SEVERANCE COMPENSATION AGREEMENT
agreement (the Agreement) is entered into this 10th day of July, 2017 (Effective Date), by and between Citizens Business Bank (the Bank), and Richard H. Wohl,
Executive Vice President of the Bank (the Executive).
Whereas, the Banks Board of Directors has determined that it is appropriate
to reinforce and encourage the continued attention and dedication of members of the Banks senior management, 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 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 subsequent
termination of the Executives employment or resignation for good reason by the Executive.
Now, therefore, in consideration of these promises
and the mutual covenants and agreements contained herein and to induce the Executive to remain employed by the Bank and to continue to exert Executives 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 Change in Control occurs during the Banks employment of the Executive and
(i) the Executives employment is terminated by the Company or the Bank or any successor to the Company or
the Bank other than for Cause (as defined below), within one hundred and twenty (120) days prior to the completion of such Change of Control or within one (1) year after the completion of such Change in Control; or
(ii) the Executive resigns his or her employment for Good Reason (as defined below) within one (1) year
after the completion of such Change in Control;
the Executive shall receive the following: (i) an amount equal to two
(2) times the Executives annual base compensation for the last calendar year ended immediately preceding the Change in Control, plus (ii) an amount equal to two (2) times the average annual bonus received for the last two
calendar years ended immediately preceding the Change in Control, plus (iii) all accrued obligations (such as earned but unused vacation pay) and vested benefits (including but not limited to any awards of stock options or restricted stock
under any Bank or Company equity incentive plan) accrued prior to any such termination of or resignation by the Executive. The Bank shall pay such amounts and/or provide such vested benefits, less applicable withholdings, employment and payroll
taxes (which taxes shall be
paid upon termination or resignation of Executives employment or at the time payments
are made hereunder, as required by law), in 24 equal monthly installments (without interest or other adjustment) on the first day of each month commencing with the first such date that is at least six (6) months after the date of the
Executives separation from service (as such term is defined for purposes of Section 409A of the Internal Revenue Code pursuant to Treasury Regulations and other guidance promulgated thereunder) and continuing for 23 successive
months thereafter. This payment schedule is intended to comply with the requirements of Section 409A of the Internal Revenue Code and shall be interpreted consistently therewith.
B. The Executive may designate in writing (on a form provided by the Bank and delivered by the Executive to the
Bank before Executives death, substantially in the form attached to this Agreement) primary and contingent beneficiaries to receive the balance of any payments or vested or accrued benefits under section 1.A that are not made prior to the
Executives death and the proportions in which such beneficiaries are to receive such payment. The total amount of the balance of such payment or the sum of such benefits shall be paid or transferred to such beneficiaries in a single unreduced
lump sum payment or transfer made within ninety (90) days following the Executives death. The Executive may change beneficiary designations from time to time by completing and delivering additional such forms to the Bank. The last written
beneficiary designation on such form delivered by the Executive to the Bank prior to the Executives death will control. If the Executive fails to designate a beneficiary in such manner, or if no designated beneficiary survives the Executive,
then Executives payment balance shall be paid to the Executives estate in an unreduced lump sum payment or vested benefit transfer within ninety (90) days following the Executives death.
Certain specified terms of the foregoing Section 1(A) of this Agreement are expressly subject to and modified by the Addendum to
this Severance Compensation Agreement.
A. Change in Control. For purposes of this Agreement, a Change in Control shall deemed to have
(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 by such person or persons) ownership of stock of the Company or the Bank possessing more than 50% of the total voting power of the Companys or the Banks 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 Companys Board of Directors is replaced during any twelve
(12) month period by directors whose appointment
for election is not endorsed by a majority of the members of the Companys board prior
to the date of the appointment or election;
(iii) a merger or consolidation where the holders of the
Banks or the Companys 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, acquired (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 gross fair market value greater than 50% of the total gross fair market value of all of the Banks 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 Control if the assets are transferred to:
(a) a shareholder of the Bank (immediately before the asset transfer) in exchange for or with respect to its
(b) 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;
(c) 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
(d) an entity, at least 50% of the total value or voting power is owned, directly or indirectly by 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 Bank.
Each event comprising a Change in Control is intended to constitute a change in ownership or effective control, or a
change in the ownership of a substantial portion of the assets, of the Company or the Bank as such terms are defined for purposes of Section 409A of the Internal Revenue Code and Change in Control as used herein shall be
interpreted consistently therewith.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur as a result of
any transaction which merely changes the jurisdiction of incorporation of the Company or the Bank.
B. Good Reason shall mean, for purposes of this Agreement:
(i) Executives then current level of annual base salary is reduced without Executives written
(ii) there is an (relative to Executives annual base salary) overall reduction in the
employee benefits provided to Executive (including, without limitation, medical, dental, life and health insurance and incentive bonus
opportunity) from the plans in effect immediately prior to the Change in Control;
(iii) Executive suffers a diminution in his or her title, authority, duties or responsibilities;
(iv) Any of Executives salary payments, bonus payments and/or stock option grants are not made or provided
timely and in accordance either with this Agreement or applicable law;
(v) the relocation of
the location to which Executive is required to report to a location more than fifty (50) miles from the Executives work location at the time of the Effective Date;
(vi) the Bank or any successor to the Bank either fails to assume or communicates that it intends to refuse to
assume any part of this Agreement, including all of the Banks or its successors obligations as set forth herein, except as otherwise required by law or regulation; or
(vii) any material breach of this Agreement by the Bank or its successor.
C. Cause. For purposes of this Agreement, the Bank shall have Cause to terminate the Executives
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
Executives 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 Executives employment by the Bank for Cause, the Bank shall deliver to Executive at the time the Executive is notified of the termination of his employment a
written statement setting forth in reasonable detail the facts and circumstances claimed by the Bank to provide a basis for the termination of the Executives employment for Cause.
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 the following (the Term):
(i) the termination or resignation of the Executives employment from the Bank for any reason (unless a
Change in Control has occurred and the
Executive either has been terminated or has resigned for Good Reason within one
(1) year after such Change in Control);
(ii) three (3) years from the date hereof if a Change in
Control has not occurred during such period;
(iii) the termination of Executives employment from the
Bank for Cause within one (1) year after a Change in Control;
(iv) one (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 upon
satisfaction of all of the Banks obligations hereunder.
4. No Obligation to Mitigate Damages; No Effect on Other Contractual
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 resignation, or otherwise, by his or her engagement as a consultant or his 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 Executives 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 set forth in section 12 below or as otherwise agreed to in writing by the Bank and the Executive.
5. Successor to the
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 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 of this Agreement
by operations of law. Notwithstanding the assumption of this Agreement by a successor or 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
or benefits are still transferable to Executive hereunder, all such amounts shall be paid or benefits transferred in accordance with the terms of this Agreement to the Executives designated beneficiary(ies) or, if there are no such designated
beneficiary(ies), to the Executives estate. This Agreement shall, therefore, inure to the benefit of and be enforceable by the Executives designated beneficiaries, personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
6. Confidentiality and
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 generally known to the public through no fault or breach of this Agreement by Executive. The Executive agrees that, for a period
of one (1) year following any Change in Control, (i) the Executive shall not use the Banks confidential information or trade secrets to solicit the banking business of any customer with whom the Bank, the Company or a subsidiary bank
is doing or has done business during the one (1) year period preceding any such Change in Control, (ii) use such confidential information or trade secrets to encourage any such customers to stop using the facilities or services of the
Bank, or (iii) use such confidential information or trade secrets to encourage any such customers to use the facilities or services of any competitor of the Bank. The Executive further agrees, during the term of the Executives employment
with the Bank and for a one (1) year period following the termination of the Executives employment with the Bank for any reason, including a Change in Control or nonrenewal of this Agreement at the end of the Term, not to solicit the
services of any officer, employee or independent contractor of the Bank or the Company.
As a condition to the Executives receiving any payments pursuant to section 1 of this Agreement, Executive must sign and deliver a general release
to the Company and the Bank, not later than forty-five (45) days following the date of termination of employment, in form and substance acceptable to the Company and the Bank, releasing the Company, the Bank, their respective employees,
officers, directors, stockholders and agents, and each person who controls any of them within the meaning of Section 15 of the Securities Act of 1933, as amended, from any and all claims of any kind or nature, whether known or unknown (other
than claims with respect to payments pursuant to section 1 of this Agreement, payments of vested benefits or accrued obligations under any employee benefit plan of the Bank, or valid claims for indemnification), from the beginning of time to the
date of termination.
8. Legal Fees and Expenses.
In the event of any judicial or non-judicial proceeding (including arbitration) of any dispute between the Bank
and the Executive concerning the validity, enforceability, interpretation or enforcement of this Agreement, the party that does not prevail in such
dispute shall pay to the prevailing party all legal fees and expenses which the prevailing party may incur as a result of such proceeding.
9. Limitation on Payments.
This Agreement is made expressly subject to the provision 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 Banks obligations to make payments hereunder are expressly relieved if such payments violate these sections of law or any
In the event that the Company or the Bank enters into or has entered into a Securities Purchase Agreement or other similar
agreement with the United States Department of Treasury as part of the Capital Purchase Program under the Emergency Economic Stabilization Act of 2008 (EESA), the restrictions set forth in this paragraph shall apply to any payments under
this Agreement. Solely to the extent, and for the period, required by the provisions of Section 111 of EESA applicable to participants in the Capital Purchase Program under EESA and the regulation issued by the Department of the Treasury as
published in the Federal Register on October 20, 2008, if the Executive is a Senior Executive Officer within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the
Federal Register on October 20, 2008, then: (a) the Executive shall be ineligible to receive compensation hereunder to the extent that the Compensation Committee of the Board of Directors of the Company or the Bank determines this
Agreement includes incentives for the Executive to take unnecessary and excessive risks that threaten the value of the Company or the Bank; (b) the Executive shall be required to forfeit any bonus or incentive compensation paid to the Executive
hereunder during the period that the Department of the Treasury holds a debt or equity position in the Company or the Bank based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and (c) the
Company and the Bank shall be prohibited from making to the Executive, and the Executive shall be ineligible to receive hereunder, any golden parachute payment in connection with the Executives applicable severance from
employment, in each case, within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008.
Notwithstanding any other provisions of this Agreement, if the Companys principal tax advisor determines that the total amounts payable pursuant
to this Agreement, together with other payments to which Executive is entitled, would constitute an excess parachute payment (as defined in Section 280G of the Internal Revenue Code), as amended, then the total payment under section
1.A above (and proportionally each monthly installment thereof) shall be reduced to the largest amount which may be paid without any portion of such amount being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.
10. Regulatory Provisions
(a) Suspension and Removal Orders. If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Banks affairs by notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Banks obligations under this Agreement
shall be suspended as of the date of any such service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank shall (to the fullest extent permitted by law): (i) pay the Executive any compensation withheld
while its obligations under this Agreement were suspended, as though the Executive was never suspended; and (ii) reinstate (in whole or in part) any of its obligations under this Agreement which were suspended. If the Executive is removed
and/or permanently prohibited from participating in the conduct of the Banks affairs by an order issued under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or (g)(1)), all obligations
of the Bank under this Agreement shall terminate as of the effective date of the order, but any vested rights of the Executive shall not be affected.
(b) Termination by Default. If the Bank is in default (as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall terminate as of the date of default, but any vested rights of the Executive shall not be affected.
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
If the Bank: Citizens Business Bank
701 N. Haven Avenue, Suite 350
Ontario, California 91764
Attention: Christopher D. Myers, President and CEO
If to the Executive: At the address below his 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.
12. Arbitration. The Executive and the Bank hereby agree that, to the fullest extent permitted by
law, the Executive and the Bank shall submit all disputes arising under this Agreement to final and binding arbitration in Ontario, California before an arbitrator associated with the American Arbitration Association, JAMS or other mutually
agreeable alternative dispute resolution service. If there is a dispute as to whether an issue or claim is arbitrable, the arbitrator will have the authority to resolve any such dispute, including claims as to fraud in the inducement or
execution, or claims as to validity, construction, interpretation or enforceability.
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.
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.
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. Any and all prior discussions, negotiations, agreements and/or severance agreements on the subject matter hereof (i.e., severance pay upon separation from service following a Change in Control), including,
but not limited to, the Severance Compensation Agreement between the Bank and the Executive dated December 31, 20011, are merged and integrated into and are superseded by this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of California, without reference to its conflicts of laws principles.
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above,
Citizens Business Bank
/s/ Christopher D. Myers
Christopher D. Myers
/s/ Richard H. Wohl
Richard H. Wohl
Address: 701 N. Haven Avenue
City and State:
Ontario, California 91764
Addendum to Severance Compensation Agreement
(Richard Wohl, EVP and General Counsel)
language of subparagraphs (i) and (ii) of Section 1(A) only is hereby deleted and replaced by the following: (i) an amount equal to two (2) times the Executives annual base compensation for the last calendar year ended
immediately preceding the Change in Control (with such annual base compensation amount to be fully annualized in the event the Change in Control occurs within or following any calendar year during which Executive was employed for only part of the
relevant calculation period), plus (ii) for any period prior to the Companys actual payment of the Executives annual bonus for the full calendar year 2019, an amount equal to two (2) times the average annual bonus received by
the Executive for the full calendar years 2014 and 2015; and for any period following the Companys actual payment of the Executives annual bonus for the full calendar year 2019, an amount equal to two (2) times the average annual
bonus received by the Executive for the last two (2) prior calendar years employed with the Bank preceding the Change in Control, plus.