<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
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
CVB FINANCIAL CORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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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(2) Aggregate number 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
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
CVB FINANCIAL CORP.
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1998
TO OUR SHAREHOLDERS:
The 1998 Annual Meeting of Shareholders of CVB Financial Corp. will be held
at the Double Tree Hotel, 222 North Vineyard, Ontario, California 91764 on
Wednesday, May 20, 1998 at 7:00 p.m. local time.
At our meeting, we will ask you to act on the following matters:
1. ELECTION OF DIRECTORS. Elect seven persons to the Board of Directors to
serve for a term of one year. The following seven persons are the nominees:
George A. Borba Charles M. Magistro
John A. Borba James C. Seley
Ronald O. Kruse D. Linn Wiley
John J. LoPorto
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS. Ratify
the appointment of Deloitte & Touche as independent public accountants for 1998.
3. OTHER BUSINESS. Transact any other business which properly comes before
the meeting.
Our Bylaws provide for the nomination of directors in the following manner:
"Nominations for election of members of the Board of Directors may be made
by the Board of Directors or by any shareholder of any outstanding class of
voting stock of the corporation entitled to vote for the election of directors.
Notice of intention to make any nominations, other than by the Board of
Directors, shall be made in writing and shall be received by the President of
the corporation no more than 60 days prior to any meeting of shareholders called
for the election of directors, and no more than 10 days after the date the
notice of such meeting is sent to shareholders pursuant to Section 2.2 of these
bylaws; provided, however, that if only 10 days' notice of the meeting is given
to shareholders such notice of intention to nominate shall be received by the
President of the corporation not later than the time fixed in the notice of the
meeting for the opening of the meeting. Such notification shall contain the
following information to the extent known to the notifying shareholder: (a) the
name and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the number of shares of voting stock of the corporation
owned by each proposed nominee; (d) the name and residence address of the
notifying shareholder; and (e) the number of shares of voting stock of the
corporation owned by the notifying shareholder. Nominations not made in
accordance herewith shall be disregarded by the then chairman of the meeting,
and the inspectors of election shall then disregard all votes cast for each
nominee."
If you were a shareholder of record at the close of business on April 1,
1998, you may vote at the meeting or at any postponement or adjournment of the
meeting.
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IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors
DONNA MARCHESI
Corporate Secretary
Dated: April 13, 1998
2
<PAGE> 4
PROXY STATEMENT FOR
CVB FINANCIAL CORP.
701 NORTH HAVEN AVENUE, SUITE 350
ONTARIO, CALIFORNIA 91764
(909) 980-4030
This proxy statement contains information about the annual meeting of
shareholders of CVB Financial Corp. to be held on Wednesday, May 20, 1998
beginning at 7:00 p.m., local time, at the Double Tree Hotel, 222 North
Vineyard, Ontario, California, 91764, and at any postponements or adjournments
of the meeting.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
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 vote at the 1998 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 13, 1998 to all shareholders entitled
to vote. The record date for those entitled to vote is April 1, 1998. On April
1, 1998, there were 15,016,958 shares of our common stock outstanding. The
common stock is our only class of stock outstanding. We are also sending along
with this Proxy Statement, the Company's 1997 Annual Report which includes our
financial statements.
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 all seven nominees for director, and
o "FOR" ratification of the appointment of Deloitte & Touche as
independent accountants for 1998.
If any other matter is presented, your proxy will vote in accordance with
the recommendation of the Board of Directors, or, if no recommendation is given,
in their own discretion. At the time this Proxy Statement went to press, we knew
of no matters which needed to be acted on at the meeting, other than those
discussed in this Proxy Statement.
HOW MANY VOTES DO I HAVE?
Each share of common stock entitles you to one vote. The proxy card
indicates the number of shares of common stock that you own. In the election of
directors, you are entitled to cumulate your votes if you are present at the
meeting, the nominee's(s') name(s) have properly been placed in nomination, and
you have given notice at the
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<PAGE> 5
meeting prior to the actual voting of your intention to vote your shares
cumulatively. Cumulative voting allows you to give one nominee as many votes as
is equal to the number of directors to be elected, multiplied by the number of
shares you own, or to distribute your votes in the same fashion between two or
more nominees. The return of an executed proxy grants the Board of Directors the
discretionary authority to also cumulate votes.
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 you file with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
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 an account statement and
letter from the nominee authorizing you to vote the shares and indicating that
you are the beneficial owner of the shares on April 1, 1998, the record date for
voting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the conduct of business at the meeting. Proxies
which are marked as abstentions will be included in the calculation of the
number of shares considered to be present at the meeting.
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL?
The seven 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 vote will
not count either "for" or "against" the nominee. In order to ratify the
selection of independent accountants, the accountants must receive the
affirmative vote of a majority of the votes represented and voting at the annual
meeting which also must be at least a majority of the required quorum. So, if
you "abstain" from voting, it has the same effect as if you voted "against" this
proposal.
WHAT ARE THE COSTS OF SOLICITATION OF PROXIES?
The Company will bear the costs of this solicitation, including the expense
of preparing, assembling, printing and mailing this Proxy Statement and the
material used in this solicitation of proxies. The proxies will be solicited
principally through the mails, but directors, officers and regular employees of
the Company may solicit proxies personally or by telephone. Although there is no
formal agreement to do so, the Company 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, the Company
may pay for and utilize the services of individuals or companies not regularly
employed by the Company in connection with the solicitation of proxies.
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S COMMON STOCK?
The following table shows the beneficial ownership of common stock as of
April 1, 1998 by each person we know to be the beneficial owner of more than
five percent of the outstanding shares of common stock. "Beneficial ownership"
is a technical term broadly defined by the Securities and Exchange Commission to
mean more
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<PAGE> 6
than ownership in the usual sense. So, for example, you beneficially own the
Company's common stock not only if you hold it directly, but also if you
indirectly (through a relationship, contract or understanding) have (or share)
the power to vote the stock, to sell it or you have the right to acquire it
within 60 days of April 1, 1998:
<TABLE>
<CAPTION>
NAME ADDRESS COMMON STOCK
---- ------- BENEFICIALLY OWNED
------------------
NUMBER PERCENT
OF SHARES OF CLASS
--------- --------
<S> <C> <C> <C>
George A. Borba 701 N. Haven Avenue 2,558,166 16.97
Ontario, CA 91764
Charles M. Magistro 701 N. Haven Avenue 1,078,499 7.16
Ontario, CA 91764
John Vander Schaaf 500 Wells Lane 983,823 6.53
Ripon, CA 95366
</TABLE>
HOW MUCH STOCK DO THE COMPANY'S DIRECTORS AND OFFICERS OWN?
The following table shows the beneficial ownership of the Company's common
stock as of April 1, 1998 by (i) our President and Chief Executive Officer; (ii)
our four most highly compensated executive officers in 1997; (iii) each director
and nominee for director and (iv) by all directors and executive officers as a
group.
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<PAGE> 7
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
------------------
NUMBER PERCENT
NAME OF SHARES(1) OF CLASS(2)
---- ------------ -----------
<S> <C> <C>
George A. Borba(3)
Chairman of the Board and Nominee 2,558,166 16.97
John A. Borba(3)
Director and Nominee 593,360 3.94
Ronald O. Kruse(3)
Director and Nominee 440,298 2.92
John J. LoPorto(3)(4)
Director and Nominee 372,062 2.47
Charles M. Magistro(3)
Director and Nominee 1,078,497 7.15
James C. Seley(5)
Director and Nominee 13,586 *
D. Linn Wiley, President, Chief
Executive Officer, Director and
Nominee(6) 317,806 2.01
Frank Basirico, Executive
Vice President(7) 10,084 *
Jay W. Coleman, Executive
Vice President(8) 103,992 *
Edwin Pomplun, Executive
Vice President(9) 4,800 *
Robert J. Schurheck, Former Executive Vice President
and Chief Financial Officer 71,166 *
Current Directors and Executive Officers
(13 persons)(10) 5,493,651 35.27
</TABLE>
- ------------------
* Less than 1%.
1/ Except as otherwise noted below, each person directly or indirectly has
sole or shared voting and investment power with respect to the shares
listed.
2/ The percentage for each of these persons or group is based upon the total
number of shares of the Company's Common Stock outstanding as of the Record
Date plus the shares which the respective individual or group has the right
to acquire within 60 days after April 1, 1998 by the exercise of stock
options.
3/ Includes 60,395 shares which each individual can acquire within 60 days
after April 1, 1998 by the exercise of stock options.
4/ Includes 1,557 shares held by Mr. LoPorto as custodian for his
grandchildren.
5/ Includes 12,079 shares which Mr. Seley can acquire within 60 days after
April 1, 1998 by the exercise of stock options.
6/ Includes 124,546 shares which Mr. Wiley can acquire within 60 days after
April 1, 1998 by the exercise of stock options.
(footnotes continued on next page)
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7/ Represents 10,084 shares which Mr. Basirico can acquire within 60 days
after April 1, 1998 by the exercise of stock options.
8/ Represents 103,992 shares which Mr. Coleman can acquire within 60 days
after April 1, 1998 by the exercise of stock options.
9/ Includes 3,300 shares which Mr. Pomplun can acquire within 60 days after
April 1, 1998 by the exercise of stock options.
10/ Includes 555,976 shares which members of the group can acquire within 60
days after April 1, 1998 by the exercise of stock options.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
PROPOSAL 1: ELECTION OF DIRECTORS
We have nominated seven directors for election at the annual meeting, which
is the number of slots fixed for the election of directors.
We will nominate the persons named below, all of whom are present members
of the Board of Directors of the Company, for election to serve until the 1999
Annual Meeting of Shareholders. Each of these persons is also a member of the
Board of Directors of the Company's principal subsidiary, Citizens Business
Bank. The Board will cast its votes to effect the election of these nominees. If
any nominee is unable to serve, your proxy may vote for another nominee proposed
by the Board or the Board may reduce the number of directors to be elected.
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<PAGE> 9
<PAGE> 10
THE NOMINEES
The directors standing for reelection are:
<TABLE>
<CAPTION>
Principal Year First
Occupation Elected or
For Past Appointed
Name and Position Five Years Age a Director
- ----------------- ---------- --- ----------
<S> <C> <C> <C>
George A. Borba 1/ Dairy Farmer, George Borba 65 1981
Chairman of the Board & Son Dairy
John A. Borba 1/ Dairy Farmer, John Borba & 70 1981
Director Sons
Ronald O. Kruse Chairman, Kruse Investment 59 1981
Vice Chairman of the Board and Co., Inc.2/
Director
John J. LoPorto Investor 65 1981
Director
Charles M. Magistro Physical Therapy Consultant 73 1981
Vice Chairman of the Board and
Director
James C. Seley Trustee, Seley Family Trust 56 1996
Director
D. Linn Wiley President and Chief 59 1991
President, Chief Executive Officer Executive Officer, CVB
and Director Financial Corp. and
Citizens Business Bank
</TABLE>
- ----------
1/ George A. Borba and John A. Borba are brothers.
2/ Prior to joining Kruse Investment Co., Inc., Mr. Kruse was Chairman of O.H.
Kruse Grain & Milling from 1974 through August 31, 1995.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors oversees the business and affairs of the Company.
The Board also has nine standing committees including an Audit Committee, a
Personnel Committee and a Stock Option Committee all of which, except for the
Stock Option Committee, are also committees of the Bank. The Board does not have
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.
THE AUDIT COMMITTEE
In 1997 John Borba chaired the Audit Committee, which held twelve meetings
in 1997. Messrs. R. Kruse, J. LoPorto, and J. Seley are also members of this
committee. The purpose of the Audit Committee, among other things, is to direct
the activities of the external auditors of the Bank to fulfill the legal and
technical requirements necessary to adequately protect the directors,
shareholders and employees of the Company and the Bank. The Audit
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<PAGE> 11
Committee also recommends to the Board of Directors the appointment of
independent accountants and makes certain that the external auditors have the
necessary freedom and independence to freely examine all the Bank records.
THE PERSONNEL COMMITTEE
In 1997, Mr. Charles Magistro chaired the Personnel Committee, which held
three meetings during 1997. Messrs. G. Borba, J. Borba, R. Kruse, J. Seley and
D.L. Wiley are also members of this committee. This committee approves issues
related to the compensation of the officers and employees of the Bank.
THE STOCK OPTION COMMITTEE
In 1997 Mr. George Borba chaired the Stock Option Committee of the Company,
which held five meetings during 1997. Messrs. J. Borba, R. Kruse, J. LoPorto, C.
Magistro, and J. Seley are also members of this committee. The Stock Option
Committee administers the Company's stock option plan, including making all
decisions regarding the grant of options.
THE NUMBER OF MEETINGS ATTENDED
During 1997, the Board of Directors held 12 meetings, and the Board of
Directors of the Bank held 12 meetings. All of the directors of the Company and
the Bank during 1997 attended at least 75% of the aggregate of (i) the total
number of such Company and Bank Board meetings and (ii) the total number of
meetings held by all committees of the Board of Directors of the Company or Bank
on which he served during 1997.
EXECUTIVE COMPENSATION
HOW DO WE COMPENSATE DIRECTORS?
We compensate directors of the Company and the Bank with a fee for
attendance at Board and committee meetings. Each director received $3,068 per
month for Board and Committee meetings, except for the Chairman of the Board
(Mr. George Borba) and one Vice Chairman of the Board (Charles Magistro) who
each received $8,763 and $5,843, per month for attendance such meetings. Mr.
Wiley does not receive any fees for serving as a director of the Company or the
Bank. The Company paid a total of $322,536 in 1997 as directors' fees. Pursuant
to the Company's option plan, each of the Company's non-employee directors,
except for Mr. Seley, has received options to purchase a total of 60,397 shares
of the Company's common stock. These options were granted over a five-year
period after each non-employee director completed a year of service with the
Company. Mr. Seley is entitled to the same benefit under the Company's option
plan as he completes his first five years of service with the Company. In
addition, the Company pays a health insurance premium for each of the Company's
non-employee directors. In 1997, the premium averaged approximately $5,000 for
each non-employee director.
HOW DO WE COMPENSATE EXECUTIVE OFFICERS?
Summary of Cash and Certain Other Compensation
The tables on pages 8-10 show salaries and bonuses paid during the last
three years, options granted in fiscal 1997 and 1997 fiscal year-end option
values for our Chief Executive Officer and our next four most highly compensated
executive officers (collectively, the "Named Executives"). We have provided
information for Mr. Robert Schurheck who retired as Executive Vice President and
Chief Financial Officer from the Company and the Bank on February 28, 1998.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
------------
Annual Compensation Awards
----------------------------------------- ------------
Other Annual All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($)(1) Options(2) Compensation($)(3)
- --------------------------------------- -------- ---------- -------- ------------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
D. LINN WILEY 1997 751,522(4) 224,475 -- -- 12,000
President and Chief Executive Officer 1996 628,179(4) 204,750 -- -- 12,000
1995 516,357(4) 187,680 -- 6,261 11,996
FRANK BASIRICO 1997 135,000 40,500 -- -- 7,769
Executive Vice President and Senior 1996 125,000 7,500 -- 33,000 6,651
Loan Officer of the Bank 1995 83,137 3,088 -- -- 6,651
JAY W. COLEMAN 1997 153,500 46,050 -- -- 12,000
Executive Vice President of Sales and 1996 147,500 33,188 -- -- 12,000
Service Division of the Bank 1995 140,000 30,450 -- 12,268 11,996
EDWIN POMPLUN 1997 115,000 31,913 -- 9,750
Executive Vice President and Trust 1996 110,000 20,350 -- 8,250 0
Division Manager of the Bank 1995 N/A N/A N/A N/A N/A
ROBERT J. SCHURHECK 1997 151,000 57,758 -- -- 12,000
Chief Financial Officer of the 1996 145,000 40,238 -- -- 12,000
Company and Executive Vice 1995 135,000 36,450 -- 12,268 11,996
President/Chief Financial Officer of
the Bank
</TABLE>
- ---------------------
(1) The amount of the aggregate of the other annual compensation did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus for
the particular executive officer.
(2) Represents stock options we granted, retroactively adjusted, as
appropriate, for the 10% stock dividends paid in January 1997 and January
1996, and for our three for two stock split paid in January, 1998.
(3) Represents amounts the Bank contributed to the Profit Sharing Plan and
allocated to the Named Executives' vested or unvested account under such
plan.
(4) Includes $386,522 for 1997, $278,179 for 1996, and $176,357 for 1995 that
represents the dollar value of 16,105 shares of Common Stock, 14,641 shares
of Common Stock, and 13,310 shares of Common Stock we granted to Mr. Wiley
pursuant to his employment agreement. See "DIRECTORS AND EXECUTIVE
OFFICERS--Compensation of Executive Officers and Directors--Employment
Agreements and Termination of Employment Arrangements."
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<PAGE> 13
Stock Options
The following table provides information with respect to the Named
Executives concerning the grant of options during 1997. We have retroactively
updated the share numbers in this table to take into account the 3 for 2 stock
split we paid on January 21, 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1997
Potential
Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
----------------- ---------------
(a) (b) (c) (d) (e) (f) (g)
Number of Percent of
Securities Total
Underlying Options Exercise
Options Granted or Base
Granted to Employees Price Expiration
Name (#)(1) in 1997 ($/Sh)(1) Date 5%($) 10%($)
---- ---------- ------------ --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Edwin Pomplun 9,750 30% 15.75 8-20-07 $96,575 $244,739
</TABLE>
- ----------
(1) Retroactively adjusted for the three for two stock split we paid on January
21, 1998.
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<PAGE> 14
Option Exercises and Holdings
The following table provides information with respect to the Named
Executives concerning their exercise of options during the 1997 fiscal year. We
have retroactively updated the share numbers in this table to take into account
the 3 for 2 stock split we paid on January 21, 1998.
AGGREGATED OPTION(1) EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at 12/31/97 In-the-Money Options at
Acquired (#)(2) 12/31/97 ($)(3)
on Exercise Value Realized --------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- --------------- -------------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
D. Linn Wiley -- -- 123,293 3,758 $ 2,619 $ 64,015
Frank Basirico -- -- 9,721 29,087 150,402 435,084
Jay W. Coleman -- -- 101,547 7,362 2,270,158 125,424
Edwin Pomplun -- -- 1,650 16,350 26,208 104,830
Robert J. Schurheck -- -- 50,388 7,362 1,053,704 125,424
</TABLE>
- ----------
(1) We have no plans pursuant to which stock appreciation rights may be
granted.
(2) Retroactively adjusted for the three for two stock split we paid on January
21, 1998.
(3) Value of unexercised "in-the-money" options is the difference between the
fair market value of the securities underlying the options and the exercise
or base price of the options as of December 31, 1997.
EMPLOYMENT AGREEMENT WITH OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER
On August 8, 1991, we entered into an employment agreement with Mr. Wiley
which sets forth his compensation as President and Chief Executive Officer of
the Company and the Bank. The agreement provides for an annual base salary of at
least $300,000. The agreement further provides for Mr. Wiley to receive an
annual bonus of $200,000 for each year after 1991, although Mr. Wiley's actual
bonus may be more or less than $200,000 depending on the attainment of certain
performance goals. In addition, as compensation for each full year of service,
the agreement provides that Mr. Wiley will receive an unrestricted, fully vested
and non-forfeitable Common Stock grant, together with certain additional cash
compensation, on August 21 of each year commencing with August 21, 1992. The
number of shares to be granted each year is as follows (subject to standard
anti-dilution adjustments including the 10% stock dividend paid by the Company
in January 1993, January 1994, January 1995, January 1996 and January 1997):
10,000 shares in 1992, 20,000 shares in 1993, 20,000 shares in 1994, 10,000
shares in 1995, 10,000 shares in 1996 and 10,000 shares in 1997. In the event
there is a change in control of the Company, or Mr. Wiley is terminated for any
reason, other than for cause, he is entitled to receive a sum equal to one
year's base salary at the rate being paid to him at the time he is terminated,
unless he accepts employment with the acquiring company. Additionally, the
agreement provides for certain other benefits, including the grant of an option
to purchase 50,000 shares of Common Stock (which was made in 1991) at an
exercise price equal to the fair market value of such stock on the date of
grant, use of an automobile, a country club membership, participation in the
Bank's Profit Sharing Plan and medical and life insurance benefits.
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<PAGE> 15
SEVERANCE COMPENSATION AGREEMENTS WITH CERTAIN OTHER EXECUTIVE OFFICERS
In September 1996, the Bank entered into severance compensation agreements
with each of the Named Executives, except for Mr. Wiley. These agreements
provide that in the event that a "Change of Control," as described below, occurs
during the executive's employment and (i) the executive's employment is
terminated by the Company or the Bank or any successor, other than for cause,
within one year of the completion of such Change of Control, or (ii) the
executive terminates or resigns employment for Good Reason, as described below,
within one year of the completion of a Change in Control, the executive shall
receive an amount equal to the executive's annual base compensation for the last
calendar year immediately preceding the Change in Control. This amount will be
paid in a lump sum within five days after the effective date of termination of
the executive's employment.
"Change in Control" occurs if, among other things,:
(i) any person or group, other than a director of officer serving since
September 1996, 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 possessing more than 50% of the total voting power of the Company's or
the Bank's stock;
(ii) a majority of the members of the Company's or the Bank's 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 occurs where the holders of the Bank's or the Company's
voting stock immediately prior to the effective date of such merger own less
than 50% of the voting stock of the entity surviving such merger; or
(iv) any one person or 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. A transfer of assets 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.
"Good Reason" includes (i) the executive's then current level of annual
base salary or employee benefit coverage is reduced; (ii) the executive suffers
a material diminution in, among others, title, authority or responsibilities; or
(iii) the executive's principal business office is relocated by more than fifty
miles from its existing location.
REPORT ON EXECUTIVE COMPENSATION
The Report of the Personnel Committee and the Stock Option Committee should
not be deemed 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 the information contained in the report by
reference.
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<PAGE> 16
REPORT OF THE PERSONNEL COMMITTEE
AND THE STOCK OPTION COMMITTEE
WHAT IS THE COMPANY'S PHILOSOPHY ON EXECUTIVE COMPENSATION?
The Company has 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.
There are three principal components of the executive compensation program.
They include base salary compensation, bonus compensation (performance
compensation) and long-term incentive compensation.
BASE SALARY
For 1997, we determined the base salary compensation for each of the
Company's executive officers. This includes the Named Executives, other than Mr.
Wiley. We first established a range of base salary compensation for each
executive. The salary range is based on the California Bankers Association
salary survey and other salary information and considerations. We placed the
mid-point of the base salary range at the higher end of the average base salary
range of other California financial institutions of comparable size. This
reflects our willingness to pay a higher base salary than our competitors to
attract and retain highly qualified executives and employees.
We predicate the base salary on the executive's ability, experience and
past and potential performance and contribution to the Company. Furthermore, we
establish the base salary so that we will have the ability to increase these
base salaries within the salary ranges in future years based on the executive's
performance. The full Board of Directors approved both the salary range and the
actual base salary for each executive officer.
We will evaluate and adjust the range of each executive's base salary, if
appropriate, in subsequent years, based on future salary surveys, comparable
salary information and other considerations. Base salary adjustments for each
executive will be predicated primarily on performance and the executive's
position in the base salary range. We conduct performance evaluations at least
annually. We base the evaluations on results achieved. These results are
measured against specific performance standards established at the beginning or
during the course of the year. For example, a branch manager would have
performance objectives and standards based on, among other things, deposit
growth, fee income, expense control and net earnings.
BONUS
We base bonus compensation on the Bank's return on equity and other
specific performance criteria. The Bank must achieve a minimum return on equity
for anyone to be eligible for a bonus. This criterion provided for a minimum
return on average equity of 15% for 1997. The Bank's actual return on average
equity for 1997 was 18.87%. The individual performance objectives and standards
relate to specific results where the executive has substantial influence and
accountability. The full Board of Directors approved all executive officers'
bonuses for service during 1997.
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<PAGE> 17
WHAT KIND OF LONG-TERM INCENTIVE COMPENSATION DOES THE COMPANY OFFER?
We have two compensation plans that provide long-term incentives for our
executive officers. They include a Stock Option Plan and a Profit Sharing Plan.
The Stock Option Plan aligns the interests of key employees, including the
Named Executives, with those of our shareholders. We provide these employees
with an incentive to achieve superior performance by granting them long-term
options to purchase Company Common Stock at a fixed exercise price that equals
the fair market value of the underlying stock on the date of the grant. The
Stock Option Committee administers the Stock Option Plan. This committee has the
authority to select the key employees eligible for the stock options and the
number of options they will receive. The members of the Stock Option Committee
do not utilize any performance goals in determining the number of options to be
granted, nor do they consider the number of options previously granted to an
executive officer. Rather, the members base the award of stock options on their
own analysis of that employee's contribution to the Company, including an
assessment of the employee's responsibilities, as well as the employee's
commitment to the Company's future. Last year, the Company's shareholders
approved an amendment to the Stock Option Plan as a result of the enactment of
Section 162(m) of the Internal Revenue Code which limits the deductibility of
compensation paid to certain executive officers in excess of $1 million dollars
per year. Stock options awarded under the Option Plan now qualify for exclusion
under Section 162(m) of the Code as performance-based compensation.
The Profit Sharing Plan primarily provides retirement benefits to all
eligible employees, including Named Executives. It also has death and disability
features. Employees become eligible upon completing at least one year of
service. Annual contributions are made solely by the Company. These
contributions are entirely discretionary, and are approved by the Board of
Directors based on the Company's earnings. For 1997, the Company contributed
$1,021,248, or 8% of total employee base salary and bonus, to the Profit Sharing
Plan. We allocate contributions proportionately to the accounts of plan
participants based on their base salaries and bonus. Plan participants become
fully vested in these amounts upon reaching seven years of service.
HOW DO WE COMPENSATE OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER?
Mr. Wiley, the President and Chief Executive Officer of the Company and the
Bank, received compensation for his services during 1997 based primarily upon
his rights under his employment agreement with the Company and the Bank. We
discuss this contract under the heading "Employment Agreement with Our President
and Chief Executive Officer." Mr. Wiley is also eligible to receive a
discretionary annual bonus pursuant to his employment agreement. We base his
bonus on specific performance achievements as outlined above for other executive
officers. Mr. Wiley may receive a bonus of up to and including 83% of his base
salary under this plan. He received an annual bonus of $224,475, or 61.5% of
base salary, for his services in 1997. This bonus was predicated on return on
average equity, deposit growth, noninterest expense control, loan delinquencies,
net loan losses and staff turnover. In addition
13
<PAGE> 18
to the benefits his employment agreement provides, Mr. Wiley is an eligible
participant in the Company's Profit Sharing Plan. He received an unvested
allocation of $12,000 for 1997. This represents his proportionate share of the
aggregate employer contribution authorized by the Board of Directors for 1997.
Dated: April 1, 1998
THE PERSONNEL COMMITTEE
GEORGE A. BORBA
JOHN A. BORBA
RONALD O. KRUSE
CHARLES M. MAGISTRO
JAMES C. SELEY
D. LINN WILEY
THE STOCK OPTION COMMITTEE
GEORGE A. BORBA
JOHN A. BORBA
RONALD O. KRUSE
JOHN J. LoPORTO
CHARLES M. MAGISTRO
JAMES C. SELEY
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Personnel Committee or the Stock Option
Committee during 1997 has ever been an officer or employee of the Company or any
of its subsidiaries, except for Mr. Wiley, who is the President and Chief
Executive Officer of the Company and the Bank and a member of the Personnel
Committee, and Mr. George Borba, who is the Chairman of the Board of the Company
and the Bank and a member of both the Personnel Committee and the Stock Option
Committee. The Personnel Committee made all decisions regarding compensation of
executive officers during 1997, other than those related to stock options or the
base salary of Mr. Wiley.
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return (stock price appreciation plus reinvested
dividends) on Common Stock with (i) the cumulative total return of the American
Stock Exchange 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 are 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.
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<PAGE> 19
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.
[GRAPH OMITTED]
Fiscal Years Ended December 31, 1992 Through December 31, 1997
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
- ----------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
CVB Financial Corp. 100 150.34 196.90 189.55 295.33 585.63
Industry Index 100 128.89 126.39 153.71 218.62 237.93
AMEX Market Index 100 118.81 104.95 135.28 142.74 171.76
</TABLE>
15
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and executive officers of the Company and the
companies with which they are associated were customers of, and had banking
transactions with, the Bank in the ordinary course of its business during 1997,
and the Bank expects to have such banking transactions in the future. The Bank
made all of these loans and commitments on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing at
the time for comparable transactions with other persons of similar
creditworthiness. In our opinion, these transactions did not involve more than a
normal risk of collectibility or present other unfavorable features.
DID DIRECTORS AND OFFICERS COMPLY WITH THEIR SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE REQUIREMENTS IN 1997?
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors, and persons who own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the American
Stock Exchange. The SEC requires executive officers, directors and greater than
ten-percent shareholders to furnish to us copies of all Section 16(a) forms they
file.
Based solely on our review of these reports and of certifications furnished
to us, we believe that during the fiscal year ended December 31, 1997 all
executive officers, directors and greater than ten-percent beneficial owners
complied with all applicable Section 16(a) filing requirements, except for Mr.
Pomplun who filed two Forms 4 late each relating to one transaction.
THE BOARD RECOMMENDS A VOTE "FOR" ALL SEVEN NOMINEES FOR DIRECTOR.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have appointed Deloitte & Touche as independent public accountants for
the year ending December 31, 1998. The Audit Committee recommended the
appointment of Deloitte & Touche to the Board. Deloitte & Touche, who performed
audit services for the Company in 1997, including an examination of the
consolidated financial statements and services related to filings with the
Securities and Exchange Commission, has served as our accountants since 1986.
Deloitte & Touche performed all of its services in 1997 at customary rates and
terms. Representatives of Deloitte & Touche will be present at the 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 the Company and our shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE SELECTION OF
DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR 1998.
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ANNUAL REPORT
Together with this Proxy Statement, CVB Financial Corporation has
distributed to each of its shareholders an annual report, including the
Company's Form 10-K, for the year ended December 31, 1997. The Company's Form
10-K contains consolidated financial statements of the Company and its
subsidiaries and the report thereon of Deloitte & Touche, the Company's
independent public accountants.
UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING,
ADDRESSED TO DONNA MARCHESI, SECRETARY OF THE COMPANY, AT 701 NORTH HAVEN
AVENUE, SUITE 350, ONTARIO, CALIFORNIA 91764, WE WILL PROVIDE, WITHOUT CHARGE, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1997, INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.
PROPOSALS OF SHAREHOLDERS
If you wish to submit a proposal for consideration at the Company's 1999
Annual Meeting of Shareholders, you may do so by following the procedures
prescribed in the Securities Exchange Act of 1934. To be eligible for inclusion,
the Company's Corporate Secretary must receive your proposals no later than
December 14, 1998.
Dated: April 13, 1998 CVB FINANCIAL CORP.
By
-------------------------------------
D. Linn Wiley
President and Chief Executive Officer
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<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
Please mark
your votes as
indicated in [X]
this example
FOR all nominees WITHHOLD
listed below (except as AUTHORITY
indicated to the contrary below). to vote for all
Discretionary authority to control the nominees
votes is granted to the Board. listed below
[ ] [ ]
1. ELECTION OF DIRECTORS. 3. OTHER BUSINESS: In their discretion, the Proxies are
authorized to vote upon such other business as may
Nominees: George A. Borba, John A. Borba, properly come before the Meeting and at any and all
Ronald O. Kruse, John J. LoPorto, adjournments thereof. IF ANY OTHER MATTER IS
Charles M. Magistro, James C. Seley and D. Linn Wiley. PRESENTED, YOUR PROXY WILL VOTE IN ACCORDANCE WITH
INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual THE RECOMMENDATION OF THE BOARD OF DIRECTORS, OR IF NO
nominee(s) write that nominee's name in the space below. RECOMMENDATION IS GIVEN, IN THEIR OWN DISCRETION. The
Board of Directors at present knows of no other
_________________________________________________________________ business to be presented at the meeting.
2. RATIFICATION OF APPOINTMENT OF DELOITTE & THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
TOUCHE as independent public accountants FOR AGAINST ABSTAIN ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF
of the Company for the year ending [ ] [ ] [ ] DIRECTORS AND "FOR" RATIFICATION OF THE APPOINTMENT
December 31, 1998. OF DELOITTE & TOUCHE. THE PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS MADE, IT WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND
"FOR" RATIFICATION OF THE APPOINTMENT OF DELOITTE &
TOUCHE.
PLEASE SIGN AND DATE BELOW
I/we hereby ratify and confirm all that said
attorneys and proxies, or any of them, or their
substitutes, shall lawfully do or cause to be done
because of this proxy, and hereby revoke any and all
proxies I/we have given before to vote at the meeting.
I/we acknowledge receipt of the notice of Annual
Meeting and the Proxy Statement which accompanies the
notice.
Signed: _______________________________________ Signed: _______________________________________ Dated: ______________________, 1998
Please date this Proxy and sign above as your name(s) appear(s) on this card. Joint owners should each sign personally. Corporate
proxies should be signed by an authorized officer. Executors, administrators, trustees, etc., should give their full titles.
- -----------------------------------------------------------------------------------------------------------------------------------
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</TABLE>
<PAGE> 23
REVOCABLE PROXY
CVB FINANCIAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1998
THE BOARD OF DIRECTORS IS SOLICITING THIS PROXY
I/we hereby nominate, constitute and appoint John A. Borba, John J. LoPorto and
James C. Seley, and each of them, their attorneys, agents and proxies, with
full powers of substitution to each, to attend and act as proxy or proxies at
the 1998 Annual Meeting of Shareholders of CVB FINANCIAL CORP, which will be
held at the Double Tree Hotel, 222 North Vineyard, Ontario, California 91764,
on Wednesday, May 20, 1998, at 7:00 p.m., and at any and all adjournments
thereof, and to vote as I/we have indicated the number of shares which I/we, if
personally present, would be entitled to vote.
PLEASE SIGN AND DATE ON REVERSE SIDE
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