Reason” in an amount equal to the sum of her then current base salary plus the average of the annual performance bonus (consisting of both cash and other incentive compensation, but excluding the Company match of any deferred compensation) provided to her with respect to the three (3) fiscal years of the Company immediately preceding the fiscal year of termination, for the greater of two (2) years or the period of time remaining in the applicable term, paid in equal installments on the normal pay dates following Ms. Luvleen Sidhu’s separation from service with the Company, subject to execution of a release of claims. Ms. Luvleen Sidhu is also eligible for employee benefits and shall be entitled to a fraction of any Cash Bonus for the fiscal year of the Company within which Ms. Luvleen Sidhu’s termination of employment occurs which, based upon the criteria established for such Cash Bonus, would have been payable to her had she remained employed through the date of payment.
Messrs. Crawford, Diegel and Taylor are entitled to receive an annual base salary of at least $279,292, $250,000 and $250,000, respectively, pursuant to their respective employment agreement and incentive compensation in an amount, in such form, and at such time as approved by our Board. Each of these executives are entitled to receive severance compensation in the event of a termination of his employment by the Company without “Cause” or by the executive for “Good Reason” in an amount equal to the sum of their then current base salary plus the average of the annual performance bonus (consisting of both cash and other incentive compensation, but excluding the Company match of any deferred compensation) provided to them with respect to the three (3) fiscal years of the Company immediately preceding the fiscal year of termination, for the greater of one (1) year or the period of time remaining in the applicable term, paid in equal installments on the normal pay dates following their separation from service with the Company, subject to execution of a release of claims. Messrs. Crawford, Diegel and Taylor are also eligible for employee benefits and shall be entitled to a fraction of any Cash Bonus for the fiscal year of the Company within which their termination of employment occurs which, based upon the criteria established for such Cash Bonus, would have been payable to them had they remained employed through the date of payment.
Equity Incentive Plan
We have also entered into our 2020 Equity Incentive Plan, which became effective upon the closing of the Business Combination. The Equity Incentive Plan provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of us and its affiliates. Additionally, the Equity Incentive Plan provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants. Initially, the aggregate number of shares of Common Stock that may be issued pursuant to stock awards under the Equity Incentive Plan after the Equity Incentive Plan becomes effective will not exceed 10% of the issued and outstanding shares of our common stock immediately after the closing of the Business Combination.
The maximum number of shares of Common Stock subject to awards granted under the Equity Incentive Plan or any other equity plan maintained by us during any single fiscal year to any non-employee director, taken together with any cash fees paid to the director during the year, will not exceed $300,000 in any calendar year.
The Equity Incentive Plan permits the grant of performance-based stock and cash awards. The Plan Administrator can structure such awards so that stock or cash will be issued or paid pursuant to such award only after the achievement of certain performance goals during a designated performance period.
Director Compensation
For fiscal year 2020, BankMobile did not provide director compensation to its directors. However, all of the directors were reimbursed for their reasonable out-of-pocket expenses related to their services as a member of the BankMobile board of directors. Our Board has adopted a non-employee director compensation plan beginning in fiscal year 2021 that provides that we will pay our non-employee directors an annual fee of $20,000, paid in quarterly installments. We will also reimburse our directors for their reasonable out of pocket expenses related to their services as a member of our board of directors. In addition, our non-employee directors will also be eligible to receive shares of stock pursuant to our 2020 Equity Incentive Plan.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The following includes a summary of transactions since January 1, 2020 to which we have been a party, in which the amount involved in the transaction exceeded the lesser of $120,000 or 1% of our average total assets, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change of control, and other arrangements, which are described under the section entitled “Executive Compensation.” For the purposes of this section, “Megalith” refers to Megalith Financial Acquisition Corp. prior to the Business Combination.
Related Person Policy
Our code of ethics requires us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations includes any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving us.
In addition, our audit committee, pursuant to its charter, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present is required in order to approve a related party transaction. A majority of the members of the entire audit committee constitutes a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee is required to approve a related party transaction.
Founders Shares
On November 13, 2017, MFA Investor Holdings LLC (the “Sponsor”) purchased 4,312,500 Founder Shares for an aggregate price of $25,000. The Founder Shares automatically converted into shares of Class A Common Stock upon the consummation of the Business Combination. MFA Investor Holdings LLC forfeited 80,278 Founder Shares on September 21, 2018. The Founder Shares forfeited by the Sponsor were cancelled by the Company.
The Sponsor and its members have agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of an initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any thirty (30) trading day period commencing at least one-hundred fifty (150) days after the initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property. The Sponsor distributed its Founders Shares to its members.
Placement Warrants
Concurrently with the closing of the Megalith IPO, the Sponsor and Chardan Capital Markets, LLC (“Chardan”) purchased an aggregate of 6,560,000 Placement Warrants at a price of $1.00 per Placement Warrant (5,810,000 by the Sponsor and 750,000 by Chardan) for an aggregate purchase price of $6,560,000. Each whole Placement Warrant is exercisable for one whole share of Class A Common Stock at a price of $11.50 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of equity or equity-linked securities). Concurrently with the underwriter’s partial exercise of the over-allotment, Megalith consummated a private sale of an additional 385,778 Placement Warrants to the Sponsor at a price of $1.00 per Placement Warrant generating gross proceeds of $385,778. The Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. In addition, for as long as the Placement Warrants are held by Chardan or its designees or affiliates, they may not be exercised after five years from August 23, 2018.
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Support Services
The Company entered into an agreement whereby, commencing on August 23, 2018 until October 31, 2020, Megalith paid an affiliate of the Sponsor a monthly fee of $2,000 for office space, as well as certain administrative and support services, as may be required by Megalith from time to time. This agreement terminated upon the Business Combination. In 2020, Megalith paid a total of $20,000 under this agreement.
Megalith paid an entity affiliated with its President and Chief Executive Officer a fee of approximately $7,692 every two weeks until November 15, 2020. A bonus of $78,000 was paid out after the successful completion of the Megalith IPO. This agreement terminated upon the Business Combination. In 2020, Megalith paid a total of $165,384 under this agreement.
Sponsor Share Letter
Pursuant to a letter agreement (the “Sponsor Share Letter”) the Sponsor entered into concurrently with the Merger Agreement, with Megalith and BankMobile, at the consummation of the Business Combination, the Sponsor forfeited 2,932,222 of its Founder Shares, subjected an additional 300,000 of its Founder Shares to potential vesting and forfeiture based on a stock-price based earnout over a seven year period from the Closing, and transferred 101,703 of its Founder Shares to stockholders of Customers Bank at Closing. Sponsor also transferred 178,495 of its Founder shares and 1,311,501 private placement warrants to certain investors in the PIPE Financing.
Registration Rights
The holders of Megalith’s founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of Class A Common Stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement, requiring us to register such securities for resale (in the case of the founder shares, only after conversion to Class A Common Stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed by us, and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. In the case of the founder shares, the lock-up period will expire on the earlier of (A) January 4, 2022, or (B) (x) if the last sale price of Megalith’s Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any 30-trading day period commencing at least one-hundred fifty (150) days after January 4, 2021, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property. In the case of the private placement warrants and the respective Class A Common Stock underlying such warrants, the lock-up period will expire thirty (30) days after January 4, 2021. In the case of Chardan, in addition to the foregoing restriction on transfer of the private placement warrants until thirty (30) days after January 4, 2021, the private placement warrants purchased by Chardan shall not be sold during the offering, or sold, transferred, assigned, pledged or hypothecated for a period of one-hundred eighty (180) days immediately following the date of effectiveness of the registration statement of which this prospectus forms a part or commencement of sales of this offering, except to any member participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described in this sentence for the remainder of the time period. Additionally, the private placement warrants purchased by Chardan shall not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of one-hundred eighty (180) days immediately following the date of effectiveness of the registration statement of which this prospectus forms a part or commencement of sales of this offering. Furthermore, notwithstanding the foregoing, pursuant to FINRA Rule 5110 Chardan may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years, respectively, after the effective date of the registration statement of which this prospectus forms a part and may not exercise its demand rights on more than one occasion. We will bear the expenses incurred in connection with the filing of any such registration statements.
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Customers Bank
Prior to the Business Combination, we were a wholly-owned subsidiary of Customers Bank, which is the wholly-owned bank subsidiary of Customers Bancorp, Inc. Luvleen Sidhu is the daughter of Mr. Jay Sidhu, the Chairman & CEO of Customers Bancorp and the Executive Chairman of Customers Bank. Ms. Luvleen Sidhu has served as our Chief Executive Officer since January 2020 and was previously our President and Chief Strategy Officer. For a summary of Ms. Luvleen Sidhu’s compensation, bonus and equity award grants, see the section entitled “Executive Compensation.”
Jay Sidhu is the Chairman & CEO of Customers Bancorp and Executive Chairman of Customers Bank. Mr. Jay Sidhu also served the Executive Chairman of the board of directors of Megalith through August 7, 2020, and is a controlling member of the Sponsor.
Samvir Sidhu is Head of Corporate Development of Customers Bancorp and Vice Chairman & Chief Operating Officer of Customers Bank. He also served on the board of directors of Megalith and is a member of the Sponsor. Mr. Samvir Sidhu is the son of Mr. Jay Sidhu and brother of Ms. Luvleen Sidhu.
Bhanu Choudhrie previously served on the board of directors of Customers Bancorp. Mr. Choudhrie also served on the board of directors of Megalith prior to the Business Combination and is a controlling member of the Sponsor.
Customers Bancorp, Customers Bank, and BankMobile were parties to an Amended and Restated Intercompany Services Agreement (“Intercompany Agreement”) until it was terminated upon the consummation of the Business Combination.
Customers Bank and BankMobile were subject to a Non-Negotiable Demand Promissory Note and Line of Credit Agreement (“Intercompany Note”) until it was terminated upon the consummation of the Business Combination.
Effective upon the consummation of the Business Combination, we entered into with Customers Bank the Transition Services Agreement, Licensing Agreement, Deposit Processing Services Agreement, Non-Competition Agreement and Loan Agreement.
Transition Services Agreement
On January 4, 2021, we entered into that certain Transition Services Agreement (the “Transition Services Agreement”) with Customers Bank, pursuant to which each party agrees for a period of up to twelve months to provide certain transition services listed therein to the other party. In consideration for the services, we will pay Customers Bank a service fee of $12,500 per month, plus any expenses associated with the services. We may terminate the Transition Services Agreement without penalty with at least 30 days advance written notice if we determine there is no longer a business need for the services.
License Agreement
On January 4, 2021, we entered into that certain Software License Agreement (the “License Agreement”) with Customers Bank, providing that we grant a non-exclusive, nontransferable, royalty-free license to use the mobile banking technology to Customers Bank for a period of ten years. The License Agreement may be terminated upon either party’s uncured material breach, provided that if the agreement is terminated for our uncured material breach, then we shall pay Customers Bank an early termination fee equal to the product of $10 million, and the number of whole months remaining in the term divided by 120. The license is subject to certain other restrictions on use and customary conditions set forth in the License Agreement.
Deposit Servicing Agreement
On January 4, 2021, we entered into that certain Deposit Processing Services Agreement (the “Deposit Servicing Agreement”) with Customers Bank, providing that Customers Bank would establish and maintain deposit accounts and other banking services in connection with customized products and services offered by us, and we would provide certain other related services in connection with the accounts. The initial term continues until December 31, 2022, which shall automatically renew for additional three year terms unless either party gives
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written notice of nonrenewal within 180 days prior to the expiration of the term. The Deposit Servicing Agreement may be terminated early by either party upon material breach, upon notice of an uncured objection from a regulatory authority, or by us upon 90 days’ written notice upon the satisfaction of certain conditions. As compensation, Customers Bank will retain any and all revenue generated from the funds held in the deposit accounts, and Customers Bank will pay us a monthly servicing fee equal to 150 basis points for deposit servicing and 150 basis points for net interest margin sharing, and a monthly interchange fee equal to all debit card interchange revenues on demand deposit accounts generated by us for Customers Bank plus the difference between Durbin Exempt and Durbin regulated interchange revenue, as determined pursuant to the Deposit Servicing Agreement.
Non-Competition Agreement
On January 4, 2021, Customers Bank entered into that certain Non-Competition and Non-Solicitation Agreement (the “Non-Competition Agreement”) in favor of and for the benefit of us, our subsidiaries and each of their respective affiliates and successors (each, a “Covered Party”), providing that Customers Bank will not for a period of 4 years after the closing of the Business Combination directly or indirectly engage in the “Business” (as defined in the Non-Competition Agreement) in the Territory (as defined in the Non-Competition Agreement), except for white label digital banking services with previously identified parties and passive investments of no more than 2% of a class of equity interests of a competitor that is publicly traded. Customers Bank also agreed not to directly or indirectly hire or solicit any employees of a Covered Party.
Indemnification Agreements
On January 4, 2021, we entered into standard indemnification agreements with each of our senior officers and directors, requiring us to indemnify him or her against certain liabilities that may arise by reason of their service to us, to the fullest extent permitted by Delaware law.
Loan Agreement
On January 4, 2021, we and our subsidiary BTMX, Inc. entered into a Loan Agreement (the “Debt Agreement”) with Customers Bank (the “Lender”) providing for a line of credit of up to $10 million, subject to a borrowing base requirement based on our and our subsidiary’s accounts receivables. Borrowings made under the Debt Agreement are subject to an interest rate equal to the 1-month London Interbank Offered Rate plus 375 basis points, and are secured by our and our subsidiary’s assets. Borrowed funds may be repaid at any time without penalty. Concurrent with signing the Debt Agreement, we drew approximately $5.4 million under the Debt Agreement to refinance intercompany debt owed by BankMobile to Customers Bank immediately prior to the Closing.
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PROPOSAL NO. 2
APPROVAL OF THE BM TECHNOLOGIES, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN
The Company is requesting that shareholders approve the BM Technologies, Inc. 2021 Employee Stock Purchase Plan (the “Purchase Plan”). The following summary of major features of the Purchase Plan is subject to the specific provisions in the full text of the Purchase Plan set forth as Exhibit “A” to this Proxy Statement.
The Purchase Plan will permit participants to purchase shares of the Company’s common stock directly from the Company from authorized but previously unissued shares or shares held in the treasury. The Company will use the proceeds it receives from the sale of the common stock pursuant to the Purchase Plan for general corporate purposes. It is the Company’s intention that the Purchase Plan qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
Purpose of the Purchase Plan
The purpose of the Purchase Plan is to provide an incentive for eligible employees to remain in the employ of the Company and to devote their best efforts to its success by affording such employees an opportunity to acquire the Company’s common stock in a convenient and advantageous manner and to maintain a proprietary interest in the Company. The Company believes that employees who participate in the Purchase Plan will have a closer identification with the Company by virtue of their ability, as shareholders, to participate in the Company’s growth and earnings.
Key Terms
The Purchase Plan is designed to meet the requirements of Code Sections 421 and 423 and to reflect prevailing corporate governance and compensation best practices. The following is a summary of the key provisions of the Purchase Plan:
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Effective Date:
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May 1, 2021.
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Plan Term:
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Unless terminated earlier by the Company’s Board of Directors, the Purchase Plan will remain in effect until the earlier of the date in which all shares of common stock reserved thereunder have been purchased or April 30, 2031.
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Eligible Participants:
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Any person, including a Company officer, who is an employee of the Company for tax purposes and who is customarily employed for at least 20 hours per week and has been continuously employed by the Company for at least one year preceding the offering date.
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Shares Authorized:
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500,000 shares of the Company’s common stock, par value $0.0001 per share, subject to adjustment at the discretion of the Board of Directors upon changes in the Company’s capitalization.
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Shares Authorized as a Percent of Outstanding Common Stock:
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Less than 1% of shares outstanding on April 26, 2021.
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Purchase Price:
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85% of the fair market value of the Company’s common stock on the offering date but in any event in accordance with Code Section 423.
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Share Limits Per Person:
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The lesser of $25,000 in fair market value or 15% of a participant’s eligible compensation per employee per calendar year.
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Eligibility
Any employee, who, on the offering date, has at least one year of continuous service with the Company or a subsidiary of the Company, and customarily works at least 20 hours per week is eligible to participate in the Purchase Plan. Non-employee directors of the Company are ineligible to participate in the Purchase Plan.
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Administration of the Purchase Plan
The Board of Directors, or the Compensation Committee (“Committee”) administers the Purchase Plan except where the Purchase Plan specifically reserves the determination of matters to the Board of Directors. The Committee has the authority to make final and binding decisions, determinations of all questions of, and interpretations with respect to, the operation of the Purchase Plan.
Participation in the Purchase Plan
The Board of Directors will, from time to time in its discretion, make offerings to eligible employees to purchase the Company’s common stock under the Purchase Plan. The terms and conditions for each such offering shall specify the offering date, the offering price, the offering period and the number of shares of common stock that may be purchased under the offering. The offering period may have a length between one month and one year. The Committee will give notice to eligible employees of each offering and the terms and conditions for each offering. Each eligible employee who desires to accept all or any part of the option to purchase shares of common stock under an offering shall signify his or her election to do so by authorizing the Company, in the form and manner prescribed by the Committee, to make payroll deductions pursuant to the Plan.
Purchasing Stock
A participant may designate that the Company use payroll deductions to purchase stock at a rate that is at least 1% and that does not exceed 5% of such participant’s compensation, which rate the Board of Directors may change from time to time. Such election and authorization must be made at least 15 days prior to an offering period and shall continue in effect unless and until such participant changes his or her payroll deductions or terminates his or her employment with the Company. The price of each share of common stock purchased under the Purchase Plan will be equal to its fair market value as of the end of such offering period less a 15% discount. The Purchase Plan defines “fair market value” as follows: (a) if the common stock is traded on a national securities exchange, the closing price on the applicable day, or if the common stock did not trade on such day, the closing price on the most recent preceding day on which there was a trade; (b) if the common stock is quoted on an automated quotation system, the closing price on the applicable day, or if the common stock did not trade on such day, the mean between the closing bid and asked prices on such day; or (c) in all other cases, the “fair market value” as determined by the Committee in good faith and using such financial sources as it deems relevant and reliable (but in any event not less than fair market value within the meaning of Code Section 409A). The number of shares purchased is determined by dividing the payroll deductions for the payroll period by the price paid by the participant.
Limitations
If the event of a stock dividend, stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, combination or reclassification of the Company’s common stock or similar event affecting the common stock, the Board will appropriately adjust the number of shares available under the Purchase Plan.
The Purchase Plan does not permit a participant to purchase common stock with a fair market value in excess of $25,000 in any one calendar year. These limitations are to ensure, in part, that the Purchase Plan complies with Code requirements.
A participant does not have the rights of a shareholder until the participant actually purchases the shares of stock. A participant may not transfer the right to purchase stock under the Purchase Plan.
Withdrawing from the Purchase Plan
A participant may stop participating in the Purchase Plan at any time by providing notice in the form specified by the Committee. A participant may, at any time, elect to withdraw part or all of the shares of Common Stock, except fractional shares, held in his or her account. Thereafter, a certificate for the number of whole shares which such participant has elected to withdraw shall be issued to him or her. No certificate for fractional shares will be issued, and the value of any fractional shares shall be paid in cash. If a participant terminates employment at the Company at any time, participation in the Purchase Plan automatically terminates.
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Termination and Amendments
The Board has the power to amend or terminate the Purchase Plan at any time, except that the Board may not, without first obtaining shareholder approval, increase the maximum number of shares reserved under the Purchase Plan other than as otherwise provided in the Purchase Plan, reduce the price at which shares subject to options granted under the Purchase Plan may be purchased, change the definition of subsidiaries eligible to participate in the Purchase Plan, or otherwise materially increase the benefits provided in the Purchase Plan. Unless the Purchase Plan is previously terminated by the Board, it will terminate on April 30, 2031.
Certain Federal Income Tax Consequences of the Purchase Plan
The following summarizes the federal income tax consequences of an employee’s participation in the Purchase Plan. This summary does not address federal employment taxes, state and local income taxes, and other taxes that may be applicable and is not intended to be a complete description of the tax consequences of participation in the Purchase Plan.
The Company intends that the Purchase Plan qualify as an “employee stock purchase plan” within the meaning of Code Section 423. As such, a participant will not recognize taxable income upon enrollment in the Purchase Plan or purchasing shares. In general, a participant recognizes taxable income in the year in which the shares of stock purchased under the Purchase Plan is sold or otherwise disposed of (including by gift).
Qualifying Dispositions. If a participant does not dispose of shares acquired pursuant to the Purchase Plan until at least two years have passed from the beginning of the month in which the participant acquired such shares (a “qualifying disposition”), the participant will have ordinary income in the year of the qualifying disposition equal to the lesser of (i) the amount by which the fair market value of the shares on the start of the option period exceeds the purchase price paid for such shares or (ii) 10% of the fair market value of the shares on the start of the option period in which the shares were acquired. The amount of ordinary income will be added to the basis of the stock and any additional gain recognized upon the qualifying disposition will be a long-term capital gain. If the fair market value on the date of the qualifying disposition is less than the purchase price paid for the shares, there will be no ordinary income and any loss will be a long-term capital loss.
Disqualifying Dispositions. If a participant disposes of shares acquired pursuant to the Purchase Plan at any time within two years from the start of the option period in which the participant acquired such shares (a “disqualifying disposition”), the participant will have ordinary income in the year of the disqualifying disposition equal to the amount by which the fair market value of the shares on the purchase date exceeded the purchase price. The amount of the ordinary income will be added to the basis of the stock, and any resulting gain or loss upon the disposition will be a capital gain or loss. The capital gain or loss will be long-term if the participant holds the stock for more than one year.
When a participant disposes of shares acquired under the Purchase Plan in a disqualifying disposition, the Company may take a deduction for federal income tax purposes in an amount equal to the ordinary income the participant recognizes in the disposition. The Company is not entitled to any other deductions if shares are disposed of in a qualifying disposition. Participants may be limited in their ability to take capital losses that they may incur. Maximum tax rates applicable to capital gains vary, so treatment of any particular participant’s capital gains will also vary.
New Plan Benefits
It is not possible to determine the number of shares of stock that any particular individual, including any of the named executive officers, will purchase under the Purchase Plan in the future.
Voting Requirements
The affirmative vote of a majority of votes cast at the meeting, assuming the presence of a quorum, is required for the adoption of this Proposal.
RECOMMENDATION
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT YOU VOTE “FOR” PROPOSAL NO. 2 APPROVAL OF THE BM TECHNOLOGIES, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN.
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AUDIT COMMITTEE REPORT(1)
The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2020.
In executing its responsibilities, the Audit Committee has reviewed and discussed our audited financial statements for fiscal year 2020 with our management. The Audit Committee also has discussed with Withum, our independent auditor for fiscal year 2020, the matters required to be discussed by PCAOB Auditing Standard No. AS 1301, “Communications with Audit Committees.” In addition, the Audit Committee has received written disclosures and a letter from our independent auditor delineating all relationships between them and us, consistent with the applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and has discussed with them matters pertaining to their independence.
Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the fiscal year 2020 audited financial statements be included in the Company’s Annual Report on Form 10-K for filing with the SEC. The Audit Committee and Board of Directors have also recommended the selection of BDO USA LLP as our independent auditor for fiscal year 2021.
From the members of the Audit Committee:
Marcy Schwab (Chair)
A.J. Dunklau
Pankaj Dinodia
April 23, 2021
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OTHER BUSINESS
The Board of Directors knows of no other business to be presented for action at the 2021 Annual Meeting of Stockholders. If any matters do come before the meeting on which action can properly be taken, it is intended that the proxies shall vote in accordance with the judgment of the person or persons exercising the authority conferred by the proxy at the meeting. The submission of a proposal does not guarantee its inclusion in our proxy statement or presentation at the meeting unless certain securities law requirements are met.
You are cordially invited to participate in the 2021 Annual Meeting of Stockholders. Whether or not you plan to participate in the meeting, you are requested to indicate your vote as to the matters to be acted on at the meeting by following the instructions provided in the enclosed proxy card or voting instruction form.
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By order of the Board of Directors
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Robert Ramsey
Chief Financial Officer
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Wayne, Pennsylvania
April 29, 2021
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EXHIBIT A
BM TECHNOLOGIES, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
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BM TECHNOLOGIES, INC. 2021 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: April 23, 2021
APPROVED BY THE COMPANY’S STOCKHOLDERS: Pending
EFFECTIVE DATE: May 1, 2021
1. ESTABLISHMENT AND PURPOSE.
(a) Establishment of Plan. BM Technologies, Inc. (the “Company”), upon approval by the Committee, hereby adopts this BM Technologies, Inc. 2021 Employee Stock Purchase Plan (the “Plan”), effective May 1, 2021 (the “Effective Date”).
(b) Purpose of Plan. The purpose of the Plan is to provide eligible employees with an incentive to advance the interests of the Company and its Subsidiaries, by affording them an opportunity to purchase stock of the Company at a favorable price.
2. GENERAL.
(a) Compliance With Applicable Laws. The Plan is subject to any applicable provisions of Delaware General Corporation Law, and any other applicable law or regulation.
(b) Effective Date. The Plan will not become effective until the date that the Plan has been approved by the Board. The effectiveness of the Plan shall be subject to approval by the holders of a majority of the outstanding shares of capital stock of the Company within twelve (12) months before or after the date the Plan is adopted by the Board. Such approval shall be obtained in the manner and to the degree required under applicable laws. No Shares may be delivered to any Participant under the Plan unless and until such shareholder approval is obtained. If such shareholder approval is not obtained, all options to purchase shares of Stock granted hereunder shall be null and void, except that any payroll deductions related to the options shall be returned to the applicable Participants.
(c) Duration. The Plan shall remain in effect until the earliest of (i) the date the Board terminates the Plan pursuant to Section 15, (ii) the Plan’s automatic termination as set forth in Section 15, or (iii) the date that all Shares authorized for issuance under the Plan shall have been purchased or granted according to the Plan’s provisions.
3. DEFINED TERMS.
The following words and phrases as used in this Plan shall have the meanings set forth in this Section unless a different meaning is clearly required by the context:
(a) “Board” means the Board of Directors of the Company.
(b) “Cancellation Notice” means the notice, in the form approved by the Committee, that is delivered by a Participant who wishes to cancel his or her election to purchase Stock during an Offering, as described in Section 8(e).
(c) “Cause” shall have the meaning set forth in the Participant’s employment agreement with the Company or one of its Subsidiaries; or if no such definition exists at the time in question, means, with respect to a Participant, the occurrence of any of the following events: (i) the Participant’s willful failure to substantially perform his or her duties and responsibilities to the Company or any Subsidiary or deliberate violation of a material Company or Subsidiary policy; (ii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, or other willful misconduct; (iii) the Participant’s material unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any Subsidiary or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company or any Subsidiary; (iv) the Participant’s willful and material breach of any of his or her obligations under any written plan or covenant with the Company or any Subsidiary; or (v) the Participant’s willful and material violation of the Company or any Subsidiary’s Code of Ethics, as amended from time to time. The Committee shall in its discretion determine whether
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or not a Participant is being terminated for Cause. The Committee’s determination shall, unless arbitrary and capricious, be final and binding on the Participant, the Company, any Subsidiary, and all other affected persons. The foregoing definition does not in any way limit the Company or any Subsidiary’s ability to terminate a Participant’s employment or service at any time, and the term “Company” will be interpreted herein to include any Subsidiary or affiliate or successor thereto, if appropriate. Any determination by the Committee that the service of a Participant was terminated with or without Cause for the purposes of the Plan will have no effect upon any determination of the rights or obligations of the Company or any Subsidiary, or such Participant for any other purpose. For purposes of this definition, Cause shall not be considered to exist unless the Company provides written notice to the Participant which indicates the specific Cause provision in this Plan relied upon, to the extent applicable sets forth in reasonable detail the facts and circumstances claimed to provide a basis for such Cause.
(e) “Change in Control” means the occurrence of any one or more of the following events: (i) the consummation of a transaction, or a series of related transactions undertaken with a common purpose, in which any individual, entity or group (a “Person”), acquires ownership of stock of the Company that, together with stock held by such Person, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the Company’s stock; or (ii) a sale, lease, exchange or other transfer, in one transaction or a series of related transactions undertaken with a common purpose, of the Company’s assets having a total Gross Fair Market Value of forty percent (40%) or more of the total gross fair market value of all of the assets of the Company. For this purpose, “Gross Fair Market Value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this Plan, a Change in Control will not include (i) a transaction in which the holders of the outstanding voting securities of the Company immediately prior to the transaction hold at least fifty percent (50%) of the outstanding voting securities of the successor company immediately after the transaction; (ii) any transaction or series of transactions approved by the Board principally for bona fide equity financing purposes in which cash is received by the Company or any successor thereto or indebtedness of the Company is cancelled or converted or a combination thereof; (iii) a sale, lease, exchange or other transfer of all or substantially all of the Company’s assets to a majority-owned Subsidiary; or (iv) a transaction undertaken for the principal purpose of restructuring the capital of the Company, including, but not limited to, reincorporating the Company in a different jurisdiction.
Notwithstanding the foregoing, a Change in Control will only be deemed to occur if the consummation of the corporate transaction meets the requirements of Treasury Regulation §1.409A-3(a)(5).
(f) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations or formal guidance issued thereunder.
(g) “Committee” means the Compensation Committee of the Board, or in its absence, the Board shall serve as the Committee.
(h) “Company” means BM Technologies, Inc., a Delaware corporation.
(i) “Effective Date” means May 1, 2021.
(j) “Eligible Compensation” means the gross (before taxes and other authorized payroll deductions are withheld) total of all wages, salaries, commissions, overtime and bonuses received during the Offering Period, but shall not include (i) employer contributions to or payments from any deferred compensation program, whether such program is qualified under Code Section 401(a) (other than amounts considered as employer contributions under Code Section 402(e)(3)) or nonqualified, (ii) amounts realized from the receipt or exercise of a stock option that is not an incentive stock option within the meaning of Code Section 422, (iii) amounts realized at the time property described in Code Section 83 is freely transferable or no longer subject to a substantial risk of forfeiture, (iv) amounts realized as a result of an election described in Code Section 83(b), and (v) amounts realized as a result of a disqualifying disposition within the meaning of Code Section 421(b).
(k) “Eligible Employee” shall have the meaning set forth in Section 7.
(l) “Enrollment Form” means the enrollment form (in writing or electronic) approved by the Committee on which the Participant gives notice of his or her election to participate in an Offering under the Plan.
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(m) “Excluded Class” means any or all of the following classes of employees: (i) employees who have been employed less than two (2) years; (ii) highly compensated employees (within the meaning of Code Section 414(q)); or (iii) highly compensated employees (within the meaning of Code Section 414(q)) with compensation above a certain designated level, who are officers, or who are subject to the disclosure requirements of Section 16(a) of the Securities Exchange Act of 1934.
(n) “Fair Market Value” of a share of Stock means, for a particular day:
(i) If shares of Stock of the same class are listed or admitted to unlisted trading privileges on any national or regional securities exchange at the date of determining the Fair Market Value, then the last reported sale price, regular way, on the composite tape of that exchange on that business day or, if no such sale takes place on that business day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to unlisted trading privileges on that securities exchange or, if no such closing prices are available for that day, the last reported sale price, regular way, on the composite tape of that exchange on the last business day before the date in question; or
(ii) If subparagraph (i) does not apply and if sales prices for shares of Stock of the same class in the over-the-counter market are reported by NYSE American (or a similar system then in use) at the date of determining the Fair Market Value, then the last reported sales price so reported on that business day or, if no such sale takes place on that business day, the average of the high bid and low asked prices so reported or, if no such prices are available for that day, the last reported sale price so reported on the last business day before the date in question; or
(iii) If subparagraphs (i) and (ii) do not apply and if bid and asked prices for shares of Stock of the same class in the over-the-counter market are reported by NYSE American (or, if not so reported, by the National Quotation Bureau Incorporated) at the date of determining the Fair Market Value, then the average of the high bid and low asked prices on that business day or, if no such prices are available for that day, the average of the high bid and low asked prices on the last business day before the date in question; or
(iv) If subparagraphs (i)-(iii) do not apply at the date of determining the Fair Market Value, then the value determined in good faith by the Committee, which determination shall be conclusive for all purposes; or
(v) If subparagraphs (i), (ii) or (ii) apply, but the volume of trading is so low that the Board determines in good faith that such prices are not indicative of the fair value of the Stock, then the value determined in good faith by the Committee, which determination shall be conclusive for all purposes notwithstanding the provisions of subparagraphs (i), (ii), and (iii).
If the Committee is required to determine Fair Market Value under (iv) or (v) above, the Fair Market Value determination will be based on all relevant facts and circumstances, including, but not limited to: (A) the market value of the shares of comparable banks, and (B) the trend of the Company’s earnings.
(o) “Grant Date” means the first day of an Offering Period.
(p) “Offering” means the offer by the Company during the designated Offering Period to permit Eligible Employees to elect to purchase shares of Stock at the designated Purchase Price.
(q) “Offering Period” means the period specified by the Committee as described in Section 8.
(r) “Participant” means each Eligible Employee who elects to participate in an Offering Period.
(s) “Participating Affiliate” shall have the meaning set forth in Section 6.
(t) “Plan” means this BM Technologies Inc. 2021 Employee Stock Purchase Plan.
(u) “Purchase Date” means the last day of an Offering Period.
(v) “Purchase Price” means the per share price of Stock to be paid by each Participant on the Exercise Date for an Offering, which amount shall be eighty-five (85%) of the Fair Market Value of the Stock on the Purchase Date.
(w) “Stock” means the authorized $0.0001 par value common stock of the Company, which shares may be unissued shares or reacquired shares or shares bought on the market for purposes of the Plan.
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(x) “Subsidiary” means, with respect to the Company, (i) any other corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%). For purposes of this definition, “owned” means a person or entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Committee. Except to the extent that the full Board is serving as the Committee hereunder, the Committee shall be composed solely of three (3) or more Non-Employee Directors, in accordance with Rule 16b-3 and shall act only by a majority of its members then in office. Subject to the provisions of the Plan, the Committee shall interpret and construe the Plan and all options granted under the Plan; shall make such rules as it deems necessary for the proper administration of the Plan; shall make all other determinations necessary or advisable for the administration of the Plan, including the determination of eligibility to participate in the Plan and the amount of a Participant’s option under the Plan; and shall correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any option granted under the Plan, in the manner and to the extent that the Committee deems desirable to carry the Plan or any option into effect. The Committee shall, in its sole discretion exercised in good faith, make such decisions or determinations and take such actions as it deems appropriate, and all such decisions, determinations and actions taken or made by the Committee pursuant to this and the other paragraphs of the Plan shall be conclusive and binding on all parties. The Committee shall not be liable for any decision, determination or action taken or not taken in good faith in connection with the administration of the Plan. The Committee, in its discretion, may approve the use of a voice response system or on-line administration system through which Eligible Employees and the Committee may act under the Plan, as an alternative to written forms, notices and elections.
5. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 13, the aggregate number of shares which may be sold pursuant to options granted under the Plan shall not exceed five hundred thousand (500,000) shares of Stock. Should any option granted under the Plan expire or terminate prior to its exercise in full, the shares theretofore subject to such option may again be subject to an option granted under the Plan. Any shares of Stock which are not subject to outstanding options upon the termination of the Plan shall cease to be subject to the Plan.
6. PARTICIPATING AFFILIATE.
Each present and future Subsidiary corporation of the Company (within the meaning of Code Section 424(f)) that is eligible by law to participate in the Plan shall be a “Participating Affiliate” during the period that such entity is such a Subsidiary corporation; provided, however, that (a) the Committee may at any time and from time to time, in its sole discretion, terminate a Participating Affiliate’s participation in the Plan, and (b) any foreign Subsidiary corporation of the Company shall be eligible to participate in the Plan only upon approval of the Committee. Any Participating Affiliate may, by appropriate action of its board of directors, terminate its participation in the Plan. Transfer of employment among the Company and Participating Affiliates shall not be considered a termination of employment hereunder.
7. ELIGIBILITY.
Any employee of the Company or a Participating Affiliate (determined under Treasury Regulation section 1.421-1(h)) who satisfies all of the following requirements as of the applicable Grant Date (“Eligible Employee”) shall be eligible to participate in any Offering Period that begins on or after the first day of the next calendar quarter after all such requirements are met:
(a) The employee is customarily employed by the Company and/or one or more Participating Affiliates at least twenty (20) hours per week and at least five (5) months per year; and
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(b) The employee does not, immediately after the option is granted, own stock possessing five-percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of a parent or Subsidiary corporation (within the meaning of Sections 423(b)(3) and 424(d) of the Code); and
(c) The employee is not within one (1) or more Excluded Categories that the Committee has designated (in writing or electronically) as being ineligible to participate in the Offering.
8. OFFERING.
(a) Offering Period. The Committee shall designate (in writing or electronically) one (1) or more Offering Periods during which the Company will offer options to Eligible Employees to purchase shares of Stock under this Plan, which designation shall be incorporated by reference into the Plan. An Offering Period may have any length between one (1) month and one (1) year. Offering Periods may be alternative, concurrent, sequential or overlapping, and need not have the same duration, commencing or ending dates, or Purchase Prices; provided, however, all Eligible Employees who are eligible to purchase shares of Stock during an Offering Period shall have the same rights and privileges with respect to that Offering Period.
(b) Election to Participate. Each Eligible Employee who elects to participate in an Offering (a “Participant”) shall deliver to the Company or its designee (as determined by the Committee), within the time period designated by the Committee, an Enrollment Form (in writing or electronic) approved by the Committee, on which the Participant will give notice of his or her election to participate in the Plan as of the next following Grant Date, and the percentage or specific amount (as determined by the Committee) of his or her Eligible Compensation to be deducted for each pay period during the Offering Period and credited to a book entry account established in his or her name. The designated percentage or specific amount of a Participant’s Eligible Compensation to be deducted for each pay period during an Offering Period may not be less than one-percent (1%) or greater than (i) twenty-five-percent (25%) of the amount of Eligible Compensation (after taxes and any other authorized payroll deductions are withheld) from which the deduction is made; or (ii) an amount which will result in non-compliance with the annual limitations stated in Section 8(d) below. The Committee may adopt a procedure pursuant to which a Participant who has elected to participate in an Offering shall be deemed to have made the same election for each subsequent Offering for which he or she is eligible, unless and until the Participant cancels his or her election as described in Section 8(e) below.
(c) Payment for Shares. A Participant may elect to purchase shares of Stock during an Offering Period only by means of payroll deduction.
(d) Annual Limitations. No Eligible Employee shall be granted an option under the Plan to purchase Stock to the extent such grant would permit his or her rights to purchase Stock under the Plan and under all other employee stock purchase plans of the Company and its parent and Subsidiary corporations (as such terms are defined in Section 424(e) and (f) of the Code) to accrue at a rate which exceeds, in any one calendar year in which any such option granted to such Eligible Employee is outstanding at any time (within the meaning of Section 423(b)(8) of the Code), the lesser of (i) $25,000 in Fair Market Value of Stock (determined in accordance with Section 8(b) at the time the option is granted), or (ii) fifteen percent (15%) of the Participant’s Eligible Compensation (determined at the time the option is granted).
(e) Cancellation of Election. Any Participant may cancel his or her election made for an Offering Period at any time prior to thirty (30) days before the Purchase Date for that Offering Period. Partial withdrawals shall not be permitted. A Participant who wishes to cancel his or her election must timely deliver (in writing or electronically) to the Company or its designee (as determined by the Committee) a Cancellation Notice in the form approved by the Committee. The Company, promptly following the time when the such Cancellation Notice is delivered, shall refund (or cause to be refunded) to the Participant the amount of the cash balance in his or her account under the Plan and shall cancel the Participant’s payroll deduction authorization and his or her interest in unexercised options under the Plan shall terminate. A Participant who cancels his or her election shall not be eligible to participate in the Plan during the then current Offering Period, but shall be eligible to participate again in the Plan in a subsequent Offering Period (provided that the Participant is otherwise eligible to participate in the Plan at such time and complies with the enrollment procedures).
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(f) Termination of Employment. If the employment of a Participant terminates for any reason (including death), his or her election made for the current Offering Period and his or her participation in the Plan shall terminate as of the date of termination of employment; provided, however, if such termination occurs within the last two (2) weeks of the Offering Period, the Participant’s participation shall not terminate until the end of the Offering Period after his or her Plan account has been applied toward the purchase of shares of Stock for such Offering Period. The Company shall refund to the Participant the amount of the cash balance in his or her account under the Plan, and no further shares of Stock will be purchased under the Plan.
(g) Leaves of Absence. For purposes of this Plan, the Participant’s employment will be treated as continuing while the Participant is on military, sick leave or other bona fide leave of absence if such leave does not exceed ninety (90) days or, if longer, such period during which the Participant continues to be guaranteed reemployment rights by statute or contract as described in Treasury Regulation §1.421-7(h)(2). If a Participant takes an unpaid leave of absence, then such Participant may not make additional contributions under the Plan while on such unpaid leave of absence (except to the extent of any Eligible Compensation paid during such leave), but any payroll deductions already taken during the applicable Offering Period shall be applied to exercise options on the next following Purchase Date, unless cancelled pursuant to Section 8(e) or (f) above.
9. PURCHASE OF STOCK.
On the Purchase Date at the end of an Offering Period, each Participant in the Offering, automatically and without any act on his or her part, shall be deemed to have exercised his or her option to purchase whole shares of Stock at the Purchase Price for such Offering. The number of whole shares of Stock to be purchased by a Participant shall be the total payroll deductions withheld on behalf of such Participant during the Offering Period divided by the Purchase Price of the Stock. To the extent that, after the purchase of the maximum number of whole shares of Stock permitted under the Plan with respect to an Offering Period, there is cash remaining in the Participant’s Plan account, the Company shall as soon as practicable issue (or cause to be issued) the Participant a check for such amount.
10. INSUFFICIENCY OF SHARES AVAILABLE FOR ISSUANCE.
If the total number of shares of Stock remaining available for issuance pursuant to Section 5 is less than the total number of shares of Stock that has been elected by Participants to be purchased for a given Offering Period, after application of the limitations in Sections 8(b) and (d) (the “Total Share Limit”), then the number of shares of Stock that could otherwise be acquired by each Participant for the given Offering Period shall be reduced proportionately based on the ratio that such available shares bears such total shares elected to be purchased by all Participants with respect to such Offering Period.
11. RESTRICTION UPON ASSIGNMENT.
An Eligible Employee’s rights under the Plan shall not be transferable otherwise than by will or the laws of descent and distribution. An Eligible Employee’s option to purchase shares of Stock shall be exercisable, during the Participant’s lifetime, only by the Eligible Employee to whom it was granted. The Company shall not recognize any assignment or purported assignment by an Eligible Employee of his or her option or of any rights under his or her option, and any such attempt may be treated by the Company as an election to withdraw from the Plan. Notwithstanding the foregoing, a Participant may file a written designation of a beneficiary who is to receive any shares of Stock and cash in the Participant’s Plan account in the event of such Participant’s death. Such designation of beneficiary may be changed by the Participant at any time by written notice during Participant’s lifetime. Upon the death of a Participant and upon receipt by the Company or its designee (as determined by the Committee) of proof of the identity and existence of a beneficiary validly designated by him or her under the Plan, the Company shall deliver (or cause to be delivered) such shares and cash to such beneficiary. In the event of the death of the Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver (or cause to be delivered) such shares of Stock and cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company or any Subsidiary) the Company shall deliver (or cause to be delivered) such shares of Stock and cash to the applicable court having jurisdiction over the administration of such estate. No designated beneficiary shall, prior to the death of the Participant by whom he or she has been designated, acquire any interest in the shares or Stock or cash credited to the Participant under the Plan.
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12. NO STOCKHOLDER RIGHTS.
A Participant shall not have any rights or privileges of a stockholder until the Company has issued a certificate for shares of Stock to the Participant following the applicable Purchase Date. With respect to a Participant’s Stock that has been issued but is held by the Company (or its agent) pursuant to Section 11, the Company shall, as soon as practicable and in accordance with applicable law, pay the Participant any cash dividends attributable thereto and facilitate the Participant’s voting rights attributable thereto.
13. CHANGES IN STOCK; ADJUSTMENTS.
Whenever any change is made in the Stock, by reason of a stock dividend or by reason of subdivision, stock split, reverse stock split, recapitalization, reorganization, combinations, reclassification of shares, or other similar change, appropriate action will be taken by the Committee to appropriately adjust the number of shares of Stock subject to the Plan, the minimum and maximum number of shares that may be purchased hereunder, and the number and Purchase Price of shares available for purchase and elections made to purchase such shares during the current Offering Period.
Upon the occurrence of a Change in Control, unless a surviving corporation assumes or substitutes new options to purchase (within the meaning of Code Section 424(a)) for all options to purchase shares of Stock then outstanding or the Committee elects to continue the options to purchase shares of Stock then outstanding without change, the Purchase Date for all options then outstanding shall be accelerated to a date fixed by the Committee prior to the effective date of such Change in Control.
It is intended that, if possible, any adjustments contemplated by the preceding paragraph be made in a manner that satisfies applicable legal, tax (including, without limitation and as applicable in the circumstances, Section 424 of the Code and Section 409A of the Code) and accounting (to not trigger any charge to earnings with respect to such adjustment) requirements.
14. USE OF FUNDS; NO INTEREST PAID.
All funds received or held by the Company (or its agent) under the Plan shall be included in the general funds of the Company free of any trust or other restriction, and may be used for any corporate purpose. No interest shall be paid to any Participant or credited to his or her account under the Plan.
15. AMENDMENT OR TERMINATION THE PLAN.
The Board in its discretion may terminate the Plan at any time with respect to any shares for which options have not theretofore been granted. The Committee shall have the right to alter or amend the Plan or any part thereof, from time to time without the approval of the stockholders of the Company; provided, that no change in any option theretofore granted, other than a change determined by the Committee to be necessary to comply with applicable law, may be made which would impair the rights of the Participant without the consent of such Participant; and provided, further, that the Committee may not make any alteration or amendment, without the approval of the stockholders of the Company, which would (i) increase the aggregate number of shares which may be issued pursuant to the provisions of the Plan (other than as a result of the anti-dilution provisions of the Plan), (ii) change the annual limitation under Section 8(d)(ii), (iii) extend the term of an Offering Period or the term of the Plan (as defined below), (iv) change the class of individuals eligible to receive options under the Plan, or (v) cause options issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code.
Unless earlier terminated by the Board, the Plan shall automatically terminate, and no further Offering Periods shall begin, ten (10) years after its Effective Date; provided, however, no termination of the Plan, other than to the extent that the Board determines is necessary or advisable to comply with applicable U.S. or foreign laws, shall adversely affect in any material way any option previously granted under the Plan, without the written (or electronic) consent of the Participant who has elected to purchase shares pursuant to such option. No further options to purchase may be granted under the Plan after the Plan is terminated.
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16. SECURITIES LAWS.
The Company shall not be obligated to issue any Stock pursuant to any option granted under the Plan at any time when the shares covered by such option have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules or regulations available for the issuance and sale of such shares. Further, all Stock acquired pursuant to the Plan shall be subject to the Company’s policy or policies, if any, concerning compliance with securities laws and regulations, as the same may be amended from time to time.
17. NO RESTRICTION ON CORPORATE ACTION.
Nothing contained in the Plan shall be construed to prevent the Company or any Subsidiary from taking any corporate action which is deemed by the Company or such Subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any grant made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any Subsidiary as a result of any such action.
18. CHOICE OF LAW.
The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan and all payments hereunder, without regard to that state’s conflict of laws rules.
19. SEVERABILITY.
Each provision in this Plan is severable, and if any provision is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not, in any way, be affected or impaired thereby.
Adopted this 23rd day of April, 2021.
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BM TECHNOLOGIES, INC.
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By:
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/s/ Robert Ramsey
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Corporate Secretary
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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.Vote by Mobile or Internet QUICK EASY IMMEDIATE IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail Your Mobile or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over the Internet must be received by 11:59 p.m., Eastern Time, on June 15, 2021. BM Technologies, Inc. INTERNET – www.cstproxyvote.com Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares. Vote at the Meeting – If you plan to attend the virtual online annual meet¬ing, you will need your 12 digit control number to vote electronically at the annual meeting. To attend the annual meeting, visit: https://cstproxy.com/bmtechnologies/2021 MOBILE VOTING – On your Smartphone/Tablet, open the QR Reader and scan the below image. Once the voting site is displayed, enter your Control Number from the proxy card and vote your shares. MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY. FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED Please mark your votes like this PROXY THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2, 3 AND 4. X FOR all Nominees listed to the left WITHHOLD AUTHORITY to vote (except as marked to the contrary for all nominees listed to the left) 1. Election of Directors(1) Aaron Hodari(2) Pankaj Dinodia ABSTAIN AGAINST FOR 3. Ratification of appointment of BDO USA, LLP as independent registered public accounting firm. 4. To transact such other matters as may properly come before the 2021 annual meeting or any adjournment or postponement thereof. FOR AGAINST ABSTAIN (Instruction: To withhold authority to vote for anyindividual nominee, strike a line through that nominee’s name in the list above) ABSTAIN AGAINST FOR 2. Approval of the BM Technology, Inc. 2021 Employee Stock Purchase Plan. CONTROL NUMBER Signature Signature, if held jointly Date 2021. Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such. 17949 BM Technologies_PROXY CARD_REV1 Back Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders To view the 2021 Proxy Statement, 2020 Annual Report and to Attend the Annual Meeting, please go to:https://www.cstproxy.com/bmtechnologies/2021 FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS BM Technologies, Inc. The undersigned appoints Luvleen Sidhu and Robert Ramsey, and each as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the shares of common stock of BM Technologies, Inc. held of record by the undersigned at the close of business on April 26, 2021 at the Annual Meeting of Stockholders of BM Technologies, Inc. to be held on June 16, 2021, or at any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF ELECTING THE TWO NOMINEES TO THE BOARD OF DIRECTORS, AND IN FAVOR OF PROPOSAL 2 AND PROPOSAL 3, AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXY HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. (Continued, and to be marked, dated and signed, on the other side)
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Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders To view the 2021 Proxy Statement, 2020 Annual Report and to Attend the Annual Meeting, please go to:https://www.cstproxy.com/bmtechnologies/2021 PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS BM Technologies, Inc. The undersigned appoints Luvleen Sidhu and Robert Ramsey, and each as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the shares of common stock of BM Technologies, Inc. held of record by the undersigned at the close of business on April 26, 2021 at the Annual Meeting of Stockholders of BM Technologies, Inc. to be held on June 16, 2021, or at any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF ELECTING THE TWO NOMINEES TO THE BOARD OF DIRECTORS, AND IN FAVOR OF PROPOSAL 2 AND PROPOSAL 3, AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXY HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. (Continued, and to be marked, dated and signed, on the other side)