SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11 (c) or Rule 14a-12
COMMUNITY WEST BANCSHARES
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(Name of Registrant as Specified in Its Charter)
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(Name of Person (s) Filing Proxy Statement, if other than 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) (1) 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 paid
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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COMMUNITY WEST BANCSHARES
445 Pine Avenue
Goleta, California 93117-3474
Telephone: (805) 692-5821
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 2004
NOTICE IS HEREBY GIVEN that the 2004 Annual Meeting of Shareholders
(Meeting) of Community West Bancshares (Company) will be held at the Holiday
Inn, 5650 Calle Real, Goleta, California 93117, on Thursday, May 27, 2004, at
6:00 P.M. Pacific Daylight Time, for the purpose of considering and voting on
the following matters:
1. ELECTION OF DIRECTORS. To elect seven persons to the Board of
Directors of the Company (Board) to serve until the 2005 Annual Meeting of
Shareholders and until their successors are elected and have qualified. The
following persons are the Board nominees:
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen Kirk B. Stovesand
Lynda J. Nahra
2. OTHER BUSINESS. Transacting such other business as may properly
come before the Meeting and any adjournment or postponements thereof.
The Proxy Statement that accompanies this Notice contains additional
information regarding the proposals to be considered at the Meeting and
shareholders are encouraged to read it in its entirety.
The Board has fixed the close of business on April 9, 2004, as the record
date for determination of shareholders entitled to notice of, and the right to
vote at, the Meeting.
As set forth in the enclosed Proxy Statement, proxies are being solicited
by and on behalf of the Board. All proposals set forth above are proposals of
the Company. It is expected that these materials will be mailed to shareholders
on or about April 9, 2004.
The Bylaws of the Company 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
capital stock of the corporation entitled to vote for the election of
directors. Notice of intention to make any nominations (other than for
persons named in the notice of the meeting at which such nomination is to
be made) shall be made in writing and shall be delivered or mailed to the
president of the corporation no more than sixty (60) days prior to any
meeting of shareholders called for the election of directors and no more
than ten (10) days after the date the notice of such meeting is sent to
shareholders pursuant to Section 2.4 of these Bylaws; provided, however,
that if ten (10) days notice of such meeting is sent to shareholders, such
notice of intention to nominate must 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 capital stock of the
corporation owned by each proposed nominee; (d) the name and residence
address of the
notifying shareholder; (e) the number of shares of capital stock of the
corporation owned by the notifying shareholder; (f) with the written
consent of the proposed nominee, a copy of which shall be furnished with
the notification, whether the proposed nominee has ever been convicted of
or pleaded nolo contendere to any criminal offense involving dishonesty or
breach of trust, filed a petition in bankruptcy or been adjudged a
bankrupt. The notice shall be signed by the nominating shareholder and by
the nominee. Nominations not made in accordance herewith shall be
disregarded by the chairman of the meeting and, upon his instructions, the
inspectors of election shall disregard all votes cast for each such
nominee. The restrictions set forth in this paragraph shall not apply to
nomination of a person to replace a proposed nominee who has died or
otherwise become incapacitated to serve as a director between the last day
for giving notice hereunder and the date of election of directors if the
procedure called for in this paragraph was followed with respect to the
nomination of the proposed nominee. A copy of the preceding paragraph shall
be set forth in the notice to shareholders of any meeting at which
directors are to be elected."
SINCE IMPORTANT MATTERS ARE TO BE CONSIDERED AT THE MEETING, IT IS VERY
IMPORTANT THAT EACH SHAREHOLDER VOTE.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS
SOLICITED BY THE BOARD. ANY SHAREHOLDER WHO EXECUTES AND DELIVERS SUCH A PROXY
HAS THE RIGHT TO REVOKE IT AT ANY TIME BEFORE IT IS EXERCISED BY GIVING WRITTEN
NOTICE OF REVOCATION TO THE SECRETARY OF THE COMPANY, BY SUBMITTING PRIOR TO THE
MEETING A PROPERLY EXECUTED PROXY BEARING A LATER DATE OR BY BEING PRESENT AT
THE MEETING AND ELECTING TO VOTE IN PERSON BY ADVISING THE CHAIRMAN OF THE
MEETING OF SUCH ELECTION.
PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING SO THAT THE COMPANY CAN ARRANGE FOR ADEQUATE ACCOMMODATIONS.
By Order of the Board of Directors,
John D. Illgen, Secretary
Dated: April 9, 2004
Goleta, California
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S 2003 ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, ARE AVAILABLE UPON REQUEST TO: CHARLES G.
BALTUSKONIS, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, COMMUNITY
WEST BANCSHARES, 445 PINE AVENUE, GOLETA, CA 93117-3474, TELEPHONE (805)
692-5821, ON THE COMPANY'S WEBSITE AT WWW.COMMUNITYWEST.COM AND ON THE WEBSITE
OF THE SECURITIES AND EXCHANGE COMMISSION AT WWW.SEC.GOV.
COMMUNITY WEST BANCSHARES
445 PINE AVENUE
GOLETA, CALIFORNIA 93117-3474
________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 2004
________________________
SOLICITATION AND VOTING OF PROXIES
Community West Bancshares (Company or CWBC) is furnishing this Proxy
Statement to its shareholders in connection with the solicitation by the Board
of Directors of proxies to be used at the Annual Meeting (Meeting) of
Shareholders, to be held on Thursday, May 27, 2004 at 6:00 P.M. PDT at the
Holiday Inn, 5650 Calle Real, Goleta, California 93117, and at any and all
adjournments and postponements thereof, and, the designated proxyholders
(Proxyholders) are members of the Company's management. Only shareholders of
record (shareholders) on April 9, 2004 (Record Date) are entitled to notice of
and to vote in person or by proxy at the Meeting or any adjournment or
postponement thereof. This Proxy Statement and the enclosed proxy card (Proxy)
first will be mailed to shareholders on or about April 9, 2004. The Company's
Annual Report to Shareholders, including consolidated financial statements for
the year ended December 31, 2003, accompanies this Proxy Statement.
Regardless of the number of shares of Common Stock of the Company (Common
Stock) owned, it is important that the holders of a majority of shares be
represented by proxy or be present in person at the Meeting. Shareholders are
requested to vote by completing the enclosed proxy card and returning it signed
and dated in the enclosed postage-paid envelope. Shareholders are to indicate
their vote in the spaces provided on the proxy card. PROXIES SOLICITED BY THE
BOARD WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO
INSTRUCTIONS ARE INDICATED, SIGNED PROXY CARDS WILL BE VOTED "FOR ALL NOMINEES"
FOR THE ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT. If any other
business is properly presented at the Meeting, the Proxy will be voted in
accordance with the recommendations of the Board.
Other than the matters set forth on the attached Notice of the Meeting, the
Board knows of no additional matters that will be presented for consideration at
the Meeting. Execution of a proxy, however, confers to the designated
Proxyholders discretionary authority to vote the shares in accordance with the
recommendations of the Board on such other business, if any, that may properly
come before the Meeting and at any adjournments or postponements thereof,
including whether or not to adjourn the Meeting.
You may revoke your Proxy at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed Proxy bearing a later date, or by attending the
Meeting and voting in person. However, if you are a shareholder whose shares are
not registered in your own name, you will need to provide appropriate
documentation from the record holder to vote personally at the Meeting.
The following matters will be considered and voted upon at the Meeting:
1. ELECTION OF DIRECTORS. To elect seven persons to the Board of
Directors to serve until the 2005 Annual Meeting of Shareholders and
until their successors are elected and have qualified. The following
persons are the Board of Directors' nominees:
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen Kirk B. Stovesand
Lynda J. Nahra
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2. OTHER BUSINESS. Transacting such other business as may properly come
before the Meeting and any adjournment or postponements thereof.
This solicitation of proxies is being made by the Board. The expense of
solicitation of proxies for the Meeting will be borne by the Company. It is
anticipated that proxies will be solicited primarily through the use of the
mail. Proxies may also be solicited personally or by telephone by Directors,
officers and employees of the Company, and its wholly-owned subsidiary, Goleta
National Bank (GNB), without additional compensation therefor. The Company will
also request persons, firms and corporations holding shares in their names, or
in the name of their nominees, that are beneficially owned by others, to send
proxy materials to and obtain proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in doing so. The total
estimated cost of the solicitation is $5,000.
VOTING SECURITIES
The securities that may be voted at the Meeting consist of shares of Common
Stock. The close of business on April 9, 2004 has been fixed by the Board as
the Record Date for the determination of shareholders of record entitled to
notice of and to vote at the Meeting and at any adjournment or postponements
thereof. The total number of shares of Common Stock outstanding on the Record
Date was 5,710,969 shares. Each shareholder is entitled to one vote, in person
or by proxy, for each share as of the Record Date, except that in the election
of Directors, each shareholder has the right to cumulate provided that the
candidates' names have been properly placed in nomination prior to commencement
of voting and a shareholder has given notice of their intention to cumulate
votes prior to commencement of voting. Cumulative voting entitles a shareholder
to give one candidate a number of votes equal to the number of Directors to be
elected, multiplied by the number of shares of Common Stock held by that
Shareholder, or to distribute such votes among as many candidates as the
shareholder deems fit. The Company is soliciting authority to cumulate votes in
the election of Directors, and the enclosed Proxy grants discretionary authority
for this purpose. The candidates receiving the highest number of votes, up to
the number of Directors to be elected, will be elected.
Of the shares of Common Stock outstanding on the Record Date, 1,026,206
shares of Common Stock (17.97%) of the issued and outstanding shares of Common
Stock) were beneficially owned by Directors and executive officers of the
Company. Such persons have informed the Company that they will vote "FOR" the
election of the nominees to the Board.
Under California law and the Company's Bylaws, a quorum consists of the
presence in person or by proxy of a majority of the shares entitled to vote at
the Meeting, and a matter (other than the election of Directors) voted on by
Shareholders will be approved if it receives the vote of a majority of the
shares both present and voting, which shares also constitute a majority of the
required quorum, unless the vote of a greater number of shares is required.
Abstentions and broker non-votes will be included in the number of shares
present at the Meeting and entitled to vote for the purpose of determining the
presence of a quorum. Accordingly, in the event the number of shares voted
affirmatively does not represent a majority of the required quorum, abstentions
and broker non-votes will have the effect of a "no" vote. Abstentions and broker
non-votes do not have the effect of votes in opposition to any nominee for
election of Director.
If you hold Common Stock in "street name" and you fail to instruct your
broker or nominee as to how to vote such Common Stock, your broker or nominee
may, in its discretion, vote such Common Stock "FOR" the election of the Board
nominees.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND
EXECUTIVE OFFICERS
The following table sets forth certain information as of the Record Date,
concerning the beneficial ownership of the Company's outstanding Common Stock by
persons (other than depositories) known to the Company to own more than 5% of
the Company's outstanding Common Stock, by the Company's Directors and executive
officers, and by all Directors and executive officers of the Company as a group.
Except as indicated, the address of each of the persons listed below is c/o
Community West Bancshares, 445 Pine Avenue, Goleta, CA.
NUMBER OF SHARES OF NUMBER OF SHARES PERCENT OF CLASS
COMMON STOCK SUBJECT TO VESTED BENEFICIALLY
NAME AND TITLE BENEFICIALLY OWNED(1) STOCK OPTIONS(2) OWNED(2)
------------------------------------------------- --------------------- ------------------ -----------------
CHARLES G. BALTUSKONIS, Executive Vice President 5,300 1,500 *
and Chief Financial Officer, CWBC and GNB
ROBERT H. BARTLEIN, Director, Acting Chairman of 135,762 13,545 2.61%
the Board, GNB
JAMES K. BATTAGLIA, Senior Vice President, GNB 1,000 1,500 *
JEAN W. BLOIS, Director 48,824 25,099 1.29%
CYNTHIA M. HOOPER, Senior Vice President, GNB 9,600 7,200 *
JOHN D. ILLGEN, Director 46,956 27,959 1.31%
INVESTORS OF AMERICA LIMITED PARTNERSHIP (3) 568,696 - 9.96%
BERNARD R. MERRY, Senior Vice President, GNB - 16,700 *
LYNDA J. NAHRA, Director, President and Chief 3,350 40,300 .76%
Executive Officer, CWBC and GNB
WILLIAM R. PEEPLES, Director, Acting Chairman of 754,273 - 13.21%
the Board, CWBC (4)
JAMES R. SIMS, JR., Director 19,141 27,959 .82%
KIRK B. STOVESAND, Director 2,000 5,000 *
WILLIAM VIANI, Executive Vice President, GNB - 8,000 -
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP 1,026,206 174,762(5) 20.40%
(12 in number)
* Less than .5%
(1) Includes shares beneficially owned, directly and indirectly, together with associates, except for
shares subject to vested stock options and outstanding warrants. Also includes shares held as trustee and held
by or as custodian for minor children. Unless otherwise noted, all shares are held as community property under
California law or with sole investment and voting power.
(2) Shares subject to options held by Directors or executive officers that are exercisable within 60 days
after the Record Date (vested) are treated as issued and outstanding for the purpose of computing the percent
of the class owned by such person, but not for the purpose of computing the percent of class owned by any other
person.
(3) Address is: 135 North Meramec, Clayton, MO 63105.
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(4) Includes 171,800 shares held by Mr. Peeples' spouse, concerning which Mr. Peeples disclaims beneficial
ownership.
(5) Does not include an aggregate of 116,800 shares subject to options held by Directors or executive
officers that were exercisable more than 60 days after the Record Date.
PROPOSAL 1
ELECTION OF DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS
The Company's Bylaws provide that the authorized number of Directors shall
be not less than six nor more than 11, with the exact number of Directors fixed
from time to time by resolution of a majority of the Board or by resolution of
the shareholders. The number of Directors is currently fixed at seven.
At the Meeting, seven persons will be elected to serve as Directors of the
Company until the 2005 Annual Meeting and until their successors are elected and
have qualified. The seven persons named below, all of whom are currently
Directors of the Company, have been nominated by the Board for re-election. A
Proxy that is submitted with the instruction "FOR all nominees listed" or
without instructions will be voted in such a way as to effect the election of
all seven nominees, or as many thereof as possible. In the event that any of
the nominees should be unable to serve as a Director, it is intended that the
Proxy will be voted for the election of such substitute nominees, if any, as
shall be designated by the Board. The Board has no reason to believe that any
of the nominees will be unable or unwilling to serve. Additional nominations
can only be made by complying with the notice provision set forth in the Bylaws
of the Company, an extract of which is included in the Notice of Annual Meeting
of Shareholders accompanying this Proxy Statement. This Bylaw provision is
designed to give the Board advance notice of competing nominations, if any, and
the qualifications of nominees, and may have the effect of precluding
third-party nominations if the notice provisions are not followed.
Pursuant to Nasdaq Stock Market (NASD) Rule 4200 (a) 15, the Board has made
an affirmative determination that the following members of the Board are
"independent" within the meaning of such rule: Robert H. Bartlein, Jean W.
Blois, John D. Illgen, William R. Peeples, James R. Sims, Jr. and Kirk B.
Stovesand. As such, pursuant to NASD Rule 4350 (c) (1), a majority of the
members of the Board and all the members of the Audit Committee are
"independent" as so defined.
The following persons have been nominated for election by the Board:
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen Kirk B. Stovesand
Lynda J. Nahra
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES.
INFORMATION ABOUT THE NOMINEES
ROBERT H. BARTLEIN (AGE 56)
Mr. Bartlein has been a member of the Board of CWBC since its inception in
1997 and a founder and Director of GNB since 1989. Mr. Bartlein serves on
CWBC's Nominating and Corporate Governance Committee and is Acting Chairman of
the Board of GNB, Chairman of the Loan Committee and a member of the Executive
Committee. He is President and CEO of Bartlein & Company, Inc.,
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founded in 1969, which is a property management company with five California
offices as well as offices in other states. He is a graduate of the University
of Wisconsin - Madison, with a degree in Finance, Investments and Banking, and
did post-graduate study at the University of Wisconsin - Milwaukee. Mr. Bartlein
is past President and a Director of the American Lung Association of Santa
Barbara and Ventura Counties.
JEAN W. BLOIS (AGE 76)
Mrs. Blois has been a member of the Board of CWBC since its inception in
1997 and of GNB since 1989. She is Chairman of GNB's Personnel / Compensation
Committee and a member of the Asset / Liability Committee. She co-founded Blois
Construction, Inc. and served in a financial capacity before retirement. She
formed her own consulting firm, Jean to the Rescue. Mrs. Blois graduated with a
BS from the University of California, Berkeley. She served as a Trustee of the
Goleta Union School District for 13 years, a Director of the Goleta Water
District for 10 years and is currently a council member for the City of Goleta.
JOHN D. ILLGEN (AGE 59)
Mr. Illgen has been a member of the Board of CWBC since its inception in
1997 and of GNB since 1989. He is Secretary of the Board of CWBC and a member
of the Nominating and Corporate Governance Committee, Chairman of GNB's Asset /
Liability Committee and a member of the Personnel / Compensation and Compliance
Committees. Mr. Illgen is a Vice President and a Director of Northrop Grumman
Simulation Technologies Corp. (NGC). He was Founder (1988), President and
Chairman of Illgen Simulation Technologies, Inc. until its merger with NGC in
December 2003. Mr. Illgen is a Director of the National Defense Industry
Association and appears on General Alexander Haig's "World Business Review" as
an industry expert in information systems, modeling and simulation. Mr. Illgen
is an honorary member of the Santa Barbara Scholarship Foundation Board and a
Past President (1979-80) of Goleta Rotary Club.
LYNDA J. NAHRA (AGE 53)
Ms. Nahra has been President and Chief Executive Officer of GNB since 2000,
and of CWBC since February 2004, after serving in various positions of
increasing responsibility for GNB since 1997. Ms. Nahra is a member of GNB and
CWBC's Boards and serves on GNB's Loan, Asset / Liability, Compliance,
Management Succession and Disclosure Committees. Her banking career began in
1970 with Bank of America and her banking experience has included management
positions in operations, consumer and commercial lending, sales, private banking
and corporate banking. Ms. Nahra serves as a Director of Women's Economic
Ventures and the Girl Scouts of Tres Condados, is a Finance Committee member for
the Goleta Montessori Center School and the Santa Barbara United Way and is a
member of Montecito Rotary Club. Ms. Nahra's educational background is from
California Western University in San Diego and Pacific Coast Banking School.
WILLIAM R. PEEPLES (AGE 61)
Mr. Peeples is Acting Chairman of the Board of CWBC and a founder and
Director of GNB since 1989. Mr. Peeples is Chairman of CWBC's Audit, Nominating
and Corporate Governance Committees and serves on GNB's Loan, Personnel /
Compensation, Executive and Management Succession Committees. Mr. Peeples
served in various financial capacities, including President and Chief Financial
Officer of Inamed Corporation from 1985 to 1987. He also was a founder and
Chief Financial Officer of Nusil Corporation and Imulok Corporation from 1980 to
1985. Mr. Peeples has been active as a private investor and currently serves as
Managing General Partner of two real estate partnerships. Mr. Peeples holds a
BBA from the University of Wisconsin - Whitewater, and an MBA from Golden Gate
University, Air Force on-base program.
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JAMES R. SIMS JR. (AGE 68)
Mr. Sims has been a member of the Board of CWBC since its inception in 1997
and of GNB since 1989. Mr. Sims serves on GNB's Compliance and Audit Committees
and previously served on the Finance Committee. Mr. Sims is a real estate
broker whose career began in 1970 in Santa Barbara. He is a past President of
the Santa Barbara Board of Realtors, Chairman of the Multiple Listing Service
and served in 1984 as Regional Vice President of the California Association of
Realtors. Mr. Sims served on the Santa Barbara Coastal Housing Association
seeking affordable housing and he developed three Residential Care Facilities
for the elderly in Camarillo that he operated until his retirement in 2000.
KIRK B. STOVESAND (AGE 41)
Mr. Stovesand has been a member of the Board of CWBC and GNB since May
2003. Mr. Stovesand serves on GNB's Audit Committee and is Secretary of GNB's
Board. He is a partner of Walpole & Co., founded in 1974, which is a Certified
Public Accounting and Consulting firm. Mr. Stovesand has served on the boards
of both for-profit and not-for-profit organizations. He is a graduate of the
University of California Santa Barbara with a degree in Business Economics. Mr.
Stovesand received a Masters Degree in Taxation from Golden Gate University and
a Master Certificate in Global Business Management from George Washington
University. He is a Certified Financial Planner and a member of the American
Institute of Certified Public Accountants.
None of the Directors or executive officers of the Company were selected
pursuant to any arrangement or understanding, other than with the Directors and
executive officers of the Company, acting within their capacities as such. The
Company knows of no family relationships between the Directors and executive
officers of the Company, nor do any of the Directors or executive officers of
the Company serve as Directors of any other company which has a class of
securities registered under, or which is subject to the periodic reporting
requirements of, the Securities Exchange Act of 1934 (Exchange Act) or any
investment company registered under the Investment Company Act of 1940.
Officers serve at the discretion of the Board.
EXECUTIVE AND CERTAIN OTHER KEY OFFICERS (not members of the Board)
The following sets forth, as of the Record Date, the names and certain
other information concerning executive and certain other key officers of the
Company, in addition to the executive officer who is nominated for election as a
Director.
CHARLES G. BALTUSKONIS (AGE 53)
Mr. Baltuskonis, Executive Vice President and Chief Financial Officer of
CWBC and GNB, has been with the Company since November 2002. He served as
Senior Vice President and Chief Accounting Officer of Mego Financial Corporation
from 1997 to 2002, and Senior Vice President and Controller of TAC Bancshares
from 1995 to 1997. Prior to that, he was Chief Financial Officer of F&C
Bancshares and of First Coastal Corporation and a Senior Manager with the public
accounting firm of Ernst & Young, specializing in services to financial
institutions. Mr. Baltuskonis is a certified public accountant, a member of the
American Institute of Certified Public Accountants and holds a BS from Villanova
University.
JAMES K. BATTAGLIA (AGE 61)
Mr. Battaglia, Senior Vice President, SBA Lending, has been with GNB since
January 2003. Initially, he managed the Sacramento / Northern California
Region. As of August 2003, Mr. Battaglia was appointed overall business manager
of GNB's SBA Division. He served as Senior Vice President and SBA Division
Manager from 2000 to 2002 and SBA Credit Administrator from 1994 to 1999 at
Sacramento Commercial Bank, and as Vice President, SBA Credit Administration
from 1989 to 1993 at Truckee River Bank. Prior to that, he held construction
management positions with SOHIO Construction
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Company and Alyeska Pipeline Service Company. Mr. Battaglia holds a BS in
Economics from the University of Oregon.
CYNTHIA M. HOOPER (AGE 41)
Ms. Hooper, Senior Vice President, SBA Lending, has been with GNB since
1989. She started at GNB in commercial lending and currently manages the SBA
underwriting and processing unit, which underwrites and processes loans for 15
Preferred Lender territories in nine states. Prior to serving at GNB, she was
in commercial lending at City Commerce Bank. Ms. Hooper is a member of the
National Association of Government Guaranteed Lenders and has served as a
Director of the Goleta Chamber of Commerce.
BERNARD R. MERRY (AGE 56)
Mr. Merry, Senior Vice President, Mortgage, has been with GNB since 1998.
His GNB roles have included HUD Administrator and head of Alternative Mortgage
Products. He was named Mortgage Division Manager in November 2001. Currently,
Mr. Merry oversees GNB's Retail and Wholesale Mortgage Departments. He formerly
was a Vice President for ITT Financial Services for 24 years managing their West
Coast Broker Division and California Real Estate Collection Department. Mr.
Merry worked as a consultant for Option One Mortgage Corporation and as
Assistant Vice President for Cityscape Mortgage Corporation, opening its Western
States operation.
WILLIAM VIANI (AGE 56)
Mr. Viani, Executive Vice President and Credit Administrator of GNB, has
been with the Company since 1996. He has held various positions with GNB, most
recently Senior SBA Loan Officer. Mr. Viani began his banking career with
Crocker National Bank and his experience includes commercial credit, special
assets and corporate banking. From 1993 to 1996, he was with El Camino
National Bank, serving as President and Chief Executive Officer from 1995 to
1996. From 1988 to 1993, he was Senior Lending Officer with Ventura County
National Bank. Mr. Viani is a member of Risk Management Associates and holds a
BS in Economics from Loyola University and an MA from the University of Southern
California.
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES
The Board met 14 times (12 regular meetings and two special meetings)
during the year ended December 31, 2003, and had the following standing
committees that met during the year: Audit Committee and Personnel /
Compensation Committee. The Company formed a Nominating and Corporate
Governance Committee in 2004. In addition, the Company's Directors served on
the Board of Directors of GNB, including the various committees established by
that subsidiary. During 2003, none of the Company's Directors attended less
than 75% of the Company's Board meetings and meetings of committees on which
they served. All the Board members attended the 2003 Annual Meeting of
Shareholders.
The Audit Committee is composed of three independent Directors: Messrs.
Peeples, Sims and Stovesand. This Committee is responsible for review of all
internal and external examination reports and selection of the Company's
independent auditors. The Audit Committee met six times during 2003.
The Nominating and Corporate Governance Committee was formed in 2004 and is
composed of three independent Directors: Messrs. Peeples, Bartlein and Illgen.
The Committee is responsible for recommendations regarding the Board's
composition and structure and policies and processes regarding overall corporate
governance.
7
The Personnel / Compensation Committee is composed of three independent
Directors: Mrs. Blois and Messrs. Illgen and Peeples. The Committee is
responsible for determining executive compensation. This Committee met once
during 2003.
SHAREHOLDER COMMUNICATION WITH DIRECTORS
Shareholders may communicate directly with the Board by writing to:
William R. Peeples, Acting Chairman of the Board of Directors
Community West Bancshares
445 Pine Avenue
Goleta, CA 93117-3474
DIRECTORS' COMPENSATION
There were no CWBC Director fees paid during 2003.
GNB Directors' fees were suspended after March 2002 and reinstated in April
2003. GNB's non-employee Directors are now paid for attendance at Board
meetings at the rate of $1,000 for each regular Board meeting (with the Chairman
receiving $1,500), and $200 for each committee meeting. If a Director attends a
meeting by telephone, only 25% of the above fee is received. Also, in 2003,
each non-employee Director received compensation of $3,500.
AUDIT COMMITTEE REPORT
The Report of the Audit Committee of the Board shall not be deemed filed
under the Securities Act of 1933 (Securities Act) or under the Exchange Act.
The Board maintains an Audit Committee comprised of three of the Company's
Directors, who each met the independence and experience requirements of the NASD
Rule 4350 (c) (1). The Audit Committee assists the Board in monitoring the
accounting, auditing and financial reporting practices of the Company. The Audit
Committee operates under a written charter, which was last amended and ratified
on April 24, 2003, and is assessed annually for adequacy by the Audit Committee.
Based on the attributes, education and experience requirements required by
NASD Rule 4350 (d) (2) (A), the requirements set forth in section 407 of the
Sarbanes-Oxley Act of 2002 and associated regulations, the Board has identified
William R. Peeples as an "Audit Committee Financial Expert" as defined under
Item 401 (h) of Regulation S-K, and has determined him to be independent.
Management is responsible for the preparation of the Company's financial
statements and financial reporting process, including its system of internal
controls. In fulfilling its oversight responsibilities, the Audit Committee:
- Reviewed and discussed with management the audited financial
statements contained in the Company's Annual Report on Form 10-K for
fiscal 2003; and
- Obtained from management their representation that the Company's
financial statements have been prepared in accordance with accounting
principles generally accepted in the United States.
The Company's independent auditors, Ernst & Young LLP (Ernst), are
responsible for performing an audit of the Company's financial statements in
accordance with the auditing standards generally accepted in the United States
and expressing an opinion on whether the Company's financial statements present
fairly, in all material respects, the Company's financial position and results
of operations for the periods presented and conform with accounting principles
generally accepted in the United States. In fulfilling its oversight
responsibilities, the Audit Committee:
8
- Discussed with Ernst the matters required to be discussed by Statement
on Auditing Standards No. 61, as amended (Communication with Audit
Committees), and Section 204 of the Sarbanes-Oxley Act of 2002; and
- Received and discussed with Ernst the written disclosures and the
letter from Ernst required by Independent Standards Board Standard No.
1 (Independence Discussions with Audit Committees), and reviewed and
discussed with Ernst whether the rendering of the non-audit services
provided by them to the Company during fiscal 2003 was compatible with
their independence.
In addition, the Company received a letter from Ernst to the effect that
Ernst's audit of the Company was subject to its quality control system for the
United States accounting and auditing practice to provide reasonable assurance
that the engagement was conducted in compliance with professional standards,
that there was appropriate continuity of Ernst personnel working on the audit
and the availability of national office consultation.
In performing its functions, the Audit Committee acts only in an oversight
capacity. It is not the responsibility of the Audit Committee to determine that
the Company's financial statements are complete and accurate, are presented in
accordance with accounting principles generally accepted in the United States or
present fairly the results of operations of the Company for the periods
presented or that the Company maintains appropriate internal controls. Nor is
it the duty of the Audit Committee to determine that the audit of the Company's
financial statements has been carried out in accordance with generally accepted
auditing standards or that the Company's auditors are independent.
Based upon the reviews and discussions described above, and the report of
Ernst, the Audit Committee has recommended to the Board, and the Board has
approved, that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2003 for
filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
William R. Peeples, Chairman
James R. Sims, Jr.
Kirk B. Stovesand
Dated: February 26, 2004
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Company's Nominating and Corporate Governance Committee (NCGC
Committee) was established in February 2004 and the committee charter was
approved in March 2004. A copy of the charter is attached to this Proxy
Statement as Appendix A. The NCGC Committee, consisting of three independent
Directors, makes recommendations to the Board regarding the Board's composition
and structure, nominations for elections of Directors and policies and processes
regarding principles of corporate governance to ensure the Board's compliance
with its fiduciary duties to the Company and its shareholders. The NCGC
Committee will review the qualifications of, and recommend to the Board,
candidates as additions, or to fill Board vacancies if any were to occur during
the year.
The NCGC Committee will consider, as part of its nomination process, any
director candidate recommended by a shareholder of the Company who follows the
procedures in this Proxy Statement shown under the heading "2005 Shareholder
Proposals". The NCGC Committee will follow the processes in the charter when
identifying and evaluating overall Board composition and individual nominees to
the Board.
9
PERSONNEL / COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Personnel / Compensation Committee (PC Committee) is made up of three
Directors, none of whom served as an officer of the Company or of its
subsidiaries. The Company's executive officers have represented to the Company
that none of them served on the Board or PC Committee, or in an equivalent
capacity, of another entity.
PERSONNEL / COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Report of the PC Committee of the Board shall not be deemed to be filed
under the Securities Act or under the Exchange Act.
The PC Committee was responsible for reviewing and approving the Company's
overall compensation and benefit programs and for administering the compensation
of the Company's executive and senior officers.
The PC Committee's functions and objectives are: (i) to determine the
competitiveness of current base salary, annual incentives and long-term
incentive relative to specific competitive markets for the President; (ii) to
develop a performance review mechanism that has written objectives and goals
which are used to make salary increase determinations; (iii) to develop an
annual incentive plan for senior management; and (iv) to provide guidance to the
Board in its role in establishing objectives regarding executive compensation.
The PC Committee's overall compensation philosophy is as follows: (i) to attract
and retain quality talent which is critical to both short-term and long-term
success; (ii) to reinforce strategic performance objectives through the use of
incentive compensation programs; (iii) to create a mutuality of interest between
executive and senior officers and shareholders through compensation structures
that share the rewards and risks of strategic decision-making; and (iv) to
encourage executives to achieve substantial levels of ownership of stock in the
Company.
The compensation package offered to executive officers consists of a mix of
salary, incentive bonus awards and stock option awards, as well as benefits
under employee benefit plans. Salary levels recommended by the PC Committee are
intended to be consistent and competitive with the practices of comparable
financial institutions and each executive's level of responsibility. The PC
Committee generally utilizes internal and/or external surveys of compensation
paid to executive officers performing similar duties for depository institutions
and their holding companies.
In establishing executive compensation for the Chief Executive Officer of
CWBC and GNB, the PC Committee considered the overall financial condition of the
Company, profitability, asset quality and compliance with rules and regulations.
In determining Ms. Nahra's compensation, the PC Committee used both quantitative
and qualitative criteria. They included estimated (at the time) earnings of over
$2 million, which is indicative of creation of shareholder value; capital
strength, as evidenced by the qualification of GNB as "well capitalized";
continued strong asset quality; improvements in customer service and compliance;
the development of other executive and senior talent in the Company; and,
working with the management group, to diligently and expeditiously perform
procedures to ensure the Consent Order was timely removed by the Office of the
Comptroller of the Currency (OCC). The PC Committee also considered the amount
of time the executive had been with the Company, performance goals and general
industry customs. Generally excluded from the PC Committee's consideration of
incentive bonuses would be income or expenses resulting from extraordinary or
non-recurring events, regulatory changes, merger or acquisition activity or the
imposition of changes in generally accepted accounting principles.
10
The PC Committee believes that the Company's compensation program and
compensation levels are effective in attracting, motivating and retaining
outstanding executive and senior officers and that they are consistent with the
Company's immediate and long-term goals.
THE PERSONNEL / COMPENSATION COMMITTEE
Jean W. Blois, Chairman
John D. Illgen
William R. Peeples
Dated: November 19, 2003
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 2003, 2002
and 2001, the compensation information for the Company's Chief Executive Officer
and the other four most highly compensated executive officers serving the
Company in 2003 (collectively, the Named Executive Officers).
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING (1) ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
------------------------------------ ---- -------- ------- ------------ ---------- --------------
LYNDA J. NAHRA, President and Chief 2003 $165,000 $35,000 (2) $7,679 55,000 $ 2,846
Executive Officer, CWBC and GNB 2002 142,501 20,000 - - 2,519
2001 129,167 25,000 (3) 1,806 4,000 2,161
CHARLES G. BALTUSKONIS, Executive 2003 125,000 15,000 - 10,000 1,771
Vice President and Chief Financial 2002 15,625 - - 7,500 -
Officer, CWBC and GNB
JAMES K. BATTAGLIA, Senior Vice 2003 116,980 7,500 (4) 16,000 11,500 1,176
President, SBA Loans, GNB
CYNTHIA M. HOOPER, Senior Vice 2003 109,375 7,500 - - 1,825
President, SBA Loans, GNB 2002 98,797 3,750 - 10,000 2,210
2001 85,000 - (3) 39,400 - 1,667
BERNARD R. MERRY, Senior Vice 2003 159,972 7,500 - - 2,794
President, Mortgage Division 2002 142,451 9,500 - - 2,433
Manager, GNB 2001 131,016 15,000 - 4,000 2,614
(1) Amounts represent Company's 401 (k) matching contribution.
(2) Amount represents deferrals plus interest on Ms. Nahra's deferred compensation plan.
(3) Amounts were for commissions. Ms. Nahra and Ms. Hooper no longer receive commissions.
(4) Includes a $10,000 sign-on bonus and a $6,000 automobile allowance.
STOCK OPTIONS
In connection with the bank holding company reorganization, the Company
adopted the Community West Bancshares 1997 Stock Option Plan (1997 Plan)
providing for the issuance of up to 842,014 option shares. At the 2003 Annual
Meeting of Shareholders, an additional 450,000 option shares were approved, for
an aggregate total of 1,292,014 option shares. As of the Record Date, 357,356
options had been exercised and options for 552,407 shares were outstanding,
leaving 382,251 shares available for future grants.
11
The following table sets forth certain information regarding stock options
granted by the Company to the Named Executive Officers during 2003:
OPTION GRANTS IN LAST FISCAL YEAR
------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (2)
--------------------------------------------------------------------------- -------------------
Number of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year (1) ($/share) Date 5% 10%
---------------------- ---------- --------------- ---------- ---------- -------- ---------
Charles G. Baltuskonis 10,000 5.1% $ 6.50 7/13 $40,878 $103,593
---------------------- ---------- --------------- ---------- ---------- -------- ---------
James K. Battaglia 7,500 3.8% 4.64 1/13 21,886 55,462
---------------------- ---------- --------------- ---------- ---------- -------- ---------
James K. Battaglia 4,000 2.0% 6.50 7/13 16,351 41,437
---------------------- ---------- --------------- ---------- ---------- -------- ---------
Lynda J. Nahra 20,000 10.1% 4.64 1/13 58,361 147,899
---------------------- ---------- --------------- ---------- ---------- -------- ---------
Lynda J. Nahra 30,000 15.2% 5.23 4/13 98,674 250,058
---------------------- ---------- --------------- ---------- ---------- -------- ---------
Lynda J. Nahra 5,000 2.5% 6.50 7/13 20,439 51,797
------------------------------------------------------------------------------------------------
(1) The Company issued options to purchase 198,000 shares of Common Stock in 2003. The Company
issued no stock appreciation rights in 2003.
(2) Potential realizable value assumes that the common stock appreciates at the annual rate
shown (compounded annually) from the date of grant until the options expire. These numbers
are calculated based on the SEC's requirements and do not represent an estimate by CWBC
of future stock price growth.
12
The following table sets forth certain information regarding stock options
outstanding at December 31, 2003 for the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised In-
Unexercised the-Money
Options at Fiscal Options at Fiscal
Year End (# Year End (1)
Shares Acquired exercisable/ ($exercisable/
Name on Exercise Value Realized unexercisable) unexercisable)
---------------------- --------------- -------------- ------------------ -------------------
Lynda J. Nahra - - 29,500/53,000 $ 48,415/$209,150
---------------------- --------------- -------------- ------------------ -------------------
Charles G. Baltuskonis - - 1,500/16,000 $ 6,630/$51,520
---------------------- --------------- -------------- ------------------ -------------------
James K. Battaglia - - -/11,500 $ -/$42,700
---------------------- --------------- -------------- ------------------ -------------------
Cynthia M. Hooper - - 4,400/9,600 $ 14,200/$38,800
---------------------- --------------- -------------- ------------------ -------------------
Bernard R. Merry - - 15,900/2,600 $ 26,143/$6,975
------------------------------------------------------------------------------------------------
(1) Based on the closing price on the Nasdaq National Market at $9.00 per share on December
31, 2003.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
(AS OF DECEMBER 31, 2003)
------------------------------------------------------------------------------------------------------------
Number of
securities to be Number of securities
issued upon Weighted-average remaining available for future
exercise of exercise price of issuance under equity
outstanding outstanding compensation plans
options, warrants options, warrants (excluding securities
Plan Category and rights and rights reflected in column (a)
---------------------------------- ------------------ ------------------- -------------------------------
(a) (b) (c)
---------------------------------- ------------------ ------------------- -------------------------------
Plans approved by shareholders 463,207 $ 6.04 475,651
---------------------------------- ------------------ ------------------- -------------------------------
Plans not approved by shareholders - N/A -
---------------------------------- ------------------ ------------------- -------------------------------
Total 463,207 475,651
------------------------------------------------------------------------------------------------------------
EMPLOYMENT AND OTHER COMPENSATION AGREEMENTS
Ms. Nahra has an Employment Contract that expires December 31, 2006. As of
July 1, 2003, Ms. Nahra's annual base salary was increased to $175,000. In
addition, she has a deferred compensation account maintained at GNB for her
benefit, to which 6% of her base salary (currently $10,500 per annum) is
credited, along with interest at the then-current GNB six-month certificate of
deposit rate. Ms. Nahra is also eligible for an annual bonus at the sole
discretion of GNB's Board Personnel / Compensation Committee. For 2003, such
bonus amount awarded was $35,000. Ms. Nahra's contract specifies that, in the
event of termination without cause, she would continue to receive salary and
benefits plus deferred compensation for a period of three months. Also, the
contract contains a change of control (as defined)
13
clause whereby, if she is terminated within one year following such event, she
would be entitled to six months base salary plus deferred compensation.
Mr. Llewellyn W. Stone served as Chief Executive Officer and President of
the Company until September 1, 2001. Mr. Stone continued as Chief Executive
Officer of the Company until December 31, 2001, at which time he entered into a
26-month contract to serve as a part-time employee and consultant for a monthly
salary of $3,646. Mr. Stone is a party to an Executive Salary Continuation
Agreement (ESC) with the Company dated January 1, 1994. The purpose of the ESC
was to provide an incentive to Mr. Stone for his continuing employment with GNB
on a long-term basis. The ESC provides Mr. Stone with salary continuation
benefits of up to $50,000 per year for 15 years after retirement. Normal
retirement under the ESC was age 61. The present value of the contractual
liability has been recognized in the Company's audited financial statements.
Beginning in March 2004, Mr. Stone began receiving benefit payments under the
ESC.
PROFIT SHARING AND 401(K) PLAN
The Company has established a 401(k) plan for the benefit of its employees.
Employees are eligible to participate in the plan after three months of
consecutive service. Employees may make contributions to the plan under the
plan's 401(k) component and the Company may make contributions under the plan's
profit sharing component, subject to certain limitations. The Company's
contributions were determined by the Board and amounted to $128,776, $171,467
and $176,782, respectively, in 2003, 2002 and 2001.
STOCK PERFORMANCE GRAPH
The following graph presents the cumulative, five-year total return for the
Company's Common Stock compared with the Nasdaq Total Return Index, a broad
market index of stocks traded on the Nasdaq National Market, and the SNL
Securities Index of banks having under $500 million in total assets, which the
Company believes is representative of peer issuers. The graph assumes an
initial investment of $100 in each of the Company's Common Stock, the securities
underlying the Nasdaq Total Return Index and the securities underlying the SNL
Index for Banks on December 31, 1998, and that all dividends were reinvested.
This graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
14
[GRAPHIC OMITTED]
YEAR ENDED
----------------------------------------------------------
INDEX 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
------------------------- -------- -------- -------- -------- -------- --------
Community West Bancshares 100.00 75.21 41.17 63.75 49.83 95.62
NASDAQ - Total US 100.00 185.95 113.19 89.65 61.67 92.90
SNL <$500M Bank Index 100.00 92.57 89.30 123.53 158.20 230.92
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the Directors and executive officers of the Company, as well as the
companies with which such Directors and executive officers are associated, are
customers of and have had banking transactions with GNB in the ordinary course
of business. GNB expects to have such ordinary banking transactions with such
persons in the future. In the opinion of GNB management, all loans and
commitments to lend included in such transactions were made in compliance with
applicable laws on substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions with other persons
of similar creditworthiness and did not involve more than a normal risk of
collectibility or present other unfavorable features. Although GNB does not
have any limits on the aggregate amount it would be willing to lend to Directors
and officers as a group, loans to individual Directors and officers must comply
with GNB's internal lending policies and statutory lending limits.
1997 STOCK OPTION PLAN
ELIGIBILITY
Full-time employees, officers and Board members of CWBC and subsidiaries,
including GNB, are eligible to receive awards under the Plan at the discretion
of the Board.
15
As of December 31, 2003, the Plan currently has available unissued and
authorized grants to Directors of options to purchase up to 160,002 shares of
Common Stock.
ADMINISTRATION
The Board, serving as the "Stock Option Committee", administers the Plan.
The Board has the authority to make all determinations and approvals. Members
of the Board receive no additional compensation for their administration of the
Plan.
TERMS OF THE STOCK OPTIONS
The Plan authorizes the issuance to employees of two types of stock-based
awards: "Incentive Stock Options", which are intended to satisfy the definition
of "incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (Code), and "Non-Qualified Stock Options",
which fall outside the requirements of Section 422. Directors who are not
employees of CWBC or its subsidiaries are eligible to receive only Non-Qualified
Stock Options, while employees may, subject to the requirements of the Code,
receive Incentive Stock Options.
In general, the option exercise price for each share covered by an option
equals the fair market value of the Common Stock on the date of grant. If the
recipient owns in excess of 10% of the total combined vesting power of CWBC or
any subsidiary, the exercise price of any Incentive Stock Option must be at
least 110% of the fair market value on the date of grant.
The Board has the discretion to determine the vesting schedule of all
options under the Plan, provided that all options must vest at least 20% per
year over five years from the date of grant.
Stock Options must be exercised by payment in full of the exercise price,
or, with the prior consent of the Board, may be exercised by the delivery of
previously owned shares of Common Stock.
If a plan participant's employment or affiliation as a Director with CWBC
or a subsidiary ceases for any reason other than death, disability or for cause,
the participant's options expire 90 days after the cessation (or any earlier
date when the option's term expires). Vesting ceases at the time the affiliation
ceases. If the participant's affiliation is terminated for cause, then the
participant's options expire 30 days after termination (or any earlier date when
the option's term expires), unless reinstated by the Board. If the participant
dies while employed by CWBC, or during the 90-day period referred to above, the
participant's estate may exercise any options that had vested on the date of
death for a subsequent period of one year. After the disability of a
participant, the participant may exercise options that had vested when the
disability occurred for a subsequent period of one year.
TERMINATION OF STOCK OPTIONS AND THE PLAN
The Plan terminates on January 23, 2007, the tenth anniversary of its
adoption. No option exercised under the plan shall be exercisable for a period
greater than ten years from its date of grant.
INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
2003 were Ernst & Young LLP (Ernst). The Company has engaged Ernst as
independent auditors for the fiscal year ending December 31, 2004.
Representatives of Ernst will be invited to attend the Meeting. The Company
will afford the representatives an opportunity to make a statement, should they
desire to do so, and expect that the representatives will be available to
respond to appropriate questions.
AUDIT FEES
During the years ended December 31, 2003 and 2002, the aggregate fees
billed by Ernst for the audit of the Company's consolidated financial statements
for such fiscal year and for the review of the
16
Company's interim financial statements were $140,500 and $130,250, respectively.
The Company was also billed aggregate fees of $7,500 in 2002 by Arthur Andersen
LLP (Andersen) for review of the Company's first quarter interim financial
statements.
AUDIT-RELATED FEES
During the years ended December 31, 2003 and 2002, the aggregate fees
billed by Ernst for other audit-related services were $22,500 and $0,
respectively.
TAX FEES
During the years ended December 31, 2003 and 2002, the aggregate fees
billed by Ernst for professional services related to state and federal tax
compliance and consulting were $84,600 and $74,200, respectively. The Company
was also billed aggregate fees of $18,500 in 2002 by Andersen for professional
services related to state and federal tax compliance and consulting.
OTHER FEES
During the years ended December 31, 2003 and 2002, there were no fees
billed by Ernst for information technology consulting services.
The Audit Committee of the Company reviewed and discussed with Ernst
whether the rendering of the non-audit services provided by them to the Company
during fiscal 2003 was compatible with their independence. The Audit Committee
pre-approves all audit and permissible non-audit services to be provided by
Ernst and the estimated fees for these services.
2005 SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in the Proxy Statement
for the Company's 2005 Annual Meeting of Shareholders (2005 Meeting) must be
received by the Company at its offices at 445 Pine Avenue, Goleta, California
93117, no later than January 3, 2005. The proposals must also satisfy the
conditions and procedures prescribed by the Securities and Exchange Commission
(SEC) in Rule 14a-8 for such proposals to be included in the Company's Proxy
Statement for the 2005 Meeting, and must be limited to 500 words. To be
included in the Proxy Statement, the shareholder must be a holder of record or
beneficial owner of at least $2,000 in market value or 1 % of the Company's
securities entitled to be voted on the proposal, and have held the shares for at
least one year and will continue to hold the shares through the date of the 2005
Meeting. Either the proposer, or a representative qualified under California
law to present the proposal on the proposer's behalf, must attend the meeting to
present the proposal. Shareholders may not submit more than one proposal.
Shareholders wanting to recommend names of individuals for possible
nomination to the Board may do so according to the following procedures:
1. Contact the Corporate Secretary to obtain the Board membership
criteria.
2. Make typewritten submission to the Corporate Secretary naming the
proposed candidate and specifically noting how the candidate
meets the criteria as set forth by the Board.
3. Submission must be received 120 days prior to the expected
mailing date of the Proxy Statement.
4. Submitter must prove they are a shareholder of the Company and
have held those shares for at least one year at the time of
submission.
5. If the Submittee is aware of the submission, he or she must sign
a statement indicating such.
17
6. If the Submittee is not aware of the submission, the Submitter
must explain why.
The written submission must be mailed to:
Corporate Secretary
Community West Bancshares
445 Pine Avenue
Goleta, CA 93117-3474
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers (as
defined in regulations promulgated by the SEC thereunder), Directors and persons
who own more than ten percent of the Common Stock to file reports of stock
ownership and changes in stock ownership with the SEC. The officers, Directors
and greater than ten percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of all reports of ownership
furnished to the Company, or written representations that no forms were
necessary, the Company believes that during the last year its officers,
Directors and greater than ten percent beneficial owners complied with all
filing requirements.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The SEC has in effect a rule governing a company's ability to use
discretionary proxy authority with respect to shareholder proposals that were
not submitted by the shareholders in time to be included in the proxy statement.
As a result, in the event a shareholder proposal is not submitted to the Company
prior to April 9, 2004, the proxies solicited by the Board for the 2004 Annual
Meeting will confer authority on the Proxyholders to vote the shares in
accordance with their best judgment and discretion if the proposal is presented
at the 2004 Annual Meeting without any discussion of the proposal in the Proxy
Statement for such meeting.
The Company's Board knows of no business that will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If however, other matters are properly brought before
the Meeting, it is the intention of the persons named in the accompanying Proxy
to vote the shares represented thereby on such matters in accordance with their
best judgment.
Whether or not you intend to be present at the Meeting, you are urged to
return your proxy card promptly. If you are then present at the Meeting and
wish to vote your shares in person, your original Proxy may be revoked by voting
at the Meeting. However, if you are a shareholder whose shares are not
registered in your own name, you will need the Proxy card obtained from your
recordholder to vote personally at the Meeting.
By Order of the Board of Directors,
COMMUNITY WEST BANCSHARES
William R. Peeples,
Acting Chairman of the Board
Dated: April 9, 2004
Goleta, California
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APPENDIX A
Community West Bancshares
Nominating and Corporate Governance
Committee Charter
PURPOSE AND SCOPE
The primary function of the Nominating and Corporate Governance
Committee ("Committee") is to assist the Board of Directors ("Board") of
Community West Bancshares ("Company") in fulfilling its responsibilities
by: (i) reviewing and making recommendations to the Board regarding the
Board's composition and structure, establishing criteria for Board
membership and evaluating corporate policies relating to the recruitment of
Board members; and (ii) establishing, implementing and monitoring policies
and processes regarding principles of corporate governance to ensure the
Board's compliance with its fiduciary duties to the Company and its
shareholders.
COMPOSITION AND MEETINGS
The Committee shall be comprised of a minimum of three members of the
Board as appointed by the Board, each of whom shall meet any independence
requirements promulgated by the Securities and Exchange Commission, the
NASDAQ Stock Market or any governmental or regulatory body exercising
authority over the Company (each a "Regulatory Body"), and each member of
the Committee shall be free from any relationship that, in the opinion of
the Board, would interfere with the exercise of his or her independent
judgment as a member of the Committee.
The members of the Committee shall be elected by the Board and shall
serve until their successors shall be duly elected and qualified or until
their earlier resignation or removal. Unless a Chair is elected by the full
Board, the members of the Committee may designate a Chair by majority vote
of the full Committee membership.
The Committee shall meet as necessary, but at least once each year, to
enable it to fulfill its responsibilities and duties as set forth herein.
The Committee shall report its actions to the Board and keep written
minutes of its meeting which shall be recorded and filed with the books and
records of the Company.
RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Committee shall:
CORPORATE GOVERNANCE POLICY ESTABLISHMENT AND REVIEW
1. Develop principles of corporate governance including, but not
limited to, the establishment of a corporate code of ethics and
conduct for all Directors, officers and employees of the company
and its affiliates, ("Code of Conduct") designed to promote
honest and ethical conduct, including the ethical handling of
conflicts of interest; full, fair, accurate, timely and
understandable disclosure in the company's periodic reports; and
compliance with applicable governmental rules and regulations.
The Code of Conduct shall be submitted by the committee to the
Board and the Boards of the Company's affiliates for their
approval.
2. Review and assess the adequacy of the Code of Conduct approved by
the board periodically, but at least annually. The Committee
shall recommend any modifications to the Code of Conduct to the
Board for approval. If so approved, the Company shall submit the
revised Code of Conduct to the Boards of its affiliates for their
approval.
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3. Direct members of the Company's senior management to report any
violations of or non-compliance with the Code of Conduct to the
committee.
4. Be available to members of the Company's senior management team
to consult with and to resolve reported violations or instances
of non-compliance with the Code of Conduct.
5. Determine an appropriate response to material violations of or
non-compliance with the Code of Conduct including, at the
discretion of the committee, reporting any material violations of
or non-compliance with the Code of Conduct to the appropriate
Regulatory Body.
6. Review and assess the adequacy of this Charter periodically as
conditions dictate, but at least annually and recommend any
modifications to the charter if and when appropriate to the Board
for its approval.
7. Review and assess the adequacy of the charters of any committee
of the Board ("Governing Documents") periodically to ensure
compliance with any principles of corporate governance developed
by the committee and recommend to the Board any necessary
modifications to the Governing Documents.
BOARD COMPOSITION, NOMINATIONS AND SHAREHOLDER PROPOSALS
1. Evaluate the current composition and organization of the Board
and its committees in light of requirements established by any
Regulatory Body or any other applicable statute, rule or
regulations which the Committee deems relevant and make
recommendations regarding the foregoing to the Board for
approval.
2. Review the composition and size of the Board to ensure that the
Board is comprised of members reflecting the proper expertise,
skills, attributes and personal and professional backgrounds for
service as a director of the Company. The mandatory retirement
age of Board members shall be 80 years.
3. Determine the criteria for selection of the Chairman of the
Board, Board members and Board committee members.
4. Evaluate the performance of current Board members proposed for
re-election, and make recommendations to the Board regarding the
appropriateness of members of the Board standing for re-election.
5. Evaluate and, if deemed necessary, recommend the termination of
Board membership of any director in accordance with the Code of
Conduct or any corporate governance principles adopted by the
Board, for cause or for other appropriate reason.
6. Review and recommend to the Board an appropriate course of action
upon the resignation of current Board members or any planned
expansion of the Board.
7. Evaluate and recommend to the Board the appointment of Board
members to committees of the Board.
8. Evaluate and approve a slate of nominees for election to the
Board and review the qualification, experience and fitness for
service on the Board of any potential members of the Board.
9. Review all stockholder proposals submitted to the Company
(including any proposal relating to the nomination of a member of
the Board) and the timeliness of the submission thereof and
recommend to the Board appropriate action on each such proposal.
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CRITERIA FOR EVALUATING BOARD NOMINEE CANDIDATES
The Board should be composed of:
1. Directors chosen with a view to bringing to the Board a variety
of experiences and backgrounds.
2. Directors who have high level managerial experience or are
accustomed to dealing with complex problems.
3. Directors who will represent the balance, best interests of the
shareholders as a whole rather than special interest groups or
constituencies, while also taking into consideration the overall
composition and needs of the Board.
4. A majority of the Board's Directors shall be independent
Directors under the criteria for independence required by the SEC
and NASDAQ.
In considering possible candidates for election as an outside Director, the
Nominating Committee and other directors should be guided by the foregoing
general guidelines and by the following criteria:
1. Each Director should be an individual of the highest character
and integrity, have experience at or demonstrated understanding
of strategy/policy-setting and a reputation for working
constructively with others.
2. Each Director should have sufficient time available to devote to
the affairs of the Company to carry out the responsibilities of a
director.
3. Each Director should be free of any conflict of interest that
would interfere with the proper performance of the
responsibilities of a Director.
4. The Chief Executive is expected to be a Director. Other members
of senior management may be considered, but Board membership is
not necessary or a prerequisite to a higher management position.
Conflicts of Interest
1. Resolve actual and potential conflicts of interest a Board member
may have and issue to any Board member having an actual or
potential conflict of interest instructions on how to conduct him
or herself in matters before the Board that may pertain to the
conflict.
2. To the extent deemed necessary by the committee, engage outside
counsel and/or independent consultants to review any matter under
its responsibility.
3. Take such other actions regarding the Company's corporate
governance that are in the best interest of the Company and its
shareholders as the Committee shall deem appropriate or as shall
otherwise be required by any Regulatory Body.
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COMMUNITY WEST BANCSHARES
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 2004
The undersigned hereby appoints Marcy Shewmon and Susan Thompson, or any of
them, agents and proxy of the undersigned, each with full power of substitution,
to attend and act as proxy or proxies of the undersigned at the Annual Meeting
of Shareholders of Community West Bancshares to be held at the Holiday Inn, 5650
Calle Real, Goleta, California, on Thursday, May 27, 2004, at 6:00P.M,. and at
any and all adjournments thereof, and to vote as specified herein the number of
shares which the undersigned, if personally present, would be entitled to vote.
1. ELECTION OF DIRECTORS:
-----------------------
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen Kirk B. Stovesand.
Lynda J. Nahra
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW:
______________________________________________________________________
2. Other Business. To transact such other business as may properly come
before the Meeting and any adjournment thereof.
PLEASE SIGN AND DATE THE OTHER SIDE
THIS PROXY WILL BE VOTED AS SPECIFIED OR IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE SEVEN NOMINEES FOR ELECTION AND FOR PROPOSAL 2. (Please sign
exactly as name appears. When shares are held by joint tenants, both should
sign. When signing as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.)
__________________________ Dated: ___________, 2004
(Number of Shares)
__________________________ _________________________
(Please Print Your Name) (Signature)
__________________________ _________________________
(Please Print Your Name) (Signature, if held jointly)
I do [ ] do not [ ] expect to attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
BY THE SHAREHOLDER DELIVERING IT PRIOR TO ITS EXERCISE BY FILING WITH THE
CORPORATE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY
EXECUTED PROXY BEARING A LATER DATE OR BY APPEARING AND VOTING IN PERSON AT THE
MEETING.