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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
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 240.14a-11(c) or 240.14a-12
NARA BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] 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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(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
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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.
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NARA BANCORP, INC.
3701 WILSHIRE BOULEVARD
SUITE 220
LOS ANGELES, CA 90010
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 16, 2001
TO OUR SHAREHOLDERS
We are pleased to announce that we will hold our first annual meeting
of shareholders on Wednesday, May 16, 2001, at the Oxford Palace Hotel, 745
South Oxford Avenue, Los Angeles, California at 10:30 a.m. At this meeting, we
will ask you to vote on the following matters:
1. ELECTION OF DIRECTORS. You will have the opportunity to elect six
members of the board of directors to serve until our next annual meeting. The
following six persons are our nominees for election:
Thomas Chung
Benjamin B. Hong
Steve Y. Kim
Nack Kim
Ki Suh Park
Jesun Paik
Messrs. Chung and Hong have served as directors of our subsidiary, Nara
Bank, N.A., for many years and they currently serve as directors for Nara
Bancorp as well. We are pleased to nominate them for reelection. In addition, we
have selected Messrs. Steve Y. Kim, Nack Kim, Ki Suh Park and Jesun Paik as new
nominees for our board of directors. We encourage you to read about their
business experience in the accompanying proxy statement.
2. APPOINTMENT OF AUDITORS. You will be asked to ratify the selection
of Deloitte & Touche LLP as our independent auditors for the year ending
December 31, 2001.
3. OTHER BUSINESS. If other business is properly raised at the meeting
or if we need to adjourn the meeting, you will vote on these matters, too.
Our bylaws provide for the nomination of directors in the following
manner:
"Nominations for election to the Board of Directors may be made by the
Board of Directors or by any stockholder of any outstanding class of capital
stock of the Corporation entitled to vote for the election of directors.
Nominations, other than those made by or on behalf of the existing management of
the Corporation, shall be made in writing and be delivered or mailed to the
president of the Corporation not less than 14 days nor more than 50 days prior
to any meeting of stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given to
stockholders, such nominations shall be mailed or
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delivered to the president of the Corporation not later than the close of
business on the seventh day following the day on which the notice of meeting was
mailed. Such notification shall contain the following information to the extent
known to the notifying stockholder:
(a) The name and address of each proposed nominee.
(b) The principal occupation of each proposed nominee.
(c) The total number of shares of capital stock of the
Corporation owned by each proposed nominee.
(d) The name and address of the notifying stockholder.
(e) The number of shares of capital stock of the Corporation
owned by the notifying stockholder.
Nominations not made in accordance herewith may be disregarded by the
chairman of the meeting, and upon his instructions, all votes cast for each such
nominee may be disregarded."
If you were a shareholder as of the close of business on April 24,
2001, you are entitled to vote at this meeting. We cordially invite all
shareholders to attend the meeting in person. To assure your representation at
the meeting, however, you are urged to mark, sign, date and return the enclosed
proxy card as soon as possible in the enclosed postage-prepaid envelope.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY MAIL YOUR PROXY IN THE ENVELOPE PROVIDED. YOU
MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING, AND, IF YOU
ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ BON T. GOO
---------------------------------------
Bon T. Goo, Secretary
Dated: April 30, 2001
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TABLE OF CONTENTS
PAGE
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GENERAL INFORMATION 1
Why Did You Send Me This Proxy Statement? 1
What Vote Is Required For Each Proposal? 1
How Many Votes Do I Have? 2
How Do I Vote By Proxy? 2
Can I Change My Vote After I Return My Proxy Card? 2
How Do I Vote In Person? 2
What Vote Is Required for Each Proposal? 3
What Constitutes A Quorum? 3
What Are the Recommendations of the Board of Directors? 3
How Will Nara Bancorp, Inc. Executive Officers and Directors Vote? 3
What Are the Costs of Solicitation of Proxies? 3
Will There Be Any Other Matters Considered at the Annual Meeting? 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 5
Who Are the Largest Owners of Nara Bancorp, Inc.'s Common Stock? 5
How Much Stock Do Nara Bancorp, Inc. Directors, Nominees for Directors and
Executive Officers Own? 5
Did Directors and Officers Comply with Their Section 16(a) Beneficial Ownership
Reporting Compliance Requirements in 2000? 6
What Is the Background of Our Executives Who Are Not Directors? 7
What Are the Responsibilities of Our Board of Directors and Committees? 7
The Audit Committee 8
EXECUTIVE AND DIRECTOR COMPENSATION 9
How Do We Compensate Directors? 9
How Do We Compensate Executive Officers? 10
Stock Options 10
Employment Agreement with Our President and Chief Executive Officer 11
Personnel Committee Interlocks and Insider Participation 11
Personnel Committee Report 12
What Is Our Philosophy on Executive Compensation? 12
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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Is The Compensation We Pay Our Executives Deductible? 13
How Do We Compensate Our President and Chief Executive Officer? 13
Performance Graph 14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 15
PROPOSAL NO. 1 ELECTION OF DIRECTORS OF NARA BANCORP, INC. 15
Nominations 15
PROPOSAL NO. 2 RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS 17
General 17
Fees 17
PROPOSALS OF SHAREHOLDERS 18
2000 ANNUAL REPORT TO SHAREHOLDERS 18
ANNUAL REPORT ON FORM 10-K 19
OTHER MATTERS 19
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NARA BANCORP, INC.
3701 Wilshire Boulevard
Suite 220
Los Angeles, CA 90010
PROXY STATEMENT
For the
Annual Meeting of Shareholders
To be held on May 16, 2001
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GENERAL INFORMATION
In February of 2001, we became a registered bank holding company, with
Nara Bank, N.A. as our wholly owned subsidiary. This proxy statement contains
information about our first annual meeting of shareholders to be held on
Wednesday, May 16, 2001 at the Oxford Palace Hotel, 745 South Oxford Avenue, Los
Angeles, California at 10:30 a.m. and at any postponements or adjournments
thereof. The date of this Proxy Statement is April 30, 2001 and it is first
being mailed to shareholders on or about the same date.
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this proxy statement and the enclosed proxy card because
the board of directors is soliciting your votes for use at the 2001 annual
meeting of shareholders.
This proxy statement summarizes the information you need to know to
cast an informed vote at the meeting. However, you do not need to attend the
meeting to vote your shares. Instead, you may simply complete, sign and return
the enclosed proxy card.
We will begin sending this proxy statement, notice of annual meeting
and the enclosed proxy card on or about April 30, 2001 to all shareholders
entitled to vote. The record date for those entitled to vote is April 24, 2001.
On that date, there were 5,485,017 shares of our common stock outstanding. The
common stock is our only class of stock outstanding. We are also sending our
annual report for the fiscal year ended December 31, 2000 along with this proxy
statement.
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL?
o Election of Directors. The six nominees for director who
receive the most votes will be elected. So, if you do not vote
for a particular nominee or you indicate "withhold authority
to vote" for a particular nominee on your proxy card, your
abstention will have no effect on the election of directors.
o Ratification of Auditors. Shareholder ratification of the
selection of Deloitte & Touche as our independent auditors is
not required. However, we are submitting the selection of
Deloitte & Touche to you for ratification as a matter of good
corporate practice. Ratification requires the affirmative vote
of a majority of the shares present at the meeting. If you
fail to ratify the selection by a majority vote
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of the present and voting shares, we will reconsider whether
to retain Deloitte & Touche. Even if the selection is
ratified, we may, in our discretion, direct the appointment of
different independent auditors at any time during the year if
we determine that such a change would best benefit our company
and our shareholders.
HOW MANY VOTES DO I HAVE?
Each share of common stock that you own entitles you to one vote. The
proxy card indicates the number of shares of common stock that you own. Our
Certificate of Incorporation and bylaws do not provide for cumulative voting.
HOW DO I VOTE BY PROXY?
Whether you plan to attend the meeting or not, we urge you to complete,
sign and date the enclosed proxy card and to return it promptly in the envelope
provided. Returning the proxy card will not affect your right to attend the
meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended by the board
of directors as follows:
o "FOR" the election of each of the six nominees for director;
o "FOR" the appointment of Deloitte & Touche as our independent
auditors; and
o in the discretion of the proxy holder as to any other matter that
may properly come before the meeting.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at any
time before the proxy is exercised if:
o you file either a written revocation of your proxy, or a duly
executed proxy bearing a later date, with our Corporate Secretary
prior to the meeting, or
o you attend the meeting and vote in person. However, your presence
at the meeting will not revoke your proxy unless and until you
vote in person.
If your shares are held in the name of your broker, bank or other
nominee, and you wish to vote in person, you must bring a properly executed
legal proxy from your nominee so that you can vote your shares.
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HOW DO I VOTE IN PERSON?
If you plan to attend the meeting and vote in person, we will give you
a ballot form when you arrive. However, if your shares are held in the name of
your broker, bank or other nominee, you must bring a properly executed legal
proxy from the nominee authorizing you to vote the shares and indicating that
you are the beneficial owner of the shares on April 24, 2001, the record date
for voting.
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL?
The six nominees for director who receive the most votes will be
elected. So, if you do not vote for a particular nominee or you indicate
"withhold authority" for a particular nominee on your proxy card, your vote will
not count either "for" or "against" that particular nominee. In order to ratify
the election of auditors, the auditors must receive the affirmative vote of a
majority of the shares represented and voting at the meeting. So if you
"abstain" from voting, it has the same effect as if you voted "against" this
proposal.
WHAT CONSTITUTES A QUORUM?
To establish a quorum at the annual meeting, a majority of the shares
of our common stock outstanding on the record date must be present either in
person or by proxy. We will count abstentions for purposes of establishing the
presence of a quorum at the meeting.
WHAT ARE THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS?
Our current board of directors has unanimously approved the following
items:
o the election of each of the named nominees for director;
o the appointment of Deloitte & Touche as our independent auditors.
The board of directors recommends that you vote FOR each of the six
nominees for director, and FOR the ratification of Deloitte & Touche as our
independent auditors for the year ending December 31, 2001.
HOW WILL NARA BANCORP, INC. EXECUTIVE OFFICERS AND DIRECTORS VOTE?
On the record date of April 24, 2001, our executive officers, directors
and nominees for directors, including their affiliates, had voting power with
respect to an aggregate of 1,104,106 shares of our common stock or approximately
19% of the shares of our common stock outstanding on that date. We currently
expect that such directors, nominees and officers will vote all of their shares
in favor of each of the nominees for director and in favor of each of the other
proposals.
WHAT ARE THE COSTS OF SOLICITATION OF PROXIES?
We will bear the cost of this solicitation, including the expense of
preparing, assembling, printing and mailing this proxy statement and the
material used in this solicitation of proxies.
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The proxies will be solicited principally through the mails, but our directors,
officers and regular employees may solicit proxies personally or by telephone.
Although there is no formal agreement to do so, we may reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expense in forwarding these proxy materials to their principals. In
addition, we may pay for and utilize the services of individuals or companies we
do not regularly employ in connection with the solicitation of proxies.
WILL THERE BE ANY OTHER MATTERS CONSIDERED AT THE ANNUAL MEETING?
We are unaware of any matter to be presented at the annual meeting
other than the proposals discussed in this proxy statement. If other matters are
properly presented at the annual meeting, then the persons named in the proxy
will have authority to vote all properly executed proxies in accordance with
their judgment on any such matter, including any proposal to adjourn or postpone
the meeting.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
WHO ARE THE LARGEST OWNERS OF NARA BANCORP, INC.'S COMMON STOCK?
The following table shows the beneficial ownership of our common stock
as of April 24, 2001, by each person who we knew owned more than 5% of our
common stock. "Beneficial ownership" is a technical term broadly defined by the
Securities and Exchange Commission to mean more than ownership in the usual
sense. So, for example, you beneficially own our common stock not only if you
hold it directly, but also indirectly, if you, through a relationship, contract
or understanding, have, or share, the power to vote the stock, to sell the stock
or have the right to acquire the stock, within 60 days of April 24, 2001. We
have relied on the public filings of each of the individuals on Schedules 13-D
or 13-G, in determining how many shares these individuals own:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
------------------------------------------------------- ---------------- ----------------
John Barry, 2104 Hastings Ave., Newport, MN 55055 349,920 6.4%
Chong-Moon Lee, 1245 Oakmead Pkwy., Sunnyvale, 471,876 8.7%
CA 94086
First Wilshire Securities Management, Inc. 600 S. 357,475 6.5%
Lake St., Suite 100 Pasadena, CA 91106-3955
Thomas Chung, 5525 Wilshire Blvd., Los Angeles, CA
90036 399,591(1) 7.3%
(1) Includes 12,500 shares of common stock issuable upon exercise of fully
vest warrants.
HOW MUCH STOCK DO NARA BANCORP, INC. DIRECTORS, NOMINEES FOR DIRECTORS AND
EXECUTIVE OFFICERS OWN?
The following table shows the beneficial ownership of our common stock
as of April 24, 2001 by (i) our chief executive officer; (ii) the most highly
compensated executive officers of our wholly owned subsidiary, Nara Bank, N.A.,
in 2000; (iii) each director and nominee for director and (iv) all directors,
nominees and executive officers as a group.
NAME AND POSITIONS HELD NUMBER OF SHARES PERCENT OF CLASS
------------------------------------------ ----------------- ------------------
Benjamin B. Hong(1) 198,841(2) 3.5%
President, CEO & Director of Nara
Bank and Nara Bancorp
Bon T. Goo(1) 33,571(3) *
Executive Vice President &
Chief Financial Officer of Nara Bank
and Nara Bancorp
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NAME AND POSITIONS HELD NUMBER OF SHARES PERCENT OF CLASS
------------------------------------------ ----------------- ------------------
Min J. Kim(1) 20,154(4) *
Executive Vice President &
Chief Credit Officer of Nara Bank
Thomas Chung (1) 399,591(5)(6) 7.3%
Chairman of Board
Chang H. Kim, Director(1) 108,032(5)(7) 1.9%
Yong H. Kim, Director(1) 190,039(5) 3.4%
Hyon M. Park, Director(1) 85,411(5)(8) 1.5%
Brian B. Woo, Director(1) 68,467(5)(9) *
Steve Y. Kim, Nominee(10) - *
Nack Kim, Nominee(11) - *
Ki Suh Park, Nominee (12) - *
Jesun Paik, Nominee (13) - *
ALL DIRECTORS, NOMINEES AND OFFICERS
AS A GROUP (12 TOTAL) 1,104,106(14) 19.0%
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* Indicates holdings of less than 1%.
(1) The address for each of these individuals is c/o Nara Bancorp, Inc., 3701
Wilshire Boulevard, Suite 220, Los Angeles, California 90010.
(2) Includes 130,032 shares vested but not exercised under the Nara Bancorp,
Inc. 2001 Nara Bank Continuation 1989 Stock Option Plan (the "1989
Plan").
(3) Includes 24,317 shares vested but not exercised under the 1989 Plan,
1,167 shares held by Mr. Goo's spouse, 1,800 shares held by Mr. Goo's son
and 450 shares of common stock issuable upon exercise of fully vest
warrants held by Mr. Goo's son.
(4) Includes 18,490 shares vested but not exercised under the 1989 Plan.
(5) Includes 34,992 shares vested but not exercised under the 1989 Plan.
(6) Includes 12,500 shares of common stock issuable upon exercise of fully
vest warrants.
(7) Includes 1,634 shares held by Mr. Kim's minor children.
(8) Includes 3,024 shares held by Mr. Parks' spouse.
(9) Includes 233 shares held by Mr. Woo's spouse.
(10) Steve Y. Kim address is 2029 Century Park East, 21st Floor, Los Angeles,
California 90067.
(11) Nack Kim's address is Dong-A Media Center 18F, 139 Sejong-Ro, Chongro-Ku,
Seoul, Korea.
(12) Mr. Park's address is 6330 San Vicente Blvd., Los Angeles, California
90048.
(13) Mr. Paik's address is 1 Milbank Ave., 3F, Greenwich, Connecticut 06830.
(14) Includes 312,807 shares vested but not exercised under the 1989 Plan and
12,950 shares of common stock issuable upon exercise of fully vest
warrants.
DID DIRECTORS AND OFFICERS COMPLY WITH THEIR SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE REQUIREMENTS IN 2000?
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our equity securities, to file
reports of ownership and reports of changes in ownership of common stock with
the Securities and Exchange Commission. Prior
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to the completion of our reorganization in February of 2001, these reports were
filed with the Office of the Comptroller of the Currency. The Exchange Act
requires officers, directors and greater than 10% shareholders to furnish us
with copies of all Section 16(a) forms they file.
To our best knowledge, based solely on a review of the copies of such
forms and certifications furnished to us, we believe that all of our directors
and executive officers, except Min J. Kim and Bon T. Goo, complied with all
Section 16(a) filing requirements applicable to them during the 2000 fiscal
year. Ms. Kim, an executive officer of Nara Bank, failed to file on a timely
basis one report on Form 4 required by Section 16(a) regarding one transaction.
Ms. Kim filed the report on a Form 5 on February 8, 2001. Mr. Goo, an executive
officer of Nara Bank and Nara Bancorp, failed to file on a timely basis one
report on Form 4 required by Section 16(a) regarding one transaction. Mr. Goo
filed the report on Form 4 on September 21, 2000.
WHAT IS THE BACKGROUND OF OUR EXECUTIVES WHO ARE NOT DIRECTORS?
BON T. GOO. From 1988 to 1990 and prior to joining Nara Bank in 1990,
Mr. Goo served as Vice President and Manager of the Accounting, Investment, and
Control Division of Hanmi Bank. Mr. Goo served as a Senior Vice President of
Nara Bank from 1990 to 2000. He has served in his current capacity as Executive
Vice President and Chief Financial Officer of Nara Bank since January of 2000
and has served in the same capacities for Nara Bancorp since November of 2000.
MIN J. KIM. From 1992-1995 and prior to joining the Nara Bank in 1995,
Ms. Kim served as Vice President and Manager of the Western Branch of Hanmi Bank
in Los Angeles. She had previously served in other positions with Hanmi Bank.
Ms. Kim served Nara Bank as a Senior Vice President and its Chief Credit
Administrator from 1996 to 1999. She has served in her current capacities as
Executive Vice President and Chief Credit Officer of Nara Bank since January of
2000 and has served in the same capacities for Nara Bancorp since November of
2000.
WHAT ARE THE RESPONSIBILITIES OF OUR BOARD OF DIRECTORS AND COMMITTEES?
The board of directors oversees our business and affairs. The board of
directors of Nara Bancorp has two committees, both of which also are committees
of Nara Bank's board of directors. These two committees are outlined below. Nara
Bank has an additional two committees, which also are outlined below. Neither
Nara Bancorp nor Nara Bank has a nominating committee. The procedures for
nominating directors, other than by the board of directors itself, are set forth
in the bylaws and in the Notice of Annual Meeting of Shareholders accompanying
this proxy statement.
During 2000, the board of directors of Nara Bancorp held two (2)
special meetings and no regular meetings, and the board of directors of Nara
Bank held twelve (12) regular meetings and six (6) special meetings. All of the
directors of Nara Bancorp and Nara Bank during 2000 attended at least 75% of the
aggregate of (i) the total number of Nara Bancorp and Nara Bank board meetings
and (ii) the total number of meetings held by all committees of the boards of
directors of Nara Bancorp and Nara Bank on which they served during 2000.
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The information presented below is for the committees of Nara Bank
because Nara Bancorp did not commence operations as a stand-alone company until
February 2, 2001.
THE AUDIT COMMITTEE: The audit committee, which consists of Director
Thomas Chung as Chairman, and all other directors except Benjamin B. Hong,
operates under a written charter adopted by the board of directors. The Audit
Committee Charter adopted by the board sets out the responsibilities, authority
and specific duties of the audit committee. A copy of the Audit Committee
Charter is attached to this Proxy Statement as Appendix A. Each of the members
is "independent," as defined by our policy and the National Association of
Securities Dealers, Inc. listing standards. The audit committee of Nara Bank met
two (2) times during the year ended December 31, 2000. Presented below is the
report of Nara Bank's audit committee.
Audit Committee Report
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other filings by Nara Bancorp under the Securities Act of 1933 or under
the Securities Act of 1934, except to the extent we specifically incorporate
this Report by reference.
The audit committee reports to the board and is responsible for
overseeing and monitoring financial accounting and reporting, the system of
internal controls established by management and our audit process.
Pursuant to the charter, the audit committee has the following
responsibilities:
o To monitor the preparation of quarterly and annual financial
reports;
o To review the adequacy of internal control systems and financial
reporting procedures with management and independent auditors; and
o To review the general scope of the annual audit and the fees
charged by the independent auditors.
In discharging its oversight responsibility, the audit committee has
met and held discussions with management and Deloitte & Touche LLP, the
independent auditors for Nara Bank. Management of Nara Bank represented to the
audit committee that all financial statements were prepared in accordance with
generally accepted accounting principles, and the audit committee has reviewed
and discussed the financial statements with management and the independent
auditors. Nara Bank's audit committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees).
Nara Bank's audit committee also obtained from the independent auditors
a formal written statement describing all relationships between the Bank and the
auditors that bear on the auditors' independence consistent with Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committee.
Nara Bank's audit committee discussed with the independent auditors any
relationships that may impact on Deloitte & Touche's objectivity and
independence and satisfied itself as to the auditors' independence.
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Based on these discussions and reviews, Nara Bank's audit committee
recommended that the Bank's Board of Directors approve the inclusion of the
Bank's audited financial statements in Nara Bancorp's Annual Report on Form 10-K
for the year ended December 31, 2000, for filing with the Securities and
Exchange Commission.
Respectfully submitted by the members of the Audit Committee of the Board of
Directors:
April 20, 2001
THOMAS CHUNG
CHANG H. KIM
HYON M. PARK
BRIAN B. WOO
THE LOAN COMMITTEE: Nara Bank's loan committee, which consists of
Director Hyon M. Park as Chairman, all other directors of Nara Bank and the
Chief Credit Administrator, establishes the loan policy, reviews loans made by
management and approves loans in excess of management's lending authority. The
loan committee met twenty-four (24) times during 2000.
THE INVESTMENT COMMITTEE: Nara Bank's investment committee, which
consists of Director Hyon Park as Chairman, all other directors of Nara Bank and
the Chief Financial Officer, establishes investment policy and guidelines, and
reviews Nara Bank's current investment portfolio and quarterly plan. The
investment committee met three (3) times during 2000.
THE PERSONNEL COMMITTEE: Nara Bank's personnel committee, which
consists of Director Yong H. Kim as Chairman and all other directors of Nara
Bank, met once during 2000. This committee reviews the performance of senior
management and establishes salary and benefit guidelines for Nara Bank's
personnel.
EXECUTIVE AND DIRECTOR COMPENSATION
HOW DO WE COMPENSATE DIRECTORS?
During the fiscal year 2000, the outside non-employee directors of Nara
Bank were paid $3,000 monthly if they attended at least one meeting during a
month regardless of the number of meetings held during a month. The only
employee director on the board (the President) received $1,000 monthly for his
service as a director in addition to his regular salary and bonuses. The
Chairman of the Board received an additional $400 per month for services
rendered. Total directors' fees paid in 2000 were approximately $224,000, of
which approximately $107,000 was deferred under Nara Bank's deferred
compensation plan.
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HOW DO WE COMPENSATE EXECUTIVE OFFICERS?
Nara Bancorp does not compensate any of its executive officers at this
time. However, the following table sets forth certain summary information
concerning compensation awarded to, earned by, or paid by Nara Bank for services
rendered to the Bank in all capacities by Nara Bank's chief executive officer
and the two other most highly compensated executive officers of Nara Bank who
earned in excess of $100,000 (the "Named Officers"), for each of the fiscal
years ended December 31, 2000, 1999 and 1998.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)
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NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER
- ------------------------------------- ------------- ---------------- ------------------- --------------------
Benjamin Hong 2000 $184,074 $449,819 $12,000(2)
President & Chief Executive 1999 $184,074 $384,017 $12,000(2)
Officer of Nara Bank 1998 $179,691 $310,232 $12,000(2)
Bon T. Goo 2000 $103,595 $ 80,069 N/A
Executive Vice President & Chief 1999 $ 86,730 $ 43,648 N/A
Financial Officer of Nara Bank 1998 $ 81,945 $ 53,442 N/A
Min J. Kim 2000 $ 95,127 $ 79,609 N/A
Executive Vice President & Chief 1999 $ 84,632 $ 53,482 $ 8,400(3)
Credit Officer of Nara Bank 1998 $ 75,735 $ 73,165 $ 8,400(3)
- ------------------------------------------------------------------------------------------------------------------
(1) We furnish and plan to continue to furnish to certain officers the use of
company-owned automobiles, which are used primarily for business purposes.
We have provided and intend to continue to provide certain officers with
certain specified life and medical insurance benefits. Because portions of
automobile expenses, club membership fees, insurance premiums attributable
to personal use, and other perquisites did not exceed the lesser 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.
(2) Represents fees received for services as a director of Nara Bank.
(3) Represents automobile allowance.
STOCK OPTIONS
Nara Bank did not grant any stock options or stock appreciation rights
to any executive officers or directors in 2000.
The following table sets forth the number of shares acquired by each
Named Officer upon the exercise of stock options during 2000 and the number of
shares covered by both exercisable and unexercisable stock options held by each
Named Officer at December 31, 2000. Also reported are values of "in-the-money"
options, which represent the positive spread between the respective exercise
prices of outstanding stock options and $20 per share, which was the market
price of Nara Bank's common stock on the Nasdaq National Market on December 31,
2000:
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AGGREGATED OPTION EXERCISES IN 2000 AND VALUES
NUMBER OF SECURITIES
SHARES UNDERLYING OPTION AT VALUE OF IN-THE-MONEY
ACQUIRED ON VALUE 12/31/2000 OPTIONS AT 12/31/2000
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------- -------------- ------------- ----------------------- -------------------------
Benjamin Hong -0- N/A 130,032/None $2,266,458(1)/ N/A
Bon T. Goo 5,837 $15,001 24,317/4,838 $423,845(2)/$71,893(3)
Min J. Kim -0- N/A 18,490/4,838 $322,281(4)/$71,893(3)
- ------------------------------------------------------------------------------------------------------------------
(1) Using a fair market value of $20.00 per share which was the closing price
of Nara Bank's common stock on December 31, 2000, and an exercise price of
$2.57 per share, these options had a value of $17.43 per share, times
130,032 shares.
(2) Using a fair market value of $20.00 per share which was the closing price
of Nara Bank's common stock on December 31, 2000, and an exercise price of
$2.57 per share, these options had a value of $17.43 per share, times
24,317 shares.
(3) Using a fair market value of $20.00 per share which was the closing price
of Nara Bank's common stock on December 31, 2000, and an exercise price of
$5.14 per share, these options had a value of $14.86 per share, times
4,838 shares.
(4) Using a fair market value of $20.00 per share which was the closing price
of Nara Bank's common stock on December 31, 2000, and an exercise price of
$2.57 per share, these options had a value of $17.43 per share, times
18,490 shares.
EMPLOYMENT AGREEMENT WITH OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER
Benjamin B. Hong was appointed President and Chief Executive Officer of
Nara Bank pursuant to an employment agreement effective June 30, 1994. Mr.
Hong's employment agreement was for an initial term of five years from such date
with an option to renew such agreement for an additional four years. Mr. Hong's
initial contract expired in June of 1999, but was renewed according to its terms
for the additional four-year period. Mr. Hong's employment agreement provides
for a base salary of $120,000 in the initial year, plus profit sharing equal to
a minimum of 7% of the pre-tax income of Nara Bank, an automobile allowance, one
month's paid vacation per year and payment of monthly country club dues and
business-related expenses. Pursuant to his employment agreement, Mr. Hong was
granted stock options to purchase 100,000 shares of Nara Bank's common stock,
which, pursuant to the February 2001 reorganization, were automatically
converted into options to purchase an equal number of shares of Nara Bancorp
common stock, at an exercise price of $3.00 per share. Such options expire at
the end of his employment period. The terms of these options are subject to the
terms and conditions set forth in the 1989 Stock Option Plan, as amended and
adopted by Nara Bancorp. In 1997, Mr. Hong was granted additional 30,000 options
under the 1989 Stock Option Plan. All of the options granted to Mr. Hong have
vested and are immediately exercisable by him.
Neither Nara Bancorp nor Nara Bank has entered into any other written
employment agreements with any of their respective officers except as described
above.
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Personnel Committee during the
2000 fiscal year is, or ever has been, an officer or employee of Nara Bancorp or
any of its subsidiaries.
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Personnel Committee Report
The Report of the Personnel Committee should not be deemed incorporated
by reference into any filings under the Securities Exchange Act of 1934 or the
Securities Act of 1933 except to the extent we specifically incorporate the
information contained in this Report by reference thereto.
WHAT IS OUR PHILOSOPHY ON EXECUTIVE COMPENSATION?
We have adopted a basic philosophy and practice of offering a
compensation program designed to attract and retain highly qualified employees.
Our compensation practices encourage and motivate these individuals to achieve
superior performance. This underlying philosophy pertains specifically to
executive compensation, as well as employee compensation at all other levels
throughout the organization.
Our executive compensation program is administered by the board. The
role of the board in this respect is to review and approve the base salaries,
bonuses, stock options and other compensation of the executive officers and
management-level employees of Nara Bank. The board also administers our stock
option plans and will make grants to executive officers under the 2000 Long Term
Incentive Plan, as adopted by Nara Bancorp.
We have designed our executive compensation program to support what we
believe to be an appropriate relationship between executive pay and the creation
of shareholder value. To emphasize equity incentives, we link a significant
portion of executive compensation to the market performance of our common stock.
The objectives of our program are:
o To support a pay-for-performance policy that differentiates bonus
amounts among all executives based on both their individual
performance and the performance of Nara Bancorp;
o To align the interests of executives with the long-term interests
of shareholders through awards whose value over time depends upon
the market value of Nara Bancorp's common stock; and
o To motivate key executives to achieve strategic business
initiatives and to reward them for their achievement.
We also provide our executives with employee benefits, such as
retirement and health benefits. The three principal components of our executive
compensation program include cash compensation, bonuses and equity-based
compensation.
Cash Compensation.
We review bank executive compensation surveys to ensure that the total
cash compensation provided to executive officers and senior management remains
at a competitive level to enable us to attract and retain management personnel
with the talents and skills required to meet the challenges of a highly
competitive industry. The compensation of executive officers is reviewed
annually by the board.
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Bonuses.
For 2000, we approved cash bonuses for specific senior management and
executive staff of Nara Bank. The bonuses were determined based on revenue and
earnings targets for Nara Bank, along with individual performance objectives.
Equity-Based Compensation.
We use equity-based compensation, principally in the form of stock
options, as a cornerstone of our executive compensation program. Equity awards
typically are based on industry surveys, each officer's individual performance
and achievements, market factors and the recommendations of executive
management. Neither Nara Bancorp nor Nara Bank granted any stock options or
stock appreciation rights to any executive officers or directors in 2000.
IS THE COMPENSATION WE PAY OUR EXECUTIVES DEDUCTIBLE?
As part of the Omnibus Reconciliation Act of 1993, Section 162(m) was
added to the Internal Revenue Code. Section 162(m) limits the deduction of
compensation paid to the chief executive officer and other named executive
officers to the extent the compensation of a particular executive exceeds $1
million, unless such compensation was based on predetermined quantifiable
performance goals or paid pursuant to a written contract that was in effect on
February 17, 1993.
We will continue to review and modify our compensation practices and
programs as necessary to ensure our ability to attract and retain key executives
while taking into account the deductibility of compensation payments. Under the
2000 Long Term Incentive Plan, as adopted by Nara Bancorp, award of stock
options and performance stock are designed generally to satisfy the requirements
of Section 162(m) of the Internal Revenue Code. Section 162(m) limits the
deductibility of compensation paid to certain executive officers in excess of $1
million dollars per year. The 1989 Stock Option Plan was never amended to comply
with the requirements of Section 162(m). Both plans permit us flexibility to
reward senior management for extraordinary contributions that cannot properly be
recognized under a predetermined quantitative plan.
HOW DO WE COMPENSATE OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER?
Mr. Benjamin B. Hong, the President and Chief Executive Officer of Nara
Bancorp and Nara Bank received compensation for his services to Nara Bank during
2000 based primarily upon his rights under his employment agreement with Nara
Bank. We discuss this contract under the heading "Employment Agreement with Our
President and Chief Executive Officer."
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PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total shareholder return (stock price appreciation plus reinvested
dividends) on the common stock of Nara Bank (which was the traded company until
February 5, 2001) with (i) the cumulative total return of the Nasdaq Market
Index, and (ii) a published index comprised by Media General Financial Services,
Inc. of banks and bank holding companies in the "Pacific States," which includes
Alaska, California, Hawaii, Oregon and Washington (the industry group line
depicted below). The graph assumes an initial investment of $100 and
reinvestment of dividends. Points on the graph represent the performance as of
the last business day of each of the years indicated. The graph is not
necessarily indicative of future price performance. The graph commences on the
date that Nara Bank's stock first began trading on the Nasdaq National Market.
The graph shall not be deemed filed or incorporated by reference into
any filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that we specifically incorporate this graph by
reference.
COMPARE CUMULATIVE TOTAL RETURN
AMONG NARA BANK, N.A.
NASDAQ MARKET INDEX AND MG GROUP INDEX
[PERFORMANCE GRAPH]
1/29/98 12/31/98 12/31/99 12/31/00
NARA BANK, N.A. 100.00 82.93 102.07 227.55
MG GROUP INDEX 100.00 105.33 107.39 124.27
NASDAQ MARKET INDEX 100.00 135.48 107.39 150.19
ASSUMES $100 INVESTED ON JAN. 29, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2000
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no existing or proposed material transactions between Nara
Bancorp or Nara Bank and any of our officers, directors, nominees or principal
shareholders or the immediate family or associates of the foregoing persons,
except as indicated below.
Some of the directors and officers of Nara Bancorp and/or Nara Bank and
the immediate families and the business organizations with which they are
associated, are customers of, and have had banking transactions with, Nara Bank
in ordinary course of our business and we expect to have banking transaction
with such persons in the future. All loans made to such persons have been made
on substantially the same terms, including interest rate and collateral, as
those prevailing for comparable contemporaneous transactions with other persons
of similar creditworthiness and do not involve more than a normal risk of
collectibility or present other unfavorable features.
PROPOSAL NO. 1
ELECTION OF DIRECTORS OF NARA BANCORP, INC.
NOMINATIONS
Our Certificate of Incorporation and bylaws provide that the number of
directors may be no less than five (5) and no more than twenty-five (25), with
the exact number to be fixed by resolution of the board or shareholders. The
board, by a resolution unanimously passed on April 11, 2001, has fixed the
number at six (6). The Board of Directors has unanimously nominated the six (6)
persons set forth in the following table to serve as Nara Bancorp's directors
until the next annual meeting of shareholders and until each person's successor
is elected and qualified.
The proxy holders will vote all proxies for the election of the six (6)
nominees listed below unless authority to vote for the election of any of the
directors is withheld. The nominees receiving the highest number of affirmative
votes of the shares entitled to be voted for them shall be elected as directors.
Abstentions and votes cast against nominees will have no effect on the election
of directors. If any of the nominees should unexpectedly decline or be unable to
act as a director, the proxies voted for them may be voted for a substitute
nominee to be designated by the board of directors. The board of directors has
no reason to believe that any nominee will become unavailable and has no present
intention to nominate persons in addition to or in lieu of those names below.
The next table provides certain information as of April 24, 2001, with
respect to those persons nominated by the board of directors for election as
directors. Nara Bancorp knows of no arrangements, including any pledge by any
person of Nara Bancorp's securities, the operation of which may, at a subsequent
date, result in a change in control of Nara Bancorp. There are no arrangements
or understandings by which any of the directors or nominees for director of Nara
Bancorp were selected. There is no family relationship between any of the
directors, nominees or executive officers, except for two nominees for director,
Messers. Paik and Park, who are brothers-in-law.
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Business Experience Year First Elected
Name Age During the Past Five Years to Board
---- --- -------------------------- --------
Thomas Chung 74 Currently Chairman of the Board of Nara Bancorp and 2000
Nara Bank. In addition, Mr. Chung presently holds
the following positions: President of His & Her
Hair Goods Co., a hair products distributor;
President since 1969 of Evergrowind Co., Inc., a
real estate development company; Chairman of the
Board since 1998 of Bitro Telecom Co., Inc., a
telecommunications firm; and Director since 1992 of
Chagel Communication, Inc., a broadcasting company.
Benjamin B. Hong 68 President and Chief Executive Officer of Nara Bank 2000
since 1994; President and Chief Executive Officer
of Nara Bancorp, Inc., since November 2000(1)
Steve Y. Kim 51 Since March of 1999, Mr. Kim has served as the Nominee
Managing Partner of Alcatel Ventures, LLC, an
international venture capital fund, which acquired
Xylan Corporation, a manufacturer of high-end,
intelligent switching systems for computer
networking founded by Mr. Kim served as the Chief
Executive Officer and Chairman of Xylan Corporation
from its founding in 1993 and until the acquisition
by Alcatel in March of 1999.
Nack Kim 54 Executive Vice President and Chief Financial Nominee
Officer of Lend Lease Korea, Inc., since February
2000; Previously a partner with D.K. Consulting, a
management consulting company from March of 1999 to
February of 2000; From 1989 until March of 1999,
Mr. Kim served as the partner in changes of the
West Coast Korean Practice division of Deloitte &
Touche, LLP
Ki Suh Park 69 Since 1981, Mr Park has served as Managing, Nominee
Planning and Design Partner for Gruen Associates, a
Los Angeles-based architectural firm and has held
various positions within that company since 1961.
Jesun Paik 64 Executive Vice President and Senior Advisor of the Nominee
Americas Division of The Sakura Bank, Ltd. in New
York City since 1994; Vice Chairman of the Board of
Manufacturer's Bank; Mr. Paik has held senior
positions with numerous financial institutions over
a more-than-30-year career.
- ---------------------------
(1) Prior to joining Nara Bank in 1994, Mr. Hong served as the President
and Chief Executive Officer of Hanmi Bank from 1988 to 1994.
None of the directors, nominees for director or officers of Nara
Bancorp serves as a director of any company which has a class of securities
registered under, or which is subject to the periodic reporting requirements of,
the Securities Exchange Act of 1934 or any investment company registered under
the Investment Company Act of 1940.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE "FOR" ALL SIX NOMINEES
FOR DIRECTOR.
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PROPOSAL NO. 2
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
GENERAL.
We have appointed Deloitte & Touche as our independent auditors for the
year ending December 31, 2001. The audit committee recommended to the board, and
the board of directors unanimously approved, the appointment of Deloitte &
Touche. Deloitte & Touche, who performed our audit services in 2000, has served
as Nara Bank's accountants since 1995. Deloitte & Touche performed all of its
services in 2000 at customary rates and terms.
FEES.
The following table sets forth the aggregate fees that we incurred for
audit and non-audit services provided by Deloitte & Touche, which acted as
independent auditors for the fiscal year ending 2000 and performed audit
services for us in fiscal year 2000. The table lists audit fees, financial
information systems design and implementation fees, and other fees.
AUDIT FEES. The audit fees include only fees that are customary under
generally accepted auditing standards and are the aggregate fees that we
incurred for professional services rendered for the audit of our annual
financial statements for fiscal year 2000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
financial information systems design and implementation fees include fees billed
for non-audit services performed during fiscal year 2000 such as directly or
indirectly operating, or supervising the operation of, our information system or
managing our local area network. These non-audit services also include services
such as designing or implementing a hardware or software system that aggregates
source data underlying our financial statements or generates information that is
significant to our financial statements taken as a whole.
ALL OTHER FEES. All other fees include the aggregate fees billed for
services rendered by Deloitte & Touche, other than those services covered above.
DECEMBER 31, 2000
Audit Fees (Financial).......................................... $70,600
Financial Information Systems Design and Implementation Fees.... $19,000
Other Fees...................................................... $155,863
The audit committee of the board considered whether the provision of financial
information systems design and implementation services and other non-audit
services is compatible with maintaining the independence of Deloitte & Touche.
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Representatives of Deloitte & Touche will be present at the annual
meeting, will be available to respond to your appropriate questions and will be
able to make such statements as they desire.
If you do not ratify the selection of independent accountants, the
audit committee and the Board will reconsider the appointment. However, even if
you ratify the selection, the Board may still appoint new independent
accountants at any time during the year if it believes that such a change would
be in the best interests of Nara Bancorp, Inc. and our shareholders.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL
OF PROPOSAL 2.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any such proposal to be included in the proxy
statement for Nara Bancorp, Inc.'s 2002 annual meeting of shareholders must be
submitted by a shareholder prior to December 31, 2001, in a form that complies
with applicable regulation.
In addition, in the event a shareholder proposal is not submitted to
Nara Bancorp, Inc. prior to March 15, 2002, the proxy to be solicited by the
board of directors for the 2002 annual meeting of shareholders will confer
authority on the holders of the proxy to vote the shares in accordance with
their best judgement and discretion, if the proposal is presented at the 2002
annual meeting of shareholders without our discussion of the proposal in the
proxy statement for such meeting.
2000 ANNUAL REPORT TO SHAREHOLDERS
Nara Bancorp, Inc.'s 2000 Annual Report to shareholders containing
audited financial statements of Nara Bank is included in this mailing to
shareholders.
The financial statements of Nara Bank as of December 31, 2000 and 1999
and for each of the years in the three-year period ended December 31, 2000
included in the 2000 Annual Report have been audited by Deloitte & Touche,
independent auditors, as stated in their report, which is included therein, and
have been so included in reliance upon their authority as experts in accounting
and auditing
18
24
ANNUAL REPORT ON FORM 10-K
Nara Bancorp will provide you, without charge, a copy of its annual
report for the year ended December 31, 2000 on Form 10-K, including financial
statements and schedules, as filed with the Securities and Exchange Commission
pursuant to the Exchange Act of 1934. If you did not receive it, we will send it
to you without charge if you send notification to our Corporate Secretary as the
address below. The Annual Report on Form 10-K includes a list of exhibits filed
with the Securities and Exchange Commission, but does not include the exhibits
themselves. If you wish to receive copies of the exhibits, we will send them to
you. Expenses for copying and mailing will be your responsibility. Please write
to: Mr. Bon T. Goo, Nara Bancorp, Inc., 3701 Wilshire Boulevard, Suite 220, Los
Angeles, CA 90010. In addition, the Securities and Exchange Commission maintains
a website, http://www.sec.gov, which contains information filed by us with them.
OTHER MATTERS
The board of directors knows of no other matters that will be brought
before the meeting, but if such matters are properly presented to the meeting,
proxies solicited hereby will be voted in accordance with the judgment of the
persons holding such proxies. All shares represented by duly executed proxies
will be voted at the meeting in accordance with the terms of such proxies.
NARA BANCORP, INC.
Los Angeles, California
April 30, 2001
/s/ Bon T. Goo
Bon T. Goo, Secretary
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25
APPENDIX A
NARA BANCORP, INC.
Audit Committee Charter
Statement of Policy
- -------------------
The Audit Committee is appointed on an annual basis by the Board of Directors of
Nara Bancorp, Inc. (the Company). The Audit committee is established and is
authorized by the Board of Directors, as set forth in this Audit Committee
Charter, to assist the Board in fulfilling their oversight responsibilities as
it relates to:
- - The Company's corporate accounting policies;
- - The Company's system of internal controls regarding finance, accounting,
legal, compliance and ethics that management and the Board have
established;
- - The Company's compliance with applicable laws and regulations; and,
- - The quality and integrity of financial reporting and financial disclosure.
In this capacity, it is the responsibility of the Audit committee to maintain
free and open means of communication between the Board, the external auditors,
the internal auditors, and the financial management of the Company.
Responsibilities
- ----------------
In carrying out its responsibilities, the Audit Committee will:
1. Review and update the Audit committee Charter annually, or as needed, and
report to the Board on having satisfied its responsibilities under the
Charter.
2. Confirm and assure the independence of the internal auditors and the
external auditors annually.
3. Review the reporting relationship with the external auditors and Audit
Committee in light of the external auditor's accountability to the Board of
Directors, and as representative of the Board, the Audit Committee
authority and responsibility to select, evaluate, and where, appropriate,
replace the external auditors. Review and approve the compensation and fees
of the external auditors.
4. Review and discuss with the external auditor regarding its judgments about:
- - The quality of the Company's accounting principles as applied in financial
reporting.
- - The clarity of the Company's financial disclosures.
26
- - The degree of conservatism of the Company's accounting principles and
underlying estimates.
- - The nature and extent of any significant changes in accounting principles
or the application of an accounting principle(s).
- - Other significant decisions made by management in preparing the financial
disclosures.
5. Review and concur in the appointment, replacement, reassignment or
dismissal of the internal auditors.
6. Meet with the external auditors, internal auditors and financial management
of the Company to review the scope of the proposed financial audit for the
current year, the audit procedures to be utilized, and, at the conclusion
thereof, review such audit, including any comments or recommendations of
the external auditors.
7. Review with the independent accountants their assessment of the quarterly
financial statements.
8. Review with the external auditor, the internal audits and the Company's
financial management, the adequacy and effectiveness of the accounting,
financial and management controls of the Company, including information
systems and security, as well as any recommendations regarding improvements
to internal control procedures or particular areas where new or more
detailed controls or procedures are desirable.
9. Review the internal audit function of the Company including the
independence and authority of its reporting obligations, the proposed audit
scope, plans and budgets for the upcoming year, and the coordination of
such plans with the external auditors to assure completeness of coverage,
reduction of redundant efforts and the effective use of audit resources.
10. Consider and review with management and the internal auditors:
- - Significant findings during the year and management's responses.
- - Any difficulties encountered in the course of their audits, including
restrictions on scope of work or access to required information,
- - Changes required in the planned scope of the audit plan, and
- - Internal Audit Charter
11. Review legal and regulatory matters that may have a material impact on the
financial statements, related policy compliance, and programs and reports
received from the Office of the Comptroller of the Currency and other
regulatory examiners.
27
12. Receive prior to each meeting, a summary of findings from completed
internal auditors and a progress report on the proposed internal audit
plan, with explanations of any significant deviations from the original
plan.
13. Review the financial statements of the Company annually with management and
the independent auditors to determine that the external auditors are
satisfied with the disclosure and content of the financial statements
presented. Any changes in accounting principles should be reviewed.
14. Inquire of management, internal auditors and the external auditors about
significant risks or exposures and assess the steps management has taken to
minimize such risk to the Company.
15. Conduct or authorize special studies or investigations into any matters
within the Committee's scope of responsibilities such as considerations
related to fraud, compliance with laws and regulations and the Company's
code of ethical conduct.
16. Review policies and procedures with respect to corporate officers' expense
accounts and perquisites, including use of corporate assets, and consider
results of any reviews conducted by internal auditors or external auditors.
17. Record actions of the committee and approve such minutes of the Audit
Committee meetings.
18. Review with appropriate Company personnel the actions taken to ensure
compliance with the Company's Ethics and Conflict of Interest policies.
19. Review the report of the Audit Committee required to be included in the
proxy statement.
Organization and Structure
- --------------------------
The Audit Committee is organized as a standing committee of the Company's Board
of Directors.
Membership
- ----------
The size of the membership of the Audit Committee is based on the size of the
Board of Directors and the size and complexity of the Company. The Committee
shall be composed of independent members. The members of the Committee shall be
considered independent if they have no relationship to the Company that may
interfere with the exercise of their independence from management of the
Company. A member of the
28
Committee who receives compensation from the Company solely for his/her service
on the Board or who receives benefits under a tax qualified retirement plan
shall be considered independent.
All Committee members shall be financially literate, with at least one member
having had past employment experience in finance or accounting, a professional
certification in accounting or any other comparable experience or background.
This experience should include a current or past position as a chief executive
or financial officer or other senior officer with financial oversight
responsibilities.
Frequency of Meetings
- ---------------------
The Audit committee normally meets at least quarterly to fulfill its oversight
and financial reporting responsibilities, or more frequently as circumstances
dictate. As part of its role to foster open communications, the Committee may
meet periodically with management, the Company's financial statement auditors
and the internal auditors to discuss any matters that the Committee or any of
these groups believe are of a confidential nature.
29
NARA BANCORP, INC.
PROXY CARD
Solicited on behalf of the Board of Directors of Nara Bancorp,
Inc. (the "Company") for use at the Annual Meeting of Shareholders (the
"Meeting") to be held on May 16, 2001, at 10:30 a.m. at the Oxford Palace Hotel,
745 South Oxford Avenue, Los Angeles, California 90005.
The undersigned hereby appoints Thomas Chung and Benjamin B. Hong, as
Proxies, with the full power of substitution, to vote all shares of common stock
of the Company held of record on April 24, 2001 by the undersigned, at the
Meeting or at any adjournments thereof, on the items set forth below, and in the
Proxies' discretion, upon such other business as may properly come before the
Meeting.
Please mark your vote as indicated in this example |X|
1. The election of the following persons to the board of directors, to serve
until the next annual meeting:
Thomas Chung, Benjamin B. Hong, Steve Y. Kim, Nack Kim, Ki Suh Park,
and Jesun Paik.
[ ] FOR ALL NOMINEES [ ] WITHHOLD FOR ALL NOMINEES
(Except as set forth below)
To withhold authority to vote for any nominee, write that person's name in the
space above.
2. The ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending December 31,
2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting, including adjourning
the Meeting for the purpose of soliciting additional proxies.
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THIS PROXY CARD, 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 ALL OF THE NOMINEES IDENTIFIED ABOVE AND FOR EACH OF THE
PROPOSALS LISTED. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, INCLUDING
WHETHER OR NOT TO ADJOURN THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXY
HOLDERS IN ACCORDANCE WITH THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. ALL
PROXIES HERETOFORE GIVEN BY THE UNDERSIGNED ARE HEREBY REVOKED. RECEIPT OF THE
COMPANY'S PROXY STATEMENT DATED APRIL 30, 2001, IS ACKNOWLEDGED.
Please mark, sign, date and return this Proxy in the accompanying
prepaid envelope.
Signature(s)______________________________________________________ Dated
___________________, 2001 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 name. When shares are
in the names of more than one person, each should sign.