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Exhibit 10.4
COMMUNITY WEST BANCSHARES
COMMUNITY WEST BANK
445 Pine Avenue
Goleta, California  93117
 
December 11, 2008
Charles G. Baltuskonis
c/o Community West Bancshares
445 Pine Avenue
Goleta, California  93117
 
Dear Mr. Baltuskonis,
 

Community West Bancshares (the "Company") anticipates entering into a Securities
Purchase Agreement (the "Participation Agreement"), with the United States
Department of Treasury ("Treasury") that provides for the Company’s
participation in the Treasury’s TARP Capital Purchase Program (the "CPP"). If
the Company does not participate or ceases at any time to participate in the
CPP, this letter shall be of no further force and effect.
 
For the Company to participate in the CPP and as a condition to the closing of
the investment contemplated by the Participation Agreement, the Company is
required to establish specified standards for incentive compensation to its
Senior Executive Officers and to make changes to its compensation arrangements.
The requirements of this Agreement shall apply to you only for so long as both
(1) you are a Senior Executive Officer of the Company and/or Community West Bank
(the "Bank") and (2) any debt or equity securities issued by the Company under
the CPP are held by Treasury (the "CPP Covered Period"). To comply with these
requirements, and in consideration of the benefits that you will receive as a
result of the Company’s participation in the CPP, you agree as follows:
 
(6)           No Golden Parachute Payments. The Company and the Bank are
prohibiting any Golden Parachute Payment to you during any CPP Covered Period.
To the extent any event occurs during the CPP Covered Period that would
otherwise trigger a Golden Parachute Payment, you will be entitled to the lesser
of (i) your rights under the Benefit Plans (as defined below) and (ii) the
maximum amount allowed under Section 111(b)(2)(C) of EESA.
 
(7)           Recovery of Bonus and Incentive Compensation. Any bonus and
incentive compensation paid to you during a CPP Covered Period is subject to
recovery or "clawback" by the Company if the payments were based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria.
 
(8)           Compensation Program Amendments. Each of the Company’s
compensation, bonus, incentive and other benefit plans, arrangements and
agreements (including golden parachute, severance and employment agreements;
collectively, "Benefit Plans") with respect to you is hereby amended to the
extent necessary to give effect to provisions (1) and (2). For reference,
certain affected Benefit Plans are set forth in Appendix A to this letter.
 
UST Sequence Number: 82
Exhibit 10.4
 
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In addition, the Company is required to review its Benefit Plans to ensure that
they do not encourage senior executive officers to take unnecessary and
excessive risks that threaten the value of the Company. To the extent any such
review requires revisions to any Benefit Plan with respect to you, you and the
Company and the Bank (to the extent applicable) agree to negotiate such changes
promptly and in good faith.
 
(9)           Definitions and Interpretation. This letter shall be interpreted
as follows:
 
·            "Senior Executive Officer" is used with same meaning as in
subsection 111(b)(3) of EESA.
 
·           "Golden Parachute Payment" is used with same meaning as in Section
111(b)(2)(C) of EESA.
 
·           "EESA" means the Emergency Economic Stabilization Act of 2008 as
implemented by guidance or regulation issued by the Department of the Treasury
and as published in the Federal Register on October 20, 2008, as in effect on
the date hereof.
 
·           The term "Company" includes any entities treated as a single
employer with the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing
Date). You are also delivering a waiver pursuant to the Participation Agreement,
and, as between the Company and you, the term "employer" in that waiver will be
deemed to mean the Company as used in this letter.
 
·           The term "CPP Covered Period" shall be limited by, and interpreted
in a manner consistent with, 31 C.F.R. § 30.11 (as in effect on the Closing
Date).
 
·           Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA
(and, to the maximum extent consistent with the preceding, to permit operation
of the Benefit Plans in accordance with their terms before giving effect to this
letter). 
 
(10)           Miscellaneous. To the extent not subject to federal law, this
letter will be governed by and construed in accordance with the laws of the
State of California without regard the provisions thereof that would apply the
law of any other State. This letter may be executed in two or more counterparts,
each of which will be deemed to be an original. A signature transmitted by
facsimile shall be deemed an original signature.
 
UST Sequence Number: 82
Exhibit 10.4
 
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The Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.
 
 

 
Yours sincerely,
         
COMMUNITY WEST BANCSHARES
         
By:
/s/ Lynda J. Nahra
   
Name:
Lynda J. Nahra
   
Title:
President and Chief Executive Officer
                   
COMMUNITY WEST BANK
                 
By:
/s/ Lynda J. Nahra
   
Name:
Lynda J. Nahra
   
Title:
President and Chief Executive Officer
 

Intending to be legally bound, I agree with and accept the foregoing terms on
the date set forth below

/s/ Charles G. Baltuskonis
 
Charles G. Baltuskonis
 

Date:
December 11, 2008

cc:
Charles G. Baltuskonis, via Hand Delivery

 
UST Sequence Number: 82
Exhibit 10.4
 
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