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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Name of Registrant as Specified in Its Charter)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(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:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(2) Aggregate number of securities to which transaction applies:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(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:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(4) Proposed maximum aggregate value of transaction:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(5) Total fee paid:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/ / 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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(2) Form, schedule or registration statement number:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(3) Filing party:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(4) Date filed:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
April 22, 2003
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Community West Bancshares that will be held at the Holiday Inn, 5650 Calle Real,
Goleta, California 93117, on Thursday May 22, 2003, at 6:00 P.M. Pacific
Daylight Time. I look forward to greeting as many of our shareholders as
possible.
As set forth in the attached Proxy Statement, the Meeting will be held to
consider the election of Directors and approve an amendment to increase the
number of shares reserved for issuance under the 1997 Stock Option Plan.
We will also review operating results for the past year and the progress of
Community West Bancshares and present an opportunity to ask questions of general
interest to shareholders.
Your vote is important. Whether or not you attend the meeting in person, I
urge you to promptly vote your Proxy by signing and dating the Proxy card and
returning it in the accompanying postage-paid envelope. If you decide to attend
the meeting and vote in person, you will, of course, have that opportunity.
I look forward to seeing you at the Annual Meeting on Thursday, May 22,
2003.
Very truly yours,
Michael A. Alexander
Chairman of the Board
And Chief Executive Officer
COMMUNITY WEST BANCSHARES
445 Pine Avenue
Goleta, California 93117-3474
Telephone: (805) 692-5821
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 2003
NOTICE IS HEREBY GIVEN that the 2003 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 22, 2003, 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 to serve until the 2004 Annual Meeting of Shareholders and until their
successors are elected and have qualified. The following persons are the Board
of Directors' nominees:
Michael A. Alexander Lynda Nahra
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen
2. APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES RESERVED FOR
ISSUANCE UNDER THE STOCK OPTION PLAN. To ratify an amendment to
the 1997 Stock Option Plan increasing from 842,014 to 1,292,014
the number of shares of the Company's Common Stock which may be
subject to awards granted thereunder.
3. 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 of Directors has fixed the close of business on April 22, 2003,
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 of Directors of the Company. All proposals set
forth above are proposals of the Company. It is expected that these materials
first will be mailed to shareholders on or about April 22, 2003.
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 COMPANY'S BOARD OF DIRECTORS. 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,
Robert H. Bartlein, Secretary
Dated: April 22, 2003
Goleta, California
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S 2002 ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, ARE AVAILABLE UPON REQUEST TO: CHARLES G.
BALTUSKONIS, SENIOR 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 22, 2003
________________________
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 22, 2003 at 6:00 P.M. Pacific Daylight
Time 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 22, 2003 ("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 22, 2003. The
Company's Annual Report on Form 10-K, including consolidated financial
statements for the year ended December 31, 2002, accompanies this Proxy
Statement.
Regardless of the number of shares of 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 of Directors of the
Company 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 and "FOR" the
amendment to increase the number of shares reserved for issuance under the stock
option plan. If any other business is properly presented at the Meeting, the
Proxy will be voted in accordance with the recommendations of the Company's
Board of Directors.
Other than the matters set forth on the attached Notice of the Meeting, the
Board of Directors 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 Company's Board of Directors 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
1
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 2004 Annual Meeting of Shareholders and until their
successors are elected and have qualified. The following persons are the Board
of Directors' nominees:
Michael A. Alexander Lynda Nahra
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen
2. APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES RESERVED FOR ISSUANCE
UNDER THE STOCK OPTION PLAN. To ratify an amendment to the 1997 Stock
Option Plan ("1997 Plan") increasing from 842,014 to 1,292,014 the
number of shares of the Company's Common Stock which may be subject to
awards granted thereunder.
3. 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 of Directors of the
Company. 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 ("Goleta" or "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 of the Company ("Common Stock"). The close of business on April 22, 2003
has been fixed by the Board of Directors as the record date ("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 5,690,224 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
2
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, 1,122,085
shares of Common Stock (21.50% 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 of Directors and "FOR" the proposed
amendment to increase the number of shares reserved for issuance under the 1997
Stock Option Plan.
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 the 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
of Directors' nominees. If, however, you fail to instruct your broker or nominee
as to how to vote such Common Stock, your broker or nominee may not vote such
Common Stock with respect to the proposal to increase the number of shares of
Common Stock reserved for issuance under the 1997 Stock Option Plan.
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 93117.
3
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)
--------------------------------------- --------------------- ------------------ -----------------
MICHAEL A. ALEXANDER, Chairman of 121,724 8,545 2.29%
the Board and Chief Executive
Officer, Community West Bancshares
CHARLES G. BALTUSKONIS, Senior Vice - - -
President and Chief Financial Officer,
Community West Bancshares and
Goleta National Bank
ROBERT H. BARTLEIN, Director 135,762 8,545 2.53%
JEAN W. BLOIS, Director 48,824 20,099 1.21%
STEPHEN W. HALEY, Director, President - 4,000 *
and Chief Operating Officer,
Community West Bancshares (3)
CYNTHIA M. HOOPER, Senior Vice 9,600 2,400 *
President, Goleta National Bank
JOHN D. ILLGEN, Director 46,956 22,959 1.22%
INVESTORS OF AMERICA LIMITED 568,696 - 9.99%
PARTNERSHIP
135 North Meramec
Clayton, MO 63105
BERNARD R. MERRY, Senior Vice - 12,200 *
President, Goleta National Bank
LYNDA NAHRA, Director, President and 1,350 19,000 *
Chief Executive Officer, Goleta
National Bank
WILLIAM R. PEEPLES, Vice Chairman of 738,728 8,545 13.11%
the Board (4)
JAMES R. SIMS, JR., Director 19,141 22,959 *
ALL DIRECTORS AND EXECUTIVE 1,122,085 129,252(5) 21.50%
OFFICERS AS A GROUP (11 in Number)
* Less than 1%
(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 were
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) Mr. Haley resigned in March 2003.
(4) Includes 169,800 shares held by Mr. Peeples' spouse, concerning which Mr.
Peeples disclaims beneficial ownership.
4
(5) Does not include an aggregate of 69,900 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 of Directors 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 2004 Annual Meeting of Shareholders 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 of
Directors 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 of Directors. The Board
of Directors 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 of
Directors 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.
The following persons have been nominated for election by the Board of
Directors:
Michael A. Alexander Lynda Nahra
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES.
INFORMATION ABOUT THE NOMINEES
MICHAEL A. ALEXANDER (AGE 72)
Mr. Alexander has been the Chairman of the Board of CWBC since 2000 and has
been a member of the CWBC Board since its inception in 1997 and the GNB Board
5
(current Chairman) since 1989, and was named the Chief Executive Officer of the
holding company, effective March 2003. Mr. Alexander serves on CWBC's Audit
Committee, is Chairman of GNB's Compliance, Executive and Management Succession
Committees, and serves on GNB's Personnel / Compensation and Asset / Liability
Committees. He was Chairman of the Board of Utilcom Inc. from 1992 to 2002. He
was employed by General Motors from 1955 to 1992, starting as a project engineer
and rising to Director of Aerospace Programs before he retired in 1992, and was
a construction flight officer in the U.S. Air Force from 1953 to 1955. He has
been the President and a member of the Board of Directors of Trinity Children
and Family Services since 1976 and is a member of the Board of Directors of
Santa Barbara Greek Orthodox Church and Innovative Survivability Systems. Mr.
Alexander holds a degree in Industrial Management and Mechanical Engineering
from the Massachusetts Institute of Technology.
ROBERT H. BARTLEIN (AGE 55)
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 is currently
Vice Chairman of the Board of GNB, Chairman of the Loan Committee, a member of
the Executive Committee and Secretary of the Board of CWBC. He is President and
CEO of Bartlein & Company, Inc., 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. He 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 75)
Ms. 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. Ms. Blois graduated with a
BA 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 newly-formed
City of Goleta.
JOHN D. ILLGEN (AGE 58)
Mr. Illgen has been a member of the Board of CWBC since its inception in
1997 and of GNB since 1989. He is Chairman of the Asset / Liability Committee
and a member of GNB's Personnel / Compensation and Compliance Committees. Mr.
Illgen is President and Chairman of Illgen Simulation Technologies, Inc. (ISTI).
His responsibilities at ISTI include Operations, Marketing, Strategic Planning
and Technical Program Management. Mr. Illgen is on special assignment to the
U.S. Army focused on training our Armed Forces using software simulation,
virtual systems and live systems in a contemporary operational environment. Mr.
Illgen is an honorary member of the Santa Barbara Scholarship Foundation Board
of Directors and a member and Past President (1979-80) of Goleta Rotary Club.
6
LYNDA NAHRA (AGE 52)
Ms. Nahra has been President and Chief Executive Officer of GNB since 2000
after serving in various positions of increasing responsibility for the Bank
since 1997. 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 is
a member of GNB and CWBC's Boards and serves on GNB's Loan, Asset / Liability,
Management, Compliance and Disclosure Committees. Ms. Nahra serves as a
director of Women's Economic Ventures, Treasurer of Montecito Rotary Club, and
is a Finance Committee member for the Goleta Montessori Center School and the
Santa Barbara United Way. Ms. Nahra's educational background is from California
Western University in San Diego and Pacific Coast Banking School.
WILLIAM R. PEEPLES (AGE 60)
Mr. Peeples has been the Vice Chairman of the Board of CWBC since its
inception in 1997 and a founder and Director of GNB since 1989. Mr. Peeples is
Chairman of CWBC's Audit Committee 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 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 industrial buildings. Mr. Peeples holds a BBA
from Wisconsin State University and an MBA from Golden Gate University, Air
Force on-base program.
JAMES R. SIMS JR. (AGE 66)
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 Committee and
previously served on the Finance and Audit Committees. 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.
Since the last Annual Meeting, one Director, Stephen W. Haley, resigned
before the end of his term.
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
7
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 of Directors.
EXECUTIVE OFFICERS (not members of the Board of Directors)
The following sets forth, as of the Record Date, the names and certain
other information concerning the executive officers of the Company, in addition
to the executive officer who is nominated for election as a Director.
CHARLES G. BALTUSKONIS (AGE 52)
Mr. Baltuskonis, Senior 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, Mego Financial Corporation, from
1997 to 2002 and Senior Vice President and Controller, TAC Bancshares, from 1995
to 1997. Prior to that, he was Chief Financial Officer of F&C Bancshares and
First Coastal Corporation and a Senior Manager with the public accounting firm
of Ernst & Young. Mr. Baltuskonis is a certified public accountant, is a member
of the American Institute of Certified Public Accountants and holds a BS from
Villanova University.
CYNTHIA M. HOOPER (AGE 40)
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. This SBA unit 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 an active
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 55)
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 promoted to Mortgage Division Manager in November 2001.
Presently, Mr. Merry oversees the Retail and Wholesale Mortgage Departments for
GNB. He formerly was a Vice President for ITT Financial Services for 24 years
running their West Coast Broker Division and their 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.
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES
The Board of Directors of the Company met 17 times (14 regular meetings and
three special meetings) during the year ended December 31, 2002, and had the
following standing committees that met during the year: the Audit Committee and
8
the Personnel / Compensation Committee. The Company does not have a nominating
committee. In addition, the Company's Directors served on the Board of Directors
of Goleta, including the various committees established by that subsidiary.
During 2002, none of the Company's Directors attended less than 75% of the
Company's Board meetings and meetings of committees on which they served.
The Audit Committee is composed of three members of the Board of Directors:
Messrs. Alexander, Peeples and Sims. 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 five times during 2002.
The Personnel / Compensation Committee, which is currently composed of four
members of the Board of Directors; Messrs. Alexander, Illgen and Peeples, and
Ms. Blois. The Committee is responsible for determining executive compensation.
This Committee met once during 2002.
DIRECTORS' COMPENSATION
There were no CWBC Director fees paid during 2002. Until March 31, 2002,
Goleta's Directors were paid for attendance at Bank Board meetings at the rate
of $500 for each regular Board meeting (with the Chairmen receiving $750); and,
for all Directors except Ms. Nahra and Mr. Haley, $150 for each committee
meeting. After March 31, 2002, all Directors' fees for Goleta meetings were
suspended until further notice.
AUDIT COMMITTEE REPORT
The Report of the Audit Committee of the Board of Directors shall not be
deemed filed under the Securities Act of 1933 ("Securities Act") or under the
Exchange Act.
The Board of Directors maintains an Audit Committee comprised of three of
the Company's Directors. Messrs. Peeples and Sims each met the independence and
experience requirements of the Nasdaq Stock Market. Mr. Alexander also met such
standards until his appointment in March 2003 as Chief Executive Officer of the
Company. The Company is seeking to replace Mr. Alexander on this Committee.
The Audit Committee assists the Board of Directors 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 restated
on April 25, 2002 and is assessed annually for adequacy by the Audit Committee.
The Audit Committee held five meetings during fiscal 2002.
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 2002; and
9
- 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:
- 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 2002 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 of Directors, and the
Board of Directors 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, 2002 for filing with the Securities and Exchange Commission.
10
THE AUDIT COMMITTEE
William R. Peeples, Chairman
Michael A. Alexander
James R. Sims, Jr.
Dated: February 27, 2003
PERSONNEL / COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Personnel / Compensation Committee ("Committee") is made up of four
Directors: Messrs. Alexander, Illgen and Peeples, and Ms. Blois. None of these
Directors served as an officer of the Company or of its subsidiaries until March
2003, when, as previously noted, Mr. Alexander was appointed as Chief Executive
Officer of the Company. The Company is seeking to replace Mr. Alexander on this
Committee. The Company's executive officers have represented to the Company
that none of them served on the Board of Directors or Personnel / Compensation
Committee, or in an equivalent capacity, of another entity.
PERSONNEL / COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Report of the Personnel / Compensation Committee of the Board of
Directors shall not be deemed to be filed under the Securities Act or under the
Exchange Act.
The 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 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 of Directors in its role in establishing objectives regarding executive
compensation. The 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 Committee are
intended to be consistent and competitive with the practices of comparable
financial institutions and each executive's level of responsibility. The
Committee generally utilizes internal and/or external surveys of compensation
paid to executive officers performing similar duties for depository institutions
and their holding companies.
11
In establishing executive compensation for the Presidents of the Company
and Goleta, the Committee considered the overall financial condition of the
Company, profitability, asset quality and compliance with rules and regulations.
The Committee also considered the amount of time the executives had been with
the Company, performance goals and general industry customs. Generally excluded
from the 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.
The 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
Michael A. Alexander
John D. Illgen
William R. Peeples
Dated: November 29, 2002
12
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 2002, 2001
and 2000, the compensation information for the Company's Chief Executive Officer
and the other four (a total of six are shown in the table as there was a
transition to a new Chief Financial Officer at the end of 2002) most highly
compensated executive officers serving the Company in 2002 (collectively, the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------ (1) ALL OTHER
SECURITIES COMPENSA-
OTHER ANNUAL UNDERLYING ---------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS TION
--------------------------------------- ---- -------- ------- ------------- ---------- --------------
STEPHEN W. HALEY, President and Chief 2002 $175,000 $ - $ 24,200 - $ 1,512
Operating Officer, Community West 2001 103,750 10,000 13,200 20,000 -
Bancshares (resigned March 2003) (2)
LYNDA NAHRA, President and Chief 2002 142,501 20,000 - - 2,519
Executive Officer, Goleta National 2001 129,167 25,000 1,806 4,000 2,161
Bank (3) 2000 101,458 - 23,577 7,500 2,188
CHARLES G. BALTUSKONIS, Senior Vice 2002 15,625 - - 7,500 -
President and Chief Financial Officer,
Community West Bancshares and
Goleta National Bank (4)
PHILIP E. GULDEMAN, Executive Vice 2002 103,167 16,667 - 25,000 406
President and Chief Financial Officer
(resigned December 2002) (5)
CYNTHIA M. HOOPER, Senior Vice 2002 98,797 3,750 - 10,000 2,210
President, SBA Loans, Goleta National 2001 85,000 - 39,400 - 1,667
Bank (6) 2000 68,333 - 44,585 4,000 1,500
BERNARD R. MERRY, Senior Vice 2002 142,451 9,500 - - 2,433
President, Mortgage Division 2001 131,016 15,000 - 4,000 2,614
Manager, Goleta National Bank 2000 126,450 5,000 - 6,500 2,274
(1) Amounts represent Company's 401 (k) matching contribution.
(2) Mr. Haley was President and Chief Operating Officer of the Company from
September 2001 to March 2003. Amounts in "Other Annual Compensation" were
for a living allowance.
(3) Amounts in "Other Annual Compensation" for Ms. Nahra were for commissions.
Ms. Nahra no longer receives commissions.
(4) Mr. Baltuskonis was named Chief Financial Officer Designee in November 2002
and became Chief Financial Officer in December 2002 subsequent to Mr.
Guldeman's resignation.
(5) Mr. Guldeman was Executive Vice President and Chief Financial Officer from
April 2002 to December 2002.
(6) Amounts in "Other Annual Compensation" for Ms. Hooper were for commissions.
Ms. Hooper no longer receives commissions.
STOCK OPTIONS
In connection with the bank holding company reorganization, the Company
adopted the Community West Bancshares 1997 Stock Option Plan ("1997 Plan")
13
providing for the issuance of up to 842,014 shares. As of the Record Date,
336,611 options had been exercised and options for 350,852 shares were
outstanding, leaving 154,551 shares available for future grants. For a
description of the 1997 Plan, see "Proposal 2. Amendment of 1997 Plan." The
following table sets forth certain information regarding stock options granted
by the Company to the Named Executive Officers during 2002:
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 7,500 8.5% $ 4.58 11/21/12 $21,603 $ 54,744
----------------------- ---------- --------------- ---------- ---------- -------- ---------
Philip E. Guldeman (3) 25,000 28.4% 4.45 4/1/12 69,965 177,299
----------------------- ---------- --------------- ---------- ---------- -------- ---------
Cynthia M. Hooper 10,000 11.3% 4.60 4/26/12 28,929 73,310
----------------------- ---------- --------------- ---------- ---------- -------- ---------
(1) The Company issued options to purchase 88,128 shares of Common Stock
in 2002. The Company issued no stock appreciation rights in 2002.
(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.
(3) Mr. Guldeman resigned effective December 2002.
14
The following table sets forth certain information regarding stock options
outstanding at December 31, 2002 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)
---------------------- --------------- -------------- ------------------ -------------------
Stephen W. Haley - - 4,000/20,000 $ -/$-
---------------------- --------------- -------------- ------------------ -------------------
Lynda Nahra - - 19,000/27,500 $ -/$-
---------------------- --------------- -------------- ------------------ -------------------
Charles G. Baltuskonis - - -/7,500 $ -/$825
---------------------- --------------- -------------- ------------------ -------------------
Bernard R. Merry - - 12,200/18,500 $ -/$-
---------------------- --------------- -------------- ------------------ -------------------
Cynthia M. Hooper - - 2,400/14,000 $ -/$900
---------------------- --------------- -------------- ------------------ -------------------
(1) Based on the closing price on the Nasdaq National Market at $4.69 per share
on December 31, 2002.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
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 350,852(1) $ 6.30 154,551(2)
---------------------------------- ------------------ ------------------- -------------------------------
Plans not approved by shareholders - N/A -
---------------------------------- ------------------ ------------------- -------------------------------
Total 350,852 154,551
---------------------------------- ------------------ ------------------- -------------------------------
(1) Shares issuable pursuant to outstanding options under the 1997 Stock
Option Plan.
(2) Represents shares of Company Common Stock, which may be issued pursuant
to future awards under the 1997 Stock Option Plan.
15
EMPLOYMENT AND OTHER COMPENSATION AGREEMENTS
Mr. 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 ("ESCA")
with the Company dated January 1, 1994. The purpose of the ESCA was to provide a
special incentive to Mr. Stone for his continuing employment with Goleta on a
long-term basis. The ESCA provides Mr. Stone with salary continuation benefits
of up to $50,000 per year for 15 years after retirement. Normal retirement
under the ESCA is age 61. In the event of death prior to retirement, Mr. Stone's
beneficiary will receive the full salary continuation benefits. In the event of
disability, wherein Mr. Stone does not continue employment with the Bank, Mr.
Stone is entitled to a total yearly payment equal to $5,000 per year of service
beginning with January 1, 1994, up to a total yearly payment of $50,000. If Mr.
Stone terminates employment with the Bank for a reason other than death,
disability, cause or voluntary termination, prior to the normal retirement age,
he will be entitled to salary continuation benefits calculated as set forth
above for disability. If Mr. Stone's employment is terminated after a transfer
of controlling ownership of the Company or a sale of the Company or Goleta, Mr.
Stone will become fully vested as to the full amount of salary continuation
benefits. Although Mr. Stone has reduced his duties to those of part-time
employee and consultant, he continues to be an employee of the Company and is
not currently receiving benefits under the ESCA.
Mr. Haley was President of the Company until March 2003 at an annual salary
of $175,000.
Ms. Nahra is entitled to one year's severance pay in the case of
involuntary termination. The Board of Directors of Goleta is currently
negotiating an employment agreement with Ms. Nahra.
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 of Directors and amounted to
$171,467, $176,782 and $164,125, respectively, in 2002, 2001 and 2000.
16
STOCK PERFORMANCE GRAPH
The following graph presents the cumulative, five-year total return for the
Company's (and previously Goleta'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, 1997, 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.
[GRAPHIC OMITTED]
PERIOD ENDED
-------------------------------------------------------------------------------------
INDEX 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
-------------------------------------------------------------------------------------
Community West Bancshares 100.00 102.37 76.99 42.15 65.26 51.01
NASDAQ - Total US* 100.00 140.99 261.48 157.42 124.89 86.33
SNL <$500M Bank Index 100.00 91.31 84.52 81.54 112.79 144.45
17
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 its banking subsidiary,
Goleta, in the ordinary course of Goleta's businesses. Goleta expects to have
such ordinary banking transactions with such persons in the future. In the
opinion of management of Goleta, 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 Goleta 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 Goleta's internal lending
policies and statutory lending limits.
PROPOSAL 2
AMENDMENT OF 1997 STOCK OPTION PLAN
The Board is asking you to approve an amendment to CWBC's 1997 Stock Option
Plan ("1997 Plan") increasing by 450,000 the number of shares of Common Stock
that may be issued from 842,014 shares to 1,292,014 shares. Of the increase,
200,000 shares are proposed to be available for issuance to Directors and
250,000 shares are allocated for issuance to employees. As of April 22, 2003,
66,051 shares in total were available to be issued, allocated as 66,049
qualified shares and 2 non-qualified (Director) shares.
PURPOSE
The purpose of the 1997 Plan is:
- To strengthen CWBC and its subsidiaries by providing additional means
of attracting and retaining competent managerial personnel and by
providing to participating Directors, officers and key employees added
incentive for high levels of performance and for unusual efforts to
increase the earnings of CWBC; and
- To achieve these purposes and accomplish those results by providing a
means whereby Directors, officers and key employees may purchase
shares of the Common Stock under stock options granted in accordance
with the plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO INCREASE
THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE 1997 STOCK OPTION PLAN.
18
ELIGIBILITY
Full-time employees, officers and Board members of CWBC and subsidiaries,
including Goleta, are eligible to receive awards under the 1997 Plan at the
discretion of the Board of Directors.
The 1997 Plan currently authorizes grants to Directors of options to
purchase up to 273,856 shares of Common Stock.
ADMINISTRATION
The Board of Directors, serving as the "Stock Option Committee",
administers the 1997 Plan. The Board has the authority to make all
determinations and approvals. Members of the Board of Directors receive no
additional compensation for their administration of the 1997 Plan.
TERMS OF THE STOCK OPTIONS
The 1997 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 of Directors 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 of Directors, 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 termination 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 of Directors. After
the death of a participant, the participant's estate may exercise any options
that had vested on the date of death for a subsequent period of 90 days. 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.
19
TERMINATION OF STOCK OPTIONS AND THE PLAN
The 1997 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,
2002 were Ernst & Young LLP ("Ernst"). The Company has engaged Ernst as
independent auditors for the fiscal year ending December 31, 2003.
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 fiscal year ended December 31, 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 Company's interim financial
statements were $130,250. The Company was also billed aggregate fees of $7,500
by Arthur Andersen LLP for review of the Company's first quarter interim
financial statements.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the fiscal year ended December 31, 2002, there were no fees billed
by Ernst for information technology consulting services.
OTHER FEES
During the fiscal year ended December 31, 2002, the aggregate fees billed
by Ernst for professional services other than audit and information technology
consulting fees were $74,200, related primarily to state and federal tax
compliance and consulting. The Company was also billed aggregate fees of
$18,500 by Arthur Andersen LLP for professional services related to state and
federal tax compliance and consulting.
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 2002 was compatible with their independence.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in the Proxy Statement
for the Company's 2004 Annual Meeting of Shareholders must be received by the
Company at its offices at 445 Pine Avenue, Goleta, California 93117, no later
than December 26, 2003. The proposals must also satisfy the conditions
20
established by the Securities and Exchange Commission ("SEC") for such proposals
to be included in the Company's Proxy Statement for the 2004 Annual Meeting of
Shareholders.
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
Recently, the SEC amended its 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 of that rule change, in the event a shareholder proposal is not
submitted to the Company prior to March 12, 2003, the proxies solicited by the
Board for the 2003 Annual Meeting of Shareholders 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 2003 Annual Meeting of
Shareholders without any discussion of the proposal in the proxy statement for
such meeting.
The Company's Board of Directors 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
Michael A. Alexander,
Chairman of the Board and Chief Executive Officer
Dated: April 22, 2003
Goleta, California
21
COMMUNITY WEST BANCSHARES
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 2003
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 22, 2003, 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
Michael A. Alexander Lynda Nahra
Robert H. Bartlein William R. Peeples
Jean W. Blois James R. Sims, Jr.
John D. Illgen
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW:
______________________________________________________________________
2. APPROVAL IN AN INCREASE in the number of shares reserved for issuance
under the Stock Option Plan
The Board of Directors recommends a vote FOR:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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:, 2003
-------------------------- --------------
(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.