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FDIC Enforcement Decisions and Orders

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{{4-30-96 p.C-3646}}
   [10,975]In the Matter of Corporate Bank, Santa Ana, California, Docket No. FDIC-94-54b (5-4-94).

   Bank to cease and desist from such unsafe or unsound practices as operating with employment and severance agreements that provide excessive pay for former officer. (This order was terminated by order of the FDIC dated 2-8-96. See ¶16,071.)

   [.1] Compensation—Employment Contract—Recision Required
   [.2] Compensation—Severance Agreement—Recision Required
   [.3] Shareholders—Disclosure—Cease and Desist Order

In the Matter of

CORPORATE BANK
SANTA ANA, CALIFORNIA
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-94-54b

   Corporate Bank, Santa Ana, California ("Bank"), having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices alleged to have been committed by the Bank and of its right to a hearing on the alleged charges under section 8(b)(1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b)(1), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC"), dated May 4, 1994, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices, the Bank consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
   The FDIC considered the matter and determined that it had reason to believe that the Bank had engaged in unsafe or unsound banking practices. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns cease and desist from the following unsafe and unsound banking practices:
   (a) operating with an employment agreement with its former president and chief executive officer which contains imprudent termination provisions and provides for excessive amounts of severance pay; and
   (b) operating under a settlement agreement with its former president and chief executive officer which provides for an excessive amount of severance pay.
   IT IS FURTHER ORDERED, that the Bank, its institution-affiliated parties, and its {{6-30-95 p.C-3647}}successors and assigns, take affirmative action as follows:

   [.1] 1. The Bank shall rescind paragraph 6 of the Bank's Employment Agreement with Gary M. Wrigley dated May 15, 1990 ("Wrigley Employment Agreement"), and shall cease and desist from making any and all payments to Gary M. Wrigley pursuant to paragraph 6 of the Wrigley Employment Agreement.

   [.2] 2. The Bank shall rescind the Settlement Agreement and General Release entered into between Gary M. Wrigley and the Bank on January 31, 1994 and February 4, 1994, respectively ("Wrigley Settlement Agreement"), and shall cease and desist from making any and all payments to Gary M. Wrigley and the law firm of Paul, Hastings, Janofsky & Walker pursuant to the Wrigley Settlement Agreement. Prior to entering into any agreement for the payment of any and all sums, whether directly or indirectly, to Gary M. Wrigley and/or the law firm of Paul, Hastings, Janofsky & Walker arising out of the termination of and/or resignation by Gary M. Wrigley, the Bank shall receive the prior written approval of the Regional Director of the FDIC's San Francisco Regional Office ("Regional Director").

   [.3] 3. Following the effective date of this ORDER, the Bank shall send to its shareholders or otherwise furnish a description of this ORDER in conjunction with the Bank's next shareholder communication and also in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Section, 550 - 17th Street, N.W., Washington, D.C. 20429, at least fifteen (15) days prior to dissemination to shareholders. Any changes requested to be made by the FDIC shall be made prior to dissemination of the description, communication, notice, or statement.
   This ORDER shall become effective ten (10) days from the date of its issuance.
   The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at San Francisco, California, this 4th day of May, 1994.
   Pursuant to delegated authority.

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