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                            BROADWAY FINANCIAL CORPORATION

                            RECOGNITION AND RETENTION PLAN
                                FOR OUTSIDE DIRECTORS

                                      ARTICLE I
                                ESTABLISHMENT OF PLAN

     I.1  Broadway Financial Corporation, a Delaware corporation (the
"COMPANY"), hereby establishes this Recognition and Retention Plan ("PLAN") upon
the terms and conditions hereinafter stated in this Plan.


                                      ARTICLE II
                                   PURPOSE OF PLAN

     II.1 The purpose of this Plan is to recognize Outside Directors (as defined
herein) of experience and ability by providing such persons with a proprietary
interest in the Company, as compensation for their contributions to the Company
and its Affiliates, including the Bank, (each as defined herein) and as an
incentive to make such contributions and to promote the Company's growth and
profitability in the future.


                                     ARTICLE III
                                     DEFINITIONS

     The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below.  Whenever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.

     III.1     "AFFILIATE" means (i) a member of a controlled group of
corporations of which the Company is a member or (ii) an unincorporated trade or
business which is under common control with the Company as determined in
accordance with Section 414(c) of the Internal Revenue Code of 1986, as amended
(the "CODE"), and the regulations issued thereunder.  For purposes hereof, a
"controlled group of corporations" shall mean a controlled group of corporations
as defined in Section 1563(a) of the Code determined without regard to Section
1563(a)(4) and (e)(3)(C).

     III.2     "BANK" means Broadway Federal Bank, f.s.b.

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     III.3     "BENEFICIARY" means the person or persons designated by a
Recipient to receive any benefits payable under this Plan in the event of such
Recipient's death.  Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee.  In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, his or her estate.

     III.4     "BOARD" means the Board of Directors of the Company.

     III.5     "Change in Control" of the Bank or the Company means an event of
a nature that:  (i) would be required to be reported in response to Item 1(a) 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 Effective Date of this Plan; or (ii) results in any person acquiring control
of the Bank or the Company within the meaning of the Home Owner's Loan Act of
1933, as amended, and the rules and regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the
Effective Date of this Plan (provided, that in applying the definition of change
in control as set forth under the rules and regulations of the OTS, the Board
shall substitute its judgment for that of the OTS); and, without limitation,
such a Change in 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) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act and the regulations of the SEC thereunder, each as in
effect on the date of the adoption of this Plan by the Board,  directly or
indirectly, of securities of the Bank or the Company representing 20% or more of
the combined voting power of the Bank's or the Company's outstanding securities
except for any securities of the Bank purchased by the Company in connection
with the conversion of the Bank to stock form and any securities purchased by
any tax qualified employee benefit plans of the Bank or the Company; or
(B) individuals who constitute the Board of Directors of the Company on the date
of the adoption of this Plan by the Board (the "INCUMBENT BOARD") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors then comprising the Incumbent
Board, or whose nomination for election by the Company's stockholders was
approved by the same nominating committee serving under an Incumbent Board,
shall be, for purposes of this clause (B), considered as though he or she were a
member of the Incumbent Board; or (C) a plan of liquidation, reorganization, 

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merger, consolidation, sale of all or substantially all the assets of the Bank
or the Company or similar transaction has been approved by the Board and the
stockholders, or otherwise occurs in which the Bank or Company is not the
resulting entity; or (d) a proxy statement soliciting proxies from stockholders
of the Company, by someone other than the current management of the Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or the Bank or similar transaction with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to the plan or transaction 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 20% or more of
the voting securities of the Bank or the Company.

     III.6     "COMMITTEE" means the committee of the Board administering this
Plan, which shall be comprised of members of the Board who are "disinterested
directors" as that term is defined under Rule 16b-3 under the Exchange Act, as
promulgated by the Securities and Exchange Commission.

     III.7     "COMMON STOCK" means shares of the common stock, $.01 par value
per share, of the Company.

     III.8     "COMPANY" means Broadway Financial Corporation, the parent
holding company of the Bank.

     III.9     "CONVERSION" shall mean the conversion of the Bank from the
mutual to stock form of organization and the acquisition of the Bank by the
Company.

     III.10    "DISABILITY" means the permanent and total inability by reason of
mental or physical inability, or both, of a Recipient to perform his or her
responsibilities as an Outside Director.  A medical doctor selected or approved
by the Board of Directors must advise the Committee that it is either not
possible to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of such
Recipient's lifetime.

     III.11    "EFFECTIVE DATE" means August 1, 1997.

     III.12    "EMPLOYEE" means any person who is currently employed on a full
time basis by the Company or an Affiliate, including officers, but such term
shall not include Outside Directors or Directors Emeriti.

     III.13    "OUTSIDE DIRECTOR" means a member of the Board of 

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Directors of the Company or an Affiliate, who is not also an Employee.

     III.14    "PLAN SHARES" means shares of Common Stock held in the Trust and
issued or issuable to a Recipient pursuant to this Plan.

     III.15    "PLAN SHARE AWARD" means a right granted under this Plan to earn
Plan Shares.

     III.16    "PLAN SHARE RESERVE" means the shares of Common Stock held by the
Trustee pursuant to Sections 5.2 and 5.3.

     III.17    "RECIPIENT" means an Outside Director who receives a Plan Share
Award under this Plan.

     III.18    "RETIREMENT" means the termination of service from the Board of
Directors of the Company and/or an Affiliate Company following written notice to
the Board as a whole of such Outside Director's intention to retire or
retirement in accordance with the Company's bylaws or applicable Board policy,
or after reaching age 65, except that a Recipient shall not be deemed to have
retired for purposes of this Plan in the event he or she continues to serve as a
consultant to the Board or as an advisory director.

     III.19    "TRUST" means the trust created by the trust agreement between
the Trustee and the Company established to hold Plan assets.

     III.20    "TRUSTEE" means that person or persons and entity or entities
approved by the Board to hold legal title to any Plan assets for the purposes
set forth herein.


                                      ARTICLE IV
                              ADMINISTRATION OF THE PLAN

     IV.1 ROLE OF THE BOARD AND THE COMMITTEE.  The Trustee and the members of
the Committee provided for in this Plan shall each be appointed or approved by,
and shall serve at the pleasure of, the Board.  The Committee shall have
authority to interpret and administer the provisions of this Plan and shall have
the other powers allocated to it in this and other sections of this Plan.

     IV.2 LIMITATION ON LIABILITY.  No member of the Board or the Committee or
any Trustee(s) shall be liable for any determination made in good faith with
respect to this Plan or any Plan Shares or Plan Share Awards granted under it. 
If a member of the Board 

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or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him or her in such capacity under or with respect to this Plan, the Bank
shall indemnify such member against any expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or her in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in the
best interests of the Bank and its Affiliates and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.


                                      ARTICLE V
                          CONTRIBUTIONS; PLAN SHARE RESERVE

     V.1  AMOUNT AND TIMING OF CONTRIBUTIONS.  At the Effective Date and
thereafter as necessary, the Bank shall contribute to the Trust an amount
sufficient to purchase up to 8,034 shares of Common Stock.  No contributions by
Outside Directors shall be permitted.  The Trustee may hold and commingle
contributions to this Plan and earnings thereon with the assets of any other
Recognition and Retention Plan maintained by the Company.

     V.2  INVESTMENT OF TRUST ASSETS; CREATION OF PLAN SHARE RESERVE.  The
Trustee shall invest all of the Trust's assets exclusively in Common Stock
except as otherwise provided below; PROVIDED, HOWEVER, that the Trust shall not
invest in more than 8,034 shares of Common Stock, which shares shall constitute
the initial "Plan Share Reserve."  The Trustee, in accordance with applicable
rules and regulations, shall purchase shares of Common Stock in the open market
or, in the alternative, shall purchase authorized but unissued shares of Common
Stock from the Company, sufficient to fund the Plan Share Reserve.  Any earnings
received with respect to Common Stock held in the Plan Share Reserve shall be
held in an interest-bearing account.  Any earnings received with respect to
Common Stock subject to a Plan Share Award shall be held in an interest-bearing
account on behalf of the individual Recipient.

     V.3  EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON PLAN SHARE
RESERVES.  Upon the allocation of Plan Share Awards under Section 6.2, or the
decision of the Committee to return Plan Shares to the Company, the Plan Share
Reserve shall be reduced by the number of Plan Shares subject to the Plan Share
Awards so allocated or returned.  Any Plan Shares subject to a Plan Share Award
which may not be earned because of a forfeiture  

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by the Recipient pursuant to Section 7.1 shall be returned (added) to the Plan
Share Reserve for future Plan Share Awards.


                                      ARTICLE VI
                               ELIGIBILITY; ALLOCATIONS

     VI.1 ELIGIBILITY.  Outside Directors of the Company and its Affiliates are
eligible to receive Plan Share Awards.

          VI.2 ALLOCATIONS.

     (a)  Each Outside Director serving in such capacity as of the date of the
Conversion and who is continuing to serve in such capacity at the Effective Date
shall be deemed to be granted a Plan Share Award of 402 Plan Shares (the "FIXED
AWARD").  Each such Outside Director shall also be deemed to be granted
additional Plan Share Awards (the "FIXED SERVICE AWARDS") based on years of
service with the Company, including service with the Bank, which amounts shall
be earned on a non-cumulative basis in accordance with the following schedule:

<TABLE>
<CAPTION>

     YEARS OF SERVICE         FIXED SERVICE AWARDS
     ----------------         --------------------
     <S>                      <C>
           3                  150 Plan Shares 
          15                  300 Plan Shares 
          17                  402 Plan Shares 

</TABLE>

     (b)  Each individual who is first elected as an Outside Director subsequent
to the date of the Conversion ("SUBSEQUENT OUTSIDE DIRECTORS") shall be deemed
to be granted a Plan Share Award of 402 Plan Shares (also referred to herein as
a "FIXED AWARD"), as of the effective date of such election.  Upon completion of
3, 15 and 17 years of service as an Outside Director, each Subsequent Outside
Director shall be deemed to be granted Fixed Service Awards as set forth in this
Section 6.2(a).  Notwithstanding the preceding, no Plan Share Award shall be
deemed to be granted under this Plan to any Subsequent Outside Director who at
any previous time was an employee of either the Company or an Affiliate and in
such capacity was eligible for a "Plan Share Grant" under the Company's
Performance Equity Program for Officers and Employees.

     (c)  If sufficient Plan Shares are not available under this Plan for a
Fixed Award or Fixed Service Award to be made to an Outside Director, including
a Subsequent Outside Director, and thereafter Plan Shares become available
through forfeiture or by reason of the purchase of additional shares of Common
Stock by 

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the Trustee, such Outside Director(s) shall then receive a Plan Share Award,
sharing pro rata among such Outside Directors the number of Plan Shares then
available under this Plan.  The date of such Plan Share Award shall be the date
such Plan Shares become available.

     VI.3 FORM OF ALLOCATION.  As promptly as practicable after a Plan Share
Award has been deemed granted pursuant to Section 6.2, the Recipient shall be
notified in writing of the grant of the Plan Share Award.  Such notice shall
include the number of Plan Shares covered by the Plan Share Award and the terms
upon which the Plan Shares subject to the Plan Share Award may be earned.  The
Bank shall maintain records as to all grants of Plan Share Awards under this
Plan.


                                     ARTICLE VII
                EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

     VII.1     EARNING PLAN SHARES; FORFEITURES.

     (a)  GENERAL RULES.  Plan Shares subject to a Plan Share Award shall be
deemed earned by a Recipient at the rate of twenty percent (20%) annually of the
aggregate number of shares covered by the Plan Share Award commencing one year
from the date of grant for awards made to Outside Directors serving in such
capacity at the time of Conversion.  Subsequent Outside Directors shall be
deemed to earn Plan Shares subject to Plan Share Awards at the rate of twenty
percent (20%) annually commencing one year from the date of grant.  If an
Outside Director is not renominated, reelected or otherwise discontinues service
on the Board or the Board of Directors of an Affiliate prior to earning all Plan
Shares subject to a Plan Share Award for any reason (except as specifically
provided in subsections (b) and (c) below), the Recipient shall forfeit the
right to earn any Shares subject to the Plan Share Award which have not
theretofore been earned.  In determining the number of Plan Shares which are
earned, fractional shares shall be rounded down to the nearest whole number,
provided that such fractional shares shall be aggregated and earned, on the
fifth anniversary of the date of grant.

     (b)  EXCEPTION FOR TERMINATIONS DUE TO DEATH, DISABILITY OR CHANGE IN
CONTROL.  Notwithstanding the general rule contained in Section 7.1(a) above,
Plan Shares subject to a Plan Share Award held by a Recipient whose service as
an Outside Director with the Company or an Affiliate terminates due to death or
Disability, or, to the extent not prohibited by 12 C.F.R. Section 563b.3(g)(4), 
in the event of a Change in Control, shall be deemed earned as of 

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the Recipient's last day of service with the Company or an Affiliate.

     (c)  RETIREMENT.  Notwithstanding the general rule contained in Section
7.1(a) above, all awards held by a Recipient whose service on the Board of the
Company or the Board of Directors of an Affiliate terminates due to Retirement
and who, as of the Recipient's last day of service as a director of the Company
or an Affiliate, is performing services for the Company or an Affiliate as a
consultant or advisory director of the Company or an Affiliate shall not be
forfeited and shall continue to be earned as determined by the Committee;
PROVIDED, HOWEVER, that any unearned shares shall be forfeited upon such
Recipient's termination of services as a consultant or active advisory director
of the Company or any Affiliate.  Plan shares earned pursuant to this subsection
shall be otherwise subject to the provisions of this Plan.

     (d)  REVOCATION FOR MISCONDUCT.  Notwithstanding anything to the contrary,
any Plan Share Award, or portion thereof, previously awarded under this Plan
shall be deemed revoked to the extent Plan Shares have not been delivered
thereunder to the Recipient in the case of an Outside Director who is removed
from the Board of the Company or the Board of Directors of an Affiliate for
cause (as hereinafter defined) by shareholder, regulatory or other appropriate
action.  "Cause" is defined as personal dishonesty, incompetence, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or the willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or a final cease
and desist order.

     VII.2     ACCRUAL OF DIVIDENDS.  Whenever Plan Shares are distributed to a
Recipient or Beneficiary under Section 7.3, such Recipient or Beneficiary shall
also be entitled to receive, with respect to each Plan Share distributed, an
amount attributable to any cash dividends and a number of shares of Common Stock
equal to any stock dividends declared and paid with respect to a share of Common
Stock between the date the relevant Plan Share Award was granted and the date
the Plan Shares are being distributed.  There shall also be distributed an
appropriate amount of net earnings, if any, of the Trust with respect to any
cash dividends so paid out.

     VII.3     DISTRIBUTION OF PLAN SHARES.

     (a)  TIMING OF DISTRIBUTIONS; GENERAL RULE.  Except as provided in
subsection (b) below, Plan Shares shall be distributed to the Recipient or his
or her Beneficiary, as the 

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case may be, as soon as practicable after they have been earned.

     (b)  FORM OF DISTRIBUTION.  All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock. 
One share of Common Stock shall be distributed for each Plan Share earned and
payable.  Payments representing accumulated cash dividends (and earnings
thereon, if any) shall be made in cash or Common Stock.

     VII.4     VOTING OF PLAN SHARES.  After a Plan Share Award has been
granted, the Recipient shall be entitled to direct the Trustee as to the voting
of the Plan Shares which are covered by the Plan Share Award and which have not
yet been earned and distributed to him or her pursuant to Section 7.3.  All
shares of Common Stock held by the Trust as to which Recipients are not entitled
to direct, or have not directed, the voting, shall be voted by the Trustee in
the same proportion as Plan Shares which have been awarded and voted.


                                     ARTICLE VIII
                                    MISCELLANEOUS

     VIII.1    ADJUSTMENTS FOR CAPITAL CHANGES.  In the event of any change in
the outstanding shares of Common Stock of the Company by reason of any stock
dividend or split, recapitalization, merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares effected without receipt or
payment of consideration by the Company, the number of Plan Shares available for
issuance pursuant to this Plan shall automatically be adjusted to prevent
dilution or enlargement of the rights granted to the Recipient under this Plan.

     VIII.2    NONTRANSFERABLE.  Plan Share Awards and rights to Plan Shares
shall not be transferrable by a Recipient, and during the lifetime of the
Recipient, Plan Shares may only be earned by and paid to the Recipient who was
notified in writing of the Award by the Committee pursuant to Section 6.3.

     VIII.3    RIGHT TO SERVE AS A DIRECTOR.  Neither this Plan nor any grant of
a Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee
or the Board in connection with this Plan shall create any right on the part of
any Outside Director to continue in such capacity with the Company or any
Affiliate thereof.

     VIII.4    VOTING AND DIVIDEND RIGHTS.  No Recipient shall 

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have any voting or dividend rights or other rights of a stockholder in respect
of any Plan Shares covered by a Plan Share Award, except as expressly provided
in Sections 7.2 and 7.4 above, prior to the time said Plan Shares are actually
distributed to him or her.

     VIII.5    AMENDMENT OF PLAN.  This Plan may be amended from time to time 
by the Board; PROVIDED, that Sections 6.2 and 7.1 hereof shall not be amended 
more than once every six months other than to comply with the Code or the 
Employee Retirement Income Security Act of 1974, as amended, or the 
respective regulations thereunder.  Except as provided in Section 8.1 hereof, 
rights and obligations under any Plan Share Award granted before an amendment 
shall not be altered or impaired by such amendment without the written 
consent of the Recipient.  If this Plan becomes qualified under 17 C.F.R. 
Section 240.16(b)-3 ("RULE 16(b)-3") of the rules and regulations promulgated 
under the Exchange Act and an amendment would require stockholder approval 
under such Rule 16(b)-3 to retain this Plan's qualification, then subject to 
the discretion of the Board, such amendment shall be presented to the 
stockholders of the Company for ratification, provided, however, that the 
failure to obtain stockholder ratification shall not affect the validity of 
this Plan as so amended and the Plan Share Awards granted thereunder.

     VIII.6    GOVERNING LAW.  This Plan shall be governed by and construed in
accordance with the internal laws of the State of California to the extent not
preempted by the laws of the United States.

     VIII.7    [Reserved.]

     VIII.8    COMPLIANCE WITH SECTION 16.  Transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or any successor
provision under the Exchange Act.  Unless otherwise hereafter determined by the
Board, to the extent any provision of this Plan does not so comply, such
provision shall be deemed null and void, to the extent permitted by law.

     VIII.9    TERM OF PLAN.  This Plan shall remain in effect until the earlier
of (1) 21 years from the Effective Date, (2) termination of this Plan by a
majority of the outstanding shares of the Common Stock entitled to vote;
PROVIDED, HOWEVER, no such termination shall affect the Recipients' rights under
a previously granted Plan Share Award without the consent of the affected
Recipients, or (3) the distribution of all assets of the Trust.  Termination of
this Plan shall not affect any Plan Share Awards previously granted, and such
Plan Share Awards shall 

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remain valid and in effect until they have been earned and paid, or by their
terms expire or are forfeited.


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