Business Context and Reporting Period
This Form 8-K was filed by Nara Bancorp, Inc. (referred to as the Company) on February 27, 2008. The report details the Board of Directors' approval of Long Term Incentive Plans for six named executive officers, effective January 1, 2008. The Company is incorporated in Delaware and maintains its principal executive offices in Los Angeles, California.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes
The primary material change reported is the establishment of deferred compensation accounts for six executives. These plans are designed to incentivize long-term retention and are contingent upon meeting specific annual performance criteria.
Guidance, Outlook, and Management Commentary
Management commentary indicates the plans are intended to reward a select group of management contributing to the Bank's growth and future success. The filing outlines specific terms for the deferred compensation accounts:
- Interest Rate: All accounts accrue interest at an annual rate of 6.25%.
- Min Kim (CEO) and Bonita Lee (CCO): Up to $40,000 per year for 10 years; payout begins at age 65.
- Alvin D. Kang (CFO): Up to $40,000 per year for 5 years; payout begins January 1, 2013.
- Kyu S. Kim (Regional Manager), Myung Hee Hyun (COO), and Jasna Penich (CRO): Up to $30,000 per year for 10 years; payout begins at age 65.
Vesting Schedule:
- Standard Executives (Kim, Lee, Kim, Hyun, Penich): Five-year cliff vesting of 50% of total potential contributions plus interest, followed by 10% vesting annually in years six through ten.
- CFO (Kang): Three-year cliff vesting of 50% of total potential contributions plus interest, followed by 25% vesting in years four and five.
Change in Control: The plans allow for immediate vesting of contributions (vested or unvested) upon a change in control combined with a separation from service for "good reason" within twelve months.
Investor Verification Checklist
- Verify the specific performance criteria required for executives to receive the full annual contribution amounts.
- Confirm the total potential liability to the Company based on the maximum contribution limits and the 6.25% interest accrual over the plan terms.
- Review the definition of "good reason" for separation from service to understand the triggers for accelerated vesting.
- Check subsequent filings for any amendments to these plans or changes in executive tenure.