| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
Effective at 12.01 a.m. (Pacific Daylight Time) on April 1, 2024 (the “Effective Time”), Central Valley Community Bancorp (“Central Valley”) completed the previously announced merger transaction with Community West Banchares (“Community West”), in accordance with the terms and conditions of the Agreement and Plan of Reorganization and Merger, dated as of October 10, 2023, by and among Central Valley and Community West (the “Merger Agreement”). At the Effective Time, Community West merged with and into the Central Valley, with Central Valley being the surviving entity (the “Corporate Merger”). Following the Corporate Merger, Community West Bank, a wholly owned subsidiary of Community West, (“CWB”) merged with and into Central Valley Community Bank, a wholly-owned subsidiary of Central Valley, (“CVCB”) with CVCB being the surviving banking institution (the “Bank Merger”, and collectively with the Corporate Merger, the “Mergers”). Effective with the Mergers, the corporate name of the Central Valley and CVCB were changed to Community West Bancshares and Community West Bank, respectively. Pursuant to the Merger Agreement, holders of Community West common stock was converted into the right to receive 0.79 of a share of common stock of Central Valley for each share of Community West common stock held immediately prior to the Effective Time of the Mergers, with cash to be paid in lieu of any fractional shares of common stock of Central Valley (the “Merger Consideration”). At the Effective Time, (i) each outstanding unvested Community West restricted stock award automatically vested in full and will be entitled to the Merger Consideration, (ii) each outstanding unvested Community West stock option automatically vested in full, and each outstanding stock option was substituted for a stock option issued by Central Valley for the right to receive a number of shares of Central Valley’s common stock at an exercise price, both adjusted for the Merger Consideration. As a result of the Mergers, Central Valley will issue approximately 7,038,220 shares of Central Valley common stock and reserve 390,462 shares of common stock for the substituted Community West stock options.
The pre-Merger outstanding shares of Central Valley common stock remain outstanding and are not affected by the Merger. Following the Merger, the Company will have outstanding approximately 18,870,214 shares of its common stock with former shareholders of Community West owning 37% percent of the outstanding shares.
The Central Valley shares of common stock will continue to be listed for trading on the NASDAQ Capital Market under the name “Community West Bancshares” with “CWBC” as the new trading symbol.
The foregoing description of the Mergers and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference from Exhibit 2.1 included with this report.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Board of Directors
The bylaws of Central Valley and CVCB provide for a board of directors with a range of nine to 15 positions with the specific number fixed by resolution of the respective board of directors. On March 20, 2024, the respective boards of directors of Central Valley and CVCB approved a resolution to expand the number of directors to 15, to be effective on the consummation of the Mergers.
On March 20, 2024, the respective boards of directors of Central Valley and CVCB also resolved that, effective upon the consummation of the Mergers, as contemplated by the Merger Agreement, Robert H. Bartlein, Suzanne M. Chadwick, Tom L. Dobyns, James W. Lokey, Martin E. Plourd and Kirk B. Stovesand (“New Directors”), would be appointed to serve on the boards of directors of Central Valley and CVCB. In addition, pursuant to the Merger Agreement, these six new directors will be included on the list of nominees for directors presented by the Central Valley board of directors for which the Central Valley board of directors will solicit proxies at the Central Valley 2024 Annual Meeting.
Each of the New Directors will be entitled to receive the compensation that other directors of Central Valley receive, as determined by the board of directors from time to time. Each non-employee director who is not the Chairman of the Board of Directors currently receives an annual retainer of $46,800 plus stock awards valued at $30,000. The New Directors will receive their initial annual grant of stock awards at the time of the 2024 Annual Meeting. Such
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