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 the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
COMMUNITY WEST BANCSHARES
5638 Hollister Avenue
Goleta, California 93117
Telephone: (805) 683-4944
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1998
TO THE SHAREHOLDERS OF COMMUNITY WEST BANCSHARES:
NOTICE IS HEREBY GIVEN that, pursuant to the Bylaws of Community West
Bancshares and the call of its Board of Directors, the 1998 Annual Meeting of
Shareholders (the "Meeting") of Community West Bancshares (the "Company") will
be held at the Holiday Inn, 5650 Calle Real, Goleta, California 93117, on
Thursday, May 28, 1998, at 6:00 p.m., for the purpose of considering and voting
on the following matters:
1. ELECTION OF DIRECTORS. Electing the following eleven (11) persons
----------------------
to the Board of Directors to serve until the 1999 Annual Meeting of Shareholders
and until their successors are elected and have qualified:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein C. Randy Shaffer
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
</TABLE>
<PAGE>
2. OTHER BUSINESS. Transacting such other business as may properly
---------------
come before the Meeting and any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 1, 1998, as
the record date for determination of shareholders entitled to notice of, and the
right to vote at, the Meeting.
The Bylaws of the Company provide for the nomination of directors in the
following manner:
<PAGE>
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
May 8, 1998 Michel Nellis, Secretary
<PAGE>
COMMUNITY WEST BANCSHARES
5838 Hollister Avenue
Goleta, California 93117
Telephone: (805) 683-4944
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 1998 Annual Meeting of Shareholders (the "Meeting") of
Community West Bancshares (the "Company") to be held at the Holiday Inn, 5650
Calle Real, Goleta, California 93117, on Thursday, May 28, 1998, at 6:00 p.m.,
and at any and all adjournments thereof.
It is expected that this Proxy Statement and accompanying Notice and form
of Proxy will be mailed to shareholders on or about May 8, 1998.
AGENDA FOR THE MEETING
- -------------------------
The matters to be considered and voted upon at the Meeting will be:
1. ELECTION OF DIRECTORS. Electing the following eleven (11) persons
to the Board of Directors to serve until the 1999 Annual Meeting of Shareholders
and until their successors are elected and have qualified:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein C. Randy Shaffer
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
</TABLE>
<PAGE>
2. OTHER BUSINESS. Transacting such other business as may properly
come before the Meeting and any adjournment or adjournments thereof.
REVOCABILITY OF PROXIES
- -------------------------
A Proxy for use at the Meeting is enclosed. Any shareholder who executes
and delivers such Proxy has the right to revoke it at any time before it is
exercised by filing with the Secretary of the Company an instrument revoking it
or a duly-executed Proxy bearing a later date. In addition, the powers of the
proxyholders will be revoked if the person executing the Proxy is present at the
Meeting and elects to vote in person. Subject to such revocation, all shares
represented by a properly executed Proxy received in time for the Meeting will
be voted by the proxyholders in accordance with the instructions on the Proxy.
IF NO INSTRUCTION IS SPECIFIED WITH REGARD TO A MATTER TO BE ACTED UPON, THE
SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE COMPANY'S BOARD OF DIRECTORS.
PERSONS MAKING THE SOLICITATION
- ----------------------------------
This solicitation of Proxies is being made by the Board of Directors of
Company. The expense of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of Proxies for the Meeting
will be borne by the Company. It is contemplated that Proxies will be solicited
principally through the use of the mail, but officers, directors and employees
of the Company may solicit Proxies personally or by telephone, without receiving
special compensation therefor. Although there is no formal agreement to do so,
the Company may reimburse banks, brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expense in forwarding these Proxy Materials
to their beneficial owners. In addition, the Company may utilize the services
of individuals or companies not regularly employed by the Company in connection
with the solicitation of Proxies if Management of the Company determines that
this is advisable.
GOLETA NATIONAL BANK
- ----------------------
Effective December 31, 1997, Goleta National Bank, Goleta, California (the
"Bank") became the wholly-owned subsidiary of the Company. The Bank is
chartered under the laws of the United States and operates a full service
commercial banking business.
VOTING SECURITIES
There were issued and outstanding 3,344,950 shares of the no par value
common stock of the Company (the " Common Stock") on May 1, 1998, which date
has been fixed as the record date for the purpose of determining the
shareholders of the Company entitled to notice of and to vote at the Meeting
(the "Record Date"). On any matter submitted to the vote of the shareholders of
the Company, each holder of the Common Stock will be entitled to one vote, in
person or by proxy, for each share of the Common Stock held of record by such
shareholder on the books of the Company as of the Record Date. In connection
with the election of directors shares shall be voted cumulatively if notice of
the intention to vote cumulatively is properly given prior to voting.
Cumulative voting allows a shareholder to cast that number of votes equal to
the number of shares held in his or her name as of the Record Date, multiplied
by the number of directors to be elected. This total number of votes may be
cast for one nominee or may be distributed among as many nominees or in such
proportions as the shareholder sees fit.
SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as set forth below and in the following table, Management does not
know of any individual, group, corporation or other entity who owns
beneficially, directly or indirectly, more than 5% of the outstanding shares of
the Common Stock as of May 1, 1998. The following table sets forth the amount
of shares of the Common Stock beneficially owned, directly and indirectly, by
each of the Company's directors, naming them, and by all directors and executive
officers ()foot1) The term "executive officer" means the President and Chief
Executive Officer and the Executive Vice President. of the Company, as a group,
as of May 1, 1998. Management is not aware of any change in control of the
Company which has occurred since January 1, 1997, or any arrangement which may,
at a subsequent date, result in a change in control of the Company.
<TABLE>
<CAPTION>
NAME AND OFFICE HELD COMMON STOCK
WITH THE COMPANY BENEFICIALLY OWNED(1) PERCENT OF CLASS(2)
- ------------------------------------- --------------------- -------------------
<S> <C> <C>
Michael A. Alexander
Chairman of the Board of Directors 74,370(1) 2.3%
- ------------------------------------- --------------------- -------------------
Mounir R. Ashamalla
Director 74,856(1) 2.3%
--------------------- -------------------
Robert H. Bartlein
Vice Chairman of the Board 86,472(1) 2.7%
--------------------- -------------------
Jean W. Blois
Director 51,086(1) 1.6%
--------------------- -------------------
John D. Illgen
Director 42,080(1) 1.3%
--------------------- -------------------
John D. Markel
Director 314,664(1) 9.5%
--------------------- -------------------
Michel Nellis
Secretary and Director 40,952(1) 1.3%
--------------------- -------------------
William R. Peeples
Director 309,588(1) 9.7%
--------------------- -------------------
C. Randy Shaffer
Executive Vice President
and Director 44,230(1) 1.4%
--------------------- -------------------
James R. Sims, Jr.
Director 17,400(1) 0.6%
--------------------- -------------------
Llewellyn W. Stone
President, Chief Executive Officer
and Director 85,424(1) 2.7%
--------------------- -------------------
All directors and Executive Officers
as a group
(11 in number) 1,141,104(1) 32.4%
- ------------------------------------- --------------------- -------------------
<FN>
(1) The term "executive officer" means the President and Chief Executive
Officer and the Executive Vice President.
(2) Includes shares subject to options held by each director and named
officer and the directors and named officers as a group that are exercisable
("vested") within 60 days of April 30,1998, as well as warrants to purchase
common stock of the Company currently outstanding. These are treated as issued
and outstanding for the purpose of computing the percentage of each director and
named officers as a group but not for the purpose of computing the percentage of
class of any other person.
(3) Mr. Alexander has shared voting and investment powers as to 39,632 of
these shares, has 9,460 shares acquirable by exercise of stock options, and has
13,538 shares acquirable by exercise of stock warrants.
(4) Dr. Ashamalla has 10,164 shares acquirable by exercise of stock options
and has 12,986 share acquirable by exercise of stock warrants.
(5) Mr. Bartlein has 23,804 shares acquirable by exercise of stock options
and has 13,822 shares acquirable by exercise of stock warrants.
(6) Ms. Blois has 24,244 shares acquirable by exercise of stock options.
(7) Mr. Illgen has 15,444 shares acquirable be exercise of stock options and
has 5,574 shares acquirable by exercise of stock warrants.
(8) Mr. Markel has shared voting and investment powers as to 27,720 of these
shares, has 15,840 shares acquirable by exercise of stock options and has
120,652 shares acquirable by exercise of stock warrants.
(9) Ms. Nellis has shared voting and investment powers as to 7,246 of these
shares, has 15,444 shares acquirable by exercise of stock options and has 1,990
shares acquirable by exercise of stock warrants.
(10) Mr. Peeples has 2,860 shares acquirable by exercise of stock options and
has 28,000 shares acquirable by exercise of stock warrants.
(11) Mr. Shaffer has shared voting and investment powers as to 1,300 of these
shares.
(12) Mr. Sims has 9,152 shares acquirable by exercise of stock options and has
464 shares acquirable by exercise of stock warrants.
(13) Mr. Stone has shared voting and investment powers as to 1,584 of these
shares and has 24,000 shares acquirable by exercise of stock options.
(14) Includes 143,252shares acquirable by exercise of stock options and
190,026 shares acquirable by exercise of stock warrants.
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
- --------
The Bylaws of the Company provide that the authorized number of directors
shall not be less than six (6) or more than eleven (11), with the exact number
of directors fixed from time to time by resolution of a majority of the full
Board of Directors or by resolution of the shareholders. The number of
directors has been fixed at eleven (11) by action of the Board of Directors.
The persons named below, all of whom are currently members of the Company's
Board of Directors, will be nominated for election as directors to serve until
the 1999 Annual Meeting of Shareholders and until their successors are elected
and have qualified. Votes will be cast in such a way as to effect the election
of all eleven (11) 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 unavailable to serve if
elected. 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.
None of the directors, nominees 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 with the capacities as
such. As of December 31, 1997, there are no family relationships between the
directors and executive officers of the Company. None of the directors or
executive offices of the Company serve as directors of any 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, as amended ,or
any investment company registered under the Investment Company Act of 1940, as
amended.
The following table sets forth the names and certain information as of May
1, 1998, concerning the person to be nominated by the Board of Directors for
election as directors of the Company:
<PAGE>
<TABLE>
<CAPTION>
Year First
Appointed or
Name and Offices Held Age Principal Occupation Elected To Board
- ------------------------------- --- -------------------------------------------------- ----------------
<S> <C> <C> <C>
Michael A. Alexander 67 Chief Executive Officer of Utilicom Corp. since 1997
Chairman of the Board 1994. Prior to that time, Director of Programs of
Delco Electronics.
Mounir R. Ashamalla 60 Oral-Maxillo-Facial Surgeon 1997
Director
Robert H. Bartlein 50 President of Bartlein Group, Inc. and President of 1977
Director and Vice Chairman of Bartlein & Company, Inc.
the Board
Jean W. Blois 70 Independent consultant 1997
Director
John D. Illgen 53 President and Chairman of Illgen Simulation 1977
Director Technologies, Inc.
John D. Markel 54 Private Investor 1997
Director
Michel Nellis 51 Partner with Nellis Associates 1997
Secretary and Director
William R. Peeples 54 Private Investor 1997
Director
C. Randy Shaffer 51 Executive Vice President of the Company and 1998
Director and Executive Vice Executive Vice President of Bank
President
James R. Sims, Jr. 62 Realtor. 1997
Director
Llewellyn W. Stone 55 President and Chief Executive Officer of the 1997
President, Chief Executive Company and Bank
Officer and Director
</TABLE>
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
- -------------------------------------
The Board of Directors of the Company held 12 regular meetings in 1997.
All of the Company's directors, attended at least seventy-five percent (75%) of
all board meetings and meetings of committees of the board on which they served
in 1997.
COMPENSATION AND OTHER TRANSACTIONS
WITH MANAGEMENT AND OTHERS
SUMMARY COMPENSATION
- ---------------------
The following table sets forth a summary of annual and long-term
compensation for services in all capacities to the Company for the Company
President and Chief Executive Officer and the only other executive officer of
the Company whose annual compensation from the Company and/or any of its
subsidiaries exceeded $100,000 during 1997 (the "named executive officers").
Columns showing restricted stock awards, long-term incentive plan payouts and
all other compensation have been omitted as not applicable.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
--------------------- --------------------------
Option
Name and Shares/ LTIP All Other
Principal Position Year Salary Bonus Other(1) Awards SAR's Payouts Compensation
- -------------------- ---- -------- ------- -------- ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Llewellyn W. Stone 1997 $179,250 $51,000 - -0- -0- -0- -0-
President and Chief 1996 $127,123 $51,000 - -0- -0- -0- -0-
Executive Officer 1995 $126,600 $51,000 - -0- -0- -0- $ 636
Of Bank
C. Randy Shaffer 1997 $118,605 $30,000 - -0- -0- -0- -0-
Executive Vice 1996 $ 90,973 $30,000 - -0- -0- -0- -0-
President and Chief 1995 $ 87,744 $25,000 - -0- -0- -0- $ 1,867
Financial Officer of
Bank
- --------------------
<FN>
(1) The Company furnishes and plans to continue to furnish to certain
officers the use of Company or Bank-owned automobiles which are used primarily
for Company and/or Bank business purposes. The Company has provided and plans
to provide certain of its officers with certain specified life and medical
insurance benefits. Since portions of the automobile expenses, club membership
fees, insurance premiums attributable to personal use and other perquisites did
not exceed the lower of $50,000 or ten percent (10%) of the total annual salary
reported in the table per individual, such amounts have not been included in the
foregoing figures.
</TABLE>
STOCK OPTIONS
- ---------------
The following table sets forth certain information regarding stock options
granted during 1997 to the Company's President and Chief Executive Officer and
the only other executive officer of the Company with compensation in excess of
$100,000 in 1997. The Company has not issued Stock Appreciation Rights ("SAR").
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Percentage of Total
Options Granted Options Granted to
Name During 1997 Employees During 1997 Exercise Price Expiration Date
- ------------------ --------------- --------------------- -------------- ---------------
<S> <C> <C> <C> <C>
Llewellyn W. Stone - - - -
- ------------------ --------------- --------------------- -------------- ---------------
C. Randy Shaffer - - - -
- ------------------ --------------- --------------------- -------------- ---------------
</TABLE>
The following table sets forth certain information regarding stock options
exercised during 1997 by the President and Chief Executive Officer and the only
other executive officer with the Company with compensation in excess of $100,000
in 1997.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND VALUES
Number of Securities
Underlying Unexercised Value of Unexercised in the
Shares Acquired Value Options at 12/31/97 Money Options at 12/31/97
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------ --------------- --------- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Llewellyn W. Stone None N/A 79,000/-0- $ 496,460/N/A(2)
- ------------------ --------------- --------- ------------------------- -----------------------------
C. Randy Shaffer 43,000 $ 138,620 -0-/-0- N/A/N/A
- ------------------ --------------- --------- ------------------------- -----------------------------
<FN>
(2) Based on closing price on December 31, 1997 of $18.25 per share.
</TABLE>
EMPLOYMENT AGREEMENT
- ---------------------
Mr. Stone has an employment with the Company to serve as its President and Chief
Executive Officer. The agreement provides for Mr. Stone to serve for a term of
ten years beginning November 16, 1993. Under the terms of the employment
agreement, Mr. Stone's base annual salary for 1998 is $_________. The agreement
also provides Mr. Stone with the use of a Bank-owned automobile, vacation of
five weeks per year, golf membership at La Cumbre Country Club, a group medical
accident and health, disability and life, insurance benefits. In the event Mr.
Stone is terminated by the Company without cause or in the event of (i) a merger
or consolidation where the Company or Bank is not the surviving corporation,
(ii) a merger or consolidation or transfer of all or substantially all of the
assets of the Company or Bank or (iii) certain changes in ownership of the
Company, and the employment agreement is terminated, Mr. Stone will be entitled
to severance pay equal to six months' salary.
EXECUTIVE SALARY CONTINUATION AGREEMENT
- ------------------------------------------
On January 1, 1994, the Bank's Board of Directors entered into an Executive
Salary Continuation Agreement with Mr. Stone. The purpose of the Executive
Salary Continuation Agreement is to provide special incentive to Mr. Stone for
his continuing employment with the Bank on a long term basis. The Executive
Salary Continuation Agreement provides Mr. Stone with salary continuation
benefits of up to $50,000 per year for 15 years after retirement. Normal
retirement in the Executive Salary Continuation Agreement 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,
except no salary continuation benefits are payable in the event Mr. Stone
voluntarily terminates within five years of the date of the Executive Salary
Continuation Agreement. In the event of a transfer of controlling ownership or
sale of the Company or Bank, Mr. Stone will become fully vested as to the full
amount of salary continuation benefits if termination of employment thereafter
occurs.
DIRECTORS' COMPENSATION
- ------------------------
In 1997, each director of the Company received $400 for attending each
regular meeting of the Board of Directors, and $125 for attending each committee
meeting of the Bank. The Chairman of the Board received $700 for attending each
meeting of the Board of Directors. As of the Record Date, the Board of
Directors of the Company has not determined to pay any fees to directors for
attendance at meetings.
<PAGE>
401(K) PLAN
- ------------
On September 1, 1995 the Bank established a 401(k) plan for the benefit of
its employees. Employees are eligible to participate in the plan if they were
employed by the Bank on September 1, 1995 or after 3 months of consecutive
service. Employees may make contributions to the plan under the plan's 401(k)
component, and the Bank may make contributions to the plan under the plan's
profit sharing component, subject to certain limitations. The Bank's
contributions are determined by the Board of Directors and amounted to $112,592
and $39,132 in 1997 and 1996, respectively.
CERTAIN TRANSACTIONS
- ---------------------
There are no existing or proposed material transactions between the Company
or the Bank and any of its executive officers, directors, or beneficial owners
of more than 5% of the Common Stock (the "principal shareholders of the
Company"), or the associates of any of the foregoing persons, except as
indicated below.
Directors, executive officers and principal shareholders of the Company,
and the companies with which they are associated, are clients of and have had
and will continue to have banking transactions with the Bank in the ordinary
course of the Bank's business and the Company and Bank expect to have such
ordinary banking transactions with such persons in the future. In the opinion
of Management, substantially 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, collateral and repayment terms on
extensions of credit, as those prevailing at the same time for comparable
transactions with other persons of similar creditworthiness and on terms not
involving more than the normal risk of collectability or presenting other
unfavorable features. It is the intention of Management to continue to follow
these guidelines in its banking transactions with such persons. The maximum
aggregate amount of all such loans during the period January 1, 1997 to December
31, 1997 was approximately $2,200,000, which represented approximately eighteen
percent (18%) of the Company's total capital accounts as of that date.
YEAR 2000 COMPLIANCE
- ----------------------
As the year 2000 approaches, a critical issue has emerged regarding how
existing application software programs and operating systems can accommodate
this date value. In brief, many existing application software products in the
marketplace were designed to only accommodate a two digit date position which
represents the year (for example, '97' is stored on the system and represents
the year as 1997). As a result, the year 1999 could be the maximum date value
these systems will be able to accurately process. A time-sensitive software may
recognize a date using "00" as the year 1900 rather than year 2000. This could
result in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions or
engage in similar normal business activities.
The Company has adopted a plan of action to minimize the risk of the year
2000 event including the establishment of an oversight committee. The committee
will coordinate the identification, evaluation, and implementation of changes to
computer systems and software. The committee's goal is to achieve a year 2000
date conversion with no effect on customers or disruption to business
operations. The Company plans on completing the testing process of all
significant applications by December 31, 1998.
The Company has initiated formal communications with all of its vendors,
including the U.S. Government, to determine their Year 2000 compliance
readiness. The Company is reviewing the extent the interface systems are
vulnerable to any third parties' year 2000 issues. There can be no guarantee
that the systems of other companies on which the Company systems rely will be
timely converted and would not have an adverse effect on the Company's systems.
Many of the Company's systems include new hardware and software purchased from
vendors who have represented that these systems are already year 2000 compliant.
The Company is in the process of obtaining assurances from vendors that timely
updates will be made available to make all remaining systems compliant.
<PAGE>
Management does not anticipate the Company will be required to purchase any
additional hardware or software to be year 2000 compliant. However, management
does anticipate some administrative costs relative to the identification and
testing of the Company's electronic data processing systems. The costs and
timing of the year 2000 project is based on management's best estimates, which
were derived utilizing numerous assumptions of future events, including the
continued availability of certain resources, third party modification plans and
other factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ from these plans.
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders of the Company must be received by the Company at its
offices 5638 Hollister Avenue, Goleta, California 93117, no later than January
8, 1999, and must satisfy the conditions established by the Securities and
Exchange Commission ("SEC") for shareholder proposals to be included in the
Company's Proxy Statement for that meeting.
ANNUAL REPORT ON FORM 10-K
The Company has prepared and filed with the SEC an Annual Report on Form
10-K ("Annual Report") for the year ended December 31, 1997. The Company will
provide a copy of the Annual Report including financial statements and schedules
without cost, upon written request directed to Community West Bancshares, 5638
Hollister Avenue, Goleta, California 93117, attention: Ms. Lynda Pullon.
INDEPENDENT ACCOUNTANTS
The firm of Deloitte & Touche LLP served as the Company's independent
public accountants for 1997. The Company has not yet selected a firm to be its
accountants for 1998.
It is anticipated that a representative of Deloitte & touche LLP will be
present at the Meeting to respond to appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
at the Meeting. However, if other matters properly come before the Meeting, it
is the intention of the Proxyholders to vote each Proxy in accordance with the
recommendations of the Company's Board of Directors on such matters, and
discretionary authority to do so is included in the Proxy.
Dated: May 8, 1998 COMMUNITY WEST BANCSHARES
Michel Nellis,
Secretary
<PAGE>
PROXY COMMUNITY WEST BANCSHARES PROXY
ANNUAL MEETING OF SHAREHOLDERS - MAY 28, 1998
The undersigned shareholder of Community West Bancshares (the
"Company") hereby nominates, constitutes and appoints Michel Nellis, the
attorney, agent, and proxy of the undersigned, with full powers of substitution,
to vote all stock of the Company which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company to be held at the Holiday Inn,
5650 Calle Real, Goleta, California 93117, on Thursday, May 28, 1998, at 6:00
p.m. and at any and all adjournments thereof, as fully and with the same force
and effect as the undersigned might or could do if personally present there at,
as follows:
1. ELECTION OF DIRECTORS. Authority to elect eleven (11) persons named below
and in the Proxy Statement dated May 8, 1998, accompanying the Notice of said
Meeting, to serve until the 1999 Annual Meeting of Shareholders and until their
successors are elected and have qualified:
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein C. Randy Shaffer
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
</TABLE>
<PAGE>
AUTHORITY GIVEN _ AUTHORITY WITHHELD _
(except as marked to the contrary below) (as to all nominees listed above)
If You Wish to Withhold Authority To Vote For Some But Not All Of the
Nominees Named Above, You Should Check The Box Named "Authority Given" And You
Should Enter The Name(s) Of The Nominee(s) With Respect To Whom You Wish To
Withhold Authority To Vote In The Space Provided Below:
_______________
2. OTHER BUSINESS. To transact such other business as may properly come
before the Meeting and any adjournment or adjournments thereof.
PLEASE SIGN AND DATE THE OTHER SIDE
PLEASE SIGN AND DATE BELOW
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON PROPOSAL
1. THE PROXY CONFERS AUTHORITY AND SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS. IN ALL OTHER MATTERS, IF ANY,
PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE COMPANY'S BOARD OF DIRECTORS.
Dated:, 1998
(Number of Shares)
(Please Print Your Name) (Signature of Shareholder)
(Please Print Your Name) (Signature of Shareholder)
(Please date this Proxy and sign your name as it appears on the stock
certificates. Executors, administrators, trustees, etc., should give their full
titles. All joint owners should sign.)
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.
