Exhibit 10.5

 

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FlexShopper, Inc.

 

Non-Employee Director Compensation Policy

 

Members of the Board of Directors (the “Board”) of FlexShopper, Inc. (the
“Company”) who are not employees of the Company or any subsidiary of the Company
and have not been appointed to the Board in connection with an Investor Rights
Agreement (“Directors”) shall be paid the following amounts in consideration for
their services on the Board. Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Company’s 2018 Omnibus
Equity Compensation Plan, or any subsequent equity compensation plans then in
effect (the “Plan”).

 

Annual Compensation

 

Cash or Equity Compensation

 

Each Director shall be paid an annual cash retainer of $40,000; provided, that
the Chairman of the Board shall be paid an annual cash retainer of $50,000.
Annual cash retainers shall be prorated for partial years of service and paid
quarterly in arrears. The first annual cash retainer paid under this Policy
shall be paid on the effective date of this Policy.

 

Each Director may elect to receive his or her annual cash retainer amount for
2019 in Options instead of cash by providing the Company notice of such election
on or before the Policy’s effective date. Options awarded pursuant to any such
election will be granted on the Policy’s effective date. Any Option awarded
pursuant to such election shall be exercisable for a number of shares of the
Company’s common stock (“Common Stock”) equal to the (i) dollar amount of such
annual cash retainer amount multiplied by (ii) 1.33. All Options granted in lieu
of an annual cash retainer shall vest in four equal quarterly installments
beginning on March 31, 2019.

 

Year-End Equity Compensation

 

On the date of this Policy, the Chairman of the Board shall be awarded a number
of Options to purchase 70,000 shares of Common Stock and each other Director
shall be awarded a number of Options to purchase 60,000 shares of Common Stock.
All Options awarded pursuant to this paragraph shall vest on the one-year
anniversary of the Grant Date.

 

Equity Award Terms

 

All Options issued pursuant to this Policy shall be made under and pursuant to
the Plan. Each such Option shall have an exercise price per share of Common
Stock equal to the Fair Market Value of such share on the Grant Date. Upon a
Separation of Service before any Options have vested due to the Director’s
death, or if there is a Change in Control prior to any Options having vested,
then such unvested Options shall become fully vested as of the date of such
death or Change in Control, as applicable. Upon a Separation of Service at any
time for any reason other than death or a Change in Control before any Options
have vested, then such unvested Options shall become vested pro rata (i) with
respect to Options awarded in lieu of an annual cash retainer, based on the
number of days between the more recent of the Option’s Grant Date or the date of
the last quarterly vesting date, divided by 90, or (ii) with respect to Options
awarded as Year-End Equity Compensation, based on the number of days between the
Option’s Grant Date and the date of cessation of services divided by 365, and in
each case to the extent such Option is not thereby vested such unvested portion
shall be forfeited as of the date of such Separation from Service. The Board, in
its sole discretion and in recognition for meritorious service, may elect to
vest up to 100% of a Director’s unvested equity awards upon a Director’s
retirement. Except as set forth above, Options issued pursuant to this Policy
shall have such other terms as set forth in the form of Award Agreement
previously approved by the Board.

 

 

 

 

Expense Reimbursement

 

The compensation described in this Policy is in addition to reimbursement of all
out-of-pocket expenses incurred by Directors in attending meetings of the Board.

 

Employee Directors

 

An employee of the Company who serves as a director on the Board or on the board
of directors of a Company subsidiary shall receive no additional compensation
for such service.

 

Section 409A

 

This Policy is intended to comply with Code Section 409A to the extent subject
thereto, and, accordingly, to the maximum extent permitted, the Policy shall be
interpreted and administered to be in compliance therewith. Any payments
described in this Policy that are due within the “short-term deferral period” as
defined in Code Section 409A shall not be treated as deferred compensation
unless applicable laws require otherwise.

Adopted Effective April 23, 2019