Document:

Exhibit 10.1

 

BROADWAY FINANCIAL CORPORATION

 

AWARD AGREEMENT

 

Optionee :

Number of Shares :

Exercise Price :

Date of Grant :

 

Pursuant to this Award Agreement (“Agreement”), Broadway Financial Corporation, a Delaware corporation (the “Company”), has granted an option (the “Option”) to _______________(the “Optionee”), to purchase a total of _________ shares of the Company’s Common Stock (the “Optioned Stock”) at the Exercise Price provided herein, and in all respects subject to the provisions of the Company’s 2008 Long-Term Incentive Plan (the “Plan”), all of which are incorporated herein by reference except as otherwise provided herein.  All terms defined in the Plan shall have the same meanings as used herein.

 

1.        Tax Effects of the Option.  The Option is not intended to be an incentive stock option, as described in Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.        Exercise Price.  The price required to be paid for each share of the Optioned Stock upon exercise of the Option (the “Exercise Price”) is One Dollar and Sixty Two Cents ($1.62).

 

3.        Exercise of Option.  The Option shall be exercisable during its term only in accordance with the following:

 

(i)        Right to Exercise.

 

(a)        The Option shall become exercisable (“vest”) in cumulative installments with respect to 20% of the Optioned Stock on the first anniversary of the Date of Grant of the Option, and as to an additional 20% of the Optioned Stock on each subsequent anniversary of the date of grant, so that 100% of the Optioned Stock shall be exercisable at and after the fifth anniversary of the Date of Grant; provided, however, that in no event shall the Option be exercisable, in whole or part, later than ten years after the date of grant (the “Option Expiration Date”).

 

(b)        Vesting of the Option shall cease immediately upon termination of Optionee’s service as an employee of the Company (including subsidiaries of the Company) for any reason other than termination of such service by the Company in connection with, or in contemplation of, a Change of Control, as defined in Section 6 of the Plan.

 

(c)        In the event of Optionee’s death or permanent disability, this Option may be exercised no later than the earlier to occur of: (i) 12 months after the date of Optionee’s death or termination of service as an

 

 

employee of the Company (including subsidiaries of the Company) due to permanent disability, or (ii) the Option Expiration Date.

 

(d)        In the event of termination of Optionee’s service as an employee of the Company (including subsidiaries of the Company) for any other reason, this Option may be exercised no later than the earlier to occur of: (i) 90 days after Optionee’s termination of such service as an employee, or (ii) the Option Expiration Date.

 

(f)        The exercisability of this Option may be accelerated in certain events as more fully set forth in Section 6 of the Plan.

 

(g)        This Option may not be exercised for a fraction of a share.

 

(ii)       Method of Exercise.  This Option may be exercised by Optionee (or a transferee pursuant to a “qualified domestic relations order” within the meaning of the Code or, in the event of Optionee’s death, by the person or persons to whom that right passes by will or by the laws of descent and distribution), to the extent then vested, by giving written notice of such exercise to the Secretary of the Company.  Such notice shall specify the number of shares of Optioned Stock to be purchased and shall be accompanied by payment, or specification of the method of payment if such payment is to be made as provided in Section 4 (iii) or (iv) hereof, of the Option Price for such shares in any form and manner specified in Section 4.  The form of notice of exercise attached hereto as Exhibit A has been approved for the foregoing purpose by the Committee.  The Company’s obligation to issue or deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements by the Optionee in accordance with Section 5.4 of the Plan.

 

4.        Method of Payment.  Payment of the exercise price shall be made in any of the following ways, or any combination thereof, at the election of the Optionee:

 

(i)        cash;

 

(ii)       check;

 

(iii)      tendering shares of Common Stock of the Company (either by actual delivery or by attestation), including shares otherwise distributable pursuant to the exercise of the Option, which have a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; and

 

(iv)      irrevocably authorizing a third party to sell a sufficient number of the shares of Optioned Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding requirement resulting from such exercise.

 

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5.        Restrictions on Exercise.  The Option may not be exercised if the issuance of shares of the Optioned Stock upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulations, or if such issuance would not comply with the requirements of any stock exchange upon which the shares of the Company’s Common Stock may then be listed.  As a condition to the exercise of the Option, the Company may require Optionee to make any representation and warranty to the Company as may be reasonably requested by the Company to comply or to confirm compliance with any applicable law or regulation.  In addition, the provisions of Section 6 of the Plan regarding exercise of the Option upon a change in Control shall not apply, and the vesting of the Option shall not be accelerated following a Change in Control as therein provided, at any time that such provisions would not be consistent with the requirements of Part 359 of the Rules and Regulations of the Federal Deposit Insurance Corporation (12 C.F.R. Part 359).

 

6.        Non-Transferability of Option.  The Option may not be transferred, pledged or assigned by the holder thereof (except, in the event of the holders’ death, by will or the laws of descent and distribution or pursuant to a “qualified domestic relations order” within the meaning of the Code), and the Company shall not be required to recognize any attempted assignment of such rights by any holder.  During an Optionee’s lifetime, the Option may be exercised only by him or her or by his or her guardian or legal representative.

 

7.        Term of Option.  The Option may not be exercised more than ten years from the date of grant of this Option and may be exercised during such period only in accordance with the Plan and the terms of this Agreement.

 

8.        Taxation Upon Exercise of Option.  Optionee understands that Optionee may be required to recognize income for tax purposes upon exercise of the Option.  Optionee acknowledges and agrees that the Company may withhold shares of Optioned Stock the Optionee is otherwise entitled to receive on exercise of this Option to satisfy tax withholding obligations as provided in Section 5.4 of the Plan.

 

9.        Applicable Law.  The provisions of this Agreement shall be governed by and interpreted in accordance with the laws of the State of California, without regard to the conflict of laws provisions of any jurisdiction.

 

10.       No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.

 

11.       Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

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12.       Force and Effect. The various provisions of this Agreement are severable in their entirety.  Any determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

 

13.       Successors. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.

 

14.       Entire Agreement. This Agreement, together with the Plan, contains the entire understanding of the parties and shall not be modified or amended except by a written document duly signed by both parties hereto. No waiver by either party of any default under this Agreement shall be deemed a waiver of any later default.

 

DATE OF GRANT:

 

	
 
    	
BROADWAY FINANCIAL CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    
						

 

Optionee acknowledges receipt of the copy of the Plan attached hereto, represents that Optionee is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions thereof.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee and of the Board of Directors of the Company upon any questions relating to the Option or otherwise arising under the Plan.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Optionee: [name]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Optionee: [signature]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
 
    	
 
    
				

 

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EXHIBIT A

 

BROADWAY FINANCIAL CORPORATION

 

OPTION EXERCISE NOTICE

 

 

 

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California  90036

 

 

Attention:  Corporate Secretary

 

 

1.        Exercise of Option.  The undersigned (“Optionee”) hereby elects to exercise the option that was granted to Optionee effective as of _________________ to purchase ________________ shares of the Common Stock (the “Shares”) of Broadway Financial Corporation, a Delaware corporation (the “Company”), under and pursuant to the Company’s 2008 Long-Term Incentive Plan(the “Plan”), and the related Award (the “Agreement”).

 

2.        Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understands the Plan and the Agreement.

 

3.        Federal Restrictions on Transfer.  Optionee understands that the Shares must be held indefinitely unless they are registered under the Securities Act of 1933, as amended (the “Securities Act”), or unless an exemption from the registration requirements of the Securities Act is available, and that the certificate(s) representing the Shares may bear a legend to that effect.  Optionee understands that the Company is under no obligation to register the Shares and that an exemption may not be available to permit Optionee to transfer Shares in the amounts or at the times proposed by Optionee.

 

4.        Tax Consequences.  Optionee understands that Optionee may be required to recognize taxable income as a result of Optionee’s purchase or disposition of the Shares being purchased by Optionee pursuant hereto.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of such shares and that Optionee is not relying on the Company for any tax advice.

 

5.        Delivery of Payment.  Optionee herewith delivers to the Company the aggregate exercise price for the shares of the Optioned Stock that Optionee has elected to purchase and has made provision pursuant to Section 5.4 of the Plan for the payment of any federal or state withholding taxes required to be paid or withheld by the Company in connection with this exercise of the Option.

 

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OPTIONEE:
    	
 
    	
 
    	
 
    
	
 
    	
[Name]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

6Exhibit 10.2

 

BROADWAY FINANCIAL CORPORATION

 

AWARD AGREEMENT

 

 

Pursuant to the Broadway Financial Corporation 2008 Long-Term Incentive Plan (the “Plan”), Broadway Financial Corporation (the “Company”) hereby grants a Full Value Award in the form of restricted stock to the Grantee named above covering 120,483 shares of Common Stock of the Company (the “Award”).  Upon acceptance of this Award, the Grantee shall receive the number of shares of Stock of the Company covered by the Award, subject to the restrictions and conditions set forth herein and in the Plan (the “Restricted Stock”).  The Company acknowledges the receipt from the Grantee of consideration with respect to the par value of the Stock in the form of cash, past or future services rendered to the Company by the Grantee or such other form of consideration as is acceptable to the Committee.

 

The Company is currently a participant in the Capital Purchase Program, developed pursuant to the United States Department of Treasury’s Troubled Asset Relief Program (“TARP”) under the Emergency Economic Stabilization Act of 2008, as amended. To the extent that, with respect to this Award, the Grantee is subject to the restrictions of Section 30.10 of 31 C.F.R. part 30, an interim final regulation promulgated by the United States Department of Treasury (“Treasury”) governing executive compensation for recipients of financial assistance under TARP, and the guidance related thereto (the “TARP Rules”), this Award is and shall be intended to satisfy the requirements for and qualify as an award of “long term restricted stock,” as defined the TARP Rules, and this Agreement shall be interpreted and construed in accordance therewith.

 

1. Acceptance of Award. The Grantee shall have no rights with respect to this Award unless Grantee shall have accepted this Award by signing a copy of this Award Agreement and delivering the signed copy to the Company. Upon acceptance of this Award by the Grantee, the shares of Restricted Stock so accepted shall be issued and held by the Company’s transfer agent in book entry form, and the Grantee’s name shall be entered as the stockholder of record on the books of the Company. Thereupon, the Grantee shall have all the rights of a stockholder with respect to such shares, including voting and dividend rights, subject, however, to the restrictions and conditions specified in Paragraph 2 below.

 

2. Restrictions and Conditions.

 

(a) Any certificates or book entries for the shares of Restricted Stock granted herein shall bear an appropriate legend, as determined by the Committee in its sole discretion, to the effect that such shares are subject to restrictions as set forth herein and in the Plan.

 

 

(b) Shares of Restricted Stock granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting.

 

(c) Notwithstanding anything herein or in the Plan to the contrary, but only to the extent the Grantee is subject to the restrictions of Section 30.10 of the TARP Rules with respect to this Award, vested shares of the Stock granted hereunder shall not be transferable (as defined in 26 C.F.R. 1.83–3(d)) at any time earlier than the time permitted under the following schedule (except to the extent provided below or as necessary to reflect a merger or acquisition of the Company (within the meaning of the TARP Rules)):

 

(i) 25 percent of the shares of Stock at the time of repayment of 25 percent of the aggregate financial assistance received by the Company from Treasury under TARP;

 

(ii) an additional 25 percent of the shares of Stock granted (for an aggregate total of 50 percent of the shares of Stock) at the time of repayment of 50 percent of the aggregate financial assistance received by the Company from Treasury under TARP;

 

(iii) an additional 25 percent of the shares of Stock granted (for an aggregate total of 75 percent of the shares of Stock granted) at the time of repayment of 75 percent of the aggregate financial assistance received by the Company from Treasury under TARP; and

 

(iv) the remainder of the shares of Stock granted at the time of repayment of 100 percent of the aggregate financial assistance received by the Company from Treasury under TARP.

 

Notwithstanding the foregoing, at any time beginning with the date upon which shares of Restricted Stock become vested and ending on December 31 of the calendar year including such vesting date, a portion of the vested shares of Stock may be made transferable to the extent reasonably required to pay the Federal, state or local taxes that are anticipated to apply to the income recognized due to such vesting.  The amounts made transferable for such purpose shall not count toward the percentages in the schedule above.

 

3. Vesting of Restricted Stock.  To the extent not previously forfeited, the shares of Restricted Stock shall vest and become nonforfeitable on the earlier of (i) (A) with respect to 100,000 shares of Restricted Stock, the second anniversary of the Date of Grant, and (B) with respect to the remaining 20,483 shares of Restricted Stock, the third anniversary of the Date of Grant, (ii) Grantee’s death or permanent disability, or (iii) Grantee’s termination of employment by the Company (including its subsidiaries or any successor) within one year following a Change in Control; provided, however, that the Change in Control-based vesting provided for in this clause (iii) shall not apply at any time that such vesting would not be consistent with the requirements of Part 359 of the Rules and Regulations of the Federal Deposit Insurance Corporation (12 C.F.R. Part 359).  If Grantee’s employment with the Company (including subsidiaries) terminates for any reason prior to the third anniversary of the Date of Grant, all shares of Restricted Stock that are unvested (and that do not vest upon such termination pursuant to clause (ii) or (iii) of the preceding sentence) shall be immediately forfeited.  For purposes of this Agreement, the term “Change in Control” means, with respect to the Company, a

 

 

change in control within the meaning of Treasury Regulations Section 1.280G-1Q&A 27-29 or Section 1.409A-3(i)(5)(i).  Section 6 of the Plan shall not apply.

 

4. Dividends. Dividends on shares of Restricted Stock shall be paid currently to the Grantee.

 

5. Incorporation of Plan. Except as otherwise provided herein, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Committee set forth in the Plan. Capitalized terms in this Agreement that are not defined herein shall have the meaning specified in the Plan, unless a different meaning is indicated herein. The terms of the Plan shall not be considered an enlargement of any benefits under this Agreement.  In addition, the Award is subject to any rules and regulations promulgated by the Committee.  However, any Award subject to this Agreement may not in any way be restricted or limited by any Plan amendment or termination or by change of Committee rules and regulations approved after the Date of Grant indicated on the first page hereof without the Award recipient’s written consent.

 

6. Transferability. This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than (i) by will or the laws of descent and distribution or (ii) pursuant to an order issued under state domestic relations laws.

 

7. Tax Withholding. The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Committee for payment of all Federal, state, and local taxes required by law to be withheld on account of such taxable event. Except in the case where an election is made pursuant to Paragraph 8 below, and to the extent permitted under Paragraph 2(c) above, the Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued or released by the transfer agent a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due.

 

8. Election Under Section 83(b). The Grantee and the Company hereby agree that the Grantee may, within 30 days following the acceptance of this Award as provided in Paragraph 1 hereof, file with the Internal Revenue Service and the Company an election under Section 83(b) of the Internal Revenue Code. In the event the Grantee makes such an election, he or she agrees to provide a copy of the election to the Company. The Grantee acknowledges that he or she is responsible for obtaining the advice of his or her tax advisors with regard to the Section 83(b) election and that he or she is relying solely on such advisors and not on any statements or representations of the Company or any of its agents with regard to such election.

 

9. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Grantee at any time.

 

10. Notices. Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the

 

 

address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

 

11. Force and Effect. The various provisions of this Agreement are severable in their entirety.  Any determination of invalidity or unenforceability of any one provision shall have no effect on the continuing force and effect of the remaining provisions.

 

12. Successors. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.

 

13.  Applicable Law. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflict of law provisions of any jurisdiction.

 

14. Entire Agreement. This Agreement, together with the Plan, contains the entire understanding of the parties and shall not be modified or amended except by a written document duly signed by both parties hereto. No waiver by either party of any default under this Agreement shall be deemed a waiver of any later default.

 

 

 

 

 

 

 

	
 
    	
 
    
	
 
    	
BROADWAY FINANCIAL   CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof are hereby agreed to by the undersigned.

 

 

	
Dated:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Grantee’s   Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Grantee’s   Name

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