DEF 14A of Axos Financial, Inc., Sep 25, 2023

DEF 14A of Axos Financial, Inc.

Filed Sep 25, 2023 · FY20230001299709-23-000261

Open on EDGAR

  1. ITEM 1. ELECTION OF DIRECTORS

    ITEM 1. ELECTION OF DIRECTORS

  2. Board Nominees – 2023

    Board Nominees – 2023 The Company’s Board is divided into three classes designated as Class I, Class II and Class III (see Corporate Governance, Board of Directors Composition and Independence). There are currently three Class I directors whose terms expire at the 2023 Annual Meeting. The members of the Board of Directors of the Company also are the members of the Board of Directors of Axos Bank (the “Bank”), a consolidated subsidiary of the Company. The Board of Directors, upon recommendation of the Nominating/Corporate Governance Committee, has nominated the three Class I directors named below for election to the Board to hold office for a three-year term expiring at the 2026 Annual Meeting or until a successor is elected and qualified. Unless otherwise instructed, the proxy holders named in the enclosed proxy intend to vote the proxies received by them for the election of these nominees. If, prior to the Annual Meeting, any nominee of the Board of Directors becomes unable to serve as a director, the proxy holders will vote the proxies received by them for the election of a substitute nominee selected by the Board of Directors as permitted by the rules of the Securities and Exchange Commission.

  3. Class I Director Nominees for Terms Ending at the 2026 Annual Meeting of Stockholders

    Class I Director Nominees for Terms Ending at the 2026 Annual Meeting of Stockholders Tamara N. Bohlig. Ms. Bohlig, age 54, has served as member of the Board of Directors since August 2019 and currently serves as Chair of the Compliance and Independent Credit Review Committee and as member of the Technology Committee of the Board of Directors of the Bank; she formerly served as a member of the Nominating/Corporate Governance Committee of the Board of Directors of the Company. Ms. Bohlig brings to the Board more than thirty years of experience, driving billions in aggregate revenue and accumulated assets under management for companies at the intersection of technology, financial services, and consumer products. Over her thirty-year career, Ms. Bohlig has led corporate and product marketing teams in developing, launching, and managing more than 30 enterprise and consumer products and services, including the marketing of 250+ investment products and 100+ platform services. Today, Ms. Bohlig is a small business owner-operator, and a fractional executive providing strategic marketing services for growth companies. Earlier, Ms. Bohlig served as CMO of AssetMark and SmartBiz Loans, helping the former take its asset management platform public on the New York Stock Exchange. She also served as a senior executive across business development, client experience, and marketing for Charles Schwab & Co., Inc.’s investor retail and investment management divisions. Her early career included vice president roles in marketing for JPMorgan Chase, N.A. (formerly WaMu and Providian), as well as product management, sales, and marketing roles for Hewlett-Packard, P&G, and General Mills. Ms. Bohlig holds two degrees from Northwestern University, including an MBA from the J.L. Kellogg Graduate School of Management, and a bachelor of arts in sociology. The Company believes Ms. Bohlig’s qualifications to serve on the Board, in addition to those discussed above, include her directly relevant experience in the asset management and brokerage industries, specifically as it relates to business development, client experience, product management and marketing. Nicholas A. Mosich. Mr. Mosich, age 68, has served as a member of the Board of Directors since May 2009 and as Vice Chairman of the Board of Directors since October 2010. Mr. Mosich serves as member of the Audit Committee of the Board of Directors of the Company and the Bank and serves as Chair of the Asset/Liability Committee and as member of the Credit Committee of the Board of Directors of the Bank,. Mr. Mosich has extensive knowledge of the real estate development and investment banking industries acquired through his career as a Managing Member of Ion Capital Partners, LLC / Arroyo Vista Partners, LLC, both discretionary investment funds that acquire land for residential development projects in California. Mr. Mosich serves as General Partner of Southwest Aviation Complex, LP, a fixed base operation at Van Nuys Airport and as General Partner of Vineyard Ventures, LP, a Washington real estate venture. Mr. Mosich also brings 40 years of capital markets and business management experience, most recently as an Executive Vice President and Board Member of The Seidler Companies Incorporated, a NYSE member firm (“Seidler”). While at Seidler, Mr. Mosich was responsible for overseeing its Private Client Service operations and Investment Banking Operations. He was a Managing Director of Seidler’s Community Bank Group, active in mergers and acquisitions, raising public and private capital for emerging growth banks including an active role as a co-manager of the Axos initial public offering. Previously, Mr. Mosich was a partner at McGoodwin James & Company, a venture capital firm headquartered in Costa Mesa. At McGoodwin, he was active in funding later stage venture companies and making private investments in public companies. Mr. Mosich completed his undergraduate degree (cum laude) at the University of Michigan and received a MBA from Stanford University. The Company believes Mr. Mosich’s qualifications to serve on the Board, in addition to those discussed above, include his experience developing residential real estate in California and providing capital market services to small banks and other businesses. Edward J. Ratinoff. Mr. Ratinoff, age 58, has served as a member of the Board of Directors since April 2010 and currently serves as Chair of the Credit Committee and as a member of the Compliance and Independent Credit Review Committee of the Board of Directors of the Bank; he formerly served as a member of the Nominating/Corporate Governance Committee of the Board of Directors of the Company. Mr. Ratinoff currently holds the position of Founder and Managing Principal of James Investment Partners, a privately-held real estate investment platform based in Los Angeles. Mr. Ratinoff previously served as Managing Director and Head of Acquisitions for Phoenix Realty Group, an institutional real estate investment firm focused on opportunistic multifamily investments. Mr. Ratinoff also held the position of Managing Director and west coast head for the J.E. Robert Companies. In this role, Mr. Ratinoff was responsible for all equity and debt transactions throughout the western United States for the real estate investment funds sponsored by the firm and was a member of the investment committees for both JER Partners and JER Investors Trust (NYSE: JRT). Mr. Ratinoff has also served as Principal with FowlerFlanagan Partners and held senior positions focusing on real estate investment banking with McDonald Investments, Chase Securities and BT Alex Brown, executing public and private capital markets transactions for west coast-based real estate companies. Mr. Ratinoff received a Bachelor of Arts in Architecture and City Planning from the University of California, Berkeley, and a MBA from the J.L. Kellogg Graduate School of Management at Northwestern University. The Company believes Mr. Ratinoff’s qualifications to serve on the Board, in addition to those discussed above, include his experience investing and managing multifamily real estate projects and providing capital markets financing for real estate assets.

  4. Continuing Class II Directors with Terms Ending at the 2024 Annual Meeting of Stockholders

    Continuing Class II Directors with Terms Ending at the 2024 Annual Meeting of Stockholders Gregory Garrabrants. Mr. Garrabrants, age 51, has served as President and Chief Executive Officer since October 2007 and as member of the Board of Directors of the Company and the Bank since March 2008. Mr. Garrabrants brings to the Board more than twenty-five years of experience in financial services. Mr. Garrabrants also possesses particular strengths with respect to leadership and management skills. Prior to joining the Company, Mr. Garrabrants was a senior vice president and the head of corporate business development at the nation’s seventh largest thrift focusing on entry into new business segments, mergers and acquisitions, joint ventures and strategic alliances. Before his senior executive roles at banking institutions, Mr. Garrabrants served the financial services industry as an investment banker, management consultant and attorney for over 15 years. He was an investment banker at Goldman Sachs specializing in advising management and directors on issues such as strategic planning, capital and liquidity management, balance sheet management, asset/liability management, and enhancement of stockholder value. Prior to Goldman Sachs, Mr. Garrabrants served as a management consultant at McKinsey & Company. At McKinsey, Mr. Garrabrants led teams that worked with senior management of money center banks, non-bank financial services companies, insurance companies and asset managers on strategy development, sales force effectiveness, risk management, organizational design and corporate restructuring. Prior to McKinsey, Mr. Garrabrants worked as a summer associate at Skadden, Arps, Slate, Meagher & Flom, Munger, Tolles & Olson, and Morrison & Foerster focusing on corporate and securities law and clerked for the Honorable Steven V. Wilson of the United States District Court for the Central District of California. Prior to graduate school, he began his career at Deloitte Consulting in the financial advisory services and litigation support practices. Mr. Garrabrants earned his Juris Doctorate, magna cum laude, from the Northwestern University School of Law and his MBA, with the highest distinctions, from the J.L. Kellogg Graduate School of Management at Northwestern University. He has a Bachelor of Science degree in Industrial and Systems Engineering and a minor in Economics from the University of Southern California where he graduated with high honors. He is a Chartered Financial Analyst and member of the California Bar. The Company believes Mr. Garrabrants’ qualifications to serve on the Board, in addition to those discussed above, include his extensive experience in banking, investment banking, strategic planning and team leadership. The Company believes that his 16 years of service to the Company reflect his skills to attract high quality new customers, build new banking and securities products and services and to develop management teams responsive to current and future business changes. Paul J. Grinberg. Mr. Grinberg, age 62, has served as a member of the Board of Directors since April 2004 and as Chairman of the Board of Directors of the Company and the Bank since February 2017. Mr. Grinberg currently serves as Chair of the Audit Committee of the Board of Directors of the Company and the Bank, and as a member of the Compensation Committee and the Nominating/Corporate Governance Committee of the Board of Directors of the Company; he formerly served as Chair of the Nominating/Corporate Governance Committee of the Board of the Directors of the Company and as member of the Compliance and Independent Credit Review Committee of the Board of Directors of the Bank. Mr. Grinberg brings to the Board extensive executive management, operational, M&A, accounting and financial reporting expertise. Mr. Grinberg currently serves as the President of PG Mountain Capital, a company which provides consulting and advisory services to private equity and venture capital firms and their related businesses. Mr. Grinberg also serves as Chairman of Social Leverage Acquisition Corp I (NYSE: SLAC), a special purpose acquisition company formed to effect a business combination with one or more businesses. Mr. Grinberg previously served as an executive with Encore Capital Group (Nasdaq: ECPG), an international specialty finance company with operations in fifteen countries, from September 2004 thru December 2018. His most recent position was President, International, overseeing Encore’s International operations. Before that, he served as Group Executive, International and Corporate Development and Executive Vice President and Chief Financial Officer. Prior to joining Encore, Mr. Grinberg served as President of Brio Consulting Group, a company he founded that provided financial strategy and consulting services to private equity and venture-backed companies. Before that, Mr. Grinberg served as Chief Financial Officer of Stellcom, Inc., a systems integration firm focused on providing mobile and wireless engineering solutions to Fortune 1000 companies, and as Executive Vice President and Chief Financial Officer of TeleSpectrum Worldwide, Inc., a publicly traded company that provided outsourced call center solutions to Fortune 500 companies. Mr. Grinberg began his career at Deloitte & Touche LLP, ultimately becoming a partner in the firm’s Merger and Acquisition Services Group. Mr. Grinberg earned a MBA (graduating Beta Gamma Sigma) from Columbia University and a bachelor’s degree in accounting (graduating magna cum laude) from Yeshiva University. The Company believes Mr. Grinberg’s qualifications to serve on the Board, in addition to those discussed above, include his 19 years of experience in banking as a director of the Company, his nearly 25 years of experience as a public company executive and CFO in the financial services industry, his public accounting experience including public and private company auditing, his M&A advisory experience and his experience analyzing financial strategies for growing businesses. Uzair Dada. Mr. Dada, age 56, has served as a member of the Board of Directors since January 2015 and serves as Chair of the Technology Committee and as a member of the Credit Committee of the Board of Directors of the Bank. Mr. Dada has a strong business and financial background focused on technology and marketing. He is the Founder and CEO (since 2001) of Iron Horse (IH), an award-winning growth marketing technology and services company serving an array of Fortune 500 and high tech companies. Under Mr. Dada's leadership, IH has introduced a suite of proprietary demand generation solutions and technologies that are widely recognized for their innovation. Mr. Dada is a graduate of the University of California, Berkeley and the J.L. Kellogg Graduate School of Management at Northwestern University. The Company believes Mr. Dada’s qualifications to serve on the Board, in addition to those discussed above, include his valuable digital marketing technology and systems integration experience, his IT compliance and auditing experience and his strong business and financial background.

  5. Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders James S. Argalas. Mr. Argalas age 52, has served as member of the Board of Directors since August 2011 and currently serves as a member of the Asset/Liability Committee and as a member of the Compliance and Independent Credit Review Committee of the Board of Directors of the Bank; he formerly served as a member of the Audit Committee of the Board of Directors of the Company and the Bank. Mr. Argalas brings to the Board extensive experience in the financial and investment sectors. In 2006, he founded Presidio Union, LLC, a company that specializes in providing financial analysis and corporate advisory services to early stage growth companies and their investors, taking an active role in developing ventures that have the potential to create significant stockholder value. Prior to founding Presidio Union, Mr. Argalas was a Principal at Watershed Asset Management and NM Rothschild, where he was responsible for investments in distressed credit, liquidations, real estate, special situations, and debt and equity investments in Asia-Pacific. Prior to joining Watershed, Mr. Argalas was an Associate Principal with McKinsey & Company and an Associate at Goldman Sachs. Mr. Argalas has a MBA from the J.L. Kellogg Graduate School of Management at Northwestern University with majors in Finance, Entrepreneurship and International Business; in addition, Mr. Argalas holds a Bachelor of Science degree in Engineering from the University of Michigan, and a Bachelor of Science degree in Foreign Service from Georgetown University. The Company believes Mr. Argalas’ qualifications to serve on the Board, in addition to those discussed above, include his experience investing in complex debt securities, real estate and other special investment situations including investments in early stage financial technology ventures. James J. Court. Mr. Court, age 61, has served as a member of the Board of Directors since April 2011 and currently serves as Chair of the Compensation Committee, as a member of the Nominating/Corporate Governance Committee of the Board of Directors of the Company and as member of the Technology Committee of the Board of Directors of the Bank; he formerly served as a member of the Compliance and Independent Credit Review Committee of the Board of Directors of the Bank. Mr. Court currently is Chief Executive Officer of Navogen, LLC (“Navogen”), a business and technology consulting firm. Mr. Court started Navogen in December of 2018. Previously, Mr. Court served as Chairman and President of First American’s Property & Casualty Insurance Group (“First American”). Mr. Court joined First American in 1999 and has previously served in senior management roles including Chief Operating Officer and Chief Information Officer; his responsibilities at First American included overseeing all three Property & Casualty operating units. Prior to joining First American, Mr. Court held information technology and operations positions at MGE UPS Systems and Printronix, Inc. Further, Mr. Court has led successful business and technology transformations in both the financial services and manufacturing sectors. Mr. Court holds a MBA from the Graziadio School of Business and Management at Pepperdine University, a Bachelor of Science degree in Information Systems from the University of Redlands, and an Associate degree in Electronic Engineering Technology. The Company believes Mr. Court’s qualifications to serve on the Board, in addition to those discussed above, include his experience as CEO, COO and CIO for information technology firms as well his insurance industry knowledge, particularly real estate title insurance and property and casualty insurance. Stefani D. Carter. Ms. Carter, age 45, has served as a member of the Board of Directors since August 2021 and currently serves as Chair of the Nominating/Corporate Governance Committee and as a member of the Compensation Committee of the Board of Directors of the Company and as member of the Asset/Liability Committee of the Board of Directors of the Bank. Ms. Carter has been a practicing attorney since 2005, specializing in civil litigation, contractual disputes and providing general counsel and advice to small businesses and individuals. Ms. Carter currently serves as an arbitrator and is the principal of three entities, Stefani Carter & Associates, LLC, a consulting and legal services firm, Stable Realty, LLC, a real estate investments firm, and Dallas HERO, a non-profit focusing on local ballot initiatives. From 2020 to 2023, Ms. Carter served as a litigation shareholder at Ferguson Braswell Fraser Kubasta PC (“FBFK”), a full-service law firm. Prior to FBFK, Ms. Carter served as senior counsel at the law firm of Estes Thorne & Carr PLLC for three years. In addition, Ms. Carter served as an elected representative of House District 102 in the Texas House of Representatives between 2011 and 2015. From 2008 to 2011, Ms. Carter was employed as an associate attorney at the law firm of Sayles Werbner, PC and from 2007 to 2008 was a prosecutor in the Collin County District Attorney’s Office. Prior to serving as a prosecutor, Ms. Carter was an associate attorney at Vinson & Elkins LLP from 2005 to 2007. Ms. Carter currently serves as the Lead Director, the Chair of the Nominating and Corporate Governance Committee, and as a Member of the Related Party Transactions Committee of Braemar Hotels & Resorts, Inc. (NYSE: BHR), a luxury lodging real estate investment trust. In addition, Ms. Carter currently serves as the Chairman of the Board of Directors, as a Member of the Nominating and Corporate Governance Committee, and as a Member of the Executive Committee of Wheeler Real Estate Investment Trust, Inc. (NASDAQ: WHLR), a retail real estate investment trust. Ms. Carter has a Juris Doctor from Harvard Law School, a Master's in Public Policy from Harvard University's John F. Kennedy School of Government, and a Bachelor of Arts in Government as well as a Bachelor of Journalism in News/Public Affairs from the University of Texas at Austin. The Company believes that Ms. Carter's qualifications, in addition to those discussed above, include her extensive experience in advising and counseling clients in civil litigation and contractual disputes, her many experiences as an elected official, and her experience serving on other public company boards. Roque A. Santi. Mr. Santi, age 60, has served as a member of the Board of Directors since August 2022 and currently serves as a member of the Audit Committee of the Board of Directors of the Company and the Bank and as a member of the Asset/Liability Committee and the Credit Committee of the Board of Directors of the Bank. Mr. Santi currently serves as Enterprise CFO with Roosevelt Management Company, LLC, in New York, where he develops and implements strategic plans and directs personnel responsible for the oversight of financial control function. Prior to joining Roosevelt Management, he served from 2010 to 2019 as President, CEO, CFO and board member for Elderlife Financial Services, LLC, where he organized the recapitalization and buildout of a national direct lending unit and developed a unique "financial concierge" service for the senior living industry during the financial crisis. From 2004 to 2019, Mr. Santi was President and CFO with ECC Capital Corporation. Mr. Santi's experience includes being a Partner with Ernst & Young LLP and Arthur Andersen LLP, and a Manager with Deloitte & Touche. Mr. Santi served as a member of the board of ElderLife Financial Services, LLC through 2021, and was a member of the board of Federal National Holdings, Inc. Mr. Santi has a bachelor's degree in Accounting from Pace University in New York, New York, and has been a Certified Public Accountant since 1988 – Certified in Maryland and Virginia (status - inactive).

  6. Continuing Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    The Company believes that Mr. Santi's qualifications, in addition to those discussed above, include his over 37 years of executive leadership and expertise in the lending and mortgage industry and experience in both large corporate and entrepreneurial C suites together with his experience serving on other boards.

  7. COMMITTEES OF THE BOARD OF DIRECTORS

    COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors of the Company has three standing committees: Audit, Compensation and Nominating/Corporate Governance. The members of the Audit Committee of the Board of Directors of the Company also serve as members of the Audit Committee of the Board of Directors of the Bank and together are referred to herein as the “Audit Committee.” A description of the general functions, composition and number of meetings held by each Committee during 2023 fiscal year is set forth below. Audit Committee. The current members of the Audit Committee are Paul J. Grinberg, Chairman; Nicholas A. Mosich and Roque A. Santi. All of the members of the Audit Committee are independent directors within the meaning of the NYSE listed company rules and meet the enhanced independence requirements for audit committee members contained in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Board of Directors has determined that Mr. Grinberg, Mr. Mosich and Mr. Santi meet the definitions of “audit committee financial expert” adopted by the SEC and included in NYSE’s rules for listed companies. The Audit Committee has a written charter that specifies its responsibilities, which include oversight of the financial reporting process and system of internal accounting controls of the Company, and appointment and oversight of the independent public accountants engaged to audit the Company’s financial statements. Our Board of Directors, upon the recommendation of the Audit Committee, approved that charter. A copy of our Audit Committee Charter, which complies with applicable NYSE rules, is accessible at the Governance section of our website at www.axosfinancial.com. During fiscal year 2023, the Audit Committee of the Board of Directors of the Company held 13 meetings and the Audit Committee of the Board of Directors of the Bank held six meetings. The Audit Committee also meets with our outside auditors and members of management, separately. Compensation Committee. The Compensation Committee is comprised of the following directors, all of whom are independent (as defined in the applicable NYSE listed company rules): James J. Court, Chairman, Paul J. Grinberg and Stefani D. Carter. The Compensation Committee assists the Board in discharging its responsibilities relating to compensation of the Company’s directors and executive officers. The Compensation Committee reviews and approves the salaries and establishes incentive compensation and other benefit plans and recommends compensation of our non-employee directors. Our Board of Directors has approved a charter setting forth the role and responsibilities of the Compensation Committee. A copy of that charter, which complies with applicable NYSE rules, is accessible at the Governance section of our website at www.axosfinancial.com. The Compensation Committee held five meetings during fiscal year 2023. Nominating/Corporate Governance Committee. The members of the Nominating/Corporate Governance Committee during fiscal year 2023 were Paul J. Grinberg, Chairman, Edward J. Ratinoff and Tamara N. Bohlig. The Nominating/Corporate Governance Committee assists the Board in selecting nominees for election to the Board, in assessing the performance of the Board and in monitoring the composition of the Board. Each member of the Nominating/Corporate Governance Committee meets the “independent director” requirements within the meaning of the NYSE listed company rules. The Board has adopted a charter setting forth the responsibilities of the Nominating/Corporate Governance Committee. A copy of that charter, which complies with applicable NYSE rules, is accessible at the Governance section of our website at www.axosfinancial.com. During fiscal year 2023, the Nominating/Corporate Governance Committee of the Board of Directors of the Company held three meetings. The Director Nominating Process. In identifying new Board candidates, the Nominating/Corporate Governance Committee seeks recommendations from existing board members and executive officers. The Nominating/Corporate Governance Committee also has the authority to engage an executive search firm and other advisors, as it deems appropriate, to assist it identifying qualified candidates for the Board. In determining whether to nominate each of the director nominees, the Committee considers the following: •Relevant Industry Experience, including banking, financial services, technology services, real estate, insurance and trust services. The Committee considers his or her understanding of our business and the business environment in which we operate; and the candidate’s ability and willingness to devote adequate time and effort to Board responsibilities, taking into account his or her employment and other board commitments. •Public Company Experience, including experience serving on other public company boards, experience with investor relations and familiarity with regulations. •Expertise in Technology, including backgrounds in information systems, financial systems, IT controls and software integrations. •Financial Acumen, including ability to make independent analytical inquiries about financial matters related to our business and the business environment in which we operate. •Leadership Experience, including experience as a CEO, CFO, COO or other senior level position engaging employees, customers, and stockholders, etc. •Legal and Compliance Experience, including experience with bank regulations, compliance, litigation and contract provisions. The Nominating/Corporate Governance Committee conducts a comprehensive review of the activities and associations of each candidate to ensure that there are no legal impediments, conflict of interests or other considerations that might hinder or prevent service on the Board. In making its selection, the Nominating/Corporate Governance Committee bears in mind that the foremost responsibility of a director of a Company is to represent the interests of the stockholders as a whole. The Nominating/Corporate Governance Committee will consider candidates proposed by stockholders upon timely written notice to the Corporate Secretary. Any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at an annual meeting of stockholders only if the stockholder meets certain criteria and the written notice of such stockholder’s intent to make such nomination or nominations has been given in accordance with our Bylaws. See Stockholder Proposals for 2024 Annual Meeting.

  8. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    COMPENSATION OF NON-EMPLOYEE DIRECTORS The Board of Directors of the Company, acting upon a recommendation from our Compensation Committee, annually determines the compensation of the non-employee directors for their service in the Board and its committees.

  9. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    | Key Principles | Significant Time Commitment | | The Board and the Compensation Committee are guided by the following principles: •Compensation should consist of a combination of cash and equity compensation awards that are designed to fairly pay the non-employee directors for work required for a company of our size and scope; •Compensation should align the non-employee directors’ interests with the long-term interests of our stockholders; and •Compensation should assist with attracting and retaining qualified non-employee directors. | In addition to preparation for and attendance of Board and Committee meetings (65 total in fiscal 2023), our non-employee directors are engaged in a variety of other ways, including: •Receiving updates on significant developments; and •Communicating and meeting with each other, senior management and regulators from time to time. |

  10. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    | What We Do | What We Do Not Do | | •Emphasis on Equity Compensation: The majority of non-employee director compensation is in the form of equity-based awards (RSUs). •Equity Ownership Requirements: All non-employee directors are required to own at least five times his or her annual cash retainer in common stock of AX, with a five-year transition period. | •No fees for attending meetings - attendance is expected and compensation is not dependent on Board meeting schedule. •No undue focus on short-term stock performance - pay aligns with compensation philosophy, not short-term fluctuations in stock price. |

  11. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    The Company does not pay director compensation to directors who are also our employees. All non-employee directors of the Company also serve on the Board of Axos Bank. The non-employee directors receive no additional compensation related to such service. The Compensation Committee monitors non-employee director pay to ensure consistency with best practices so that our non-employee directors are appropriately compensated for the extensive services they provide to the Company. The Compensation Committee engaged its independent compensation consultant to analyze our non-employee director compensation program in light of the Company’s compensation principles for non-employee directors. The Compensation Committee took into account the advice of the independent compensation consultant in recommending non-employee director compensation for the 2023 fiscal year.

  12. Non-employee Director Compensation in Fiscal 2023

    Non-employee Director Compensation in Fiscal 2023

  13. Non-employee Director Compensation in Fiscal 2023

    | Name | Fees Earned or Paid in Cash1 | Stock Awards2 | Option Awards | Non-Equity Incentive Plan Compensation | Changes in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | James S. Argalas | $40,000 | $278,160 | $— | $— | $— | $— | $318,160 | | Tamara N. Bohlig | 40,000 | 278,160 | — | — | — | — | 318,160 | | Stefani D. Carter | 40,000 | 278,160 | — | — | — | — | 318,160 | | James J. Court | 53,000 | 305,976 | — | — | — | — | 358,976 | | Uzair Dada | 40,000 | 278,160 | — | — | — | — | 318,160 | | Paul J. Grinberg | 132,000 | 841,434 | — | — | — | — | 973,434 | | Nicholas A. Mosich | 66,000 | 354,654 | — | — | — | — | 420,654 | | Edward J. Ratinoff | 40,000 | 278,160 | — | — | — | — | 318,160 | | Roque A. Santi3 | 33,333 | 244,980 | — | — | — | — | 278,313 |

  14. Non-employee Director Compensation in Fiscal 2023

    | 1 | The amounts in this column represent the annual cash fees paid to our non-employee directors for service during fiscal 2023. | | 2 | The stock awards included for each non-employee director above consist of Restricted Stock Units. The value for each of these awards is its grant date fair value calculated by multiplying the number of units subject to the award by the NYSE closing price per share on the date such award was granted. The table below shows the award number of units, the grant date, the per-unit fair value, and the total grant date fair value for the stock awards shown. | | 3 | Mr. Santi commenced service on the Board on August 22, 2022. |

  15. Grants of Plan-Based Awards in Fiscal 2023

    Grants of Plan-Based Awards in Fiscal 2023 This table shows all plan-based awards that the Company made to non-employee directors during Fiscal 2023:

  16. Grants of Plan-Based Awards in Fiscal 2023

    | Name | Grant Date | Non-equity Incentive Plan | Restricted Stock Units (“RSUs”) | Option Awards: Number of Shares Underlying Option | Base Price of RSUs (per Unit) | Grant Date Fair Value of RSUs | | James S. Argalas | 8/15/2022 | — | 6,000 | — | $46.36 | $278,160 | | Tamara N. Bohlig | 8/15/2022 | — | 6,000 | — | 46.36 | 278,160 | | Stefani D. Carter | 8/15/2022 | — | 6,000 | — | 46.36 | 278,160 | | James J. Court | 8/15/2022 | — | 6,600 | — | 46.36 | 305,976 | | Uzair Dada | 8/15/2022 | — | 6,000 | — | 46.36 | 278,160 | | Paul J. Grinberg | 8/15/2022 | — | 18,150 | — | 46.36 | 841,434 | | Nicholas A. Mosich | 8/15/2022 | — | 7,650 | — | 46.36 | 354,654 | | Edward J. Ratinoff | 8/15/2022 | — | 6,000 | — | 46.36 | 278,160 | | Roque A. Santi1 | 9/15/2022 | — | 6,000 | — | 40.83 | 244,980 |

  17. Grants of Plan-Based Awards in Fiscal 2023

    | 1 | Mr. Santi commenced service on the Board on August 22, 2022. |

  18. Guiding Principles and Compensation Practices

    Guiding Principles and Compensation Practices Our executive compensation program is designed to attract, motivate and retain a talented, entrepreneurial and creative team of executives who will provide leadership for the Company’s success in dynamic and competitive markets. We design our executive compensation program to be driven by performance, rewarding our executives for creating value for stockholders. We have a pay-for-performance philosophy for executive compensation based on the following principles: •Performance Expectations. We have clear performance expectations of our executive team, and the design of our executive compensation program reflects these expectations. Our Compensation Committee sets forth the performance expectations for our CEO and our CEO sets forth the performance expectations for the rest of our executive team. Each executive officer’s performance is evaluated on a regular basis against pre-defined and documented performance objectives. Each executive officer must demonstrate exceptional personal performance in order to remain part of the executive team. We believe that individuals who underperform should either be removed from the executive team with their compensation adjusted accordingly, or be dismissed from the Company. A substantial portion of each executive’s pay is performance-based compensation that is variable based on the Company or business unit’s annual and long-term operating performance and long-term stockholder returns. •Emphasis on Long-Term Equity Incentives. Our executive compensation program emphasizes long-term stockholder value creation by compensating executives with (“RSUs”) earned based upon performance criteria in a particular year and then vested on a time-based vesting schedule over three-years for NEOs other than the CEO and four years for the CEO. The Compensation Committee believes performance-based requirements for grants of RSUs, which then vest on a time-based vesting schedule are the most effective way to attract and retain a talented executive team and align executives’ interests with those of stockholders. As a result, our executive compensation program is weighted considerably toward long-term equity awards rather than cash compensation and our executives generally hold significant unvested RSUs at any particular time. This practice is intended to create a substantial retention incentive, encourage our executives to focus on the Company’s long-term success, and align executive interests with the long-term interests of our stockholders. •Competitive With Industry Peers. We believe total compensation packages for our executive officers should be sufficiently competitive with industry peer companies to enable the Company to attract and retain top executive talent, while being consistent with the Company’s objective of maintaining a competitive and efficient cost structure and aligning executive compensation to Company performance and stockholder value. Compensation should be commensurate with the role, scope and complexity of each executive’s position relative to other executives and employees. The Company’s compensation programs reflect its position as a leading technology-oriented financial institution in a highly competitive, and dynamic industry, recognizing that the Company competes for executive talent with commercial banks, investment banks, financial technology start-ups, and technology companies.

  19. Elements of Direct Compensation

    | Element | Character | How Compensation Objectives Are Met | | Base Salary | Short-Term | Compensation is commensurate with the role, scope and complexity of each executive’s position relative to other executives and employees. | | Annual Non-Equity Incentive Plan Compensation (Cash Bonus) | Short-Term | Varies based on the Company attaining annual performance measures that are aligned with the business strategy and stockholders’ interests. | | Long-Term Incentive Compensation (Restricted Stock Units) | Long-Term | Varies based on long-term total stockholder return (“TSR”) and promotes stockholders’ interests. | | Benefits and Perquisites | Short-Term | Establishes limited perquisites in line with market practice that include health and welfare insurance coverage and 401(k) plan benefits on the same basis as our general employee population. |

  20. Long-Term Equity Incentive Compensation

    Long-Term Equity Incentive Compensation The Company designed its Amended and Restated 2014 Stock Incentive Plan (the “2014 Plan”) with a focus on aligning NEO incentives with long-term stockholder value. Restricted stock unit awards are used by the Company to create a long-term incentive program. The restricted stock unit awards granted under the 2014 Plan are awarded to NEOs based on achievement of performance objectives and then generally vest over three years, one-third on each one-year anniversary of the award. Mr. Garrabrants’ awards currently vest over four years, one-fourth at the end of each fiscal year. Expense related to Mr. Garrabrants’ awards from an employment agreement effective July 1, 2017 is recognized over a period of nine years based upon Monte Carlo calculated values amortized using the graded vesting method. Effective January 1, 2023 the CEO’s employment agreement renewed automatically for one year with the same long-term equity incentive for Mr. Garrabrants that is expensed over five years based upon Monte Carlo calculated values amortized using the graded vesting method. The expense for the awards of all other NEOs is amortized over the three-year vesting period following the grant.

  21. Compensation Practices

    | What We Do | What We Don’t Do | | Pay For Performance – A significant percentage of direct compensation is based upon measurable performance goals. Risk Management – We prohibit short sales, transactions in derivatives of the Company’s securities, including various hedging type transactions, without prior approval. Performance-Based, Long-Term Equity – We emphasize long-term equity awards in our pay mix. At-Will Employment – We employ our executive officers at will. Responsible Use of Equity – We manage our equity award program responsibly, awarding only approximately 1.24% of weighted average shares outstanding (on a fully diluted basis) in 2023. | No Tax Gross Ups – We do not offer gross-ups of related excise taxes. Special Perquisites – We do not provide executive perquisites that are not available to other employees generally. Re-Pricing or Repurchase of Underwater Equity Awards – Unless our stockholders approve, we do not permit the repricing or repurchase of underwater stock options or stock appreciation rights. Pension or Other Special Benefits – We do not provide pensions or supplemental executive retirement, deferred compensation, health, or insurance benefits. No “Single Trigger” Severance Payments or equity vesting on Change In Control - Our employment agreements do not have “single-trigger” cash severance payments resulting solely from the occurrence of a change of control. |

  22. Equity Compensation Practices

    Equity Compensation Practices To directly align the interests of our executives with the interests of the stockholders, our Board maintains Company common stock (“shares”) ownership guidelines, that require the CFO, the CEO and each executive vice president to maintain a minimum ownership interest in the Company. The current ownership guideline requires executives to acquire and maintain shares having a market value equal to at least eight times annual salary for the CEO, five times annual salary for the CFO and three times annual salary for executive vice presidents within five years of appointment to the position or five years from February 27, 2019, whichever is later.

  23. Peer Group

    Peer Group The Compensation Committee reviews compensation practices and program design at peer companies to inform its decision-making process so it can set total compensation levels that it believes are commensurate with Axos’ peers and its performance. The Compensation Committee reviews compensation components at peer companies, including salaries and target bonus levels comparing them to specific market percentiles. The Compensation Committee believes that, in general, performance targets should be set above peer company performance targets (e.g., higher return on equity targets, higher growth targets), and that executives should bear greater multi-year downside from poor performance and greater multi-year upside benefit from strong performance. At the time of entry into the employment agreement with Mr. Garrabrants in 2017, the peer group selected by the Compensation Committee with the advice of an independent compensation consultant (the “Peer Group”) consisted of thirteen publicly traded banks within the same industry and having the same eight digit GICS classification as the Company, with median assets of $9.8 billion, as of December 31, 2016, and an asset size range from $4.9 billion to $18.9 billion. The thirteen banks comprising the Peer Group consist of the following:

  24. Peer Group

    | Banc of California (BANC) Bank of Hawaii Corporation (BOH) Bank OZK (OZK) CVB Financial Corp (CVBF) Eagle Bancorp (EGBN) FCB Financial Holdings (FCB)** First Financial Bankshares (FFIN) | Home Bancshares (HOMB) Opus Bank (OPB)* Trustco Bank Corp / NY (TRST) United Community Banks (UCBI) Washington Federal (WAFD) Western Alliance Bancorporation (WAL) |

  25. Peer Group

    * In 2020, Opus Bank was acquired by Pacific Premier Bank. ** In 2019, FCB Financial Holdings was acquired by Synovus Financial Corp. The Peer Group has been developed and used to benchmark the compensation of our executives as discussed in more detail below.

  26. CEO Base Salary

    CEO Base Salary The Chief Executive Officer’s base salary was set at $700,000, the 8th percentile of the Peer Group (meaning that 92% of the Peer Group CEO’s had a higher base salary at time of entry into the agreement), for fiscal year 2018 and all future contract years in the CEO’s employment agreement entered into on July 1, 2017 (the “Agreement”), which was automatically renewed in January 2022 and 2023. Since Mr. Garrabrants was appointed CEO in 2007, his salary has been set pursuant to his multi-year employment agreements and he has not received a base salary increase during the term of these employment agreements.

  27. CEO Short-Term Cash Incentive Compensation

    CEO Short-Term Cash Incentive Compensation In the Agreement, the Chief Executive Officer’s base salary plus Annual Target Cash Bonus was set at the 56th percentile of the Peer Group. The CEO’s Annual Target Cash Bonus is equal to 150% of base salary for the term of the Agreement ($700,000 × 150% = $1,050,000). The short-term cash incentive is set in accordance with the following formula: Annual Cash Bonus ($) = Annual Target Cash Bonus × (Individual Factor) + 2% (After-Tax Net Income - Target Net Income) Target Net Income = Monthly Average Common Equity Over the Fiscal Year × 15%

  28. Fiscal Year 2023 Calculation

    Fiscal Year 2023 Calculation •After-Tax Net Income was $307,164,781 •2023 Fiscal Year Return on Average Equity = 17.22% •Average Common Equity was $1,792,569,966 •Target Net Income = $1,792,569,966 × 15% = $262,885,495 2023 Fiscal Year Annual Cash Bonus ($) = $1,050,000 × (1.0) + 2% ($307,164,781 - $268,885,495) = $1,815,586 If the Company fails to achieve a 15% return on average common equity, the cash bonus is reduced in accordance with the Annual Cash Bonus Formula. In the event that the return on equity is sufficiently below the 15% target in any fiscal year, the annual target cash bonus is reduced to zero, and any negative amount calculated by the formula is carried forward to reduce future cash bonus payments in a subsequent fiscal year. For example, solely for hypothetical illustrative purposes, if the Company had fiscal year 2023 net income of $0, monthly average common equity over fiscal 2023 of $1 billion, and assuming the individual factor is 1.0, then the incentive compensation would be calculated as follows: Cash Incentive Compensation = ($1,050,000) × (1.0) + 2% (0 - 15% × $1,000,000,000) = $1,050,000 - $3,000,000 = -$1,950,000 Under the above hypothetical illustrative example, no annual cash bonus would be payable to the CEO for fiscal year 2023. If the Annual Cash Bonus Formula results in a negative dollar amount, as it does in the hypothetical illustrative example above, no incentive compensation payments would be made and future incentive compensation amounts would be reduced until any future positive incentive compensation amounts accumulate to exceed the aggregate cumulative negative incentive compensation amount resulting from the Annual Cash Bonus Formula in past years. The cumulative negative incentive compensation is capped at $2.1 million and, for the avoidance of doubt, such negative incentive compensation amount is not subject to recoupment in the event the CEO is no longer employed by the Company at the time the next annual bonus would otherwise be payable. The plan was designed in this manner to make it inherently based on long-run Company performance and provide no incentives to shift earnings unproductively across fiscal years or fiscal quarters, due to the cumulative negative incentive compensation impact. The target return on average common equity is fixed at 15%, and is not adjusted based on prior-year performance or negotiated operating budgets. The fixed return on common equity target mitigates incentives to take strategic actions to influence subsequent targets. In addition, the amount of net income required to reach the 15% return on common equity target grows with the book value of the Company’s equity, providing assurances to stockholders that above-target incentive compensation amounts are only realized after achieving superior returns on the equity invested in the Company. The $1,815,586 bonus was paid to the CEO in September 2023 upon the issuance of the fiscal 2023 audited financial statements with an unqualified audit opinion.

  29. CEO Restricted Stock Unit Award Calculation Description

    CEO Restricted Stock Unit Award Calculation Description The annual restricted stock unit award is a long-term incentive designed to provide a risk-balanced approach to executive compensation. Once earned based on achievement of pre-determined performance targets, the restricted stock units granted to the Chief Executive Officer vest over four years, one-fourth at the end of each fiscal year, encouraging actions which improve the long-term growth in the Company’s common stock price and discouraging excessive risk taking. Restricted stock unit awards to the CEO pursuant to the Agreement are based on the Company’s total return to stockholders (“TRS”) above or below the XABQ banking index (“bank index performance”). As a result, the CEO is not rewarded for external market factors that increase stock returns across the banking sector, and is not (overly) penalized for market factors decreasing sector-wide returns. The XABQ Index is a total return index that includes reinvestment of all cash distributions of the ABAQ index members on the ex-date. The ABAQ index is the index most closely populated with companies that resemble the bank’s competition. The Chief Executive Officer’s target equity award was set such that total target compensation – including the sum of the base salary, target cash bonus, and the target equity grant – would approximate the 65th percentile of total compensation for CEOs in the Peer Group. The compensation consultant recommended setting target total compensation above the peer-group median because of the higher return on equity hurdle requirement to reach target cash awards, the significant greater formulaic multi-year downside risk present in the Agreement vs. Peer Group compensation plans, and the long-term nature of the Agreement. Historically, the Compensation Committee has not made any adjustments to the CEO’s compensation over the contract term despite upward adjustments of Peer Group compensation over the terms of the CEO’s contract. The CEO’s target equity award was determined based on the beginning market capitalization of the Company prior to the beginning of each fiscal year during the term of the Agreement in accordance with the following table:

  30. CEO Restricted Stock Unit Award Calculation Description

    | Beginning Market Capitalization | Target Equity Award | | <$2.0 Billion Market Cap | $2,500,000 | | $2.0 Billion - $2.5 Billion Market Cap | $3,000,000 | | $2.5 Billion - $3.5 Billion Market Cap | $3,500,000 | | $3.5 Billion or More Market Cap | $4,000,000 |

  31. CEO Restricted Stock Unit Award Calculation Description

    This target equity grant is increased or decreased by relative over-performance or underperformance of the Company’s stock versus the bank index performance in accordance with the following formula (the “Equity Award Formula”): Equity Award (Shares) = (Equity Award ($)) ÷ (Beginning Stock Price) Equity Award ($) = (Target Award ($)) × (Individual factor) + 2% (Company’s TRS - XABQ Index Return) × (Beginning Market Cap) In the event that the Company’s TRS in any fiscal year is lower than the percentage return of the bank index, the Equity Award Formula reduces the value of the baseline equity grant by an amount that could eliminate the CEO’s equity award entirely or result in the equity award value being a negative number. If the CEO’s equity award value determined under the Equity Award Formula is a negative number in any fiscal year, it will reduce the value of the baseline equity award, if any, in subsequent fiscal years. In the event that the calculated value of an equity award is negative, the baseline equity award for the fiscal year is reduced to zero and the negative value is carried forward to be utilize as a baseline for the subsequent fiscal year’s determination of the CEO’s restricted stock unit award. Under the Agreement, any negative equity award value amount is not subject to clawback or recoupment from prior years’ awards in the event the CEO is no longer employed by the Company at the time the next annual incentive award would be payable. By reducing the baseline equity award value in subsequent fiscal years, no equity award will be made for the calculation year unless the Company’s TRS in the subsequent year or years is sufficiently in excess of the bank index performance to compensate fully for any prior year’s deficit. The Agreement measures the relative TRS for the fiscal year based on the change in the Company’s share price during that period, taking into account any dividends paid either by the Company or the index, which is assumed to be reinvested in the applicable company. The Beginning Stock Price is the average daily stock price in the final month of the prior fiscal year, which mitigates incentives to manipulate prior year-end stock prices and mitigates the impact of one-day or short-term stock price fluctuations. Beginning Market Cap is calculated by multiplying the number of shares outstanding at the end of the prior fiscal year by the Beginning Stock Price. The Target Equity Award is determined by the table described above and will adjust up or down in accordance with the beginning market capitalization of the Company. The Individual Factor is the same as the individual factor used in the cash incentive compensation plan described above. The Company’s Annual Stockholder Return includes reinvested dividends and the XABQ Index Return is the annual return of the ABAQ Index including reinvested dividends. If the Company’s annual stockholder return is lower than the XABQ Index, the Chief Executive Officer’s Target Award is reduced by this calculation. If the Equity Award is negative in any year, future equity awards are reduced or eliminated until the cumulative negative value is compensated by outperformance of the Company’s share price vs. the XABQ Index. For example, and solely for hypothetical illustrative purposes, if the Company had a target equity award of $3,500,000 in fiscal year 2023, an individual factor of 1.0, a 10% annual return compared to the XABQ Index of 20%, a beginning share price of $30 and a beginning market cap of $2.5 billion, the CEO’s equity award for fiscal 2023 would be calculated as follows: Equity Award ($) = ($3,500,000 × 1.0) + 2% (10% - 20%) × ($2,500,000,000) = $3,500,000 - $5,000,000 = ($1,500,000) Equity Award (Shares) = ($1,500,000) ÷ $30 = (50,000) shares In the example above, no equity award would be granted, and the negative value associated with 50,000 shares (negative $1,500,000) would reduce any future positive equity awards. The Compensation Committee believes the symmetric upside rewards and downside penalties associated with the Restricted Stock Unit Award Formula – coupled with the reliance on relative performance versus the Peer Group – provides stronger incentives to create stockholder value than more typical plans that provide awards during unprofitable years and fail to carry forward negative performance over a multiyear period. The Compensation Committee adopted the methodology in the Agreement in order to link long-term compensation more closely to TSR, reward performance relative to the Peer Group, discourage risk taking due to the long-term formulaic negative carry forward, adjust current share awards in the event of the Company’s share price underperformance, and encourage long-term investments that will result in the market recognizing long-term value creation rather than simply annual increases in earnings. RSU grants in any fiscal year are limited to 480,000 shares. If the Equity Award calculated under the Equity Award Formula exceeds the maximum grant of 480,000 shares, the CEO will receive a cash payment in Performance Units equal to the value on the date of the award between the number of shares calculated pursuant to the Equity Award Formula and the value of 480,000 shares (based on the Beginning Stock Price). The Performance Units “if any” will vest and be paid over a minimum of four years (subject to a maximum annual payment of $3,000,000).

  32. Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date

    Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date The Agreement was automatically renewed on January 1, 2023 (the “2023 Award”) and 2022 (the “2022 Award”) for a term beginning on July 1 and ending June 30 of the respective year, since no notice of non-renewal was provided by either the Company or CEO. The RSU or other long-term equity incentive award the Company became obligated to grant the CEO in connection with the 2023 Award will not be granted to the CEO until September 2024, if at all. The 2023 Award is contingent on the CEO remaining employed by the Company until September 2024 and is subject to other requirements for vesting of the grants under the Agreement. The grant to be issued in conjunction with the 2023 Award and 2022 Award is treated for accounting purposes as if the RSU award was granted on January 1 of each equity award’s respective year. Specifically, in accordance with Accounting Standards Codification (“ASC”) 718, an estimate of the RSU awards was made on January 1 of the each respective year using Monte Carlo simulation to generate estimated future prices of the Company’s stock, estimated future Company TSR and estimated future total returns on the XABQ index. With these outputs, the Company estimated the future number of restricted stock units and values. For accounting purposes, the Company charges the value across the future vesting periods using a grading method to determine grant-date expense attributable to future years. The Company graded or spread the award expense as required under ASC 718 across the service period and the four-year vesting periods. The estimated fair values for the 2023 Award and 2022 Award were $5.2 million and $8.8 million, respectively, on each award’s grant date. The remaining unrecognized $10.9 million estimate for the RSU awards will be recognized as compensation expense to be amortized over each of the following five fiscal years as follows:

  33. Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date

    | FY 2024 | FY 2025 | FY 2026 | FY 2027 | FY 2028 | | $4,553,272 | $3,270,835 | $1,890,032 | $927,505 | $237,524 |

  34. Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date

    The information appearing in this section “Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date” and the tables above shall not be deemed a substitute for the information set forth in the Summary Compensation Table and other tables included below. In accordance with Item 402 of Regulation S-K under the Securities Act of 1934, as amended, the entire estimated value of the 2023 Award and 2022 Award of $5.2 million and $8.8 million, respectively, appears as one grant in each respective year in the Summary Compensation Table.

  35. Fiscal Year 2023 Performance and CEO RSU Award Calculation

    Fiscal Year 2023 Performance and CEO RSU Award Calculation

  36. Fiscal Year 2023 Performance and CEO RSU Award Calculation

    | Measurement Period | Axos | Russell 2000® Index | S&P 500® | NASDAQ Composite | XABQ | | Fiscal Year 2023 | 10% | 11% | 18% | 26% | (17)% |

  37. Fiscal Year 2023 Performance and CEO RSU Award Calculation

    At the conclusion of fiscal year 2023, the Company’s TSR of 10% was greater than the -17% total return of the XABQ index. Under the Agreement, the CEO was granted an RSU award of $15,256,413 less the prior year carryforward of the fiscal year 2022 accumulated deficit of $6,404,183, for a net RSU award of $8,852,230 ($3,000,000 × 1.0) + 2% (((10)% - (17)%) × $2,213,378,186) = $3,500,000 + $12,256,413 = $15,256,413 TSRs are rounded in the shown calculation, but resulting value shown reflects the non-rounded calculation result Equity Award (Shares) = $8,852,230 ÷ $37.0265 = 239,078 shares

  38. CEO Pay Ratio

    CEO Pay Ratio Rules of the Securities and Exchange Commission require most publicly traded companies to provide information regarding the relationship of the median annual total compensation of our employees, other than our Chief Executive Officer, to the annual total compensation of Mr. Garrabrants, our Chief Executive Officer. We identified the median employee by calculating the total compensation of all persons excluding the CEO who were employed by us as of June 30, 2023, including full time and part time employees. We considered regular pay for salaried and hourly employees, overtime, equity compensation and taxable cash benefits, including cash incentive payments, and referral fee income, for the fiscal year ended June 30, 2023 as reflected by our internal payroll records. We made annualizing adjustments to the compensation of full time employees who joined us mid-year. We then ranked the fiscal 2023 compensation received by all of the employees in our employee population other than our CEO to determine our median employee. Once we identified our median employee, we calculated such employee’s annual total compensation in the same manner as our named executive officers’ compensation is determined for purposes of the Summary Compensation Table. Based on this methodology, we determined that: •The annual total compensation of our median employee was $88,956. •The annual total compensation of Mr. Garrabrants, our Chief Executive Officer, was $10,605,532. •The ratio of Mr. Garrabrants’ total compensation for 2023 to that of the median employee was 119 to 1. Mr. Garrabrants’ restricted stock unit award included in his fiscal 2023 compensation calculation is highly dependent on the Company’s performance in fiscal 2024 as described in the preceding pages, and may not be realized by Mr. Garrabrants. If the Company does not significantly outperform its peers in fiscal 2024, Mr. Garrabrants’ would not be awarded any restricted stocks units and his received compensation would be reduced to $5,380,006 and the ratio to median employee to 60 to 1.

  39. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control A change in control may be in the best interest of our common stockholders. We believe it is appropriate to align the compensation of the Chief Executive Officer and the Chief Financial Officer with the benefits of our stockholders. Since their long-term stock compensation is designed to be significant and such compensation vests in future years, we provide them with accelerated vesting of restricted stock units and cash compensation in certain situations where we believe a change in control of the Company and (or) terminating them is in the best interest of the common stockholders. Generally, such compensation is not significant to the Chief Executive Officer or the Chief Financial Officer if such termination is the result of material failures in the performance of their duties as generally described in their employment contracts.

  40. Summary Compensation Table

    Summary Compensation Table The following table shows all compensation earned and equity incentives awarded during fiscal year 2023 and the preceding two fiscal years for our Chief Executive Officer, Chief Financial Officer, and the other three most highly compensated executive officers. All individuals listed in the following table are referred to in this Proxy Statement as the “Named Executive Officers.”

  41. Summary Compensation Table

    | Name | Year1 | Salary2 | Non-Equity Incentive Plan Compensation3 | Bonus4 | Stock Awards5 | All Other Compensation6 | Total | | Gregory Garrabrants | 2023 | $700,000 | $4,667,806 | $— | $5,225,526 | $12,200 | $10,605,532 | | | 2022 | 700,000 | 4,230,387 | — | 8,792,836 | 11,600 | 13,734,823 | | | 2021 | 700,000 | 4,474,758 | — | — | 9,750 | 5,184,508 | | Thomas Constantine7 | 2023 | 330,000 | — | 475,000 | 455,057 | 12,200 | 1,272,257 | | | 2022 | 310,000 | — | 435,000 | 410,077 | 11,600 | 1,166,677 | | Raymond Matsumoto | 2023 | 385,000 | — | 565,000 | 555,037 | 12,200 | 1,517,237 | | | 2022 | 365,000 | — | 535,000 | 480,040 | 11,600 | 1,391,640 | | | 2021 | 320,000 | — | 400,000 | 360,024 | 11,400 | 1,091,424 | | David Park8 | 2023 | 380,000 | — | 433,000 | 391,764 | 10,250 | 1,215,014 | | Derrick K. Walsh9 | 2023 | 315,000 | — | 460,000 | 445,033 | 10,250 | 1,230,283 | | | 2022 | 300,000 | — | 430,000 | 866,164 | 9,750 | 1,605,914 |

  42. Summary Compensation Table

    | 1 | Fiscal year in which salary and non-equity incentives and bonuses were earned. For stock awards, the fiscal year of the accounting grant date. | | 2 | Salary for fiscal year 2023 approved by the Compensation Committee in September 2022. | | 3 | Payments under Non-Equity Incentive Plans were earned in accordance with the employment contracts of Mr. Garrabrants. Amounts for Mr. Garrabrants include cash bonus plus $2.9 million of vested performance units during the year. | | 4 | Bonus earned during the fiscal years listed. | | 5 | Aggregate value of restricted stock unit awards based upon the accounting grant date and calculated in accordance with ASC 710 and 718. The actual value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time. For Mr. Garrabrants, the $5.2 million and $8.8 million value of the stock award for fiscal 2023 and 2022 included in the table above, represents the ASC 718 aggregate grant date value of the RSU awards issuable in connection with the one-year renewal of his employment agreement. See the section “Impact of One-Year Renewal of Agreement on CEO Restricted Stock Unit Award Grant Date” for a further description of these award. As required by Item 402 of Regulation S-K, the table above presents the aggregate grant date value notwithstanding the RSU award represents a multi-year incentive award. The presentation required by Item 402 with respect to this award reduces the comparability of Mr. Garrabrants’ compensation year-over-year because it presents a multi-year incentive award as only being compensation in a single year. The resulting expense allocation will be spread across all vesting years in accordance with ASC 718. The total of the compensation expense of $14.0 million is being recognized in the income statement over fiscal years 2022 through 2028. | | 6 | All other compensation amounts are 401(k) matching contributions. | | 7 | Mr. Constantine was not an NEO in fiscal year 2021. | | 8 | Mr. Park was not an NEO in fiscal years 2022 and 2021. | | 9 | Mr. Walsh was appointed CFO and became a NEO in fiscal year 2022. Mr. Walsh received a one-time grant of 10,000 RSUs upon promotion to CFO. |

  43. Grants of Plan-Based Awards in Fiscal Year 2023

    Grants of Plan-Based Awards in Fiscal Year 2023 The table below shows all plan-based awards that the Company made during fiscal year 2023 to the Named Executive Officers:

  44. Grants of Plan-Based Awards in Fiscal Year 2023

    | Name | Grant Date | Estimated Possible Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units1 | Closing Price of Stock on Date of Grant | Grant Date Fair Value of Stock and Option Awards2 | | | | Threshold | Target | Maximum | Threshold (#) | Target (#) | Maximum (#) | | | | | Gregory Garrabrants3 | 01/01/23 | $— | $— | $— | — | — | — | 83,050 | $62.92 | $5,225,526 | | Thomas Constantine | 09/23/22 | — | — | — | — | — | — | 6,115 | 36.80 | 225,032 | | | 03/15/23 | — | — | — | — | — | — | 6,095 | 37.74 | 230,025 | | Raymond Matsumoto | 09/23/22 | — | — | — | — | — | — | 7,473 | 36.80 | 275,006 | | | 03/15/23 | — | — | — | — | — | — | 7,420 | 37.74 | 280,031 | | David Park | 09/23/22 | — | — | — | — | — | — | 5,075 | 36.80 | 186,760 | | | 03/15/23 | — | — | — | — | — | — | 5,432 | 37.74 | 205,004 | | Derrick K. Walsh | 09/23/22 | — | — | — | — | — | — | 5,979 | 36.80 | 220,027 | | | 03/15/23 | — | — | — | — | — | — | 5,962 | 37.74 | 225,006 |

  45. Grants of Plan-Based Awards in Fiscal Year 2023

    | 1 | Restricted stock units for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant, for all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant. | | 2 | Aggregate value of restricted stock unit awards based upon the accounting grant date and calculated in accordance with ASC 710 and 718. The actual value at the end of the vesting period may be significantly higher or lower than the value presented depending upon the market value of the common stock at that time. | | 3 | The January 1, 2023 award to Mr. Garrabrants (to be issued in September 2024, if the Company significantly outperforms its peers, in connection with the renewal of his employment agreement) reflects estimated RSU awards totaling 83,050 RSUs at an average price of $62.92 determined through Monte Carlo simulation in accordance with ASC 718. |

  46. Outstanding Equity Awards at Fiscal Year-End 2023

    Outstanding Equity Awards at Fiscal Year-End 2023 This table shows the equity awards that have been previously awarded to each of the Named Executive Officers and which remained outstanding as of June 30, 2023 all of which consist of restricted stock units:

  47. Outstanding Equity Awards at Fiscal Year-End 2023

    | | Restricted Stock Unit Awards | | | | Name | Number of Shares or Units of Stock That Have Not Vested | Date of Grant1 | Market Value of Shares or Units of Stock That Have Not Vested2 | | Gregory Garrabrants | 239,176 | 08/25/21 | $9,433,101 | | Thomas Constantine | 2,287 | 08/31/20 | 90,199 | | | 1,152 | 03/19/21 | 45,435 | | | 2,717 | 08/25/21 | 107,158 | | | 3,009 | 03/23/22 | 118,675 | | | 6,115 | 09/23/22 | 241,176 | | | 6,095 | 03/15/23 | 240,387 | | Raymond Matsumoto | 2,422 | 08/31/20 | 95,524 | | | 1,152 | 03/19/21 | 45,435 | | | 2,988 | 08/25/21 | 117,847 | | | 3,725 | 03/23/22 | 146,914 | | | 7,473 | 09/23/22 | 294,735 | | | 7,420 | 03/15/23 | 292,645 | | David Park | 1,682 | 08/31/20 | 66,338 | | | 756 | 03/19/21 | 29,817 | | | 1,584 | 08/25/21 | 62,473 | | | 2,272 | 03/23/22 | 89,608 | | | 5,075 | 09/23/22 | 200,158 | | | 5,432 | 03/15/23 | 214,238 | | Derrick K. Walsh | 2,287 | 08/31/20 | 90,199 | | | 997 | 03/19/21 | 39,322 | | | 6,667 | 09/23/21 | 262,946 | | | 2,859 | 09/24/21 | 112,759 | | | 2,866 | 03/23/22 | 113,035 | | | 5,979 | 09/23/22 | 235,812 | | | 5,962 | 03/15/23 | 235,141 |

  48. Outstanding Equity Awards at Fiscal Year-End 2023

    | 1 | Restricted stock units for Mr. Garrabrants vest in one-fourth increments on each of the first four fiscal year-ends following the date of grant. For all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant. | | 2 | The values contained in this column were calculated by multiplying the number of shares by $39.44, which was the closing price of the Company’s common stock reported on the NYSE on June 30, 2023. |

  49. Stock Vested in Fiscal Year 2023

    Stock Vested in Fiscal Year 2023 This table shows the restricted stock units that vested for each Named Executive Officer during fiscal year 2023:

  50. Stock Vested in Fiscal Year 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Gregory Garrabrants | 119,588 | $4,716,551 | | Thomas Constantine | 11,461 | 450,305 | | Raymond Matsumoto | 12,187 | 478,369 | | David Park | 8,048 | 321,800 | | Derrick Walsh | 13,597 | 544,221 |

  51. Stock Vested in Fiscal Year 2023

    The value realized upon vesting is based on the product of the number of shares vesting multiplied by the market price of a Company share on the applicable vesting date.

  52. Pay Versus Performance

    Pay Versus Performance The following table shows a comparison of summary compensation and compensation actually paid (“CAP”), as computed in accordance with Item 402(v) of Regulation S-K, to the Company’s Chief Executive Officer as the Company’s Principal Executive Officer (“PEO”) and the average of such measures for the Company’s Named Executive Officers other than the Company’s PEO (“Non-PEO NEO”) relative to the Company’s measures of financial performance for each of the fiscal years indicated.

  53. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO1 | Compensation Actually Paid to PEO1,2 | Average Summary Compensation Table Total for Non-PEO NEO1 | Average Compensation Actually Paid to Non-PEO NEOs1,3 | Value of Initial Fixed $100 Investment Based on: | | Net Income (In Thousands) | Return on Average Common Equity | | | | | | | Axos Total Shareholder Return4 | Peer Group Total Shareholder Return4 | | | | 2023 | $10,605,532 | $5,859,824 | $1,308,698 | $1,469,939 | 178.62 | 123.55 | 307,165 | 17.22 | | 2022 | 13,734,823 | 24,909,780 | 1,489,318 | 979,109 | 162.36 | 149.73 | 240,716 | 15.61 | | 2021 | 5,184,508 | 11,991,308 | 1,185,961 | 2,549,105 | 210.10 | 159.42 | 215,707 | 16.51 |

  54. Pay Versus Performance

    | 1 | NEOs included in the above table are compromised of the following individuals. In accordance with rules of the Securities and Exchange Commission, only the Firm’s CEO, CFO and three highest-paid NEOs from the Summary Compensation Table are included. | | | | | Fiscal Year | PEO | Non-PEO NEOs | | | 2023 | Gregory Garrabrants | Thomas Constantine, David Park, Raymond Matsumoto, Derrick K. Walsh | | | 2022 | Gregory Garrabrants | Thomas Constantine, Raymond Matsumoto, Andrew J. Micheletti, Brian Swanson, Derrick K. Walsh | | | 2021 | Gregory Garrabrants | Eshel Bar-Adon, Raymond Matsumoto, Andrew J. Micheletti, Brian Swanson |

  55. Pay Versus Performance

    | 2 | The following summarizes the amounts deducted and added to the Summary Compensation Table Total for PEO to calculate CAP to PEO: | | | | | | | Fiscal Year | | | | | | 2023 | 2022 | 2021 | | | Amounts reported in the Summary Compensation Table as Stock Awards granted during the fiscal year which are based on grant date fair values | $(5,225,526) | $(8,792,836) | $— | | | Fair value as of the end of the fiscal year of equity awards granted during the fiscal year which remain outstanding and unvested as of the end of the fiscal year | 3,275,492(a) | 16,945,327(b) | — | | | Change in fair value during the fiscal year of awards granted in prior years that remain outstanding and unvested as of the end of the fiscal year | 858,642 | — | 2,917,200 | | | Fair value as of the vesting date for awards that were granted and vested during the fiscal year | — | 4,287,266 | — | | | Change in fair value from the end of the prior fiscal year to the vesting date for awards granted in prior years that vested during the fiscal year | 429,321 | (1,264,800) | 3,889,600 | | | Fair value as of the end of the prior fiscal year of awards granted in prior years that did not meet the applicable vesting conditions during the fiscal year | (4,083,637) | — | — | | | Net difference between Summary Compensation Table Total for PEO and CAP to PEO | $(4,745,708) | $11,174,957 | $6,806,800 |

  56. Pay Versus Performance

    (a) Reflects an aggregated estimated RSU award totaling 83,050 RSUs, related to awards made to Mr. Garrabrants on January 1, 2023 to be issued, if at all, in September 2024 based on the Company’s performance in connection with the renewal of his employment agreement. See “Impact of One-Year Renewal on CEO Restricted Stock Unit Award Grant Date” and footnote 5 to the Summary Compensation Table for additional information regarding the fiscal year 2023 estimated award. (b) Includes $4,083,638, reflecting an aggregated estimated RSU award totaling 113,909 RSUs, related to awards made to Mr. Garrabrants on January 1, 2022 based on the Company’s performance in connection with the renewal of his employment agreement. See footnote 5 to the Summary Compensation Table for additional information regarding the fiscal year 2022 award.

  57. Pay Versus Performance

    | 3 | The following summarizes the average amounts deducted and added to the Average Summary Compensation Table Total for Non-PEO Named Executive Officers to calculate at Average CAP to Non-PEO Named Executive Officers: | | | | | | | Fiscal Year | | | | | | 2023 | 2022 | 2021 | | | Amounts reported in the Summary Compensation Table as Stock Awards granted during the fiscal year which are based on grant date fair values | $(461,723) | $(749,258) | $(510,473) | | | Fair value as of the end of the fiscal year of equity awards granted during the fiscal year which remain outstanding and unvested as of the end of the fiscal year | 488,573 | 559,274 | 801,457 | | | Change in fair value during the fiscal year of awards granted in prior years that remain outstanding and unvested as of the end of the fiscal year | 81,648 | (340,008) | 897,969 | | | Change in fair value from the end of the prior fiscal year to the vesting date for awards granted in prior years that vested during the fiscal year | 52,743 | 19,783 | 174,191 | | | Net difference between Average Summary Compensation Table Total for Non-PEO NEOs and Average CAP to Non-PEO NEOs | $161,241 | $(510,209) | $1,363,144 |

  58. Pay Versus Performance

    | 4 | Axos Total Shareholder Return and Peer Group Total Shareholder Return assumes $100 was invested in AX common stock and in the ABAQ Total Return Index (ticker:XABQ), respectively, on June 30, 2020. |

  59. Pay Versus Performance

    The charts and narrative below are based on the information above in order to present the relationship between Company’s PEO’s CAP and the average of the Company’s Non-PEO NEOs’ CAP with the indicated measure of financial performance, against the last three fiscal years. Axos total shareholder return and peer group total shareholder return are impacted by the broader equity markets, which saw the Russell 2000 Index return 10.6% during the Company’s fiscal year 2023, following a -26.1% return during the Company’s fiscal year 2022 and a 60.3% return during the Company’s fiscal year 2021. The Company’s net income has increased in each of the past three fiscal years reflecting the successful leadership of the PEO and the Non-PEO NEOs; however, net income is dependent on a variety of factors, some of which are not directly linked to how compensation actually paid to the Company’s executive officers is determined for purposes of this disclosure, including the share price of the Company’s common stock during the applicable fiscal year. The Company’s return on average common equity has ranged from 15.61% to 17.22% over the past three fiscal years. Return on average common equity is dependent on a variety of factors, some of which are not directly linked to how compensation actually paid to the Company’s executive officers is determined for purposes of this disclosure, including the share price of the Company’s common stock during the applicable fiscal year. For fiscal year 2023, the Company considers the following performance measures to be the most important performance measures to link CAP to the Company’s PEO to company performance:

  60. Pay Versus Performance

    | Net income | Total return to stockholders | | Return on average common equity | Market capitalization | | Average common equity | |

  61. Pay Versus Performance

    For fiscal year 2023, the Company considers the following performance measures to be the most important performance measures to link CAP to the Company’s Non-PEO NEO to company performance:

  62. Pay Versus Performance

    | Overall and relative performance of the Named Executive Officer | | Corporate performance, including return on average common equity | | Peer bank Named Executive Officer compensation levels | | Business unit performance |

  63. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control This section discusses the incremental compensation that would be payable by the Company in the event of a change-in-control of the Company or a termination of employment of certain Named Executive Officers with the Company for various described reasons, sometimes referred to in this section as a “triggering event.” In accordance with applicable SEC rules the following discussion assumes that the triggering event in question – death, disability, change in control or termination – occurred on June 30, 2023. With respect to calculations based on the Company’s stock price, we used $39.44, which was the reported closing price of one share of the Company’s common stock on NYSE on June 30, 2023. Pursuant to applicable SEC rules, the analysis contained in this section does not consider or include payments made to a Named Executive Officer with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms, or operation in favor of executive officers of the Company, such as employee group term life insurance. In addition, in connection with any actual termination of employment, the Company may determine to enter into an agreement or to establish an arrangement providing additional benefits or amounts, or altering the terms of benefits provided upon the events discussed below, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include, for example, the timing during the year of any event and the Company’s stock price. The Company believes that severance protections can play a valuable role in attracting and retaining key executive officers. The Compensation Committee evaluates the level of severance benefits consistent with competitive practices. The following is a general discussion of the primary categories of triggering events which apply to certain of the Company’s Named Executive Officers.

  64. Death or Disability

    Death or Disability In the event of the death of the Chief Executive Officer, his beneficiary or estate shall be entitled to receive (i) the immediate vesting, to the extent not otherwise vested, of all equity incentive awards including restricted stock unit awards granted to him, (ii) his cash incentive award for the period in which death occurs, prorated to the date of death, and (iii) accrued salary. For the avoidance of doubt, the Chief Executive Officer’s beneficiary or estate shall not be entitled to any restricted stock units set forth in the Agreement which had not been granted prior to the date of death. Upon the Chief Executive Officer’s receipt of a notice of termination for disability, he shall receive, (i) the immediate vesting, to the extent not otherwise vested, of all equity incentive awards including restricted stock unit awards granted to him, (ii) his cash incentive award for the period in which termination occurs, prorated to the date of termination, (iii) his annual restricted stock unit award required to be issued pursuant to the Agreement for the period in which the termination date occurs or an equivalent amount of cash, prorated to the termination date, and (vi) accrued salary. In the event of the death or disability of the Chief Financial Officer, his beneficiary or estate shall receive a payment of a death benefit of the executive’s then-current annual salary, and his target cash bonus for the year. All unvested restricted stock units at the date of death or disability shall fully vest.

  65. Upon a Change-in-Control of the Company

    Upon a Change-in-Control of the Company A change in control (“CIC”) generally defined in the executive’s employment agreement to mean a change in the ownership or control of 50% of the voting stock of the Company, whether by sale, merger or reorganization, or all or substantially all of the assets are sold or transferred to a person who did not own or control the assets of the Company prior to such transaction. The exact definition varies depending upon the terms of agreement with each Named Executive Officer. If the employment of the Chief Executive Officer is terminated during the term of the Agreement, and within one year after a CIC, the Company or the Company’s successor terminates the Chief Executive Officer other than for cause, death or disability or the Chief Executive Officer terminates his employment for good reason, in either case, a “Change in Control Termination,” then: (i) The Company shall pay him in a single severance payment as soon as practicable after the termination, but in no event later than thirty 30 days thereafter, an amount in cash equal to the sum of (a) three times his then-current base salary and (b) his Target Annual Cash Award as in effect on the termination date and minus any accumulated amount negative bonuses from prior periods, (ii) any unvested equity incentive award including restricted stock unit awards previously granted pursuant to the Agreement, shall become immediately and fully vested (iii) any Target Annual Cash Award earned from the prior year, but not paid at termination, shall be paid to him; (iv) his Target Annual Cash Award for the period in which such termination occurs, prorated to the Termination Date shall be paid to him; and (v) a prorated grant of the Annual Restricted Stock Award shall be issued to him. If a CIC occurs and the employment of the Chief Executive Officer is terminated one year prior to the CIC other than for “cause”, and if such termination of employment or event was at the request, suggestion or initiative of a third party who has taken steps reasonably calculated to effect a CIC, then his termination shall be deemed to be a Change in Control Termination and upon occurrence of the CIC, the Chief Executive Officer shall be entitled to receive the payments as described above. For the Chief Financial Officer, in the event his employment is terminated by the Company without cause within 36 months after a CIC, he shall be entitled to (i) a severance payment equal to two times his then-current annual salary and target bonus and paid as a lump-sum; (ii) accelerated vesting of all unvested portions of equity awards including RSUs; and (iii) continuation of group medical insurance benefits to the earlier of the end of the 12-month severance period or the executive’s commencement of work for a new employer that provides group medical insurance. For all Named Executive Officers, the 2014 Plan provides that as of the consummation of a “corporate transaction,” all outstanding unvested stock options and unvested shares of restricted stock would generally receive accelerated vesting, but only to the extent that such awards are not assumed by the Company or substituted by the acquiring company with all existing terms and conditions, including vesting terms, remaining in effect. For this purpose, “corporate transaction” is generally defined in the Plan as an acquisition of the Company by merger, consolidation, asset acquisition or stock purchase, which is generally the same as a CIC. The following tables summarize the approximate value of termination payments and benefits that certain Named Executive Officers would have received if their employment had been terminated on June 30, 2023 under the circumstances specified or if there were a Change in Control on June 30, 2023:

  66. Gregory Garrabrants – Chief Executive Officer

    | | | | | | Termination After Change-in-Control5, 6 | | | | A | A | B | C | D | E | | Type of Benefit1 | Death | Disability | Termination before a Change- in-Control by Company without Cause | Upon a Change-in- Control5 | Termination by Company for Any Reason or by Executive with Good Reason | Termination by Executive without Good Reason | | Cash Severance2 | $1,815,586 | $1,815,586 | $3,233,975 | $1,815,586 | $2,100,000 | $— | | Restricted Stock Unit Vesting3 | 12,708,593 | 12,708,593 | 12,708,593 | 12,708,593 | — | — | | 280G Tax Gross Up4 | — | — | — | — | — | — | | Total Value Upon Event | $14,524,179 | $14,524,179 | $15,942,568 | $14,524,179 | $2,100,000 | $— | | Total Value Upon CIC and Termination Events in Column D (Column C+D) | | | | | $16,624,179 | | | Total Value Upon CIC and Termination Event in Column E (Column C+E) | | | | | | $14,524,179 |

  67. Gregory Garrabrants – Chief Executive Officer

    | 1 | This change in control table is based on Mr. Garrabrants Second Amended and Restated Employment Agreement dated June 30, 2017, as automatically renewed on January 1, 2023. | | 2 | Mr. Garrabrants’ employment agreement provides for the payment of his Annual Cash Bonus in the event of Death, Disability, Termination before a Change-in-Control by Company without Cause, or Upon a Change-in-Control. In addition: (i) Upon a Termination before a Change-in-Control by Company without Cause, Mr. Garrabrants is entitled to two times his base salary and 12 months of medical insurance benefits; and (ii) Upon a Termination by Company for Any Reason or by Executive with Good Reason, Mr. Garrabrants is entitled to three times his base salary. | | 3 | The value of restricted stock unit vesting was calculated by multiplying the number of unvested shares, including the estimated 83,050 RSUs from the January 1, 2023 award, by the AX share closing price of $39.44 on 6/30/2023. | | 4 | Mr. Garrabrants’ employment agreement provides that if any Company payments made upon termination after a change-in-control of the Company constitutes a “parachute payment” under Section 280G of the Internal Revenue Code, the Company would not make a gross-up payment to Mr. Garrabrants. The Company is required to adjust the parachute payment downward, if such a decrease will increase the net after-tax payment to Mr. Garrabrants. No such adjustment downward has been made in the numbers above. | | 5 | These columns assume the vesting of all unvested stock options and restricted stock units accelerated on the consummation of the change-in-control as provided in the 2014 Plan and there was no assumption or substitution of unvested stock options and restricted stock by the acquirer. | | 6 | For a change-in-control and subsequent termination of Mr. Garrabrants’ employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination. |

  68. Thomas Constantine – Chief Credit Officer

    | | | | | Termination After Change-in-Control4, 5 | | | | A | B | C | D | E | | Type of Benefit | Death3 or Disability | Termination before a Change- in-Control by Company without Cause | Upon a Change-in- Control4 | Termination by Company for Any Reason or by Executive with Good Reason | Termination by Executive without Good Reason | | Cash Severance1 | $— | $330,000 | $— | $330,000 | $— | | Restricted Stock Unit Vesting2 | 843,030 | 843,030 | 843,030 | — | — | | Total Value Upon Event | $843,030 | $1,173,030 | $843,030 | $330,000 | $— | | Total Value Upon CIC and Termination Events in Column D (Column C+D) | | | | $1,173,030 | | | Total Value Upon CIC and Termination Event in Column E (Column C+E) | | | | | $843,030 |

  69. Thomas Constantine – Chief Credit Officer

    | 1 | Mr. Constantine’s employment agreement provides for a lump sum cash payment in the amount of one times his annual salary if the Company terminates his employment, without cause, prior to or after a change-in-control, or by our successor after a change-in-control. | | 2 | The value of restricted stock units vesting was calculated by multiplying the total number of unvested shares by the AX share closing price of $39.44 on 6/30/2023. | | 3 | The Company provides life insurance covering one year of base salary. | | 4 | These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards. | | 5 | For a change-in-control and subsequent termination of Mr. Constantine’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination. |

  70. Raymond Matsumoto – Chief Operating Officer

    | | | | | Termination After Change-in-Control3, 4 | | | | A | B | C | D | E | | Type of Benefit | Death2 or Disability | Termination before a Change- in-Control by Company without Cause | Upon a Change-in- Control3 | Termination by Company for Any Reason or by Executive with Good Reason | Termination by Executive without Good Reason | | Cash Severance | $— | $— | $— | $— | $— | | Restricted Stock Unit Vesting1 | 993,099 | 993,099 | 993,099 | — | — | | Total Value Upon Event | $993,099 | $993,099 | $993,099 | $— | $— | | Total Value Upon CIC and Termination Events in Column D (Column C+D) | | | | $993,099 | | | Total Value Upon CIC and Termination Event in Column E (Column C+E) | | | | | $993,099 |

  71. Raymond Matsumoto – Chief Operating Officer

    | 1 | The value of restricted stock units vesting was calculated by multiplying the total number of unvested shares by the AX share closing price of $39.44 on 6/30/2023. | | 2 | The Company provides life insurance covering one year of base salary. | | 3 | These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards. | | 4 | For a change-in-control and subsequent termination of Mr. Matsumoto’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination. |

  72. David Park – Executive Vice President, Commercial Banking and Treasury Management

    | | | | | Termination After Change-in-Control3, 4 | | | | A | B | C | D | E | | Type of Benefit | Death2 or Disability | Termination before a Change- in-Control by Company without Cause | Upon a Change-in- Control3 | Termination by Company for Any Reason or by Executive with Good Reason | Termination by Executive without Good Reason | | Cash Severance | $— | $— | $— | $— | $— | | Restricted Stock Unit Vesting1 | 662,631 | 662,631 | 662,631 | — | — | | Total Value Upon Event | $662,631 | $662,631 | $662,631 | $— | $— | | Total Value Upon CIC and Termination Events in Column D (Column C+D) | | | | $662,631 | | | Total Value Upon CIC and Termination Event in Column E (Column C+E) | | | | | $662,631 |

  73. David Park – Executive Vice President, Commercial Banking and Treasury Management

    | 1 | The value of restricted stock units vesting was calculated by multiplying the total number of unvested shares by the AX share closing price of $39.44 on 6/30/2023. | | 2 | The Company provides life insurance covering one year of base salary. | | 3 | These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquirer does not assume such awards. | | 4 | For a change-in-control and subsequent termination of Mr. Park’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination. |

  74. Derrick K. Walsh – Chief Financial Officer

    | | | | | Termination After Change-in-Control3, 4 | | | | A | B | C | D | E | | Type of Benefit | Death or Disability | Termination before a Change- in-Control by Company without Cause | Upon a Change-in- Control3 | Termination by Company for Any Reason or by Executive with Good Reason | Termination by Executive without Good Reason | | Cash Severance1 | $1,102,500 | $— | $— | $2,223,316 | $— | | Restricted Stock Unit Vesting2 | 1,089,214 | 1,089,214 | 1,089,214 | — | — | | Total Value Upon Event | $2,191,714 | $1,089,214 | $1,089,214 | $2,223,316 | $— | | Total Value Upon CIC and Termination Events in Column D (Column C+D) | | | | $3,312,530 | | | Total Value Upon CIC and Termination Event in Column E (Column C+E) | | | | | $1,089,214 |

  75. Derrick K. Walsh – Chief Financial Officer

    | 1 | Mr. Walsh’s employment agreement provides for (i) In the event of Death or Disability, one times his base salary plus annual target bonus (ii) Termination by Company for Any Reason or by Executive with Good Reason, two times the sum of his base salary and target bonus, and 12 months of medical insurance benefits | | 2 | The value of restricted stock units was calculated by multiplying the number of unvested shares by the AX share closing price of $39.44 on 6/30/2023. | | 3 | These columns assume that the vesting of stock options and restricted stock units accelerated on the consummation of the change-in-control. This assumes that the acquiring company does not assume such awards. | | 4 | For a change-in-control and subsequent termination of Mr. Walsh’s employment, he would have received the “Total Value Upon Event” specified in the table in column C plus the “Total Value Upon Event” in either column D or column E, depending upon the circumstances of his termination. |

  76. Transactions with Our Directors and Officers

    Transactions with Our Directors and Officers In the ordinary course of its business and subject to applicable banking regulations, the Bank makes loans to and engages in other banking transactions with its directors, officers and employees and their associates. Other than loans pursuant to our Loan Program, such loans and other banking transactions are generally made on the same terms as those prevailing at the time for comparable transactions with persons of comparable creditworthiness that have no affiliation with the Company or the Bank. Loans are made only to persons affiliated with the Company and the Bank if they do not involve more than the normal risk of collectability of loans made to non-affiliated persons and if they do not present any other unfavorable features. As discussed above, the Bank offers the Loan Program under which each eligible borrower may obtain loans to finance the purchase, construction, maintenance or improvement of a primary residence for terms of 9 years to 30 years at interest rates that are below market rates on loans made to persons unaffiliated with the Bank and the Company. Outstanding loans to all directors and executives who elected to participate in the Loan Program made up approximately 37% of the total balance outstanding for the Loan Program. As of June 30, 2023, none of the loans under the Loan Program or to our directors or executive officers were classified by the Bank as non-accrual, past due, restructured or potential problem loans. The table below provides information on our employee loans and the directors and executive officers who participated in the Loan Program:

  77. Transactions with Our Directors and Officers

    | (in thousands) Name | Largest Aggregate Principal Outstanding for 2023 | Principal Outstanding at June 30, 2023 | Principal Paid During 2023 | Interest Paid During 2023 | Loans Paid off during 2023 | Interest Rate Payable (%)1 | | Greg Garrabrants2 Chief Executive Officer | $8,498.4 | $8,498.4 | $7.3 | $38.2 | $— | 0.43% | | James S. Argalas Director | 7,400.6 | 7,162.4 | 238.1 | 80.6 | $— | 1.02% | | Paul J. Grinberg2 Director | 3,655.9 | 3,655.9 | — | 17.9 | — | 0.56% | | Andrew J. Micheletti EVP, Finance | 2,850.0 | 2,809.8 | 40.2 | 54.8 | 877.7 | 2.89% | | David Park EVP, Commercial Banking & Treasury Management | 1,400.7 | 1,353.4 | 47.4 | 5.9 | — | 0.43% | | Thomas Constantine EVP, Chief Credit Officer | 1,297.4 | 1,249.9 | 47.5 | 5.8 | — | 0.39% | | Brian Swanson EVP, Head of Consumer Bank | 1,282.0 | 1,239.0 | 43.0 | 5.4 | — | 0.43% | | Derrick Walsh EVP, Chief Financial Officer | 945.0 | 910.7 | 34.3 | 4.1 | — | 0.41% | | Nicholas Mosich Director | 740.8 | 715.8 | 25.0 | 3.1 | — | 0.43% | | Eshel Bar-Adon EVP, Strategic Partnerships and Chief Legal Officer | 677.4 | 652.6 | 24.8 | 3.1 | — | 0.43% | | Raymond Matsumoto EVP, Chief Operating Officer | 504.5 | 487.5 | 17.1 | 2.1 | — | 0.43% | | John Tolla Chief Risk Officer | 462.8 | 445.7 | 17.0 | 2.1 | — | 0.43% | | Non-director or executive officer employee loans | | 50,591.5 | | | | |

  78. Transactions with Our Directors and Officers

    | 1 | All loans in the table made pursuant to the Bank’s Loan Program. The interest rates reflect the mid-term Applicable Federal Rate (“AFR”) at time of loan origination. | | 2 | Loan type is a construction loan with principal payments to commence upon completion of construction. |

  79. ITEM 4. APPROVAL OF THE AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

    ITEM 4. APPROVAL OF THE AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

  80. Why the Amended Plan is Important for Our Future Success

    Why the Amended Plan is Important for Our Future Success Achieving superior long-term results for our stockholders has always been one of our primary objectives and, therefore, it is essential that employees think and act like owners of the Company. Stock ownership helps enhance the alignment of the long-term economic interests of our employees with those of our stockholders. Accordingly, we have historically granted equity compensation awards to encourage alignment of the interests of substantially all of our employees with the long-term economic interests of our stockholders. Our direct competitors and our peer companies rely on equity compensation to attract and retain top talent in our industry and remain competitive and we believe that any failure by us to offer competitive levels of equity compensation to attract and retain employees would have an adverse effect on our business.The following points summarize why our Board strongly believes that an amendment and restatement to the Plan in the form of the 2014 Amended and Restated Stock Incentive Plan (the “Amended Plan”) is essential for our future success to help ensure all employees think and act like owners: •100% of full-time employees who have reached the end of their first bonus period are awarded a portion of their incentive compensation in the form of RSUs. •Multi-year vesting period and potential for personal income growth supports employee retention, especially for high-performing employees who drive our success •Further supporting employee retention, any unvested awards are generally forfeited upon departure from the Company •Long-term equity incentives help prevent management from making decisions that favor short-term results over longer-term stability and profitability. •The 1,000,000 additional shares of common stock represent only 1.7% of the number of shares of common stock that are outstanding as of September 1, 2023 and is designed to manage our equity compensation needs for the next two to three years, depending on the Company’s share price on award grant dates. When annualized over a utilization period of 2.5 years, the 0.7% is far lower than the growth in book value of the Company, which has averaged 16% over the past three fiscal years. On September 21, 2023, our Board approved an amendment and restatement to the Plan in the form of the Amended Plan. A copy of the Amended Plan is attached to this Proxy Statement as Appendix A, and the discussion in this proposal is qualified in its entirety by the full text of the Amended Plan. The Amended Plan was effective on the date of the Board’s approval, so long as it is approved by our stockholders within 12 months after that date. If we do not obtain stockholder approval of the Amended Plan, the Plan (without giving effect to the proposed amendment and restatement) will remain in effect.

  81. Highlights of Material Differences between the Plan and the Amended Plan

    The Plan allowed for 5,680,000 shares prior to amendment. Management recommended and the Compensation Committee of the Board recommended and the Board approved a share pool reserve increase of 1,000,000 common shares for future issuance under the Amended Plan for a total of 6,680,000 shares. In determining the number of shares to be reserved under the Amended Plan, management and the Compensation Committee of the Board reviewed our stock award history and our stock award activity relative to peers. Additionally, and consistent with the Company’s Director and Executive Officer Stock Ownership and Retention Guidelines, the Amended Plan includes the following minimum ownership interests in the Company: (i) the Chief Executive Officer must maintain at least eight times his or her annual salary, (ii) the Chief Financial Officer must maintain at least five times his or her annual salary, (iii) each Executive Vice President must maintain at least three times his or her annual salary, and (iv) each Director must maintain at least five times the Director’s annual cash compensation retainer. The Company’s most recent three-year average of gross and net shares awarded is 796,926 shares and 569,140 shares, respectively. The net shares awarded are net of shares retained by the Company and converted to cash to fund the grantee’s income tax obligations. A company’s new award shares as a percentage of outstanding shares on a fully diluted basis, or gross burn rate, is the gross number of equity award shares granted in a given year divided by the weighted average common shares outstanding on a fully diluted basis for the same year. Gross burn rate excludes the add-back of canceled or forfeited equity awards in the calculation. Net burn rate is a similar calculation to gross burn rate, but excludes shares retained by the Company and converted to cash to fund the grantee’s income tax obligations. The Company’s three-year average outstanding shares on a fully diluted basis was 60,565,806. The Company’s gross burn rate is 1.32% and net burn rate is 0.94%. The Company’s outstanding awards as of September 1, 2023 were 1,258,549 and 1,453,523 common shares remained available for issuance under the Plan (assuming that all outstanding awards are ultimately settled for their full number of shares and are not forfeited or modified). By adding 1,000,000 shares to the Amended Plan, a total of 2,453,523 shares would be available for issuance and, assuming the gross burn rate was maintained at the three-year average of 796,926 shares, the total of 2,453,523 shares would support three additional years of awards. The addition of 1,000,000 shares is reasonable relative to Company history because it allows the Company to cover the remaining life of the Amended Plan expiring in 2026. To understand our stock award activity relative to peers, the Company reviewed peer data and specifically compared its stock award activity to two Institutional Shareholder Services Inc. (“ISS”) benchmarks for gross burn rate: banks (1.05%) and diversified financial services industries (3.61%). Using ISS methodology which weights restricted stock units double, our gross burn rate, or three-year average new award shares as a percentage of outstanding shares (on a fully diluted basis) is an average of 2.63%. Management further considered two important factors when analyzing the data and determining the share increase request: the Bank’s compensation mix (more equity awards and less cash) in comparison to peers and the continued growth and contribution of the Securities Business segment makes comparison to diversified financial services more relevant. As noted in the Executive Compensation section and throughout Item 2 and Item 4 of this Proxy Statement, the Company seeks to align the long-term economic interests of our employees with those of our stockholders and uses restricted stock units as a key component of all, including Bank, employees’ compensation. Our employees’ bonus awards are typically granted in a portion of cash and a portion of restricted stock unit grants. As discussed elsewhere in this Proxy Statement, our peer banks have higher levels of cash compensation and lower levels of equity compensation relative to the senior officers, and we believe the same holds true for all employees. Generally, we believe our Bank peers only use equity as a component for a portion of their employees’ compensation and instead provide higher cash bonuses to a larger portion of their workforce than we do. Approximately 75% of our workforce has indirect or direct equity ownership in AX common stock, which we believe is a much greater ownership level than our peers and better aligns our workforce with stockholder interests. Furthermore, the benefit of our compensation methodology to stockholders is evidenced in the Company’s outperformance of its peers in terms of total compensation expense incurred. The FDIC provides Bank statistics for salaries and benefits expense as a percentage of average assets each quarter and this data includes equity compensation expense. In reviewing FDIC data for the most recent period available ended June 30, 2023, the Bank’s salaries and benefits, including equity compensation, were 0.82% of average assets compared to a peer ratio of 1.32% for banks with greater than $1 billion in assets. This means, assuming an equal assets size, our Bank with $19.4 billion in assets at June 30, 2023, is spending approximately $97 million less than our peers on compensation expense. Our compensation methodology is demonstrably better for stockholders and ultimately for employees as they each become stockholders with tenure and may experience personal income growth through stock price appreciation. The Company has grown, both organically and through acquisitions, and expanded products and services in its Securities Business segment, which consists of a clearing broker-dealer, registered investment advisor custody business, registered investment advisor, and introducing broker-dealer lines of businesses. Management expects to have an increase in revenue for the Securities business segment compared to its historical revenue, in both gross dollars and revenue percentage share of the Company’s total revenue, given the recent acquisition of the investment advisory business and organic growth of this segment. With these changes to the nature of the Company’s revenues, management and the Compensation Committee considered the ISS diversified financial services industry sector benchmark. After considering the foregoing, management recommended, and the Compensation Committee recommended and the Board approved, an increase of 1,000,000 shares to the share reserve pool in order to satisfy the Company’s equity compensation needs for approximately the next two to three years. Accordingly, the Amended Plan authorizes a maximum total of 6,680,000 common shares for grants to participants reflecting a 1,000,000 share increase from the Plan’s current limit of 5,680,000 shares. The approximate impact of the requested share reserve increase for the Amended Plan on stockholder dilution is shown in the below table (the below figures represent a percentage of our outstanding basic number of shares as of September 1, 2023):

  82. Highlights of Material Differences between the Plan and the Amended Plan

    It is important to note that the potential dilution is a forecast over multiple years and contains assumptions that no cancellation or forfeiture of shares would occur. The Company has a long history of making equity awards, while at the same time increasing book value per share, thereby evidencing the alignment of the Company’s compensation methodology with stockholder interests. As noted above, the outstanding awards as of September 1, 2023 were 1,258,549 restricted stock units at weighted average grant-date fair value of $42.58. Restricted stock units for the Chief Executive Officer vest in one-fourth increments on each of the first four fiscal year-end dates following the date of grant, for all others, vesting is in one-third increments on each of the first three anniversaries of the date of grant. As of September 1, 2023, there were 59,066,235 common shares outstanding and 1,453,523 common shares remained available for issuance under the Plan before the addition of 1,000,000 shares under the Amended Plan. Additional information on our equity compensation plans is available elsewhere in this Proxy Statement, including in the table under the heading “Equity Compensation Plan Information.” As of September 1, 2023, the fair market value of a share of our common stock (based on the closing share price as reported by NYSE on that date) was $44.13 per share. If our stockholders approve the Amended Plan, we intend to register the additional shares issuable pursuant to the 2014 Stock Incentive Plan, as amended by the Amended Plan, under the Securities Act of 1933, as amended, as soon as practicable following such approval. Because certain of our directors and executive officers may be eligible to receive awards under the Plan, such directors and executive officers may be considered to have an interest in this proposal.

  83. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

  84. AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

    AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

  85. PURPOSE

    PURPOSE The purpose of this Axos Financial, Inc. Amended and Restated 2014 Stock Incentive Plan (the “Plan”) is to benefit Axos Financial, Inc., a Delaware corporation (the “Company”), and its stockholders, by assisting the Company to attract, retain and provide incentives to key management employees, directors, and consultants of the Company and its Affiliates, and to align the interests of such service providers with those of the Company’s stockholders. Accordingly, the Plan provides for the granting of Non-qualified Stock Options, Incentive Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock Appreciation Rights, Performance Stock Awards, Performance Unit Awards, Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of the foregoing.

  86. DEFINITIONS

    DEFINITIONS The following definitions shall be applicable throughout the Plan unless the context otherwise requires: 2.1 “Affiliate” shall mean any corporation which, with respect to the Company, is a “subsidiary corporation” within the meaning of Section 424(f) of the Code or other entity in which the Company has a controlling interest in such entity or another entity which is part of a chain of entities in which the Company or each entity has a controlling interest in another entity in the unbroken chain of entities ending with the applicable entity. 2.2 “Award” shall mean, individually or collectively, any Option, Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, Performance Unit Award, Stock Appreciation Right, Distribution Equivalent Right or Unrestricted Stock Award. 2.3 “Award Agreement” shall mean a written agreement between the Company and the Holder with respect to an Award, setting forth the terms and conditions of the Award, as amended. 2.4 “Board” shall mean the Board of Directors of the Company. 2.5 “Base Value” shall have the meaning given to such term in Section 14.2. 2.6 “Cause” shall mean (i) if the Holder is a party to an employment or service agreement with the Company or an Affiliate which agreement defines “Cause” (or a similar term), “Cause” shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Cause” shall mean termination by the Company or an Affiliate of the employment (or other service relationship) of the Holder by reason of the Holder’s (A) intentional failure to perform reasonably assigned duties, (B) dishonesty or willful misconduct in the performance of the Holder’s duties, (C) involvement in a transaction which is materially adverse to the Company or an Affiliate, (D) breach of fiduciary duty involving personal profit, (E) willful violation of any law, rule, regulation or court order (other than misdemeanor traffic violations and misdemeanors not involving misuse or misappropriation of money or property), (F) commission of an act of fraud or intentional misappropriation or conversion of any asset or opportunity of the Company or an Affiliate, or (G) material breach of any provision of the Plan or the Holder’s Award Agreement or any other written agreement between the Holder and the Company or an Affiliate, in each case as determined in good faith by the Board, the determination of which shall be final, conclusive and binding on all parties. 2.7 “Change of Control” shall mean: (i) for a Holder who is a party to an employment or consulting agreement with the Company or an Affiliate which agreement defines “Change of Control” (or a similar term), “Change of Control” shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, “Change of Control” shall mean the satisfaction of any one or more of the following conditions (and the “Change of Control” shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied): (a) Any person (as such term is used in paragraphs 13(d) and 14(d)(2) of the Exchange Act, hereinafter in this definition, “Person”), other than the Company or an Affiliate or an employee benefit plan of the Company or an Affiliate, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities; (b) The closing of a merger, consolidation or other business combination (a “Business Combination”) other than a Business Combination in which holders of the Shares immediately prior to the Business Combination have substantially the same proportionate ownership of the common stock or ordinary shares, as applicable, of the surviving corporation immediately after the Business Combination as immediately before; (c) The closing of an agreement for the sale or disposition of all or substantially all of the Company’s assets to any entity that is not an Affiliate; (d) The consummation of a plan of complete liquidation of the Company, other than a merger of the Company into any subsidiary or a liquidation as a result of which persons who were stockholders of the Company immediately prior to such liquidation have substantially the same proportionate ownership of shares of common stock or ordinary shares, as applicable, of the surviving corporation immediately after such liquidation as immediately before; or (e) Within any twenty-four (24) month period, the Incumbent Directors shall cease to constitute at least a majority of the Board or the board of directors of any successor to the Company; provided, however, that any director elected to the Board, or nominated for election, by a majority of the Incumbent Directors then still in office, shall be deemed to be an Incumbent Director for purposes of this paragraph (e), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or “group” other than the Board (including, but not limited to, any such assumption that results from paragraphs (a), (b), (c), or (d) of this definition). (f) any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than forty percent (40%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Change of Control. 2.8 “Code” shall mean the United States of America Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to any section and any regulation under such section. 2.9 “Committee” shall mean a committee comprised of not less than three (3) members of the Board who are selected by the Board as provided in Section 4.1. 2.10 “Company” shall have the meaning given to such term in the introductory paragraph, including any successor thereto. 2.11 “Consultant” shall mean any non-Employee (individual or entity) advisor to the Company or an Affiliate who or which has contracted directly with the Company or an Affiliate to render bona fide consulting or advisory services thereto. 2.12 “Director” shall mean a member of the Board or a member of the board of directors of an Affiliate, in either case, who is not an Employee. 2.13 “Distribution Equivalent Right” shall mean an Award granted under Article XIII of the Plan which entitles the Holder to receive bookkeeping credits, cash payments and/or Share distributions equal in amount to the distributions that would have been made to the Holder had the Holder held a specified number of Shares during the period the Holder held the Distribution Equivalent Right. 2.14 “Distribution Equivalent Right Award Agreement” shall mean a written agreement between the Company and a Holder with respect to a Distribution Equivalent Right Award. 2.15 “Effective Date” shall have the meaning given to such term in Article III.

  87. DEFINITIONS

    2.16 “Employee” shall mean any employee, including any officer, of the Company or an Affiliate. 2.17 “Exchange Act” shall mean the United States of America Securities Exchange Act of 1934, as amended. 2.18 “Fair Market Value” shall mean, as of any specified date, the closing sales price of the Shares for such date (or, in the event that the Shares are not traded on such date, on the immediately preceding trading date) on the New York Stock Exchange (“NYSE”), as reported by NYSE, or such other domestic or foreign national securities exchange on which the Shares may be listed. If the Shares are not listed on NYSE or on a national securities exchange, but are quoted on the OTC Bulletin Board or by the National Quotation Bureau, the Fair Market Value of the Shares shall be the mean of the highest bid and lowest asked prices per Share for such date. If the Shares are not quoted or listed as set forth above, Fair Market Value shall be determined by the Board in good faith by any fair and reasonable means (which means may be set forth with greater specificity in the applicable Award Agreement). The Fair Market Value of property other than Shares shall be determined by the Board in good faith by any fair and reasonable means consistent with the requirements of applicable law. 2.19 “Family Member” of an individual shall mean any child, stepchild, grandchild, parent, stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any person sharing the Holder’s household (other than a tenant or employee of the Holder), a trust in which such persons have more than fifty percent (50%) of the beneficial interest, a foundation in which such persons (or the Holder) control the management of assets, and any other entity in which such persons (or the Holder) own more than fifty percent (50%) of the voting interests. 2.20 “Holder” shall mean an Employee, Director or Consultant who has been granted an Award or any such individual’s beneficiary, estate or representative, who has acquired such Award in accordance with the terms of the Plan, as applicable. 2.21 “Incentive Stock Option” shall mean an Option which is intended by the Committee to constitute an “incentive stock option” and conforms to the applicable provisions of Section 422 of the Code. 2.22 “Incumbent Director” shall mean, with respect to any period of time specified under the Plan for purposes of determining whether or not a Change of Control has occurred, the individuals who were members of the Board at the beginning of such period. 2.23 “Non-qualified Stock Option” shall mean an Option which is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code. 2.24 “Option” shall mean an Award granted under Article VII of the Plan of an option to purchase Shares and shall include both Incentive Stock Options and Non-qualified Stock Options. 2.25 “Option Agreement” shall mean a written agreement between the Company and a Holder with respect to an Option. 2.26 “Performance Criteria” shall mean the criteria selected by the Committee for purposes of establishing the Performance Goal(s) for a Holder for a Performance Period. 2.27 “Performance Goals” shall mean, for a Performance Period, the written goal or goals established by the Committee for the Performance Period based upon the Performance Criteria, which may be related to the performance of the Holder, the Company or an Affiliate. 2.28 “Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, selected by the Committee, over which the attainment of the Performance Goals shall be measured for purposes of determining a Holder’s right to, and the payment of, a Qualified Performance-Based Award. 2.29 “Performance Stock Award” or “Performance Stock” shall mean an Award granted under Article XII of the Plan under which, upon the satisfaction of predetermined Performance Goals, Shares are paid to the Holder. 2.30 “Performance Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to a Performance Stock Award. 2.31 “Performance Unit” shall mean a Unit awarded to a Holder pursuant to a Performance Unit Award. 2.32 “Performance Unit Award” shall mean an Award granted under Article XI of the Plan under which, upon the satisfaction of predetermined Performance Goals, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder. 2.33 “Performance Unit Agreement” shall mean a written agreement between the Company and a Holder with respect to a Performance Unit Award. 2.34 “Plan” shall mean this Axos Financial, Inc. Amended and Restated 2014 Stock Incentive Plan, as further amended or restated from time to time, together with each of the Award Agreements utilized hereunder. 2.35 “Qualified Performance-Based Award” shall mean an Award that was intended to qualify as “performance-based” compensation under Section 162(m) of the Code as in effect at the time of such Award. 2.36 “Restricted Stock Award” and “Restricted Stock” shall mean an Award granted under Article VIII of the Plan of Shares, the transferability of which by the Holder is subject to Restrictions. 2.37 “Restricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to a Restricted Stock Award. 2.38 “Restricted Stock Unit Award” and “RSUs” shall refer to an Award granted under Article X of the Plan under which, upon the satisfaction of predetermined individual service-related vesting requirements, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder. 2.39 “Restricted Stock Unit Agreement” shall mean a written agreement between the Company and a Holder with respect to a Restricted Stock Award. 2.40 “Restriction Period” shall mean the period of time for which Shares subject to a Restricted Stock Award shall be subject to Restrictions, as set forth in the applicable Restricted Stock Agreement. 2.41 “Restrictions” shall mean the forfeiture, transfer and/or other restrictions applicable to Shares awarded to an Employee, Director or Consultant under the Plan pursuant to a Restricted Stock Award and set forth in a Restricted Stock Agreement. 2.42 “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a substantially similar function. 2.43 “Shares” or “Stock” shall mean the common shares of the Company, par value $0.01 per share. 2.44 “Stock Appreciation Right” or “SAR” shall mean an Award granted under Article XIV of the Plan of a right, granted alone or in connection with a related Option, to receive a payment equal to the increase in value of a specified number of Shares between the date of Award and the date of exercise. 2.45 “Stock Appreciation Right Agreement” shall mean a written agreement between the Company and a Holder with respect to a Stock Appreciation Right. 2.46 “Tandem Stock Appreciation Right” shall mean a Stock Appreciation Right granted in connection with a related Option, the exercise of some or all of which results in termination of the entitlement to purchase some or all of the Shares under the related Option, all as set forth in Article XIV. 2.47 “Ten Percent Stockholder” shall mean an Employee who, at the time an Option is granted to him or her, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code), within the meaning of Section 422(b)(6) of the Code.

  88. DEFINITIONS

    2.48 “Termination of Service” shall mean a termination of a Holder’s employment with, or status as a Director or Consultant of, the Company or an Affiliate, as applicable, for any reason, including, without limitation, Total and Permanent Disability or death, except as provided in Section 6.4. In the event Termination of Service shall constitute a payment event with respect to any Award subject to Code Section 409A, Termination of Service shall only be deemed to occur upon a “separation from service” as such term is defined under Code Section 409A and applicable authorities. 2.49 “Total and Permanent Disability” of an individual shall mean the inability of such individual to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, within the meaning of Section 22(e)(3) of the Code. 2.50 “Unit” shall mean a bookkeeping unit, which represents such monetary amount as shall be designated by the Committee in each Performance Unit Agreement, or represents one Share for purposes of each Restricted Stock Unit Award. 2.51 “Unrestricted Stock Award” shall mean an Award granted under Article IX of the Plan of Shares which are not subject to Restrictions. 2.52 “Unrestricted Stock Agreement” shall mean a written agreement between the Company and a Holder with respect to an Unrestricted Stock Award.

  89. ELIGIBILITY AND TERMINATION OF SERVICE

    ELIGIBILITY AND TERMINATION OF SERVICE 6.1 Eligibility. Awards made under the Plan may be granted solely to individuals or entities who, at the time of grant, are Employees, Directors or Consultants. An Award may be granted on more than one occasion to the same Employee, Director or Consultant, and, subject to the limitations set forth in the Plan, such Award may include, a Non-qualified Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, an Unrestricted Stock Award, a Distribution Equivalent Right Award, a Performance Stock Award, a Performance Unit Award, a Stock Appreciation Right, a Tandem Stock Appreciation Right, or any combination thereof, and solely for Employees, an Incentive Stock Option. 6.2 Termination of Service. Except to the extent inconsistent with the terms of the applicable Award Agreement and/or the provisions of Section 6.3 or 6.4, the following terms and conditions shall apply with respect to a Holder’s Termination of Service with the Company or an Affiliate, as applicable: (i) The Holder’s rights, if any, to exercise any then exercisable Options and/or Stock Appreciation Rights shall terminate: (A) If such termination is for a reason other than the Holder’s Total and Permanent Disability or death, ninety (90) days after the date of such Termination of Service; (B) If such termination is on account of the Holder’s Total and Permanent Disability, one (1) year after the date of such Termination of Service; or (C) If such termination is on account of the Holder’s death, one (1) year after the date of the Holder’s death. Upon such applicable date the Holder (and such Holder’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in or with respect to any such Options and Stock Appreciation Rights. Notwithstanding the foregoing, the Committee, in its sole discretion, may provide for a different time period in the Award Agreement, or may extend the time period, following a Termination of Service, during which the Holder has the right to exercise any vested Non-qualified Stock Option or Stock Appreciation Right, which time period may not extend beyond the expiration date of the Award term. (ii) In the event of a Holder’s Termination of Service for any reason prior to the actual or deemed satisfaction and/or lapse of the Restrictions, vesting requirements, terms and conditions applicable to a Restricted Stock Award and/or Restricted Stock Unit Award, such Restricted Stock and/or RSUs shall immediately be canceled, and the Holder (and such Holder’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in and with respect to any such Restricted Stock and/or RSUs. Notwithstanding the immediately preceding sentence, the Committee, in its sole discretion, may determine, prior to or within thirty (30) days after the date of such Termination of Service that all or a portion of any such Holder’s Restricted Stock and/or RSUs shall not be so canceled and forfeited. 6.3 Special Termination Rule. Except to the extent inconsistent with the terms of the applicable Award Agreement, and notwithstanding anything to the contrary contained in this Article VI, if a Holder’s employment with, or status as a Director of, the Company or an Affiliate shall terminate, and if, within ninety (90) days of such termination, such Holder shall become a Consultant, such Holder’s rights with respect to any Award or portion thereof granted thereto prior to the date of such termination may be preserved, if and to the extent determined by the Committee in its sole discretion, as if such Holder had been a Consultant for the entire period during which such Award or portion thereof had been outstanding. Should the Committee effect such determination with respect to such Holder, for all purposes of the Plan, such Holder shall not be treated as if his or her employment or Director status had terminated until such time as his or her Consultant status shall terminate, in which case his or her Award, as it may have been reduced in connection with the Holder’s becoming a Consultant, shall be treated pursuant to the provisions of Section 6.2, provided, however, that any such Award which is intended to be an Incentive Stock Option shall, upon the Holder’s no longer being an Employee, automatically convert to a Non-qualified Stock Option on the date required by the applicable Treasury Regulations governing Incentive Stock Options. Should a Holder’s status as a Consultant terminate, and if, within ninety (90) days of such termination, such Holder shall become an Employee or a Director, such Holder’s rights with respect to any Award or portion thereof granted thereto prior to the date of such termination may be preserved, if and to the extent determined by the Committee in its sole discretion, as if such Holder had been an Employee or a Director, as applicable, for the entire period during which such Award or portion thereof had been outstanding (except to the extent required by the applicable Treasury Regulations governing Incentive Stock Options), and, should the Committee effect such determination with respect to such Holder, for all purposes of the Plan, such Holder shall not be treated as if his or her Consultant status had terminated until such time as his or her employment with the Company or an Affiliate, or his or her Director status, as applicable, shall terminate, in which case his or her Award shall be treated pursuant to the provisions of Section 6.2. 6.4 Termination for Cause. Notwithstanding anything in this Article VI or elsewhere in the Plan to the contrary, and unless a Holder’s Award Agreement specifically provides otherwise, in the event of a Holder’s Termination for Cause, all of such Holder’s then outstanding Awards shall expire immediately and be forfeited in their entirety upon such termination.

  90. OPTIONS

    OPTIONS 7.1 Option Period. The term of each Option shall be as specified in the Option Agreement; provided, however, that except as set forth in Section 7.3, no Option shall be exercisable after the expiration of ten (10) years from the date of its grant. 7.2 Limitations on Exercise of Option. An Option shall be exercisable in whole or in such installments and at such times as specified in the Option Agreement. 7.3 Special Limitations on Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all plans of the Company and any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code) which provide for the grant of Incentive Stock Options exceeds One Hundred Thousand Dollars ($100,000) (or such other individual limit as may be in effect under the Code on the date of grant), the portion of such Incentive Stock Options that exceeds such threshold shall be treated as Non-qualified Stock Options. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Holder’s Options, which were intended by the Committee to be Incentive Stock Options when granted to the Holder, will not constitute Incentive Stock Options because of such limitation, and shall make reasonable efforts to notify the Holder of such determination as soon as practicable after such determination. No Incentive Stock Option shall be granted to an Employee if, at the time the Incentive Stock Option is granted, such Employee is a Ten Percent Stockholder, unless (i) at the time such Incentive Stock Option is granted the Option price is at least one hundred ten percent (110%) of the Fair Market Value of the Shares subject to the Incentive Stock Option, and (ii) such Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. No Incentive Stock Option shall be granted more than ten (10) years from the earlier of the Effective Date or date on which the Plan is approved by the Company’s stockholders. The designation by the Committee of an Option as an Incentive Stock Option shall not guarantee the Holder that the Option will satisfy the applicable requirements for “incentive stock option” status under Section 422 of the Code. 7.4 Option Agreement. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve, including, but not limited to, provisions intended to qualify an Option as an Incentive Stock Option. An Option Agreement may provide for the payment of the Option price, in whole or in part, by the delivery of a number of Shares (plus cash if necessary) that have been owned by the Holder for at least six (6) months and having a Fair Market Value equal to such Option price, or such other forms or methods as the Committee may determine from time to time, in each case, subject to such rules and regulations as may be adopted by the Committee. Each Option Agreement shall, solely to the extent inconsistent with the provisions of Sections 6.2, 6.3, and 6.4, as applicable, specify the effect of Termination of Service on the exercisability of the Option. Moreover, without limiting the generality of the foregoing, a Non-qualified Stock Option Agreement may provide for a “cashless exercise” of the Option, in whole or in part, by (a) establishing procedures whereby the Holder, by a properly-executed written notice, directs (i) an immediate market sale or margin loan as to all or a part of Shares to which he is entitled to receive upon exercise of the Option, pursuant to an extension of credit by the Company to the Holder of the Option price, (ii) the delivery of the Shares from the Company directly to a brokerage firm and (iii) the delivery of the Option price from sale or margin loan proceeds from the brokerage firm directly to the Company, or (b) reducing the number of Shares to be issued upon exercise of the Option by the number of such Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the date of the Option’s exercise. An Option Agreement may also include provisions relating to: (i) subject to the provisions hereof, accelerated vesting of Options, and (ii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall in its sole discretion determine. The terms and conditions of the respective Option Agreements need not be identical. 7.5 Option Price and Payment. The price at which a Share may be purchased upon exercise of an Option shall be determined by the Committee; provided, however, that such Option price (i) shall not be less than the Fair Market Value of a Share on the date such Option is granted (or 110% of Fair Market Value for an Incentive Stock Option held by Ten Percent Stockholder, as provided in Section 7.3), and (ii) shall be subject to adjustment as provided in Article XV. The Option or portion thereof may be exercised by delivery of an irrevocable notice of exercise to the Company. The Option price for the Option or portion thereof shall be paid in full in the manner prescribed by the Committee as set forth in the Plan and the applicable Option Agreement, which manner, with the consent of the Committee, may include the withholding of Shares otherwise issuable in connection with the exercise of the Option. Separate share certificates shall be issued by the Company for those Shares acquired pursuant to the exercise of an Incentive Stock Option and for those Shares acquired pursuant to the exercise of a Non-qualified Stock Option. 7.6 Stockholder Rights and Privileges. The Holder of an Option shall be entitled to all the privileges and rights of a stockholder of the Company solely with respect to such Shares as have been purchased under the Option and for which share certificates have been registered in the Holder’s name. 7.7 Options and Rights in Substitution for Stock or Options Granted by Other Corporations. Options (or other Awards) may be granted under the Plan from time to time in substitution for stock options (or other equity-based awards) held by individuals employed by entities who become Employees, Directors or Consultants as a result of a merger or consolidation of the employing entity with the Company or any Affiliate, or the acquisition by the Company or an Affiliate of the assets of the employing entity, or the acquisition by the Company or an Affiliate of stock or shares of the employing entity with the result that such employing entity becomes an Affiliate. The Shares subject to any such replacement Awards shall not count against the Section 5.1 Share grant limits. 7.8 Prohibition Against Re-Pricing. Except to the extent (i) approved in advance by holders of a majority of the shares of the Company entitled to vote generally in the election of directors, or (ii) as a result of any Change of Control or any adjustment as provided in Article XV, the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price under any outstanding Option or Stock Appreciation Right, or to grant any new Award or make any payment of cash in substitution for or upon the cancellation of Options and/or Stock Appreciation Rights previously granted.

  91. RESTRICTED STOCK AWARDS

    RESTRICTED STOCK AWARDS 8.1 Award. A Restricted Stock Award shall constitute an Award of Shares to the Holder as of the date of the Award which are subject to a “substantial risk of forfeiture” as defined under Section 83 of the Code during the specified Restriction Period. At the time a Restricted Stock Award is made, the Committee shall establish the Restriction Period applicable to such Award. Each Restricted Stock Award may have a different Restriction Period, in the discretion of the Committee. The Restriction Period applicable to a particular Restricted Stock Award shall not be changed except as permitted by Section 8.2. 8.2 Terms and Conditions. At the time any Award is made under this Article VIII, the Company and the Holder shall enter into a Restricted Stock Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. Shares awarded pursuant to a Restricted Stock Award shall be represented by a share certificate registered in the name of the Holder of such Restricted Stock Award. If provided for under the Restricted Stock Agreement, the Holder shall have the right to vote Shares subject thereto and to enjoy all other stockholder rights, including the entitlement to receive dividends on the Shares during the Restriction Period provided that such dividends will be only paid (if at all) to the Holder upon the vesting of the underlying Shares except that (i) the Holder shall not be entitled to delivery of the share certificate until the Restriction Period shall have expired, (ii) the Company shall retain custody of the share certificate during the Restriction Period (with a share power endorsed by the Holder in blank), (iii) the Holder may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Shares during the Restriction Period and (iv) a breach of the terms and conditions established by the Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of the Restricted Stock Award (along with any unpaid dividends on such unvested Shares). At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Stock Awards, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the Restriction Period. Such additional terms, conditions or restrictions shall, to the extent inconsistent with the provisions of Sections 6.2, 6.3 and 6.4, as applicable, be set forth in a Restricted Stock Agreement made in conjunction with the Award. Such Restricted Stock Agreement may also include provisions relating to: (a) subject to the provisions hereof, accelerated vesting of Awards, and (b) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall in its sole discretion determine. The terms and conditions of the respective Restricted Stock Agreements need not be identical. All Shares delivered to a Holder as part of a Restricted Stock Award shall be delivered and reported by the Company or the Affiliate, as applicable, to the Holder at the time of vesting. 8.3 Payment for Restricted Stock. The Committee shall determine the amount and form of any payment from a Holder for Shares received pursuant to a Restricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any payment for Shares received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.

  92. UNRESTRICTED STOCK AWARDS

    UNRESTRICTED STOCK AWARDS 9.1 Award. Shares may be awarded (or sold) to Employees, Directors or Consultants under the Plan which are not subject to Restrictions of any kind, in consideration for past services rendered thereby to the Company or an Affiliate or for other valid consideration. 9.2 Terms and Conditions. At the time any Award is made under this Article IX, the Company and the Holder shall enter into an Unrestricted Stock Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may determine to be appropriate. 9.3 Payment for Unrestricted Stock. The Committee shall determine the amount and form of any payment from a Holder for Shares received pursuant to an Unrestricted Stock Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any payment for Shares received pursuant to an Unrestricted Stock Award, except to the extent otherwise required by law.

  93. RESTRICTED STOCK UNIT AWARDS

    RESTRICTED STOCK UNIT AWARDS 10.1 Award. A Restricted Stock Unit Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder at the end of a specified Restriction Period. At the time a Restricted Stock Unit Award is made, the Committee shall establish the Restriction Period applicable to such Award. Each Restricted Stock Unit Award may have a different Restriction Period, in the discretion of the Committee. A Restricted Stock Unit shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares prior to the time the Holder shall receive a distribution of Shares pursuant to Section 10.3. 10.2 Terms and Conditions. At the time any Award is made under this Article X, the Company and the Holder shall enter into a Restricted Stock Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Restricted Stock Unit Agreement shall set forth the individual service-based vesting requirement which the Holder would be required to satisfy before the Holder would become entitled to distribution pursuant to Section 10.3 and the number of Units awarded to the Holder. Such conditions shall be sufficient to constitute a “substantial risk of forfeiture” as such term is defined under Section 409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Stock Unit Awards in the Restricted Stock Unit Agreement, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the applicable vesting period. The terms and conditions of the respective Restricted Stock Unit Agreements need not be identical. 10.3 Distributions of Shares. The Holder of a Restricted Stock Unit shall be entitled to receive a cash payment equal to the Fair Market Value of a Share, or one Share, as determined in the sole discretion of the Committee and as set forth in the Restricted Stock Unit Agreement, for each Restricted Stock Unit subject to such Restricted Stock Unit Award, if the Holder satisfies the applicable vesting requirement. Such distribution shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the calendar year in which the Restricted Stock Unit first becomes vested (i.e., no longer subject to a “substantial risk of forfeiture”).

  94. PERFORMANCE UNIT AWARDS

    PERFORMANCE UNIT AWARDS 11.1 Award. A Performance Unit Award shall constitute an Award under which, upon the satisfaction of predetermined individual and/or Company (and/or Affiliate) Performance Goals based on selected Performance Criteria, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder. At the time a Performance Unit Award is made, the Committee shall establish the Performance Period and applicable Performance Goals. Each Performance Unit Award may have different Performance Goals, in the discretion of the Committee. A Performance Unit Award shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares. 11.2 Terms and Conditions. At the time any Award is made under this Article XI, the Company and the Holder shall enter into a Performance Unit Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Performance Unit Agreement the Performance Period, Performance Criteria and Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to payment pursuant to Section 11.3, the number of Units awarded to the Holder and the dollar value or formula assigned to each such Unit. Such payment shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Unit Awards, including, but not limited to, rules pertaining to the effect of Termination of Service prior to expiration of the applicable performance period. The terms and conditions of the respective Performance Unit Agreements need not be identical. 11.3 Payments. The Holder of a Performance Unit shall be entitled to receive a cash payment equal to the dollar value assigned to such Unit under the applicable Performance Unit Agreement if the Holder and/or the Company satisfy (or partially satisfy, if applicable under the applicable Performance Unit Agreement) the Performance Goals set forth in such Performance Unit Agreement. If necessary to satisfy the requirements of Code Section 162(m) as in effect on the Effective Date, if applicable, the achievement of such Performance Goals shall be certified in writing by the Committee prior to any payment. All payments shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate (i.e., no longer subject to a “substantial risk of forfeiture”).

  95. PERFORMANCE STOCK AWARDS

    PERFORMANCE STOCK AWARDS 12.1 Award. A Performance Stock Award shall constitute a promise to grant Shares (or cash equal to the Fair Market Value of Shares) to the Holder at the end of a specified Performance Period subject to achievement of specified Performance Goals. At the time a Performance Stock Award is made, the Committee shall establish the Performance Period and applicable Performance Goals based on selected Performance Criteria. Each Performance Stock Award may have different Performance Goals, in the discretion of the Committee. A Performance Stock Award shall not constitute an equity interest in the Company and shall not entitle the Holder to voting rights, dividends or any other rights associated with ownership of Shares unless and until the Holder shall receive a distribution of Shares pursuant to Section 12.3. 12.2 Terms and Conditions. At the time any Award is made under this Article XII, the Company and the Holder shall enter into a Performance Stock Agreement setting forth each of the matters contemplated thereby and such other matters as the Committee may determine to be appropriate. The Committee shall set forth in the applicable Performance Stock Agreement the Performance Period, selected Performance Criteria and Performance Goals which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to the receipt of Shares pursuant to such Holder’s Performance Stock Award and the number of Shares subject to such Performance Stock Award. Such distribution shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Stock Awards, including, but not limited to, rules pertaining to the effect of the Holder’s Termination of Service prior to the expiration of the applicable performance period. The terms and conditions of the respective Performance Stock Agreements need not be identical. 12.3 Distributions of Shares or Payment of Cash. The Holder of a Performance Stock Award shall be entitled to receive a cash payment equal to the Fair Market Value of a Share, or one Share, as determined in the sole discretion of the Committee, for each Performance Stock Award subject to such Performance Stock Agreement, if the Holder satisfies the applicable vesting requirement. If necessary to satisfy the requirements of Code Section 162(m) as in effect on the Effective Date, if applicable, the achievement of such Performance Goals shall be certified in writing by the Committee prior to any payment. Such distribution shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate (i.e., no longer subject to a “substantial risk of forfeiture”).

  96. RECAPITALIZATION OR REORGANIZATION

    RECAPITALIZATION OR REORGANIZATION 15.1 Adjustments to Shares. The shares with respect to which Awards may be granted under the Plan are Shares as presently constituted; provided, however, that if, and whenever, prior to the expiration or distribution to the Holder of Shares underlying an Award theretofore granted, the Company shall effect a subdivision or consolidation of the Shares or the payment of a Share dividend on Shares without receipt of consideration by the Company, the number of Shares with respect to which such Award may thereafter be exercised or satisfied, as applicable, (i) in the event of an increase in the number of outstanding Shares, shall be proportionately increased, and the purchase price per Share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding Shares, shall be proportionately reduced, and the purchase price per Share shall be proportionately increased. Notwithstanding the foregoing or any other provision of this Article XV, any adjustment made with respect to an Award (x) which is an Incentive Stock Option, shall comply with the requirements of Section 424 of the Code, and in no event shall any adjustment be made which would render any Incentive Stock Option granted under the Plan to be other than an “incentive stock option” for purposes of Section 422 of the Code, and (y) which is a Non-qualified Stock Option (or Stock Appreciation Right), shall comply with the requirements of Section 409A of the Code, and in no event shall any adjustment be made which would render any Non-qualified Stock Option (or Stock Appreciation Right) granted under the Plan to become subject to Section 409A of the Code. 15.2 Recapitalization. If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any exercise or satisfaction, as applicable, of a previously granted Award, the Holder shall be entitled to receive (or entitled to purchase, if applicable) under such Award, in lieu of the number of Shares then covered by such Award, the number and class of shares and securities to which the Holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the Holder had been the holder of record of the number of Shares then covered by such Award. 15.3 Other Events. In the event of changes to the outstanding Shares by reason of an extraordinary cash dividend, reorganization, merger, consolidation, combination, split-up, spin-off, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for under this Article XV, any outstanding Awards and any Award Agreements evidencing such Awards shall be adjusted by the Board in its discretion in such manner as the Board shall deem equitable or appropriate taking into consideration the applicable accounting and tax consequences, as to the number and price of Shares or other consideration subject to such Awards. In the event of any adjustment pursuant to Sections 15.1, 15.2 or this Section 15.3, the aggregate number of Shares available under the Plan pursuant to Section 5.1 (and the Code Section 162(m) limit set forth therein) may be appropriately adjusted by the Board, the determination of which shall be conclusive. In addition, the Committee may make provision for a cash payment to a Holder or a person who has an outstanding Award. The number of Shares subject to any Award shall be rounded to the nearest whole number. 15.4 Powers Not Affected. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or of the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change of the Company’s capital structure or business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Shares or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. 15.5 No Adjustment for Certain Awards. Except as hereinabove expressly provided, the issuance by the Company of shares of any class or securities convertible into shares of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect previously granted Awards, and no adjustment by reason thereof shall be made with respect to the number of Shares subject to Awards theretofore granted or the purchase price per Share, if applicable. 15.6 Effect of Change of Control. In the event that there is a Change of Control and/or the Company is a party to a merger or acquisition or reorganization or similar transaction, outstanding Awards shall be subject to the merger agreement or other applicable transaction agreement. Such agreement may provide, without limitation, that subject to the consummation of the applicable transaction, for the assumption (or substitution) of outstanding Awards by the surviving entity or its parent, for their continuation by the Company (if the Company is a surviving corporation), or for their cancellation either with or without consideration, in all cases without the consent of the Holder and outstanding Awards need not be uniformly treated.

  97. MISCELLANEOUS

    17.8 Section 162(m). The following conditions shall apply if it is intended that the requirements of Section 162(m) of the Code, as in effect on the date of any Award, be satisfied such that such Awards which were made to Holders who were “covered employees” (as such term was defined in Section 162(m) of the Code at the time of such Award) shall continue to constitute “performance-based” compensation within the meaning of Section 162(m) as then in effect. Any Performance Goal(s) applicable to Qualified Performance-Based Awards shall be objective, shall be established not later than ninety (90) days after the beginning of any applicable Performance Period (or at such other date as may be required or permitted for “performance-based” compensation under Section 162(m) of the Code in effect at the time of the Award) and shall otherwise meet the requirements of Section 162(m) of the Code as in effect at the time of the Award, including the requirement that the outcome of the Performance Goal or Goals be substantially uncertain (as defined in the regulations under Section 162(m) of the Code in effect at the time of the Award) at the time established. The Performance Criteria to be utilized under the Plan to establish Performance Goals shall consist of objective tests based on one or more of the following: earnings or earnings per share, cash flow or cash flow per share, operating cash flow or operating cash flow per share revenue growth, product revenue growth, financial return ratios (such as return on equity, return on investment and/or return on assets), share price performance, stockholder return, equity and/or value, operating income, operating margins, earnings before interest, taxes, depreciation and amortization, earnings, pre- or post-tax income, economic value added (or an equivalent metric), profit returns and margins, credit quality, sales growth, market share, working capital levels, comparisons with various share market indices, year-end cash, debt reduction, assets under management, operating efficiencies, strategic partnerships or transactions (including co-development, co-marketing, profit sharing, joint venture or other similar arrangements), and/or financing and other capital raising transaction. Performance criteria may be established on a Company-wide basis or with respect to one or more Company business units or divisions or subsidiaries; and either in absolute terms, relative to the performance of one or more similarly situated companies, or relative to the performance of an index covering a peer group of companies. When establishing Performance Goals for the applicable Performance Period, the Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company, discontinued operations, other unusual or non-recurring items, and the cumulative effects of accounting changes, and as identified in the Company’s financial statements, notes to the Company’s financial statements or management’s discussion and analysis of financial condition and results of operations contained in the Company’s most recent annual report filed with the U.S. Securities and Exchange Commission pursuant to the Exchange Act. Holders who are “covered employees” (as defined in Section 162(m) of the Code in effect on the Effective Date) shall be eligible to receive payment under a Qualified Performance-Based Award which is subject to achievement of a Performance Goal or Goals only if the applicable Performance Goal or Goals are achieved within the applicable Performance Period, as determined by the Committee. If any provision of the Plan would disqualify the Plan or would not otherwise permit the Plan to comply with Section 162(m) of the Code with respect to any Award that previously complied with Section 162(m) as in effect at the time of such Award, then such provision shall, to the extent practicable, be construed or deemed amended to conform to the requirements or provisions of Section 162(m) of the Code as then in effect. The Committee may postpone the exercising of Awards, the issuance or delivery of Shares under any Award or any action permitted under the Plan to prevent the Company or any subsidiary from being denied a federal income tax deduction, provided that such deferral satisfies the requirements of Section 409A of the Code. For purposes of the requirements of Treasury Regulation Section 1.162-27(e)(4)(i) as in effect on the Effective Date, the maximum aggregate amount that may be paid in cash during any calendar year to any one person (measured from the date of any payment) with respect to one or more Awards payable in cash shall be Three Million Dollars ($3,000,000). Such amount would act as a limit on cash payments made under Performance Unit Awards or Performance Stock Unit Awards, but would not apply to other types of awards, such as Restricted Stock Awards or Options. 17.9 Section 409A. Notwithstanding any other provision of the Plan, the Committee shall have no authority to issue an Award under the Plan with terms and/or conditions which would cause such Award to constitute non-qualified “deferred compensation” under Section 409A of the Code unless such Award shall be structured to be exempt from or comply with all requirements of Code Section 409A. The Plan and all Award Agreements are intended to comply with the requirements of Section 409A of the Code (or to be exempt therefrom) and shall be so interpreted and construed and no amount shall be paid or distributed from the Plan unless and until such payment complies with all requirements of Code Section 409A. It is the intent of the Company that the provisions of this Agreement and all other plans and programs sponsored by the Company be interpreted to comply in all respects with Code Section 409A, however, the Company shall have no liability to the Holder, or any successor or beneficiary thereof, in the event taxes, penalties, excise taxes and/or interest may ultimately be determined to be applicable to any payment or benefit received by the Holder or any successor or beneficiary thereof. 17.10 Indemnification. Each person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred thereby in connection with or resulting from any claim, action, suit, or proceeding to which such person may be made a party or may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid thereby in settlement thereof, with the Company’s approval, or paid thereby in satisfaction of any judgment in any such action, suit, or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or By-laws, by contract, as a matter of law, or otherwise. 17.11 Other Benefit Plans. No Award, payment or amount received hereunder shall be taken into account in computing an Employee’s salary or compensation for the purposes of determining any benefits under any pension, retirement, life insurance or other benefit plan of the Company or any Affiliate, unless such other plan specifically provides for the inclusion of such Award, payment or amount received. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees, in cash or property, in a manner which is not expressly authorized under the Plan.

  98. MISCELLANEOUS

    17.12 Limits of Liability. Any liability of the Company with respect to an Award shall be based solely upon the contractual obligations created under the Plan and the Award Agreement. None of the Company, any member of the Board nor any member of the Committee shall have any liability to any party for any action taken or not taken, in good faith, in connection with or under the Plan. 17.13 Governing Law. Except as otherwise provided herein, the Plan shall be construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. 17.14 Severability of Provisions. If any provision of the Plan is held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed and enforced as if such invalid or unenforceable provision had not been included in the Plan. 17.15 No Funding. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to ensure the payment of any Award. Prior to receipt of Shares or a cash distribution pursuant to the terms of an Award, such Award shall represent an unfunded unsecured contractual obligation of the Company and the Holder shall have no greater claim to the Shares underlying such Award or any other assets of the Company or Affiliate than any other unsecured general creditor. 17.16 Headings. Headings used throughout the Plan are for convenience only and shall not be given legal significance. 17.17 Minimum Vesting. Notwithstanding anything to the contrary, with respect to at least 95% of the Shares underlying all Awards granted under the Plan after September 21, 2023, such Awards shall have a minimum vesting period for every portion of the Award of at least one year after the Award’s date of grant. This minimum vesting requirement for such covered Awards may not be superseded by an individual Award agreement or other agreement. 17.18 Dividends/Dividend Equivalents. For all Awards, no payment of dividends (or dividend equivalents) shall be made with respect to any unvested Awards. Dividends (and dividend equivalents) shall only be paid to a Participant to the extent that the underlying Award to which the dividends/dividend equivalents are attached becomes vested. For avoidance of doubt, accrual of dividends (and dividend equivalents) while the underlying Award is unvested and which are payable upon vesting is permitted to the extent provided under this Plan or Award Agreement. 17.19 Acceleration of Vesting Permitted Only in Limited Circumstances. The Committee and any Award Agreement may provide for accelerated vesting of an Award only (i) in the event of a Participant’s death or (ii) in the event of a Participant’s Total and Permanent Disability, or (iii) if a Change of Control occurs and there is no assumption, substitution or continuation of Awards, then the Committee in its discretion may provide that some or all Awards shall vest and become exercisable as of immediately before such Change of Control. Additionally, the Committee may also in its discretion include in an Award Agreement that accelerated vesting of an Award will be provided if the Participant’s Termination of Service is effected without Cause by the Company (or its acquirer) within a specified period of time before, on or after a Change of Control. For avoidance of doubt, (a) “substitution” includes, without limitation, an Award being replaced by a cash award that provides an equivalent intrinsic value (wherein intrinsic value equals the difference between the market value of a share and any exercise price) and (b) this Section 17.19 shall not modify any accelerated vesting provisions approved by the Committee or the Board on or before September 21, 2023, relating to any Award outstanding as of September 21, 2023.