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;


    
      
         


      

      
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    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

     

    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.


    
      
         


      

      
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    (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.

     

    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.


    
      
         


      

      
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    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.

     

    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:


    
      
         


      

      
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    (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 commo 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;

     

    (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.


    
      
         


      

      
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    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.

     

    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.


    
      
         


      

      
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         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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