SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BROADWAY FINANCIAL CORPORATION
(Name of Registrant as Specified in its Charter)
_____________________________________________
(Name of Person(s) filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
BROADWAY FINANCIAL CORPORATION
4800 Wilshire Boulevard
Los Angeles, California 90010
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the Annual
Meeting of Stockholders of Broadway Financial Corporation (the "Company"), which
will be held at the Company's principal executive offices, 4800 Wilshire
Boulevard, Los Angeles, California 90010, at 2:00 p.m., on June 18, 2003.
As described in the accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement, stockholders will be asked to vote on the election of three
directors, to ratify the appointment of the Companys independent auditors for
2003 and to transact such other business as may properly come before the Annual
Meeting or any postponement or adjournment thereof.
Your vote is very important, regardless of the number of shares you own. Even if
you currently plan to attend the Annual Meeting, I urge you to mark, sign and
date each proxy card you receive and to return it to the Company as soon as
possible in the postage-paid envelope that has been provided,. Returning your
proxy card will not prevent you from voting in person, but will assure that your
vote is counted if you are unable to attend.
Sincerely,
Paul C. Hudson
President and Chief Executive Officer
IMPORTANT: If your Broadway Financial Corporation shares are held in the name of
a brokerage firm or nominee, only that brokerage firm or nominee may execute a
proxy on your behalf. To ensure that your shares are voted, we urge you to
telephone the individual responsible for your account today and obtain
instructions on how to direct him or her to execute a proxy.
If you have any questions or need any assistance in voting your shares, please
telephone Beverly A. Dyck, the Company's Investor Relations Representative, at
(323) 634-1700, Ext 231.
BROADWAY FINANCIAL CORPORATION
4800 Wilshire Boulevard
Los Angeles, California 90010
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 18, 2003
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Broadway
Financial Corporation (the "Company") will be held at the Company's principal
executive offices, 4800 Wilshire Boulevard, Los Angeles, California 90010, at
2:00 p.m., on June 18, 2003, for the following purposes:
1) To elect three directors of the Company to serve until the Annual Meeting
of Stockholders to be held in the year 2006 and until their successors are
elected and have been qualified. The Board of Directors has nominated Mr.
Paul C. Hudson, Mr. Kellogg Chan and Mr. David M. W. Harvey;
2) To ratify the appointment of KPMG LLP as the Company's independent audit
firm for 2003; and
3) To consider such other business as may properly come before and be voted
upon at the Annual Meeting of Stockholders or any postponement or
adjournment thereof.
The Board of Directors has selected April 21, 2003 as the record date for the
Annual Meeting. Only those stockholders of record at the close of business on
that date will be entitled to notice of and to vote at the Annual Meeting or any
postponement or adjournment thereof. A list of stockholders entitled to vote at
the Annual Meeting will be available at the Companys principal executive
offices during the ten days prior to the meeting. The list will also be
available for inspection at the Annual Meeting of Stockholders.
By Order of the Board of Directors
Beverly A. Dyck
Secretary
Los Angeles, California
May 2, 2003
BROADWAY FINANCIAL CORPORATION
4800 Wilshire Boulevard
Los Angeles, California 90010
PROXY STATEMENT
Annual Meeting of Stockholders
June 18, 2003
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Broadway Financial Corporation, a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held at the Company's principal
executive offices, 4800 Wilshire Boulevard, Los Angeles, California, 90010, at
2:00 p.m., on June 18, 2003, and at any postponement or adjournment thereof.
This Proxy Statement and the accompanying form of proxy were first mailed to
stockholders on or about May 2, 2003.
The Company was incorporated under Delaware law in September 1995 for the
purpose of acquiring and holding all of the outstanding capital stock of
Broadway Federal Bank, f.s.b. ("Broadway Federal" or the "Bank") as part of the
Bank's conversion from a federally chartered mutual savings and loan association
to a federally chartered stock savings bank (the "Conversion"). The Conversion
was completed, and the Bank became a wholly owned subsidiary of the Company, on
January 8, 1996. Unless otherwise indicated, references in this Proxy Statement
to the Company include the Bank as its predecessor.
The Board of Directors has selected April 21, 2003 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting. A total of 1,818,934, shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), were outstanding at the close of business
on that date. A majority of the shares entitled to vote, represented in person
or by proxy, will constitute a quorum for the transaction of business at the
Annual Meeting. Stockholders will be entitled to cast one vote for each share of
Common Stock held by them of record at the close of business on the record date
on any matter that may be presented at the Annual Meeting for consideration and
action by the stockholders. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum, but as unvoted for purposes of determining the approval of any matter
submitted for a vote of the stockholders. A plurality of votes cast is required
for election of directors and the affirmative vote of the majority of shares
represented and voting will be required to ratify the appointment of KPMG LLP as
the Company's independent audit firm. If a broker indicates on its proxy that
the broker does not have discretionary authority to vote on a particular matter
as to certain shares, those shares will be counted for general quorum purposes
but will not be considered as present and entitled to vote with respect to that
matter.
All valid proxies received in response to this solicitation will be voted in
accordance with the instructions indicated thereon by the stockholders giving
such proxies. If no contrary instructions are given, such proxies will be voted
FOR the election of the nominees named in this Proxy Statement as directors and
FOR approval of the appointment of KPMG LLP as the Company's independent audit
firm for the fiscal year ending December 31, 2003. Although the Board of
Directors currently knows of no other matter to be brought before the Annual
Meeting, if other matters properly come before the Annual Meeting and may
properly be acted upon, including voting on a substitute nominee for director in
the event that any director nominee named in this Proxy Statement becomes
unwilling or unable to serve before the Annual Meeting, the proxy will be voted
in accordance with the best judgment of the persons named in the proxies.
Any stockholder may revoke his or her proxy at any time before it is voted at
the Annual Meeting by delivering a later signed and dated proxy or other written
notice of revocation to Beverly A. Dyck, Secretary of the Company, at 4800
Wilshire Boulevard, Los Angeles, California 90010. A proxy will also be
considered revoked if the stockholder executing the proxy is present at the
Annual Meeting and chooses to vote in person.
The principal solicitation of proxies is being made by mail. The Company has
retained U. S. Stock Transfer Corporation, the Company's transfer agent, to
assist in the solicitation of proxies for an estimated fee of $1,600 plus
reimbursement of certain expenses. To the extent necessary, proxies may be
solicited by officers, directors and employees of the Company, or its wholly
owned subsidiaries, none of whom will receive additional compensation therefor,
and may be solicited by telephone, personal contact or other means. The Company
will bear the cost of the solicitation of proxies, including postage, printing
and handling, and will reimburse brokers and other nominee holders of shares for
their expenses incurred in forwarding solicitation material to beneficial owners
of shares.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that the Board of Directors
shall be divided into three classes, with the term of one class of directors to
expire each year. Three directors are to be elected at the Annual Meeting. The
Certificate of Incorporation does not provide for cumulative voting in the
election of directors.
The following table sets forth the names and information regarding the persons
who are currently members of the Company's Board of Directors, including those
nominated by the Board of Directors for election at the Annual Meeting. If
elected, Messrs. Paul C. Hudson, Kellogg Chan and David M. W. Harvey will each
serve for a term of three years and until their respective successors are
elected and qualified. Each has consented to be named in this Proxy Statement
and has indicated his intention to serve if elected. If any of the nominees
becomes unable to serve as a director for any reason, the shares represented by
the proxies solicited hereby may be voted for a replacement nominee selected by
the Board of Directors.
Mr. Larkin Teasley, who has been a director since 1977 and whose term expires on
June 18, 2003, will not stand for re-election. The Board of Directors extends
its deepest appreciation to Mr. Teasley for his many years of dedicated service
as a director of the Company and the Bank.
Age at Positions Currently
December 31, Director Term Held with The
Name 2002 Since Expires Company and the Bank
-------------------------- ------------- -------- ------- ---------------------
NOMINEES:
Paul C. Hudson (1) 54 1985 2003 Director, President
the Chief Executive
Officer
Kellogg Chan 63 1993 2003 Director
David M. W. Harvey 45
CONTINUING DIRECTORS:
Elbert T. Hudson (1) 82 1959 2004 Director and Chairman
of the Board
Robert C. Davidson, Jr. 57 2003 2004 Director
Rosa M. Hill 73 1977 2004 Director
A. Odell Maddox 56 1986 2005 Director
Daniel A. Medina 45 1997 2005 Director
Virgil Roberts 55 2002 2005 Director
--------------
(1) Elbert T. Hudson and Paul C. Hudson are father and son.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THE ABOVE NOMINEES.
2
The business experience of each of the nominees and continuing directors is as
follows:
Nominees:
Paul C. Hudson is the President and Chief Executive Officer of the Company and
the Bank. Mr. Hudson joined the Bank in 1981, was elected to the Board of
Directors in 1985, and served in various positions prior to becoming President
and Chief Executive Officer in 1992. Mr. Hudson is a member of the California
and District of Columbia Bars. He serves on the board of the Los Angeles
Metropolitan Transit Authority, Pitzer College, Orthopaedic Hospital Foundation,
the Southern California Counseling Center and the California Community
Foundation. Mr. Hudson also chairs the Board of Community Build Inc. Mr. Hudson
is a member of the Executive Committees of the Company and the Bank and a member
of the Loan Committee of the Bank.
Kellogg Chan has been President of Asia Capital Group, Ltd., a biotechnology
holding company since 2001. He has been a member of the Board of Directors since
1993. He was Chairman and Chief Executive Officer of Universal Bank, f.s.b. from
1994 to 1995 and a consultant to Seyen Investments from 1993 to 1994. He was
President and Chief Executive Officer of East-West Bank from 1976 to 1992. Mr.
Chan is a past trustee of the Greater Los Angeles Zoo Association, and past
member of the Boards of Directors of the San Marino City Club, the Southern
California Chinese Lawyers Association and the San Gabriel Valley Council of Boy
Scouts. Mr. Chan is a member of the Chinese American Citizens Alliance, Central
City Optimists, and the San Marino City Club. Mr. Chan is the Chairman of the
Loan Committee of the Bank, a member of the Audit/CRA/Compliance Committee and
Investment Committee of the Bank and a member of the Executive Committee of the
Company.
David M. W. Harvey is the principal member of Hot Creek Capital, L.L.C., a firm
engaged in investing in very small capitalization financial services companies
that he founded in 1994. Beginning in 1963, he served as a corporate banker at
Security Pacific National Bank and in 1986 jointed Silicon Valley Bank. Mr.
Harvey joined the law firm of Sullivan and Cromwell in 1990 where he served as
an attorney in the banking group. Mr. Harvey served on the Board of Directors of
California Center Bank from 2000 to 2001. He received his B. A. from the
University of California at Davis, an M.B.A. from George Washington University,
and a J. D. from Tulane University.
Continuing Directors:
Elbert T. Hudson is Chairman of the Board of both the Company and the Bank and
has engaged in the practice of law since his retirement as Chief Executive
Officer of the Bank in 1992. He was elected as President/Chief Executive Officer
of the Bank in 1972, a position he held until his retirement. Mr. Hudson is
Chairman of the Executive Committee of the Bank, a committee he has served on
continuously since 1972, and serves on the Board of Directors of Broadway
Service Corporation ("BSC"), a wholly owned subsidiary of Broadway Federal. He
also served on the Loan Committee of the Bank from 1959 through 1984. Mr.
Hudson, a member of the California Bar since 1953,was a practicing attorney
prior to his election as President/Chief Executive Officer of Broadway Federal.
Mr. Hudson is a member of the Board of Directors of Golden State Mutual Life
Insurance Company and is a member of its Executive Committee and Chairman of its
Audit Committee. Mr. Hudson is a member of the Board of Los Angeles Trade
Technical College Foundation and the Los Angeles Community Development Bank. Mr.
Hudson is Chairman of the Executive Committees of the Company and the Bank and a
member of the Asset Review Committee of the Bank.
Robert C. Davidson, Jr. is Chairman/CEO of Surface Protection Industries, one of
the largest African American owned manufacturing companies in California. Prior
to acquiring Surface Protection Industries in 1978, Mr. Davidson held a number
of entrepreneurial and consulting positions in Los Angeles, Boston and New York.
He is a member of the Boards of Directors of Jacobs Engineering Group, Inc.,
Morehouse College, Children's Hospital and the University of Chicago Graduate
School of Business Advisory Council. Mr. Davidson is a member of the
Compensation/Benefits Committee of the Bank.
3
Rosa M. Hill was formerly an elementary school teacher with Los Angeles City
Schools, and the Fisk University Children's School, Nashville, Tennessee. Mrs.
Hill was also employed as a social worker with the Los Angeles County Bureau of
Public Assistance. She served on the Board of Trustees, Bennett College,
Greensboro, North Carolina, for nine years, serving as Vice Chair of the Board
for seven years. She has also served on the Board of Family Services of Los
Angeles. Mrs. Hill has been an active member of the Holman United Methodist
Church in Los Angeles for more than 50 years where she has served and continues
to serve in many leading roles of the church. Mrs. Hill is the Chairperson of
the Compensation/Benefits Committee of the Bank and is a member of the Asset
Review Committee of the Bank.
A. Odell Maddox is Manager of Maddox Co., a real estate property management and
sales company. Mr. Maddox served as a real estate appraiser for the Los Angeles
County Assessor's Office from 1969 to 1972 and as a loan consultant for Citizens
Savings and Loan Association from 1978 to 1979. Mr. Maddox served as President
of Maddox & Stabler Construction Company Inc. (a public works construction
company) from 1984 to 1999. Mr. Maddox is the Chairman of the Asset Review
Committee of the Bank and a member of the Loan and Executive Committees of the
Bank.
Daniel A. Medina is a private investor. Until March 31, 2000 he was Managing
Director in the Global Corporate Finance Practice for Arthur Andersen, LLP which
he joined in February 1999. Prior to joining Arthur Andersen, Mr. Medina had
been Vice President-Acquisitions for Avco Financial Services, Inc., since
October 1996 and Managing Director-Corporate Advisory Department for Union Bank
of California, N.A., a subsidiary of the Bank of Tokyo Mitsubishi Bank, since
1992. Mr. Medina has been a member of the Company's Board of Directors since
1997. Prior to that time he was an advisor to the Broadway Federal Board of
Directors beginning in 1993, and the Company's Board of Directors beginning in
1996. Mr. Medina is the Chairman of the Investment Committee and the
Audit/CRA/Compliance Committee of the Bank and a member of the Executive
Committee of the Bank and the Compensation/Benefits Committees of the Bank and
the Company.
Virgil Roberts is the managing partner of Bobbitt & Roberts, a law firm
representing clients in the entertainment industry. He previously served as
President of Dick Griffey Productions and Solar Records. Mr. Roberts is the past
Chairman of the Los Angeles Annenberg Metropolitan Project and a past Chair of
the California Community Foundation. He also serves on the Board of Directors of
Community Build, and is a Trustee of Occidental College and the Marlborough
School. Mr. Roberts is a member of the Audit/CRA/Compliance and
Compensation/Benefits Committees of the Bank.
Board Meetings and Committees
The Board of Directors of the Company and the Board of Directors of the Bank
each held eleven meetings during 2002. The Company has three committees: the
Executive Committee, the Compensation/Benefits Committee and the Audit
Committee. The Bank has six committees: the Executive Committee, the
Audit/CRA/Compliance Committee, the Compensation/Benefits Committee, the Loan
Committee, the Asset Review Committee and the Investment Committee. Neither the
Company nor the Bank has a standing Nominating Committee.
Company Committees
The Executive Committee consists of Messrs. E. Hudson (Chairman), P. Hudson and
Chan. This Committee, together with the corresponding committee of the Bank's
Board of Directors, serves as an interim decision-making body that functions
between Board of Directors meetings, if required, to assist the chief executive
officer by providing input on critical issues and ensuring appropriate Board of
Directors involvement in the strategic planning process. The Executive Committee
held no meetings during 2002.
The Audit/CRA/Compliance Committee consists of Messrs Medina (Chairman), Chan
and Roberts. The Audit/CRA/Compliance Committee, together with the corresponding
committee of the Bank's Board of Directors, is responsible for oversight of the
internal audit function for the Company, assessment of accounting and internal
control policies and monitoring of regulatory compliance. The Committee is also
responsible for oversight of the Company's independent auditors. The
Audit/CRA/Compliance Committee had one meeting during 2002. The members of the
Audit/CRA/Compliance Committee are independent directors as defined under the
National Association of Securities Dealers' listing standards.
4
The Compensation/Benefits Committee consists of Ms. Hill (Chairwoman) and
Messrs. Davidson, Roberts and Medina. This Committee, together with the
corresponding committee of the Bank's Board of Directors, is responsible for the
oversight of salary and wage administration and various employee benefits,
policies and incentive compensation issues at the Company level. The
Compensation/Benefits Committee held no meetings during 2002.
Bank Committees
The Executive Committee consists of Messrs. E. Hudson (Chairman), P. Hudson,
Maddox and Medina. This Committee monitors financial matters, including capital
adequacy and liquidity, and analyzes overall earnings performance, focusing on
trends, regulations, projections and problem anticipation and resolution. It
also monitors the status of litigation and serves as an interim decision-making
body that functions between Board meetings, if required, to assist the chief
executive officer by providing input on critical issues and ensuring appropriate
Board involvement in the strategic planning process. The Executive Committee met
seven times during 2002.
The Audit/CRA/Compliance Committee consists of Messrs. Medina (Chairman), Chan
and Roberts. The Audit/CRA/Compliance Committee is responsible for oversight of
the internal audit function, assessment of accounting and internal control
policies and monitoring regulatory compliance. The Committee is also responsible
for oversight of the Bank's independent auditors. The Audit/CRA/Compliance
Committee met ten times during 2002. The members of the Audit/CRA/Compliance
Committee are independent directors as defined under the National Association of
Securities Dealers' listing standards.
The Compensation/Benefits Committee consists of Ms. Hill (Chairwoman) and
Messrs. Davidson, Medina and Roberts. This Committee is responsible for the
oversight of salary and wage administration and various employee benefits,
policies and incentive compensation issues, as well as the appraisal of the
chief executive officer's performance, determination of his salary and bonus,
and making recommendations regarding such matters for approval by the Board of
Directors. The Committee met seven times during 2002.
The Loan Committee consists of Messrs. Chan (Chairman), P. Hudson, Maddox and
Mr. Heywood, Chief Loan Officer as a non-Board member. The Loan Committee is
responsible for developing the lending policies of the Bank, monitoring the loan
portfolio and compliance with established policies, and approving specific loans
in accordance with the Bank's loan policy. The Committee met nine times during
2002.
The Asset Review Committee consists of Messrs. Maddox (Chairman), E. Hudson, and
Ms. Hill. The Asset Review Committee is responsible for the review and approval
of asset classifications, and for monitoring delinquent loans and foreclosed
real estate. In addition, the Asset Review Committee reviews the adequacy of the
Bank's loan valuation allowance. The Committee met three times during 2002.
The Investment Committee consists of Messrs. Medina (Chairman), and Chan. The
Investment Committee is responsible for monitoring the Bank's interest rate risk
in order to reduce the Bank's vulnerability to changes in interest rates. The
Committee also monitors and controls the level and type of securities
investments made by the Bank. The Committee met three times during 2002.
5
Executive Officers Who Are Not Directors
The following table sets forth information with respect to executive officers of
the Company and the Bank who are not directors. Officers of the Company and the
Bank serve at the discretion of, and are elected annually, by the respective
Boards of Directors.
Positions Held With
Name Age(1) the Company and the Bank
------------------------- ------- -----------------------------------------
Alvin D. Kang 58 Chief Financial Officer of the Company
and Executive Vice President/Chief
Financial Officer of the Bank
Eric V. Johnson 43 Senior Vice President/Chief Retail
Banking Officer of the Bank
Johnathan E. Heywood (2) 35 Senior Vice President/Chief Loan Officer
of the Bank
-------------------------
(1) As of December 31, 2002. (2) Hired May 16, 2002
The business experience of each of the executive officers is as follows:
Alvin D. Kang joined Broadway Federal in December 2001 as Executive Vice
President/Chief Financial Officer. Prior to joining Broadway Federal, Mr. Kang
was Executive Vice President at Takenaka & Company, LLC, a consulting and
investment-banking firm from August 1999 to April 2002, and was the Managing
Member of Mu & Kang Consultants L.L.C. from November 1995 to August 1999. Prior
to that, Mr. Kang served as an Audit Partner with KPMG LLP and Ernst & Young LLP
and he has 32 years experience serving the Thrift and Banking industries. During
his public accounting career, Mr. Kang was active in the Financial Managers
Society and was a frequent speaker at industry conferences. He also served on
the Savings and Loan Committee of the American Institute of Certified Public
Accountants.
Eric V. Johnson joined Broadway Federal Bank in May 1999 as Senior Vice
President/Chief Loan Officer and currently serves as Senior Vice President/Chief
Retail Banking Officer and Foreign Asset Control Compliance Officer. Prior to
joining Broadway Federal, Mr. Johnson was the Senior Vice President of Loan
Servicing at Home Savings of America, from 1993 to 1999. Mr. Johnson is a member
of the Board of Directors of the Harriet Buhai Center for Family Law. Mr.
Johnson has been an active member of Holman United Methodist Church for over 18
years and holds many leadership roles in the church. Mr. Johnson also served
with the San Gabriel Valley Boy Scouts of America.
Johnathan E. Heywood joined Broadway Federal Bank in May 2002 as Senior Vice
President/Chief Loan Officer. Prior to joining Broadway Federal, from 1999 to
2001, Mr. Heywood was Vice President of Numerata, Inc., a corporation that
provides Internet, web-based technologies to the real estate industry. From 1997
to 1999, Mr. Heywood was a Partner at Irvine City Financial, L.L.C, a real
estate investment company. Mr. Heywood also served as Vice President-Loan
Origination from 1995 to 1997 at First Fidelity Thrift and Loan Association and
Vice President - Major Loans at Irvine City Bank from 1989 to 1995. Mr. Heywood
is a member of the National Association of Realtors, Mortgage Bankers
Association, Real Estate Information Professionals Association and the Alliance
for Advanced Real Estate Transaction Technology.
6
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information, as of March 31, 2003, concerning the
shares of the Company's Common Stock owned by each person known to the Company
to be a beneficial owner of more than 5% of the Company's Common Stock, by each
of the directors and executive officers of the Company and the Bank, and by all
directors and executive officers as a group.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
---------------------------------- ---------------------- ------------
Beneficial Owners:
Hot Creek Capital (2)
144 Summit Ridge Way
Gardnervills, Nevada 89410 401,912 (2) 20.92%
Jam Partners LP (3)
One 5th Avenue
New York, New York 10008 141,300 (3) 7.35%
Wellington Management Co. (4)
75 State Street
Boston, Massachusetts 02109 129,280 (4) 6.73%
Broadway Federal Bank Employee
Stock Ownership Plan 104,512 (1) 5.44%
Directors and Executive Officers: (1)
Elbert T. Hudson 25,628 (5)(6) 1.33%
Paul C. Hudson 77,961 (7) 4.06%
Kellogg Chan 25,675 (8) 1.34%
Robert C. Davidson, Jr. - (9) 0.00%
Rosa M. Hill 27,684 (10)(11) 1.44%
A. Odell Maddox 16,245 (12) 0.85%
Daniel A. Medina 5,225 (8)(13) 0.27%
Virgil Roberts 11,388 (14) 0.59%
Alvin D. Kang 3,000 (15) 0.16%
Eric V. Johnson 8,608 (16) 0.45%
Johnathan E. Heywood - - -
All directors and executive
officers as a group (12 persons) 201,414 - 10.49%
----------------------------------
(1) The address for each of the directors and executive officers and the
Broadway Federal Bank Employee Stock Ownership Plan is 4800 Wilshire
Boulevard, Los Angeles, California 90010.
(2) Based on on information derived from Schedule 13D/A filed with the
Securities and Exchange Commission by Hot Creek Capital, L.L.C on March 21,
2003.
(3) Based on information derived from Schedule 13G/A filed with the Securities
and Exchange Commission by Sy Jacobs, JAM Partners, L.P., a Delaware
limited partnership, and JAM Managers L.L.C, a Delaware limited liability
company on January 22, 2002. Mr. Jacobs and JAM Managers, L.L.C. have
shared voting power over all 141,300 shares and JAM Partners, L.P. has
shared voting power over 128,900 of the shares
7
(4) Based on information derived from Schedule 13G/A filed with the Securities
and Exchange Commission by Wellington Management Company, LLP, a
Massachusetts limited liability partnership ("WMC"), on February 12, 2003
and Schedule 13G/A filed by First Financial Fund, Inc., a registered
closed-end investment company, on February 14, 2003. WMC, in its capacity
as investment advisor, may be deemed the beneficial owner of shares of
Common Stock owned by its clients, including 129,280 shares owned by First
Financial Fund, Inc. as to which WMC has shared dispositive voting power
and which are reported in total beneficial ownership of WMC of 145,480.
(5) Includes 6,322 shares held jointly with spouse with whom voting and
investment power is shared.
(6) Includes 3,166 allocated shares under the Broadway Federal Savings and Loan
Association Employee Stock Ownership Plan (the "ESOP"), 14,526 shares
subject to options granted under the Long Term Incentive Plan (the "LTIP"),
and 257 shares subject to grants under the Performance Equity Plan, which
options are all currently exercisable.
(7) Includes 12,334 allocated shares under the ESOP, 50,463 shares subject to
options granted under the LTIP, and 364 shares subject to grants under the
Performance Equity Plan, which options are all currently exercisable.
(8) Includes 3,899 shares subject to options granted under the 1996 Stock
Option Plan for Outside Directors (the "Directors Stock Option Plan") and
88 shares subject to grants under the Recognition and Retention Plan.
(9) Mr. Davidson became director in March 2003.
(10) Includes 7,098 shares subject to options granted under the Director's Stock
Option Plan and 128 shares subject to grants under the Recognition and
Retention Plan, which options are all currently exercisable.
(11) Includes 19,282 shares held jointly with spouse with whom voting and
investment power is shared.
(12) Includes 851 shares subject to options granted under the Director's Stock
Option Plan and 148 shares subject to grants under the Recognition and
Retention Plan, which options are all currently exercisable.
(13) Includes 432 shares held jointly with spouse with whom voting and
investment power is shared.
(14) Includes 11,388 shares held jointly with spouse with whom voting and
investment power is shared.
(15) Includes 2,000 shares held jointly with spouse with whom voting and
investment power is shared.
(16) Includes 4,518 shares subject to options granted under the LTIP, which
options are all currently exercisable and 3,130 allocated shares under the
ESOP.
8
EXECUTIVE COMPENSATION, BENEFITS AND RELATED MATTERS
The following table sets forth the annual and long-term compensation for the
Company's President/Chief Executive Officer, the Chief Financial Officer, the
Chief Retail Banking Officer and the Chief Lending Officer (collectively, the
"Named Executive Officers"), as well as the total compensation paid to each,
during the Company's last three fiscal years:
Summary Compensation Table
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
----------------------------------- --------------------------- ---------
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compensation Awards Options/ Payouts Compensation
Position Year ($) ($) ($) ($) SARS (#) ($) ($)
----------------------- ------ --------- -------- -------------- ------------ -------------- --------- --------------
Paul C. Hudson 2002 159,538 21,375 - 2,448 (b) 29,718 5,010 4,654 (1)
President/Chief 971 (2)
Executive Officer 2001 154,475 21,375 - - 5,648 5,010 5,275 (1)
828 (2)
2000 139,241 6,011 - - 5,010 4,357 (c)
4,357 (1)
924 (2)
Alvin D. Kang 2002 143,033 - - 5,500 (b) 50,000 - 2,100 (1)
Chief Financial 1,548 (2)
Officer (3) 2001 8,355 - - - - - - (1)
129 (2)
- - - - -
Eric V. Johnson 2002 127,922 16,477 - 2,400 (b) 28,704 2,086 3,610 (1)
Chief Retail 375 (2)
Banking Officer 2001 123,263 15,950 - - 11,296 2,086 3,996 (1)
360 (2)
2000 116,250 4,950 - - - - 3,448 (1)
924 (2)
Johnathan E. Heywood 2002 66,334 - - 3,000 (b) 40,000 202 (2)
Chief Loan Officer (3) -
(1) Reflects amounts contributed by the Company to the 401(k) Plan on behalf of
each individual. The amounts contributed by the Company each year
represents 100% of each employee's contribution up to 3% of salary.
(2) Reflects the dollar value of group term life insurance paid by the Bank
during the periods covered. (3) Alvin D. Kang and Johnathan E. Heywood were
hired in December 2001 and May 2002, respectively.
(3) Alvin D. Kang and Johnathan E. Heywood were hired in December 2001 and May
2002, respectively.
9
The following tables summarize options granted in 2002 and the value of
unexercised options held by the Named Executive Officers at December 31, 2002.
Options/SAR Grants in Last Fiscal Year
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Expiration
Options/SARs Employees in Exercise or Date
Name Granted (#) Fiscal Year Base Price ($/Sh) (1)
--------------------------- ------------- ----------------- -------------- -----------
Paul C. Hudson
President and Chief
Executive Officer 29,718 16% 6.68 07/25/2013
Alvin D. Kang
Chief Financial Officer 50,000 27% 6.68 07/25/2013
Eric V. Johnson
Chief Retail
Banking Officer 28,704 16% 6.68 07/25/2013
Johnathan E. Heywood
Chief Loan Officer 40,000 22% 6.68 07/25/2013
(1) The stock options were awarded on July 25, 2002 and are exercisable in
installments of 20%, cumulatively, on each anniversary date of the award.
Aggregated Option/SAR Exercises In Last
Fiscal Year And Fiscal Year-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Shares Value Options/SARs at Fiscal SARS at Fiscal Year-End
Acquired on Realized Year-End (#)Exercisable ($) Exercisable (E)/
Name Exercise (#) ($) (E)/Exercisable (U) Unerercisable (U)
--------------------- ------------ ---------- ---------------------- ------------------------
Paul C. Hudson - - 36,407 (U) 104,713 (U)
47,163 (E) 179,323 (E)
Alvin D. Kang - - 50,000 (U) 128,000 (U)
None (E) None (E)
Eric V. Johnson - - 35,002 (U) 114,806 (U)
4,998 (E) 13,913 (E)
Johnathan E. Heywood - - 40,000 (U) 102,400 (U)
None (E) None (E)
DIRECTOR COMPENSATION
No remuneration was paid to the directors by the Company in 2002. Currently, the
Chairman of the Board of Broadway Federal receives a monthly retainer fee of
$3,224, and all other directors of Broadway Federal, who are not employees,
receive a monthly retainer fee of $1,000 each. A fee of $500 is paid to each
director of Broadway Federal, other than the Chairman of the Board and the
President, for special Board meetings. Committee meeting fees of $200 per
meeting, except for the Loan Committee, are also paid to directors of Broadway
Federal, other than the Chairman of the Board and the President. Loan Committee
members, other than the President and the Chief Lending Officer, are paid a
monthly fee of $500. On November 20, 2001, Dr. Willis K. Duffy became a Director
Emeritus and, as such, was receiving a monthly retainer fee of $817 until
January 2003 when he passed away. On May 17, 2002, Lyle A. Marshall became a
Director Emeritus and began receiving a monthly retainer fee of $974.
10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's current loan policy provides that all loans made by the Company or
its subsidiaries to its directors and executive officers must be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and must
not involve more than the normal risk of collectibility or present other
unfavorable features.
On September 30, 1999, the Bank made a $550,000 loan to Maddox & Stabler LLC.
Mr. A. Odell Maddox is a director of the Company and the Bank. The loan is
secured by a 24-unit multi-family property located in Los Angeles, California.
The terms of the 30-year loan include an initial interest rate of 8% fixed for
the first five years. Thereafter the rate will be 2.50% over the one-year
Treasury Bill rate. Since inception, payments on the loan have been made as
agreed. As of March 31, 2003, the outstanding balance of the loan was $530,813.
On February 25, 2002, the Bank made a $300,000 loan to Alvin D. Kang, who is
Executive Vice President and Chief Financial Officer of the Bank and Chief
Financial Officer of the Company. The loan was secured by a single family
residential property located in Torrance, California. The loan earned an
interest rate of 5.75%. The loan was paid off on December 3, 2002.
SEVERANCE AGREEMENTS
The Company and the Bank have entered into severance agreements with each of
Messrs. Paul Hudson, Kang, Johnson and Heywood. Each agreement provides that if,
within three years of any Change in Control (as defined in the agreement), the
officer's employment is terminated, either by the officer following a demotion
or other specified adverse treatment or by the Company or the Bank other than
for Cause (as defined in the agreement), then the officer will receive a
severance payment equal to the sum of (A) the officer's unpaid salary and bonus
or other incentive compensation for the remainder of the year in which
employment is terminated, and (B) a specified multiple of the highest Annual
Compensation (as defined in the agreement) paid to the officer in any of the
three years preceding termination of employment. The multiple is 2.5 for Mr.
Hudson, 2 for Mr. Kang and 1.5 for each of Messrs. Johnson and Heywood. In
addition to these payments, any stock options and similar rights held by the
officer will become fully vested and exercisable, and the health and other
benefits coverage provided to the officer will be continued for one year after
termination of employment.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as the Company's independent audit
firm for the fiscal year ending December 31, 2003. It is anticipated that
representatives of KPMG will be present at the Annual Meeting. The KPMG LLP
representatives will be given an opportunity to make a statement, if they desire
to do so, and will be available to respond to any appropriate questions from
stockholders. KPMG LLP performed the independent audit of the Company's
financial statements for the fiscal year ended December 31, 2002. Audit services
included examination of the consolidated financial statements of the Company and
a review of certain filings with the Securities and Exchange Commission.
11
The following table sets forth information regarding the aggregate fees billed
for services rendered by KPMG LLP for the fiscal year ended December 31, 2002:
2002 2001
------------- -------------
Audit fees $129,500 $115,900
Audit related fees - -
Tax fees (1) 30,450 42,000
All other fees - -
------------- -------------
Total Fees $159,450 $157,900
============= =============
(1) For tax consultation and tax compliance services.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO RATIFY
THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
Audit Committee Report
The Audit/CRA/Compliance Committee oversees the Company's financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process, including
the Company's systems of internal controls. In fulfilling its oversight
responsibilities, the Committee reviewed the audited financial statements in the
Annual Report with management including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.
The Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of the audited financial statements with
accounting principles generally accepted in the United States of America, their
judgments as to the quality, as well as the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee under auditing standards generally accepted in the United
States of America, including SAS 61. In addition, the Committee has discussed
with the independent auditors the auditors' independence from management and the
Company, including the matters in the written disclosures required by
Independence Standards Board Standard No. 1, and considered the compatibility of
non-audit services provided by the auditor with the auditors' independence.
The Committee discussed with the Company's internal and independent auditors the
overall scope and plans for their respective audits. The Committee meets with
the internal and independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of the Company's
internal controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the audited financial statements be
included in the Annual Report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 2002. The Committee has also
recommended to the Board the selection of the Company's independent auditors.
This report of the Audit/Compliance Committee shall not be deemed incorporated
by reference by any general statement incorporating this Proxy Statement by
reference into filings under the Securities Act of 1933, or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Mr. Daniel A. Medina
Mr. Kellogg Chan
Mr. Virgil Roberts
12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports (Forms 3, 4
and 5) of stock ownership and changes in ownership with the Securities and
Exchange Commission. To our knowledge, based solely on the Company's review of
the copies of such reports furnished to us and written representations as to
whether such reports were required during the fiscal year ended December 31,
2002, Johnathan E. Heywood filed a Form 4 covering one previously unreported
transaction and Eric V. Johnson filed a Form 4 and a Form 5 covering one each
previously unreported transaction. Ms. Hill and Messrs. Chan, Maddox, Medina,
Teasley, E. Hudson and P. Hudson each filed a form 5 covering one previously
unreported transaction.
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR PRESENTATION AT THE ANNUAL MEETING
Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's 2004 proxy solicitation materials must set forth such
proposal in writing and file it with the Secretary of the Company on or before
January 3, 2004. The Board of Directors will review any stockholder proposals
which are filed as required and will determine whether such proposals meet
applicable criteria for inclusion in the proxy solicitation materials and for
consideration at the Annual Meeting. Except for director nominations, any
stockholder may make any other proposal at the 2004 Annual Meeting and the same
may be discussed and considered, but unless stated in writing and filed with the
Secretary of the Company on or before May 19, 2004, such proposal may only be
voted upon at a meeting held at least 30 days after the Annual Meeting at which
it is presented. Stockholder director nominations must be received by the
Company no earlier than March 20, 2004 and no later than April 19, 2004.
Under the Company's Bylaws, stockholder nominations for election of directors
may only be made pursuant to timely notice in writing to the Secretary of the
Company not less than 60 days nor more than 90 days prior to the anniversary
date of the previous year's Annual Meeting (between March 20, 2004 and April 20,
2004) to be considered at the Annual Meeting in year 2004. Such notice must
state the nominee's name, age and business and residence addresses, the
nominee's principal occupation or employment, and the class and number of shares
of Common Stock beneficially owned by the nominee on the date of the notice. The
required notice must also disclose certain information relating to the nominee,
required to be disclosed in a proxy statement and in certain other filings under
federal securities laws.
ANNUAL REPORT AND FORM 10-KSB
The 2002 Annual Report to Stockholders containing the consolidated financial
statements of the Company for the year ended December 31, 2002 accompanies this
proxy statement.
Stockholders may obtain, without charge, a copy of the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2002 as filed with the
Securities and Exchange Commission, without accompanying exhibits, by writing to
Beverly A. Dyck, Investor Relations Representative, Broadway Financial
Corporation, 4800 Wilshire Boulevard, Los Angeles, California 90010.
Stockholders may obtain any of the exhibits that are referred to in the list of
exhibits in the Form 10-KSB upon payment to the Company of the cost of
furnishing them.
Please mark, sign, date, and return the accompanying proxy card in the enclosed
postage-paid envelope at your earliest convenience, whether or not you currently
plan to attend the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Beverly A. Dyck
Secretary
BROADWAY FINANCIAL CORPORATION
REVOCABLE PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 2003
THE BOARD OF DIRECTORS IS SOLICITING THIS PROXY
I/we hereby constitute and appoint Elbert T. Hudson and Paul C. Hudson, and each
of them, my/our attorneys, agents and proxies, with full power of substitution
to each, to attend and act as proxy or proxies at the 2003 Annual Meeting of
Stockholders of Broadway Financial Corporation, which will be held at its
principal executive offices, 4800 Wilshire Boulevard, Los Angeles, California
90010, on Wednesday, June 18, 2003 at 2:00 p.m., and at any postponement or
adjournment thereof, and to vote as I/we have indicated the number of shares
which I/we, if personally present, would be entitled to vote.
TO RETURN YOUR PROXY CARD BY MAIL
o Mark, sign and date your proxy card.
o Detach your proxy card.
o Mail your proxy card in the postage paid envelope provided.
--------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote
indicated to the contrary (below). for all nominees listed below.
Nominees: Paul C. Hudson, Kellogg Chan, and David M. W. Harvey.
INSTRUCTION: TO WITHHOLD AUTHORITY to vote for individual nominee(s) write
that nominees(s) name in the space below.
2. RATIFICATION OF APPOINTMENT OF KPMG LLP as the independent
audit firm of Broadway Financial Corporation for the year
ending December 31, 2003
PLEASE SIGN AND DATE BELOW
I/we hereby ratify and confirm all that said
attorneys and proxies, or any of them, or their
substitutes, shall lawfully do or cause to be
done because of this proxy, and hereby revoke
any and all proxies I/we have given before to
vote at the meeting. I/we acknowledge receipt
FOR of the notice of Annual Meeting and the Proxy
Statements which accompanies the notice.
AGAINST
ABSTAIN
Dated:______________________________________,
2003
________________________________________________
Signature
_______________________________________________
Signature
Please date this Proxy and sign above as your
name(s) appear(s) on this card. Joint owners
should each sign personally. Corporate proxies
should be signed by an authorized officer.
Executors, administrators, trustees, etc.
should give their full titles.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF DIRECTORS NOMINATED BY THE
BOARD OF DIRECTORS AND FOR RATIFICATION OF
THE APPOINTMENT OF KPMG, LLP. THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED.
IF NO DIRECTION IS MADE, IT WILL VOTED FOR
THE ELECTION OF DIRECTORS NOMINATED BY THE
BOARD OF DIRECTORS AND FOR RATIFICATION OF
THE APPOINTMENT OF KPMG LLP.