Item 9A. Controls and Procedures
ITEM 9A. Controls and Procedures
(a)
Evaluation of disclosure controls and procedures
Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, Bogota Financial Corp. evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.
(b)
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management, including our Principal Executive Officer and Principal Financial Officer, concluded that our internal control over financial reporting was effective and met the criteria of the “Internal Control — Integrated Framework (2013)” as of December 31, 2023.
(c)
Attestation Report of the Registered Public Accounting Firm
Not applicable because the Company is an emerging growth company.
(d)
Changes in Internal Controls.
There were no changes made in our internal controls during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, Bogota Financial Corp.’s internal control over financial reporting.
ITEM 9B. Other Information
During the three months ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5 - 1 (c) or any “non-Rule 10b5 - 1 trading arrangement,” as that term is used in SEC regulations.
Employment Agreement with Kevin Pace. On March 27, 2024, Bogota Savings Bank (the “Bank”), the wholly owned subsidiary of the Company, entered into an employment agreement with Kevin Pace, President and Chief Executive Officer of the Bank and the Company. The agreement has an initial term through December 31, 2025. Beginning on January 1, 2025, and each January 1 thereafter, the term of the agreement extends automatically for one additional year so that the term will be two years from the date of such renewal unless either the Bank or Mr. Pace gives written notice no later than 30 days before the renewal date that the term will not be renewed. At least 30 days prior to each renewal date, disinterested members of the board of directors of the Bank will conduct a comprehensive performance evaluation of Mr. Pace’s performance to determine whether to renew the employment agreement.
Pursuant to the employment agreement, Mr. Pace will receive an annual base salary of $380,000, which may be increased, but not decreased, other than a percentage decrease ( not greater than 10% ) applicable to all members of senior management. In addition to his base salary, the employment agreement provides that Mr. Pace may receive a bonus on a discretionary basis, as determined by the Compensation Committee, and/or will be eligible to participate in any bonus plan or arrangement of the Bank in which senior management is eligible to participate. Mr. Pace is also entitled to participate in all employee benefit plans, arrangements and perquisites offered to the senior management of the Bank as well as reimbursement of reasonable travel and other business expenses incurred in the performance of his duties with the Bank, including memberships in organizations as Mr. Pace and the board of directors of the Bank mutually agree are necessary and appropriate. In addition, the Bank shall provide Mr. Pace with a company-owned or leased automobile (or a reasonable car allowance) and shall pay or reimburse Mr. Pace for the reasonable maintenance, insurance, gas, tolls and other charges related to the business of the automobile in accordance with the Bank’s automobile policy.
The Bank may terminate Mr. Pace’s employment with or without “cause” (as defined in the employment agreement) at any time, and Mr. Pace may resign at any time with or without “good reason” (as defined in the employment agreement). In the event of Mr. Pace’s termination by the Bank without cause (other than due to death or disability) or Mr. Pace’s voluntary resignation for “good reason” (in either case a “qualifying termination event”), the Bank would pay Mr. Pace a cash severance payment equal to 24 months of his base salary, payable in equal bi-weekly installments for 24 months, commencing within 60 days following his date of termination. In addition, provided that Mr. Pace timely elects continue coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), Mr. Pace would receive 18 consecutive monthly cash payments equal to his monthly COBRA premium in effect as of the date of termination for the level of coverage in effect for Mr. Pace under the Bank’s group health plan. The payments and benefits described above are subject to Mr. Pace executing, and not revoking, a release of claims against the Bank.
If a qualifying termination event occurs on or after a change in control of the Bank or the Company, Mr. Pace would be entitled to (in lieu of the payments and benefits described in the previous paragraph) a severance payment equal to two times the sum of his ( 1 ) annual base salary in effect as of the date of his termination or immediately prior to the change in control, whichever is higher; and ( 2 ) the average annual cash bonus earned for the two most recently completed performance periods prior to the change in control. Such payment is payable in bi-weekly installments for a period of two years, commencing within 30 days following Mr. Pace’s date of termination. In addition, Mr. Pace would receive 18 consecutive monthly cash payments equal to his monthly COBRA premium in effect as of the date of termination for the level of coverage in effect for Mr. Pace under the Bank’s (or successor’s) group health plan immediately before his termination.
If Mr. Pace’s employment is terminated due to his voluntary resignation without good reason, termination for cause, death or disability, the employment agreement will immediately terminate, and the Bank would have no obligation to pay any additional severance benefits to Mr. Pace under the employment agreement.
Upon termination of employment (other than a termination in connection with a change in control), Mr. Pace will be required to adhere to one -year non-competition and non-solicitation restrictions set forth in his employment agreement.
The non-competition and non-solicitation covenants apply following a change in control for a period mutually to be agreed to by the parties, which will be no less than six months nor exceed two years. In the event payments and benefits provided to Mr. Pace become subject to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the Bank shall obtain an independent appraisal of the value of the non-competition and non-solicitation covenants, and the aggregate value of the parachute payment (as defined in Code Section 280G ) will be reduced by the appraised value of the covenants.
The foregoing description of the employment agreement does not purport to be complete and is qualified in its entirety by reference to the agreement attached hereto as Exhibits 10.2 of this Annual Report on Form 10 -K and is incorporated by reference into this Item 9B.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
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PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
Information regarding directors, executive officers and corporate governance of the Company is presented under the headings “Proposal 1 — Election of Directors,” “Corporate Governance — Code of Ethics for Senior Officers” and “— Committees of the Board of Directors — Audit Committee” in the Company’s definitive Proxy Statement for the 2024 Annual Meeting of Stockholders (the “Proxy Statement”) and is incorporated herein by reference. Additionally, no directors or officers of Bogota Financial Corp failed to file on a timely basis any reports required by Section 16(a) of the Exchange Act during 2023.
Bogota Financial Corp. has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions. A copy of the Code of Ethics is available on Bogota Financial Corp.’s website at www.bogotasavingsbank.com under “Investor Relations.”
ITEM 11. Executive Compensation
Information regarding executive compensation is presented under the headings “Executive Compensation,” and “Corporate Governance — Director Compensation” in the Proxy Statement and is incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
(a)
Securities Authorized for Issuance under Stock-Based Compensation Plans
The following table sets forth information regarding outstanding options and shares under equity compensation plans at December 31, 2023:
(a)
(b)
(c)
Plan Category
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plan approved by security holders
752,638
$
10.45
149,968
Equity compensation plan not approved by security holders
-
-
Total
752,638
$
10.45
149,968
(b)
Security Ownership of Certain Beneficial Owners
The information required by this item is incorporated herein by reference to the section captioned “Stock Ownership” in the Proxy Statement.
(c)
Security Ownership of Management
The information required by this item is incorporated herein by reference to the section captioned “ Stock Ownership” in the Proxy Statement.
(d)
Changes in Control
Management of Bogota Financial Corp. knows of no arrangements, including any pledge by any person of securities of Bogota Financial Corp., the operation of which may at a subsequent date result in a change in control of the registrant.
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ITEM 13. Certain Relationships and Related Transactions, and Director Independence
Information regarding certain relationships and related transactions, and director independence is presented under the heading “Corporate Governance — Director Independence” and “— Other Information Relating to Directors and Executive Officers Transactions with Certain Related Persons” in the Proxy Statement and is incorporated herein by reference.
ITEM 14. Principal Accountant Fees and Services
The information required by this item is incorporated herein by reference to the section captioned “Proposal 2 – Ratification of the Appointment of Independent Registered Public Accountants” of the Proxy Statement.
PART IV
ITEM 15. Exhibits and Financial Statement Schedules
3.1
Articles of Incorporation of Bogota Financial Corp. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Bogota Financial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended)
3.2
Amended and Restated Bylaws of Bogota Financial Corp. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Bogota Financial Corp. (File No. 001-39180), initially filed with the Securities and Exchange Commission on January 25, 2024)
4.1
Form of Common Stock Certificate of Bogota Financial Corp. (incorporated by reference to Exhibit 4 to the Registration Statement on Form S-1 of Bogota Financial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended)
4.6
Description of Bogota Financial Corp.’ s Securities (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10-K of Bogota Financial Corp. (File No. 001-39180), filed with the Securities and Exchange Commission on March 30, 2020)
10.1
Resignation and Separation Agreement and Release of Claims between Bogota Savings Bank and Joseph Coccaro (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Bogota Financial Corp. (File No. 001-39180), filed with the Securities and Exchange Commission on November 30, 2023) †
10.2
Employment Agreement between Bogota Savings Bank and Kevin Pace †
10.3
Change in Control Agreement between Bogota Savings Bank and Brian McCourt (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Bogota Financial Corp. (File No. 001-39180), filed with the Securities and Exchange Commission on January 15, 2020) †
10.4
Bogota Savings Bank Director’ s Retirement Plan (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 of Bogota Financial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †
10.5
Bogota Savings Bank Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 of Bogota Financial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †
10.6
Form of Bogota Savings Bank Executive Bonus Plan (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 of Bogota Financial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †
10.7
Bogota Financial Corp. 2021 Equity Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement (File No. 001-39180, filed on April 22, 2021) †
10.8
Form of Incentive Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-8 (File No. 333-258064), filed on July 21, 2021) †
10.9
Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-8 (File No. 333-258064), filed on July 21, 2021) †
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10.10
Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 (File No. 333-258064), filed on July 21, 2021) †
21
Subsidiaries of Registrant
23.1
Consent of Independent Public Accounting Firm – S.R. Snodgrass, P.C.
31.1
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of President and Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97
Clawback Policy
101
The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline XBRL: (i) Balance Sheets, (ii) Statements of Income, (iii) Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Statements of Cash Flows and (vi) Notes to the Financial Statements.
104
Cover Page Interactive Data File (formatted in XBRL and contained in Exhibit 101)
________________
† Management contract or compensation plan or arrangement.
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ITEM 16. Form 10-K Summary
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BOGOTA FINANCIAL CORP.
Date: March 28, 2024
By:
/s/ Kevin Pace
Kevin Pace
President and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signatures
Title
Date
/s/ Kevin Pace
President, Chief Executive Officer and Director
March 28, 2024
Kevin Pace
(Principal Executive Officer)
/s/ Brian McCourt
Executive Vice President and Chief Financial Officer
March 28, 2024
Brian McCourt
(Principal Financial Officer)
/s/ Steven M. Goldberg
Chairman of the Board
March 28, 2024
Steven M. Goldberg
/s/ William Hanson
Director
March 28, 2024
William Hanson
/s/ John Masterson
Director
March 28, 2024
John Masterson
/s/ John G. Reiner
Director
March 28, 2024
John G. Reiner
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