DEF 14A of NewtekOne, Inc., Apr 29, 2024

DEF 14A of NewtekOne, Inc.

Filed Apr 29, 2024 · FY20230001587987-24-000074

Open on EDGAR

  1. Information about the Directors and Executive Officers

    Information about the Directors and Executive Officers Set forth below is information, as of April 26, 2024, regarding Messrs. Sloane and Downs who are being nominated for election as directors of the Company at the Annual Meeting, as well as information about our other current directors whose terms of office will continue after the Annual Meeting. Included below is specific information about each director’s experience, qualifications, attributes or skills that led the Board of Directors to the conclusion that the individual is qualified to serve on our Board, in light of our business and structure. (1) The business addresses of the director nominees and the other directors are c/o NewtekOne, Inc., 4800 T-Rex Avenue, Suite 120, Boca Raton, FL 33431.

  2. Nominees for Class I Directors — Terms Expiring 2027

    Nominees for Class I Directors — Terms Expiring 2027

  3. Nominees for Class I Directors — Terms Expiring 2027

    | Name, Address, and Age(1) | Position(s) Held with the Company | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Director or Nominee for Director During Past 5 Years | | Messrs. Sloane and Downs are not Independent Directors as defined by Nasdaq listing rules. | | | | | | Barry Sloane, 64 | Director; Chief Executive Officer and President | Director since 1999 and Class I Director since 2014; Term expires 2024 | Chief Executive Officer and President of the Company; Chief Executive Officer of Newtek Bank, N.A. and the Company’s non-bank subsidiaries | | | Peter Downs, 59 | Director; Chief Lending Officer | Class I Director since 2014; Term expires 2024 | Chief Lending Officer of the Company and Newtek Bank, N.A.; President of Newtek Small Business Finance, LLC | |

  4. Nominees for Class I Directors — Terms Expiring 2027

    Mr. Sloane has served as our Chairman and Chief Executive Officer since 1999, as our President since 2008 and Chairman and Chief Executive Officer of our bank subsidiary, Newtek Bank, N.A. (“Newtek Bank”) since January 2023. Mr. Sloane founded the Company in 1998 and is an executive officer of each of the Company’s subsidiaries. From September 1993 through July 1995, Mr. Sloane was a Managing Director of Smith Barney, Inc., where he directed the Commercial and Residential Real Estate Securitization Unit, and was national sales manager for institutional mortgage and asset backed securities sales. From April 1991 through September 1993, Mr. Sloane was founder and President of Aegis Capital Markets, a consumer loan origination and securitization business which was eventually taken public with the name of “Aegis Consumer Funding.” From October 1988 through March 1991, Mr. Sloane was Senior Vice President of Donaldson, Lufkin and Jenrette, where he was responsible for directing sales of mortgage-backed securities. From August 1982 to September 1988, Mr. Sloane was a senior mortgage security salesman and trader for Bear Stearns, L.F. Rothschild, E.F. Hutton and Paine Webber. Mr. Sloane’s broad business and financial experience and his knowledge of the Company’s businesses have been of great value to the other members of the Board and qualify him to serve on our Board of Directors and as the Chairman of our Board of Directors. Mr. Downs is the Company’s and Newtek Bank’s Chief Lending Officer. Since 2003, Mr. Downs has been the President of Newtek Small Business Finance, LLC (“NSBF”), the Company’s wholly owned subsidiary, and a member of the NSBF board of directors. Mr. Downs became Chief Lending Officer of Newtek Bank and a member of the board of directors of Newtek Bank in January 2023. He has had primary responsibility for the development of the Company’s lending policies and procedures, portfolio and marketing. Prior to joining the Company in 2003, Mr. Downs spent sixteen years in various small business lending roles within the banking industry. From 1990 to 2001, he was employed with European American Bank (“EAB”), where he held various positions including New Business Development Officer for Small Business Lending and Group Manager of Retail Small Business Lending which encompassed the underwriting and servicing of the bank’s small business loan portfolio. Subsequent to EAB’s acquisition by Citibank, Mr. Downs ran the bank’s U.S. Small Business Administration (“SBA”) lending portfolio in New York, and eventually was named the National Director of SBA lending, after which he was responsible for coordinating the bank’s SBA underwriting and sales efforts in all Citibank markets across the country. In addition to his banking experience, he has been involved in several non-profit small business advisory boards, and has been a member of the National Association of Government Guaranteed Lenders (“NAGGL”) Regional Technical Issues Committee. Mr. Down’s history with the Company and extensive experience in the small business lending space, including SBA 7(a) lending, provides our Board of Directors with the valuable insight of an experienced lender.

  5. Incumbent Class III Directors — Terms Expiring 2026

    Incumbent Class III Directors — Terms Expiring 2026

  6. Incumbent Class III Directors — Terms Expiring 2026

    | Name, Address, and Age(1) | Position(s) Held with the Company | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Director or Nominee for Director During Past 5 Years | | Messrs. Salute and Mulia are Independent Directors as defined by Nasdaq listing rules. | | | | | | Richard Salute, 78 | Director | Class III Director since 2015; Term expires 2026 | Retired | Director, Near Intelligence, Inc., September 2023 though March 27, 2024. | | Salvatore Mulia, 76 | Director | Director since 2004 and Class III Director since 2014; Term expires 2026 | Retired | |

  7. Incumbent Class III Directors — Terms Expiring 2026

    Mr. Salute served as Capital Markets and SEC Practice Director at J.H. Cohn and CohnReznick LLP from 2004 to 2014. Prior to that, he spent 29 years, from 1972 to 2001, at Arthur Andersen managing complex audits for public and private companies. During his tenure, he was responsible for providing clients with strategic planning services as well as consulting on corporate finance, mergers and acquisitions, and process evaluation. His clients included large multinational companies and entrepreneurial start-ups. In addition to his client responsibilities, he started three business lines for Arthur Anderson: the Enterprise Group (New York Metropolitan area), the Technology Practice (New York office) and the Bankruptcy and Corporate Recovery Practice (nationwide). More recently, Mr. Salute served as Chief Financial Officer of PAVmed Inc. from June 2014 to September 2015. Mr. Salute also serves as a director of Newtek Bank. Mr. Salute served as a director and a member of the audit committee of Near Intelligence, Inc., a global data intelligence platform, from September 2023 through March 27, 2024. Mr. Salute also served as a director of Walker Innovation Inc. from 2015 through 2018. Mr. Salute is a graduate of Adelphi University and a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants. Mr. Salute has more than 39 years of audit, accounting, and tax experience. His extensive audit, accounting, and tax experience and relationships with industry players are an asset to our Board of Directors. Mr. Salute’s expertise and experience also qualify him to serve as chairman of the Audit Committee and as the Audit Committee Financial Expert. Mr. Salute’s experience with SEC matters includes numerous initial public offerings and his experience representing publicly traded, as well as over-the-counter market traded, clients provides a significant addition to the Board of Directors. Mr. Mulia, prior to his retirement in 2017, was a financial advisor and principal at RTM Financial Services, Westport, CT, a firm he founded with his wife. RTM was involved in advising small business with an emphasis on leasing and lending advisory services since February 2003. From February 2001 to February 2003, Mr. Mulia was Executive Vice President of Pitney Bowes Capital Corp, Shelton, CT which was engaged in providing financial services to business customers. From 1980 to 1993, Mr. Mulia held senior management positions within General Electric’s Financial Services Division, GE Capital Corporation (“GECC”), and was responsible for developing new products and business initiatives in financial services. In addition, during his tenure at GECC, Mr. Mulia was a principal in GEVEST, GECC’s investment banking unit, where he headed syndication and led acquisition teams which acquired leasing companies including TransAmerica Leasing, Chase Manhattan’s leasing subsidiary and LeaseAmerica. Mr. Mulia also serves as a director of Newtek Bank. Mr. Mulia’s experience in the financial services industry, as well as his experience with smaller to mid-sized companies needing capital and debt and his understanding of these businesses provides a significant addition to our Board of Directors. His understanding of the dynamics of these businesses has been particularly helpful in addressing similar issues of the Company and this experience provides a significant addition to the Board of Directors.

  8. Incumbent Class II Directors — Terms Expiring 2025

    Incumbent Class II Directors — Terms Expiring 2025

  9. Incumbent Class II Directors — Terms Expiring 2025

    | Name, Address, and Age(1) | Position(s) Held with the Company | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Other Directorships Held by Director or Nominee for Director During Past 5 Years | | Messrs. Zink and Perez-Hickman are Independent Directors as defined by Nasdaq listing rules. | | | | | | Gregory Zink, 67 | Director | Class II Director since 2017; term expires in 2025 | Partner at Newport LLC since 2021; Managing partner, Lowell Group, LLC, 1988-2021. | | | Fernando Perez-Hickman, 56 | Director | Class II Director since 2021; term expires in 2025 | Managing Partner, Azora Exan; Vice Chairman, Director of Corporate Strategy and member of IBERIABANK’s Planning Group Committee from 2017-2020. | | | Mrs. Razon-Feingold is not an Independent Director as defined by Nasdaq listing rules. | | | | | | Halli Razon-Feingold, 35 | Director; Chief Administrative Officer and Senior Vice President, Human Resources | Class II Director since 2021; term expires in 2025 | Chief Administrative Officer of the Company since July 2016, and Senior Vice President, Human Resources of the Company since July 2019 | |

  10. Incumbent Class II Directors — Terms Expiring 2025

    Mr. Zink has served as an independent director of the Company since 2017. Mr. Zink is a Partner at Newport LLC, a national strategic advisory firm that specializes in helping owners and CEOs of privately held, growth stage companies accelerate growth and significantly improve the value of their businesses. From 1998 to 2021, Mr. Zink was the principal of the Lowell Group, LLC, a management consulting firm which provided strategic, operational, marketing and financial consulting assistance to start-up, small and medium size businesses. From 1988 through 2019, Mr. Zink served as the Chief Executive Officer, Chief Financial Officer and Director of NGJ Brand Solutions, a distributor of commercial fitness equipment and health and wellness solutions provider in Japan. Mr. Zink was also previously employed by Newtek as an Executive Vice President from 2000-2005, Touche Ross/Deloitte Consulting, AT&T, and is a graduate of the General Electric Financial Management Program. Mr. Zink has an MBA from the Wharton School of the University of Pennsylvania. Mr. Zink also serves as a director of Newtek Bank. Mr. Zink’s professional experience provides a significant addition to the Board of Directors. Mr. Zink’s many years of experience providing consulting and financial advice to small and medium sized businesses, provides a significant addition to the Board of Directors. Mr. Perez-Hickman has served as an independent director of the Company since 2021. Mr. Perez-Hickman is a Managing Partner at Azora Capital, a Madrid-based European based private equity firm, and its U.S. affiliate Azora Exan, based in Miami, Florida. Mr. Perez-Hickman served as Vice Chairman, Director of Corporate Strategy and member of IBERIABANK’s Planning Group Committee from 2007 until its merger with First Horizon Bank in July 2020. At IBERIABANK, he was responsible for corporate strategy and mergers and acquisitions, supervising the Consumer and Retail Banking Division, reporting to the CEO. From 2007 to 2017, Mr. Perez-Hickman served as Executive Chairman of the Board of Sabadell United Bank and Managing Director of Santander Private Banking International. Mr. Perez-Hickman also serves as a director of Newtek Bank. Mr. Perez-Hickman’s broad experience as a highly successful and experienced executive with a proven track record in management, mergers and acquisitions and value creation at financial services businesses in the United States, Spain and international markets, provides a significant addition to the Board of Directors. Mrs. Razon-Feingold has served as a non-independent director of the Company since 2021. Mrs. Razon-Feinghold has served as the Company’s Chief Administrative Officer since July 2016 and as Senior Vice President of Human Resources for the Company since July 2019. Mrs. Razon-Feingold’s tenure at the Company spans over eleven years, with her current principal responsibilities centered on managing the Executive department and all areas of Human Resources for the Company and all of its subsidiaries. Mrs. Razon-Feingold holds a master’s degree in Industrial/Organizational Psychology from CUNY Baruch College and a bachelor’s degree in Psychology from Hofstra University. Mrs. Razon-Feingold’s long experience with the Company provides a significant addition to the Board of Directors.

  11. Director Compensation

    Director Compensation The Board of Directors has adopted a plan for compensation of non-employee directors which gives effect to the time and effort required of each of them in the performance of their duties. For 2023, the Board of Directors provided for the payment of annual cash compensation in the amount of $125,000 for each non-employee director, with no additional fees for committee membership or chairmanship. In addition, pursuant to the terms of the Company’s 2023 Stock Incentive Plan (the “2023 Stock Plan”), which was approved by the Board of Directors in April 2023 and the Company’s shareholders on June 14, 2023, the maximum dollar value of shares of Common Stock for which a non-employee director may be awarded in any calendar year is fifty thousand dollars ($50,000). In July 2023, non-employee directors Salute, Mulia, Zink and Perez-Hickman were awarded $25,000 of shares of Restricted Stock at the beginning of their 2023 terms of service, which forfeiture restrictions will lapse after twelve months. Directors do not receive any perquisites or other personal benefits from the Company.

  12. 2023 Director Summary Compensation Table

    | Name of Director | Fees earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Option Awards ($) | All Other Compensation ($) | Total ($) | | Current Independent Directors: | | | | | | | Salvatore F. Mulia | 125,000 | 25,000 | — | — | 150,000 | | Richard Salute | 125,000 | 25,000 | — | — | 150,000 | | Gregory Zink | 125,000 | 25,000 | — | — | 150,000 | | Fernando Perez-Hickman | 125,000 | 25,000 | — | — | 150,000 |

  13. Chief Executive Officer Pay Ratio

    Chief Executive Officer Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and applicable SEC rules, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our Chief Executive Officer and President, Barry Sloane. For fiscal year 2023, the median of the annual total compensation of all of our employees (other than Mr. Sloane, our Chief Executive Officer) was $92,742 and the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table, was $700,000. Based on this information, our Chief Executive Officer’s 2023 annual total compensation was approximately 7.5 times that of the median of the 2023 annual total compensation of all of our employees. We selected December 31, 2023 as the date used to identify our “median employee” whose annual total compensation was the median of the annual total compensation of all our and our consolidated subsidiaries’ employees (other than our Chief Executive Officer) for 2023. As of December 31, 2023, our employee population consisted of 528 individuals who are located in our Lake Success, New York, Orlando, Florida and Boca Raton, Florida offices, as well as individuals who work remotely out of their residences in various states. To identify our median employee, we compared the annual total compensation for each of our employees, as determined in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which included salary and cash bonus. In making this determination, we annualized the compensation of 121 employees who were hired in 2023 but did not work for us the entire fiscal year.

  14. Information about 2023 NEOs Who Are Not Directors

    Information about 2023 NEOs Who Are Not Directors Michael A. Schwartz, age 63, has served as Chief Legal Officer and Corporate Secretary since January 2015, and has served as Chief Legal Officer and Corporate Secretary of the Company’s bank subsidiary Newtek Bank since January 2023. In addition. Mr. Schwartz serves on the boards of a number of the Company’s non-bank subsidiaries. Beginning in November 2013, Mr. Schwartz was Senior Counsel to the Company. Prior to joining the Company, Mr. Schwartz spent twenty-two years in private practice specializing in complex litigation in the fields of securities, mergers and acquisitions, corporate governance, commercial law, unfair employment practices, consumer protection and antitrust. Mr. Schwartz served on the Company’s Board of Directors from 2005 through 2009. M. Scott Price, age 45, was appointed Chief Financial Officer of the Company and Newtek Bank in May 2023. Prior to joining the Company and Newtek Bank, Mr. Price was executive vice president and senior finance executive with First Horizon Corporation and prior to First Horizon, the chief accounting officer and corporate controller for IBERIABANK Corporation. Mr. Price has over 17 years’ experience in the financial services industry with specific focuses on, and an extensive background in, banking regulation and bank accounting. Mr. Price is a certified public accountant (“CPA”) and holds a Master of Accountancy from Auburn University. Nicolas Young, age 47, was appointed President and Chief Operating Officer of Newtek Bank on January 6, 2023. From August 2, 2021 until January 2023, Mr. Young was the Company’s Chief Risk Officer. Mr. Young previously served as Executive Vice President & Chief Credit Officer for IBERIABANK, and was EVP & Chief Risk Officer of Sabadell in Miami, Florida. Mr. Young has over 20 years’ experience in credit and risk management. Mr. Young is a native of Montevideo, Uruguay and holds a Bachelor of Economics from Universidad ORT Uruguay. Nicholas J. Leger, age 43, served as the Company’s Chief Accounting Officer from February 5, 2021 to March 2024, when he was transitioned to the role of Treasurer, and is no longer an executive officer. Mr. Frank M. DeMaria, age 35, was appointed Executive Vice President, Chief Accounting Officer, effective as of March 29, 2024. Mr. DeMaria joined the Company in May 2023, and had served as the Company’s and Newtek Bank’s Senior Vice President of Finance and Accounting. Prior to joining the Company, Mr. DeMaria served as Senior Vice President and Controller of Flagstar Bank, N.A. In addition, Mr. DeMaria previously served as Senior Vice President, Chief Accounting Officer and Principal Accounting Officer of Amalgamated Financial Corp. from July 2021 to October 2022. Mr. DeMaria began his career with KPMG LLP, Audit Financial Services, in October 2012, holding various roles including Senior Manager from October 2019 to July 2021. Mr. DeMaria holds a Master of Business Administration for Accountants and a Bachelor of Science in Accounting from Marist College. Mr. DeMaria is a Certified Public Accountant in the state of New York.

  15. Base Salary

    Base Salary The Company provides NEOs and other employees with base salary to compensate them for services rendered during the fiscal year. Executive base salaries continue to reflect our operating philosophy, our performance driven corporate culture and business direction, with each salary determined by the skills, experience and performance level of the individual executive, and the needs and resources of the Company. Base salaries are generally targeted to market levels and base salary ranges for NEOs are determined for each executive based on his or her position and responsibility by using market data from peer companies and published salary surveys, and the Company generally attempts to fix each NEO’s salary within the range. We believe that the Company’s most direct competitors for executive talent are not necessarily restricted to those companies that are included in the peer company index used to compare shareholder returns, but encompass a broader group of companies engaged in the recruitment and retention of executive talent in competition with the Company. During the review of base salaries for senior level executives, including the NEOs, we primarily consider: • an internal review of each executive’s compensation both individually and relative to other executive officers; • individual performance of the executive; and • a review of the Company’s financial and operational performance relative to the Company’s annual plan. Salary levels typically are considered annually as part of the Company’s performance review process as well as upon a promotion or other change in job responsibility. Merit based increases to salaries are based on the Chief Executive Officer’s assessment of the individual’s performance. Merit based increases to the salaries of NEOs other than the Chief Executive Officer are recommended by the Chief Executive Officer and confirmed by the Nominating Committee and those for the Chief Executive Officer are determined by the Nominating Committee.

  16. Annual Bonus

    Annual Bonus Discretionary annual cash bonuses may be awarded to executive officers along with the Company’s non-executive employees under the Company’s cash bonus plan. The Company typically creates a cash bonus pool based on an annually determined percentage of the salaries of all employees, which it accrues as an expense. Payments under the plan are discretionary and are based on the Company’s and the employee’s overall performance as determined by the Chief Executive Officer and the Nominating Committee. The Nominating Committee determines any bonus for the Chief Executive Officer based on, among other things, a review of the Company’s financial performance relative to the Company’s annual plans as established by the Board of Directors. The Chief Executive Officer in consultation with the Nominating Committee with respect to the NEOs, or in consultation with the NEOs and other senior level officers with respect to lower level employees, determines annual bonuses for other employees based on such employee’s and the Company’s performance. Factors considered include the achievement of business plans, goals and performance relative to other companies of a similar size and business strategy. The mix and weighting of the factors vary, depending on the business segment and the executive’s responsibilities. The level of achievement and overall contribution by the executive determines the level of bonus.

  17. Equity-Based Compensation

    Equity-Based Compensation The Company must compete for leadership with commercial banks, bank holding companies, financial holding companies, investment banks, and other publicly traded companies, which are generally able to award many different types of stock-based compensation to their officers, employees and directors, (including their non-employee directors). On September 12, 2014, the Board of Directors voted to establish the Newtek Business Services Corp. 2014 Stock Incentive Plan (the “2014 Plan”). The 2014 Plan was approved by shareholders of the Company on October 22, 2014. The 2014 Plan provided for the grant of options to purchase Common Shares, the terms of which were determined by the Nominating Committee and set forth in an award agreement between the Company and the executive or employee. The Company did not issue any options historically under the 2014 Plan. On April 27, 2015, the Nominating Committee and the Board of Directors approved the Amended and Restated 2014 Stock Incentive Plan (the “2015 Stock Plan”), subject to exemptive relief from the SEC and shareholder approval, in order to have increased flexibility to use Restricted Stock Awards, in addition to stock options, to assist the Company in achieving its objectives with respect to long-term equity incentive compensation. On May 10, 2016, we received (as a business development company regulated under the Investment Company Act of 1940) an exemptive order from the SEC permitting us to award Restricted Stock Awards to our employees, officers, and non-employee directors, and on July 27, 2016, our shareholders approved the 2015 Stock Plan. The 2015 Stock Plan permitted us to issue awards of stock options and Restricted Stock Awards in an aggregate amount of up to 20% of our issued and outstanding Common Shares (the “Plan Maximum Shares”) as of the effective date of the plan. Under the 2015 Stock Plan, all of the Plan Maximum Shares were available for grants of stock options, and half of the Plan Maximum Shares (up to 10% of our issued and outstanding Common Shares as of the effective date of the 2015 Stock Plan) were available for grants of Restricted Stock Awards. In connection with our conversion to a financial holding company and the adoption of the 2023 Stock Plan, the 2015 Stock Plan was terminated by the Board in April 2023. The 2023 Stock Plan was approved by the Board of Directors in April 2023 and the Company’s shareholders on June 14, 2023. The 2023 Stock Plan permits us to issue Restricted Stock Awards and stock options (collectively, the “Awards”) up to an aggregate amount of three million (3,000,000) shares of Common Stock. The number of Restricted Stock Awards issued and outstanding will not at the time of issuance of any Restricted Stock Awards exceed ten percent (10%) of the outstanding voting securities of the Company, and no more than 500,000 shares of Common Stock may be issued through incentive stock options (“ISOs”). The Nominating Committee believes that Restricted Stock Awards are the best method of encouraging stock ownership in the Company by eligible participants by giving them a proprietary interest in the Company’s performance, which more closely aligns compensation with the Company’s performance and provides a means to attract and retain persons of outstanding ability in key positions with the Company. Restricted Stock Awards are based on the employee’s and the Company’s performance and the mix and weighting of the factors vary, depending on the business segment and the employee’s responsibilities. The level of achievement and the overall contribution by the employee determines the level of Restricted Stock Award. The Company’s Board of Directors and its Nominating Committee, which consists entirely of directors who are not employees of the Company, believe that in light of the Company’s plan for growth, stock-based incentive compensation, particularly the award of Restricted Stock Awards, advances the interests of the Company by providing substantial motivation for superior performance and more fully aligning the interests of officers and directors with the interests of our shareholders.

  18. Compensation of the Chief Executive Officer

    Compensation of the Chief Executive Officer The Nominating Committee’s decisions regarding compensation of Mr. Sloane are guided by the same policies and considerations that govern compensation of the Company’s other NEOs. While recognizing the Chief Executive Officer’s leadership in building a highly talented management team and in driving the Company forward, Mr. Sloane’s base salary was $700,000 for 2023 and 2022. Mr. Sloane did not receive a cash bonus for 2023 or 2022. Mr. Sloane did not receive a Restricted Stock Award in 2023. Mr. Sloane received a grant of 61,652 Restricted Stock Awards in December 2022, which will be fully vested in January 2026; and a grant of 47,081 Restricted Stock Awards in August 2022, which will be fully vested on August 15, 2025. The Nominating Committee has determined that this salary package is competitive with the labor market median for someone with Mr. Sloane’s skills and talents and is reflective of the Company’s current cash and financial position and the status of the Company’s Common Shares.

  19. Compensation of the Other 2023 NEOs

    Compensation of the Other 2023 NEOs The Nominating Committee approved the 2023 compensation for Peter Downs, Michael Schwartz, M. Scott Price, Nicholas Leger and Nicolas Young, as recommended to it by the Chief Executive Officer. Mr. Downs’s base salary was $625,000 in 2023 and $550,000 in 2022. Mr. Downs did not receive a cash bonus for 2023 and received a $250,000 cash bonus for 2022 (paid in 2023). Mr. Downs did not receive a Restricted Stock Award in 2023 and received a grant of 17,655 Restricted Stock Awards in August 2022, which will be fully vested on August 15, 2025. Mr. Schwartz’s base salary was $450,000 in 2023 and $400,000 in 2022. Mr. Schwartz did not receive a cash bonus for 2023 and received a $250,000 cash bonus for 2022 (paid in 2023). Mr. Schwartz did not receive a Restricted Stock Award in 2023 and received a grant of 14,124 Restricted Stock Awards in August 2022, which will be fully vested on August 15, 2025. Mr. Price was hired in May 2023, and his 2023 base salary was $400,000 from May 15, 2023 through June 30, 2023, and $433,000 for the remainder of 2023. Pursuant to Mr. Price’s employment agreement with the Company, he was paid a $133,333.33 cash bonus for 2023 (paid in 2024). In connection with his hire, Mr. Price received a grant of 18,645 Restricted Stock Awards in July 2023, which will be fully vested on July 15, 2026. Mr. Leger’s base salary was $400,000 in 2023 and $325,000 in 2022. Mr. Leger did not receive a cash bonus for 2023 and received a $200,000 cash bonus for 2022 (paid in 2023). Mr. Leger did not receive a grant of Restricted Stock Awards in 2023 and received a grant of 10,593 Restricted Stock Awards in August 2022, which will be fully vested on August 15, 2025. Mr. Young’s base salary was $650,000 in 2023 and $500,000 in 2022. Mr. Young did not receive a cash bonus for 2023 and received a $100,000 cash bonus for 2022 (paid in 2023). Mr. Young did not receive a grant of Restricted Stock Awards for 2023 and received an award of 9,416 Restricted Stock Awards in August 2022, which will be fully vested on August 15, 2025.

  20. Elements of Executive Compensation and 2023 Compensation Determinations

    Annual Bonus Awards. The Nominating Committee designs our annual cash bonuses to motivate our NEOs to achieve objectives consistent with our operating plan. The Nominating Committee retains discretion in the sizing and awarding of cash bonuses for each NEO to ensure that individual bonus determinations appropriately balance the interests of the Company’s shareholders, while rewarding an NEO’s contributions to performance. In evaluating the performance of our NEOs to arrive at their 2023 cash bonus awards, the Nominating Committee considered the factors to determine the amount of salary and other benefits, as set forth above. The Nominating Committee also considered the following factors and aspects of the Company’s 2023 operating performance in the determination of specific NEO bonus awards: • Declaration of $0.72 per share in cash dividends; • Closing of the Acquisition of NBNYC; • The Company’s transition to a financial holding company from a business development company; • Ability to maintain employee and staff productivity in a remote work environment and hire and retain well qualified employees; • The management of the Company’s assets and capital; • Managerial assistance provided to Newtek Bank and our non-bank subsidiaries, including contributions to growth of sales, growth of deposits, regulatory compliance, growth of operating earnings and earnings per share; and • Each NEO’s specific performance achievements and contributions to the Company’s 2023 financial performance and execution of the Company’s operating plan. When allocating bonus awards, the Nominating Committee also evaluated the total compensation paid to the NEOs and other employees. Based on the foregoing considerations and analysis, and after due deliberation, the Committee did not award the 2023 NEOs annual cash bonuses with respect to 2023, except for Mr. Price whose employment agreement provided for a minimum cash bonus for 2023 (paid in 2024).

  21. Elements of Executive Compensation and 2023 Compensation Determinations

    | | 2023 Cash Bonus Award | As Percentage of 2023 Base Salary | | 2023 NEOs | | | | Barry Sloane | $— | —% | | Peter Downs | $— | —% | | Michael Schwartz | $— | —% | | M. Scott Price | $133,333 | 31% | | Nicolas Young | $— | —% | | Nicholas Leger | $— | —% |

  22. Pay Versus Performance

    Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we are providing the following disclosure regarding the relationship between executive compensation and certain financial performance measures of the Company. For a complete description regarding the Company’s compensation program, please see “Compensation Discussion and Analysis.”

  23. Pay Versus Performance Table

    Pay Versus Performance Table The following table shows the past three fiscal years’ total compensation for our named executive officers as set forth in the Summary Compensation Table, the compensation actually paid to our principal executive officer (the “PEO”) and the other named executive officers, our total shareholder return (“TSR”) and our net income. SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine the compensation actually paid as reported in the Pay Versus Performance table. Compensation Actually Paid does not necessarily represent compensation actually earned, realized or received by the applicable named executive officer, but rather is a valuation calculated under applicable SEC rules by adjusting the Summary Compensation Table totals for the applicable year as described in the footnotes to the Pay Versus Performance Table.

  24. Pay Versus Performance Table

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for non-PEO Named Executive Officers(1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income | | | | | | | | Total Shareholder Return(4) | Peer Group Total Shareholder Return(5) | | Basic EPS | | | ($) | ($) | ($) | ($) | | | ($ in thousands) | ($) | | 2023 | 700,000 | 599,203 | 596,469 | 575,468 | (11.1)% | 18.5% | 47,329 | $1.89 | | 2022 | 2,700,000 | 2,096,624 | 918,750 | 785,908 | (50.2)% | (28.2)% | 32,311 | 1.34 | | 2021 | 3,500,000 | 4,633,439 | 895,000 | 960,718 | 55.5% | 17.7% | 84,142 | 3.69 | | 2020 | 700,000 | 637,939 | 486,667 | 447,525 | (1.5)% | 19.9% | 33,619 | 1.59 |

  25. Pay Versus Performance Table

    ____________ (1) Mr. Sloane was our PEO for each of the fiscal years presented in the above table. For 2023, our non-PEO NEOs were Messrs. Leger, Downs, Schwartz, Price and Young. For 2022, our non-PEO NEOs were Messrs. Leger, Downs, Schwartz and Young. For 2021, our non-PEO NEOs were Messrs. Leger, Downs, Schwartz and Young. For 2020, our non-PEO NEOs were Messrs. Downs, Schwartz and Christopher Towers, a former Chief Accounting Officer. (2) Compensation actually paid to our PEO was calculated in accordance with Item 402(v) of Regulation S-K by deducting and adding from the Summary Compensation Table totals as shown below:

  26. Pay Versus Performance Table

    | Year | Reported Summary Compensation Table Total for PEO($) | Less: Reported Value of Equity Awards(a)($) | Equity Award Adjustments | | | | | | Compensation Actually Paid to PEO($) | | | | | Plus: Year End Fair Value of Equity Awards Granted in the Year that are Unvested at Year End($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested at Year End($) | Plus: Fair Value of Equity Awards that were Granted and Vested in the Same Year at Vesting Date($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year($) | Less: Year End Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions($) | Plus: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation($) | | | 2023 | 700,000 | — | — | (363,605) | — | 155,621 | — | 107,187 | 599,203 | | 2022 | 2,700,000 | (2,000,000) | 1,766,911 | (703,325) | — | (29,048) | — | 362,085 | 2,096,624 | | 2021 | 3,500,000 | (1,800,000) | 2,299,313 | — | — | 634,125 | — | — | 4,633,439 | | 2020 | 700,000 | — | — | (235,805) | — | — | — | 173,745 | 637,939 |

  27. Pay Versus Performance Table

    (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (3) Compensation actually paid to our non-PEO NEOs was calculated in accordance with Item 402(v) of Regulation S-K by deducting and adding from the Summary Compensation Table totals as shown below:

  28. Pay Versus Performance Table

    | Year | Average of Reported Summary Compensation Table Total for non-PEO NEOs($) | Less: Reported Value of Equity Awards(a)($) | Equity Award Adjustments | | | | | | Average Compensation Actually Paid to non-PEO NEOs($) | | | | | Plus: Year End Fair Value of Equity Awards Granted in the Year that are Unvested at Year End($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested at Year End($) | Plus: Fair Value of Equity Awards that were Granted and Vested in the Same Year at Vesting Date($) | Plus: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year($) | Less: Year End Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions($) | Plus: Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation($) | | | 2023 | 596,469 | (59,440) | 51,460 | (36,507) | — | 10,152 | — | 13,333 | 575,468 | | 2022 | 918,750 | (275,000) | 210,389 | (90,316) | — | (12,042) | — | 34,127 | 785,908 | | 2021 | 895,000 | (318,750) | 304,275 | — | 11,347 | 59,449 | — | 9,397 | 960,718 | | 2020 | 486,667 | (16,667) | — | (29,476) | — | (12,422) | — | 19,423 | 447,525 |

  29. Pay Versus Performance Table

    (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (4) Cumulative TSR is calculated by dividing (a) the sum of the cumulative amount of dividends for the measure period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. (5) We include a comparison against the Russell 2000 as disclosed in Part II Item 5 of our Annual Report on Form 10-K as of December 31, 2023. We use the Russell 2000 because it represents small cap market capitalization companies similar to us. We do not believe there is a published industry or line-of-business index, or a readily definable peer group of publicly traded companies, that provides a more meaningful comparison of the cumulative return of our common stock or that there is otherwise a reasonably identifiable peer group for purposes of such performance graphs as we ceased to be a business development company subject to the Investment Company Act of 1940 at the beginning of 2023.

  30. Unranked Tabular List of the Company’s Most Important Financial Performance Measures

    Unranked Tabular List of the Company’s Most Important Financial Performance Measures The following is an unranked list of the most important financial performance measures used by the Company to evaluate compensation actually paid to the NEOs, for the year ended December 31, 2023, to Company performance: - growth in profitability and earnings per share; - growth in net assets; - cash dividends paid to our shareholders; and - growth in loans originated and growth in deposits at Newtek Bank.

  31. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following tables set forth the aggregate compensation earned by our NEOs during 2023 and the two previous years.

  32. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(13) ($) | Option Awards | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Totals ($) | | Barry Sloane, | 2023 | 700,000 | — | — | — | — | — | — | 700,000 | | Chief Executive Officer | 2022 | 700,000 | — | 2,000,000(4) | — | — | — | — | 2,700,000 | | | 2021 | 700,000 | 1,000,000(3) | 1,800,000(5) | — | — | — | — | 3,500,000 | | M. Scott Price, (14) | 2023 | 426,400 | 133,333(1) | 300,000(8) | — | — | — | — | 859,733 | | Chief Financial Officer | 2022 | — | — | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | — | — | | Peter Downs, | 2023 | 625,000 | — | — | — | — | — | — | 625,000 | | Chief Lending Officer | 2022 | 550,000 | 250,000(2) | 375,000(6) | — | — | — | — | 1,175,000 | | | 2021 | 550,000 | 250,000(3) | 250,000(7) | — | — | — | — | 1,050,000 | | Michael Schwartz, | 2023 | 450,000 | — | — | — | — | — | — | 450,000 | | Chief Legal Officer | 2022 | 400,000 | 250,000(2) | 300,000(9) | — | — | — | — | 950,000 | | | 2021 | 360,000 | 200,000(3) | 325,000(10) | — | — | — | — | 885,000 | | Nicolas Young, | 2023 | 650,000 | — | — | — | — | — | — | 650,000 | | President, Newtek Bank | 2022 | 500,000 | 100,000(2) | 200,000(11) | — | — | — | — | 800,000 | | | 2021 | 500,000 | 25,000(3) | 600,000(12) | — | — | — | — | 1,125,000 | | Nicholas Leger (17) | 2023 | 400,000 | — | — | — | — | — | — | 400,000 | | Chief Accounting Officer | 2022 | 325,000 | 200,000(2) | 225,000(15) | — | — | — | — | 750,000 | | | 2021 | 270,000 | 150,000(3) | 100,000(16) | — | — | — | — | 520,000 |

  33. 2023 Summary Compensation Table

    ____________ (1) Cash bonus awarded for 2023 (and paid in 2024) pursuant to terms of employment agreement. (2) Discretionary cash bonus awarded for 2022 performance and paid in 2023. (3) Discretionary cash bonus awarded for 2021 performance and paid in 2022. (4) Received 61,652 Restricted Stock Awards in December 2022, vesting on January 15, 2026; and 47,081 Restricted Stock Awards in August 2022, vesting on August 15, 2025. (5) Received 83,209 Restricted Stock Awards in February 2021, with one-third vested on each of February 15, 2022, February 15, 2023, and February 15, 2024. (6) Received 17,655 Restricted Stock Awards in August 2022, vesting on August 15, 2025. (7) Received 11,557 Restricted Stock Awards in February 2021, with one-third vested on each of February 15, 2022, February 15, 2023, and February 15, 2024. (8) Received 18,645 Restricted Stock Awards in July 2023, vesting on July 15, 2026. (9) Received 14,124 Restricted Stock Awards in August 2022, vesting on August 15, 2025. (10) Received grant of 3,083 Restricted Stock Awards in March 2021, with one-third vested on each of March 15, 2022, March 15, 2023, and March 15, 2024; 6,935 Restricted Stock Awards granted in February 2021, with one-third vested on each of February 15, 2022, February 15, 2023 and February 15, 2024. (11) Received a grant of 9,416 Restricted Stock Awards in August 2022, vesting on August 15, 2025. (12) Received a grant of 17,196 Restricted Stock Awards in August 2021, vested one-third on August 2, 2022 and August 2, 2023, and one-third vesting August 2, 2024. (13) The value reported for in this column is the aggregate grant date fair value of stock awards granted to the NEOs, determined in accordance with FASB ASC Topic 718, using the valuation methodology for equity awards set forth in Note 15 - Stock-Based Compensation included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (14) Mr. Price was appointed our Chief Financial Officer in May 2023. (15) Received an award of 10,593 Restricted Stock Awards in August 2022, vesting on August 15, 2025. (16) Received an award of 4,623 Restricted Stock Awards in February 2021, vested one-third in each of 2021 and 2023, and one- third vesting in 2024. (17) Mr. Leger was transitioned to the role of Treasurer in March 2024, and is no longer an NEO.

  34. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards

  35. 2023 Grants of Plan-Based Awards

    | | | Estimated 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 Units | All Other Option Awards: Number of Securities Underlying options (#) | Exercise or Base price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(6) | | Name | Grant Date | Thresh-old ($) | Target ($) | Maxi-mum ($) | Thresh-old (#) | Target (#) | Maxi-mum (#) | | | | | | M. Scott Price(1) | 7/5/23 | — | — | — | — | — | — | 18,645 | — | — | $300,000 |

  36. 2023 Grants of Plan-Based Awards

    ____________ (1) Received a grant of 18,645 Restricted Stock Awards in July 2023 in connection with his start of employment, vesting on July 15, 2026. (2) The value reported in this column is the aggregate grant date fair value of stock awards granted to the NEOs in 2023, determined in accordance with FASB ASC Topic 718.

  37. Outstanding Equity Awards at 2023 Year End

    Outstanding Equity Awards at 2023 Year End There were 388,569 outstanding equity awards as of December 31, 2023, including dividends paid on the outstanding equity awards in the form of additional Restricted Stock Awards, of which 239,758 were held by our NEOs. There were no outstanding option awards as of December 31, 2023. The following table sets forth information regarding outstanding awards of Restricted Stock Awards held by our NEOs as of December 31, 2023:

  38. Outstanding Equity Awards at 2023 Year End

    | Name | Number of Shares or Units that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested ($)(7) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Number of Unearned Shares, Units or Other Rights that have not Vested ($)(7) | | Barry Sloane(1) | 156,178 | $2,155,261 | 156,178 | $2,155,256 | | M. Scott Price(2) | 19,354 | $267,085 | 19,354 | $267,085 | | Peter Downs(3) | 25,368 | $350,074 | 25,368 | $350,078 | | Michael A Schwartz(4) | 20,642 | $284,864 | 20,642 | $284,860 | | Nicolas Young(5) | 18,216 | $251,385 | 18,216 | $251,381 | | Nicholas Leger(6) | 14,177 | $195,643 | 14,177 | $195,643 |

  39. Outstanding Equity Awards at 2023 Year End

    (1) Mr. Sloane received an award of 61,652 Restricted Stock Awards in December 2022, plus accrued dividends, vesting on January 15, 2026; 47,081 Restricted Stock Awards in August 2022, plus accrued dividends, vesting on August 15, 2025; and 83,209 Restricted Stock Awards in February 2021 with one-third of the award vested in each of 2022, 2023 and 2024. (2) Mr. Price received an award of 18,645 Restricted Stock Awards in July 2023, plus accrued dividends, vesting on July 15, 2026. (3) Mr. Downs received an award of 17,655 Restricted Stock Awards in August 2022, plus accrued dividends, vesting on August 15, 2025; and 11,557 Restricted Stock Awards in February 2021, plus accrued dividends, with one-third of the award vested in each of 2022, 2023 and 2024. (4) Mr. Schwartz received an award of 14,124 Restricted Stock Awards in August 2022, plus accrued dividends, vesting on August 15, 2025; 6,934 Restricted Stock Awards in February 2021, plus accrued dividends, with one-third of the award vested in each of 2022, 2023 and 2024 and an award of 3,213 Restricted Stock Awards in March 2021, plus accrued dividends, with one-third of the award vested in each of 2022, 2023 and 2024. (5) Mr. Young received an award of 9,416 Restricted Stock Awards in August 2022, plus accrued dividends, vesting on August 15, 2025; and 17,197 Restricted Stock Awards in August 2021, plus accrued dividends, with one-third of the award vested in each of 2022 and 2023 and one-third vesting on August 2, 2024. (6) Mr. Leger received an award of 10,593 Restricted Stock Awards in August 2022, vesting on August 15, 2025; and 4,623 Restricted Stock Awards in February 2021 with one-third of the award vested in each of 2021 and 2023, and one-third vesting in 2024. Mr. Leger was transitioned to the role of Treasurer in March 2024, and is no longer an NEO. (7) Based on the closing price of our Common Shares of $13.80 on December 31, 2023.

  40. 2023 Options Exercised and Stock Vested

    2023 Options Exercised and Stock Vested No options were exercised in 2023. The number of Restricted Stock Awards held by the NEOs that vested in the fiscal year ended December 31, 2023 are set forth in the table below.

  41. 2023 Options Exercised and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(6) | | Barry Sloane(1) | — | — | 35,693 | $727,780 | | M. Scott Price | — | — | — | $— | | Peter Downs(2) | — | — | 4,957 | $101,073 | | Michael Schwartz(3) | — | — | 4,296 | $76,768 | | Nicolas Young(4) | — | — | 7,268 | $130,679 | | Former NEO | | | | | | Nicholas Leger(5) | — | — | 1,982 | $40,413 |

  42. 2023 Options Exercised and Stock Vested

    (1) Mr. Sloane received an award of 83,218 Restricted Stock Awards in February 2021, with one-third of the award vested on each of February 15, 2022, February 15, 2023 and February 15, 2024; includes dividends paid on the Restricted Stock Awards in the form of additional Restricted Stock Awards, (2) Mr. Downs received an award of 11,557 Restricted Stock Awards in February 2021, with one-third of the award vested on each of February 15, 2022, February 15, 2023 and February 15, 2024; includes dividends paid on the Restricted Stock Awards in the form of additional Restricted Stock Awards. (3) Mr. Schwartz received an award of 6,935 Restricted Stock Awards in February 2021, with one-third of the award vested on each of February 15, 2022, February 15, 2023 and February 15, 2024, and 3,083 Restricted Stock Awards in March 2021, with one-third of the award vested on each of March 15, 2022, March 15, 2023 and March 15, 2024; includes dividends paid on the Restricted Stock Awards in the form of additional Restricted Stock Awards. (4) Mr. Young received an award of 17,197 Restricted Stock Awards in August 2021, with one-third of the award vested on each of August 2, 2022 and August 2, 2023 and one-third vesting on August 2, 2024; includes dividends paid on the Restricted Stock Awards in the form of additional Restricted Stock Awards. (5) Mr. Leger received an award of 4,623 Restricted Stock Awards in February 2021, with one-third of the award vested on each of February 15, 2022, February 15, 2023 and February 15, 2024; includes dividends paid on the Restricted Stock Awards in the form of additional Restricted Stock Awards, (6) Based on the closing price of our Common Shares of $20.39, $12.20 and $17.98 on February 15, 2023, March 15, 2023 and August 2, 2023, respectively.

  43. Employment Agreements

    Employment Agreements The Company entered into separate employment agreements with the following NEOs during 2023 (each, a “2023 Employment Agreement” and collectively, the “2023 Employment Agreements”): • Barry Sloane, as Chairman, Chief Executive Officer and President; • Nicholas Leger, as Chief Accounting Officer and Executive Vice President; • Peter Downs, as Chief Lending Officer and President of Newtek Small Business Finance, LLC; • Michael Schwartz, as Chief Legal Officer and Corporate Secretary; • M. Scott Price, as Chief Financial Officer; and • Nicolas Young, as President and Chief Operating Officer, Newtek Bank. Generally, under the 2023 Employment Agreements, Messrs. Sloane, Leger, Downs, Schwartz, Price, and Young were entitled to a set base compensation, cash bonuses pursuant to the Company’s Annual Cash Bonus Plan or by the action of the Board of Directors, and incentive compensation at the discretion of the Nominating Committee. In addition, Messrs. Sloane, Leger, Downs, Schwartz, Price and Young were entitled to other benefits, such as participation in retirement and medical and other plans, executive benefits, and paid time off and sick leave available to all employees of the Company. The 2023 Employment Agreements also provided for severance payments in the case of termination without just cause, as defined therein, or of resignation with good reason, as defined therein, and, in the cases of Messrs. Sloane, Leger, Downs, Schwartz and Young, payment if their 2023 Employment Agreements were not renewed for other than just cause. Under the 2023 Employment Agreements, during the term of their employment, Messrs. Sloane, Leger, Downs, Schwartz, Price and Young agreed to devote substantially all of their business time to the Company and to not engage in any business or activity contrary to the business or affairs of the Company. The Company agreed to indemnify Messrs. Sloane, Leger, Downs, Schwartz, Price and Young for any and all loss, expenses, or liability that he may incur as a result of their services for the Company to the extent permitted by the Company’s Bylaws. Mr. Sloane’s 2023 Employment Agreement provided for: • a twelve-month term through March 1, 2024 at an annual base salary of $700,000; Mr. Leger’s 2023 Employment Agreement provided for: • at least one annual salary review by the Board of Directors; • participation in any discretionary bonus plan established for senior executives; and • retirement and medical plans, customary fringe benefits, paid time off and sick leave. Mr. Downs’ 2023 Employment Agreement provided for: • a twelve-month term through March 1, 2024 at an annual base salary of $625,000; • at least one annual salary review by the Board of Directors; • participation in any discretionary bonus plan established for senior executives; and • retirement and medical plans, customary fringe benefits, paid time off and sick leave. Mr. Schwartz’s 2023 Employment Agreement provided for: • a twelve-month term through March 1, 2024 at an annual base salary of $450,000; • at least one annual salary review by the Board of Directors; • participation in any discretionary bonus plan established for senior executives; and • retirement and medical plans, customary fringe benefits, paid time off and sick leave. Mr. Young’s 2023 Employment Agreement with Newtek Bank provided for: • a term through March 1, 2024 at an annual base salary of $650,000; • at least one annual salary review by the Board of Directors; • participation in any discretionary bonus plan established for senior executives; and • retirement and medical plans, customary fringe benefits, paid time off and sick leave. Mr. Price was hired in May 2023 and his 2023 Employment Agreement provided for: • a term through May 15, 2024, at an annual base salary of $400,000 from May 15, 2023 through June 30, 2023, and $433,000 for the remained of the term; • a $133,333.33 cash bonus for 2023 (paid in 2024); • retirement and medical plans, customary fringe benefits, paid time off and sick leave; and • in addition, in connection with his hire, Mr. Price received a grant of 18,645 Restricted Stock Awards in July 2023, which Award vests on July 15, 2026. Messrs. Sloane’s, Downs’, Young’s and Schwartz’ 2023 Employment Agreements were renewed as of April 5, 2024 for terms through March 31, 2025, at annual base salaries of $700,000, $700,000, $700,000, and $5000,000, respectively. In addition, Messrs. Downs, Young and Schwartz entered into change in control agreements with the Company which provide for severance payments, in the cases of Messrs. Downs and Schwartz, equal to 1.15 times the sum of their respective annual base compensation in effect at the time of termination plus the amount of their respective cash bonus paid with respect to the immediately preceding fiscal year, and in the case of Mr. Young, equal to 1.15 times his annual base compensation in effect at the time of termination, in the event of a Qualifying Termination (as defined in the change of control agreements) within the twelve months following a Change of Control (as defined in the change of control agreements). Aside from the foregoing, the other terms and provisions of Messrs. Sloane’s, Down’s, Schwartz’s and Young’s employment agreements remained substantially the same. Mr. Leger transitioned to the role of Treasurer as of March 29, 2024, and is no longer an executive officer.

  44. Payments upon Change of Control, Non-renewal or Termination

    Payments upon Change of Control, Non-renewal or Termination Mr. Sloane’s 2023 Employment Agreement provided for a payment in the event of non-renewal of his employment in an amount equal to one (1.0) times the sum of his annual base compensation in effect at the time of termination plus any cash bonus paid with respect to the preceding fiscal year, or in the case of a change of control or termination other than for just cause, an amount equal to two (2) times the sum of the his annual base salary in effect at the time of termination, plus the amount of any cash bonus paid with respect to the immediately preceding fiscal year. In addition, in the case of termination other than for just cause, all outstanding and unvested equity awards were to be accelerated in full. Messrs. Leger’s, Downs’ and Schwartz’ 2023 Employment Agreements provided for a payment in the case of termination other than for just cause or following a change in control, equal to one (1.0) times the sum of their current annual base compensation plus any cash bonuses paid with respect to the immediately preceding fiscal year. In addition, in the case of termination other than for cause, non-renwal or change in control, all outstanding and unvested equity awards were to be accelerated in full. In addition, in the event of non-renewal of their employment agreements, Messrs. Leger, Downs and Schwartz would be entitled to amounts equal to 50% of the sum of their respective current annual base compensation plus any cash bonus paid with respect to the immediately preceding fiscal year. Messrs. Young’s and Price’s 2023 Employment Agreements provided for a payment in the case of termination other than for just cause or a change in control, equal to one (1.0) times their annual base compensation. In addition, in the case of Mr. Young’s termination other than for cause, 50% of all outstanding and unvested equity awards were to be accelerated and in the case of Mr. Price, all outstanding and unvested equity awards were to be accelerated in full. In addition, in the event of non-renewal of his 2023 Employment Agreement, Mr. Young would be entitled to an amount equal to 100% of his annual base compensation plus 50% of all outstanding and unvested equity awards were to be accelerated. Each 2023 Employment Agreement contained a non-competition provision that required Messrs. Sloane, Leger, Schwartz, Young, Price and Downs to devote substantially their full business time and efforts to the performance of their duties under the Employment Agreements. Messrs. Sloane, Leger, Schwartz, Young, Price and Downs are not prohibited, however, from serving on the boards of directors of, and holding offices or positions in, companies or organizations which, in the opinion of the Board of Directors, will not present conflicts of interest with the Company, or investing in any business dissimilar from the Company’s or, solely as a passive or minority investor, in any business. Under each of the 2023 Employment Agreements, the Company may terminate Messrs. Sloane’s, Leger’s, Schwartz’, Young’s, Price’s or Downs’ employment for “just cause” as defined in the respective Employment Agreement, and upon the termination, no severance benefits are available. If Messrs. Sloane, Leger, Schwartz, Young, Price or Downs voluntarily terminates his employment for “good reason” as defined in the 2023 Employment Agreements, the executive is entitled to the same payment as in the case of termination other than for cause. If the executive’s employment terminates during the term of the agreement due to death or disability, the executive shall receive his compensation and executive benefits up to the date of executive’s last day of employment, and all outstanding and unvested equity awards were to be accelerated in full. The executive is able to terminate voluntarily his agreement by providing prior written notice to the Board of Directors, in which case the executive is entitled to receive only his compensation, vested rights and benefits up to the date of termination. On April 5, 2024, the Company entered into change in control agreements with each of Messrs. Downs, Young and Schwartz, which provide for severance payments in the event of a qualifying termination within the twelve months following a change of control and superseded each individuals respective Employment Agreement with respect to the severance payments therein.

  45. Post Termination Payments

    | | Post Termination Payments | | | | Name | Change in Control | Non-Renewal | Termination without cause | | Barry Sloane(3) | $3,555,256 | $2,855,256 | $3,555,256 | | M. Scott Price(1)(2) | $693,485 | $— | $693,485 | | Nicholas Leger(1)(2) | $795,643 | $495,643 | $795,643 | | Peter Downs(1)(2) | $1,225,078 | $787,578 | $1,225,078 | | Michael Schwartz(1)(2) | $984,860 | $634,860 | $984,860 | | Nicolas Young | $775,690 | $775,690 | $775,690 |

  46. Post Termination Payments

    (1) In the event of termination without cause, NEO would receive the termination without cause payment in equal installments over a twelve (12) month period following termination of employment. (2) In the event of the non-renewal of NEO’s employment agreement, NEO would receive the non-renewal payment in equal installments over the six (6) month period following the non-renewal of the employment agreement. (3) In the event of the termination without cause or non-renewal, NEO would receive the first $500,000 of the payment in a lump sum within thirty (30) days after termination, with the remaining amount of the payment paid in equal installments over a six (6) month period following non-renewal or termination.

  47. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The Company did not have any nonqualified deferred compensation in the year ended December 31, 2023.

  48. Pension Benefits

    Pension Benefits The Company had no obligation under pension benefit plans to the NEOs as of December 31, 2023.

  49. Equity Compensation Plan Information

    Equity Compensation Plan Information The following table summarizes our equity compensation plan information as of December 31, 2023.

  50. Equity Compensation Plan Information

    | | Number of Securities to Be Issued Upon Exercise of Outstanding Stock Awards, Warrants and Rights | Weighted-average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | | | (a) | (b) | (c) | | Plan Category | | | | | Equity Compensation Plans Approved by Security Holders | 388,569 shares(1) | ─ | 2,917,523 shares(2) | | Equity Compensation Plans Not Approved by Security Holders | ─ | ─ | ─ |

  51. Equity Compensation Plan Information

    (1) Represents 84,980 Restricted Stock Awards granted under the 2023 Stock Plan and 303,589 Restricted Stock Awards granted under the 2015 Stock Plan. (2) Represents 2,917,523 Common Shares available for issuance pursuant to the 2023 Stock Plan. No securities remain available for future issuance under the 2015 Stock Plan and 2014 Plan as the Nominating Committee terminated the 2015 Stock Plan and 2014 Plan on April 26, 2023. THE BOARD BELIEVES THAT A VOTE FOR THE PROPOSAL TO ELECT EACH OF THE DIRECTORS OF THE COMPANY AS DESCRIBED ABOVE IS IN THE BEST INTEREST OF OUR SHAREHOLDERS AND RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTORS INCLUDED IN SUCH PROPOSAL