SMMC South Mountain Merger Corporation

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Your vote is important. You are cordially invited to attend the Annual Meeting. Whether or not you expect to attend the Annual Meeting, please complete, date, sign and return the enclosed proxy, or vote by telephone or over the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the Annual Meeting. A return envelope (which is postage prepaid if mailed in the United States) will be provided to you if you email a request for a proxy card. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder. If you have any questions or need additional information, please contact Georgeson LLC, the Company’s proxy solicitor, at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104, or by telephone at 866-821-2570.

We are making the Proxy Materials available because our Board is soliciting your proxy to vote at the Annual Meeting. You are invited to attend the Annual Meeting to vote on the proposals described in this Proxy Statement. However, you do not need to attend the Annual Meeting to vote your shares of our Class 1 Common Stock, $0.0001 par value per share (“Common Stock”). Instead, you may follow the instructions below to submit your proxy by telephone or over the internet or request a proxy card from us and complete, sign and return the proxy card in the envelope provided.

We intend to commence mailing to all stockholders of record entitled to vote at the Annual Meeting the Notice of Internet Availability of Proxy Materials on or about April 22, 2022. Additionally, we intend to post our Proxy Materials on the internet at www.proxyvote.com on or about April 22, 2022. We will mail printed copies of the Proxy Materials to stockholders who request them.

Our principal executive office is located at 1009 Lenox Drive, Suite 101, Lawrenceville, New Jersey 08648 and our telephone number is (609) 235-1010.

We are acting under a Securities and Exchange Commission (“SEC”) rule that allows companies to furnish proxy materials over the internet rather than in paper form. This rule allows a company to send its stockholders a notice regarding internet availability of proxy materials. Instructions on how to access proxy materials over the internet or how to request a paper copy of proxy materials may be found in the Notice. If you would prefer to receive our Proxy Materials in printed form by mail or electronically by email on an ongoing basis, please follow the instructions contained in the Notice.

The Annual Meeting will be held on Thursday, June 2, 2022 at 8:30 a.m. Eastern Daylight Time at BTRS Holdings Inc., 1009 Lenox Drive, Suite 101, Lawrenceville, New Jersey 08648. Directions to the Annual Meeting may be found at www.proxyvote.com. Information on how to vote in person at the Annual Meeting is discussed below.

Only stockholders of record at the close of business on April 4, 2022 will be entitled to vote at the Annual Meeting. On such record date, there were 159,954,910 shares of Common Stock outstanding and entitled to vote.

If on April 4, 2022 your shares were registered directly in your name with the Company’s transfer agent, Continental Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy, by telephone or over the internet as instructed on your proxy card or the Notice or to request a proxy card from us and complete, date, sign and return the proxy card in the envelope provided to ensure your vote is counted.

If on April 4, 2022 your shares were held in an account at a broker, bank or other agent, then you are the beneficial owner of shares held in “street name” and our Proxy Materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares in your account. Please refer to the voting instructions provided by your broker, bank or other agent. Many organizations enable beneficial owners to give voting instructions by telephone or over the internet as well as in writing. You are also welcomed to attend the Annual Meeting and vote in person. However, because you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you request and obtain a valid proxy (sometimes referred to as a “legal proxy”) from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with our Proxy Materials, or contact that organization to request a proxy form.

There are four matters scheduled for a vote:

Our Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.

You may either vote “For” each of the nominees to our Board or you may “Withhold” your vote for any nominee you specify. With regard to your non-binding advisory vote on how frequently we should solicit stockholder advisory approval of our executive compensation, you may vote for any one of the following: one year, two years or three years, or you may abstain from voting on that matter. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.

If you are a stockholder of record, you may vote at the Annual Meeting, vote by proxy over the telephone, or vote by proxy through the internet or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote at the meeting even if you have already voted by proxy.

Votes submitted by telephone, through the internet or by mail must be received by 11:59 p.m., Eastern Daylight Time, on June 1, 2021. Submitting your proxy (whether by telephone, over the internet or by mail if you request or receive a paper proxy card) will not affect your right to vote at the Annual Meeting should you decide to attend.

See “Who can vote at the Annual Meeting? — Beneficial Owner: Shares Registered in the Name of a Broker or Bank” for voting instructions if you beneficially own shares held in street name.

We provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

On each matter to be voted upon, you have one vote for each share of Common Stock you own as of April 4, 2022.

If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or in person at the Annual Meeting, your shares will not be voted.

If you return a signed and dated proxy card without marking voting selections, your shares will be voted as follows:

If any other matter is properly presented at the Annual Meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using their best judgment.

If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. In this regard, under the rules of the New York Stock Exchange (“NYSE”), brokers, banks and other securities intermediaries that are subject to NYSE rules may use their discretion to vote your “uninstructed” shares with respect to matters considered to be “routine” under NYSE rules, but not with respect to “non-routine” matters. In this regard, Proposal No. 1, the election of directors, No. 3, the approval, on a non-binding advisory basis, of our executive compensation, and No. 4, approval, on a non-binding advisory basis, of the frequency of future stockholder advisory votes to approve our executive compensation, are considered to be “non-routine” under NYSE rules meaning that your broker may not vote your shares on those proposals in the absence of your voting instructions. However, Proposal No. 2, the ratification of an independent registered public accounting firm, is considered to be a “routine” matter under NYSE rules meaning that if you do not return voting instructions to your broker, bank or other agent by its deadline, your shares may be voted by your broker, bank or other agent in its discretion on Proposal No. 2.

If you a beneficial owner of shares held in street name, and you do not plan to attend the Annual Meeting, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.

We will pay for the entire cost of soliciting proxies. We have retained Georgeson LLC (“Georgeson”) to assist in the solicitation of proxies at a base fee of $12,500, plus additional amounts, which will vary depending upon the extent of services actually performed, plus reimbursement for reasonable out-of-pocket expenses. In addition to the Proxy Materials, our directors and employees may also solicit proxies online, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokers, banks or other agents for the cost of forwarding our Proxy Materials to beneficial owners.

If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the Notice to ensure that your shares are voted.

Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:

Your most current proxy card or telephone or internet proxy is the one that is counted.

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by your broker, bank or other agent.

Stockholders who wish to present proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for inclusion in our proxy materials to be distributed by us in connection with our 2023 annual meeting of stockholders must submit their proposals to us on or before December 23, 2022.

Apart from Exchange Act Rule 14a-8, the Nominating and Corporate Governance Committee of our Board will consider candidates for director recommended by our stockholders, so long as such recommendations comply with our second amended and restated certificate of incorporation (the “Charter”) and our amended and restated bylaws (the “Bylaws”) and applicable laws, rules and regulations. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth below, based on whether or not the candidate was recommended by a stockholder. Submissions must include, among other information, the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of our Common Stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. We must receive the notice of a stockholder’s intention to introduce a nomination or proposed item of business at our 2023 annual meeting of stockholders:

Assuming that our 2023 annual meeting of stockholders is held within 30 days of the anniversary of the Annual Meeting, we must receive notice of a stockholder’s intention to introduce a nomination or other item of business at the 2023 annual meeting of stockholders no later than March 4, 2023 and no earlier than February 2, 2023.

Stockholders who wish to present a proposal pursuant to Exchange Act Rule 14a-8 or recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board or introduce an item of business at an annual meeting may do so in writing to BTRS Holdings Inc., Attn: Aimie Killeen, Chief Legal Officer and Secretary, 1009 Lenox Drive, Suite 101, Lawrenceville, New Jersey 08648.

Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, (i) for Proposal No. 1 to elect directors, votes “For,” votes “Withheld” and broker non-votes, (ii) with respect to Proposal No. 2, the ratification of an independent registered public accounting firm, and Proposal No. 3, approval, on a non-binding advisory basis, of our executive compensation, votes “For” and “Against,” abstentions and, if applicable, broker non-votes and (iii) with respect to Proposal No. 4, approval, on a non-binding advisory basis, of the frequency of future stockholder advisory votes to approve executive compensation, votes for frequencies of one year, two years or three years, abstentions and broker non-votes.

As discussed above, when a beneficial owner of shares held in street name does not give voting instructions to his or her broker, bank or other agent holding his or her shares as to how to vote on matters deemed to be “non-routine” under NYSE rules, the broker, bank or other such agent cannot vote the shares. These un-voted shares are counted as “broker non-votes.” Proposal Nos. 1, 3 and 4 are considered to be “non-routine” under NYSE rules and we therefore expect broker non-votes to exist in connection with these proposals.

As a reminder, if you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.

The following table summarizes the minimum vote needed to elect directors and approve each of the matters scheduled for vote at the Annual Meeting and the effect of abstentions and broker non-votes.

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the voting power of the outstanding shares entitled to vote at a meeting are present at the meeting in person or represented by proxy. On the record date, April 4, 2022, there were 159,954,910 shares of Common Stock outstanding and entitled to vote. Thus, the holders of 79,977,456 shares must be present in person or represented by proxy at the Annual Meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other agent) or if you vote at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of the voting power of the shares present at the Annual Meeting or represented by proxy may adjourn the Annual Meeting to another date.

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a current report on Form 8-K within four business days after the Annual Meeting. In the event we are unable to obtain the final voting results within four business days, we will file the preliminary voting results in a current report on Form 8-K within four business days following the Annual Meeting, and will file an amended current report on Form 8-K with the final voting results within four business days after the final voting results are known.

Mr. Bernicker has served as a director of our Board since January 2021. Mr. Bernicker served as the Chief Executive Officer of South Mountain and as a member of the South Mountain board of directors from February 2019 until the closing of the Business Combination. Mr. Bernicker is also the Chief Executive Officer and a director of North Mountain Merger Corp. Mr. Bernicker most recently served as a consultant to Repay Holdings Corp (Nasdaq: RPAY) management team on their merger with Thunder Bridge Acquisition Ltd. in July 2019 and the International Money Express Inc. (Nasdaq: IMXI) management team in connection with their merger with FinTech Acquisition Corp. II in July 2018. From 2012 until it was acquired by First Data Corp. (NYSE: FDC) in July 2017, Mr. Bernicker was the Chief Financial Officer of CardConnect, which merged with FinTech Acquisition Corp., a former special purposes acquisition company, in July 2016. From 2010 until 2012, Mr. Bernicker was an Executive Director of Heartland Payment Systems, a merchant acquirer and payment processor. From 2008 until 2010, Mr. Bernicker was a Senior Vice President of Fraud Strategy for Bank of America and, prior to that, Mr. Bernicker held several leadership positions with Commerce Bancorp, prior to its acquisition by TD Bank NA in March 2008. Prior to joining Commerce Bancorp, from 2000 until 2004, Mr. Bernicker was the Chief Financial Officer of C/Base Inc., dba eCount, a stored-value card issuer. Mr. Bernicker was also a member of the Card Operations Risk Executive Council for Visa/USA. Prior to that, Mr. Bernicker was a member of the audit group in the Philadelphia office of Ernst & Young, LLP. Mr. Bernicker holds a bachelor’s degree in accounting from the University of Delaware. Mr. Bernicker is qualified to serve on the Board based on his significant experience leading and growing companies as an executive in financial services, financial technology and retail banking.

Mr. Harris has served as a director of our Board since January 2021 and prior to this served as a director of Legacy Billtrust since November 2012. Mr. Harris has also been a Partner at Bain Capital Ventures since September 2012. Prior to joining Bain Capital Ventures, Mr. Harris founded Village Ventures, Inc., an early stage venture capital firm focused on the media and financial services sectors, and served as Managing Director from January 2000 to September 2012. Mr. Harris has served as a member of the board of directors of Flywire Corporation, a global payments enablement and software company, since January 2015 and of AvidXchange Holdings, Inc., a provider of accounts payable automation software and payment solutions for middle market businesses and their suppliers, since July 2015. Mr. Harris holds a B.A. in Political Economy from Williams College. Mr. Harris is qualified to serve on our Board based on his extensive experience investing in and guiding companies in the financial services industry.

Ms. Hart has served as a director of our Board since January 2021 and prior to this served as a director of Legacy Billtrust since October 2018. Ms. Hart has served as Chief Executive Officer of Williams Lea since April 2019 and as a member of the board of directors of Cast & Crew, a payroll and human resources solutions company for the entertainment industry, since March 2019. Previously, Ms. Hart served as Chief Executive Officer, President and as a member of the board of directors of Sterling Talent Solutions, a leading provider of background and identity services, from May 2013 to May 2018. From 2012 to 2016, Ms. Hart served as a member of the board of directors of Regulatory Data Corporation, including as Lead Director and Chair of the Compensation Committee, and from 2010 to 2012, Ms. Hart served as Chief Executive Officer, President, and as a member of the board of directors of Infogroup, Inc., a data analytics and marketing services provider. Ms. Hart holds a B.S. in Finance & Computer Systems Management from Drexel University and an MBA from Rider University. Ms. Hart is qualified to serve on our Board based on her significant experience leading global expansion and growth strategies in software and information services companies and her expertise in compensation, strategy and governance.

Mr. Farrell has served as a director of our Board since January 2021 and prior to this served as a director of Legacy Billtrust since July 2015. From March 2016 to July 2021, Mr. Farrell served as Chairman of the board of directors of GlobalTranz Enterprises, LLC (“GlobalTranz”), including as Executive Chairman from January 2019 to

September 2020, and as Chief Executive Officer from September 2020 to July 2021 and from March 2016 to January 2019. Mr. Farrell has served as a member of the board of directors of Recycle Track Systems, Inc. since October 2018, GAN Integrity Inc. since July 2019, TransImpact since March 2020, and Worldwide Express, LLC (“Worldwide Express”) since July 2021. Mr. Farrell has also served as Senior Advisor at PSG Equity, a private equity firm specializing in growth-oriented investments in media, communications, software and services, since January 2016. Mr. Farrell previously served as Chief Executive Officer of Kewill Inc. from October 2012 to December 2015. Prior to joining Kewill Inc., Mr. Farrell served as the President and Chief Executive Officer of EDGAR Online, Inc. from March 2011 until it was acquired by RR Donnelley & Sons (Nasdaq: RRD) in August 2012. Prior to joining EDGAR Online, Mr. Farrell served as Chairman of the board and CEO of Metastorm, Inc., a leading provider of business process management enterprise software and solutions, from August 2002 until it was acquired by Open Text (Nasdaq: OTEX) in February 2011. Mr. Farrell is qualified to serve on our Board based on his significant board experience and his extensive leadership, financial, sales, operations management and corporate governance experience in high-growth software and technology driven companies.

Mr. Murray has served as a director of our Board since April 2022. Since May 2012, Mr. Murray has served as consultant to The Riverside Company, a private equity firm, guiding portfolio companies to transformational outcomes by adopting new technologies and processes, restructuring operations and executing strategic acquisition and/or disposal of business units. Since April 2022, Mr. Murray has served as a member of the board of directors of EventsAir, a leader in innovative event technology solutions based in Brisbane, Australia. Mr. Murray served as chair of the board of directors of CreditIQ, a high-growth fintech software business delivering an end-to-end solution for online and in-store car sales, from January 2020 until it was acquired by Cars.com (NYSE: CARS) in November 2021. From December 2017 to December 2019, Mr. Murray served as the Chief Executive Officer of Paypro Corporation, a privately-owned payroll and benefits company. From January 2018 to July 2019, Mr. Murray served as a member of the board of directors of Paradigm Tax Group, a national consulting tax firm (“Paradigm”), and prior to that served as an advisor to the board of directors from 2014 to 2017, also performing various operational roles at Paradigm through this time. Mr. Murray also served as senior advisor to n2y LLC, an e-learning provider, from July 2016 to April 2017. In addition, Mr. Murray served as a member of the board of directors of DentalPlans.com, a leading dental and health savings online marketplace, from December 2012 to June 2017. Mr. Murray began his career in the investment banking group at First Boston Corporation (later acquired by Credit Suisse) and Stone & Youngberg LLC (later acquired by Stifel Nicolaus & Company Inc.), and has served on many non-profit boards and local and state-wide commissions by political appointment. Mr. Murray holds a B.S. in Finance from the Marshall School of Business at the University of Southern California and an MBA from the Haas School of Business at UC Berkeley. Mr. Murray is qualified to serve on our Board based on his successful track record of leading a variety of different organizations and extensive experience in executive management and leadership, corporate finance, strategic integration and the technology industry.

Ms. Spottiswood has served as a director of our Board since January 2021 and prior to this served as a director of Legacy Billtrust since December 2020. From May 2011 to June 2021, Ms. Spottiswood served as a member of the board of directors and as Chairwoman of the audit committee of Cardtronics PLC (Nasdaq: CATM), a leading provider of fully integrated ATM and financial kiosk products and services. From October 2017 to December 2020, Ms. Spottiswood served as Chief Executive Officer and Chairwoman of the board of directors of Syncapay, Inc., a holding company that she formed in 2017 in conjunction with an acquisition of daVinci Payments. In December 2020, daVinci Payments merged with North Lane Technologies, forming Onbe, Inc., a corporate funded payments company where she currently serves as Chairman of the board of directors. From October 2014 to July 2015, Ms. Spottiswood served as General Manager of Blackhawk Engagement Solutions, a division of Blackhawk Network Holdings Inc. (“Blackhawk”), a leading prepaid and payments network. Previously, Ms. Spottiswood was the President and Chief Executive Officer of Parago, Inc., a tech-enabled marketing services and payments company that she co-founded in 1999 and sold to Blackhawk in 2014. Ms. Spottiswood was also a founding member of the Network Branded Prepaid Card Association and remained on the board of directors until 2013. Ms. Spottiswood holds a Bachelors of Business Administration in Accounting from the University of Texas. Ms. Spottiswood is qualified to serve on our Board based on her significant leadership and board experience in the electronic payments and financial technology industries, as well as her financial expertise.

The following Board Diversity Matrix provides the self-identified personal characteristics for our Board:

As required under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board consults with the Company’s counsel to ensure that our Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.

Our Board has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, our Board determined that Messrs. Bernicker, Farrell, Harris, Irving, and Murray and Messes. Hart and Spottiswood, representing seven of the eight directors, qualify as independent directors, as defined under the listing standards of Nasdaq. In making these determinations, our Board considered the current and prior relationships that each non-employee director has with us and all other facts and circumstances that our Board deemed relevant in determining their independence, including the beneficial ownership of our Common Stock by each non-employee director and the transactions involving them described in “Certain Relationships and Related Person Transactions.” Our Board determined that Mr. Lane is not considered independent given his position as our Chief Executive Officer.

There are no family relationships among the directors and executive officers.

Pursuant to our Corporate Governance Guidelines, our Board does not require the separation of the offices of the Chairman and the Chief Executive Officer. Currently, our Board believes that it is in the best interests of us and our stockholders for our Chief Executive Officer, Mr. Lane, to serve as both Chief Executive Officer and Chairman given his extensive knowledge of the Company and industry and his strategic vision, which we believe provides us with optimally effective leadership. Our Board believes that retaining flexibility in these decisions is in the best interests of us and our stockholders. In the event that we do not have an independent chairperson of the Board, the independent directors may designate a lead independent director. Our Board periodically reviews our leadership structure and may make such changes in the future as it deems appropriate and in the best interests of us and our stockholders.

One of the key functions of our Board is informed oversight of our risk management process. Our Board has a standing Risk Management Committee and administers this oversight function directly through the Risk Management Committee, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board and Risk Management Committee are responsible for monitoring and assessing strategic risk exposure and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our Audit Committee also monitors compliance with legal and regulatory requirements. Our Compensation Committee also assesses and monitors whether our compensation plans, policies and programs comply with applicable legal and regulatory requirements.

Our Board met seven times in the fiscal year ended December 31, 2021. Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committees on which they served, held during the portion of fiscal year ended December 31, 2021 for which they served as director or committee member. In addition, we encourage all of our directors and nominees for director to attend our annual meeting of stockholders, but attendance is not mandatory.

Generally, each regular meeting of our Board includes the opportunity for an executive session of our independent directors without management present. The Board of Directors may invite attendance by one or more members of management to participate in part or all of any such executive session at their discretion. Executive sessions and separate meetings of the independent directors are also held from time to time, as needed, but no less than two times per year.

Below is a description of each committee of our Board. Copies of the charters for each committee are available on the Corporate Governance section of the Company’s website at https://investors.billtrust.com/corporate-governance/governance-overview.

Our Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that each of the members of the Audit Committee satisfies the independence requirements of the Nasdaq listing standards and Rule 10A-3 under the Exchange Act. Our Board has also determined that Mr. Irving qualifies as an “audit committee financial expert” within the meaning of applicable SEC rules. The Board made a qualitative assessment of Mr. Irving’s level of knowledge and experience based on a number of factors, including his formal education and experience as a chief financial officer for public reporting companies. In addition, our Board has determined that each member of the Audit committee can read and understand fundamental financial statements in accordance with Nasdaq audit committee requirements. In arriving at this determination, the Board examined each audit committee member’s scope of experience and the nature of their prior and/or current employment.

The functions of the Audit Committee include, among other things:

Our Board reviews the Nasdaq listing standards definition of independence for Compensation Committee members on an annual basis and has determined that each of the members of the Compensation Committee satisfies the independence requirements of the Nasdaq listing standards and Rule 10C-1 under the Exchange Act, is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act, and is an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code (the “Code”). In arriving at this determination, our Board examined each Compensation Committee member’s scope of experience and the nature of their prior and/or current employment.

The functions of the Compensation Committee include, among other things:

Each year, the Compensation Committee reviews with management the Company’s Compensation Discussion and Analysis (“CD&A”) and considers whether to recommend that it be included in proxy statements and other filings.

Typically, the Compensation Committee meets at least quarterly and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the Chief Talent Officer and at times with Pearl Meyer & Partners, LLC (“Pearl Meyer”), the Company’s independent compensation consultant. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Committee. In particular, the Compensation Committee has the sole

authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the compensation committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent.

During the fiscal year ended December 31, 2021, after taking into consideration the six factors prescribed by the SEC and Nasdaq described above, the Compensation Committee engaged Pearl Meyer as compensation consultants. The Compensation Committee requested that Pearl Meyer:

As part of its engagement, Pearl Meyer was requested by the Compensation Committee to develop a comparative group of companies and to perform analyses of competitive performance and compensation levels and design for that group. At the request of the Compensation Committee, Pearl Meyer also engaged in discussions with members of the Compensation Committee and senior management to learn more about the Company’s business operations and strategy, key performance metrics and strategic goals, as well as the labor markets in which the Company competes. Pearl Meyer ultimately developed recommendations that were presented to the Compensation Committee for its consideration. Following an active dialogue with Pearl Meyer, the Compensation Committee considered Pearl Meyer’s input as part of its decision-making process.

Our Board has determined that each of the members of the Nominating and Corporate Governance Committee satisfies the independence requirements of the Nasdaq listing standards.

The functions of the Nominating and Corporate Governance Committee include, among other things:

Our Board has determined that each of the members of the Risk Management Committee satisfies the independence requirements of the Nasdaq listing standards.

The functions of the Risk Management Committee include, among other things:

Our Board will determine the appropriate characteristics, skills, and experience for our Board as a whole and for its individual members. Our Board considers recommendations for nominees from the Nominating and Corporate Governance Committee. Our Board will consider the minimum general criteria below, and may add any specific additional criteria with respect to specific searches, in selecting candidates and existing directors for serving on our Board. An acceptable candidate may not fully satisfy all of the criteria, but is expected to satisfy nearly all of them. Our Board believes that candidates for director should have certain minimum qualifications, including the highest personal integrity and ethics, the ability to read and understand basic financial statements, and being over 21 years of age.

Our Board and the Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, our Board and the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time.

Candidates for director nominees are reviewed in the context of the current composition of our Board and the competencies of the individual members, the current and future operating requirements of the Company and the long-term interests of stockholders, with the objective of having a balanced and effective Board that reflects a variety of characteristics, perspectives, skills and professional experience. The Nominating and Corporate Governance Committee’s review and periodic assessments of the characteristics, perspectives, skills and professional experience it seeks in our Board as a whole, and in individual directors, in connection with its review of our Board’s composition, enables it to assess the effectiveness of its goal of achieving a balanced and effective Board with diversity. Our Board considers diversity (including diversity of gender, ethnic background and country of origin), age, skills and other factors that it deems appropriate to maintain a balance of knowledge, experience, and capability on our Board.

In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviewed these directors’ service to the Company, including the number of meetings attended, level of participation, quality of performance and any relationships and transactions that might impair the directors’ independence, as well as the overall composition of our Board and the desire to add new skill sets, expertise and diversity to the Company. In the case of all director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary.

The Nominating and Corporate Governance Committee uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of our Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to our Board by majority vote.

Interested parties wishing to communicate with our Board or with individual members of our Board may do so by writing to the Board or to the particular members of the Board, and mailing the correspondence to BTRS Holdings Inc., Attn: Aimie Killeen, Chief Legal Officer and Secretary, 1009 Lenox Drive, Suite 101, Lawrenceville, New Jersey 08648. Our Chief Legal Officer, in consultation with appropriate members of our Board as necessary, will review all incoming communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our Board, or if none is specified, to the Chairman of the Board.

Our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our Code of Business Conduct and Ethics is posted on the Corporate Governance portion of our website at https://investors.billtrust.com/corporate-governance/governance-overview. We intend to disclose future amendments to certain provisions of our Code of Business Conduct and Ethics, or waivers of such provisions, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and our directors, on our website identified above.

As part of our Board’s commitment to enhancing stockholder value over the long term, our Board has adopted a set of Corporate Governance Guidelines to provide the framework for the governance of the Company and to assist our Board in the exercise of its responsibilities. Our Corporate Governance Guidelines cover, among other topics, Board composition and structure, Board membership criteria including diversity, Board leadership, director independence, Board and Board committee assessments, committees of the Board, Board access to management and outside advisors, director orientation and education and management succession planning. The full text of our Corporate Governance Guidelines is posted on the Corporate Governance portion of our website at https://investors.billtrust.com/corporate-governance/governance-overview.

Our insider trading policy prohibits our employees, including officers, and directors from pledging or engaging in hedging or similar transactions in our securities, including but not limited to prepaid variable forwards, equity swaps, margin accounts, collars, exchange funds, puts, calls and short sales.

Our longstanding corporate values are at the center of our culture: Customer Commitment, Family First, Listen Actively, Unique Individuals, Fiscally Responsible, Results Matter, Open Mindedness, Accountability & Ownership, and Invincibility. Every year we recognize team members that practice and promote our values in their actions and performance with our annual Founder’s Award and Culture Champions programs, which include special rewards including vacation packages, gift cards and other perks.

We have been named among New Jersey’s 2021 Best Places to Work by NJBIZ, a leading business journal, in acknowledgement of our positive work environment that celebrates the unique contributions of team members and connects employees at all levels with opportunities to grow. Employee feedback is crucial to how we measure our success. We conduct regular employee Net Promoter Score surveys to continually measure employee engagement and better understand and identify additional ways to support our workforce.

In addition, we seek to foster an inclusive work environment where each individual can bring their unique self, which helps drive innovation and enables us to better serve our customers. In 2021, we increased female representation at management levels to 31%. Our Employee Resource Groups are integral to fostering inclusion and belonging in our global workplace.

We are committed to growing our philanthropic presence across the communities in which we operate and throughout the world. In 2021, we established a Corporate Social Responsibility (“CSR”) function to advance our sustainable business practices and drive social impact in our communities through activities including partnerships with non-profit organizations, company-sponsored volunteer time-off and other employee volunteering initiatives, and corporate and matching grants. In 2021, 100% of our senior executives took part in CSR programming. We intend to release an update in 2022 outlining our progress on key corporate sustainability practices and company-sponsored social impact programs.

As described above, BDO was appointed as our independent registered accounting firm in January 2021, upon the dismissal of Marcum. BDO had audited the financial statements of Legacy Billtrust since 2015.

The following tables present the aggregate fees billed by BDO and Marcum to us (including Legacy Billtrust, in the case of BDO) for the years ended December 31, 2021 and 2020.

All fees incurred subsequent to the closing of the Business Combination in January 2021 were pre-approved by our Audit Committee.

Our Audit Committee has procedures in place for the pre-approval of audit and non-audit services rendered by the Company’s independent registered public accounting firm, BDO. Our Audit Committee generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of our Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.

The Audit Committee has determined that the rendering of services other than audit services by BDO is compatible with maintaining the principal accountant’s independence

THE BOARD OF DIRECTORS RECOMMENDS

A VOTE “FOR” THE RATIFICATION OF BDO AS THE COMPANY’S INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR 2022.

Below are the biographies of our current executive officers, other than Mr. Lane, whose biography appears above under “Proposal No. 1 – Election of Directors.”

Steven Pinado. Mr. Pinado has served as our President since January 2021 and prior to this served as the President of Legacy Billtrust since March 2018. Mr. Pinado has served as a member of the board of directors of Encompass+Orchestra Software, a private business management software company, since April 2020. Prior to joining Legacy Billtrust, Mr. Pinado served as Group CEO at Jonas Software, a provider of enterprise management software solutions to a broad range of industries, from September 2013 to March 2018. As Group CEO at Jonas Software, Mr. Pinado oversaw all North American business units and acquisition activity in the payments, fitness, recreation, camp, membership management, association management and IP licensing technology categories. Mr. Pinado holds a B.A. in Finance from Morehouse College and an MBA from the Tuck School of Business at Dartmouth.

Mark Shifke. Mr. Shifke has served as our Chief Financial Officer since January 2021 and prior to this served as the Chief Financial Officer of Legacy Billtrust since February 2020. Prior to joining Legacy Billtrust, Mr. Shifke held various executive leadership positions at Green Dot Corporation from June 2011 to December 2019, most recently serving as Chief Financial Officer from May 2015 to December 2019 and SVP Corporate Strategy, M&A from June 2011 to December 2019. Previously, Mr. Shifke was a Managing Director at J.P. Morgan Chase from 2007 to 2011. Mr. Shifke holds a B.A. in Political Science and Government from Tulane University, a J.D. from Tulane University Law School and an LL.M. in Taxation from New York University School of Law.

Joe Eng. Mr. Eng has served as our Chief Information Officer since January 2021 and prior to this served as the Chief Information Officer of Legacy Billtrust since February 2020. Mr. Eng also serves as Senior Advisor at Sixth Street Partners, a global investment firm. Prior to joining Billtrust, Mr. Eng served as Chief Information Officer at TravelClick, Inc. from July 2013 to June 2019 and as EVP - Chief Information Officer at JetBlue Airways from March 2008 to September 2011. Mr. Eng holds a B.A. in Computer Science from Rutgers University and a M.S. in Computer Science from New York University.

Jeanne O’Connor. Ms. O’Connor has served as our Chief Talent Officer since January 2021 and prior to this held various leadership positions at Legacy Billtrust from January 2011 to January 2021, most recently serving as Legacy Billtrust’s Senior Vice President, Human Resources. Prior to joining Legacy Billtrust, Ms. O'Connor served as Human Resources Manager at Lumeta Corporation from May 2006 to January 2011 and as a human resources consultant at Flarion Technologies from 2004 to 2006 and at ITXC Corporation from 2000 to 2004, respectively. Ms. O’Connor was also a senior compensation consultant at Prudential Financial (formerly Prudential Healthcare) from 1997 to 2000. Ms. O’Connor holds a B.S. in Business Management and a B.A. in Psychology, each from Montclair State University.

Aimie Killeen. Ms. Killeen has served as our Chief Legal Officer and Secretary since January 2022 and prior to this served as Executive Vice President, General Counsel and Company Secretary at Cardtronics plc from March 2017 to October 2021. Previously, Ms. Killeen served as General Counsel for Directcash Payments Inc. from March 2013 until its acquisition by Cardtronics plc in March 2017. Prior to Directcash Payments Inc., Ms. Killeen had been in private practice at an international law firm. Ms. Killeen holds a Bachelor of Business and a Bachelor of Laws from the University of Technology, Sydney, Australia.

We are a leading provider of cloud-based software and integrated payment processing solutions that simplify and automate business-to-business (“B2B”) commerce. For businesses around the world, there is a high degree of cost, risk, and complexity in timely receiving cash and recognizing revenue; we solve these problems by addressing both sides of the payment equation, delivering an order-to-cash platform that spans credit-to-cash application and collection, integrated with an open network connecting the B2B payments ecosystem. Our solution is at the forefront of the ongoing digital transformation of accounts receivable (“AR”), providing mission-critical solutions that span credit decisioning and monitoring, online ordering, invoicing, cash application, and collections. Our Business Payments Network (“BPN”) connects B2B buyers and sellers to a community of banks, FinTechs, and card brands. We automate payments from digital lockbox to final posting in enterprise resource planning (“ERP”), bridging receivables with buyers’ payment processes so sellers can manage cash flow more strategically and make it easier for customers to do business with them.

As of December 31, 2021, over 2,400 enterprise and middle-market customers use or are being onboarded to our platform to help them manage their AR operations and process payments. We have customers across diversified industry verticals, including technology, healthcare, industrial, wholesale distribution, consumer packaged goods, and others. Our customers include many of the largest Fortune 500 companies, as well as high-growth Fortune 1,000 and middle-market businesses. Generally, our customers are in high-bill volume industries with complex billing needs, including those with a diverse customer base, multiple distribution channels, and numerous product SKUs. Our technology, distribution, and support can be configured to the specific billing and payment needs of customers in each of these verticals.

On January 12, 2021, we announced the completion of our Business Combination. We believe that the Business Combination and being a public company better positions us to better serve our customers and offers significant capital flexibility for continued growth, both organic and inorganic, to continue our journey.

Our strong results in fiscal 2021 were driven by outperformance in our core software and payments segment and the favorable secular trend of AR digitization. In 2021, we also made significant financial and operational progress, establishing a strategic European presence with our acquisition of iController, a leading B2B provider of intelligent solutions for collections management. Our BPN showed strong continued growth in 2021 (BPN Total Payment Volume growth of 99% year-over-year) and strategic progress, and we have now signed 4 of the top 5 U.S. bank issuers as BPN processing partners. Following are key financial highlights for 2021:

Our executive compensation program has three primary elements: base salary, annual incentives, and long-term equity incentives. Each of these compensation elements serve a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on long-term sustainable stockholder value creation. Based on our performance and consistent with the design of our compensation program, the Compensation Committee made the following executive compensation decisions for fiscal year 2021 in our first year of being a publicly-traded company:

During the fiscal year ending December 31, 2021, we became a “large accelerated filer” pursuant to SEC rules and exited the “emerging growth company” status as defined in the Jumpstart Our Business Startups Act. As such, our stockholders will have their first opportunity to cast a non-binding advisory vote to approve our executive compensation at the Annual Meeting. In the future, we intend to consider the outcome of such say-on-pay votes when making compensation decisions regarding our NEOs. Following the vote at the Annual Meeting, and depending on the outcome of Proposal No. 4 (regarding the frequency of future say-on-pay votes), our next say-on-pay vote is expected to occur at our 2023 annual meeting of stockholders.

Our executive compensation philosophy is driven by the following guiding principles that underpin the critical connections between performance, long-term value creation, talent management, compensation governance and our cultural values:

Our executive compensation philosophy is supported by the following key elements of pay:

The executive compensation program uses a mix of fixed and variable pay, with an emphasis on variable pay. The program is calibrated to strike a meaningful balance between achieving strong short-term annual results and ensuring long-term viability and success. Accordingly, the mix of incentives is reviewed and determined regularly by the Compensation Committee based on the short- and long-term objectives of the business. The charts below show the target annual total direct compensation for our CEO and our other NEOs for fiscal year 2021 consisting of each NEO’s annual base salary, target annual incentive, and the grant date fair value of stock options granted to the NEO in fiscal year 2021. These charts show that a majority of executive compensation is variable (94% for our CEO and averaging 92% variable for our other NEOs).

 

The Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our NEOs. The Compensation Committee is comprised of independent, non-employee members of the Board. The Compensation Committee works very closely with its independent compensation consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. Details of the Compensation Committee’s authority and responsibilities are set forth in its charter, which may be accessed on our website at https://investors.billtrust.com/corporate-governance/governance-overview. The Compensation Committee makes all final compensation and equity award decisions regarding our NEOs, except for the CEO whose compensation is determined by the independent members of the Board based upon the recommendations of the Compensation Committee.

The Role of Management. Members of our management team attend regular meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated. Only the Compensation Committee members are allowed to vote on decisions regarding NEO compensation. The CEO reviews his recommendations for the compensation of other executives (non-NEO) with the Compensation Committee, providing management input, transparency, and oversight. Decisions on non-NEO pay are made by the CEO. The CEO is not present and does not participate in the deliberations of the Compensation Committee regarding his own compensation. Independent members of the Board make all final determinations regarding CEO compensation, based upon the recommendations of the Compensation Committee.

The Role of the Independent Compensation Consultant. The Compensation Committee engages an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs. Pursuant to authority granted to it under its charter, the Compensation Committee has hired Pearl Meyer as its independent compensation consultant. Pearl Meyer reports directly to the Compensation Committee and does not provide any additional services to management. The Compensation Committee has conducted an independence assessment of Pearl Meyer in accordance with SEC rules and has determined that Pearl Meyer does not have any conflict of interest relating to the work it is performing for the Compensation Committee.

The Role of Peer Group Companies. The Compensation Committee’s objective is to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. For purposes of setting 2021 compensation levels, in conjunction with the recommendation of Pearl Meyer, the Compensation Committee took into account publicly available data for a group of peer companies (the “2021 Compensation Peer Group”) listed below along with industry-specific survey data where appropriate. Selection criteria for determining and reviewing the 2021 Compensation Peer Group, used to establish the competitive market for the NEOs, generally include:

The 2021 Compensation Peer Group analysis for purposes of establishing 2021 compensation resulted in the selection of the following companies:

The Compensation Committee used the data from the 2021 Peer Group companies to determine appropriate base salary increases and equity grants to award to NEOs. This market data is not the sole determinant in setting pay levels for our NEOs. Actual pay levels can be above or below the targeted levels depending on factors such as experience, individual or company performance, tenure, employee potential, unique skills, criticality of the position to the Company, and other factors. In general, the Compensation Committee desires to balance general internal and external equity and can exercise discretion to deviate when necessary to recruit employees or retain the right talent.

Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract, motivate and retain executive leadership talent. In making base salary decisions, the Compensation Committee considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The Compensation Committee takes into account several factors such as competitive market data, individual performance, experience, tenure, internal equity, and employee potential. For 2021, the Compensation Committee approved merit-based salary increases for the NEOs, other than Mr. Lane who did not receive a base salary increase for 2021, as follows:

Our 2021 Incentive Compensation Plan is designed to motivate and reward our executives for achievements relative to our goals and expectations for each fiscal year. The 2021 Incentive Compensation Plan provided our NEOs the opportunity to earn a performance-based annual cash bonus. Actual payouts depend on the achievement of pre-determined financial performance objectives and can range from 0% to 150% of target award amounts. Target annual bonus opportunities are expressed as a percentage of base salary and were established according to the NEO’s level of responsibility and ability to impact overall results. Material considerations in determining annual cash bonuses include the overall performance of the Company, the level of achievement of the corporate objectives for the year and the executive’s handling of unplanned events and opportunities. The Compensation Committee considers the CEO’s input with respect to our performance against our established corporate objectives. Based on these factors and the judgment of our Compensation Committee, we approved the bonuses in the table below for our NEOs for the fiscal year ended December 31, 2021. Target award opportunities, defined as a percentage of each NEO’s base salary, for 2021 were as follows:

2021 Financial Performance Metrics, Weightings and Results. In 2021, we used net revenue and adjusted gross margin as the financial performance metrics in the 2021 Incentive Compensation Plan because we believe it is important to focus on top-line growth, as well as profitability. Revenue ensures we are delivering an appropriate level of top-line growth, while adjusted gross margin keeps us focused on efficient delivery and execution, allowing us to drive long-term stockholder value creation. The chart below shows the 2021 financial performance goals, as well as actual results.

2021 Incentive Compensation Plan Payouts. Based on the above financial performance results, the funding of the 2021 Incentive Compensation Plan was set at 150% of each NEO’s applicable bonus target. The following table lists the actual payout earned by the NEOs in 2021 (and paid in 2022):

On January 12, 2021, the Board approved equity awards across its workforce to recognize and reward the successful completion of the Business Combination. The 2021 equity awards to our NEOs were granted using 100% stock options and sized based on internal equity, employee potential and equity grant history. Stock options are intended to align the interests of award recipients with those of stockholders, since options deliver value only if our stock price appreciates after they are granted. Currently, all of these option awards are underwater.

The 2021 awards for each NEO were as follows:

The stock options vest over a four-year period, with 12.5% of shares subject to each stock option vesting every six months following the date of grant, expire on the tenth anniversary of the grant date, and have an exercise price of $16.80 per share. Continued vesting of the stock options is subject to the NEO’s continued employment through each vesting date.

Following the closing of the Business Combination, our NEOs had contingent rights to receive shares of Common Stock in respect of their vested stock options held at the time of the Business Combination (“Earnout Shares”) and restricted stock units in respect of their unvested stock options held at the time of the Business Combination (“Earnout RSUs”), in either case, if the average closing price of our Common Stock exceeded certain thresholds prior to the fifth anniversary of the closing of the Business Combination. The first issuance of Earnout Shares and Earnout RSUs was based on the volume-weighted average price of Common Stock exceeding $12.50 for any 20 trading days within any 30-trading day period (the “First Earnout”). The second issuance of Earnout Shares and Earnout RSUs was based on the volume weighted average price of Common Stock exceeding $15.00 for any 20 trading days within any 30-trading day period (the “Second Earnout”). After the closing of the Business Combination, the First Earnout and the Second Earnout were achieved, and as a result, the Earnout Shares and Earnout RSUs were granted on March 24, 2021. The Earnout RSUs are subject to the same vesting terms and conditions as the underlying unvested stock options and are not replacement awards.

As we continue to evolve as a business, we recognize that the structure of our legacy equity awards is more representative of private companies and must now evolve with the transition of our business strategy. The Compensation Committee continuously evaluates its approach to long-term equity incentive compensation and is committed to putting forth a program that aligns the interests of our executives and stockholders each year.

At the end of fiscal year 2021, the Compensation Committee transitioned from stock options to time-based restricted stock units (“RSUs”) as the sole equity vehicle for new hire, discretionary, and annual awards. The decision to shift to time-based RSUs was in response to changing market trends, to enhance employee retention and to continue to incentivize employees. The Compensation Committee believes the time-based RSUs will better align the interests of the employees and the Company’s shareholders. Time-based RSUs awarded to the NEOs vest annually over a three-year period. When determining the size of each equity award, the Compensation Committee considers several factors such as competitive market data, individual performance, internal equity, and employee potential. Under special circumstances, the Compensation Committee may grant additional equity awards to the NEOs for retention or in recognition of outstanding performance.

As part of our ongoing efforts to maintain the highest levels of good governance, we have adopted an Executive Officer Compensation Recoupment Policy which applies to all individuals who are or were Section 16 executive officers at the time they received certain incentive compensation (including cash bonuses and equity based on financial performance) from the Company. The policy provides that in the event of a restatement of financial results due to material non-compliance by the Company with any financial reporting requirement under federal securities law, the Compensation Committee may require that all incentive-based compensation received by the executive officer during the three fiscal years preceding the restatement be recouped to the extent that the amount of incentive compensation actually paid is greater than the amount of incentive compensation that would have been paid based on the restated results. The policy is intended to comply with applicable federal law, including but not limited to, any final rules promulgated under Section 954 of the Dodd-Frank Act.

Our insider trading policy prohibits our employees, including officers and directors, from pledging or engaging in hedging or similar transactions in our securities, including but not limited to prepaid variable forwards, equity swaps, collars, exchange funds, puts, calls and short sales.

Our NEOs are eligible to participate in our employee benefit plans, including medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees. We pay the premiums for the life, long-term disability, accidental death and dismemberment insurance, for all employees, including our NEOs. We generally do not provide perquisites or personal benefits.

We maintain a 401(k) plan that provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees, including our NEOs, are able to defer eligible compensation up to certain limits in the Code, which are updated annually. We have the ability to make matching and discretionary contributions to eligible participants under the 401(k) plan. We, from January 14, 2021 to December 31, 2021, and Legacy Billtrust, from January 1, 2021 to January 13, 2021, made matching contributions to each participant’s 401(k) account in an amount equal to 50% of the participant’s contributions, up to 6% of the participant’s eligible compensation. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax-exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings on those amounts are not generally taxable to participants until withdrawn or distributed from the 401(k) plan.

Similarly, our NEOs may participate in our Employee Stock Purchase Plan (the “ESPP”), along with our other employees. Pursuant to the ESPP, all eligible employees, including our NEOs, may allocate up to 15% of the employee’s earnings (as defined in the ESPP) for that year to purchase our Class 1 common stock at up to a 15% discount to the market price, subject to specified limits.

We regularly consider the various tax and accounting implications of our compensation plans. When determining the amount of long-term incentives and equity grants to executives and employees, the compensation costs associated with such grants are reviewed, as required by FASB ASC Topic 718.

Section 162(m) of the Code generally places a $1 million limit on the amount of compensation a publicly-held company may deduct in any tax year on compensation paid to each “covered employee,” which includes our NEOs. While the Compensation Committee considers tax deductibility as one of many factors in determining executive compensation, the Compensation Committee will award or modify compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not tax-deductible by us.

We believe that a majority of an executive’s total compensation should be variable “at-risk” compensation that is tied to the Company’s financial performance. However, because performance-based incentives play a large role in our compensation program, we strive to ensure that incentives do not result in actions that may conflict with the long-term best interests of the Company and our stockholders. Therefore, the Compensation Committee periodically evaluates all of our plans and policies (applicable to executives and employees below the executive level) for attributes that could result in excessive risk-taking.

We concluded that our programs and policies do not encourage excessive risk-taking because: (a) the salary component of our program is a fixed amount; (b) the majority of the average compensation paid to our executive officers is delivered in the form of equity ownership, which aligns the interest of our executives with those of our stockholders; and (c) the annual cash-based incentive plan and long-term incentive plans are designed with risk-mitigating characteristics such as (i) maximum award payouts based on the attainment of various and continually evolving Company financial objectives which diversify risks associated with a single indicator of performance, (ii) our equity-based incentives encourage a longer-term focus through multi-year vesting periods, (iii) our risk-mitigating policies in place such as clawbacks and insider trading policies and hedging prohibitions, and (iv) review and approval of final awards and quarterly updates by the Compensation Committee (and the independent members of the Board in the case of the CEO), which is composed entirely of independent directors who have discretion under our plans to approve, modify, or eliminate any award earned.

below under “— Potential Payments Upon Termination or Change in Control.” Mr. Shifke is also eligible for standard benefits such as paid time off, for reimbursement of business expenses, and to participate in employee benefit plans and programs. Mr. Shifke’s employment is at will.

Mr. Eng. In February 2020, Legacy Billtrust entered into an employment agreement with Mr. Eng. This agreement governs the current terms of Mr. Eng’s employment with us. Pursuant to his employment agreement, Mr. Eng was initially entitled to an annual base salary of $300,000, which was increased to $305,000 in February 2021, and was initially eligible to receive an annual target bonus of $150,000, which was increased to $152,500 in February 2021, payable based on the achievement of performance goals as established by the Compensation Committee. Mr. Eng is also entitled to certain severance benefits, the terms of which are described below under “— Potential Payments Upon Termination or Change in Control.” Mr. Eng is also eligible for standard benefits such as paid time off, for reimbursement of business expenses, and to participate in employee benefit plans and programs. Mr. Eng’s employment is at-will.

Ms. O’Connor. Pursuant to her employment arrangement with us, Ms. O’Connor was entitled to an annual base salary of $250,000 in 2020 upon her promotion to Chief Talent Officer, which was most recently increased to $255,000 in February 2021, and was eligible to receive an annual target bonus of $100,000, which was increased to $120,000 in February 2021, payable based on the achievement of performance goals as established by the Compensation Committee. Ms. O’Connor is also entitled to certain severance benefits, the terms of which are described below under “— Potential Payments Upon Termination or Change in Control.” Ms. O’Connor is also eligible for standard benefits such as paid time off, for reimbursement of business expenses, and to participate in employee benefit plans and programs. Ms. O’Connor’s employment is at-will.

The following table presents information concerning estimated payments and benefits that would be provided in certain circumstances for each of our NEOs serving as of the end of the fiscal year ending December 31, 2021. Unless otherwise stated, the payments and benefits set forth below are estimated assuming that the termination of employment or change in control event occurred on the last business day of our fiscal year ending December 31, 2021, using the closing market price per share of our Common Stock on that date. Actual payments and benefits could be different if such events were to occur on any other date or at any other price or if any other assumptions are used to estimate potential payments and benefits.

We have entered into certain arrangements or agreements with each of our NEOs that provide our NEOs with severance protections. The employment arrangements or agreements provide that the NEOs will be eligible for severance benefits in certain circumstances following a termination of employment by the Company without “cause” or resignation by the NEO for “good reason,” (each, as defined in the NEO’s employment agreement or applicable arrangement, and referred to herein as a “qualifying termination”), whether or not in connection with a change in control.

Under the employment agreements with each of Messrs. Lane, Pinado, Shifke, and Eng, if the NEO experiences a qualifying termination absent a “change in control” (as defined in the NEO’s employment agreement), then the executive will be entitled to receive the following severance payments and benefits:

However, if such qualifying termination occurs within three months prior to or 12 months following a change in control, the executive instead will be entitled to receive the following severance payments and benefits:

In addition, if the NEO’s employment is terminated, regardless of a change in control, by the Company without cause, or by the executive for good reason, then the NEO will be entitled to receive: (i) any portion of the target annual bonus that is based on the achievement of individual interim or year-end objectives that have been met at the time of the qualifying termination, regardless of whether such termination occurs before the end of the applicable year and the actual calculation of such bonus for such year, (ii) any portion of the target annual bonus that is based on subjective performance will be paid in accordance with our applicable bonus policy, and (iii) a pro-rata portion of the target annual bonus that is based on achievement of corporate performance objectives, with such proration determined based on the number of days during the year of such termination that the executive worked and with the applicable corporate performance determined based on actual achievement for such year.

The severance payments and benefits described above are subject to the executive’s execution and non-revocation of a general release of claims in favor of the Company and continued compliance with customary confidentiality and non-solicitation requirements.

Pursuant to each NEO’s employment agreement, if the NEO’s employment is terminated due to death or “disability” (as defined in the NEO’s employment agreement), the NEO or the NEO’s estate will be entitled to the cost of COBRA continuation coverage for all health plans and programs that the NEO or the NEO’s covered dependents participated in immediately prior to the NEO’s termination, for up to 12 months following the NEO’s termination, and immediate vesting of all unvested options that otherwise would have vested during the 12-month period following the NEO’s termination. In addition, in the event of termination due to death, NEO’s estate will be entitled to continued payment of his base salary for 12 months following his death.

Pursuant to our Executive Severance Plan Including in the Event of a Change of Control, which is applicable to Ms. O’Connor, if Ms. O’Connor’s employment is terminated by us involuntarily, and subject to her delivery to us of a general release of claims, Ms. O’Connor will be entitled to (i) continued payment of her base salary for six months after her termination date, (ii) a pro-rata portion of any bonus payable to her for the year in which her termination occurs, with such proration determined based on the number of days during such year that Ms. O’Connor worked and with the applicable corporate performance determined based on actual achievement, and (iii) the cost of COBRA continuation coverage for all health plans and programs that Ms. O’Connor or her covered dependents participated in immediately prior to her termination for up to six months following her termination date. In addition, in the event that Ms. O’Connor’s employment is terminated by us involuntarily prior to the period beginning three months prior to a change of control and ending on the first anniversary of such change in control (such period, a “change in control period”), and subject to her delivery to us of a general release of claims, Ms. O’Connor will be entitled to the vesting of all unvested equity awards that otherwise would have vested during such six-month period following Ms. O’Connor’s termination. In the event that Ms. O’Connor’s employment is terminated by us involuntarily during a change in control period, and subject to her delivery to us of a general release of claims, Ms. O’Connor will be entitled to the vesting of all unvested equity awards that otherwise would have vested during such 12-month period following Ms. O’Connor’s termination.

The following table shows for the fiscal year ended December 31, 2021 certain information regarding the potential payments upon termination or change in control for our NEOs.