ex10_3.htm


    
      

    

    Exhibit
10.3

    


    [Form
Of Indemnification Agreement]

    


    COMMUNITY
WEST BANCSHARES

    


    INDEMNIFICATION
AGREEMENT

    


    


    THIS
INDEMNIFICATION AGREEMENT (the "Agreement") is made as of the _________ day of
____________, 20__ by and between Community West Bancshares, a California
corporation (the "Company"), and _____________ ("Indemnitee"), a director or
officer of the Company with reference to the following facts:

     

    A.       
The Company and the Indemnitee recognize that interpretations of ambiguous
statutes, regulations, court opinions, and the Company's Articles of
Incorporation and Bylaws, are too uncertain to provide the Company's officers
and directors with adequate or reliable advance knowledge or guidance with
respect to the legal risks and potential liabilities to which they may become
personally exposed as a result of performing their duties in good faith for the
Company;

     

    B.        
The Company and the Indemnitee are aware of the substantial growth in the number
of lawsuits filed against corporate officers and directors in connection with
their activities in such capacities and by reason of their status as
such;

     

    C.        
The Company and the Indemnitee recognize that the cost of defending against such
lawsuits, whether or not meritorious, is typically beyond the financial
resources of most officers and directors of the Company;

     

    
      D.        
The Company and the Indemnitee recognize that legal risks and potential officer
or director liabilities, or the threat thereof, and the resultant substantial
time and expense endured in defending against such lawsuit, bear no reasonable
logical relationship to the amount of compensation received by the Company's
officers or directors. These factors pose a significant deterrent to, and induce
increased reluctance on the part of, experienced and capable individuals to
serve as officers or directors of the Company;

       

    

    
      
        E.        
The Company has investigated the availability and deficiency of liability
insurance to provide its officers and directors with adequate protection against
the foregoing legal risks and potential liabilities. The Company has concluded
that such insurance provides only limited protection to its officers and
directors, and that it is in the best interests of the Company and its
shareholders to contract with its officers and directors, including the
Indemnitee, to indemnify them to the fullest extent permitted by law against
personal liability for actions taken in the good faith performance of their
duties to the Company;

         

      

    

    F.        
Section 317 of the General Corporation Law of the State of California, which
sets forth certain provisions relating to mandatory and permissive
indemnification of officers and directors of a California corporation by such
corporation, requires indemnification in certain circumstances, permits it in
other circumstances, and prohibits it in some circumstances;

     

    G.        
The Board of Directors of the Company has determined, after due consideration
and investigation of this Agreement and various other options available in lieu
hereof, that the following Agreement is reasonable, prudent and necessary to
promote and ensure the best interests of the Company and its shareholders in
that Agreement is intended to: (1) induce and encourage highly experienced and
capable persons such as the Indemnitee to serve as officers and/or directors of
the Company; (2) encourage such persons to resist what they consider
unjustifiable suits and claims made against them in connection with the good
faith performance of their duties to the Company, secure in knowledge that
certain expenses, costs and liabilities incurred by them in their defense of
such litigation will be borne by the Company and that they will receive the
maximum protection against such risks and liabilities as legally may be made
available to them; and (3) encourage officers and directors to exercise their
best business judgment regarding matters which come before the Board of
Directors without undue concern for the risk that claims may be made against
them on account thereof; and


    
      
        
        

      

      
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    H.        
The Company desires to have the Indemnitee continue to serve as an officer or
director of the Company free from concern for unpredictable, inappropriate or
unreasonable legal risk and personal liabilities by reason of Indemnitee acting
in good faith in the performance of Indemnitee's duty to the Company. The
Indemnitee desires to continue to serve as an officer or director of the
Company, provided, and on the express condition, that he is furnished with the
indemnity set forth herein.

    


    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below and based on the premises set forth above, the Company and Indemnitee do
hereby agree as follows:

    


    
      	
              1.

            	
              Definitions.  For
      the purposes of this Agreement, the following definitions shall
      apply:

            


    

    


    (a)           The
term "Agent" shall mean any person who is or was acting in his\her capacity as a
director or officer of the Company, or is or was serving as a director, officer,
employee or agent of any other enterprise at the request of the Company, and
whether or not Indemnitee is serving in any such capacity at the time any
liability or expense is incurred for which indemnification or reimbursement can
be provided under this Agreement.

    


    (b)           The  term  "Applicable  Standard"
means that a person acted in
good  faith  and  in  a manner such
person reasonably believed to be in the best interests of the Company; except
that in a criminal proceeding, such person must
also  have  had  no  reasonable  cause
to believe that such person's conduct was
unlawful.  The  termination  of  any  Proceeding
by judgment, order, settlement,
conviction  or  upon  a  plea of nolo
contendere or its equivalent shall not, of
itself,  create  any presumption, or establish, that the
person did not meet the "Applicable  Standard."

    


    (c)           The
term "Expenses" includes, without limitation, expenses of investigations,
judicial or administrative proceedings or appeals, court costs, attorneys’ fees
and disbursements and any expenses of establishing a right to indemnification
under law or Paragraph 7 of this Agreement.  "Expenses" shall
not  include  the  amount  of  any  judgment,
fines or penalties actually levied against Indemnitee or amounts paid in
settlement of a Proceeding by or on behalf
of  Indemnitee  without  court  approval.

    


    (d)         
"Independent Legal Counsel" shall include any firm of attorneys selected by lot
by the regular outside counsel for the Company from a list of firms which meet
minimum size criteria and other reasonable criteria established by the Board of
Directors of the Company, so long as such firm has not represented the Company,
Indemnitee or any entity controlled by Indemnitee within the preceding 24
calendar months.

    


    (e)           References  to  "other  enterprise"  shall  include  employee
benefit  plans; references to "fines" shall include any excise tax
assessed with respect  to  any employee benefit plan;
references to "serving at the request of
the  Company"  shall include any service as a director or
officer of the Company which  imposes duties on, or involves services
by, such director or officer with respect  to  an employee
benefit plan, its participants, or beneficiaries; and a
person  who  acts in good faith and in a manner he/she
reasonably believes to be
in  the  interest  of  the participants
and beneficiaries of an employee benefit
plan  shall  be  deemed  to  have  acted  in  a  manner
"not opposed to the best
interests  of  the  Company"  as  referred  to  in  this  Agreement.

    


    (f)           The
term "Proceeding" shall include any threatened, pending or completed action,
suit or proceeding, whether brought in the name of the Company
or  otherwise  and whether of a civil, criminal,
administrative or investigative
nature,  in  which  Indemnitee  may  be  or
may have been involved as a party or otherwise  (other  than
as plaintiff against the Company), by reason of the fact
that  Indemnitee  is  or  was an Agent
of the Company or by reason of any action taken by Indemnitee or of any inaction
on Indemnitee's part while acting as such Agent.


    
      
        
        

      

      
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    2.        Agreement
to Serve.  Indemnitee agrees to serve or continue to serve
as  a  director  and/or  officer of the
Company at the will of the Company or in accordance with the terms of any
agreement with the Company, as the case may be,
for  so  long  as Indemnitee is duly elected or
appointed, or until such time as
Indemnitee  tenders  Indemnitee's resignation in writing or
Indemnitee's service is  terminated.

    


    3.        Indemnity
in Third Party Proceedings. The Company shall indemnify Indemnitee if Indemnitee
is made a party to or threatened to be made a party to, or otherwise involved
in, any Proceeding (other than a Proceeding which is an action by or in the
right of the Company to procure a judgment in its favor), by reason of the fact
that Indemnitee is or was an Agent of the Company. This indemnity shall apply,
and be limited, to and against all Expenses, judgments, fines, penalties,
settlements, and other amounts, actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of the Proceeding, so long as it is
determined pursuant to Paragraph 7 of this Agreement or by the court before
which such action was brought, that Indemnitee met the Applicable
Standard.

    


    4.        Indemnity
in Proceeding by or In the Name of the Company.  The
Company  shall  indemnify  Indemnitee  if  Indemnitee  is  made  a  party
to, or threatened to be made a party to, or otherwise involved in, any
Proceeding which
is  an  action  by  or  in the
right of the Company to procure a judgment in its
favor  by  reason of the fact that Indemnitee is or was an
Agent of the Company. This indemnity shall apply, and be limited, to and against
all Expenses actually
and  reasonably  incurred  by  Indemnitee  in  connection  with  the  defense
or settlement  of  such Proceeding, but only
if:  (a) Indemnitee met the Applicable
Standard  (except  that  the Indemnitee's belief
regarding the best interests of
the  Company  need  not  have  been
reasonable);  (b) Indemnitee also acted in a
manner  Indemnitee  believed  to  be  in  the  best  interests  of
the Company's shareholders; and (c) the action is not settled or otherwise
disposed of without
court  approval.  No  indemnification  shall  be  made
under this Paragraph 4 in
respect  of  any  claim,  issue or
matter as to which Indemnitee shall have been adjudged to be liable to the
Company in the performance of such person's duty or
the  Company,  unless,  and  only  to  the  extent
that, the court in which such proceeding  is  or was pending
shall determine upon application that, in view of all  the
circumstances of the case, Indemnitee is fairly and reasonably entitled
to  indemnification  for  the  expenses  which  such  court  shall  determine.

    


    5.        Expenses
of Successful
Indemnitee.  Notwithstanding  any  other provision
of this Agreement, to the extent the Indemnitee has been successful on the
merits in defense of any Proceeding referred to in Paragraphs 3 or 4 hereof,
or  in defense of any claim, issue or matter therein, including the
dismissal of an action or portion thereof without prejudice, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred in connection
therewith.

    


    6.        Advances
of Expenses. The Expenses incurred by Indemnitee in any Proceeding shall be
advanced by the Company prior to the final disposition of such proceeding at the
written request of Indemnitee, but only if Indemnitee shall undertake to repay
such advances if it is ultimately determined that the Indemnitee is not entitled
to indemnification as provided for in this Agreement. Any advance required
hereunder shall be deemed to have been approved by the Board of Directors of the
Company to the extent this Agreement was so approved. In determining whether or
not to make an advance hereunder, the ability of Indemnitee to repay shall not
be a factor. However, in a Proceeding brought by the Company directly, in its
own right (as distinguished from an action brought derivatively or by any
receiver or trustee), the Company shall have discretion whether or not to make
the advances called for hereby if Independent Legal Counsel advises in writing
that the Company has probable cause to believe, and the Company does believe,
that Indemnitee did not act in good faith with regard to the subject matter of
the Proceeding or a material portion thereof.

     

    7.       
Right of Indemnitee to Indemnification upon Application; Procedure upon
Application. Any advance under Paragraphs 5 and/or 6 hereof or indemnification
shall be made no later than 45 days after receipt of a written request of
Indemnitee in accordance with Paragraph 11 hereof. In all other cases,
indemnification shall be made by the Company only if authorized in the specific
case, upon a determination that indemnification of the Agent is proper under the
circumstances and the terms of this Agreement by: (a) a majority vote of a
quorum of the Board of Directors (or a duly constituted committee thereof),
consisting of directors who are not parties to such Proceeding; (b) approval of
the shareholders (as defined in Section 153 of the California Corporations Code,
as that Section reads at present), with the Indemnitee's shares not being
entitled to vote thereon; (c) the court in which such Proceeding is or was
pending upon application made by the Company, the Indemnitee or any person
rendering services in connection with Indemnitee's defense, whether or not the
Company opposes such application; or (d) to the extent permitted by law, by
Independent Legal Counsel in a written opinion.


    
      
        
        

      

      
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    The right
to indemnification or advances as provided by this Agreement shall be
enforceable by Indemnitee in any court of competent jurisdiction. The burden of
proving that indemnification or advances are not appropriate shall be on the
Company. Neither the failure of the Company (including its Board of Directors,
Independent Legal Counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification or advances are
proper in the circumstances because Indemnitee has met the Applicable Standard
of Conduct, nor an actual determination by the Company (including its Board of
Directors or Independent Legal Counsel) that Indemnitee has not met such
Applicable Standard of Conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the Applicable Standard of Conduct.
Indemnitee's Expenses incurred in connection with successfully establishing
Indemnitee's right to indemnification or advances in any such Proceeding shall
also be indemnified by the Company; provided, however, that if Indemnitee is
only partially successful in establishing Indemnitee's right to indemnification
or advances, only an equitably allocated portion of such Expenses, as determined
by the court, shall be indemnified.

    


    If
Indemnitee is entitled under any provision of this Agreement or indemnification
by the Company, for some or a portion of the Expenses, judgments, fines or
penalties actually and reasonably incurred by Indemnitee in the investigation,
defense, appeal or settlement of any Proceeding but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion (determined on an equitable basis) of such Expenses, judgments, fines or
penalties to which Indemnitee is entitled.

    


    8.      
 Indemnification Hereunder Not Exclusive. The indemnification provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Articles of Incorporation, the Bylaws, any
agreement, any vote of shareholders or disinterested directors, the General
Corporation Law of the State of California, or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding such office. The indemnification under this Agreement shall continue as
to Indemnitee even though Indemnitee may have ceased to be a director or officer
and shall inure to the benefit of the heirs and personal representatives of
Indemnitee.

    


    9.        Limitations.  The
Company shall not be liable under this Agreement to make any payment in
connection with any claim made against the Indemnitee:

    


    (a)           for  which  payment
is actually made to the Indemnitee under a
valid  and  collectible  insurance  policy,  provided,
however, that the Company shall remain liable for any payments required by this
Agreement in excess of the
amount  of  payment  under  such  insurance;

    


    (b)           for  which  the  Indemnitee  is  indemnified  by  the  Company
otherwise  than  pursuant  to  this  Agreement;

    


    (c)           for
an accounting of profits made from the purchase or sale by
the  Agent  of  securities of the Company within
the meaning of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions
of  any  state  statutory  law  or  common  law;

    


    (d)           For
acts or omissions that involve intentional misconduct or a knowing and culpable
violation of law;

    


    (e)           for  acts  or  omissions  that  the  Indemnitee
believes to be
contrary  to  the  best  interests  of  the  Company
or its shareholders or that
involve  the  absence  of  good  faith  on  the  part  of  the  Indemnitee;


    
      
        
        

      

      
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    (f)           for  any  transaction  from  which  the  Indemnitee
derived an improper  personal  benefit;

    


    (g)           for  acts  or
omissions that show a reckless disregard for the
Indemnitee's  duty  to the Company or its shareholders in
circumstances in which the  Indemnitee  was aware, or should
have been aware, in the ordinary course of
performing  Indemnitee's  duties,  of a risk of
serious injury to the Company or its  shareholders;

    


    (h)           for  acts
or omissions that constitute an unexcused pattern of
inattention  that  amounts  to  an  abdication  of  the
Indemnitee's duty to the
Company  or  its  shareholders;

    


    (i)           under  Section
310 of the General Corporation Law of the State
of  California,  as  that  Section  reads  at  present;  or

    


    (j)           under  Section
316 of the General Corporation Law of the State
of  California,  as  that  Section  reads  at  present.

    


    10.      Savings
Clause.  If  this  Agreement  or  any  portion  hereof  is
invalidated  on  any  ground  by  any  court
of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee as to Expenses, judgments, fines and penalties with respect to any
Proceeding to the full extent permitted by any
applicable  portion  of  this  Agreement  by  any  other  applicable  law.

    


    11.     
Notices. Indemnitee shall, as a condition precedent to Indemnitee's right to be
indemnified under this Agreement, give to the Company notice in writing within
thirty (30) days after Indemnitee becomes aware of any claim made against
Indemnitee for which Indemnitee believes, or should reasonably believe,
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Company's main office, Attention: President (or
such other address as the Company shall designate in writing to Indemnitee).
Failure to so notify the Company shall not relieve the Company of any liability
which it may have to Indemnitee otherwise than under this
Agreement.

     

    All
notices, requests, demands and other communications (collectively "notices")
provided for under this Agreement shall be in writing (including communications
by telephone, or telecommunication facilities providing facsimile transmission)
and mailed (postage prepaid and return receipt requested), telegraphed,
telexed, transmitted or personally served to each party at the address set forth
at the end of this Agreement or at such other address as any party affected may
designate in a written notice to the other parties in compliance with this
section. All such notices shall be effective when received; provided, however,
receipt shall be deemed to be effective within three (3) business days of any
properly addressed notice having been deposited in the mail, within twenty-four
(24) hours from the time electronic transmission was made, or upon actual
receipt of electronic delivery, whichever occurs first.

     

    No costs,
charges or expenses for which indemnity shall be sought hereunder shall be
incurred without the Company's consent, which consent shall not be unreasonably
withheld.

     

    12.     
Choice of Law. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of California, including applicable statutes of
limitations and other procedural statutes.

     

    13.     
Attorneys' Fees. If any legal action is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to recover, in addition to the
amounts to which the prevailing party may be entitled, actual attorneys' fees
and court costs as may be awarded by the court.

     

    14.     
Amendments. Provisions of this Agreement may be waived, altered, amended or
repealed in whole or in part only by the written consent of all
parties.

     

    15.     
Parties in Interest. Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
to any persons other than the parties to it and their respective successors and
assigns (including an estate of Indemnitee), nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party hereto. Furthermore, no provision of this Agreement shall
give any third persons any right of subrogation or action against any party
hereto.


    
      
        
        

      

      
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    16.     
Severability. If any portion of this Agreement shall be deemed by a court of
competent jurisdiction to be unenforceable, the remaining portions shall be
valid and enforceable only if, after excluding the portion deemed to be
unenforceable, the remaining terms shall provide for the consummation of the
transaction contemplated herein in substantially the same manner as originally
set forth at the date this Agreement was executed.

     

    17.     
Successors and Assigns. All terms and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
transferees, successors and assigns; provided, however, that this Agreement and
all rights, privileges, duties and obligations of the parties, may not be
assigned or delegated by any party without the prior written consent of the
other parties.

     

    18.     
Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     

    19.     
Entire Agreement. Except as provided in Paragraph 8 hereof, this Agreement
represents and contains the entire agreement and understanding between and among
the parties, and all previous statements or understandings, whether express or
implied, oral or written, relating to the subject matter hereof are fully and
completely extinguished and superseded by this Agreement. This Agreement shall
not be altered or varied except by a writing duly signed by all of the
parties.

    


    IN  WITNESS
WHEREOF, the undersigned have executed this Agreement as of the
date  first  above  written.

    


    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	
                                COMMUNITY  WEST  BANCSHARES

                              
	 
      	 
      	
                                444  Pine  Avenue

                              
	 
      	 
      	
                                Goleta,  California  93117

                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                By:

                              	 	
                                 

                              
	 
      	 
      	
                                Its:

                              	
                                Chairman  of  the  Board  of  Directors

                              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                                "Indemnitee"

                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                                Address:

                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      


                      

                    

                  

                

              

            

          

        

      

    

     

     

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