<PAGE>
As filed with the Securities and Exchange Commission on December 5, 1996
REGISTRATION NO. 333-_____
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
BROADWAY FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-4547287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
-------------------------
4835 WEST VENICE BOULEVARD, LOS ANGELES, CALIFORNIA 90019
(Address of principal executive offices) (zip code)
BROADWAY FINANCIAL CORPORATION 1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
BROADWAY FINANCIAL CORPORATION LONG TERM INCENTIVE PLAN
(Full title of the plan)
----------------------------
PAUL C. HUDSON
BROADWAY FINANCIAL CORPORATION
4835 WEST VENICE BOULEVARD
LOS ANGELES, CALIFORNIA 90019
(213) 931-1886
(Name, address, including zip code, and telephone number
including area code, of agent for service)
----------------------------
Copies to:
JAMES R. WALTHER
MAYER, BROWN & PLATT
350 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 229-9500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Share(2) Offering Price Fee
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Common Stock, $0.01 par value 89,269 $9.44 $842,699 $256
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</TABLE>
(1) Of this number, 26,781 shares are being registered for issuance under the
Stock Option Plan for Outside Directors and 62,488 shares are being
registered for issuance under the Long Term Incentive Plan (the foregoing
Plans are referred to herein collectively as the "Plans").
(2) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(c) of the Securities Act of 1933,
as amended, the price per share is estimated to be $9.44, based upon the
average of the bid and asked prices of the common stock, par value
$0.01 per share, of the Registrant as reported on the NASDAQ SmallCap
Market as reported by Tradeline on December 3, 1996.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") AND 17 C.F.R. Section 230.462.
<PAGE>
BROADWAY FINANCIAL CORPORATION.
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEMS 1. & 2. The documents containing the information for the Broadway
Financial Corporation (the "Company" or the "Registrant") 1996 Stock Option Plan
for Outside Directors and the Company's Long Term Incentive Plan (the "Plans")
required by Part I of the Registration Statement will be sent or given to the
participants in the Plans as specified by Rule 428(b)(1). Such documents are
not filed with the Securities and Exchange Commission (the "SEC") either as a
part of this Registration Statement or as a prospectus or prospectus supplement
pursuant to Rule 424 in reliance on Rule 428.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the SEC are incorporated
by reference in this Registration Statement:
(a) The Company's Registration Statement on Form S-1 (File No. 33-96814).
(b) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995 (File No. 00027464).
(c) The Company's Quarterly Report on Form 10-QSB filed by the Registrant
for the fiscal quarter ended March 31, 1996 (File No. 00027464).
(d) The Company's Quarterly Report on Form 10-QSB filed by the Registrant
for the fiscal quarter ended June 30, 1996 (File No. 00027464).
(e) The Company's Quarterly Report on Form 10-QSB filed by the Registrant
for the quarter ended September 30, 1996 (File No. 00027464).
(f) The description of Registrant's Common Stock contained in Registrant's
Form 8-A (File No. 00027464), as filed with the SEC pursuant to Section 12(g) of
the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 12b-15
promulgated thereunder on December 28, 1995.
(g) All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold.
ANY STATEMENT CONTAINED IN THIS REGISTRATION STATEMENT, OR IN A DOCUMENT
INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN, SHALL BE DEEMED
TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS REGISTRATION STATEMENT TO THE
EXTENT THAT A STATEMENT CONTAINED HEREIN, OR IN ANY OTHER SUBSEQUENTLY FILED
DOCUMENT WHICH ALSO IS INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE
HEREIN, MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED
OR
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<PAGE>
SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO
CONSTITUTE A PART OF THIS REGISTRATION STATEMENT.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Directors and officers of the Registrant are indemnified and held harmless
against liability to the fullest extent permissible by the Delaware General
Corporation Law ("DGCL") as it currently exists or as it may be amended provided
any such amendment provides broader indemnification provisions than currently
exists. This indemnification applies to the Directors who administer the Plans.
Section 102(b)(7) of the DGCL provides that a corporation in its original
certificate of incorporation or an amendment thereto may eliminate or limit the
personal liability of a director for monetary damages for a breach of the
director's fiduciary duty, except (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the DGCL (providing for liability of
directors for the willful or negligent violation of Sections 160 or 173 of the
DGCL relating to stock purchases and redemptions and payment of dividends) or
(iv) for any transaction from which a director derived an improper personal
benefit. The Registrant's Certificate of Incorporation provides for the
limitation on personal liability of a director as permitted by Section 102(b)(7)
of the DGCL.
The Certificate of Incorporation and the Bylaws of the Company provide for
indemnification of officers and directors to the fullest extent permitted by
Delaware law. Section 145 of the DGCL provides that a corporation may indemnify
any person, including an officer or director, who is, or is threatened to be
made, a party to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation) by reason of the fact that
such person was an officer, director, employee or agent of such corporation, or
is or was serving at the request of such corporation as an officer, director,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding,
provided such officer, director, employee or agent acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal actions or proceedings, had no
reasonable cause to believe that his or her conduct was unlawful. A Delaware
corporation also may indemnify any such person who is, or is threatened to be
made, a party to an action by or in the right of the corporation as provided
above, except that no indemnification is permitted without judicial approval if
such person is adjudged to be liable
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<PAGE>
to the corporation. If such person is successful on the merits or otherwise in
the defense of any action referred to above, the corporation must indemnify him
or her against the expenses (including attorneys' fees) which such person
actually and reasonably incurred.
In addition, the Company and its officers and directors are covered by
directors' and officers' liability insurance, which generally provides coverage
for losses directors and officers become obligated to pay, or for which the
Company may be required or permitted by law to pay as indemnity to the directors
and officers, for certain claims made against the directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. LIST OF EXHIBITS.
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
4.1 Form of Common Stock Certificate.
5.1 Opinion of Mayer, Brown & Platt, Los Angeles, California as to the
legality of the Common Stock registered hereby.
23.1 Consent of Mayer, Brown & Platt (contained in the opinion included as
Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney is located on the signature pages.
99.1 Broadway Financial Corporation 1996 Stock Option Plan for Outside
Directors.
99.2 Broadway Financial Corporation Long Term Incentive Plan.
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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<PAGE>
(ii) To reflect in the Prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
and
(iii) To include any additional or changed material information on the plan
of distribution.
unless the information required by (i) and (ii) is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference into this Registration
Statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the Offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
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<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on December 4, 1996.
BROADWAY FINANCIAL CORPORATION
By: /s/ Paul C. Hudson
------------------------------
Paul C. Hudson
CHIEF EXECUTIVE OFFICER AND PRESIDENT
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Paul C.
Hudson or Bob Adkins or any of them, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ Paul C. Hudson
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Paul C. Hudson
Chief Executive Officer, President
and Director
/s/ Bob Adkins
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Bob Adkins
Senior Vice President,
Principal Financial Officer and
Principal Accounting Officer
<PAGE>
/s/ Elbert T. Hudson
- -----------------------------------------
Elbert T. Hudson
Chairman of the Board
/s/ Kellogg Chan
- -----------------------------------------
Kellogg Chan
Director
/s/ Dr. Willis K. Duffy
- -----------------------------------------
Dr. Willis K. Duffy
Director
/s/ Rosa M. Hill
- -----------------------------------------
Rosa M. Hill
Director
/s/ A. Odell Maddox
- -----------------------------------------
A. Odell Maddox
Director
/s/ Lyle A. Marshall
- -----------------------------------------
Lyle A. Marshall
Director
/s/ Larkin Teasley
- -----------------------------------------
Larkin Teasley
Director
DATED: December 4, 1996
<PAGE>
COMMON STOCK COMMON STOCK
PAR VALUE $.01 CUSIP 111444105
SEE REVERSE FOR CERTAIN DEFINITIONS
BROADWAY FINANCIAL CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
SPECIMEN
is the owner of:
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK $.01 PAR VALUE PER SHARE OF
BROADWAY FINANCIAL CORPORATION
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon the surrender of this Certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be held subject to all the provisions of the Certificate of Incorporation
of the Corporation and any amendments thereto (copies of which are on file with
the Transfer Agent), to all of which provisions the holder by acceptance hereof,
assents.
This certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar. The shares represented by this Certificate are
not insured by the Federal Deposit Insurance Corporation or any other government
agency.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated: [SEAL]
President Secretary
Countersigned and Registered
American Securities Transfer Incorporated
(P.O. Box 1596, Denver, CO 80201)
Transfer Agent and Registrar
<PAGE>
The shares represented by this certificate are subject to a limitation
contained in the Certificate of Incorporation to the effect that in no event
shall any record owner of any outstanding common stock which is beneficially
owned, directly or indirectly, by a person who beneficially owns in excess of
10% of the outstanding shares of common stock (the "Limit") be entitled or
permitted to any vote in respect of shares held in excess of the Limit.
The Board of Directors of the Corporation is authorized by resolution(s),
from time to time adopted, to provide the issuance of serial preferred stock in
series and to fix and state the voting powers, designations, preferences and
relative, participating, optional, or other special rights of the shares of each
such series and the qualifications, limitations and restrictions thereof. The
Corporation will furnish to any shareholder upon request and without charge a
full description of each class of stock and any series thereof.
The shares represented by this certificate may not be cumulatively voted on
any matter. The affirmative vote of the holders of at least two-thirds of the
voting stock of the Corporation, voting together as a single class, shall be
required to approve certain business combinations and other transactions,
pursuant to the Certificate of Incorporation or to amend certain provisions of
the Certificate of Incorporation.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFTS MIN ACT - _______ custodian _______
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act
_________________________________
(State)
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
For value received, ____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFICATION NUMBER OF ASSIGNEE
________________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
__________________________________ shares of common stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint
___________________________________ Attorney to transfer the said stock on the
books of the within-named Corporation with full power of substitution in the
premises.
DATED:________________________ ________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
SIGNATURE GUARANTEED: _______________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO S.E.C. RULE 17A-d-15.
<PAGE>
December 4, 1996
Board of Directors
Broadway Financial Corporation
4835 West Venice Boulevard
Los Angeles, California 90019
Ladies and Gentlemen:
We have acted as special counsel to Broadway Financial Corporation, a
Delaware corporation (the "Corporation"), in connection with the preparation and
filing with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, of a Registration Statement on Form S-8 (the
"Registration Statement"), relating to the registration of up to 89,269 shares
of Corporation common stock, $0.01 par value per share ("Common Stock"), to be
issued pursuant to (i) the Corporation's 1996 Stock Option Plan for Outside
Directors (the "Option Plan") upon the exercise of stock options ("Option
Rights") and (ii) the Corporation's Long Term Incentive Plan (the "LTIP"). We
have been requested by the Corporation to furnish this opinion to be included as
an exhibit to the Registration Statement.
We have reviewed the Registration Statement, the Certificate of
Incorporation and Bylaws of the Corporation, the Option Plan, the LTIP, a
specimen stock certificate evidencing the Common Stock of the Corporation and
such other corporate records and documents as we have deemed appropriate for the
purpose of rendering this opinion. We have also reviewed and relied upon the
originals, or copies certified or otherwise identified to our satisfaction, such
records of the Corporation and such other instruments, certificates and written
and oral representations of public officials, and officers and representatives
of the Corporation as we have deemed appropriate or relevant as a basis for the
opinion set forth below. In addition, we have assumed, without independent
verification, the genuineness of all signatures and the authenticity of all
documents furnished to us and the conformity in all respects of copies to
originals.
For purposes of this opinion, we have also assumed that (i) the shares of
Common Stock issuable pursuant to Option Rights granted under the terms of the
Option Plan will continue to be
<PAGE>
Board of Directors
Broadway Financial Corporation
December 4, 1996
Page 2
validly authorized on the dates the Common Stock is issued pursuant to the
Option Rights; (ii) on the dates the Option Rights are exercised, the Option
Rights granted under the terms of the Option Plan will constitute valid, legal
and binding obligations of the Corporation and will (subject to applicable
bankruptcy, moratorium, insolvency, reorganization and other laws and legal
principles affecting the enforceability of creditors' rights generally) be
enforceable as to the Corporation in accordance with their terms; (iii) no
change will occur in applicable law or the pertinent facts; and (iv) the
provisions of applicable state securities laws will have been complied with to
the extent required.
Based upon the foregoing, and subject to the qualifications and assumptions
set forth herein, we are of the opinion as of the date hereof that the shares of
Common Stock to be issued pursuant to the Option Plan and the LTIP, when issued
pursuant to and in accordance with the Registration Statement, the Option Plan
and the LTIP and, upon receipt of the consideration required thereby, will be
legally issued, fully paid and non-assessable shares of Common Stock of the
Corporation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/Mayer, Brown & Platt
MAYER, BROWN & PLATT
<PAGE>
CONSENT OF INDEPENDENT AUDITORS'
The Board of Directors
Broadway Financial Corporation:
We consent to incorporation by reference in the registration statement dated on
or about December 5, 1996, on Form S-8 of Broadway Financial Corporation and
subsidiaries of our report dated March 11, 1996, relating to the consolidated
balance sheets of Broadway Federal Bank, f.s.b. and subsidiary (formerly
Broadway Federal Savings and Loan Association) as of December 31, 1995 and 1994,
and the related consolidated statements of earnings, retained earnings, and cash
flows for each of the years in the three-year period ended December 31, 1995,
which report appears in the December 31, 1995, annual report on Form 10-KSB of
Broadway Financial Corporation.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
December 5, 1996
<PAGE>
BROADWAY FINANCIAL CORPORATION
1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
I. PURPOSE
The purpose of this 1996 Stock Option Plan for Outside Directors (the
"PLAN") is to promote the growth and profitability of Broadway Financial
Corporation (the "HOLDING COMPANY") and Broadway Federal Bank, f.s.b. (the
"BANK") by providing Outside Directors (as defined in Section II(a)) of the
Holding Company and its affiliates, including the Bank, with an incentive to
achieve the long-term objectives of the Holding Company and to attract and
retain non-employee directors of outstanding abilities by providing such outside
directors with an opportunity to acquire an equity interest in the Holding
Company.
II. GRANT OF OPTIONS
(a) INITIAL GRANT. Each member of the Board of Directors of the Holding
Company or any of its affiliates not also serving as a full-time employee of the
Holding Company or any of its affiliates (an "OUTSIDE DIRECTOR"), who was
serving in such capacity on the date of the Holding Company's initial public
offering of securities and who is continuing in such service at the effective
date of this Plan, is hereby granted a nonqualified stock option ("OPTION") to
purchase shares of the common stock, $0.01 par value of the Holding Company
("COMMON STOCK"), subject to adjustment pursuant to Section IV, based on the
number of his or her years of service with the Holding Company or any of its
affiliates on a non-cumulative basis in accordance with the following schedule:
Years of Service Shares Granted
---------------- --------------
0 - 2 892
3 - 14 1,620
15 - 18 3,101
The purchase price per share of the Common Stock deliverable on exercise of
Options shall be the Fair Market Value (as defined in paragraph (d) below) of
the Common Stock on the date of grant. The grants provided for in this
paragraph (a) shall be deemed granted on the Effective Date (as defined in
Section V).
(b) GRANTS TO SUBSEQUENT OUTSIDE DIRECTORS. Each Outside Director who is
first elected as a director subsequent to the Effective Date ("SUBSEQUENT
OUTSIDE DIRECTOR") shall be granted an Option in accordance with the following:
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<PAGE>
(i) To the extent shares are then available under this Plan, as of
the date on which such Subsequent Outside Director is qualified
and first begins to serve as an Outside Director, the Subsequent
Outside Director shall be granted an Option to purchase 892
shares of Common Stock, subject to adjustment pursuant to Section
IV.
(ii) The purchase price per share of the Common Stock deliverable upon
exercise of such Option shall equal the Fair Market Value of a
share of Common Stock on the date the Option is granted.
(iii) If sufficient shares are not available under this Plan to fulfill
the grants of Options provided for in subparagraph (i) above, and
thereafter shares become available for such purpose, each
Subsequent Outside Director who has not previously received an
Option for the full number of shares set forth in subparagraph
(i) above, shall receive an Option to purchase the number of
shares of Common Stock determined by dividing pro rata among each
such Subsequent Outside Directors the number of shares then
available under this Plan, but in no event shall a Subsequent
Outside Director receive an Option for a number of shares which
exceeds the number of shares set forth in subparagraph (i). The
date of grant for Options awarded under this subparagraph (iii)
shall be the date shares become available. The purchase price
per share of the Common Stock deliverable upon exercise of each
such Option shall equal the Fair Market Value of a share of
Common Stock on the date the Option is granted.
(c) INELIGIBILITY. An Option under this Plan shall not be granted to any
Outside Director who at any previous time was an employee of either the Holding
Company or the Bank and in such capacity was eligible to receive any Options to
purchase Common Stock.
(d) FAIR MARKET VALUE. For purposes of this Plan, "Fair Market Value"
means the average of the high and low bid prices of the Common Stock as reported
by the Nasdaq Small-Cap Stock Market (as published by the Wall Street Journal,
if then so published) or, if the Common Stock is then listed on or quoted
through a stock exchange or transaction reporting system on or through which
actual sale prices are regularly reported, the closing sale price of the Common
Stock, on the grant date, or if the Common Stock was not traded on such date, on
the next preceding day on which the Common Stock was quoted or traded, as the
case may be.
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<PAGE>
III. TERMS AND CONDITIONS
(a) OPTION AGREEMENT. Each Option shall be evidenced by a written option
agreement between the Holding Company and the recipient specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
such other terms and conditions as are necessary or appropriate and not
inconsistent with the terms of this grant.
(b) VESTING. Subject to paragraph (e) below, each Option granted shall
vest (become exercisable) in five annual cumulative installments of twenty
percent (20%) per year, commencing on the first anniversary of the grant date
and each subsequent anniversary thereof.
(c) MANNER OF EXERCISE. The Option may be exercised from time to time, in
whole or in part to the extent then vested, by delivering a written notice of
exercise to the Chief Executive Officer of the Holding Company. Such notice is
irrevocable and must be accompanied by full payment of the exercise price (as
determined in accordance with Section II(a) or (b)) in cash or shares of
previously acquired Common Stock of the Holding Company, or in a combination of
cash and previously acquired shares. To the extent shares of Common Stock are
tendered in payment of all or part of the exercise price, such shares shall be
valued at the Fair Market Value thereof on the date of exercise.
(d) TRANSFERABILITY. Each option granted herein may be exercised only by
the Outside Director to whom it is issued or in the event of the Outside
Director's death, his or her personal representative(s) or designee(s), heir(s)
or devisee(s), if applicable under paragraph (e) below.
(e) TERMINATION OF SERVICE; CHANGE OF CONTROL. Upon the termination of
Outside Director's service on the Board for any reason other than Disability (as
defined herein), death, Removal for Cause (as defined herein) or, to the extent
not prohibited by 12 C.F.R. Section 563b.3(g)(4), following a Change in Control
(as defined herein) of the Bank or the Holding Company, the Outside Director's
Option shall be exercisable within the period described in paragraph (f) below,
but only to the extent the Option was vested at the date of termination.
In the event of death or termination of service due to Disability of any
Outside Director or, to the extent not prohibited by 12 C.F.R. Section
563b.3(g)(4), following a Change in Control of the Bank or Holding Company, an
Option held by such Outside Director, whether or not exercisable at such time,
shall become immediately exercisable by the Outside Director or the Outside
Director's legal representatives or beneficiaries. In
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<PAGE>
the event of a Change in Control as the result of a Terminating Event (as
defined herein), the Outside Director's Option will become exercisable pursuant
to this paragraph only if no provision has been made in writing in connection
with such Terminating Event for the continuance of this Plan and for the
assumption of the Options theretofore granted hereunder, or the substitution for
such Options of new awards issued by the successor corporation or, if
applicable, the publicly traded entity that is the parent entity of the
successor corporation, with such appropriate adjustments as may be determined or
approved by a committee of the Board of Directors or its successor, in which
event this Plan and the Options theretofore granted or substituted therefor
shall continue in the manner and under the terms so provided.
For purposes of this Plan the following terms are defined as follows:
(i) As used herein, a "CHANGE IN CONTROL" of the Bank or the Holding
Company shall mean an event of a nature that (i) would be
required to be reported in response to Item 1 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 Holding
Company within the meaning of the Home Owners' 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 by the Board of
Directors of the Holding Company (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 and the regulations of the Securities and Exchange
Commission ("SEC") thereunder, each as in effect on the date of
the adoption of this Plan by the Board of Directors of the
Holding Company, and including any such persons that may be
deemed to be acting in concert with respect to the Bank or the
Holding Company, or the acquisition, ownership or voting of Bank
or Holding Company securities) is or becomes the "beneficial
owner" (as defined in
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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 of Directors of the Holding Company), directly
or indirectly, of securities of the Bank or the Holding Company
representing 20% or more of the Bank's or the Holding Company's
outstanding securities except for any securities of the Bank
purchased by the Holding Company in connection with the
conversion of the Bank to stock form and any securities purchased
by any tax-qualified employee benefit plan of the Bank or the
Holding Company; or (B) individuals who constitute the Board on
the date of the adoption of this Plan by the Board of Directors
of the Holding Company (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 Holding 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, merger,
consolidation, sale of all or substantially all the assets of the
Bank or the Holding Company or similar transaction is not the
resulting entity (a "TERMINATING EVENT"), is approved by the
Board of Directors and stockholders or otherwise occurs; or (D)
solicitations of stockholders of the Holding Company, by someone
other than the Incumbent Board of the Holding Company, seeking
stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company or 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
this Plan are exchanged for or converted into cash or property or
securities not issued by the Bank or the Holding Company shall be
distributed; or (E) a tender offer is made for 20% or more of the
voting securities of the Bank or the Holding Company; or (F) any
other event, transaction or series of transactions occurs as a
result of which any person may be deemed to "acquire
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<PAGE>
control" of the Bank or the Holding Company (as such terms are
defined in the regulations of the OTS set forth at 12 C.F.R.
Part 574 as in effect on the Effective Date).
(ii) "DISABILITY" means the permanent and total inability by reason
of mental or physical infirmity, or both, of an Outside Director
to perform his or her duties as such. If requested by the Board
of Directors, a medical doctor selected or approved by the Board
of Directors must advise the Board 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 Director's lifetime.
(iii) "REMOVAL FOR CAUSE" means the removal of the Outside Director by
shareholder, regulatory or other appropriate action because of a
material loss to the Holding Company or one of its affiliates
caused by the Outside Director's personal dishonesty, 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 final cease and
desist order.
(f) TERMINATION OF OPTION. Each Option shall expire upon the earlier of
(i) 120 months following the date of grant, or (ii) one year following the date
on which the recipient ceases to serve in the capacity of Outside Director,
consultant or advisory director for any reason other than Removal for Cause. If
the Outside Director dies before fully exercising any portion of an Option then
exercisable, such Option may be exercised by such Outside Director's
beneficiary, personal representative(s), heir(s) or devisee(s) at any time
within the one year period following his or her death; provided, however, that
in no event shall the option be exercisable more than 120 months after the date
of its grant. If the Outside Director's service terminates on account of
Removal for Cause, Option awarded to him or her shall expire upon such removal.
IV. COMMON STOCK SUBJECT TO THIS PLAN
The shares which shall be issued and delivered upon exercise of Options
granted under this Plan may be either authorized and unissued shares of Common
Stock or authorized and issued shares of Common Stock purchased by the Holding
Company. The number of
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shares of Common Stock reserved for issuance under this Plan shall not exceed
26,781 shares of the Common Stock, subject to adjustments pursuant to this
Section IV. Any shares of Common Stock subject to an Option which for any
reason either terminates unexercised or expires, shall again be available for
issuance under this Plan.
In the event of any change or changes in the outstanding Common Stock of
the Holding Company by reason of any stock dividend or stock split,
recapitalization, reorganization, merger, consolidation, spin-off, combination
or any similar corporate change, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Company, the number
of shares of Common Stock which may be issued under this Plan, the number of
shares of Common Stock subject to Options granted under this Plan and the
exercise price of such Options, shall be automatically adjusted to prevent
dilution or enlargement of the rights granted to recipient under this Plan.
V. APPROVAL AND EFFECTIVE DATE OF THIS PLAN
Pursuant to OTS regulations, this Plan must be approved by the OTS and a
majority of the Holding Company's stockholders. This Plan shall become
effective on December 1, 1995 (the "EFFECTIVE DATE"), stockholder approval has
been obtained. No Options shall be granted under this Plan prior to the
Effective Date. In the event this Plan does not receive stockholder approval,
this Plan shall be null and void.
VI. TERMINATION OF THIS PLAN
The right to grant Options under this Plan will terminate automatically
upon the earlier of ten years after the Effective Date of this Plan or the
issuance of the maximum number of shares of Common Stock reserved for issuance
pursuant to this Plan.
VII. AMENDMENT OF THIS PLAN
This Plan may be amended from time to time by the Board of Directors of the
Company provided that Section II and III hereof shall not be amended more than
once every six months other than to comport with the Internal Revenue Code of
1986, as amended, or the Employee Retirement Income Security Act of 1974, as
amended, or the respective rules thereunder. Except as provided in Section IV
hereof, rights and obligations under any Option granted before an amendment
shall not be altered or impaired by such amendment without the written consent
of the optionee. If this Plan satisfies the requirements of Rule 16b-3 ("RULE
16b-3") of the Exchange Act, and an amendment would require stockholder approval
to retain this Plan's exemption under Rule 16b-3, then subject to the discretion
of the Board of Directors of the
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Holding Company, such amendment shall be presented to stockholders for
ratification, provided, however, that the failure to obtain stockholder
ratification shall not affect the validity of this Plan as so amended and the
Options granted thereunder.
VIII. APPLICABLE LAW
This Plan shall be governed by and construed in accordance with the
internal laws of the State of California.
IX. COMPLIANCE WITH SECTION 16
Unless otherwise hereafter determined by the Board of Directors of the
Holding Company, to the extent that any provision of this Plan fails to satisfy
the requirements of Rule 16b-3, such provisions shall be deemed null and void,
to the extent permitted by law.
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BROADWAY FINANCIAL CORPORATION
LONG TERM INCENTIVE PLAN
Section 1
PURPOSE
The purpose of this Broadway Financial Corporation 1996 Long Term Incentive
Plan (this "PLAN") is to increase stockholder value and to advance the interests
of Broadway Financial Corporation (the "HOLDING COMPANY") and its subsidiary,
Broadway Federal Bank, f.s.b. (the "BANK") (the Holding Company and Bank are
collectively referred to herein as the "COMPANY") by awarding equity based
incentives designed to attract, retain and motivate employees.
.
Section 2
ADMINISTRATION
2.1. ADMINISTRATION BY COMMITTEE. This Plan shall be administered by a
committee (the "COMMITTEE") consisting of two or more members of the Holding
Company's Board of Directors ("Board"), who are appointed and may be removed by
the Board, and who are "disinterested persons" within the meaning of Securities
and Exchange Commission Rule 16b-3 ("RULE 16B-3") promulgated under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and "outside
directors" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "CODE").
2.2. AUTHORITY. Subject to the provisions of this Plan, the Committee
shall have the authority to (a) manage and control the operation of this Plan,
(b) interpret and construe the provisions of this Plan, and prescribe, amend and
rescind rules and regulations relating to this Plan, (c) make awards under this
Plan in such forms and amounts and subject to such restrictions, limitations and
conditions as it deems appropriate, including, without limitation, awards which
are made in combination with or in tandem with other awards (whether or not
contemporaneously granted), (d) modify the terms of outstanding awards, (e)
prescribe the form of agreement, certificate or other instrument evidencing any
award under this Plan, (f) correct any defect or omission and reconcile any
inconsistency in this Plan or in any award hereunder, and (g) make all other
determinations and take all other actions as it deems necessary or desirable for
the implementation and administration of this Plan. The determination of the
Committee on matters within its authority shall be conclusive and binding on the
Company and all other persons.
Section 3
PARTICIPATION
<PAGE>
All employee of the Company, or of any subsidiaries or affiliates, are
eligible to receive awards granted pursuant to this Plan. Subject to the terms
and conditions of this Plan, the Committee shall determine and designate from
time to time the employees of the Company and its subsidiaries and affiliates
(including employees who are directors) who shall receive awards under this Plan
("PARTICIPANTS").
Section 4
SHARES SUBJECT TO THIS PLAN
4.1. NUMBER OF SHARES RESERVED. Subject to adjustment in accordance with
subsection 4.2, the maximum number of shares of common stock, $0.01 par value,
of the Holding Company ("COMMON STOCK") which may be issued under this Plan
shall not exceed 62,488 shares in the aggregate, and shall not exceed 4,463
shares with respect to any one individual in any calendar year. Such shares may
be either authorized and unissued shares, treasury shares or a combination
thereof, as the Committee shall determine. The number of shares related to
awards that expire unexercised or are forfeited, surrendered, terminated or
cancelled (except for shares of Common Stock withheld or surrendered to satisfy
tax withholding obligations) shall again be available for additional awards
under this Plan unless this Plan shall have terminated.
4.2. ADJUSTMENTS TO SHARES RESERVED. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, stock dividend, stock
split, reverse stock split, exchange or other distribution with respect to
shares of Common Stock or other change in the corporate structure or
capitalization of the Company affecting the Common Stock, the type and number of
shares of stock which are or may be subject to awards under this Plan and the
terms of any outstanding awards (including the price at which shares of stock
may be issued pursuant to an outstanding award) shall be equitably adjusted by
the Committee, in its sole discretion, to preserve the value of benefits awarded
or to be awarded to Participants under this Plan.
Section 5
STOCK OPTIONS
5.1. AWARDS. Subject to the terms and conditions of this Plan, the
Committee shall designate the Participants to whom options to purchase shares of
Common Stock ("OPTIONS") are to be awarded under this Plan and shall determine
the number, type and terms of the Options to be awarded to each of them. Each
Option awarded under this Plan shall be a "nonqualified stock option" for tax
purposes, unless the Option satisfies all of the
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requirements of Section 422 of the Code and the Committee designates such Option
as an "Incentive Stock Option".
5.2. OPTION PRICE. The "Option Price" for any Option awarded hereunder
shall not be less than the Fair Market Value of a share of Common Stock on the
date the Option is awarded. The "Fair Market Value" of a share of Common Stock
as of any date shall be equal to the average of the high and low bid prices of
the Common Stock or the closing sale price thereof as reported by an applicable
transaction reporting system or stock exchange on the date preceding the
applicable date or, if no bid quotations or sale prices of Common Stock are
reported on such date, the average of the high and low bid prices or closing
sale price of a share of Common Stock on the date as of which trading in the
Common Stock was last reported on the applicable transaction reporting system or
exchange. If the Common Stock is not listed or admitted to trading on any
exchange or system that reports actual sale prices or bid and asked quotations,
the Fair Market Value of a share of Common Stock shall be as determined in good
faith by the Committee.
5.3. OPTION EXPIRATION DATE. All rights to purchase shares of Common Stock
pursuant to an Option shall cease as of the date (the "OPTION EXPIRATION DATE")
established by the Committee at the time of the award of such Option (subject to
any earlier permitted termination by the Committee), but in no event later than
the date which is ten years after the date on which the Option is awarded.
Unless provided otherwise by the Committee, if the employment of a Participant
terminates for any reason, his or her nonvested options shall terminate and his
or her vested options shall be exercisable no later than the earliest to occur
of (i) twelve months after termination of the Participant's employment if
termination is by reason of his or her becoming disabled (within the meaning of
Section 22(e)(3) of the Code) or his or her death, (ii) 90 days after the date
of his or her termination of employment for any other reason, or (iii) the
Option Expiration Date.
5.4. VESTING. Each Option awarded under this Plan shall vest (become
exercisable), either in whole or in part, at such time or times as shall be
determined by the Committee at the time the Option is granted, or at such
earlier time or times as the Committee shall subsequently determine.
5.5. MANNER OF EXERCISE. An Option may be exercised by a Participant (or,
in the event of his or her 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 at the principal executive offices of the Company prior to the Option
Expiration Date; provided, however, that an Option may only be exercised with
respect to whole shares of Common Stock.
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Such notice shall specify the number of shares of Common Stock to be purchased
and shall be accompanied by payment of the Option Price for such shares (and, if
required by the Committee, any applicable withholding taxes) in such form and
manner as the Committee may from time to time approve.
Section 6
STOCK APPRECIATION RIGHTS
6.1. AWARDS. Subject to the terms and conditions of this Plan, the
Committee shall designate the employees to whom stock appreciation rights
("SARS") are to be awarded under this Plan and shall determine the number and
terms of the SARs to be awarded to each of them. An SAR may be awarded in
tandem with an Option at the time the Option is granted or thereafter.
Notwithstanding any provision of this Section 6 to the contrary, an SAR awarded
in tandem with an Option shall be exercisable only to the extent that the
related Option is exercisable.
6.2. PAYMENT. Subject to the terms and conditions of this Plan, upon
exercise of an SAR, a Participant shall be entitled to receive the number of
shares of Common Stock having a Fair Market Value (as of the date of exercise)
equal to:
(a) the number of shares of Common Stock as to which the SAR is
exercised;
MULTIPLIED BY
(b) the excess of the Fair Market Value (as of the date of exercise) of a
share of Common Stock over the exercise price of the SAR;
provided, however, that, in lieu of fractional shares of Common Stock, a
Participant shall be entitled to receive an appropriate cash payment; and
provided, further, that the Committee, in its sole discretion, may elect to
settle the SAR (or any portion thereof) in cash equal to the Fair Market Value
on the exercise date of any or all of the shares of Common Stock that would
otherwise be issuable upon such exercise.
6.3. SAR EXPIRATION DATE. All rights to acquire shares of Common Stock
pursuant to an SAR shall cease as of the date (the "SAR EXPIRATION DATE")
established by the Committee at the time of award (subject to any earlier
permitted termination by the Committee), but in no event later than the date
which is ten years after the date on which the SAR is awarded. Unless provided
otherwise by the Committee, if the employment of a Participant terminates for
any reason, his or her nonvested SARs shall terminate and his or her vested SARs
shall be exercisable no later than the earliest to occur of (i) twelve months
after
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termination of the Participant's employment if termination is by reason of his
or her becoming disabled (within the meaning of Section 22(e)(3) of the Code) or
his or her death, (ii) 90 days after the date of his or her termination of
employment for any other reason, or (iii) the SAR Expiration Date.
6.4. VESTING. Each SAR awarded under this Plan shall become exercisable,
either in whole or in part, at such time or times as shall be determined by the
Committee at the time the SAR is granted, or at such earlier times as the
Committee shall subsequently determine.
6.5. MANNER OF EXERCISE. An SAR may be exercised, in whole or in part to
the extent then vested, by giving written notice of such exercise to the
Secretary of the Company prior to the date on which the SAR expires. Such
notice shall specify the number of shares with respect to which the SAR is
exercised. As soon as practicable after receipt of such notice, the Company
shall deliver to the Participant certificates for the shares of Common Stock or
cash or both to which the Participant is entitled pursuant to subsection 6.2.
To the extent that an SAR that is awarded in tandem with an Option is exercised,
the related Option will be cancelled, and to the extent that an Option awarded
in tandem with an SAR is exercised, the tandem SAR will be cancelled.
Section 7
LIMITED STOCK APPRECIATION RIGHTS
7.1. AWARDS. Subject to the terms and conditions of this Plan, the
Committee may designate that limited stock appreciation rights ("LSARS") are to
be awarded in tandem with all or a portion of any Option award under this Plan.
An LSAR may be awarded in tandem with an Option at the time the Option is
granted or thereafter. Notwithstanding any provision of this Section 7 to the
contrary, an LSAR shall be exercisable only to the extent that the related
Option is exercisable. Unless otherwise provided by the Committee, an LSAR
shall not be exercised in whole or part prior to the date which is six months
after the date of award of the LSAR and may only be exercised following a Change
in Control (as defined in subsection 7.5) of the Company.
7.2. PAYMENT. Subject to the terms and conditions of this Plan, upon
exercise of an LSAR, a Participant shall be entitled to receive a cash payment
equal to:
(a) the number of shares of Common Stock as to which the LSAR is
exercised;
MULTIPLIED BY
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(b) the excess of the Fair Market Value (as of the date of exercise) of a
share of Common Stock over the exercise price of the LSAR.
7.3. LSAR EXPIRATION DATE. All rights to exercise an LSAR shall cease as
of the date (the "LSAR EXPIRATION DATE") established by the Committee at the
time of the award (subject to any earlier permitted termination by the
Committee), but in no event later than the date which is ten years after the
date on which the LSAR is awarded. Unless provided otherwise by the Committee,
if the employment of a Participant terminates for any reason, his or her
nonvested LSARs shall terminate and his or her vested LSARs shall be exercisable
no later than the earliest to occur of (i) twelve months after termination of
the Participant's employment if termination is by reason of his or her becoming
disabled (within the meaning of Section 22(e)(3) of the Code) or his or her
death, (ii) 90 days after the date of his or her termination of employment for
any other reason, or (iii) the LSAR Expiration Date. Notwithstanding any
provision of this subsection 7.3 to the contrary, an LSAR shall be exercisable
only to the extent that the underlying Option is exercisable.
7.4. MANNER OF EXERCISE. An LSAR may be exercised, in whole or in part to
the extent then vested, by giving written notice of such exercise to the
Secretary of the Company after the date of a Change in Control and prior to the
date on which the LSAR expires. Such notice shall specify the number of shares
with respect to which the LSAR is exercised. To the extent that an LSAR is
exercised, the related Option will be cancelled, and to the extent that an
Option awarded in tandem with an LSAR is exercised, the tandem LSAR will be
cancelled.
Section 8
RESTRICTED STOCK
8.1. AWARDS. Subject to the terms and conditions of this Plan, the
Committee shall designate the employees to whom shares of "Restricted Stock"
shall be awarded under this Plan and determine the number of shares and the
terms and conditions of each such award. Each Restricted Stock award shall
entitle the Participant to receive shares of Common Stock upon the terms and
conditions specified by the Committee and subject to the following provisions of
this Section 8.
8.2. RESTRICTIONS. All shares of Restricted Stock awarded hereunder shall
be subject to such restrictions as the Committee may determine, including,
without limitation, any or all of the following:
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(a) a required period of employment with the Company, as determined by
the Committee, prior to the vesting of the shares of Restricted
Stock;
(b) a prohibition against the sale, assignment, transfer, pledge,
hypothecation or other encumbrance of the shares of Restricted Stock
for a specified period as determined by the Committee; and
(c) a requirement that the holder of shares of Restricted Stock forfeit
all or a part of such shares in the event of termination of his or
her employment during any period in which such shares are subject to
restrictions.
All restrictions on shares of Restricted Stock awarded pursuant to this Plan
shall expire, and such shares shall vest in the Participant when they were
awarded, at such time or times as the Committee shall specify.
8.3. REGISTRATION OF SHARES. Shares of Restricted Stock awarded pursuant
to this Plan shall be registered in the name of the Participant and, in the
discretion of the Committee, may be deposited with an entity designated by the
Committee or with the Company. The Committee may require the Participant to
endorse a stock power in blank with respect to shares of Restricted Stock
awarded to the Participant.
8.4. STOCKHOLDER RIGHTS. Subject to the terms and conditions of this Plan,
during any period in which shares of Restricted Stock are subject to forfeiture
or restrictions on transfer, each Participant who has been awarded shares of
Restricted Stock shall have such rights of a stockholder with respect to such
shares as the Committee may designate at the time of the award, including the
right to vote such shares and the right to receive all dividends paid on such
shares. Unless otherwise provided by the Committee, stock dividends or
dividends in kind and any other securities distributed with respect to
Restricted Stock shall be restricted to the same extent and subject to the same
terms and conditions as the Restricted Stock to which they are attributable.
8.5. LAPSE OF RESTRICTIONS. Subject to the terms and conditions of this
Plan, at the end of any time period during which the shares of Restricted Stock
are subject to forfeiture or restrictions on transfer, such shares will vest and
thereupon be delivered free of all restrictions to the Participant (or to the
Participant's legal representative, beneficiary or heir).
Section 9
GENERAL
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9.1. EFFECTIVE DATE. This Plan will become effective on the date it is
adopted by the Holding Company's Board of Directors, subject to its approval by
the Company's stockholders. Awards may be issued under this Plan prior to the
time stockholder approval is obtained, but if stockholder approval is not
received within twelve months of this Plan's adoption, such awards shall be
cancelled and be of no effect. In no event may an Option or SAR be exercised,
or restrictions on Restricted Stock lapse, prior to the date stockholder
approval is obtained.
9.2. DURATION. This Plan shall remain in effect until all awards made
under this Plan have either been satisfied by the issuance of shares of Common
Stock or the payment of cash or been terminated in accordance with the terms of
this Plan and the award and until all restrictions imposed on shares of Common
Stock issued under this Plan have lapsed. No award may be made under this Plan
after the tenth anniversary of the date this Plan is adopted by the Company's
Board of Directors.
9.3. NON-TRANSFERABILITY OF INCENTIVES. No Option, SAR, LSAR or share of
Restricted Stock may be transferred, pledged or assigned by the holder thereof
(except, in the event of the holder's death, by will or the laws of descent and
distribution), and the Company shall not be required to recognize any attempted
assignment of such rights by any Participant. During a Participant's lifetime,
awards may be exercised only by him or her or by his or her guardian or legal
representative.
9.4. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. In the event that a
Participant ceases to be an employee of the Company for any reason, including
death, any awards then outstanding may be exercised or shall expire in
accordance with the terms of this Plan and the award.
9.5. EFFECT OF CHANGE IN CONTROL.
(a) To the extent not then prohibited by 12 C.F.R. Section 563b.3(g)(4)
or other applicable regulation or law, unless determined otherwise by
the Committee, upon a Participant's termination of employment within
the twelve months following a Change in Control, all unvested
Restricted Stock awards shall become fully vested and all Options,
SARs and LSARs shall be exercisable for a period ending on the
earlier of the Expiration Date of the Option, SAR or LSAR or the
first anniversary of the Participant's termination of employment.
Notwithstanding the foregoing provisions of this subsection 9.5, in
the event of a Change in Control as the result of a Terminating
Event, a Participant's Options, SARs, LSARs and Restricted Stock will
become exercisable pursuant to this paragraph only if no provision
has been made in writing in connection
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with such Terminating Event for the continuance of this Plan and for
the assumption of the awards theretofore granted hereunder, or the
substitution for such awards of new awards issued by the successor
corporation or, if applicable, the publicly traded entity that is the
parent entity of the successor corporation, with such appropriate
adjustments as may be determined or approved by the Committee, in
which event this Plan and the awards theretofore granted or
substituted therefor shall continue in the manner and under the terms
so provided.
(b) As used in this Plan, a "Change in Control" of the Company shall mean
an event of a nature that (i) would be required to be reported in
response to Item 1 of a current report filed on Form 8-K pursuant to
Section 13 or 15(d) of 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 Holding Company within the meaning of the Home
Owners' 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 and the regulations of the SEC
thereunder, each as in effect on the date of the adoption of this
Plan by the Board of Directors of the Holding Company, and including
any such persons that may be deemed to be acting in concert with
respect to the Bank or the Holding Company, or the acquisition,
ownership or voting of Bank or Holding Company securities) 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 of
Directors of the Holding Company), directly or indirectly, of
securities of the Bank or the Holding Company representing 20% or
more of the Bank's or the Holding Company's outstanding securities
except for any securities of the Bank purchased by the Holding
Company in connection with the conversion of the Bank to the stock
form and any securities purchased by any tax-qualified employee
benefit plan of the Bank; or (B) individuals who constitute the Board
on the date of the adoption of this Plan by the Board of Directors of
the Holding Company (the "INCUMBENT BOARD") cease for any
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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 Holding 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 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 Holding Company or similar
transaction in which the Bank or Holding Company is not the resulting
entity (a "TERMINATING EVENT") is approved by the Board and the
stockholders or otherwise occurs; or (D) solicitations of
stockholders of the Holding Company, by someone other than the
Incumbent Board of the Holding Company, seeking stockholder approval
of a plan of reorganization, merger or consolidation of the Holding
Company or 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 this Plan are exchanged for or converted
into cash or property or securities not issued by the Bank or the
Holding Company shall be distributed; or (E) a tender offer is made
for 20% or more of the voting securities of the Bank or the Holding
Company; or (F) any other event, transaction or series of
transactions occurs as a result of which any person may be deemed to
"acquire control" of the Bank or the Holding Company (as such terms
are defined in the regulations of the OTS set forth at 12 C.F.R. Part
574 as in effect on the effective date of this Plan).
9.6. COMPLIANCE WITH APPLICABLE LAW AND WITHHOLDING.
(a) This Plan shall be governed by and construed in accordance with the
internal laws of the State of California. Notwithstanding any other
provision of this Plan, the Company shall have no obligation to issue
any shares of Common Stock under this Plan if such issuance would
violate any applicable law or any applicable regulation or
requirement of any securities exchange or similar entity.
(b) Prior to the issuance of any shares of Common Stock under this Plan,
the Company may require a written statement that the recipient is
acquiring the shares for investment and not for the purpose or with
the intention of distributing the shares and will not dispose of them
in violation of the registration requirements of Securities Act of
1933, as amended.
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(c) With respect to any person who is subject to Section 16(a) of the
Exchange Act, the Committee may, at any time, add such conditions and
limitations to any award under this Plan that it deems necessary or
desirable to comply with the requirements of Rule 16b-3.
(d) If, at any time, the Company, in its sole discretion, determines that
the listing, registration or qualification (or any updating of any of
the foregoing) of any type of award, or the shares of Common Stock
issuable pursuant thereto, is necessary on any securities exchange or
under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, any award, the
issuance of shares of Common Stock pursuant to any award, or the
removal of any restrictions imposed on shares subject to an award,
such award shall not be made and the shares of Common Stock shall not
be issued or such restrictions shall not be removed, as the case may
be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
(e) All awards and payments under this Plan are subject to withholding of
all applicable taxes and the Company shall have the right to withhold
from any award under this Plan or to collect as a condition of any
payment under this Plan, as applicable, any taxes required by law to
be withheld. To the extent provided by the Committee, a Participant
may elect to have any distribution otherwise required to be made
under this Plan to be withheld or to surrender to the Company shares
of Common Stock already owned by the Participant to fulfill any tax
withholding obligation.
9.7. NO CONTINUED EMPLOYMENT. This Plan does not constitute a contract of
employment or continued service, and participation in this Plan will not give
any employee or Participant the right to be retained in the employ of the
Company or the right to continue as a director of the Company or any right or
claim to any benefit under this Plan unless such right or claim has specifically
accrued under the terms of this Plan or the terms of any award under this Plan.
9.8. TREATMENT AS A STOCKHOLDER. Any award to a Participant under this
Plan shall not create any rights in such Participant as a stockholder of the
Holding Company until shares of Common Stock are registered in the name of the
Participant.
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9.9. AMENDMENT OF THIS PLAN. The Board may, at any time and in any manner,
amend, suspend or terminate this Plan; provided, however, that no such amendment
or discontinuance shall:
(a) make any "material" (as such term is interpreted from time to time
for purposes of Rule 16b-3) increase in the number of shares reserved
under subsection 4.1 without stockholder approval;
(b) make any other change that would disqualify this Plan, or any award
granted under this Plan, intended to be so qualified, from the
exemption provided by Rule 16b-3; or
(c) alter or impair the rights of Participants with respect to awards
previously made under this Plan without the consent of the holder
thereof.
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