Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of March 22, 2017 by and
among Broadway Financial Corporation, (“BFC”), Broadway Federal Bank, f.s.b.
(the “Bank” and, together with BFC, the “Company”), and Wayne-Kent A. Bradshaw
(the “Executive”).  The term Company shall refer to BFC in respect of
Executive’s services to BFC and to the Bank in respect of the Executive’s
services to the Bank.

 

WHEREAS, the Executive has served as a senior executive officer of the Company
and the Bank since February, 2009;

 

WHEREAS, the Company desires to continue to retain the Executive to serve as
President and Chief Executive Officer of the Company on the terms and conditions
set forth in this Agreement, and the Executive desires to provide such services
on such terms and conditions;

 

NOW, THEREFORE, in consideration of the terms and mutual covenants herein and
for other good and valuable consideration, the parties hereto agree as follows:

 

1.                                      Services, Duties and Responsibilities.

 

(a)                                 The Company hereby agrees to employ the
Executive as its President and Chief Executive Officer during the service period
fixed by Section 4 hereof (the “Service Period”).  The Executive shall report to
the Board of Directors of BFC (the “Board”) and shall have such duties and
responsibilities as are consistent with the position of President and Chief
Executive Officer of a bank and holding company of similar size and complexity
as the Company (the “Services”).  The Executive shall also serve on the Board to
the extent he is elected for such service by the BFC stockholders, which
election shall be recommended to the BFC stockholders by the appropriate
committee of the Board, and the Executive shall serve on the board of directors
of the Bank.  The Executive’s principal work location shall be at the Company’s
principal executive offices; provided, that the Executive may be required to
travel as reasonably necessary in order to perform the Executive’s duties and
responsibilities hereunder.

 

(b)                                 During the Service Period, excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive shall devote substantially all of the Executive’s working time, energy
and attention to the performance of his duties and responsibilities hereunder
and shall faithfully and diligently endeavor to promote the business of the
Company.  During the Service Period, the Executive may not, without the prior
written consent of the Board, directly or indirectly, operate, participate in
the management, operations or control of, or act as an executive, officer,
consultant, agent or representative of, any type of competitive business or
service; provided, that the Executive may, to the extent not otherwise
prohibited by this Agreement, devote such amount of time as does not interfere
with the performance of the Executive’s duties under this Agreement to engaging
in community and charitable activities.

 

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2.                                      Compensation.

 

(a)                                 Base Salary.  During the Service Period, the
Executive shall be paid an annual base salary of $435,000 for the Executive’s
services hereunder, payable in accordance with the normal and customary payroll
procedures applicable to the Company’s senior executives.  The Executive’s base
salary shall be subject to increase but not decrease, as determined by the Board
in its discretion (such base salary, as in effect from time to time, the “Base
Salary”).

 

(b)                                 Bonus Opportunity.  During the portion of
the Service Period that the Company is subject to EESA and the Interim Final
Rule (both as defined in Section 11(a) hereof), the Executive shall be eligible
for an annual bonus opportunity, payable solely in the form of “long-term
restricted stock” (as defined in the Interim Final Rule, which term includes
restricted stock units) that will be granted to the Executive, of up to the
maximum amount permitted by EESA and the Interim Final Rule, on the terms and
conditions to be set by the compensation committee of the Board (or the Board,
in the absence of the compensation committee) and set forth in a separate
agreement which shall be entered into on or before March 30 of each year of
grant.  Any long-term restricted stock shall be subject to the service-based
vesting and the vesting limitations required by EESA and the Interim Final
Rule.  The payment or accrual of bonuses, and the grant and vesting of any
long-term restricted stock, pursuant to this Section 2(b) shall in all events be
subject to compliance with Section 11 hereof.  The Executive shall be eligible
for an annual bonus opportunity of such other type and on such performance and
other conditions as shall be determined by the compensation committee of the
Board (or the Board, in the absence of the compensation committee) during any
period after the Company ceases to be subject to EESA and the Interim Final
Rule.  Any such bonus with respect to a year in which the Service Period
terminates shall be payable in full or on a pro-rated basis, depending on the
nature of the Company’s bonus policy at that time.

 

(c)                                  Equity Incentives.  The Executive shall be
entitled to participate in the Bank’s Employee Stock Ownership Plan (the “ESOP”)
in accordance with its terms.  In addition, for any period after the Company
ceases to be subject to EESA and the Interim Final Rule, the Executive shall be
granted equity-based awards pursuant to the Company’s 2008 Long-Term Incentive
Plan on or before March 30 each year of such types and in such amounts as shall
be determined by the compensation committee of the Board (or the Board, in the
absence of the compensation committee) based on the Executive’s performance for
the preceding year.  Such awards shall each vest and, in the case of any stock
options, become exercisable (i) to the extent of thirty three percent (33%) of
the shares covered thereby, on the first anniversary of the date of grant, with
the balance of each such award vesting ratably over the succeeding twenty-four
(24) months for each grant, and (ii) in full in the event of the death or
Disability of the Executive, the termination of the Service Period by the
Company without Cause or the termination of the Service Period by the Executive
for Good Reason.  Any stock options granted to the Executive pursuant to this
Section 2(c) and the 2009 Stock Option Agreement (as defined in Section 14(b)
hereof) shall be exercisable by the Executive’s estate, legal representative or
heirs for a period of one (1) year after termination of the Service Period due
to the death, Disability, termination without Cause or termination for Good
Reason of the Executive. Unless otherwise

 

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prohibited pursuant to Section 11 hereof, all restricted stock granted pursuant
to the 2016 Award Agreement (as defined in Section 14(b) hereof), and any
subsequent restricted stock granted to the Executive shall vest in full in the
event of the death or Disability of the Executive, the termination of the
Executive’s employment without Cause, or the termination of the Executive’s
employment for Good Reason.

 

(d)                                 Other Benefits.  Except as otherwise
provided herein, the Executive shall be eligible to participate in all employee
benefit plans and arrangements of the Company applicable to other senior
executive officers, including, without limitation, the Company’s 401(k) Plan
with continuation of the Company’s current employee contribution matching
policy, and medical, dental, life and long-term disability insurance programs.

 

(e)                                  Vacation.  The Executive shall be entitled
paid vacation in accordance with the Company’s vacation policy; provided, that
the Executive shall be entitled to not less than twenty (20) days of vacation in
each calendar year (or an appropriately pro-rated portion thereof for partial
years).  The Executive shall be permitted to accrue permitted vacation days at
such rate and carry over a maximum of fifteen (15) days of such accrued unused
vacation from year to year.

 

(f)                                   Automobile Allowance.  The Company will
provide the Executive with an automobile allowance in the amount of $1,500 per
month during the Service Period, payable in accordance with the normal and
customary practices applicable to the Company’s senior executives.

 

3.                                      Reimbursement for Expenses.

 

(a)                                 Business Expenses.  The Company shall
promptly reimburse the Executive for all reasonable out-of-pocket business
expenses, including, without limitation, travel expenses incurred by the
Executive in connection with carrying out his responsibilities under this
Agreement during the Service Period upon presentation of appropriate vouchers,
receipts or other satisfactory evidence thereof and otherwise in accordance with
applicable Company policies.

 

(b)                                 Memberships.  The Company shall pay or
reimburse the Executive for social and trade membership dues and fees during the
Service Period in accordance with the Company’s policies and procedures as in
effect from time to time, which policies and procedures shall in all events
include paying the social club dues of the Executive currently paid by the
Company at a rate not exceeding $1,000 per month.

 

4.                                      Service Period.

 

(a)                                 Term.  The “Service Period” during which the
Executive shall perform the Services for the Company pursuant to this Agreement
means the period commencing on the date hereof and, subject to extension as set
forth below, expiring at the close of business on the third (3rd) anniversary of
the date hereof in the year 2020.  Prior to December 31 of each calendar year
during the Service Period, the Board shall review the Executive’s performance,
shall discuss the results of such review with Executive and

 

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promptly shall inform the Executive in writing whether the Board proposes to
extend the Service Period for an additional year, and the results thereof shall
be included in the minutes of the Board’s meeting at which the same has been
considered.  If the Board informs the Executive that it proposes to extend the
Service Period, and the Executive accepts such proposal, the Service Period
shall be extended to end on the anniversary of the date hereof that occurs in
the year immediately following the expiration date of the then existing Service
Period.  Notwithstanding the foregoing, nothing herein shall bar the parties
from (a) extending the Service Period under this Agreement by mutual agreement
or (b) continuing the Executive’s employment by the Company without extension of
this Agreement.

 

(b)                                 Termination.  Notwithstanding the foregoing,
the Service Period may be terminated at any time upon the earliest to occur of
the following events or any of the events identified in Section 7 hereof:

 

(i)                                     Death or Disability.  The Service Period
shall terminate upon the Executive’s death or Disability.  For this purpose,
“Disability” means that either (A) the Executive is deemed disabled for purposes
of any group or individual long-term disability policy maintained by the Company
that covers the Executive, or (B) in the good faith judgment of the Board, the
Executive is substantially unable to perform the Executive’s duties under this
Agreement for more than one hundred twenty (120) days, whether or not
consecutive, in any twelve (12) -month period, by reason of a physical or mental
illness or injury.

 

(ii)                                  Termination for Cause by the Company.  The
Company may terminate the Service Period for Cause at any time effective upon
written notice to the Executive.  For purposes of this Agreement, the term
“Cause” shall mean the termination of the Service Period on account of (A) the
Executive’s failure to substantially perform the Executive’s duties hereunder or
as reasonably assigned to the Executive by the Board and consistent with the
Executive’s obligations hereunder and Executive shall not have cured such
failure (as determined in the reasonable judgment of the Board) within thirty
(30) days after written notice from the Board; (B) the Executive’s material
breach of this Agreement or any material written policy of the Company and
failure of the Executive to have cured such breach (as determined in the
reasonable judgment of the Board) within thirty (30) days after written notice
from the Board; (C) the Executive’s willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses) or entry of a
final cease-and-desist order against the Executive; (D) conviction of a felony
or a plea of nolo contendere to a felony; or (E) conduct by the Executive
constituting a misdemeanor involving a Disqualifier (as defined below) by the
Executive.  “Disqualifier” means (i) fraud, moral turpitude, dishonesty, breach
of fiduciary duty involving personal profit, organized crime or racketeering;
(ii) willful violation of securities or commodities laws or regulations; (iii)
willful violation of depository institution laws or regulations; (iv) willful
violation of housing authority laws or regulations arising from the operations
of the Bank; or (v) willful violation of the rules, regulations, codes of
conduct or ethics of a self-regulatory trade or professional organization.
Notwithstanding the foregoing, the Executive shall not be deemed terminated for
Cause unless and until there shall have been delivered to the Executive a copy
of the resolution duly adopted by the Board at a meeting

 

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of the Board called and held for that purpose (after reasonable notice to the
Executive) and an opportunity for the Executive , together with counsel, to be
heard before the Board), finding that, in the good faith of the Board, the
Executive’s conduct justified termination for Cause and specifying the
particulars thereof in reasonable detail.

 

(iii)                               Termination without Cause by the Company. 
The Company may terminate the Service Period without Cause. For the avoidance of
doubt, “termination without Cause” includes, without limitation, the failure by
the Company for whatever reason to extend the Service Period pursuant to Section
4(a), except if the Executive refuses in writing to accept the then one (1) year
extension of the Service Period.

 

(iv)                              Termination by the Executive for Good Reason. 
The Executive may terminate the Service Period for Good Reason within ninety
(90) days following the initial existence of the circumstances giving rise to
Good Reason, subject to the terms and conditions of this Section 4(b)(iv).  For
purposes of this Agreement, the term “Good Reason” shall mean, unless the
Executive shall have consented in writing thereto, (i) the Executive’s demotion,
loss of title in part or in whole, removal as a director of the Company or the
Bank, loss of office, or reduction of authority, the failure by the stockholders
to elect the Executive as a director of the Company or the obligation of
Executive to report to any senior officer rather than directly to the Board,
(ii) a reduction in the Executive’s base salary, (iii) relocation of the
Executive’s primary work location more than twenty (20) miles from 5055 Wilshire
Boulevard, Los Angeles, California, (iv) a material diminution of the
Executive’s responsibilities, or (v) any material breach of this Agreement by
the Company, including, without limitation, the failure to pay the Executive any
amount when due and payable, pursuant to this Agreement, except in the event of
a bona fide dispute regarding reimbursement of business expenses, provided, that
the Executive shall have delivered written notice to the Company, within thirty
(30) days of the initial existence of the circumstances giving rise to Good
Reason, of the Executive’s intention to terminate the Service Period for Good
Reason, which notice specifies in reasonable detail the circumstances claimed to
give rise to the Executive’s right to terminate the Service Period for Good
Reason, and the Company shall not have cured such circumstances within thirty
(30) days following the Company’s receipt of such notice; provided, however,
that any breach by the Company of a payment obligation hereunder must be cured
within five (5) days (rather than the foregoing 30 days) following the Company’s
receipt of such notice.  If, following such thirty (30)-day period (or such five
(5)-day period, as applicable), the Company has not cured such circumstances and
the Executive decides to proceed with the termination of the Service Period for
Good Reason, such a termination will be effected by providing the Company with a
Notice of Termination, which Notice of Termination shall be effective as of the
date given, without any further right to cure by the Company.

 

(v)                                 Voluntary Termination by the Executive.  The
Executive may voluntarily terminate the Service Period (other than for Good
Reason); provided, that the Executive provides the Company with notice of the
Executive’s intent to terminate the Service Period at least sixty (60) days in
advance of the Date of Termination.

 

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5.                                      Termination Procedure.

 

(a)                                 Notice of Termination.  Any termination of
the Service Period by the Company or by the Executive (other than a termination
on account of the Executive’s death) shall be communicated by written “Notice of
Termination” to the other party in accordance with Section 14(a) hereof. The
Notice of Termination must indicate the specific termination provision in this
Agreement the party giving such notice believes to describe the circumstances
applicable to such termination and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under such provision.

 

(b)                                 Date of Termination.  “Date of Termination”
shall mean (i) if the Service Period expires pursuant to Section 4(a) hereof,
the date on which the expiration of the Service Period occurs; (ii) if the
Service Period is terminated due to the Executive’s death or Disability, the
date of the Executive’s death or the date on which the Notice of Termination is
received by the Executive that the Board made its determination of Disability in
accordance with Section 4(b)(i) (A) or (B) hereof, (iii) if the Company
terminates the Service Period for Cause, the date on which the Notice of
Termination is received by the Executive; (iv) if the Executive terminates the
Service Period for Good Reason, the date on which the Notice of Termination is
given by the Executive (or such earlier date as may be agreed to by the
Company); (v) if the Executive voluntarily terminates the Service Period (other
than for Good Reason), the date specified in the Notice of Termination, which
date shall be no earlier than sixty (60) days after the date such notice is
given pursuant to Section 4(b)(v) hereof, unless otherwise agreed to by the
parties; and (vi) if the Service Period is terminated for any other reason, the
date on which a Notice of Termination is received or any later date (within 30
days, or any alternative time period agreed upon by the parties, after the
giving of such notice) as set forth in such Notice of Termination.
Notwithstanding the foregoing, if the party receiving a Notice of Termination
notifies the other party that a dispute exists concerning the appropriate
characterization of the subject termination for purposes of determining the
Executive’s entitlement to Accrued Obligations and Severance Payments, and any
other benefits hereunder, the Date of Termination shall be the date on which the
dispute shall be finally resolved whether by mutual agreement of the parties, by
a binding arbitration award, or by a final non-appealable judgment or order by a
court of competent jurisdiction, provided that nothing herein modifies the
mandatory arbitration provisions set forth in Section 10 hereof.

 

(c)                                  Continuation of Payment. The Company shall
continue to pay the Executive’s full compensation in effect when the Notice of
Termination giving rise to the dispute described in subsection (b) above was
given (including, but not limited to, the Executive’s then Base Salary) and
continue the Executive as a participant in all employee benefit plans and
arrangements of the Company in which the Executive was participating when the
notice of dispute was given, until the dispute is finally resolved in accordance
with this Agreement. Amounts paid under this Section 5(c) shall not be offset
against, or reduce, any other amounts due to the Executive pursuant to this
Agreement.

 

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6.                                      Rights and Obligations Upon Termination
of the Service Period.

 

(a)                                 Termination by the Company for Disability or
without Cause, or by the Executive for Good Reason.  In the event of the
termination of the Service Period by the Company for Disability or without
Cause, or termination of the Service Period by the Executive for Good Reason,
and to the extent permitted by applicable law and regulations, including,
without limitation, those referred to in Section 11 hereof, the Company shall
pay the Executive, and the Executive shall be entitled to: (i) any unpaid
portion of the Base Salary through the Date of Termination; (ii) any
unreimbursed business expenses in accordance with Section 3(a) hereof; (iii) the
rights set forth in the Stock Option Agreement, the 2016 Award Agreement and any
subsequent restricted stock award granted pursuant to the BFC 2008 Long Term
Incentive Plan, as the sane may be amended, or any other similar plan adopted by
BFC; and (iv) any vested benefits to which the Executive is entitled under the
terms of the Company’s employee benefit plans and programs, including, without
limitation, the ESOP, subject to the terms of such plans and programs
(collectively the “Accrued Obligations”).  In addition, the Company shall
continue to pay the Executive’s monthly Base Salary (i.e., one-twelfth (1/12th)
of Executive’s annual Base Salary in effect as of the date immediately preceding
the date of termination of employment, or the date immediately prior to the
initial existence of circumstances giving rise to Good Reason, as applicable)
for (i) thirty-six (36) months (the “Severance Period”) regardless of the then
remaining portion of the Service Period (each monthly salary continuation
payment shall be deemed to be a separate installment for purposes of Section
409A of the Code) commencing with the first calendar month following the Date of
Termination and (ii) the Company shall continue during the Severance Period to
pay the automobile allowance and social club dues provided for in Sections 2(f)
and 3(b) hereof, and shall continue to pay the Executive for life, long-term
disability, medical and dental insurance premiums in manner consistent with the
Company’s obligations to make such payments pursuant to Section 2(d) (the
payments described in (i) and (ii) being collectively referred to herein as the
“Severance Payments”). All Severance Payments shall be payable in accordance
with normal and customary payroll procedures applicable to the Company’s senior
executives, subject to Section 6(d) hereof. Notwithstanding the foregoing
provisions of this Section 6(a): (i) the Executive’s entitlement to the
Severance Payments shall be subject to and conditioned upon the Executive
delivering to the Company an Irrevocable Release not later than sixty (60) days
after the date of the Executive’s termination of employment; (ii) if such 60-day
period following the Executive’s termination of employment begins in one
calendar year and ends in another, the Severance Payments shall, to the extent
required in order to comply with Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), commence on the first payroll date following the
later of (A) the end of the calendar year in which the Executive’s termination
of employment occurs or (B) the date the Executive satisfies the Irrevocable
Release requirement; and (iii) the Executive’s entitlement to the Severance
Payments shall be subject to and conditioned upon the Executive complying in all
material respects with Sections 8 and 9 of this Agreement.  “Irrevocable
Release” means a mutual general release of claims in the form affixed hereto
marked Exhibit A (except with the date of termination of employment, the date of
such Irrevocable Release and other indicated information filled in) that has
been executed by the Executive and for which the revocation period under Age
Discrimination in Employment Act of 1967, as amended, and the terms of the
release have

 

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expired.  For the avoidance of doubt, this Section 6(a) shall be subject to the
limitations of Section 11 of this Agreement.

 

(b)                                 Death.  If the Service Period is terminated
as a result of the Executive’s death, the Executive or the Executive’s estate or
beneficiaries, as the case may be, shall be entitled to solely the Accrued
Obligations.

 

(c)                                  Termination by the Company for Cause or by
the Executive Voluntarily.  If the Service Period is terminated by the Company
for Cause or voluntarily by the Executive (other than for Good Reason), the
Executive shall be entitled to solely the Accrued Obligations.

 

(d)                                 Change in Control.

 

(i)                                     In the event that the employment of the
Executive by the Company is terminated by the Company without Cause or by the
Executive for Good Reason at any time within three (3) years after a Change in
Control has occurred, the Executive shall have the right to elect to receive a
single lump sum payment of the present value, as determined using a discount
rate equal to the Applicable Federal Rate (as defined below) in effect at the
time of such determination, of all of the payments provided for in Section 6(a)
within ten (10) days after written notice requesting such payment is given to
the Company by the Executive.  If the Executive does not make such election
within thirty (30) days after the Date of Termination, then payment of an amount
equal to the aggregate of the payments provided for in Section 6(a) hereof shall
be made to the Executive in three (3) equal annual installments, the first of
which installment payments shall be made within thirty (30) calendar days
following the Date of Termination and the remaining two of which installment
payments shall be made on January 15th of the respective following years.  As
used herein the term “Applicable Federal Rate” means the rate set forth from
time to time in Table 1 of the Applicable Federal Rate Rulings of the Internal
Revenue Service, or any official successor publication, for debt instruments
maturing within three years and having annual compounding.

 

(ii)                                  As used herein, the term “Change in
Control” shall mean an event with respect to the Company of a nature that (i)
would be required to be reported in response to Item 5.01 of a current report
filed on Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) as in effect on the date of this
Agreement; or (ii) results in any person acquiring control of the Bank or the
Company within the meaning of the Home Owners’ Loan Act of 1933, as amended, and
the rules and regulations Board of Governors of the Federal Reserve System (the
“FRB”) thereunder, (provided, that in applying the definition of change in
control as set forth under such rules and regulations, the Board shall
substitute its judgment for that of the FRB); and, without limitation, such an
acquisition of control shall be deemed to have occurred at such time as (A) any
“person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act
and the regulations of the Securities and Exchange Commission (the “SEC”)
thereunder, including any such persons that may be deemed to be acting in
concert with respect to the Bank or the Company, or the acquisition, ownership
or voting of Bank or Company securities) is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under

 

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the Exchange Act and the regulations of the SEC thereunder, directly or
indirectly, of securities of the Bank or the Company representing fifty percent
(50%) or more of the Bank’s or the Company’s outstanding securities except for
any securities purchased by any tax qualified employee benefit plan of the
Company or the Bank ; or (B) individuals who constitute the Board as of the date
of this Agreement (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters (3/4) of the directors then comprising the Incumbent Board, or
whose nomination for election by the Company’s stockholders was approved by a
nominating committee serving under an Incumbent Board, shall be, for purposes of
this clause (B), considered as though such person were a member of the Incumbent
Board; or (C) a plan of liquidation reorganization, merger, consolidation sale
of all or substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or the Company is not the resulting entity is
approved by the Board and the stockholders of the Company or otherwise occurs;
or (D) solicitations of stockholders of the Company, by someone other than the
Incumbent Board of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or Bank or a similar
transaction with one or more corporations as a result of which the outstanding
shares of the Company’s voting common stock are exchanged for or converted into
cash or property or securities not issued by the Bank or the Company shall be
distributed; or (E) a tender offer is made for twenty percent (20%) or more of
the voting securities of the Bank or the Company.

 

7.                                      Other Termination Provisions.

 

(a)                                 If the Executive is suspended and/or
temporarily prohibited from participating in the conduct of the Company’s
affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)(3) or (g)(1)), the Company’s
obligations under this Agreement shall be suspended as of the date of service
unless stayed by appropriate proceedings.  If the charges in the notice are
dismissed or otherwise withdrawn, the Company shall (but subject in all events
to the requirements of Section 409A of the Code) (i) pay the Executive all of
the compensation withheld while the Company’s obligations under this Agreement
were suspended, and (ii) reinstate all of its obligations which were suspended.

 

(b)                                 If the Executive is removed and/or
permanently prohibited from participating in the conduct of the Company’s
affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all obligations of the
Company under this Agreement shall terminate as of the effective date of the
order, but vested rights of the Executive shall not be affected.

 

(c)                                  If the Company is in default (as the term
“default” is defined in section 3(x)(1) of the Federal Deposit Insurance Act, 12
U.S.C. 1813(x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but vested rights of the Executive shall not be affected.

 

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8.                                      Non-Solicitation.

 

(a)                                 During the period of the Executive’s
employment by the Company, whether pursuant to this Agreement or otherwise, and
for the twelve (12) -month period following the termination of the Executive’s
employment with the Company for any reason, the Executive will not, without the
written consent of the Company, directly or indirectly:

 

(i)                                     influence or attempt to influence any
customer of the Company or any of its affiliates to discontinue its use of the
Company’s (or such affiliate’s) services or to divert such business to any other
person, firm or corporation; provided; however, that a broad and general
advertisement or solicitation not specifically targeting or intending to target
customers of the Company or any of its affiliates shall not be deemed a
violation of this Section 8; or

 

(ii)                                  interfere with, disrupt or attempt to
disrupt the relationship, contractual or otherwise, between the Company or any
of its affiliates and any of its respective employees, customers, suppliers,
principals, distributors, lessors or licensors.  Efforts by the Executive,
whether direct or indirect, (A) to solicit or assist any other person or entity
in soliciting any employee of the Company or any of its affiliates to perform
services for any entity (other than the Company or any of its affiliates) or (B)
to encourage any employee of the Company, or any of its affiliates to leave
their employment with the Company or any of its affiliates shall be in violation
of this Section 8.  A person’s response to a broad and general advertisement or
solicitation not specifically targeting or intending to target employees of the
Company or any of its affiliates shall not be deemed a violation of this Section
8.

 

(b)                                 In the event the Executive materially
breaches any of the provisions contained in Section 8(a) hereof and the Company
seeks compliance with such provisions by judicial proceedings, the time period
during which the Executive is restricted by such provisions shall be extended by
the time during which the Executive has been in violation of any such provision
and any period of litigation required to enforce the Executive’s obligations
under this Agreement.

 

(c)                                  The Executive and the Company intend that
Section 8 of this Agreement be enforced as written.  However, if one or more of
the provisions contained in Section 8 shall for any reason be held to be
unenforceable because of the duration or scope of such provision or the area
covered thereby, the Executive and the Company agree that the court making such
determination shall have the full power to reform, by “blue penciling” or any
other means, the duration, scope and/or area of such provision and in its
reformed form such provision shall then be enforceable and shall be binding on
the parties.

 

9.                                      Confidentiality; Non-Disclosure.

 

(a)                                 The Executive hereby agrees that, during the
Service Period and thereafter, he will hold in strict confidence any proprietary
or Confidential Information related to the Company or any of its affiliates. 
For purposes of this Agreement, the term

 

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“Confidential Information” shall mean all information of the Company or any of
its affiliates (in whatever form) that is not generally known to the public,
including without limitation any inventions, processes, methods of distribution,
customer lists or trade secrets.

 

(b)                                 The Executive hereby agrees that upon the
termination of the Service Period, the Executive shall not take, without the
prior written consent of the Company, any business plans, strategic plans or
reports or other document (in whatever form) of the Company or any of its
affiliates, which is of a confidential nature relating to the Company or any of
its affiliates.

 

10.                               Dispute Resolution; Injunctive Relief.

 

(a)                                 Any dispute, claim or controversy arising
out of or relating to this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including without limitation the
determination of the scope or applicability of this Section 10(a), shall be
determined by arbitration in Los Angeles, California before a single arbitrator
who is a retired judge on the panel of JAMS.  If the parties are unable to agree
upon the selection of one arbitrator, any party may request JAMS to appoint such
arbitrator. The arbitration shall be administered by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures.  The decision of the arbitrator
shall be final and binding on the parties. The scope of discovery shall be
determined by the arbitrator. The prevailing party shall be entitled to recover
reasonable attorneys’ fees and costs in accordance with Section 13(b). Judgment
on the arbitration award may be entered in any court having appropriate
jurisdiction.  This Section 10(a) shall not preclude parties from seeking
provisional remedies in aid of arbitration from a court having appropriate
jurisdiction, nor shall it limit the rights of the Company set forth in Section
10(b) hereof.

 

(b)                                 The parties hereto agree that it would not
be possible to measure in money the damages that would be suffered by the
Company and its affiliates in the event that the Executive were to breach any of
the restrictive covenants set forth in Sections 8 and 9 hereof (the “Restrictive
Covenants”).  In the event that the Executive breaches any of the Restrictive
Covenants, the Company shall be entitled to an injunction restraining the
Executive from violating such Restrictive Covenants (without posting any bond). 
If the Company shall institute any action or proceeding to enforce any such
Restrictive Covenant, the Executive hereby waives the claim or defense that the
Company or any of its affiliates has an adequate remedy at law and agrees not to
assert in any such action or proceeding the claim or defense that the Company or
any of its affiliates has an adequate remedy at law.

 

11.                               TARP and Golden Parachute Restrictions.

 

(a)                                 Notwithstanding anything herein to the
contrary: (i) any payments made to the Executive pursuant to this Agreement or
otherwise are subject to and conditioned upon their compliance with 12 U.S.C.
1828(k) and 12 C.F.R. Part 359 regarding golden parachute and indemnification
payments; (ii) no annual bonus, incentive compensation, severance pay, or golden
parachute payments or benefits shall be paid,

 

11

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provided, or accrued under this Agreement or otherwise to the extent it would
violate Section 111 of Emergency Economic Stabilization Act of 2008, as amended
(“EESA”), and the Interim Final Rule (as hereinafter defined); (iii) no payment
or benefit shall be paid or provided under this Agreement or otherwise to the
extent that it would violate any agreement between or among the Company and the
Board of Governors of the Federal Reserve System, the Office of the Comptroller
of the Currency or any other governmental entity or agency, provided that the
Company shall use commercially reasonable efforts to negotiate the authority and
right to make all payments and provide all benefits to the Executive as and when
contemplated by this Agreement; and (iv) subject to, and in accordance with, the
interim final rule promulgated pursuant to Sections 101(a), 101(c)(5), and 111
of EESA (the “Interim Final Rule”), the Executive shall be required to repay to
the Company the amount of any bonus payment (as defined in the Interim Final
Rule) made during the TARP period (as defined in the Interim Final Rule) to the
extent that the bonus payment was based on materially inaccurate financial
statements (which includes, but is not limited to, statements of earnings,
revenues, or gains) or any other materially inaccurate performance metric
criteria.

 

(b)                                 In the event that the amounts and benefits
payable pursuant to this Agreement, when added to other amounts and benefits
which may become payable to the Executive by the Company and any affiliated
company, are such that the Executive becomes subject to the excise tax
provisions of Section 4999 of the Code relating to “excess parachute payments”
as defined for purposes of Section 280G of the Code, the Company shall pay the
Executive such additional amount or amounts as will result in the Executive’s
retention of a net amount, after the payment of all federal, state and local
excise, employment and income taxes on such payments and the value of such
benefits, equal to the net amount the Executive would have retained had the
initially calculated payment and benefits not been subject to such excise tax
provisions.  For purposes of the preceding sentence, the Executive shall be
deemed to be subject to the highest marginal federal, relevant state and
relevant local tax rate applicable to an individual resident in Los Angeles,
California.  All calculations required to be made under this subsection shall be
made by the Company’s independent public accountants, subject to the right of
Executive’s representative to review the same.  All such amounts required to be
paid by this Section shall be paid at the time any withholding may be required
by the Company, or any taxes may be required to be paid by the Executive, under
applicable law, and any additional amounts to which the Executive may be
entitled shall be paid or reimbursed no later than fifteen (15) days following
confirmation of such amount by the Company’s independent public accountants.  In
the event any amounts paid hereunder are subsequently determined to be in error,
due to estimates required for calculation of such payments being proving to be
inaccurate or otherwise, the parties hereto agree to reimburse each other to
correct such error, as appropriate, and to pay interest thereon at the
applicable federal rate (as determined pursuant to Code Section 1274) for the
period of time such erroneous amount remained outstanding and unreimbursed.  The
parties hereto recognize that the actual implementation of the provisions of
this Section 8(b) are complex and agree to deal with each other in good faith to
resolve any questions or disagreements arising with respect hereto.

 

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12.                               Section 409A.

 

(a)                                 This Agreement is intended to comply with
the requirements of Section 409A of the Code (including the exceptions thereto),
to the extent applicable, and the parties’ Agreement shall be interpreted in
accordance with such requirements.  If any provision contained in the Agreement
conflicts with the requirements of Section 409A of the Code (or the exemptions
intended to apply under the Agreement), the Agreement shall be deemed to be
reformed to comply with the requirements of Section 409A of the Code (or the
applicable exemptions thereto).  Notwithstanding anything to the contrary
herein, for purposes of determining the Executive’s entitlement to the Severance
Payments, (i) the Service Period shall not be deemed to have terminated unless
and until the Executive incurs a “separation from service” as defined in Section
409A of the Code, and (ii) the term “Date of Termination” shall mean the
effective date of the Executive’s separation from service.  Reimbursement of any
expenses provided for in this Agreement shall be made promptly upon presentation
of documentation in accordance with the Company’s policies (as applicable) with
respect thereto as in effect from time to time (but in no event later than the
end of calendar quarter following the year such expenses were incurred);
provided, however, that in no event shall the amount of expenses eligible for
reimbursement hereunder during a calendar year affect the expenses eligible for
reimbursement in any other taxable year.  Notwithstanding anything to the
contrary herein, if a payment or benefit under this Agreement is due to a
“separation from service” for purposes of the rules under Treas. Reg. §
1.409A-3(i)(2) (payments to specified employees upon a separation from service)
and the Executive is determined to be a “specified employee” (as determined
under Treas. Reg. § 1.409A-1(i) and related Company procedures), such payment
shall, to the extent necessary to comply with the requirements of Section 409A
of the Code, be made on the later of (x) the date specified by the foregoing
provisions of this Agreement or (y) the date that is six (6) months after the
date of the Executive’s separation from service (or, if earlier, the date of the
Executive’s death).  Any installment payments that are delayed pursuant to this
Section 12 shall be accumulated and paid in a lump sum on the first day of the
seventh month following the Date of Termination (or, if earlier, upon the
Executive’s death) and the remaining installment payments shall begin on such
date in accordance with the schedule provided in this Agreement.  The Severance
Payments are intended not to constitute deferred compensation subject to Section
409A of the Code to the extent such Severance Payments are covered by (i) the
“short-term deferral exception” set forth in Treas. Reg. § 1.409A-1(b)(4), (ii)
the “two times severance exception” set forth in Treas. Reg. §
1.409A-1(b)(9)(iii), or (iii) the “limited payments exception” set forth in
Treas. Reg. § 1.409A-1(b)(9)(v)(D).  The short-term deferral exception, the two
times severance exception and the limited payments exception shall be applied to
the Severance Payments in order of payment in such manner as results in the
maximum exclusion of such Severance Payments from treatment as deferred
compensation under Section 409A of the Code.  Each installment of the Severance
Payments shall be deemed to be a separate payment for purposes of Section 409A
of the Code.

 

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13.                               Legal Fees.

 

(a)                                 The Company shall promptly reimburse the
Executive for his reasonable legal fees incurred in connection with the
negotiation and preparation of this Agreement.

 

(b)                                 In the event of a dispute between the
parties hereto arising out of or relating to this Agreement, the prevailing
party in any resulting arbitration proceeding or litigation permitted under the
terms of this Agreement shall be entitled to recover such party’s reasonable
attorneys’ fees and costs in addition to any other relief to which such party
shall be entitled.  The determination of which party is the prevailing party
shall be made by the arbitrator or court before whom such arbitration or
litigation is conducted.

 

14.                               Miscellaneous.

 

(a)                                 Any notice or other communication required
or permitted under this Agreement shall be effective only if it is in writing
and shall be deemed to be given when delivered personally or one (1) day after
it is sent by a reputable overnight courier service (with evidence of delivery)
and, in each case, addressed as follows (or if it is sent through any other
method agreed upon by the parties):

 

If to BFC:

 

Broadway Financial Corporation
Attn: Board of Directors
5055 Wilshire Boulevard, Suite 500
Los Angeles, CA 90036

 

If to the Bank:

 

Broadway Federal Bank, f.s.b.
Attn: Board of Directors
5055 Wilshire Boulevard, Suite 500
Los Angeles, CA 90036

 

If to the Executive:

 

Wayne-Kent A. Bradshaw
23265 Bluebird Drive

Calabasas, CA 91302

 

or to such other address as any party hereto may designate by notice to the
others.

 

(b)                                 This Agreement together with the BFC
Non-Statutory Stock Option Agreement dated as of March 18, 2009 (the “2009 Stock
Option Agreement”), the 2016 Award Agreement dated as of March 30, 2016 (the
“2016 Award Agreement”), and the rights of the Executive pursuant to the ESOP
shall constitute the entire agreement among

 

14

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the parties hereto with respect to the subject matter hereof, and supersede and
replace any and all prior understandings or agreements with respect to the
subject matter hereof.

 

(c)                                  Only an instrument in writing signed by the
parties hereto may amend this Agreement, and any provision hereof may be waived
only by an instrument in writing signed by the party or parties against whom or
which enforcement of such waiver is sought.  The failure of any party hereto at
any time to require the performance by any other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by any party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.

 

(d)                                 This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors, assigns, heirs,
executors, administrators and other legal representatives.  Neither this
Agreement nor any right or obligation hereunder may be assigned by the
Executive, except as permitted hereunder.

 

(e)                                  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
this Agreement in the same manner and to the same extent that the Company would
have been required to perform it if no such succession had taken place.  As used
in this Agreement, the term “Company” shall mean the Company and any such
successor (or successors) that assumes this Agreement, by operation of law or
otherwise. Notwithstanding the foregoing, no such assignment or assumption shall
relieve the Company of any obligations hereunder.

 

(f)                                   The parties hereto shall cooperate with
each other and take all actions, including obtaining, any governmental or
stockholder approval, that any of them may determine in good faith to be
required to carry out the terms of this Agreement.

 

(g)                                  The Company may withhold from any amounts
payable to the Executive hereunder all federal, state, city or other taxes that
the Company may reasonably determine are required to be withheld pursuant to any
applicable law or regulation (it being understood, that the Executive shall be
responsible for payment of all taxes in respect of the payments and benefits
provided herein).

 

(h)                                 In the event that the Executive shall
perform services for the Bank or any other affiliate or subsidiary of BFC, any
compensation or benefits provided to the Executive by such other employer shall
be applied to offset the obligations of BFC hereunder, it being intended that
this Agreement set forth the aggregate compensation and benefits payable to the
Executive for all services to the Company and all of its affiliates and
subsidiaries.  BFC shall reimburse the Bank for compensation or benefits paid or
provided by the Bank to the Executive to the extent attributable to the
Executive’s performance of services for BFC in accordance with the applicable
reimbursement policies of BFC and the Bank.

 

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(i)                                     This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
reference to its principles of conflicts of law.

 

(j)                                    This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.  A facsimile of a signature shall be
deemed to be and have the effect of an original signature.

 

(k)                                 The headings in this Agreement are for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof.

 

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

 

 

Broadway Financial Corporation

 

 

 

 

 

/s/ Virgil Roberts

 

Name:

Virgil Roberts

 

Title:

Chairman of the Board

 

 

 

 

 

Broadway Federal Bank, f.s.b.

 

 

 

 

 

/s/ Virgil Roberts

 

Name:

Virgil Roberts

 

Title:

Chairman of the Board

 

 

 

 

 

/s/ Wayne-Kent A. Bradshaw

 

Wayne-Kent A. Bradshaw

 

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EXHIBIT A

 

MUTUAL GENERAL RELEASE OF CLAIMS

 

This Mutual General Release of Claims (“Agreement”) is dated and executed as of
                         ,            (“Execution Date”), by and among Broadway
Financial Corporation (“BFC”), Broadway Federal Bank, f.s.b. (the “Bank” and
together with BFC, the “Company”), and Wayne-Kent A. Bradshaw (“Executive”). 
Each of the parties hereto is referred to individually as a “Party” and
collectively as the “Parties”.

 

RECITALS

 

A.                                    The Company and Executive entered into
that certain Employment Agreement dated as of March 22, 2017 (“Employment
Agreement”).  All capitalized terms herein have the same meaning ascribed to
them in the Employment Agreement, unless otherwise defined herein.

 

B.                                    This Agreement is the mutual general
release contemplated by Section 6 of the Employment Agreement.

 

C.                                    Effective as of                 
         ,                  , Executive’s employment by the Company ceased
pursuant to Section(1) of the Employment Agreement, a copy of which is affixed
hereto marked Exhibit A and incorporated by reference herein.

 

Now, therefore, in consideration of the recitals above, and the mutual covenants
and conditions set forth herein, the Parties agree as follows:

 

1.                                      Effective Date.  The term “Effective
Date” means the date that is eight (8) calendar days after the Execution Date,
provided Executive has not revoked his consent to this Agreement within seven
(7) calendar days after the Execution Date.  If the Effective Date falls on a
weekend or holiday, the Effective Date shall be the business day immediately
following such weekend or holiday.  If Executive revokes his consent to this
Agreement within seven (7) calendar days after the Execution Date, (i) there
shall be no Effective Date, (ii) Executive shall not be entitled to any portion
of the Separation Payments, and (iii) no Party shall have any obligations under
this Agreement.

 

2.                                      Accrued Obligations and Separation
Payments.  The Company, jointly and severally, shall pay the Executive, and the
Executive shall be entitled to receive payment of the Accrued Obligations
pursuant to and in accordance with Section 6 of the Employment Agreement. The
Company, jointly and severally, shall pay Executive the Severance Payments
pursuant to and in accordance with Section 6 of the Employment Agreement.

 

3.                                      Survival of Employment Agreement
Provisions.  Executive and the Company acknowledge and agree that Sections 6(a),
6(d), 8, 9, 10, 11, 12, 13 and 14, together with all subsections thereof, of the
Employment Agreement shall remain in full force and effect, and nothing herein
terminates, amends or otherwise modifies any provision therein.

 

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(1) Insert as applicable: “4(b)(i),” “4(b)(iii)” or “4(b)(iv).”

 

1

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4.                                      Executive Release.

 

4.1                               If the Effective Date occurs, Executive for
himself and on behalf of his heirs, beneficiaries, successors and assigns,
hereby fully releases and discharges (i) the Company and its successors,
predecessors and assigns, and (ii) each of the respective past and present
shareholders, directors, officers, employees, agents, representatives, attorneys
and accountants of the persons and entities described in clause (i) (the persons
and entities described in clauses (i) and (ii), collectively, the “Company
Releasees”), and each of them of and from, without limitation, any and all
rights, claims, liabilities, losses or expenses of any kind whether arising out
of, from, or related to Executive’s employment relationship with any of the
Company Releasees, termination of Executive’s employment, or arising out of any
other matter between Executive and the Company Releasees through and including
the Execution Date.  The claims released in this Agreement include, but are not
limited to, claims based on tort, contract (express or implied and oral or
written), or any federal state, or local law, statute, regulation or ordinance. 
By way of example and not in limitation, this release includes any claims
arising under federal and state wage and hour laws, the Equal Pay Act; the
Family and Medical Leave Act of 1993; Title VII of the Civil Rights Act of 1964,
the Americans with Disabilities Act and the California Fair Employment and
Housing Act, the California Labor Code, the Pregnancy Disability Leave Act, the
Age Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act, all claims under the Employee Retirement Income Security Act, as
well as any claims asserting wrongful termination, harassment, discrimination,
breach of contract, breach of the implied (and any explicit) covenant of good
faith and fair dealing, infliction of emotional distress, misrepresentation,
interference with contract or prospective economic advantage, defamation,
invasion of privacy, and claims related to disability.  Such released claims
also include claims for wages or other compensation due, severance pay, bonuses,
sick leave, vacation pay, insurance or any other fringe benefit. 
Notwithstanding the foregoing, nothing herein waives (i) any rights or claims
Executive may have that cannot lawfully be waived by agreement of the Parties,
including, but not limited to, workers’ compensation benefits, unemployment
insurance benefits, and his indemnification rights under California Labor Code
Sections 2800, et seq., (ii) Executive’s rights to payment of the Accrued
Obligations and the Severance Payments in accordance with this Agreement, (iii)
Executive’s vested rights pursuant to the 2009 Stock Option Agreement, the 2016
Award Agreement and all subsequent restricted stock awards granted to Executive
by the Company, if any, (iv) Executive’s rights under any Company plans that by
their terms survive employment termination, including, without limitation, the
Bank’s Employee Stock Ownership Plan, (v) Executive’s rights to indemnification
pursuant to BFC’s certificate of incorporation and bylaws and the Bank’s charter
and bylaws, and (vi) any and all Executive’s rights arising out of, related to,
or in connection with this Agreement (collectively, the “Executive Reserved
Claims”). In addition, nothing herein shall prevent the Equal Employment
Opportunity Commission from investigating or pursuing any matter that it deems
appropriate; provided, however, Executive understands and agrees that, except as
otherwise arising out of or related to this Agreement, Executive is not and
shall not be entitled to seek any further monetary compensation from any Company
Releasee and that any remedies that may be available to Executive are entirely
superseded by the releases contained in this Agreement.

 

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4.2                               Except for the Executive Reserved Claims,
Executive understands and agrees that the claims released are intended to and do
include any and all claims of every nature and kind whatsoever, whether known or
unknown, suspected or unsuspected, which Executive has or may have against any
of the Company Releasees and Executive hereby waives any and all rights
Executive has or may have under Section 1542 of the California Civil Code which
provides:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

 

Notwithstanding the provisions of Section 1542, as well as laws of similar
effect, and for the purpose of implementing a full and complete release and
discharge of the parties and concerns herein released, Executive expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all claims which Executive does not know or suspects to exist in his
favor at the time of execution hereof, and that all such claims are included
within, and extinguished and discharged by, this Agreement, excluding the
Executive Reserved Claims.  Executive acknowledges that this release constitutes
an unconditional general release of any and all known or unknown claims that
Executive may have against any Company Releasees, excluding the Executive
Reserved Claims, despite the fact that Executive may become aware of claims in
the future which Executive did not consider prior to signing this Agreement.

 

5.                                      Company Release.

 

5.1                               If the Effective Date occurs, each of BFC and
the Bank, for itself and on behalf of its respective stockholders, directors,
successors and assigns, hereby fully releases and discharges Executive and
Executive’s heirs, beneficiaries, successors and assigns (collectively, the
“Executive Releasees”), and each of them of and from, without limitation, any
and all rights, claims, liabilities, losses or expenses of any kind whether
arising out of, from, or related to Executive’s employment relationship with the
Company, termination of Executive’s employment or the Employment Agreement
through and including the Execution Date.  The claims released in this Agreement
include, but are not limited to, claims based on tort, contract (express or
implied and oral or written), or any federal state, or local law, statute,
regulation or ordinance.  By way of example and not in limitation, this release
includes any claims asserting breach of contract, breach of fiduciary duty, the
covenant of good faith and fair dealing, misrepresentation, or interference with
contract or prospective economic advantage.  Notwithstanding the foregoing,
nothing herein waives any claims against Executive for (i) claims arising from
or relating to this Agreement, (ii) claims arising from or relating to the 2009
Stock Option Agreement, (iii) claims arising from or relating to the 2016 Award
Agreement, and all subsequent restricted stock awards granted to Executive by
the Company, if any, (iv) claims arising from or relating to any breach of
provisions from the Employment Agreement that survive beyond the Execution Date,
or (v) claims arising from or relating to any Company plans that by their terms
survive employment termination (collectively, the “Company Reserved Claims”).

 

3

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5.2                               Except for the Company Reserved Claims, the
Company understands and agrees that the claims released are intended to and do
include any and all claims of every nature and kind whatsoever, known or
unknown, suspected or unsuspected, which the Company has or may have against
Executive or any of the other Executive Releasees and the Company hereby waives
any and all rights it has or may have under Section 1542 of the California Civil
Code which provides:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

 

Notwithstanding the provisions of Section 1542, as well as laws of similar
effect, and for the purpose of implementing a full and complete release and
discharge of the parties and concerns herein released, the Company expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all claims which it does not know or suspect to exist in its favor
at the time of execution hereof, and that all such claims are included within,
and extinguished and discharged by, this Agreement, except for the Company
Reserved Claims.  The Company acknowledges that this release constitutes an
unconditional general release of any and all known or unknown claims (except for
the Company Reserved Claims) that it may have against Executive or any other
Executive Releasees, despite the fact that it may become aware of claims in the
future which it did not consider prior to signing this Agreement.

 

6.                                      Representations and Covenants of
Executive.  Executive represents and warrants to, and covenants with, the
Company as of the Execution Date as follows:

 

6.1                               No Claims Against Company.  Executive has not
filed any charges, complaints, grievances, arbitrations, lawsuits, or claims
against the Company, with any local, state or federal agency, union or court
from the beginning of time to the Execution Date, and Executive will not do so
at any time hereafter, based upon events occurring prior to the Execution Date,
excluding any charges, complaints, grievances, arbitrations, lawsuits, or claims
against the Company arising out of or relating to any Executive Reserved
Claims.  In the event any arbitrator or court ever assumes jurisdiction of any
lawsuit, claim, charge, grievance, arbitration, or complaint, or purports to
bring any legal proceeding on his behalf, Executive will ask any such arbitrator
or court to withdraw from and/or dismiss any such action, grievance, or
arbitration, with prejudice, excluding any charges, complaints, grievances,
arbitrations, lawsuits, or claims against the Company arising out of or relating
to any Executive Reserved Claims.

 

6.2                               Non-Assignment of Claims.  Executive has not
assigned or transferred, or purported to assign or transfer, by operation of law
or otherwise, to any person, firm, corporation, partnership or other legal
entity, any debt, claim, obligation, damage, liability, demand, or cause of
action herein released.  Executive, directly or indirectly, shall not prosecute
or maintain or institute any action or proceeding at law or in equity, of any
kind or nature whatsoever against the Company or any other Company Releasees for
any reason related in any way to any claim released in this Agreement, and shall
not raise any claim

 

4

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against the Company or any other Company Releasees by way of defense,
counterclaim or cross-claim or in any other manner, on any alleged claim
released in this Agreement.

 

6.3                               Responsible for Taxes.  Executive shall be
fully responsible for any and all of his income and other taxes relating to or
arising from the payment of the Accrued Obligations and Severance Payments as
required by applicable law, provided nothing herein modifies or amends Section
11(b) of the Employment Agreement.  If Executive fails to pay a tax obligation
required by applicable law relating to or arising from the payment of the
Accrued Obligations and Severance Payments, and if as a result of such failure
the Company becomes liable for, or pays such tax obligation, Executive shall
indemnify and hold harmless the Company for payments actually made by it to
satisfy such obligation.

 

6.4                               Voluntary Signing.  This Agreement is executed
voluntarily, without coercion, and with full knowledge of its significance, and
with Executive’s full understanding of its terms and conditions.  Executive has
received all wages and compensation, as well as reimbursement of expenses, due
and owing to him, excluding any unpaid Accrued Obligations or Severance Payments
or any other payments or benefits which may be due and owing hereunder.

 

7.                                      Representations and Covenants of
Company.  Company represents and warrants to, and covenants with, Executive as
of the Execution Date as follows:

 

7.1                               No Claims Against Executive.  Company,
directly or indirectly, has not filed any charges, complaints, grievances,
arbitrations, lawsuits, or claims against Executive, with any local, state or
federal agency, union or court from the beginning of time to the Execution Date
and that Company will not do so at any time hereafter, based upon events
occurring prior to the Execution Date, not including any charges, complaints,
grievances, arbitrations, lawsuits, or claims against Executive arising out of
or related to any Company Reserved Claims.  In the event any arbitrator or court
ever assumes jurisdiction of any lawsuit, claim, charge, grievance, arbitration,
or complaint, or purports to bring, directly or indirectly, any legal proceeding
on Company’s behalf, Company will ask any such arbitrator or court to withdraw
from and/or dismiss any such action, grievance, or arbitration, with prejudice,
not including any lawsuit, claim, charge, grievance, arbitration, or complaint
arising out of or related to the Company Reserved Claims.

 

7.2                               Non-Assignment of Claims.  Company, directly
or indirectly, has not assigned or transferred, or purported to assign or
transfer, by operation of law or otherwise, to any person, firm, corporation,
partnership or other legal entity, any debt, claim, obligation, damage,
liability, demand, or cause of action herein released.  Company, directly or
indirectly, shall not prosecute or maintain or institute any action or
proceeding at law or in equity, of any kind or nature whatsoever against
Executive or any other Executive Releasees for any reason related in any way to
any claim released in this Agreement, and shall not raise any claim against
Executive or any other Executive Releasees by way of defense, counterclaim or
cross-claim or in any other manner, on any alleged claim released in this
Agreement.

 

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7.3                               Voluntary Signing.  Company has executed this
Agreement voluntarily, without coercion, and with full knowledge of its
significance, and with Company’s full understanding of its terms and
conditions.  As of the Execution Date, Company has paid all wages and
compensation, as well as reimbursement of expenses, due and owing to Executive,
not including any unpaid accrued obligations or Severance Payments or other
payments or benefits which may be due and owing hereunder.

 

8.                                      Representations of Parties.  Each Party
represents and warrants to the other Party as follows: (i) this Agreement
constitutes the legal, valid, and binding obligation of such Party, enforceable
against him or it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, or other similar laws relating to or
affecting creditors’ rights generally, or by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law);  (ii) the Party has the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and to
perform his or its obligations under this Agreement; (iii) neither the execution
and delivery of this Agreement nor the consummation or performance of any of the
transactions contemplated by this Agreement will, directly or indirectly (with
or without notice or lapse of time) contravene, conflict with, or result in a
violation of (A) any provision of any agreement, contract, obligation, promise
or undertaking (whether written or oral and whether express or implied) to which
such Party is a party or by which his or its assets are bound or (B) any award,
decision, injunction, judgment, order, or ruling, in each case that is binding
upon such Party or to which such Party is a party; (iv) the Party will not be
required to give any notice to or obtain any approval, consent, ratification,
waiver or other authorization from any individual, corporation, general or
limited partnership, limited liability company, trust, or other entity in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of his or its respective covenants set forth in this
Agreement, except for such consents, if any, that shall have been obtained on or
prior to the Execution Date.

 

9.                                      Indemnity.

 

9.1                               If Executive breaches any of Executive’s
representations or warranties in Sections 6 (Representations and Covenants of
Executive), or 8 (Representations of Parties), Executive shall defend,
indemnify, and hold the Company and the other Company Releasees harmless from
and against any and all claims, liabilities, losses, judgments, obligations,
damages, costs, expenses, and actions, incurred as a result of such breach,
including, without limitation, reasonable attorneys’ and accountants’ fees and
costs.

 

9.2                               If the Company breaches any of its
representations or warranties in Sections 7 (Representations and Covenants of
Company), or 8 (Representations of Parties), the Company shall defend,
indemnify, and hold Executive and the other Executive Releasees harmless from
and against any and all claims, liabilities, losses, judgments, obligations,
damages, costs, expenses, and actions, incurred as a result of such breach,
including, without limitation, reasonable attorneys’ and accountants’ fees and
costs.

 

10.                               Additional Acknowledgments.  By signing this
Agreement, Executive further acknowledges and consents that Executive hereby has
been advised:

 

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(a)                                 To consult with an attorney prior to signing
this Agreement;

 

(b)                                 That Executive has up to twenty-one (21)
days in which to consider whether he should sign this Agreement, which contains
a release of claims under the Age Discrimination and Employment Act of 1967
(“ADEA”), as amended; and

 

(c)                                  That if Executive signs this Agreement,
Executive will have seven (7) days following the Execution Date to revoke the
Agreement by delivering a notice regarding same to Virgil Roberts, Chairman of
the Board, at the Company’s principal office.  This revocation period cannot be
waived, and Executive is not entitled to receive the Separation Payments prior
to expiration of this revocation period.

 

11.                               Governing Law; No Presumption From Drafting;
Survival of Representations.  This Agreement shall be governed by and
interpreted under the laws of the State of California applicable to contracts
made and to be performed entirely within such State, without regard to its
conflicts of law provisions.  This Agreement has been negotiated by all
Parties.  Accordingly, any rule of applicable law, including, without
limitation, California Civil Code Section 1654, or any other statute or common
law principles of similar effect, which would require interpretation of
ambiguities in this Agreement against the Party that has drafted it, has no
application and is expressly waived.  All representations and warranties made by
any Party herein shall survive the Effective Date.

 

12.                               Dispute Resolution. Any dispute, claim or
controversy arising out of or relating to this Agreement or the breach,
termination, enforcement, interpretation or validity thereof, including without
limitation the determination of the scope or applicability of this Section 12,
shall be determined by arbitration in Los Angeles, California before a single
arbitrator who is a retired judge on the panel of JAMS.  If the parties are
unable to agree upon the selection of one arbitrator, any party may request JAMS
to appoint such arbitrator. The arbitration shall be administered by JAMS
pursuant to its Comprehensive Arbitration Rules and Procedures.  The decision of
the arbitrator shall be final and binding on the parties. The scope of discovery
shall be determined by the arbitrator. The prevailing party shall be entitled to
recover reasonable attorneys’ fees and costs in accordance with Section 13.
Judgment on the arbitration award may be entered in any court having appropriate
jurisdiction.  This Section 12 shall not preclude parties from seeking
provisional remedies in aid of arbitration from a court having appropriate
jurisdiction.

 

13.                               Recovery of Fees and Costs.  In the event that
any legal, equitable, arbitration or other proceeding is brought for the
enforcement or interpretation of this Agreement, or because of an alleged
dispute, breach, default or invalidity in connection with any provision of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and costs incurred, in addition to any other relief to which
such Party may be entitled.

 

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14.                               Severability.  The provisions of this
Agreement are severable.  If any provision herein, or the application thereof to
any person or circumstance shall be held to be invalid or unenforceable, then in
each such event the remainder of this Agreement or the application of such
provision to any other person or any other circumstance shall not be thereby
affected.  In such event, the Parties shall negotiate in good faith to replace
the invalid or unenforceable provision with another reflecting the same relative
distribution of economic benefits and burdens.

 

15.                               Gender and Section Headings.  As used in this
Agreement, the masculine, feminine or neuter gender, and the singular or plural
number, shall each be deemed to include the others whenever the context so
indicates.  Section headings contained herein are for convenience only and shall
not be considered for any purpose in construing this Agreement.

 

16.                               Successors and Assigns.  This Agreement shall
bind and inure to the benefit of the successors, assigns, heirs and personal
representatives of the Company, each of the other Releasees and Executive,
provided no assignment shall relieve the assignor of any obligations hereunder.

 

17.                               Counterparts.  This Agreement may be executed
in several counterparts, each of which shall be deemed an original, and such
counterparts shall together constitute one and the same Agreement, binding all
Parties, notwithstanding that all of the Parties are not signatory to the
original or same counterpart.  A facsimile, or PDF scanned signature page, shall
have the same force and effect as an original signature.

 

18.                               Entire Agreement; Amendment; No Admission of
Liability.  This Agreement together with the 2009 Stock Option Agreement, the
2016 Award Agreement, the Bank Employee Stock Ownership Plan (2) constitute the
entire agreement among the Parties with respect to the subject matter hereof,
and supersede any prior or contemporaneous agreements, representations,
understandings, policies, or practices among the Parties, whether oral or
written, express or implied.  The terms of this Agreement may not be modified,
amended, changed, altered or waived, except in a writing signed by Executive and
a duly authorized representative of the Company.  This Agreement shall not be
construed as an admission of any liability or wrongdoing by Executive or the
Company.

 

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(2) Insert as applicable any other severance and equity incentive agreements
between Executive and the Company that are in effect when this Agreement is
signed.

 

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IN WITNESS WHEREOF, the Parties have entered into this Mutual General Release of
Claims as of the date first above written.

 

 

BROADWAY FINANCIAL CORPORATION

 

 

 

 

 

By:

 

 

 

Its:

 

 

 

 

 

 

 

 

 

BROADWAY FEDERAL BANK, f.s.b.

 

 

 

 

 

By:

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

 

 

Wayne-Kent A. Bradshaw

 

 

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