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:
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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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(2) Form, schedule or registration statement number:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
COMMUNITY WEST BANCSHARES
445 PINE AVENUE
GOLETA, CALIFORNIA 93117
-----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
AT 6:00 P.M.
-----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 2000 Annual Meeting of Shareholders (the "Meeting") of
Community West Bancshares (the "Company") to be held at the Timbers Restaurant,
10 Winchester Road, Goleta, California 93117 on Thursday, May 25, 2000 at 6:00
p.m., and at any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying Notice
will be mailed on or about April 21, 2000, to shareholders eligible to receive
notice of and to vote at the Meeting.
The matters to be considered and voted upon at the Meeting will be:
1. ELECTION OF DIRECTORS. Electing the following eleven persons to the Board
of Directors to serve until the 2001 Annual Meeting and until their
successors are elected and have qualified:
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein James Rady
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
2. OTHER BUSINESS. Transacting such other business as may properly come before
the Meeting and any adjournment or adjournments thereof.
<PAGE>
REVOCABILITY OF PROXIES
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such a 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 Proxy Holders will be revoked if the person
executing the Proxy is present at the Meeting and elects to vote in person by
advising the Chairman of such election. Subject to such revocation, all shares
represented by a properly executed Proxy received in time for the Meeting will
be voted by the Proxy Holders in accordance with the instructions specified on
the Proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A PROPOSAL TO BE
ACTED UPON, THE SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED IN FAVOR
OF THE PROPOSAL LISTED ON THE PROXY. 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.
PERSONS MAKING THE SOLICITATION
This solicitation of Proxies is being made by the Board of Directors of the
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, and its wholly-owned subsidiaries, Goleta National Bank
("Goleta") and Palomar Community Bank "Palomar", 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 expenses in forwarding these Proxy Materials to shareholders whose
stock in the Company is held of record by such entities. In addition, the
Company may use the services of individuals or companies it does not regularly
employ in connection with this solicitation of Proxies, if Management determines
it advisable.
VOTING SECURITIES
There were issued and outstanding 6,241,793 shares of the Company's Common
Stock on April 21, 2000, which has been fixed as the record date (the "Record
Date") for the purpose of determining the shareholders entitled to notice of,
and to vote at, the Meeting. On any matter submitted to the vote of the
shareholders, each holder of Common Stock will be entitled to one vote, in
person or by Proxy, for each share of Common Stock held of record on the books
of the Company as of the Record Date. In connection with the election of
directors, shares shall be voted cumulatively if a candidate's or candidates'
name(s) have been properly placed in nomination prior to voting and has properly
given notice of the intention to vote cumulatively. Cumulative voting allows a
shareholder to cast a 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. The 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
directs.
Directors are elected by plurality vote. Abstentions and broker non-votes
do not have the effect of votes in opposition to a director. Abstentions are,
however, counted towards a quorum.
2
<PAGE>
SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as set forth below, Management of the Company does not know of any
person who owns beneficially or of record, more than 5% of the Company's
outstanding Common Stock. The following table sets forth certain information as
of the Record Date, concerning the beneficial ownership of the Company's
outstanding Common Stock by the Company's directors, and executive officers(1),
and by all directors and executive officers of the Company as a group.
Management is not aware of any change in control of the Company, which has
occurred since January 1, 1999, or of any arrangement, which may, at a
subsequent date, result in a change in control of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES PERCENT OF CLASS
OF COMMON STOCK SUBJECT TO VESTED BENEFICIALLY
NAME AND TITLE BENEFICIALLY OWNED(2) STOCK OPTIONS(3) OWNED(3)
- -------------- ----------------------- ------------------ ------------------
<S> <C> <C> <C>
MICHAEL A. ALEXANDER,
Vice Chairman of the Board 121,206 - 1.94%
MOUNIR R. ASHAMALLA,
Director 94,891 - 1.52%
ROBERT H. BARTLEIN,
Director 111,862 - 1.79%
JEAN W. BLOIS,
Director 53,824 11,554 1.05%
JOHN D. ILLGEN,
Director 46,956 14,414 0.98%
JOHN D. MARKEL,(4)
Chairman of the Board 585,366 2,860 9.42%
MICHEL NELLIS,
Secretary and Director 42,040 14,414 0.90%
WILLIAM R. PEEPLES,(5)
Director 607,442 - 9.73%
LYNDA RADKE,
Senior Vice President and
Chief Financial Officer 2,100 14,400 0.26%
JAMES RADY,
Direction, Chairman
of the Board, Palomar 71,905 8,000 1.28%
JAMES R. SIMS, JR.,
Director 28,466 14,414 0.69%
DON SOLSBY,
Executive Vice President and
Chief Operating Officer - - -%
LLEWELLYN STONE
Director, President and Chief
Executive Officer 79,084 20,000 1.58%
ALL DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP (13 in number) 1,845,142 100,056 30.67%
_____________________________
<FN>
(1) As used throughout this Proxy Statement, the term "executive officer" means
the President and Chief Executive Officer, the Executive Vice President and
Chief Operating Officer and the Senior Vice President and Chief Financial
Officer of the Company. The term "executive officer" also includes the
President and Chief Executive Officer of Palomar. The Company's Chairman of
the Board, Vice Chairmen of the Board, and Secretary are not deemed to be
executive officers of the Company.
(2) 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.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued)
(3) Shares subject to options and warrants 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.
(4) Mr. Markel's business address is 445 Pine Avenue Goleta, CA 93117.
(5) Mr. Peeples' business address is 445 Pine Avenue Goleta, CA 93117.
</TABLE>
ELECTION OF DIRECTORS
NUMBER OF DIRECTORS
- ---------------------
Article 3.2 of the Company's Bylaws provides that the authorized number of
directors shall not be less than six (6) nor 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.
NOMINEES
- --------
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 2001 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.
The following table sets forth the names and certain information as of the
Record Date, concerning the persons to be nominated by the Board of Directors
for election as directors of the Company:
4
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR YEAR FIRST ELECTED
BUSINESS EXPERIENCE APPOINTED OR APPOINTED
DURING THE PAST DIRECTOR OF DIRECTOR OF
NAME AND TITLE AGE FIVE YEARS THE COMPANY GOLETA OR PALOMAR
- -------------- --- ---------------------------------- ----------- ------------------
<S> <C> <C> <C> <C>
MICHAEL A. ALEXANDER,
Vice Chairman of the 69 Chairman of UtilIcom Corp. since
Board 1994. (Electronics) 1997 1989
MOUNIR R. ASHAMALLA,
Director 62 Oral-Maxillo-Facial Surgeon 1997 1989
President of Bartlein Group, Inc.
ROBERT H. BARTLEIN, and Bartlein & Company, Inc.
Director 52 (Real estate management) 1997 1989
JEAN W. BLOIS,
Director 72 Independent consultant 1997 1989
President and Chairman of Illgen
JOHN D. ILLGEN, Simulation Technologies, Inc.
Director 55 (Computer software simulations) 1997 1989
JOHN D. MARKEL
Chairman of the Board 57 Private investor 1997 1989
MICHEL NELLIS Partner, Nellis Associates.
Secretary and Director 53 (Financial consulting) 1997 1989
WILLIAM R. PEEPLES,
Director 57 Private investor 1997 1989
JAMES RADY Business Development Officer and
Director 58 Chairman of the Board, Palomar 1998 1983
JAMES R. SIMS, JR.,
Director 64 Realtor 1997 1989
LLEWELLYN STONE,
Director, President and President and Chief Executive
Chief Executive Officer (1) 57 Officer, Goleta 1997 1989
_____________________________
<FN>
(1) This person is an executive officer of the Company.
</TABLE>
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.
There are no family relationships between the directors and executive officers
of the Company and none of the directors or executive officers of the Company
serve as directors of any other company which has a class of securities
registered under, or which is subject to the periodic reporting requirements of,
the Securities Exchange Act of 1934 or any investment company registered under
the Investment Company Act of 1940.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
- ------------------------------------------------
The following table sets forth the names and certain information as of the
Record Date, concerning the executive officers and a significant employee of
Palomar except Messers. Rady and Stone, who are directors and included the table
set forth above:
5
<PAGE>
<TABLE>
<CAPTION>
TITLE WITH BUSINESS EXPERIENCE TERM OF
TITLE WITH GOLETA OR DURING THE PAST FIVE OFFICE WITH
NAME THE COMPANY PALOMAR AGE YEARS THE COMPANY
- ------------ --------------- ---------------- --- ----------------------------- ------------
<S> <C> <C> <C> <C> <C>
LYNDA RADKE Senior Vice Senior Vice 30 Senior Vice President and Since 1999
President and President and Chief Financial Officer, the
Chief Financial Chief Financial Company (1999 - Present);
Officer Officer, Goleta Senior Vice President and
Chief Financial Officer,
Goleta (1997 - Present);
Vice President and
Controller, Goleta (1996 -
1997); Senior Accountant,
Deloitte and Touche (1992 -
1996)
DON SOLSBY Executive Vice 57 Director of Palomar since Since 1999
President and 1999; President, Director
Chief Operating N/A and Chief Executive
Officer Officer, Bank of
Westminster (1992 - 1996),
Partner, Metrogroup
Commercial Realty Finance
(1996 - 1999)
RICK SANBORN N/A President and 37 President and Chief N/A
Chief Executive Executive Officer, Palomar
Officer, Palomar Community Bank 1999,
Vice President, Regional
Director, Home Savings
(1999 - 1997), Senior Vice
President Domestic
Lending, Bank of Southern
California (1995 - 1997)
</TABLE>
THE BOARD OF DIRECTORS AND COMMITTEES
- ------------------------------------------
During 1999, the Company's Board of Directors held 12 regular meetings and
five special meetings. In addition to attending Board meetings, certain of the
directors serve on committees of the Board.
The Audit Committee, which consisted of Directors: Alexander, Markel,
Nellis and Peeples, review all internal and external examination reports and
selects the Company's independent accountants. The Audit Committee met twice
during 1999.
The Compensation Committee, which consisted of Directors Alexander, Blois,
Illgen, Markel and Peeples, sets executive compenstation. The Compensation
Committee met once in 1999.
In addition, the Company's directors served on the Boards of Directors of
Goleta and/or Palomar, including the various committees established by those
subsidiaries.
During 1999, none of the Company's directors attended less than 75% of the
Company's Board meetings and meetings of committees on which they served.
6
<PAGE>
SUMMARY COMPENSATION
- ---------------------
The following table sets forth a summary of annual and long-term
compensation for services in all capacities to the Company or its subsidiaries
for the "named" executive officers. All compensation was paid by Goleta or
Palomar:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- -----------------------
SECURITIES
NAME AND POSITION OTHER ANNUAL UNDERLYING ALL OTHER
IN GOLETA OR PALOMAR YEAR SALARY BONUS COMPENSATION(1) OPTIONS(2) COMPENSATION
- -------------------- ---- ------ ----- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
JAMES RADY,
Business
Development Officer, 1999 $ 90,000 $ 15,000 - 8,000 -
Chairman of the 1998 $145,000 $ 15,000 - - -
Board, Palomar 1997 $132,730 - - - -
RICK SANBORN,
President and Chief
Executive Officer 1999
Palomar $120,000 $ 20,000 - - -
C. RANDY SHAFFER,(3)
Executive Vice
President 1999 $109,000 $ 50,000 - - -
and Chief Financial 1998 $100,576 $ 50,000 - - -
Officer 1997 $118,605 $ 30,000 - - -
DON SOLSBY,(4)
Executive Vice
President
and Chief Operating
Officer 1999 $ 37,500 - 10,000
LLEWELLYN W. STONE, 1999 $175,000 $ - - - -
President and Chief 1998 $176,373 $ 60,000 - - -
Executive Officer 1997 $179,250 $ 80,000 - - -
<FN>
_____________________________
(1) These figures represent directors' fees and the aggregate total of perquisites paid to, or on behalf
of, an executive officer which total more than the lesser of $50,000 or 10% of salary and bonus.
(2) All share figures have been adjusted for the Company's two-for-one stock split in 1998.
(3) Mr. Shaffer resigned his executive officer position on October 15, 1999.
(4) Mr. Solsby was appointed an executive officer of the Company on October 15, 1999.
</TABLE>
STOCK OPTIONS
- --------------
In connection with the bank holding company reorganization, the Company
adopted the Community West Bancshares 1997 Stock Option Plan providing for the
issuance of up to 924,398(1) shares. On December 31, 1997, the Company's Board
of Directors, pursuant to the terms of the bank holding company reorganization,
issued 359,652(1) options in exchange for the then outstanding Goleta options,
effective as of the effective date for the reorganization. As of the Record
Date, the Company's 1997 Stock Option Plan provided for the issuance of 924,398
shares, of which 405,111 shares had been exercised, options for 70,240 shares
were cancelled or expired and options for 357,327 shares were outstanding,
leaving 232,200 shares available for future grants.
7
<PAGE>
Under the terms of the Company's stock option plan, full time salaried
employees may be granted either nonqualified or incentive stock options, and
directors of the Company may only be granted nonqualified options. Options may
be granted at a price of not less than 100% of the fair market value of the
stock on the date of grant. Options are generally exercisable in cumulative
installments of 20%. However, in certain circumstances, the vesting of these
options may be adjusted, as determined by the Board of Directors. All options
expire no later than ten years from the date of grant. Options are granted at
the discretion of the Company's Board of Directors.
The following table sets forth certain information regarding stock options
granted by the Company to the "named" executive officers during 1999:
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
PERCENTAGE OF ANNUAL RATES OF
NUMBER OF TOTAL OPTIONS STOCK PRICE
OPTIONS GRANTED TO APPRECIATION
GRANTED IN EMPLOYEES(2) EXERCISE EXPIRATION FOR OPTION TERM
NAME 1999(1) DURING 1999 PRICE(1) DATE 5% 10%
- ---- ----------- ------------ -------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
LYNDA RADKE - 0% - - - -
JAMES RADY 8,000 10% - 01/01/09 - -
C. RANDY SHAFFER - 0% - - - -
DON SOLSBY 10,000 12% - 10/28/09 - -
<FN>
(1) These figures and dollar amounts have been adjusted for the Company's
two-for-one stock split in 1998.
(2) Does not include options granted to the Company's non-employee
directors during 1999. (See "COMPENSATION AND OTHER TRANSACTIONS
WITH MANAGEMENT AND OTHERS - Directors' Compensation" herein.)
</TABLE>
The following table sets forth certain information regarding stock options
exercised during 1999 by the "named" executive officers:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE(4) OF UNEXERCISED
NUMBER OPTIONS AT DECEMBER 31, IN THE MONEY OPTIONS
OF SHARES 1999 AT DECEMBER 31, 1999
-------------------------- ----------------------------
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ----------- --------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Lynda Radke - - 9,400 9,600 $ 31,175 $ 23,200
James Rady - - 8,000 - - -
C. Randy Shaffer 11,429 $ 21,429 3,571 - - -
Don Solsby - - - 10,000 - -
<FN>
_____________________________
(4) Assumes a market value of $7.125 per share on December 31, 1999.
</TABLE>
8
<PAGE>
EMPLOYMENT AND OTHER COMPENSATION AGREEMENTS
- ------------------------------------------------
Mr. Stone has an employment agreement 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 1999 was $175,000
and for 2000 is $175,000. 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, 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
Goleta is not the surviving corporation, (ii) a merger or consolidation or
transfer of all or substantially all of the assets of the Company or Goleta or
(iii) certain changes in ownership of the Company, the employment agreement is
terminated and Mr. Stone will be entitled to severance pay equal to six months'
salary.
On January 1, 1994, the Goleta'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 Goleta 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 Goleta, Mr. Stone will become fully vested as to the full
amount of salary continuation benefits if termination of employment thereafter
occurs. The salary continuation program is funded through life insurance. The
cash surrender value of that policy at December 31, 1999 was $606,667 and the
annual premium was $9,500. Earnings on the policy for 1999 were sufficient to
offset the expense accrual of $36,024.
DIRECTORS' COMPENSATION
- ------------------------
In 1999, the Company's directors, were paid for attendance at Company Board
meetings at the rate of $500 for each regular Board meeting (with the Chairmen
receiving $750); and, for all directors except Mr. Stone, $150 for each
committee meeting. Messrs., Solsby and Rady, who are Palomar Board members, do
not receive fees for serving as directors of Palomar.
During 1999 Mr. Rady was granted 8,000 options at a price of $8.50.
9
<PAGE>
PROFIT SHARING AND 401(K) PLAN
- ----------------------------------
The Board of Directors of Goleta adopted, effective as of September 1,
1995, the Goleta National Bank 401(k) Plan (the "Plan). The Plan is a qualified
profit sharing plan under section 401(a) of the Internal Revenue Code of 1986,
as amended, with a 401(k) salary deferral feature. In connection with the bank
holding company reorganization and acquisition of Palomar, the Company adopted
the Plan. Employees of the Company, Goleta and Palomar are eligible to
participate in the Plan if they were employed by Goleta on September 1, 1995, by
Palomar on December 18, 1998, or after three months of consecutive service with
the Company, Goleta or Palomar. Employees can choose to make contributions of
their salary under the Plan's 401(k) salary deferral feature, and the Company
may make contributions under the profit sharing feature, subject to certain
limitations. The company's contributions are determined by the Board of
Directors. Participating employees vest in the Company's contributions over a
five-year period. Benefits from the Plan become available to employees upon
retirement, or in the event of total disability. If employment is terminated
prior to normal retirement, the employee receives all voluntary salary deferral
contributions made and the vested portion of the Company's profit sharing
contributions, based on the established vesting schedule.
As of December 31, 1999, 126 employees were participating in the Plan.
During 1999, the Company made a $179,604 profit sharing contribution. The
401(k) Plan has been qualified by the Internal Revenue Service pursuant to the
Employee Retirement Income Security Act of 1974.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- ----------------------------------------------------------------
The members of the Company's Board of Directors, acting as the Company's
Compensation Committee (the "Committee"), are Directors Alexander, Blois,
Illgen, Markel and Peeples, none of whom serve as an officer of the Company or
its subsidiaries except Mr. Stone, who is the Company's and Goleta's President
and Chief Executive Officer. None of the Company's, Goleta's or Palomar's
executive officers served on the board of directors or compensation committee,
or equivalent, of another entity, one of whose executive officers served on the
Company's or the subsidiaries' Committees or the Company's or subsidiaries'
Boards of Directors. Mr. Stone does not participate in Committee deliberations
and voting regarding his compensation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- ------------------------------------------------------------
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 is responsible for establishing the compensation for the
senior executive officers of the Company, consistent with the Company's business
plans, strategies and goals. The Committee establishes the factors and criteria
upon which the executive officers' compensation is based and how such
compensation relates to the Company's performance, general compensation
policies, competitive realities and regulatory requirements.
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 their role in establishing objectives regarding executive
compensation.
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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.
In establishing executive compensation for the President, the Committee
considered the overall financial condition of the Company, profitability, asset
quality and compliance with rules and regulations. 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 investigates the competitiveness of the compensation of those
executive officers not under an employment agreement by obtaining and reviewing
several industry salary surveys.
When determining Mr. Stone's bonus compensation for 1999, the Committee
noted the overall financial condition of the Company at December 31, 1998.
Finally, the Committee reviewed Mr. Stone's total compensation in light of the
above-referenced peer surveys.
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.
COMPENSATION COMMITTEE
Michael A. Alexander John D. Markel
Jean W. Blois William R. Peeples
John D. Illgen
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 in the Nasdaq National
Market and the SNL Securities Index of Banks under $500 million in total assets.
The SNL Index for Banks under $500 million was originally selected as the most
representative of peer issuers. However, by year-end 1999 the Company's total
assets exceeded $500 million. The SNL Index for Banks between $500 million and
$1 billion is now deemed most representative The graph assumes the value of an
investment in the Company's Common Stock, the Nasdaq Index and the SNL Bank
Index each was $100 on December 31, 1994, and that all dividends were
reinvested.
[GRAPHIC OMITED]
[GRAPHIC OMITED]
CERTAIN TRANSACTIONS
- ---------------------
During 1999 there were no, and as of the date of this Proxy Statement there
are no existing or proposed, material transactions between the Company and any
of the Company's executive officers, directors, or beneficial owners of 5% or
more of the Company's Common Stock, or the immediate family or associates of any
of the foregoing persons, except as indicated below.
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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 Goleta or Palomar in the
ordinary course of the subsidiaries' businesses and the subsidiaries expect to
have such ordinary banking transactions with such persons in the future. In the
opinion of Management of the subsidiaries, 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 the subsidiaries do not have
any limits on the aggregate amount they would be willing to lend to directors
and officers as a group, loans to individual directors and officers must comply
with their internal lending policies and statutory lending limits. The maximum
aggregate amount of all such loans during 1999 was approximately $5,405,488. At
December 31, 1999, there was approximately $5,120,585 outstanding in loans,
representing 15.1% of the Company's shareholders' equity. There were no
outstanding commitments to lend to the Company's directors and executive
officers at December 31, 1999.
On March 23, 2000, Goleta entered into a formal written agreement with the
Comptroller of the Currency of the United States of America (the "Agreement").
Under the terms of the Agreement, by September 30, 2000, and thereafter, Goleta
is required to maintain total capital of at least 12% of risk-weighted assets
and Tier 1 capital of at least 7% of adjusted total assets. Goleta is required
to adopt and implement a written asset diversification program that includes
specific plans to reduce the concentration of second mortgage loans (exclusive
of certain other loans) to 100% of capital by September 30, 2000. The Agreement
requires Goleta to submit within 60 days a capital plan, which is to include,
among other things, specific plans for meeting the special capital requirements,
projections for growth and a dividend policy. The Agreement places limitations
on growth and payments of dividends until Goleta is in compliance with its
approved capital plan. The Agreement also requires that Goleta adopt and
improve certain operating policies and procedures and develop a three-year
strategic plan. Goleta is required to submit monthly progress reports to the
OCC detailing actions taken, results of those actions and a description of
actions needed to achieve full compliance with the Agreement.
In November 1999, the Company obtained a loan of approximately $3,600,000
from Director Peeples. The proceeds of the loan were used by the Company to
make a capital contribution to Goleta in order to increase Goleta's capital
ratios and regulatory capitalization classification. The loan bears an annual
interest rate of 8.25%, which is payable monthly and matures on May 16, 2001.
In November 1999, the Company issued 582,924 shares of its common stock to
various directors. The proceeds of the issuance amounted to approximately
$7,522,698. Approximately $250,000 of the proceeds was used to reduce the
principal on the loan from Director Peeples. The balance of the proceeds was
used to make an additional capital contribution to Goleta in order to increase
Goleta's capital ratios and regulatory capitalization classification. There is
no public market for the shares issued pursuant to this transaction and such
shares have not been registered under the Securities of 1933 (the "33 Act") or
under the securities laws of any state. Such shares, therefore, cannot be
resold unless registered under the 33 Act and applicable state securities laws.
Additionally, the Company has the right to redeem the stock issued pursuant to
this transaction under certain circumstances.
-----------------
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INDEPENDENT ACCOUNTANTS
The accounting firm of Deloitte & Touche, LLP ("Deloitte"), served as the
Company's independent public accountants for 1999. In addition to independent
auditing services, Deloitte, at the Company's request, furnished certain
non-audit services. The non-audit services furnished by Deloitte included: (i)
preparation of the Company's income tax returns and tax advisory services; (ii)
management advisory services and preparation of a business plan for a
subsidiary; (iii) internal audit cosourcing services; and (iv) management
advisory services related to loan securitization.
The fees that Deloitte charged the Company, and which the Company
subsequently paid for Deloitte's non-audit services amounted to approximately
$446,000, or 318.6% of the fees that Deloitte charged the Company for audit
services. All non-audit services rendered by Deloitte were approved by the
Company's Board of Directors who considered the possible effect of each such
service on Deloitte's independence.
The Company has not yet selected a firm to be its independent accountants
for 2000.
It is not anticipated that a representative of Deloitte & Touche, LLP, will
be present at the Meeting.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the Company's 2001 Annual Meeting of
Shareholders, which is tentatively scheduled for May 25, 2001, and must be
received by the Company at its offices at 445 Pine Avenue, Goleta, California
93117, no later than December 18, 2000. The proposals must also satisfy the
conditions established by the Securities and Exchange Commission (the "SEC") for
such proposals in order to be included in the Company's Proxy Statement for the
2001 annual meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than 10% of the Common
Stock to file reports of stock ownership and changes in stock ownership with the
SEC. The executive officers, directors and greater than 10% shareholders are
required by regulation to furnish the Company with copies of all Section 16(a)
reports they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no such
forms were required for those persons, the Company believes that during 1999 all
filing requirements applicable to the Company's executive officers, directors,
and greater than 10% shareholders were complied with.
OTHER MATTERS
The SEC's rules permit the Proxy to confer discretionary authority to vote
on any matter if the Company did not have notice of the matter at least 45 days
before the date on which the Company first mailed its Proxy Materials for the
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prior year's Annual Meeting of Shareholders. The Company mailed its Proxy
Materials for the 1999 Annual Meeting on April 16, 1999 and, accordingly,
discretionary authority is conferred to the persons named in the accompanying
Proxy to vote on any matter, notice of which is not received at least on or
before March 2, 2000.
Neither the Company's Board of Directors nor the Company's Management knows
of any matters to be presented at the Meeting other than those set forth above,
notice of which has been received at least on or before March 2, 2000. If other
matters come before the Meeting, notice of which was or is received after March
2, 2000, the Proxy holders intend to vote each Proxy according to the Company's
Board of Directors' recommendations.
COMMUNITY WEST BANCSHARES
Dated: April 21, 2000 Michel Nellis, Secretary
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PROXY
COMMUNITY WEST BANCSHARES
ANNUAL MEETING OF SHAREHOLDERS
MAY 25, 2000
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 Timbers 10 Winchester
Canyon, Goleta, California 93117, on Thursday, May 25, 2000, 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 thereat, as follows:
1. ELECTION OF DIRECTORS. Authority to elect the eleven persons named below
and in the Proxy Statement dated April 21, 2000, accompanying the Notice of
said Meeting, to serve until the 2001 Annual Meeting of Shareholders and
until their successors are elected and have qualified:
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein James Rady
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
AUTHORITY GIVEN [ ] AUTHORITY WITHHELD [ ]
IF YOU WISH TO VOTE FOR SOME, BUT NOT ALL OF THE NOMINEES NAMED
ABOVE, YOU SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH
RESPECT TO WHOM YOU DO NOT WISH TO VOTE FOR IN THE SPACE
PROVIDED BELOW:
---------------------------------------------------------------------------
PLEASE SIGN AND DATE THE OTHER SIDE
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<PAGE>
PLEASE SIGN AND DATE BELOW
2. Other Business. To transact such other business as may properly come
---------------
before the Meeting and any adjournment or adjournments thereof.
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
RECOMMENDATION OF THE BOARD OF DIRECTORS, UNLESS A CONTRARY INSTRUCTION IS
INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH
INSTRUCTION. THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO VOTE ON ANY OTHER
MATTER, IF ANY, PRESENTED AT THE MEETING, NOTICE OF WHICH IS RECEIVED AFTER
MARCH 2, 2000. THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE BOARD OF DIRECTORS WITH RESPECT TO SUCH OTHER MATTERS.
Dated: , 2000
------------------- ------------
(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.
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COMMUNITY WEST BANCSHARES
445 PINE AVENUE
GOLETA, CALIFORNIA 93117
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
AT 6:00 P.M.
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 2000 Annual Meeting (the "Meeting")
of Shareholders of Community West Bancshares (the "Company") will be held at the
Timbers Restaurant, 10 Winchester Canyon Road, Goleta, California 93117, on
Thursday, May 25, 2000 at 6:00 p.m., for the purpose of considering and voting
upon the following matters:
1. ELECTION OF DIRECTORS. Electing the following eleven persons to the
Board of Directors to serve until the 2001 Annual Meeting and until
their successors are elected and have qualified:
Michael A. Alexander Michel Nellis
Mounir R. Ashamalla William R. Peeples
Robert H. Bartlein James Rady
Jean W. Blois James R. Sims, Jr.
John D. Illgen Llewellyn W. Stone
John D. Markel
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 April 21, 2000,
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:
"2.14 Nomination of Directors
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 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
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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."
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 GIVING A PROXY
MAY REVOKE IT PRIOR TO THE TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE
COMPANY IN WRITING OF REVOCATION OF SUCH PROXY, BY FILING A DULY EXECUTED PROXY
BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING SO
THAT WE CAN ARRANGE FOR ADEQUATE ACCOMMODATIONS.
By Order of the Board of Directors
Michel Nellis, Secretary
Dated: May 1, 2000
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S 1999 ANNUAL REPORT TO SHAREHOLDERS AND THE COMPANY'S
1999 ANNUAL REPORT ON FORM 10-K, INCLUDING THE AUDITED FINANCIAL STATEMENTS AND
THE FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, ARE BEING MAILED TO SHAREHOLDERS ALONG WITH THESE 2000 ANNUAL
MEETING PROXY MATERIALS. ADDITIONAL COPIES ARE AVAILABLE UPON REQUEST TO MS.
LYNDA RADKE, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, COMMUNITY WEST
BANCSHARES, 445 PINE AVENUE, GOLETA, CALIFORNIA 93117, TELEPHONE (805) 692-1862.
