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