NewtekOne, Inc.

The Company must compete for leadership with commercial banks, bank holding companies, financial holding companies, investment banks, and other publicly traded companies, which are generally able to award many different types of stock-based compensation to their officers, employees and directors, (including their non-employee directors). On September 12, 2014, the Board of Directors voted to establish the Newtek Business Services Corp. 2014 Stock Incentive Plan (the “2014 Plan”). The 2014 Plan was approved by shareholders of the Company on October 22, 2014. The 2014 Plan provided for the grant of options to purchase Common Shares, the terms of which were determined by the Nominating Committee and set forth in an award agreement between the Company and the executive or employee. The Company did not issue any options historically under the 2014 Plan. On April 27, 2015, the Nominating Committee and the Board of Directors approved the Amended and Restated

2014 Stock Incentive Plan (the “2015 Stock Plan”) and on July 27, 2016, our shareholders approved the 2015 Stock Plan. The 2015 Stock Plan permitted us to issue awards of stock options and Restricted Stock in an aggregate amount of up to 20% of our issued and outstanding Common Shares as of the effective date of the plan.

In connection with our 2023 conversion to a financial holding company, the Board of Directors in April 2023 terminated the 2015 Stock Plan and approved the Company’s 2023 Stock Incentive Plan (the 2023 Stock Plan), which was approved by the Company’s shareholders on June 14, 2023. The 2023 Stock Plan permits us to issue Restricted Stock and stock options up to an aggregate amount of 3,000,000 shares of Common Stock. The number of Restricted Stock issued and outstanding will not at the time of issuance of any Restricted Stock exceed 10% of the outstanding voting securities of the Company, and no more than 500,000 shares of Common Stock may be issued through incentive stock options. The Nominating Committee believes that Restricted Stock is the best method of encouraging stock ownership in the Company by eligible participants by giving them a proprietary interest in the Company’s performance, which more closely aligns compensation with the Company’s performance and provides a means to attract and retain persons of outstanding ability in key positions with the Company. Restricted Stock awards are based on the employee’s and the Company’s performance and the mix and weighting of the factors vary, depending on the business segment and the employee’s responsibilities. The level of achievement and the overall contribution by the employee determines the quantity of the Restricted Stock award.

The Company’s Board of Directors and its Nominating Committee, which consists entirely of directors who are not employees of the Company, believe that in light of the Company’s plan for growth, stock-based incentive compensation, particularly the award of Restricted Stock, advances the interests of the Company by providing substantial motivation for superior performance and more fully aligning the interests of officers, directors and employees with the interests of our shareholders.