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EMPLOYMENT AND CONFIDENTIALITY
AGREEMENT
Community West Bank
Executive Vice President & Chief Financial Officer

This Employment and Confidentiality Agreement (the “Agreement”) is made and
entered into as of July 1, 2007 (the “Effective Date”) by and between Community
West Bank, a Nationally Chartered Bank and wholly owned subsidiary of Community
West Bancshares (the “Bank“), Community West Bancshares, a California
corporation (“Parent”) and Charles G. Baltuskonis (“Executive”).

Witnesseth

Whereas the Bank is a California national banking association duly organized,
validly existing, and in good standing under the laws of the United States of
America, with power to own property and carry on its business as it is now being
conducted, with its principal place of business located at 445 Pine Street,
Goleta, California 93117;

Whereas the Bank desires to avail itself of the skill, knowledge and experience
of Executive in order to insure the successful management of its business;

Whereas the parties desire to enter into this Agreement;

Whereas the parties hereto desire to specify the terms of Executive’s employment
by the Bank and Company as controlling Executive’s employment at the Bank;

Now, therefore, in consideration of the representations, warranties, and mutual
covenants set forth in this Agreement, the following terms and conditions shall
apply to Executive’s employment with the Bank on and after the Effective Date:

1. ARTICLE 1- EMPLOYMENT AND TERM

1.1. Employment. The Bank shall employ Executive as the Bank’s Executive Vice
President and Chief Financial Officer (the “Position”), and Executive accepts
such employment, in accordance with the terms and conditions set forth in this
Agreement. The place of Executive’s employment under this Agreement shall be in
Goleta, California, at a location determined by the Board of Directors of the
Bank (the “Board of Directors”).

1.2. Term. The term of employment under this Agreement (“Term”) shall commence
on the Effective Date and end on June 30, 2010, subject to early termination,
provided in Article 4, below.
 
 

 
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1.3. Renewal. Upon the expiration of the Term, Executive’s employment under this
Agreement shall automatically renew for a successive period of twelve (12)
months (“Renewal Term”), and upon expiration of any subsequent Renewal Term
shall automatically renew for a successive period of twelve (12) months; unless,
at least three (3) months before the expiration of any preceding Term or Renewal
Term, either (a) the Board provides written notice of non-renewal to Executive;
or, (b) Executive provides written notice of non-renewal to Bank. Each party
shall negotiate in good faith the terms and conditions for any renewal of the
Term or any Renewal Term of this Agreement.
 
1.4. Policies and Regulations. Executive shall observe, comply with and be bound
by all of the policies, rules and regulations established by the Bank with
respect to its executives and otherwise, all of which policies, rules and
regulations are subject to change by the Bank from time to time.

2. ARTICLE 2- DUTIES OF EXECUTIVE

2.1. Powers. At all times Executive shall be empowered by and subject to the
powers and authority of the Board of Directors and the Bank’s shareholders.
Executive shall report directly to the Bank’s President and Chief Executive
Officer (“CEO”).

2.2. Duties.

(a) Executive Vice President and Chief Financial Officer of Bank.  Executive,
directly or through subordinate supervision, shall be responsible for technical
and operational activities on a day-to-day basis, as well as formulation of
strategies and business plans to achieve the Bank's long range
objectives.  Executive agrees to render services and perform the duties and acts
of Executive Vice President and Chief Financial Officer (the “Duties”) in
connection with all aspects of Bank’s business as may be required by the Board
of Directors and/or the Bank’s CEO. Executive shall perform these Duties, and
the Specific Duties as defined below, faithfully, diligently, to the best of
Executive’s ability and in the best interests of the Bank, consistent with the
highest standards of the banking industries and in compliance with all
applicable laws, rules, regulations, and policies applicable to the Bank,
including, but not limited to, the Federal Deposit Insurance Act, as amended,
and all regulations thereunder, and the Bank’s Articles of Association and
Bylaws.

(b) Executive Vice President and Chief Financial Officer of Parent. Executive
also shall have the position of Executive Vice President and Chief Financial
Officer of Parent. Executive agrees to render services and perform the duties
and acts of Executive Vice President and Chief Financial Officer of Parent as
may be required by the Board of Directors of Parent and/or the Parent’s CEO.

2.3. Specific Duties. Without limiting any of Executive’s Duties and obligations
under Section 2.2, above, Executive agrees to undertake and perform all duties
required of the Position (“Specific Duties”), including, but are not limited to:
 
(a) Serve as coordinator for the Asset and Liabilities Management Committee
(b) Manage formation and execution of investment policy.
(c) Implement  and review  risk management liabilities.
(d) Oversee  reporting to regulatory authorities, and the Board.
(e) Direct  preparation and evaluation of budgets and capital plans,
(f) Write, review, and distribute financially related policy and procedure
statements to ensure regulatory and policy compliance.
(g) Evaluate, develop, and administer accounting systems and practices that
comply with GAAP, FASB rulings, regulations and laws.
 
 

 
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(i) Establish, maintain, and monitor internal accounting control systems in
order to ensure safe and sound operations, accurate accounting records for the
statement of the institution's financial condition, and timely, accurate report
data for regulators and management.
(j) Supervise the preparation of all regulatory reports and monitors compliance.
(k) Manage interest rate risk simulation models to help ensure liquidity and
control interest rate risk; manage pricing of assets and liabilities acquired or
to be acquired to make recommendations that will result  in net interest margins
consistent with budget objectives.
(l)  Initiate the purchase and sale of security investments in compliance with
the Bank’s Investment Policy.
(m) Participate in funds acquisition activities through bidding on private and
public money In compliance with the Bank’s Asset & Liability Policy.
(n) Assist the CEO and the Board of Directors in accomplishing the activities to
comply with the Bank’s Capital Plan.
(o) Serve as a member of the Executive Management Team.
(p) Be responsible, along with the CEO, for the protection of shareholder and
creditor rights and interests, implementing controls and audits as they deem
necessary to protect such rights.

2.4. Conflict of Interests. Executive shall not directly or indirectly render
any services of a business, commercial or professional nature, to any other
person, firm or corporation, whether for compensation or otherwise, which are in
conflict with the Bank’s interests. Further, Executive shall not engage in any
activity that would impair Executive’s ability to act and exercise independent
judgment in the best interests of Bank.

2.5. Exclusive Services. During employment by the Bank, Executive shall not,
without the express prior written consent of the Board of Directors, engage
directly or indirectly in any outside employment or consulting of any kind,
whether or not Executive receives remuneration for such services. Nothing in
this Section 2.5 shall prohibit Executive from providing volunteer consulting
services (the “Volunteer Services”) through established non-profit or charitable
organizations in furtherance of such organization’s purposes, so long as such
Volunteer Services do not materially interfere with Executive’s performance of
his duties and obligations under this Agreement.

3. ARTICLE 3 — COMPENSATION. As the total consideration for the services that
Executive renders under this Agreement, Executive shall be entitled to the
following:

3.1. Base Salary. Effective January 1, 2007, the Bank shall pay Executive a base
salary of One Hundred Eighty-One Thousand Four Hundred Forty Dollars
($181,440.00) per year, less income tax and other applicable withholdings.  On
or before February 28th of each year during the Term and any Renewal Term, the
CEO shall review the base salary payable to Executive under this Agreement and
shall determine, in the CEO’s sole discretion, whether or not to adjust such
salary. Any such adjustment shall be effective as of the first day of March of
each calendar year. Nothing in this Section 3.1 shall obligate the Bank to
increase the salary payable to Executive as a result of any such review;
provided that in no event shall the Bank reduce the salary payable to Executive
as a result of such review. Base salary shall be paid in accordance with Bank’s
regular payroll practices.
 
 

 
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3.2. Annual Bonus. Executive shall be eligible to receive an annual bonus, at an
amount, if any, determined by the Board of Directors in its sole discretion. If
it is determined that a bonus will be paid Executive for any calendar year, the
bonus will be paid at or near the close of the calendar year, but no later than
thirty (30) days after year-end. Executive acknowledges and agrees that nothing
in this Agreement or the Bank’s general policies shall require the Bank to pay
Executive a bonus for any year, to pay Executive a bonus in particular amount
for any year, or to pay Executive a bonus by reason of the Bank’s payment of a
bonus to any other executives of the Bank.

3.3. Stock Options.

(a) Initial Option. At the first meeting of the Board of Directors during
July,  2007, Executive shall be granted options covering 3,750 shares of the
Common Stock of Parent (the “Common Stock”) in accordance with the terms and
conditions of the Parent’s 2006 Stock Option Plan (the “Plan”).

(b) Additional Options. So long as Executive is then employed by the Bank under
the terms of this Agreement, (i) at the first meeting of the Board of Directors
during July, 2008, Executive shall be granted options covering an additional
3,750 shares of Common Stock in accordance with the terms and conditions of the
Plan and (ii) at the first meeting of the Board of Directors during July, 2009,
Executive shall be granted options covering an additional 3,750 shares of Common
Stock in accordance with the terms and conditions of the Plan.

(c) Vesting Schedule. Executive’s interest in each of the foregoing options (the
“Options”) shall vest pro rata on an annual basis over a period of five (5)
years from the date of grant of the Option.

(d) Acknowledgement. Executive acknowledges that (i) under the Plan the exercise
price of the Options will be the per share fair market value of the Common Stock
as of the date of grant of the Option and (ii) Executive has read, reviewed and
is familiar with the terms and conditions of the Plan and the form of the Option
Agreement under which the Options will be granted to Executive.

(e) Adjustment of Option Shares. The foregoing number of shares covered by any
Option shall be appropriately adjusted in the event of a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or similar change in the capital structure of the Bank that occurs
between the Effective Date of this Agreement and the date on which the Option is
granted.

3.4. Deferred Compensation.

(a) Deferred Compensation. The Bank hereby establishes a balance sheet liability
account for the benefit of Executive (the “Deferred Account”). The provisions of
this Section 3.4 shall control all obligations of the Bank with respect to all
amounts credited to the Deferral Account.
 
 

 
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(i)
Third Quarter 2007. As of the Effective Date of this Agreement, the Bank shall
credit to the Deferral Account Forty Thousand Dollars ($40,000.00) with respect
to the calendar quarter ended September 30, 2007.

 
(ii)
Fourth Quarter 2007. Subject to the provisions of Section 3 .4(b)(iv), below,
and provided that Executive is then employed by the Bank under this Agreement,
as of December 31, 2007, the Bank shall credit to the Deferral Account an
additional Forty Thousand Dollars ($40,000.00) with respect to the calendar
quarter ended December 31, 2007.

 
(iii)
Monthly Credits. Subject to the provisions of Section 3 .4(b)(iv) below,
beginning with July 2007 and continuing throughout the Term and any Renewal Term
of this Agreement, the Bank shall credit to the Deferral Account on the last day
of each calendar month an additional One Thousand Six Hundred Dollars
($1,600.00) per month; provided that in no event shall the Bank be obligated to
credit any amount to the Deferral Account with respect to any month unless
Executive is employed by the Bank under this Agreement as of the last day of
such calendar month.

 
(iv)
No Credit During Disability. Notwithstanding anything in this Agreement to the
contrary, the Bank shall not be obligated to credit any amount to the Deferral
Account under Section 3 .4(a)(ii) above or Section 3 .4(c)(iii)  with respect to
any period during which Executive is disabled (as defined in Section 4.6 below).
Notwithstanding the foregoing, interest shall accrue on the balance of the
Deferral Account during any period during which Executive is disabled.

 
(b) Interest Accrual. The Bank shall credit to the Deferral Account at the end
of each calendar month interest on the balance of the Deferral Account at a rate
equal to the then current rate offered by the Bank on a six (6) month
certificate of deposit. Interest shall continue to accrue on the balance in the
Deferral Account so long as any amounts remain credited to the Deferral Account
and unpaid to Executive.

(c) Payment of Deferral Amounts.

(i)
No Payment if Termination of Employment Prior to Age 65. Except as provided in
Section 3.4(d) below, if Executive’s employment under this Agreement terminates
for any reason other than only Executive’s death or disability prior to the date
on which he attains age 65, the Bank shall have no obligation to pay any amount
to Executive with respect to any amounts credited to the Deferral Account.

(ii)
Payment After Age 66. Subject to the provisions of Section 3.4(c)(i), above, at
such time as Executive attains age 66, whether or not he is then employed with
the Bank, the Bank shall make payments to Executive with respect to amounts
credited to the Deferral Account as follows.

 
 

 
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(A) Beginning on the first day of the first calendar month after Executive
attains age 66, the Bank shall pay to Executive an annual amount selected by
Executive, but in any event not less than Nineteen Thousand Two Hundred Dollars
($19,200.00) and not more than Forty Thousand Dollars ($40,000.00). The Bank
shall pay such amount on a monthly, quarterly or annual basis as selected by
Executive. Executive may change the amount and the time for payment of any
amounts under this Section 3 .4(c)(ii)(A) so long as such change is made in
compliance with the election and other requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).

(B) The parties intend that the provisions of Section 3 .4(c)(ii)(A) provide for
the payment of the Deferred Account balance at a specified time within the
meaning of Section 409A(a)(2)(A)(iv) of the Code.

 
(iii)
Payment on Executive’s Disability. If the Bank terminates this Agreement by
reason of Executive’s disability (as defined in Section 4.6 below), the Bank
shall pay to or on behalf of Executive an amount selected by Executive, but in
any event not less than One Thousand Six Hundred Dollars ($1,600.00) and not
more than Three Thousand Two Dollars ($3,200.00) per month, until all amounts
credited to the Deferral Account have been paid to or for the account of
Executive. Notwithstanding the foregoing, once Executive attains age 66, the
amounts payable by the Bank to Executive shall be determined under Section 3
.4(c)(ii) above and not this Section 3 .4(c)(iii). If Executive dies after the
Bank has commenced paying his amounts under this Section 3.4(c)(iii), the Bank
shall pay to Executive’s Designated Heirs (as defined below) in accordance with
the provisions of Section 3 .4(c)(iv), below, the balance in the Deferred
Account on the date of Executive’s death.

 
(iv)
Payment on Executive’s Death. If Executive dies prior to the Bank’s payment to
Executive of all amounts credited to the Deferral Account, the entire balance of
the Deferral Account on the date of Executive’s death shall be paid by the Bank
to Executive’s Designated Heirs (as defined below) within thirty (30) days after
the later of(A) the date of the delivery to the Bank of written notice of
Executive’s death or (B) the date on which the Bank receives a court order or
written instructions from legal counsel for Executive or Executive’s estate
reasonably acceptable to the Bank authorizing and confirming the payment of the
account balance to the Designated Heirs. Set forth in Exhibit A hereto is a
schedule of Executive’s heirs (the “Designated Heirs”) for purposes of this
Agreement. Executive may change the Designated Heirs at any time and from time
to time; provided that the Bank shall not be bound by any change to the
Designated Heirs unless and until the Bank has received written notice of the
change.

 
(v)
Termination of Payment Obligation. The Bank shall have no obligation to pay
Executive any amounts under this Section 3.4(c) on or after the date on which
the Bank has paid to Executive the entire amount credited to the Deferral
Account.

 
 

 
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(vi)
Performance of Services. All amounts credited to the Deferral Account under this
Section 3.4 are deemed credited with respect to services performed or to be
performed by Executive under this Agreement after the Effective Date.

(d) Vesting on Change in Control. On the occurrence of a Change in Control, as
defined in Section 4.7(a), below, Executive’s interest in fifty percent (the
“Vested Percentage”) of the total amount credited to the Deferral Account as of
the date of the Change In Control shall become fully vested. The Bank shall pay
the Vested Percentage to Executive in accordance with the provisions of Sections
3.4(c)(ii), 3.4(c)(d)(iii), and 3.4(c)(iv) above, and the Bank shall be
obligated to pay such amount to Executive in accordance with such Sections even
though Executive’s employment under this Agreement may have terminated prior to
the date on which he attains age 65. Subject to the provisions of Section 3
.4(c)(i), above, the Bank shall pay to Executive the balance of the amounts
credited to the Deferral Account in accordance with the provisions of Sections
3.4(c)(ii), 3.4(c)(iii) and 3.4(c)(iv) above.

The vesting under this Section shall occur regardless of whether or not
Executive’s employment under this Agreement is terminated pursuant to Section
4.7, below.

(e) Tax Election. To the extent that this Agreement or the provisions of this
Section 3.4 constitute a nonqualified deferred compensation plan within the
meaning of Section 409A of the Code, Executive hereby makes an irrevocable
election as to the payment of any deferred compensation in accordance with the
provisions of this Section 3.4.

(f) Status of Deferred Account. Executive agrees that the Bank shall establish
and maintain the Deferral Account only as a balance sheet liability account and
that the Bank shall have no obligation to deposit or maintain any cash or other
assets in a separate or segregated account for the benefit of Executive.

3.5. 401K Plan. Subject to Executive’s compliance with the eligibility and other
terms and conditions of the Plan, Executive will be eligible to participate In
the Bank’s 40 1(k) Plan.

3.6. Bank Executive Benefits. Subject to Executive’s satisfaction of any
eligibility requirements, Executive shall be eligible to participate in the
Bank’s employee benefit plans, for both Executive and family (including medical,
dental, vision, prescription plan, life insurance, and short-term disability
benefits) generally provided by the Bank to its senior executives. In all
events, the Bank’s liability to Executive shall be limited to the amount of
premiums payable by the Bank to obtain the coverage(s) contemplated herein.
Nothing in this Section 3.6 or any other provision of this Agreement shall
prohibit the Bank from, or limit the right of the Bank to, changing or modifying
the terms of any of the foregoing employee benefit plans or terminating any of
such plans.

3.7. Vacation. Executive shall be entitled to vacation time of not more than
four (4) weeks per year, provided however that, during each year of the Term or
Renewal Term(s), Executive is required to and shall take at least two (2) weeks
of said vacation (the “mandatory vacation”), which shall be taken consecutively.
Executive shall be entitled to accumulate up to six (6) weeks of accrued
vacation, after which additional vacation will not accrue. The Bank shall not be
obligated to pay or reimburse Executive at the end of any calendar year any
amount for any unused vacation time. The Bank shall pay or reimburse Executive
at the end of the Term or any Renewal Term after which there is no further
Renewal Term, for any unused vacation time.
 
 

 
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3.8. Reimbursement for Expenses. The Bank shall reimburse Executive for any and
all reasonable business expenses incurred by Executive on behalf of Bank in the
performance of this Agreement, approved expenditures to be determined by the
Board of Directors (“Business Expenses”). A reimbursable Business Expense shall
be of a nature qualifying it as a proper business expense deduction on the
federal and state income tax returns of the Bank. Executive must be able to
furnish adequate records and other documentary evidence as may be required by
Federal and State statues.

4. ARTICLE 4- TERMINATION

4.1. Termination At Will. Notwithstanding anything to the contrary herein, the
Bank may terminate this Agreement at any time and for any reason, with or
without cause, in accordance with the provisions of this Section 4. Except as
otherwise specifically provided in this Agreement, such termination shall be
effective either immediately upon receipt of notice of termination by Executive
from the Bank or at such later date as the Bank may specify in the notice of
termination. Notwithstanding anything in this Agreement to the contrary, the
Bank shall have no obligation to continue Executive’s employment under this
Agreement for any period or any particular period.

4.2. Termination by the Bank Without Cause or on Non-Renewal. If during the Term
or Renewal Term, the Bank terminates this Agreement without cause or does not
renew the Term or any Renewal Term, the following provisions shall apply.

(a) Notice Period. The Bank shall provide Executive at least three (3) months
written notice of (i) the Bank’s termination of Executive’s employment under
this Agreement without cause or, (ii) the Bank’s decision not to renew the
Agreement (“Notice Period”).

(b) Compensation.

 
(i)
During Notice Period. During the Notice Period, Executive shall continue to
receive the then applicable salary and benefits specified in this Agreement and
shall continue to perform the Duties and Specific Duties of employment as
defined under the Agreement.

 
(ii)
Deferred Compensation. The Bank shall pay to Executive the balance in the
Deferral Account in accordance with the provisions of Section 3.4(d), above.

 
(c) Benefits.

 
(i)
After the effective date of the termination of this Agreement, all Executive
benefits available under Section 3.6 above (the “Benefits”), shall be continued
by Bank, contingent upon and subject to Executive’s COBRA election described
under Section 4.2(c)(ii) below, with the Bank to pay the premium cost for the
first six (6) months, and Executive to pay the premium cost thereafter. Such
Benefits to continue until the earliest of (A) the expiration of the longer of
either one (1) year following the effective date of the termination of
Executive’s employment under this Agreement or any continuation or coverage
period specified by applicable law, or (B) the date Executive becomes covered
under any other group health plan not maintained by the Bank or any of its
subsidiaries, or (C) Executive provides notice to Bank or the COBRA provider to
discontinue the Benefits. Executive shall use his commercially reasonable
efforts to promptly notify the Bank of the occurrence of an event described in
clause (B) or (C) of the preceding sentence.

 
 

 
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(ii)
In the event Executive is required to make an election under Executive
Retirement Income Security Act of 1974 Sections 601 et. seq. (“COBRA”) to
qualify for the Benefits, Bank’s obligation hereunder shall be conditioned upon
Executive’s making a timely election.

 
4.3. Termination by the Bank for Cause. The Bank may terminate this Agreement at
any time for “cause” (as defined below) by giving to Executive ten (10) days
prior written notice of termination.

(a) Definition of Cause. For purposes of this Section 4.3, the term “cause”
means and includes only:

 
(i)
conviction of or confession by Executive to theft, fraud, or embezzlement
against the Bank;

 
(ii)
Executive’s refusal or failure, after specific written notice and demand by the
Bank, to diligently perform services for the Bank as required by Article 2
hereof;

 
(iii)
Executive’s breach or violation of any material written policy or regulation of
the Bank, including, but not limited to, any written policy or regulation
dealing with sexual harassment, discrimination based on age, sex, race, religion
or other protected category, illicit drugs, and environmental protection
matters;

 
(iv)
Executive’s willful breach or violation of any material law, rule or regulation
(other than traffic violations or similar offenses) or final order of a court of
competent jurisdiction applicable to the Bank or Executive;

 
(v)
Executive’s taking of any material action which requires the prior approval of
the Board of Directors without such approval; and

 
(vi)
Executive’s breach of or failure to perform any of his fiduciary duties to the
Bank or any of shareholders involving personal profit.

(b) Notice of Termination. If the Bank proposes to terminate this Agreement
under clause (a)(i) above, this Agreement shall terminate automatically at the
end of such 10-day period and the Bank shall have no further obligation to give
Executive any further notice of termination. If the Bank proposes to terminate
this Agreement under any of clause (a)(ii), (a)(iii), (a)(v) or (a)(vi), above,
this Agreement shall terminate automatically at the end of such 10-day period
and the Bank shall have no further obligation to give Executive any further
notice of termination unless Executive has cured, to the reasonable satisfaction
of the Bank, during such 10-day period the alleged cause of termination and the
Bank provides Executive written notice of its acceptance of such cure.
Notwithstanding anything in this Agreement to the contrary, if the Bank proposes
to terminate this Agreement for cause under this Section 4.3, so long as the
Bank provides Executive a reasonable opportunity to cure any alleged cause, if
the Bank is required to do so, the Bank may terminate this Agreement as of the
date of the initial notice of termination and pay Executive an additional ten
(10) days of severance compensation.
 
 

 
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(c) Compensation.

 
(i)
Earned Compensation. Executive shall have the right to receive compensation
which has already vested or been earned as of the date of termination of this
Agreement under this Section 4.3.

 
(ii)
Deferred Compensation. The Bank shall pay Executive the balance in the Deferral
Account in accordance with the provisions of Section 3.4(c), above.

(d) Benefits.

 
(i)
Earned Benefits. Executive shall have the right to receive benefits which have
already vested or been earned as of the date of termination of this Agreement
under this Section 4.3, unless expressly prohibited by the terms of any plan,
program or agreement governing such compensation or benefits.

 
(ii)
Additional Benefits. Executive shall be entitled to receive only the right to
participate in the Bank’s medical plan in accordance with the provisions of
COBRA; provided that Executive shall be responsible for paying all applicable
insurance premiums and the Bank shall have no obligation to pay any such
premiums.

4.4. Termination by Executive on Other Event.

(a) Right to Terminate. Executive may terminate this Agreement at any time upon
the occurrence of an Other Event (as defined below) by giving to the Bank sixty
(60) days prior written notice of termination. Executive must deliver his notice
of termination under this Section 4.4(a) within sixty (60) days after the
occurrence of any Other Event specified below. Executive shall specify in
reasonable detail in such notice of termination the basis for the claim that the
Bank has breached or failed to perform any of its material obligations or
covenants. This notice of termination must set forth in reasonable detail the
facts and circumstances that support Executive’s claim of right to terminate
this Agreement under this Section 4.4.

(b) Definition. For purposes of this Agreement the term “Other Event” shall mean
and include: (i) the Bank’s breach or failure to perform any of its material
obligations or covenants under this Agreement, and either the Bank’s failure to
cure such breach or failure of performance within the 15- day period specified
in Section 4.4(c), below, or the continuation of such breach or failure of
performance after such 15-day period without Executive’s written consent; and
(ii) Good Reason (as defined in Section 4.7(d), below).
 
 

 
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(c) Right to Cure. The Bank shall have an opportunity to cure said breach or
failure of performance within fifteen (15) days of Bank’s receipt of written
notice specifying the material breach and the opportunity for Bank to resolve
said breach.

(d) Compensation.

 
(i)
Earned Compensation. Executive shall have the right to receive compensation
which has already vested or been earned as of the date of termination of this
Agreement under this Section 4.3.

 
(ii)
Deferred Compensation. The Bank shall pay Executive the balance in the Deferral
Account in accordance with the provisions of Section 3.4(d), above.

(e) Benefits.

 
(i)
Earned Benefits. Executive shall have the right to receive benefits which have
already vested or been earned as of the date of termination of this Agreement
under this Section 4.3, unless expressly prohibited by the terms of any plan,
program or agreement governing such compensation or benefits.

 
(ii)
Additional Benefits. Executive shall be entitled to receive the Benefits
specified in Section 4.2(c), above, in accordance with and subject to the terms
of such Section.

4.5. Termination on Death of Executive. This Agreement shall terminate
automatically upon Executive’s death.

(a) Compensation. The Bank shall pay to Executive, his beneficiary or
beneficiaries or Executive’s estate, as the case may be:

 
(i)
the compensation which has been earned through the date of termination of this
Agreement under this Section 4.5; and

 
(ii)
the balance in the Deferral Account in accordance with the provisions of Section
3.4(d)(iv) above.

(b) Benefits. Executive shall have the right to receive benefits which have
already vested or been earned as of the date of termination of this Agreement
under this Section 4.6, unless expressly prohibited by the terms of any plan,
program or agreement governing such compensation or benefits.

4.6. Termination on Mental or Physical Disability of Executive.

(a) Right to Terminate. If Executive is absent from work or found to be
physically or mentally incapable of performing Executive’s Duties and Specific
Duties for a period of thirty (30) consecutive days, or a cumulative period of
one hundred twenty (120) days in any one (1) calendar year, the Bank acting in
good faith, may terminate this Agreement as of the termination date specified in
a written notice of termination delivered to Executive, except that there is no
minimum Notice Period requirement.
 
 

 
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(b) Definition of Disability. For purposes of this Agreement only, physical or
mental disability shall be defined as Executive being unable to fully perform
under this Agreement for a continuous period of ninety (90) days or a cumulative
period of one hundred twenty (120) days in any one (1) calendar year.

(c) Compensation.

 
(i)
Earned Compensation. Executive shall have the right to receive compensation
which has already vested or been earned as of the date of termination of this
Agreement under this Section 4.6.

 
(ii)
Deferred Compensation. The Bank shall pay Executive the balance in the Deferral
Account in accordance with the provisions of Section 3 .4(d)(iii) above.

(d) Benefits.

 
(i)
Earned Benefits. Executive shall have the right to receive benefits which have
already vested or been earned as of the date of termination of this Agreement
under this Section 4.6, unless expressly prohibited by the terms of any plan,
program or agreement governing such compensation or benefits.

 
(ii)
Additional Benefits. Executive shall be entitled to receive the Benefits
specified in Section 4.2(c), above, in accordance with and subject to the terms
of such Section.

(e) Dispute re Disability. If there should be a dispute between the Bank and
Executive as to Executive’s physical or mental disability for purposes of this
Agreement, the question shall be settled by the opinion of an impartial
reputable physician or psychiatrist mutually agreed upon by the parties or their
representatives, or if the parties cannot agree within ten (10) days after a
request for designation of such party, then by a physician or psychiatrist
designated by the Santa Barbara County Medical Association.

4.7. Termination on Change in Control.

(a) Right to Terminate. If within twelve (12) months following (a) a merger,
consolidation or reorganization of the Bank or Parent with or into another
corporation or business entity immediately after which the shareholders of
Parent or the Bank immediately before the merger, consolidation or
reorganization own, directly or indirectly, 50% or less of the outstanding
voting securities of the surviving or resulting corporation or entity, or (b)
upon a sale or other disposition of all or substantially all of the assets of
Parent or the Bank other than to a wholly owned subsidiary of Parent or the
Bank, or (c) the acquisition of more than fifty percent (50%) of the combined
outstanding voting securities of Parent or the Banlc by any person or group of
affiliated persons (other than as a result of the organization of a holding
company for Parent or the Bank) (collectively a “Change in Control”), (i) the
Bank terminates this Agreement, with or without cause, or does not renew the
Term or any Renewal Term of this Agreement, or (ii) Executive terminates this
Agreement under Section 4.4 above, the following provisions shall apply.
 
 

 
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(b) Compensation.

 
(i)
Earned Compensation. Executive shall have the right to receive compensation
which has already vested or been earned as of the date of termination of this
Agreement under this Section 4.6.

 
(ii)
Severance Compensation. If, within one (1) year after the occurrence of the
Change in Control, Executive terminates his employment under this Agreement for
Good Reason (as defined below) or the Bank terminates Executive’s employment
under this Agreement other than for cause (as defined in Section 4.3(a) above),
the Bank shall pay to or on behalf of Executive one (1) year’s base salary and
the costs of Executive’s Benefits (as defined above) for a period of one( 1)
year after such the date of termination. The foregoing salary and benefits shall
be paid in monthly installments over such one-year period in accordance with the
Bank’s normal practices. This provision shall apply only if Executive terminates
his employment for Good Reason or if the Bank terminates Executive’s employment,
and shall not apply if Executive terminates his employment on any other basis
under Section 4.4, above.

 
(iii)
Deferred Compensation. The Bank shall pay Executive the balance in the Deferral
Account in accordance with the provisions of Section 3.4(e) above.

(c) Benefits.

(i) Earned Benefits. Executive shall have the right to receive benefits which
have already vested or been earned as of the date of termination of this
Agreement under this Section 4.7, unless expressly prohibited by the terms of
any plan, program or agreement governing such compensation or benefits.

(ii) Additional Benefits. Executive shall be entitled to receive the Benefits
specified in Section 4.2(c), above, in accordance with and subject to the terms
of such Section.

(d) For Good Reason. For purposes of this Section 4.7, the term “Good Reason”
shall mean and include only the occurrence of any of the following events:

(i) A material change occurs in the functions, duties, responsibilities,
reporting relationship, location of work, and/or title of Executive which is not
agreed to by Executive, provided that none of (A) a change in Executive’s title
following the merger or consolidation of the Bank with or into any other
corporation or entity or (B) a temporary change any of the matters described in
this clause (i) for a period of no more than sixty (60) consecutive days as a
result of Executive’s incapacity or disability shall by itself constitute an
event described in this clause (i); or
 
 

 
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(ii) The Bank requires Executive to perform any function or duty, the
performance of which would violate any material statute or public policy the
violation of which could expose Executive to personal liability or which would
have a material adverse effect on Executive’s business reputation.

5. ARTICLE 5- CONFIDENTIALITY AND NON-SOLICITATION

5.1. Confidentiality and Trade Secrets. Executive acknowledges that, in the
course of his employment with the Bank, Executive will acquire information about
the Bank’s borrowers and clients, terms and conditions of Bank transactions,
pricing information for the purchase or sale of assets, financing and
securitization arrangements, research materials, manuals, computer programs,
formulas analyzing assets portfolios, techniques, data, marketing plans and
tactics, technical information, lists of asset sources, the processes and
practices of the Bank and related companies, information contained in electronic
or computer files, financial information, salary and wage information, and other
information that is designated by the Bank or its affiliates as confidential or
that Executive knows or should know is confidential information provided by
third parties and that the Bank or its affiliates are obligated to keep
confidential as well as other proprietary information of the Bank or its
affiliates (“Confidential Information”). Executive acknowledges that all
Confidential Information is and shall continue to be the exclusive property of
the Bank. Executive agrees not to disclose any Confidential Information, either
during the Term or thereafter, directly or indirectly, under any circumstances
or by any means, to any third person or party without the prior written consent
of the Bank.

5.2. Non-Solicitation of Executives. Except as permitted by the prior written
consent of either the President/CEO of the Bank or the Chairman of the Board of
Directors, during the one (1) year period following the termination date,
Executive shall not directly or indirectly solicit for employment or for
independent contractor work from any executive of the Bank, and shall not
encourage any such executive to leave the employment of Bank.

5.3. Non-Solicitation of Customers. During the one (1) year period following the
termination date, Executive shall not directly: (a) solicit business from any
customers of the Bank; (b) encourage any customers to stop using the facilities
or services of the Bank; or (c) encourage any customers to use the facilities or
services of any competitor of the Bank.

5.4. Bank to Benefit from Provisions. To the extent any provisions of this
Article 5 relate in any way to Confidential Information and trade secrets of the
Bank, then the obligations of Executive set forth herein shall also extend to
the Bank and inure to its benefit.
 
6. ARTICLE 6- BANK’S OWNERSHIP IN EXECUTIVE’S WORK

6.1. Bank’s Ownership. Executive agrees that all inventions, discoveries,
improvements, trade secrets, formulas, techniques, processes, and know-how,
whether or not patentable, and whether or not reduced to practice, that are
conceived or developed during Executive’s employment with the Bank, either alone
or jointly with others, or relating to the Bank or to the banking industry
(“Bank’s Work”), and any written record that Executive may maintain of Bank’s
Work, shall be owned exclusively by the Bank. Executive hereby assigns to Bank,
all of Executive’s right, title, and interest, if any, in such intellectual
property defined as Bank’s Work. Executive shall furnish to Bank any and all
such records pertaining to Bank’s Work, immediately upon request.
Notwithstanding anything in this Section 6.1 to the contrary, any inventions,
discoveries, improvements, trade secrets, formulas, techniques, processes and
know-how conceived or developed by Executive solely while providing Volunteer
Services (as defined in Section 2.5, above) shall not be considered Bank Work.
 
 

 
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6.2. Return of Bank’s Property and Materials. Upon termination of his employment
with the Bank, Executive shall deliver to the Bank all Bank property and
materials that are in Executive’s possession or control, including Bank’s Work,
within five (5) calendar days.

6.3. Bank to Benefit from Provisions. To the extent any provisions of this
Article 6 relate in any way to information, property, rights, projects,
ventures, or inventions of the Bank, then the obligations of Executive set forth
in this Article 6 shall also extend to the Bank and inure to its benefit.

7. ARTICLE 7- ARBITRATION

7.1. Obligation to Arbitrate. If any dispute, controversy or claim arises out of
or relates to this Agreement, such dispute, controversy, or claim shall be
settled by binding arbitration only, in accordance with the Rules of Judicial
Arbitration and Mediation Services, using legal principles and damages according
to California Law, and shall be selected by and agreed upon by both parties.
Judgment upon the arbitrator’s award shall be entered in the jurisdiction
thereof. The arbitrator shall determine which party is the prevailing party and
shall include in the award, the prevailing party’s actual attorney’s fees and
costs. The arbitrator shall have no authority to grant either punitive or
consequential damages to any party. Nothing in the Article 7 shall prohibit or
limit the right of the Bank to commence suit or other judicial proceedings
seeking injunction or other equitable relief in the event of Executive’s breach
or threatened breach of any of his obligations under any of Sections 5 or 6 of
this Agreement or Sections 5 or 6 of the Original Agreement.

7.2. Arbitrator. If the parties cannot agree upon the selection of an arbitrator
within ten (10) days of written demand upon the other, the parties shall choose
from a list to be provided by the main Los Angeles office of the American
Arbitration Association (ZAAA”) or of the Federal Mediation and Conciliation
Service, using the strike method, with the first to strike being determined by
the flip of a coin.

7.3. Fee Deposit. As soon as practicable after selection of the arbitrator, the
arbitrator or their designated representative shall determine a reasonable
estimate of anticipated fees and costs setting forth that parry’s pro rata share
of said fees and costs. Thereafter, each party shall, within ten (10) days of
receipt of said statement, deposit said sum with the arbitrator. Failure of any
party to make such a deposit shall result in a forfeiture by the non-depositing
party of the right to prosecute or defend the claim which is the subject of the
arbitration, but shall not otherwise serve to abate, stay, or suspend the
arbitration.
 
 

 
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7.4. Hearing Schedule. Unless the parties agree otherwise, within one hundred
and twenty (120) days of the selection of the arbitrator, a hearing shall be
conducted at a time and a place in Santa Barbara County agreed upon by the
parties. Arbitration shall be conducted in accordance with AAA employment rules
and procedures (“AAA Rules”), then in effect. In the event of any inconsistency
between AAA Rules and this Agreement, the terms of this Agreement shall prevail.

7.5. Award. Within thirty (30) days of conclusion of the arbitration hearing,
the arbitrator shall issue an award, accompanied by a written decision
explaining the basis for the arbitrator’s award. The decision of the arbitrator
shall be final, binding, and non-appealable, except as otherwise permitted by
Law, and may be enforced as a final judgment in any court of competent
jurisdiction.

8. ARTICLE 8- MISCELLANEOUS

8.1. Parent as a Party. Parent is a party to this Agreement solely for purposes
of effecting the grant of the Options contemplated in Section 3, above. Parent
shall have no liability or obligation to Executive with respect to the Bank’s
performance or non-performance of any of its obligations under this Agreement.

8.2. Injunctive Relief. Executive hereby acknowledges and agrees that it would
be difficult to fully compensate the Bank for damages for a breach or threatened
breach of any of the provisions of Sections 5 or 6 hereof or Sections 5 or 6 of
the Original Agreement. Accordingly, Executive specifically agrees that the Bank
shall be entitled to temporary and permanent injunctive relief to enforce the
provisions of Sections 5 or 6 hereof or Sections 5 or 6 of the Original
Agreement, and that such relief may be granted without the necessity of proving
actual damages. The foregoing provision with respect to injunctive relief shall
not, however, prohibit the Bank from pursuing any other rights or remedies
available to the Bank for such breach or threatened breach, including, but not
limited to, the recovery of damages from Executive or any third parties.

8.3. Authorized Representative of the Bank. Although Executive is an officer of
the Bank, any and all actions and decisions to be taken or made by the Bank
under this Agreement or with respect to the employment relationship described in
this Agreement, and any and all consents, approvals and agreements permitted or
required to be given or made on the part of the Bank under this Agreement, shall
be made and accomplished by the Bank only through the actions taken, in writing,
of its Chief Financial Officer or such other person or persons as the Board of
Directors may from time to time designate.

8.4. Tax Advice. Executive represents and warrants to the Bank that he has
sought and received independent professional advice concerning the treatment of
the transactions contemplated by this Agreement under the Code, the rules and
regulations promulgated thereunder by the Internal Revenue Service (the “j$’),
and the income tax laws of any other applicable taxing jurisdictions, and that
he is not relying upon any representation, warranty or other statement made by
the Bank, its counsel or anyone acting on behalf of the Bank with respect to
such treatment or the structuring of the compensation payable under this
Agreement as assuring any particular income tax treatment. Executive understands
and agrees that neither the Bank, its counsel nor anyone acting on behalf of the
Bank has made or is making any representation, warranty or other statement with
respect to such income tax treatment.
 
 

 
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8.5. Notice. Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be deemed received (i) when personally
delivered, or, (ii) if mailed, one (1) week after having been placed in the
United States mail, registered, or certified, postage prepaid, addressed to the
party to whom it is directed at the address listed below or (iii) if sent by
facsimile, email or other form of electronic transmission, one (1) business day
after the notice is transmitted to the facsimile number, email address or other
address specified on the signature page of this Agreement, and the transmitting
party either receives confirmation of transmission or does not receive notice of
non- delivery.

8.6. Entire Agreement. This Agreement, including any documents expressly
incorporated into it by the terms of this Agreement, constitutes the entire
agreement between the parties. This Agreement supersedes and rescinds any and
all prior oral and written agreements, understandings, negotiations, and
discussions relating to the employment of Executive by Bank. This Agreement may
not be modified, supplemented or amended by oral agreement, but only by an
agreement in writing signed by Bank and Executive.

8.7. Amendment. This Agreement may be amended only in writing duly executed by
all of the parties hereto. Notwithstanding anything in this Agreement to the
contrary, any amendment to Section 3.4 of this Agreement shall be made in
compliance with the requirements of Section 409A of the Coder and the Treasury
Regulations thereunder.

8.8. Survival of Certain Provisions. Notwithstanding anything to the contrary
contained herein, in the event of any termination of this Agreement, the rights
and obligations of the parties under Sections 3.4, 4.2(b), 4.2(c), 4.3(c),
4.3(d), 4.4(d), 4.4(e), 4.5(a), 4.5(b), 4.6(c), 4.6(d), 4.6(e), 4.7(b) and
4.7(c) and Articles 5, 6, 7 and 8 hereof shall survive such termination and
shall continue in full for and effect until fully performed.

8.9. Waivers. All rights and remedies of the parties hereto are separate and
cumulative, and no one of them, whether exercised or not, shall be deemed to
limit or exclude any other rights or remedies which the parties hereto may have.
Neither party hereto shall be deemed to waive any rights or remedies under this
Agreement unless such waiver be in writing and signed by such party. No delay or
omission on the part of either party hereto in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or remedy.
A waiver of any right or remedy on any one occasion shall not be construed as a
bar to or waiver of any such right or remedy on any future occasion.

8.10. Successors and Assigns. The Bank shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation, or otherwise to
all or substantially all of the business or assets of the Bank to expressly
assume and agree to perform in writing this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. This Agreement shall inure to the
benefit of and be binding upon the Bank, its successors and assigns, and upon
Executive and Executive’s heirs, executors, administrators and legal
representatives. No party to this Agreement may delegate its or their duties
hereunder without the prior written consent of the other party to this
Agreement.
 
 

 
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8.11. Governing Law. This Agreement is entered into in the State of California,
and California law shall in all respects govern the validity, construction, and
interpretation of this Agreement.

8.12. Attorney’s Fees. In any arbitration, suit or other action between the
parties seeking enforcement of any of the terms and provisions of this
Agreement, the prevailing party in such arbitration, suit or other action shall
be awarded, in addition to damages, injunctive or other relief, its reasonable
costs and expenses, not limited to taxable costs, and a reasonable attorney’s
fees. In order for a party to change its address or other information for the
purpose of this section, the party must first provide notice of that change in
the manner required by this section.

9. ARTICLE 9- RECEIPT OF AGREEMENT

9.1. Receipt of Agreement. Each of the parties hereto acknowledges that they
have read this Agreement in its entirety and does hereby acknowledge receipt of
a fully executed copy thereof. A fully executed copy shall be an original for
all purposes, and Is a duplicate original.

IN WITNESS WHEREOF, the parties hereto have caused this Employment and
Confidentiality Agreement to be executed as of the Effective Date set forth
above.

ACCEPTED AND AGREED:

EXECUTIVE

By:
   

Name: Charles G. Baltuskonis

Address for Notice:
5739 Encina Road, #103
Goleta, CA  93117
Telephone:  (805) 451-4844

COMMUNITY WEST BANK
    A National Banking Association

By:
   

    Lynda Nahra, President & CEO
 
 

 
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Address for Notice:
445 Pine Street
Goleta, California 93317
Attention: Robert H. Bartlein, Chairman of the Board
Telephone: (805) 683-4944
Facsimile: (805) 692-2897

COMMUNITY WEST BANCSHARES,

By:
   

     Lynda Nahra, President & CEO

Address for Notice:
445 Pine Street
Goleta, California 93317
Attention: Lynda Nahra,  President & CEO
Telephone: (805) 683-4944
Facsimile: (805) 692-2897

DESIGNATED HEIRS

Set forth below is a list of the names and addresses of Executive’s heirs to
whom the Bank shall pay the balance of the Deferred Account in the event of
Executive’s death.

NAME
ADDRESS
PERCENTAGE INTEREST
                                   

 

 
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