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EXHIBIT 10.32
SEVERANCE COMPENSATION AGREEMENT
This agreement is entered into the 20th day of September, 1996 by and between
Citizens Business Bank (the "Bank"), and Xxxxxxx X. Xxxxxxxx, SVP of the Bank
(the "Executive").
Whereas, the Bank's Board of Directors has determined that it is appropriate to
reinforce and encourage the continued attention and dedication of members of the
Bank's Senior Management Committee, including the Executive, to their assigned
duties without distraction in potentially disturbing circumstances arising from
the possibility of a Change in Control (as defined herein) of CVB Financial
Corp. (the "Company") or directly or indirectly the Bank, a wholly owned
subsidiary of the Company; and
Whereas, this Agreement sets forth the compensation which the Bank agrees it
will pay to the Executive upon a Change in Control and termination of the
Executive's employment,
Now, therefore, in consideration of these premises and the mutual covenants and
agreements contained herein and to induce the Executive to remain employed by
the Bank and to continue to exert his/her best efforts on behalf of the Bank,
the parties agree as follows:
1. Compensation Upon a Change in Control.
(a) In the event that a (i) Change in Control occurs during the
employment of the Executive and (ii) (a) the Executive's employment is
terminated by the Company or the Bank or any successor to the Company or the
Bank other than for Cause (as defined herein) within one year of the completion
of such Change in Control or (b) the Executive terminates or resigns Executive's
employment for a Good Reason (as defined herein) within one year of the
completion of such Change in Control, the Executive shall receive an amount
equal to one half of the Executive's annual base compensation for the last
calendar year ended immediately preceding the Change in Control. Such amount
shall be paid in a lump sum, less applicable employment and payroll taxes,
within five days after the effective date of the termination of Executive's
employment.
2. Definitions.
(a) Change in Control. For purposes of this Agreement, a "Change in
Control" shall deemed to have occurred if:
(i) any one person, or more than one person acting as a group,
acquires (or has acquired during the 12 month period ending on the date of the
most recent acquisition) ownership of stock of the Company or the Bank
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possessing more than 50% of the total voting power of the Company's or the
Bank's stock; provided, however, it is expressly acknowledged by the Executive
that this provision shall not be applicable to any person who is, as of the date
of this agreement, a Director of the Company or the Bank;
(ii) a majority of the members of the Company's or the Bank's
Board of Directors is replaced during any 12 month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company's or the Bank's board prior to the date of the appointment or election;
(iii) a merger or consolidation where the holders of the Bank's
or the Company's voting stock immediately prior to the effective date of such
merger or consolidation own less than 50% of the voting stock of the entity
surviving such merger or consolidation.
(iv) any one person, or more than one person acting as a group,
acquires (or has acquired during the twelve month period ending on the date of
the most recent acquisition by such person or persons) assets from the Bank that
have a total fair market value greater than 50% of the total fair market value
of all of the Bank's assets immediately before the acquisition or acquisitions;
provided, however, transfer of assets which otherwise would satisfy the
requirements of this subsection (iv) will not be treated as a change in the
ownership of such assets if the assets are transferred to;
(A) an entity, 50% or more of the total value or voting power of which
is owned, directly or indirectly by the Company or the Bank;
(B) a person, or more than one person acting as a group, that owns,
directly or indirectly, 50% or more of the total value or voting power of all
the outstanding stock of the Company or the Bank; or
(C) an entity, at least 50% of the total value or voting power is owned,
directly or indirectly by a person who owns, directly or indirectly, 50% or more
of the total value or voting power of all the outstanding stock of the Bank.
Not withstanding the foregoing, a Change in Control shall not be deemed to occur
as a result of any transaction which changes the jurisdiction of incorporation
of the Company or the Bank.
(b) Cause. For purposes of this Agreement, the Bank shall have
"Cause" to terminate the Executive's employment and shall not be obligated to
make any payments hereunder or otherwise in the event the Executive has: (i)
committed a significant act of dishonesty, deceit or breach of fiduciary duty in
the performance of Executive's duties as an employee of the Bank; (ii) grossly
neglected or willfully failed in any way to perform substantially the duties of
such employment; or (iii) acted or failed to act in any other way that reflects
materially and adversely on the Bank. In the event of a termination of
Executive's employment by the Bank for Cause, the Bank shall deliver to
Executive at the time the Executive is notified of the termination of his/her
employment a written statement setting forth in reasonable detail the facts and
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circumstances claimed by the Bank to provide a basis for the termination of the
Executive's employment for Cause.
(c) Good Reason. For purposes of this Agreement, "Good Reason"
means (i) the Executive's then current level of annual base salary is reduced;
(ii) there is any reduction in the employee benefit coverage provided to the
Executive (including pension, profit sharing, deferred compensation, life
insurance and health insurance, but not including incentive bonuses) from the
coverage levels in effect immediately prior to the Change in Control, unless
that company or the Bank provide substantially equivalent employee benefits to
the Executive; (iii) the Executive suffers a material diminution in Executive's
title, authority, position, reporting relationship, responsibilities or offices;
(iv) there is a relocation of the Executive's principal business office by more
than fifty (50) miles from its existing location; or (v) the Company or the Bank
fail to obtain assumption of any employment relating to Executive by any
successor or assign of the Bank; provided, however, that termination by the
Executive for Good Reason must be made in good faith.
3. Term.
This Agreement shall terminate, except to the extent that any obligation of the
Bank hereunder remains unpaid as of such time, upon the earliest of (i) the
termination of the Executive's employment from the Bank for any reason if a
Change in Control has not occurred prior to the date of such termination; (ii) 3
years from the date hereof if a Change in Control has not occurred during such
period; (iii) the termination of Executive's employment from the Bank for Cause
within 1 year after a Change in Control, (iv) 1 year after a Change in Control
if Executive is still employed with the Bank or its successor or (v) after a
Change in Control of the Company or the Bank upon satisfaction of all of the
Company's or the Bank's obligations hereunder.
4. No Obligation to Mitigate Damages; No Effect on Other Contractual Rights.
(a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the effective date of
Termination, or otherwise, by his/her engagement as a consultant or his/her
conduct of any other business activities.
(b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the passage of time, under any employment agreement or other plan,
arrangement or deferred compensation agreement, except as otherwise agreed to in
writing by the Bank and the Executive.
5. Successor to the Bank.
(a) The Bank will require any successor or assign (whether direct or
indirect, by purchase or otherwise) to all or substantially all of the business
and/or assets of the
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Bank, by written agreement with the Executive, to assume and agree to perform
this Agreement in full. As used in this Agreement, "Bank" shall mean the Bank as
herein before defined and any successor or assign to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this
section 5 or which otherwise becomes bound by all the terms and provisions if
this Agreement by operations of law. Notwithstanding the assumption of this
Agreement by a successor assign of the Bank, if a Change in Control (as defined
in Section 2 (a) above) has occurred, the Executive shall have and be entitled
from such successor to all rights under Section 1 of this Agreement.
(b) If the Executive should die while any amounts are still payable to
him/her hereunder, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate. This Agreement shall, therefore, insure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
6. Confidentiality.
The Executive shall retain in confidence any and all confidential information
known to the Executive concerning the Company and the Bank and its business so
long as such information is not otherwise publicly disclosed.
7. Legal Fees and Expenses.
The Bank shall pay all legal fees and expenses which the Executive may incur as
a result of the Bank's contesting the validity, enforceability or the
Executive's interpretation of, or determinations, under, this Agreement if the
Executive prevails in any such contest or proceeding.
8. Limitation on Payments.
This agreement is made expressly subject to the provisions of law codified at 12
U.S.C. 1828 (k) and 12 C.F.R. Part 359 which regulate and prohibit certain forms
of benefits to Executive. Executive acknowledges that he understands these
sections of law and that the Bank's obligations to make payments hereunder are
expressly relieved if such payments violate these sections of law or any
successors thereto.
9. Notice.
For purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid as follows:
If the Bank: Citizens Business Bank
000 X. Xxxxx Xxxxxx, Xxxxx 000
0
Xxxxxxx, Xxxxxxxxxx 00000
Attention: X. Xxxx Wiley, President and CEO
If to the Executive: At the address below his/her signature or such other
address as either party may have been furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
10. Validity.
The invalidity or unenforceability of any provisions of this agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
11. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
12. Miscellaneous.
No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Bank. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or any
prior to subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. This Agreement
shall be governed by and construed in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above,
CITIZENS BUSINESS BANK
By: /s/ X. Xxxx Xxxxx
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Name: X. Xxxx Wiley
Title: President
EXECUTIVE: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Address: 000 X. Xxxxx Xxxxxx
City and State: Xxxxxxx, Xxxxxxxxxx 00000
