Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On February 14, 2020, CVB Financial Corp. ("CVB") and its principal subsidiary,
Citizens Business Bank (the "Bank" and with CVB, the "Company"), entered into an
Employment Agreement (the "Employment Agreement") with David A. Brager, the
Bank's current Executive Vice President, Sales Division Manager, which provides
for the appointment of Mr. Brager as the Company's Chief Executive Officer,
effective March 16, 2020 (the "Effective Date"). In addition, Mr. Brager will be
appointed to the Board of Directors of CVB and the Bank as of the Effective
Date.
Mr. Brager, who is 52 years old, assumed the position of Executive Vice
President and Sales Division Manager of the Bank on November 22, 2010. From 2007
to 2010, he served as Senior Vice President and Regional Manager of the Central
Valley Region for the Bank. From 2003 to 2007, he served as Senior Vice
President and Manager of the Fresno Business Financial Center for the Bank.
Prior to such time, Mr. Brager held management positions with Westamerica Bank.
Mr. Brager's appointment follows the previously announced retirement of
Christopher D. Myers, the Company's President and Chief Executive Officer,
effective as of March 15, 2020.
Pursuant to the Employment Agreement, Mr. Brager is employed for an initial term
of approximately three years, ending on March 31, 2023, with successive renewal
terms for one-year periods thereafter in each case unless terminated by either
the Company or Mr. Brager.
Mr. Brager's base salary is set at $600,000 for the initial year of the term.
The Company's Compensation Committee will evaluate Mr. Brager' and the Bank's
performance annually, and the Company's Compensation Committee may adjust
Mr. Brager' base salary upward from time to time in its sole discretion. During
the term of the Employment Agreement, Mr. Brager will continue to be eligible to
participate each year in the Company's Executive Performance Compensation Plan
adopted under the Company's 2015 Executive Incentive Plan, with a target bonus
opportunity of 100% of base salary and with a maximum bonus under such plan of
150% of Mr. Brager's base salary depending on the Company's and Mr. Brager'
achievement of performance goals.
In addition, and in accordance with the terms of the Employment Agreement and
the Company's 2018 Equity Incentive Plan, Mr. Brager will receive on or before
March 31, 2020, a grant of time-based restricted stock units (the "Time RSUs")
for a number of shares of CVB common stock having a value of $360,000 on the
grant date and a grant of a performance-based RSU's (the "Performance RSUs") for
a target of number of shares of CVB common stock having a value of $360,000 on
the grant date. The Employment Agreement provides for the Company's Compensation
Committee to make additional Time RSU, Performance RSU and/or stock option or
restricted stock grants to Mr. Brager annually during the term of the Employment
Agreement, with expected annual target grant date value of the underlying equity
of one hundred twenty percent (120%) of Mr. Brager's annual base salary at time
of grant, in such forms of awards and on such terms as may be determined from
time to time by the Company's Compensation Committee
The initial Time RSUs vest in three equal annual installments on the first three
anniversaries of the grant date, provided that, except as described below,
Mr. Brager continues in employment with the Company through each vesting date.
The initial Performance RSUs vest at the end of a three-year performance period
from April 1, 2020 through March 31, 2023, at, above or below the target number
of shares, based on the financial performance of the Company during such
performance period. The performance criteria and performance targets for the
Performance RSUs are to be established by the Company's Compensation Committee
and set forth in an award agreement as of the grant date.
Except as described below, the Performance RSUs will vest, based on performance,
at the end of the three-year performance period only if Mr. Brager continues in
employment with the Company or the Bank through such date.
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The Employment Agreement provides that if Mr. Brager is terminated without
"cause" (other than by reason of his disability) he is to be paid an amount
equal to the sum of two times (2x) his annual base pay plus two times (2x) his
average annual bonus granted for the preceding two calendar years during his
tenure as the Company's Chief Executive Officer (substituting his target annual
bonus for an annual bonus component if he has not served in such capacity for
two full calendar years), which amount is payable over 12 months. Mr. Brager's
receipt of any severance benefits pursuant to the terms of the Agreement
(including severance benefits upon a "change-in-control" described below) is
conditioned upon his execution of a release of claims in favor of the Company
and the Bank.
In the event Mr. Brager is terminated without "cause" within 120 days before a
"change-in-control" or within 12 months after a "change-in-control" or resigns
for "good reason" within 12 months after a "change-in-control" (as such terms
are defined in the Employment Agreement), he is to be paid an amount equal to
the sum of two times (2x) his annual base pay plus two times (2x) his average
annual bonus granted for the preceding two calendar years during his tenure as
the Company's Chief Executive Officer (substituting his target annual bonus for
an annual bonus component if he has not served in such capacity for two full
calendar years), which amount is payable over 12 months.
In addition, upon a change-in-control, with or without Mr. Brager's termination
of employment, Mr. Brager's unvested options and Time RSUs are to vest
immediately; Mr. Brager's Performance RSUs for any performance period for which
less than two years have been completed prior to the change-in-control are to
vest immediately for the target number of shares; and Mr. Brager's Performance
RSUs for any performance period that has ended or for which at least two years
of the performance period have been completed prior to the change-in-control are
to vest immediately for the number of shares based on actual performance during
the performance period or the completed portion of the performance period.
The foregoing summary of the Employment Agreement is qualified in its entirety
by reference to the Employment Agreement, a copy of which is attached hereto as
Exhibit 10.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On February 19, 2020 the Company issued a press release announcing the
appointment of Mr. Brager as the Company's and the Bank's Chief Executive
Officer. A copy of the press release is attached hereto as Exhibit 99.1 and the
information therein is incorporated herein by reference.
The information reported under Item 7.01 in this Current Report on Form 8-K,
including Exhibit 99.1 attached hereto, shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, regardless of any general incorporation
language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
10.1 Employment Agreement by and among CVB Financial Corp. and Citizens
Business Bank, on the one hand, and David A. Brager, on the other
hand, dated February 14, 2020.
99.1 Press Release, dated February 19, 2020.
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