Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors, executive officers and stockholders who own more than 10% of the Company's stock to file forms with the SEC to report their ownership of the Company's stock and any changes in ownership. The Company assists its directors and executive officers by identifying reportable transactions of which it is aware and preparing and filing their forms on their behalf. All persons required to file forms with the SEC must also send copies of the forms to the Company. We have reviewed all forms provided to us. Given the remote working environment during the COVID-19 Pandemic and the challenges arising from obtaining the necessary signatures, the following Form 3s were late: Anthony Bonventre (1); Marietta Davis (1); Stephen Hipp (1); Ranjana Ram (1); and Pamela Tefft (1) and theThe following Form 4s were late: Sean Kiewiet (2)Ranjana Ram (1), Bradley Miller (1), Thomas Priore (1). All Form 3s and Form 4s have since been filed.
COMPENSATION OF EXECUTIVE OFFICERS
Overview
Priority has opted to comply with the executive compensation disclosure rules applicable to "emerging growth companies" and "smaller reporting companies" as such terms are under the rules promulgated under the Securities Act of 1933, as amended. These rules require compensation disclosure for Priority's principal executive officer and its two most highly compensated executive officers other than its principal executive officer. These officers are referred to as the "Named Executive Officers" or "NEOs."
The NEOs for Priority's year ended December 31, 20202022 were:
•Thomas Priore, its President,Chairman and Chief Executive Officer;
•Timothy O’Leary, its Chief Financial Officer and Chairman;1
•Michael Vollkommer, its Chief Financial Officer;Officer2; and
•Bradley Miller, its General Counsel and Chief Risk Officer and Corporate Secretary as of February 2020.
Summary Compensation Table
The following tableSummary Compensation Table, ("SCT") presents summary information regarding the total compensation for Priority's years ended December 31, 20202022 and 20192021 for the Named Executive Officers:
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Name and Principal Position | Year | | Salary $ | | Bonus $ | | Stock Awards $ | | Option Awards $ | | Non-Equity Incentive Compensation $ | | Change in Pension Value and Deferred Compensation Earnings $ | | All Other Compensation $ | | Total $ |
| | | | | | | | | | | | | | | | | |
Thomas Priore | 2020 | | 737,500 | | | 874,682 | | | 874,682 | | (1) | | — | | | — | | | — | | | 400,000 | | (2) | | 2,886,864 | |
President, Chief Executive Officer, and Chairman | 2019 | | 500,000 | | | 600,000 | | | — | | | — | | | — | | | — | | | — | | | 1,100,000 | |
| | | | | | | | | | | | | | | | | |
Michael Vollkommer | 2020 | | 425,000 | | | 287,500 | | | 750,000 | | (3) | | — | | | — | | | — | | | 11,400 | | (4) | | 1,473,900 | |
Chief Financial Officer | 2019 | | 425,000 | | | — | | | 253,927 | | (3) | | — | | | — | | | — | | | 8,859 | | (4) | | 678,927 | |
| | | | | | | | | | | | | | | | | |
Bradley Miller | 2020 | | 273,689 | | (5) | | 157,500 | | | 250,000 | | (6) | | — | | | — | | | — | | | 10,310 | | (7) | | 691,499 | |
General Counsel, Chief Risk Officer, and Corporate Secretary | 2019 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary $ | Bonus4 $ | Stock Awards $5 | Option Awards $ | Non-Equity Incentive Compensation $ | All Other 3 $ | Total $ |
Thomas Priore President, Chief Executive Officer, and Chairman | 2022 | $975,000 | $1,140,000 | $— | $— | $— | $23,305 | $2,138,305 |
2021 | $900,000 | $2,000,000 | $— | $— | $— | $20,885 | $2,920,885 |
Timothy O'Leary1 Chief Financial Officer | 2022 | $107,693 | $69,701 | $611,941 | $— | $— | $— | $789,335 |
2021 | $— | $— | $— | $— | $— | $— | $— |
Michael Vollkommer2 Chief Financial Officer | 2022 | $310,577 | $127,675 | $— | $— | $— | $12,200 | $450,452 |
2021 | $425,000 | $212,500 | $750,000 | $— | $— | $11,600 | $1,399,100 |
Bradley Miller General Counsel and Chief Risk Officer | 2022 | $359,615 | $178,125 | $1,072,000 | $— | $— | $12,200 | $1,621,940 |
2021 | $323,462 | $162,500 | $— | $— | $— | $10,600 | $496,562 |
| | | | | | | | |
| | | | | | | |
(1)Pursuant an equity award agreement executed in February 2021 betweenMr. O'Leary joined the Company on September 19, 2022, with an annual salary of $400,000 per year and Mr. Priore the board granted restrictedan annual target bonus of 65% of his base salary. The stock units for 102,542award reflects an initial award of 149,254 shares of the Company's common stock withwhich shall vest equally on each anniversary date over a grant-date fair value of $874,682.three-year period.
(2)AMr. Vollkommer retired as Chief Financial officer on September 16, 2022.
(3)Reflects medical insurance premiums paid by the Company on behalf of Mr. Priore, and 401(k) matching contributions for Mr. Vollkommer and Mr. Miller. Mr. O'Leary will be eligible for 401(k) in 2023.
(4)In 2021, a special transaction-related cash bonus of $400,000$2,000,000 was awarded by the Priority Real Estate Technology LLC (“PRET”) Board of DirectorsCompany to Mr. Priore in connection with the sale of RentPayments in September 2020.an investment.
(3)Pursuant to the terms of an employment agreement and an equity award agreement executed in December 2018 between the Company and Mr. Vollkommer that provide for potential annual equity grants in December of each of the years 2018, 2019, 2020, 2021, and 2022, subject to annual approval by the Board. For 2020, the Board granted restricted stock units for 140,713 shares of the Company's common stock in December 2020 with a grant-date fair value of $750,000. For 2019, the Board granted restricted stock units for 107,143 shares of the Company's common stock in February 2020 with a grant-date fair value of $253,927. At vesting of the awards, the Company has not guaranteed that the vested award will have any specific monetary value, nor may Mr. Vollkommer or the Company elect settlement in any deliverable other than shares of the Company's common stock.
(4)Reflects a 401(k) plan matching contribution for Mr. Vollkommer.
(5)Mr. Miller joined the Company in February 2020. This reflects his salary from his start date in 2020. Accordingly, Mr. Miller did not receive any compensation from the Company in 2019.
(6)For 2020, the Board in February 2020 granted restricted stock units for 104,603 shares of the Company's common stock with a grant-date fair value of $250,000.
(7)Reflects a 401(k) plan matching contribution for Mr. Miller.
Narrative Disclosure to Summary Compensation Table
Mr. Thomas Priore
Mr. Thomas Priore is party to a director agreement among the Priority Payment Systems Holdings LLC and Pipeline Cynergy Holdings, LLC (together referred to as the "Employers") and Priority, dated May 21, 2014 (which we refer to as the "Thomas Priore Director Agreement"). In 2017 and through November 30, 2018, he served as Executive Chairman of Priority as an independent contractor. Effective December 1, 2018, he also became our President and Chief Executive Officer. As Chief Executive Officer, the Compensation Committee set performance goals for Mr. Priore based upon revenue, adjusted EBITDA (a non-GAAP measure), and personal performance goals for determining his short-term and long-term incentive. The 2020Mr. Priore’s annual incentive bonus target for both short-termis 100% of his base salary and his annual long-term incentive bonus target is 100% of his base salary.Given the Company’s performance and Mr. Priore’s leadership and meaningful contributions, the 2022 annual incentive bonus and long-term incentives was $750,000.incentive bonus were achieved by Mr. Priore exceededat 95% of his performance goalstarget.
Mr. Tim O’Leary
Mr. Tim O’Leary was appointed as our Chief Financial Officer, effective September 19, 2022.Mr. O’Leary is eligible for an annual discretionary bonus at a target of up to 65% of his base salary and asan annual long-term incentive award of up to $600,000 worth of RSUs.In connection with his joining the Company, Mr. O’Leary was granted an initial award of 149,254 RSUs which shall vest equally on each anniversary over a three-year period.As a result of his meaningful contributions, Mr. O’Leary was awarded an annual incentive bonus in the Compensation Committee awarded him a short-term cash bonus incentiveamount of $874,682 and a long-term stock award incentive of $874,682, vesting prospectively over two years.$69,701 which was prorated to reflect the time he has been with the Company.
Mr. Michael Vollkommer
Mr. Michael Vollkommer was appointedserved as ourthe Company Chief Financial Officer effective as of December 3, 2018. On December 21, 2018, Priority andthrough September 16, 2022.The target for Mr. Vollkommer entered into an Executive Employment Agreement (the "Vollkommer Employment Agreement") dated as of December 20, 2018.
Pursuant to the Vollkommer Employment Agreement, Mr. Vollkommer's receives an annual base salary ($425,000 in both 2020 and 2019) and is eligible for an annual discretionary bonus with a target ranging from 25%-50% of Mr. Vollkommer's annual base salary. No cashVollkommer’s bonus was awarded for 2019. If Mr. Vollkommer is terminated for any reason other than Cause or if Mr. Vollkommer terminates his employment for Good Reason, then subjectup to his execution of a release, he would be entitled to continued payment50% of his base salary forsalary.As a periodresult of six months following the dateCompany’s performance and Mr. Vollkommer’s meaningful contributions, Mr. Vollkommer was awarded a discretionary bonus of $127,125 which was prorated to reflect his termination.retirement from the Company in September 2022.
Based on Mr. Vollkommer’s performance in 2020,2021, the Compensation Committee awarded Mr. Vollkommer a discretionary bonus of $287,500.$212,500.
Mr. Bradley Miller
The Compensation Committee has setMr. Miller is eligible for a discretionary target bonus for Mr. Miller in the range of 25% -up to 50% of his base salary.Additionally, Mr. Miller may be awarded equity grants from time to time in the discretion of the Compensation Committee. Mr. Miller was granted 209,205 shares when he joined the CompanyAs a result of his meaningful contributions in February 2020 which vest over three years subject to his achieving certain performance goals. Based on his performance in 2020,
2022, Mr. Miller was awarded 104,602 shares.an annual incentive bonus in the amount of $178,125.Mr. Miller also received an award of 200,000 RSUs which shall vest equally on the anniversary date over three years.
401(k) Plan
Priority maintains a tax-qualified 401(k) defined contribution plan available to substantially all of our employees. The 401(k) plan is available on the same terms to all of its U.S. employees, including Mr. Miller and Mr. Vollkommer. Mr. Priore does not participate in the plan. Each participant may elect to make a voluntary contribution of an amount between 0% to 100% of his or her eligible compensation to the 401(k) plan, subject to Internal Revenue Service limitations. The deferred amount is invested in accordance with the election of the participant in a variety of investment choices. Subject to certain limitations, Priority will match a participant's contributions to the 401(k) plan at a rate of 100% for the first 3% of employee contributions and 50% for the next 2%. All contributions under the plan are fully vested.
Pay Versus Performance Table
The following Pay Versus Performance ("PVP") tables set forth compensation information for our PEO and non-PEO NEOs in accordance with SEC guidance for the years ended December 31, 2022 and 2021.
| | | | | | | | | | | | | | | | | | | | |
Year | Summary Compensation Table Total for PEO ($)(b) | Compensation Actually Paid to PEO ($)(c) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(d) | Average Compensation Actually Paid to Non-PEO NEOs ($)(e) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($)(f) | Net Income (loss) ($ in thousands)(g) |
2022 | $2,138,305 | $1,959,569 | $953,909 | $(352,720) | $75 | $ | (2,150) | |
2021 | $2,920,885 | $2,924,987 | $1,784,026 | $1,577,968 | $101 | $ | 1,389 | |
(b)Represents the compensation from the Summary Compensation Table for the Company's PEO, Thomas Priore for 2021 and 2022.
(c)Represents that compensation actually paid to the Company's PEO, as adjusted in the table below.
| | | | | | | | | | | |
| | 2022 | 2021 |
Summary Compensation Table Total | | $ | 2,138,305 | | $ | 2,920,885 | |
Adjustments to Determine Compensation "Actually Paid" for PEO | | | |
Deductions for amounts reported under the "Stock Awards" column in the SCT | | — | | — | |
Fair value of awards granted during the year that remain outstanding at year end | | — | | — | |
Change in fair value of awards granted in prior years that remain outstanding at year end | | (93,113) | | 4,102 | |
Change in fair value from the end of the prior year to the vesting date for awards granted in prior years and vested in the current year | | (85,623) | | — | |
Total compensation actually paid for PEO | | $ | 1,959,569 | | $ | 2,924,987 | |
(d)Represents the average summary compensation for all NEOs from the Summary Compensation Table for the named executive officers. For 2022, NEOs were Timothy O'Leary, Bradley Miller and Michael Vollkommer, who retired from the Company in September 2022. For 2021, NEOs were Michael Vollkommer and Ranjana Ram.
(e)Represents the compensation actually paid the Company's NEOs, as adjusted the table below.
| | | | | | | | | | | |
| | 2022 | 2021 |
Summary Compensation Table Total | | $ | 953,909 | | $ | 1,784,026 | |
Adjustments to Determine Compensation "Actually Paid" for Non-PEO NEOs | | | |
Deductions for amounts reported under the "Stock Awards" column in the SCT | | (1,683,941) | | (2,496,197) | |
Fair value of awards granted during the year that remain outstanding at year end | | 1,837,076 | | 2,246,633 | |
| | | |
Change in fair value of awards granted in prior years that remain outstanding at year end | | (95,186) | | 2,814 | |
Change in fair value from the end of the prior year to the vesting date for awards granted in prior years and vested in the current year | | (57,008) | | 40,692 | |
Deduction for fair value at the end of the prior year for awards granted in prior years that forfeited during the year (h) | | (1,307,570) | | — | |
Total compensation actually paid for Non-PEO NEOs | | $ | (352,720) | | $ | 1,577,968 | |
(f)Assumes $100 investment on December 31, 2020 in our common stock
(g)Represents the Company's net income on the consolidated statements of income reported in the Company's 2022 Annual Report on Form 10K.
(h)The forfeitures represent Mr. Vollkommer's outstanding awards at the time of his retirement in September 2022.
COMPENSATION OF DIRECTORS
The following table presents summary information regarding the total compensation for Priority's year ended December 31, 20202022 for our non-employee directors:
| Name of Director | Name of Director | | Fees Earned or Paid in Cash $ | | Stock Awards $ | | Option Awards $ | | Non-Equity Incentive Plan Compensation $ | | Change in Pension Value and Non-qualified Deferred Compensation $ | | All Other Compensation $ | | Total $ | Name of Director | Fees Earned or Paid in Cash $ | Stock Awards $ | Option Awards $ | Non-Equity Incentive Plan Compensation $ | All Other Compensation $ | Total $ |
| Marc Crisafulli1 | | Marc Crisafulli1 | 10,000 | — | 10,000 |
Marietta Davis | | Marietta Davis | 60,000 | 100,000 | — | 160,000 |
Christina Favilla | | Christina Favilla | 65,000 | 100,000 | — | 165,000 |
Stephen Hipp | | Stephen Hipp | 65,000 | 100,000 | — | 165,000 |
Michael Passilla | | Michael Passilla | 70,000 | 100,000 | — | 170,000 |
John Priore | John Priore | | 350,000 | | — | | — | | — | | — | | 18,070 | (1) | 368,070 | | John Priore | 60,000 | 100,000 | — | 160,000 |
| Marietta Davis * | | — | | — | | — | | — | | — | | — | | — | | |
| Christina Favilla | | 55,000 | | 100,000 | | — | | — | | — | | — | | 155,000 | | |
| William Gahan ** | | 41,667 | | 100,000 | | — | | — | | — | | — | | 141,667 | | |
| Stephen Hipp | | 2,823 | | — | | — | | — | | — | | — | | 2,823 | | |
| Matthew Kearney *** | | 62,500 | | 100,000 | | — | | — | | — | | — | | 162,500 | | |
| Michael Passilla | | 62,500 | | 100,000 | | — | | — | | — | | — | | 162,500 | | |
(1)
* Ms. DavisMr. Crisafulli joined the Board on January 1, 2021.
** Mr. Gahan retired from the Board and becameCompany as an employee of Priority as of December 10, 2020.
*** Mr. Kearney retired from the Board as of December 31, 2020.
independent, non-employee director in November 2022.
(1) Includes $18,070 in payments to Mr. John Priore for reimbursement of health insurance premiums for Mr. Priore and his eligible dependents, pursuant to his former employment agreement dated May 14, 2014 and amended November 13, 2018.
Narrative Disclosure to Director Compensation Table
Mr. John Priore
Until November 30, 2018, Mr. John Priore served as our President and Chief Executive Officer. Effective as of December 1, 2018, Mr. John Priore was appointed as our Vice-Chairman and served in that role through March 31, 2021.
Mr. John Priore entered into a Director Agreement with the Company dated December 1, 2018 (the “John Priore Director Agreement”). Pursuant to the John Priore Director Agreement, Mr. John Priore received a monthly fee of $20,833.34 ($250,000 per year) as Vice-Chairman. He was also eligible to receive a performance fee of up to $12,500 per quarter (up to $50,000 per year). Effective March 31, 2021, the John Priore Director Agreement terminated by its terms. Mr. John Priore, however, remains a director of the Company.
Independent Director Compensation
The independent directors have each entered an agreement to which each receives cash compensation of $50,000$60,000 per year, payable in monthly installments and a grant of restricted stock with a grant date fair value $100,000 which vests over four quarters. The chair of the Audit Committee received $15,000$10,000 in 20202022 in addition to their director cash compensation. The chair of the Nominating and Corporate Governance Committee and the chair of the Compensation Committee both received $5,000 in 20202022 in addition to their director cash compensation. Payment of each installment of the annual fee is subject to applicable restrictions under the debt and equity financing agreements of the Company and its subsidiaries. In the event any such restrictions prohibit payment of an installment
of the annual fee such amount will accrue interest at a rate of 6% per annum until such amount is permitted to be paid. The independent directors are reimbursed for reasonable and documented out-of-pocket expenses incurred by him or her in the performance of histheir duties.
OUTSTANDING EQUITY AWARDS AT 20202022 YEAR END
The following table provides information regarding unexercised stock options, stock that has not yet vested, and equity incentive plan awards for each NEO outstanding as of the end of 2020.2022. Each outstanding award is represented by a separate row that indicates the number of securities underlying the award.
| | | Option Awards | | | Stock Awards | | Option Awards | Stock Awards |
Name | Name | | Number of Securities Underlying Unexercised Options (Exercisable) (#) | | Number of Securities Underlying Unexercised Options (Unexercisable) (#) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | | Equity Incentive Plan Awards: Number of Unearned Shares of Stock, Units, or Other Rights That Have Not Yet Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares of Stock, Units or Other Rights That Have Not Yet Vested ($) (a) | Name | Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable) (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares of Stock, Units, or Other Rights That Have Not Yet Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares of Stock, Units or Other Rights That Have Not Yet Vested ($) |
| Thomas Priore | Thomas Priore | | — | | — | | — | | — | | — | | | — | | — | | Thomas Priore | — | 51,271 | | (a) | $ | 269,685 | |
| Michael Vollkommer | | — | | — | | — | | — | | — | | | 194,284 | | (b) | 1,367,759 | | |
| Timothy O'Leary | | Timothy O'Leary | — | 149,254 | | (b) | $ | 785,076 | |
Bradley Miller | Bradley Miller | | — | | — | | — | | — | | — | | | 104,603 | | (c) | 736,405 | | Bradley Miller | — | 252,301 | | (c) | $ | 1,327,098 | |
(a)
(a) Based on the closing price per share of the Company's common stock of $7.04 as traded on the Nasdaq Global Market on December 31, 2020.
(b) This December 2018 equity award agreement also allowsThe February 2021 grant to Mr. Vollkommer the eligibility to receive additional annual equity grants with a fair value of up to $750,000 each in December of each of the years 2019, 2020, 2021, and 2022, subject to Board approval. In February 2020, the Board approved the annual award for December 2019 by granting Mr. Vollkommer an additional 107,142 time-based restricted stock units of which 53,571 units vested on December 3, 2020 and 53,571 unitsPriore vests equally over two years. The remaining shares are scheduled to vest on December 3, 2021. In December 2020, the Board approved the annual award for December 2020 by granting Mr. Vollkommer an additional 140,713 time-based restricted stock units which are scheduled to vest 50% in December 2021 and 50% in 2022. At vesting, the Company has not guaranteed that the vested award will have any specific monetary value, nor may Mr. Vollkommer or the Company elect settlement in any deliverable other than shares of the Company's common stock.February 25, 2023.
(b)The September 2022 grant to Mr. O'Leary vests equally over three years.
(c)The February 2020 equity award agreement grantedawards outstanding for Mr. Miller 209,205are 200,000 shares granted on April 15, 2022 and 52,301 shares from his 2020 performance based and time-based restricted stock units of which 104,602 unitsservice grants that vested in February 2021, 52,302 units are scheduled to vest in February 2022 and 52,302 units are scheduled to vest in February 2023.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND EXECUTIVE OFFICERS
The following table sets forth information as of the Record Date regarding the beneficial ownership of our common stock by:
•each person known to be the beneficial owner of more than 5% of our outstanding shares of common stock;
•each director and each named executive officer; and
•all current executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
| | | | | | | | | | | | | | | | | | | | |
Name and Address of Beneficial Owner (1) | | Amount and Nature of Beneficial Ownership | | Approximate Percentage of Outstanding Common Stock (2) |
| | | | |
5% or Greater Stockholders (Other than below): | | | | |
None | | | | |
| | | | |
Directors and Named Executive Officers: | | | | |
Thomas Priore (3) | | 46,113,250 | | | 68.2 | % |
John Priore (4) | | 9,295,618 | | | 13.7 | % |
Sean Kiewiet | | 1,861,659 | | | 2.8 | % |
Michael Vollkommer | | 160,713 | | | * |
Bradley Miller | | 104,602 | | | * |
Ranjana Ram | | 164,353 | | | * |
Dave Faupel | | — | | | * |
Marietta Davis (6) | | 2,931 | | | * |
Christina Favilla (5)(6) | | 56,123 | | | * |
Stephen Hipp (6) | | 2,931 | | | * |
Michael Passilla (5)(6) | | 132,175 | | | * |
All directors and executive officers as a group (11 individuals) | | 57,894,355 | | | 85.4 | % |
| | | | | | | | | | | | | | | | | |
Name and Address of Beneficial Owner 1 | | Amount and Nature of Beneficial Ownership | | Approximate Percentage of Outstanding Common Stock 2 |
5% or Greater Stockholders (Other than below): | | | | |
Trident Finxera Holdings LP c/o Stone Point Capital 20 Horseneck Lane Greenwich, CT 05683 | | 5,193,039 | | 6.8 | % |
| | | | |
Directors and Named Executive Officers: | | | | |
Thomas Priore 3 | | 46,800,933 | | 61.3 | % |
John Priore 4 | | 9,324,316 | | 12.2 | % |
Sean Kiewiet | | 1,530,707 | | 2.0 | % |
Michael Vollkommer | | 228,749 | | * |
Bradley Miller | | 197,707 | | * |
Ranjana Ram | | 627,184 | | * |
| | | | |
Marc Crisafulli | | 20,000 | | * |
Marietta Davis 5 | | 30,174 | | * |
Christina Favilla 5 | | 82,047 | | * |
Stephen Hipp 5 | | 157,047 | | * |
Michael Passilla 5 | | 158,138 | | * |
All directors and executive officers as a group (11 individuals) | | 59,157,002 | | 77.4 | % |
______________________________
* Less than 1%
(1)
(1) Unless otherwise indicated, the business address of each of the individuals is c/o Priority Technology Holdings, Inc., 2001 Westside Parkway, Alpharetta, GA 30004.
(2)
(2) The percentage of beneficial ownership of Priority is calculated based on 67,781,14276,393,191 shares of common stock outstanding. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them as of the date indicated.
(3)
(3) Includes 10,000,000 shares of the Company's common stock directly held by Lori A. Priore, the spouse of Thomas C. Priore, in her capacity as trustee of the Thomas Priore 2019 GRAT, for the benefit of Lori A. Priore and the children of Thomas C. Priore and Lori A. Priore. Also includes 2,500,000 shares of the Company's common stock held by Lori A. Priore, the spouse of Thomas C. Priore, and Bernard H. Smyers, in their capacity as trustees of the Thomas C. Priore Irrevocable Insurance Trust u/a/d 1/8/2010, for the benefit of Lori A. Priore and the children of Thomas C. Priore and Lori A. Priore.
(4)
As of the Record Date, Thomas Priore had pledged, hypothecated or granted security interests in substantially 46,113,250 shares of our common stock held by him pursuant to a margin loan agreement. In the event of a default under the margin loan agreement, the secured parties may foreclose upon any and all shares of common stock pledged to them.
(4) Includes 9,295,618 shares of the Company's common stock directly held by AESV Credit Card Consulting LLC, which is controlled by John Priore. John Priore may be deemed to beneficially own such shares of stock directly or indirectly controlled by him.
(5)
(5) On April 1, 2020,February 25, 2022, the four independent board members were eachReporting Person was granted 53,19218,450 restricted stock units which vest 25% on April 1, 2020,2022, 25% on July 1, 2020,2022, 25% on October 1, 2020,2022, and 25% on January 1, 20212023 subject to the Reporting Person's continued service as a director of Priority.
(6) On April 1, 2021, the four independent board members were each granted 11,724 restricted stock units which vest 25% on April 1, 2021, 25% on July 1, 2021, 25% on October 1, 2021, and 25% on January 1, 2022 subject to continued service as a director of Priority.Issuer.
TRANSACTIONS WITH RELATED PERSONS
In-Kind Distributions of Common Stock of Priority
On April 6, 2020, Priority Incentive Equity Holdings, LLC ("PIEH") made in-kind distributions of 620,810 shares of common stock of Priority to Sean Kiewiet, a holder of ownership interest in PIEH. Thomas Priore is the managing member of Priority Investment Holdings LLC, which is the non-member manager of PIEH. Thomas Priore disclaimed beneficial ownership of the securities held by PIEH except to the extent of his pecuniary interest therein, if any.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
General
Our certificate of incorporation and bylaws currently provide that the number of directors constituting the Board shall be determined solely and exclusively by resolution duly adopted from time to time by the Board. There are sixseven directors presently serving on our Board, and the number of directors to be elected at this Annual Meeting is six.seven.
The Board proposes that the following sixseven director nominees be elected to the Board to serve until the next annual meeting in 2022,2024, or until his or her earlier resignation, death, or removal.
Nominees for Directors
Each nominee is listed below, along with their age as of the date of this proxy statement.Proxy Statement.
| | | | | | | | |
Name | | Age |
| | |
Thomas Priore | | 5254 |
John Priore | | 5759 |
Marc Crisafulli | | 54 |
Marietta Davis | | 6163 |
Christina Favilla | | 5456 |
Stephen P. Hipp | | 5355 |
Michael Passilla | | 5456 |
Certain biographical information about the nominees as of the date of this proxy statementProxy Statement can be found above under "Executive Officers and Board of Directors."
Vote Required
Pursuant to our bylaws, a nominee must receive the vote of a plurality of the votes cast with respect to that director's election by the shares present or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that the nominees who receive the most votes will be elected to the open director positions. Votes to abstain on Proposal Number One and broker non-votes will not be considered shares of stock entitled to vote on the election of directors and thus will not affect the outcome of this vote.
The Board recommends a vote FOR"FOR" the election of each of the director nominees listed above.
PROPOSAL NUMBER TWO
APPROVAL OF THE PRIORITY TECHNOLOGY HOLDINGS, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
General
The Board approved the Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan (the “2021 Stock Purchase Plan”) on April 16, 2021, subjectPursuant to shareholder approval. If the shareholders approve the 2021 Stock Purchase Plan, it will become operative on July 1, 2021. The 2021 Stock Purchase Plan is intended to encourage a sense of proprietorship on the partSection 14A of the Company’s eligible employees by assisting themSecurities Exchange Act (the “Exchange Act”), we are required to provide our stockholders with the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our NEOs as disclosed in making regular purchases of shares of Common Stock, thereby further aligningthis Proxy Statement in accordance with the interests of employees and shareholders in the future growth and financial success of the Company.
The 2021 Stock Purchase Plan is intended to qualify for favorable tax treatment under Section 423 of the Internal Revenue Code. Under the 2021 Stock Purchase Plan, eligible employees of the Company and its designated subsidiaries may purchase Common Stock, subject to IRS and other limits set forth in the 2021 Stock Purchase Plan, during pre-specified offering periods at a discount established by the Company not to exceed 5% of fair market value. If the 2021 Stock Purchase Plan is approved by the Company’s shareholders, our executive officers will be eligible to participate in the plan on the same terms and conditions as all other participating employees.
The material terms of the 2021 Stock Purchase Plan are summarized below. The summary is subject to and qualified in its entirety by reference to the full text of the 2021 Stock Purchase Plan, which is included as Appendix 1 to this proxy statement and incorporated herein by reference.
Summary of the Material Terms of the 2021 Stock Purchase PlanSEC’s rules.
PurposeAs described in detail in the Compensation of Executive Officers and Compensation of Directors sections above, our executive compensation programs are designed to attract, retain, and motivate executives of superior ability who are dedicated to the long-term interests of our stockholders. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term, and strategic goals, corporate goals, and the realization of increased stockholder value.
The 2021 Stock Purchase Plan is designed to provide eligible employeesHighlights of our executive compensation program, as described in the CompanyCompensation of Executive Officers and its designated subsidiaries with an opportunity to purchase Common StockCompensation of the Company through payroll deductions. The 2021 Stock Purchase Plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. Accordingly, the provisions of the plan shall be construed and operated in a manner consistent with the requirements of Section 423 of the Internal Revenue Code and the regulations promulgated thereunder.Directors section, include:
Administration•compensation programs that are performance-based and align executive officer incentives with stockholder interests over multiple timeframes;
•annual incentives that are earned based on performance measured against specific financial and strategic objectives for an executive’s area of responsibility, together with a qualitative assessment of performance;
•at-risk pay and compensation design that reflect an executive officer’s impact on Corporation performance over time; and
•appropriate risk management practices, including a clawback policy, anti-hedging policy, anti-pledging policy, stock ownership requirements, net share retention ratio, and net hold requirements with respect to equity grants.
The 2021 Stock Purchase PlanWe are asking our shareholders to indicate their support for our NEO compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation. This vote is administered bynot intended to address any specific item of compensation, but rather the Board, which may delegate authority underoverall compensation of our NEOs and the 2021 Stock Purchase Planphilosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to one or more persons designated byvote FOR the Board, including members of a committeeapproval, on an advisory basis, of the Board, memberscompensation of managementour NEOs, as disclosed in this Proxy Statement, including the Compensation of Executive Officers and Compensation of Directors section, the Company and/or members of2022 Summary Compensation Table, and the human resources function of the Company.other related tables and narrative discussion.
Shares Available UnderThough the 2021 Stock Purchase Plan
The maximum numbersay-on-pay vote is advisory, and therefore not binding, our Board of sharesDirectors and the Compensation Committee value the opinions of our Common Stock available for purchase understockholders, and the 2021 Stock Purchase Plan is 20,000. The Company has not yet issued any shares of Common Stock underCompensation Committee will consider the 2021 Stock Purchase Plan. As of April 16, 2021, the closing price of a share of Common Stock was $6.96.
Eligible Employees
Any eligible person who is employed by, and who is classifiedvoting results when making future decisions regarding executive compensation as an employee on the payroll records, of the Company or any of its designated subsidiaries on the first day of an offering period is eligible to participate in the 2021 Stock Purchase Plan, except
that any employee who owns 5% or more of the combined voting power or value of all of the issued and outstanding stock of the Company, after giving effect to the grant of an option to purchase shares under the 2021 Stock Purchase Plan, will not be eligible to participate. To be eligible, the employee must not be customarily employed for 20 hours or less per week or for not more than five months per year and must have been employed for at least 30 days. As of April 16, 2021, the number of employees who would be eligible to participate in the 2021 Stock Purchase Plan was approximately 475, which number represents all of the officers and employees of the Company and its designated subsidiaries.
Offering
Under the 2021 Stock Purchase Plan, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period. Unless a participant previously canceled his or her participation in the 2021 Stock Purchase Plan, the participant shall automatically purchase the number of whole shares of Common Stock that his or her accumulated payroll deductions will buy at the purchase price stated below. No fractional shares will be purchased. Accordingly, the balance of a participant’s contributions that results from not purchasing fractional shares will be carried forward to the next offering period unless the participant elects to withdraw from the 2021 Stock Purchase Plan or the administrator determines that such surplus shall not be carried forward subject to compliance with the Company’s insider trading policy. A participant may cancel his or her payroll deduction authorization at the time prior to the last day of the offering period established by the administrator. A participant will be deemed to have withdrawn from the 2021 Stock Purchase Plan if he or she ceases to be eligible to participate.
Offering Period
A decision on when to commence offering periods under the plan will be made if the 2021 Stock Purchase Plan is approved by the shareholders. Unless otherwise determined by the administrator, each offering period shall be for a period of three months, and it is expected that the initial offering period will begin on July 1, 2021.
Limitations
The 2021 Stock Purchase Plan limits the number of shares that a participant may purchase in a calendar year to the number of shares of Common Stock that has a fair market value (as of the date of grant of the option for the applicable offering period) equal to $25,000. Subject to the calendar year limits of $25,000, the participant may not contribute more than $5,000 per offering period (or such other amount as may be established by the administrator) nor more than forty percent (40%) of the Participant’s eligible compensation per offering period (or such other percentage as may be established by the administrator). The administrator may also set a maximum aggregate number of shares or maximum aggregate fair market value of shares that may be purchased with respect to any offering period.
Purchase Price
The purchase price per share with respect to an offering period shall be 95% of the lesser of the fair market value of a share on the first day of the offering period or the last day of the offering period; provided, however, the purchase price may be determined for subsequent offering periods by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule) or pursuant to an amendment to the Plan. For so long as the Common Stock is listed on NASDAQ or some other established stock exchange, the fair market value of a share of Common Stock on any given date will be equal to the closing sale price of Common Stock on the exchange on which it is listed on the immediately preceding trading date.
Acquisition of Shares
Any purchase of shares of Common Stock for a participant shall be effected at the end of each offering period. No participant has any rights as a shareholder until the issuance of the shares. No adjustments will be made for any dividends for which the record date is prior to the issuance of the shares. Notwithstanding any other provision of the 2021 Stock Purchase Plan, a
participant may not purchase in any offering period more than that number of whole shares which equals $25,000 divided by the fair market value of a share of Common Stock as of the first day of the offering period. Shares of Common Stock purchased under the Plan may be subject to any such holding restrictions that the Administrator shall determine to be appropriate with respect to any Offering Period consistent with Section 423 of the Code.
Change in Capitalization or Other Corporate Event
The number or kind of shares of Common Stock available for purchase under the 2021 Stock Purchase Plan, as well as the number or kind of shares covered by a purchase right under the 2021 Stock Purchase Plan that has not yet been exercised, shall be equitably adjusted as necessary or appropriate to reflect any stock dividend, extraordinary dividend, stock split or share recombination or any recapitalization, merger, consolidation, exchange of shares, spin-off, liquidation or dissolution of the Company or other similar transaction affecting the Common Stock.
Effect of a Change in Control
Upon a future Change in Control of the Company (as defined in the 2021 Stock Purchase Plan), the administrator, in its sole discretion, may take whatever action it deems necessary or appropriateappropriate. We expect to hold our next say-on-pay vote in connection therewith, including, but not limited to (i) shortening any offering period then in progress such that the last day of the offering period is on or prior to the Change in Control, (ii) shortening an offering period then in progress and refunding each participant’s contributions, (iii) cancelling all outstanding share purchase rights and paying each holder thereof an amount equal to the difference between the per share fair market value on the date of the Change in Control and the purchase price as determined in accordance with the plan or (iv) granting a substitute right to purchase shares in the surviving entity in accordance with Section 424 of the Internal Revenue Code.
Term of Plan
The 2021 Stock Purchase Plan shall terminate on the earlier of (i) April 16, 2031, (ii) the termination of the plan by the administrator as discussed below or (iii) the date on which no more shares of Common Stock are available for issuance under the plan.
Non-Transferability
No right or interest of a participant under the 2021 Stock Purchase Plan is transferable except for transfers by will or the laws of descent and distribution.
Amendment or Alteration
The administrator may at any time amend, suspend, discontinue or terminate the 2021 Stock Purchase Plan; provided that if the plan is amended in a manner that is considered the adoption of a new plan pursuant to Section 423 of the Code, such amendment shall not be effective until approved by the Company’s shareholders.
New Plan Benefits
No purchases have been made at this time under the 2021 Stock Purchase Plan. Participation in the 2021 Stock Purchase Plan is voluntary and depends on each employee’s election to participate and his or her determination as to the level of contributions to the 2021 Stock Purchase Plan. Accordingly, it is not possible to determine the future benefits that will be received under the plan.
Federal Income Tax Consequences
Generally, no income will be taxable to a participant at the time shares of Common Stock are purchased under the 2021 Stock Purchase Plan. Upon the sale or disposition of shares of Common Stock purchased under the 2021 Stock Purchase Plan, the participant generally will be liable for tax, and the amount of the tax will depend on the holding period of the shares. If the shares are sold or otherwise disposed of more than one year after the purchase date and more than two years after the first day of the applicable offering period, or if the participant dies prior to such sale or other disposition, then the participant generally will recognize ordinary income measured as the lesser of: (i) the excess of the fair market value of the shares at the time of such sale or disposition or death over the purchase price paid by the participant, or (ii) the excess of the fair market value of the shares on the first day of the applicable offering period over the purchase price paid by the participant. Any gain in excess of the amount of ordinary income recognized by the participant generally will be treated as long-term capital gain.
If the shares are sold or otherwise disposed of before the expiration of the one-year or two-year holding periods described above, and before the participant’s death, the participant generally will recognize ordinary income in an amount equal to the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the holding period of the shares.
The Company generally will not be entitled to a deduction with respect to shares of Common Stock purchased under the 2021 Stock Purchase Plan, unless the participant disposes of such shares prior to the expiration of the one-year or two-year holding periods described above. In that event, the Company generally will be entitled to a deduction only to the extent ordinary income is recognized by the participant upon a sale or disposition prior to the expiration of the holding periods described above.
2024.
Vote Required
The approval of Proposal Number Two2 requires the affirmative vote of a majority of the votes properly cast at our Annual Meeting. Abstentions are not considered votes cast and thus will not affect the outcome of this proposal. A broker or other nominee will generally have discretionary authority to vote on this proposal because it is considered a routine matter, and, therefore, we do not expect broker non-votes with respect to this proposal.
The Board recommends that youa vote FOR approval“FOR” Proposal Number 2
PROPOSAL NUMBER THREE
APPROVAL OF AN AMENDMENT TO OUR SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS
General
Our Board believes that each voting requirement in our Second Amended and Restated Certificate of Incorporation” (“Existing Certificate”) that calls for a greater than a simple majority vote are no longer needed and should be eliminated and replaced by a majority voting standard. Pursuant to this Proposal Three, we are proposing for stockholder approval a Certificate of Amendment to the Certificate to eliminate all such super-majority voting requirements contained in the Certificate. Our Board has determined that the Certificate of Amendment is in the best interests of the Company’s stockholders and unanimously adopted a resolution approving and declaring the advisability of the Certificate of Amendment, which changes the voting provisions in the Certificate as follows:
Amendments to the Certificate of Incorporation; Article V, Section A
Currently, if at any time when Priority Investment Holdings, LLC and Priority Incentive Equity Holdings, LLC or their affiliates (the “Priority Holders”) beneficially own, in the aggregate, less than 40% in voting power of the stock of the Company entitled to vote generally in the election of directors, the approval of at least 66 2/3% of the shares of the Company entitled to vote on such matter is required to amend, alter or repeal the Certificate. If this proposal is approved, the threshold approval for stockholders to amend or repeal the Certificate will be a vote of the majority of the outstanding shares of the Company entitled to vote on such amendment or repeal, which is the lowest allowable vote threshold under Delaware law.
Bylaw Amendments; Article V, Section B
Currently, if at any time the Priority Holders beneficially own, in the aggregate, less than 40% in voting power of the stock of the Company entitled to vote generally in the election of directors, the Certificate allows stockholders to amend or repeal our bylaws if at least 66 2/3% of the shares of the Company entitled to vote on such matter vote in favor of the amendment or repeal. If this proposal is approved, stockholders will have the ability to amend our bylaws with the affirmative vote of a majority of the shares cast and entitled to vote on such matter, which is the lowest allowable vote threshold under Delaware law.
Removal of Directors; Article VI, Section D
Currently, if at any time the Priority Holders beneficially own, in the aggregate, less than 40% in voting power of the stock of the Company entitled to vote generally in the election of directors, the approval of the holders of 66 2/3% of the votes that would be entitled to vote at an election of directors is required to remove a director from office prior to the expiration of his or her term with cause. If this proposal is approved, stockholders will have the ability to remove a director from office prior to the expiration of his or her term with cause with the affirmative vote of a majority of the shares of the Company entitled to vote at an election of directors, which is the lowest allowable vote threshold under Delaware law.
Stockholders’ Meeting; Article VII, Section B
Currently, if at any time the Priority Holders beneficially own, in the aggregate, at least 40% in voting power of the stock of the Company entitled to vote generally in the election of directors, any action required or permitted by the General Corporation Law of the State of Delaware to be taken at a stockholders’ meeting may be taken without a meeting and without prior notice and without a vote. If this proposal is approved, Priority Holders, regardless of their percentage of voting power of the stock of the Company, must hold a meeting in order to take any action.
This description of the proposed amendments to our Certificate is a summary and is qualified by the full text of the proposed Certificate of Amendment to our Certificate, which is attached to this Proxy Statement as Annex 1 and is incorporated herein by reference.
Vote Required
The approval of Proposal Number Three requires the affirmative vote of a majority of the votes properly cast at our Annual Meeting. Abstentions are not considered votes cast and thus will not affect the outcome of this proposal. A broker or other nominee will generally have discretionary authority to vote on this proposal because it is considered a routine matter, and, therefore, we do not expect broker non-votes with respect to this proposal
The Board of directors recommends that our shareholders vote FOR the approval of amendments to our Second Amended and Restated Certificate of Incorporation to eliminate supermajority voting requirements.
PROPOSAL NUMBER FOUR
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
The Audit Committee of the Board has appointed EY to serve as the Company's independent registered public accounting firm for the year ending December 31, 2021.2023. The Board is submitting the appointment of EY as the Company's independent registered public accounting firm for stockholder ratification and recommends that stockholders ratify this appointment. Stockholder ratification of the appointment of EY is not required by law or otherwise. The Board is submitting this matter to stockholders for ratification because the Board believes it to be a good corporate governance practice. If the stockholders do not ratify the appointment, the Audit Committee may reconsider whether to retain EY. Even if the appointment is ratified, the Audit Committee may appoint a different independent registered public accounting firm at any time during the year if, in its discretion, it determines that such a change would be in the Company's best interest and that of the Company's stockholders. A representative of EY is expected to attend the Annual Meeting, and he or she will have the opportunity to make a statement and will be available to respond to appropriate questions. For additional information regarding the Company's relationship with EY, please refer to the Audit Committee Report above.
Principal Accounting Fees and Services
The following table shows the fees for professional services provided by EY, our independent registered public accounting firm for fiscal year 2020,2022 and RSM US LLP (“RMS”), our independent registered public accounting firm for fiscal 2019,2021, in each of the last two years, in each case, at such times as they served as our independent auditors.years.
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| | 2020(1) | | 2019(2) |
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Audit fees | | $ | 1,038,000 | | | $ | 776,725 | |
Audit-related fees | | — | | | — | |
Tax fees | | 681,209 | | | — | |
All other fees | | 61,019 | | | — | |
Total | | $ | 1,780,228 | | | $ | 776,725 | |
(1)Represents fees for professional services provided by RSM and EY. EY has served as the Company's independent registered public accounting firm since June 2020.
(2)Represents fees for professional services provided by RMS, our independent registered public accounting firm for fiscal year ended December 31, 2019. | | | | | | | | | | | |
| 2022 | | 2021 |
Audit fees | $ | 1,960,750 | | | $ | 1,577,561 | |
Audit-related fees | — | | | — | |
Tax fees | 587,540 | | | 698,718 | |
All other fees | — | | | 455,760 | |
Total | $ | 2,548,290 | | | $ | 2,732,039 | |
AmountsThe amounts reported as audit fees are fees, including out-of-pocket expenses, for the current-year audit and related quarterly reviews irrespective of the period in which the related services are rendered or billed. Audit fees include fees associated with the annual audit of the Company’s consolidated financial statements included in the Annual Report on Form 10-K, review of quarterly reports on Form 10-Q, SEC regulatory filings, and statutory audits. The 2021 audit fees have been adjusted in the table above tableto reflect final billing for that fiscal year audit.
The amounts reported as audit-related, tax and all other fees are based on fees billed, including out-of-pocket expenses, for services rendered forduring the fiscal year, even if the auditor did not bill the registrant for those services until after year end. Tax fees include fees associated with tax compliance services, including the preparation, review and filing of certain tax returns, as well as tax advisory services. All other fees include fees associated with advisory services, including fees associated with the Company’s acquisition in 2021.
Fees for audit services for 2020 include the audit
Table of the Company's consolidated financial statements as of and for the year ended December 31, 2020 and review of the Company's quarterly reports on Form 10-Q for the three months ended March 31, 2020, the three months and six months ended June 30, 2020, and the three months and nine months ended September 30, 2020. Fees for audit services for 2019 include the audit of the Company's consolidated financial statements as of and for the year ended December 31, 2019 and review of the Company's quarterly reports on Form 10-Q for the three months ended March 31, 2019, the three months and six months ended June 30, 2019, and the three months and nine months ended September 30, 2019.Contents
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The Audit Committee has also adopted policies and procedures for pre-approving all non-audit work performed by EY. The Audit Committee has pre-approved the use, as needed, of EY for specific types of services that fall within categories of non-audit services, including various tax services. The Audit Committee receives regular updates as to the fees associated with the services that are subject to pre-approval. Services that do not fall within a pre-approved category require specific consideration
and pre-approval by the Audit Committee. All services rendered by EY in the table above were pre-approved by the Audit Committee.
Vote Required
The approval of Proposal Number FourThree requires the affirmative vote of a majority of the votes properly cast at our Annual Meeting. Abstentions will not affect the outcome of this proposal. A broker or other nominee will generally have discretionary authority to vote on this proposal because it is considered a routine matter, and, therefore, we do not expect broker non-votes with respect to this proposal.
The Board recommends a vote FOR"FOR" the ratification of the appointment of Ernst and Young LLP as the Company's independent registered public accounting firm for the year ending December 31, 2021.2023.
OTHER MATTERS
As of the date of this proxy statement, we know of no business that will be presented for consideration at the Annual Meeting, other than the items referred to above. If any other matter is properly brought before the Annual Meeting for action by stockholders, proxies in the enclosed form returned to the Company will be voted in accordance with the recommendation of the Board or, in the absence of such a recommendation, in accordance with the judgment of the proxy holder.
Stockholder Proposals and Director Nominations for the 20222023 Annual Meeting
We expect that our 20222024 Annual Meeting will be held in June 2022May 2024 consistent with our 20212023 Annual Meeting. Stockholders of record who intend to nominate a candidate for director or submit a proposal at the annual meeting of stockholders in 20222024 must provide written notice to the Company in accordance with our bylaws. Under our bylaws, such notice must be received at the Company's principal executive offices, addressed to the Secretary of the Company, not earlier than February 9, 2022January 26, 2024 nor later than March 11, 2022,February 24, 2024, which are dates at least 90 days but not more than 120 days in advance of the first anniversary of the date of the 20212023 Annual Meeting. Stockholders are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
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PRIORITY TECHNOLOGY HOLDINGS, INC. | VOTE BY INTERNET Before the Annual Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on 6/08/2021.May 23, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During the Annual Meeting - Go to www.virtualshareholdermeeting.com/PRTH2021.PRTH2023. You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements,Proxy Statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on 6/08/2021.May 23, 2023. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PRIORITY TECHNOLOGY HOLDINGS, INC. | | | | | | | | |
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The Board of Directors recommends that you vote FOR the election of the following sixseven director nominees: | | | | | The Board of Directors recommends that you vote FOR proposals 2, 3 and 4. | | | |
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Election of Directors | For | Against | Abstain | | | | For | Against | Abstain |
Nominees: | | | | | 2. Approval of the Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan. | | | |
1a. Thomas Priore | | | | | | | |
1b. John Priore | | | | | | | | |
1c. Marietta Davis | | | | | | | | |
1d. Christina Favilla | | | | | 3. Vote to approve an amendment to our Second Amended and Restated Certificate of Incorporation to eliminate supermajority voting requirements. | | | |
1e. Stephen Hipp | | | | | | | |
1f. Michael Passilla | | | | | | | |
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Please indicate if you plan to attend this meeting: | | | | | | | | |
| Yes | No | | | 4. Ratification of the appointment of Ernst and Young LLP as the Company's independent registered public accounting firm for the year ending December 31, 2021.2023.
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1a. Thomas Priore | | | | | | | | |
1b. John Priore | | | | | | | | |
1c. Marc Crisafulli | | | | | | | | |
1d. Marietta Davis | | | | | | | | |
1e. Christina Favilla | | | | | NOTE: To consider such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
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1f. Stephen Hipp | | | | | | | | |
1g. Michael Passilla | | | | | | | | |
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The Board of Directors recommends that you vote FOR proposals 2 and 3. | | | | | | | | | |
| For | Against | Abstain | | | | | | |
2. To approve, on a non-binding advisory basis,the compensation of our Named Executive Officers. | | | | | | | | | |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | |
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| | | | NOTE: To consider such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. | | | |
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Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | | Date | |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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PRIORITY TECHNOLOGY HOLDINGS, INC.
Annual Meeting of Stockholders
June 9, 2021 9:30May 24, 2023 11:00 A.M. Eastern Daylight Time
This proxy is solicited by the Board of Directors
The undersigned hereby appoints Thomas C. Priore and Bradley Miller, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Priority Technology Holdings, Inc. common stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held virtually on the Internet at www.virtualshareholdermeeting.com/PRTH2021PRTH2023 or any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting.
THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL SIXSEVEN NOMINEES UNDER PROPOSAL 1, FOR THE APPROVAL OF THE ESPP UNDER PROPOSALPROPOSALS 2 FOR THE APPROVAL OF THE AMENDMENT UNDER PROPOSALAND 3 FOR THE RATIFICATION OF THE APPOINTMENT OF EY UNDER PROPOSAL 4, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Continued and to be signed on reverse side