ex10_5.htm


    
      

    

    
      Exhibit
10.5

      COMMUNITY
WEST BANCSHARES

      COMMUNITY
WEST BANK

      445 Pine
Avenue

      Goleta,
California  93117

       

      December
11, 2008

      Richard
M. Favor

      c/o
Community West Bancshares

      445 Pine
Avenue

      Goleta,
California  93117

       

      Dear Mr.
Favor,

       

      


      Community
West Bancshares (the "Company") anticipates
entering into a Securities Purchase Agreement (the "Participation Agreement"),
with the United States Department of Treasury ("Treasury") that provides for
the Company’s participation in the Treasury’s TARP Capital Purchase Program (the
"CPP"). If the Company
does not participate or ceases at any time to participate in the CPP, this
letter shall be of no further force and effect.

       

      For the
Company to participate in the CPP and as a condition to the closing of the
investment contemplated by the Participation Agreement, the Company is required
to establish specified standards for incentive compensation to its Senior
Executive Officers and to make changes to its compensation arrangements. The
requirements of this Agreement shall apply to you only for so long as both
(1) you are a Senior Executive Officer of the Company and/or Community West
Bank (the "Bank") and (2) any debt or equity securities issued by the
Company under the CPP are held by Treasury (the "CPP Covered Period"). To
comply with these requirements, and in consideration of the benefits that you
will receive as a result of the Company’s participation in the CPP, you agree as
follows:

       

      (11)           No Golden Parachute Payments.
The Company and the Bank are prohibiting any Golden Parachute Payment to you
during any CPP Covered Period. To the extent any event occurs during the CPP
Covered Period that would otherwise trigger a Golden Parachute Payment, you will
be entitled to the lesser of (i) your rights under the Benefit Plans (as
defined below) and (ii) the maximum amount allowed under
Section 111(b)(2)(C) of EESA.

       

      (12)           Recovery of Bonus and Incentive
Compensation. Any bonus and incentive compensation paid to you during a
CPP Covered Period is subject to recovery or "clawback" by the Company if the
payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria.

       

      (13)           Compensation Program Amendments.
Each of the Company’s compensation, bonus, incentive and other benefit
plans, arrangements and agreements (including golden parachute, severance and
employment agreements; collectively, "Benefit Plans") with respect
to you is hereby amended to the extent necessary to give effect to provisions
(1) and (2). For reference, certain affected Benefit Plans are set forth in
Appendix A to this letter.

       

      
        
          
            UST
Sequence Number: 82

            Exhibit
10.5

             


          

          
            1

            
              

            

          

          
             


          

        

      

      


      In addition, the Company is required to
review its Benefit Plans to ensure that they do not encourage senior executive
officers to take unnecessary and excessive risks that threaten the value of the
Company. To the extent any such review requires revisions to any Benefit Plan
with respect to you, you and the Company and the Bank ( to  the extent
applicable) agree to negotiate such changes promptly and in good
faith.

       

      (14)           Definitions and
Interpretation. This letter shall be interpreted as follows:

       

      ·           "Senior
Executive Officer" is used with same meaning as in subsection 111(b)(3) of
EESA.

       

      ·           "Golden
Parachute Payment" is used with same meaning as in Section 111(b)(2)(C) of
EESA.

       

      ·           "EESA"
means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued by the Department of the Treasury and as published
in the Federal Register on October 20, 2008, as in effect on the date
hereof.

       

      ·           The
term "Company" includes any entities treated as a single employer with the
Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You are
also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term "employer" in that waiver will be deemed
to mean the Company as used in this letter.

       

      ·           The
term "CPP Covered Period" shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11 (as in effect on the Closing
Date).

       

      ·           Provisions
(1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA (and, to the
maximum extent consistent with the preceding, to permit operation of the Benefit
Plans in accordance with their terms before giving effect to this
letter). 

       

      (15)           Miscellaneous. To the extent
not subject to federal law, this letter will be governed by and construed in
accordance with the laws of the State of California without regard the
provisions thereof that would apply the law of any other State. This letter may
be executed in two or more counterparts, each of which will be deemed to be an
original. A signature transmitted by facsimile shall be deemed an original
signature.

       

      
        
          
            UST
Sequence Number: 82

            Exhibit
10.5

             


          

          
            2

            
              

            

          

          
             


          

        

      

      


      The
Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.

       

       

      
        
          
            
              
                
                  
                    
                      	 
      	
                              Yours
      sincerely,

                            
	 
      	 
      	 
      	 
      
	 
      	
                              COMMUNITY
      WEST BANCSHARES

                            
	 
      	 
      	 
      	 
      
	 
      	
                              By:

                            	
                              /s/ Lynda J. Nahra

                            	 
      
	 
      	
                              Name:

                            	
                              Lynda
      J. Nahra

                            	 
      
	 
      	
                              Title:

                            	
                              President
      and Chief Executive Officer

                            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                              COMMUNITY
      WEST BANK

                            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                              By:

                            	
                              /s/ Lynda J. Nahra

                            	 
      
	 
      	
                              Name:

                            	
                              Lynda
      J. Nahra

                            	 
      
	 
      	
                              Title:

                            	
                              President
      and Chief Executive Officer

                            	 
      


                    

                  

                

              

            

          

        

      

      


      


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

      


      


      
        
          	
                  /s/ Richard M. Favor

                	 
      
	
                  Richard
      M. Favor

                	 
      


        

      

      


      
        	
                Date:

              	
                December
      11, 2008

              


      

      


      


      
        	
                cc:

              	
                Richard
      M. Favor, via Hand Delivery

              


      

      
         

        UST Sequence Number:
82

        Exhibit
10.5

         

        3