVARD, SUITE
PH-A, LOS ANGELES, CA 90010.
By Order of the Board of Directors
/s/ Chung Hoon Youk
Chung Hoon Youk
President and Chief Executive Officer
14
"APPENDIX A"
AUDIT COMMITTEE CHARTER
OBJECTIVE
The Audit Committee assists the Board in fulfilling its responsibilities for
oversight of the quality and integrity of the accounting, auditing, internal
control and financial reporting practices of the Company. It may also have such
other duties as may from time to time be assigned to it by the Board.
COMMITTEE DUTIES AND RESPONSIBILITIES
The general recurring duties of the Committee in carrying out its oversight
role are described below. The Committee shall be responsible for:
a) Recommending to the Board the independent auditors to be retained or
nominated for approval to audit the financial statements of the Company.
Such auditors are ultimately accountable to the Board and the Committee,
as representatives of the shareholders.
b) Evaluating, together with the Board and management, the performance of
the independent auditors and, where appropriate, replacing such auditors.
c) Obtaining annually from the independent auditors a formal written
statement describing all relationships between the auditors and the
Company, consistent with Independence Standards Board Standard Number 1.
The Committee shall actively engage in a dialogue with the independent
auditors with respect to any relationships that may impact the
objectivity and independence of the auditors and shall take, or recommend
that the Board take, appropriate actions to oversee and satisfy itself as
to the auditors' independence.
d) Reviewing the audited financial statements and discussing them with
management and the independent auditors. These discussions shall include
the matter required to be discussed under Statement of Auditing Standards
No. 61 and consideration of the quality of the Company's accounting
principles as applied in its financial reporting, including a review of
particularly sensitive accounting estimates, reserves and accruals,
judgmental areas, audit adjustments (whether or not recorded), and other
such inquiries as the Committee or the independent auditors shall deem
appropriate. Based on such review, the Committee shall make its
recommendation to the Board as to the inclusion of the Company's audited
financial statements in the Company's Annual report on Form 10-K (or the
Annual Report to Shareholders, if distributed prior to the filing of the
Form 10-K).
e) Reviewing the annual management letter with the independent auditors.
f) Reviewing and approving audit fees.
g) Issuing annually a report to be included in the Company's proxy
statement as required by the rules of the Securities and Exchange
Commission stating the Committee has reviewed and discussed financial
statements with management and the independent auditor.
h) Overseeing the relationship with the independent auditors, including
discussing with the auditors the nature and the rigor of the audit
process, receiving and reviewing audit reports, and providing the
auditors full access to the Committee (and the Board) to report on any
and all appropriate matters.
i) Discussing with a representative of management and the independent
auditors: (1) the interim financial information contained in the
Company's Quarterly Report on Form 10-Q prior to its filing, (2) the
earnings announcement prior to its release (if practicable), (3) the
results of the review of such information by the independent auditors.
(These discussions may be held with the Committee as a whole or with the
Committee chair in person or by telephone.)
A-1
j) Overseeing internal audit activities, including discussing with
management and the internal auditors the internal audit function's
organization, objectivity, responsibilities, plans, results, budgets and
staffing.
k) Reviewing the internal audit charter.
l) Discussing with management, the internal auditors and independent
auditors the quality and the adequacy of and compliance with the
Company's internal controls.
m) Discussing with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a
material impact on the Company's financial statements and any material
reports or inquiries from regulatory or governmental agencies.
The Committee's job is one of oversight. Management is responsible for the
preparation of the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and the
Board recognize that management (including the internal audit staff) and the
independent auditors have more resources and time, and more detailed knowledge
and information regarding the Company's accounting, auditing, internal control
and financial reporting practices than the Committee does; accordingly the
Committee's oversight role does not provide any expert or special assurance as
to the financial statements and other financial information provided by the
Company to its shareholders and others.
COMMITTEE MEMBERSHIP
(1) The membership of the Committee shall consist of at least three
directors, who are each free of any relationship that, in the opinion of
the Board, may interfere with such member's individual exercise of
independent judgment.
(2) Each Committee member shall also meet the independence and financial
literacy requirements for servicing on audit committees, and at least one
member shall have accounting or related financial management expertise,
all set forth in the applicable rules of the governing agent.
(3) The Committee shall maintain free and open communication with
independent auditors, the internal auditors, and Company management.
(4) In discharging its oversight role, the Committee is empowered to
investigate any matter relating to the Company's accounting, auditing,
internal control or financial reporting practices brought to its
attention, with full access to all Company books, records, facilities and
personnel.
(5) The Committee may retain outside counsel, auditors or other advisors.
One of the members of the Committee shall be appointed as chair. The chair
shall be responsible for leadership of the Committee, including scheduling and
presiding over meetings, preparing agendas, and making regular reports to the
Board. The chair will also maintain regular liaison with the CEO, CFO, the lead
independent audit partner and the internal audit manager.
(1) The Committee shall meet at least quarterly, or more frequently as the
Committee considers necessary.
(2) At least once each year the Committee shall have a private meeting with
the independent auditors, management and the internal auditors.
A-2
HANMI FINANCIAL CORPORATION
PROXY
Solicited on behalf of the Board of Directors of Hanmi Financial Corporation
(the "Company") for use at the Annual Meeting of Stockholders (the "Meeting") to
be held on April 18, 2001, at 10:30 A.M. at 333 Universal Terrace Parkway,
Universal City, California.
The undersigned hereby appoints David Kim and Richard B.C. Lee, or either
one of them, as Proxies, with the full power of substitution, to vote all shares
of Common Stock of the company held of record by the undersigned on March 1,
2001 at the Meeting or at any adjournments thereof, on the items set forth below
and in their discretion upon such other business as may properly come before the
Meeting.
The Board of Directors recommends a vote in favor of the nominees listed in
Item 1.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / TO VOTE FOR ALL NOMINEES LISTED BELOW / /
George S. Chey, Ki Tae Hong, Chung Hoon Youk
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
- --------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(CONTINUED ON REVERSE SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED IN ITEM 1. ALL PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED ARE HEREBY REVOKED. RECEIPT OF THE PROXY STATEMENT DATED MARCH 26,
2001 IS ACKNOWLEDGED.
Please mark, sign, date and return this Proxy in the accompanying prepaid
envelope.
Dated ______________________, 2001
__________________________________
__________________________________
Signature of Shareholder
(Please sign exactly as name
appears hereon. If signing as an
attorney, executor, administrator,
trustee or guardian, please give
full title as such, and if signing
for a corporation, give your
title. When shares are in the
names of more than one person,
each should sign.)