EXHIBIT A
Definitions Pertaining to
The Executive Compensation Recovery Policy
of Cenntro Inc.
“
Applicable Period” means (a) in the case of any Restatement, the three completed fiscal years of
the Company immediately preceding the earlier of (i) the date the Board, a committee of the Board, or the
officer or officers of
the Company authorized to take such action if Board action is not required, concludes (or reasonably should have concluded) that a Restatement is required or (ii) the date a regulator, court or other legally authorized
entity directs
the Company to undertake a Restatement, and (b) in the case of any Misconduct, such period as the Compensation Committee or Board determines to be appropriate in light of the scope and nature of the Misconduct. The
“Applicable
Period” also includes any transition period (that results from a change in
the Company’s fiscal year) within or immediately following the three completed fiscal years identified in the preceding sentence.
“
Compensation Committee” means
the Company’s committee of independent directors responsible for executive compensation decisions, or in the absence of such a committee, a majority of the independent
directors serving on the Board.
“
Covered Officer” means (a) in the case of any Restatement, any person who is, or was at any time, during the Applicable Period, an Executive Officer of
the Company, and (b) in the case of any
Misconduct, any person who was an Executive Officer at the time of the Misconduct. For the avoidance of doubt, a Covered Officer may include a former Executive Officer that left
the Company, retired, or transitioned to an employee role
(including after serving as an Executive Officer in an interim capacity) during the Applicable Period.
“
Executive Officer” means
the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president in charge of a
principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person (including an officer of
the Company’s parent(s) or
subsidiaries) who
performs similar policy-making functions for
the Company.
“
Financial Performance Measure” means a measure that is determined and presented in accordance with the accounting principles used in preparing
the Company’s financial statements (including
“non-GAAP”
financial measures, such as those appearing in
the Company’s earnings releases or Management Discussion and Analysis), and any measure that is derived wholly or in part from such measure. Stock price and total shareholder return (and any
measures derived wholly or in part therefrom) shall be considered Financial Performance Measures.
“Impracticable.” The Compensation Committee may determine in good faith that recovery of Recoverable Incentive Compensation is
“Impracticable” (a) in the case of any Restatement, if: (i) pursuing such
recovery would violate the law of the jurisdiction of incorporation of
the Company where that law was adopted prior to
October 2, 2023 and
the Company provides an opinion of counsel to that effect acceptable to
the Company’s listing exchange;
(ii) the direct expense paid to a third party to assist in enforcing this Policy would exceed the Recoverable Incentive Compensation and
the Company has (A) made a reasonable attempt to recover such amounts and (B) provided documentation of
such attempts to recover to
the Company’s applicable listing exchange; or (iii) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of
the Company, to fail to meet
the requirements of the Internal Revenue Code of 1986, as amended, and (b) in the case of any Misconduct, in its sole discretion, in light of the scope and nature of the Misconduct.
“Incentive Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Performance Measure. Incentive Compensation does not include
any base salaries (except with respect to any salary increases earned wholly or in part based on the attainment of a Financial Performance Measure performance goal); bonuses paid solely at the discretion of the Compensation Committee or Board
that are not paid from a “bonus pool” that is determined by satisfying a Financial Performance Measure performance goal; bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period;
non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures; and equity awards that vest solely based on the passage of time and/or attaining one or more non-Financial Performance
Measures. Notwithstanding the foregoing, in the case of any Misconduct, Incentive Compensation will include all forms of cash and equity incentive compensation, including, without limitation, cash bonuses and equity awards that are received
or vest solely based on the passage of time and/or attaining one or more non-Financial Performance Measures.
“Received.” Incentive Compensation is deemed
“Received” in
the Company’s fiscal period during which the Financial Performance Measure specified in the Incentive Compensation award is attained, even if
the payment or grant of the Incentive Compensation occurs after the end of that period.
“
Recoverable Incentive Compensation” means (a) in the case of any Restatement, the amount of any Incentive Compensation (calculated on a pre-tax basis) Received by a Covered Officer during the Applicable
Period that is in excess of the amount that otherwise would have been Received if the calculation were based on the Restatement, and (b) in the case of any Misconduct, the amount of any Incentive Compensation (calculated on a pre-tax basis)
awarded or paid to a Covered Officer during the Applicable Period that the Compensation Committee determines, in its sole discretion, to be appropriate in light of the scope and nature of the Misconduct. For the avoidance of doubt, in the
case of any Restatement, Recoverable Incentive Compensation does not include any Incentive Compensation Received by a person (i) before such person began service as a Covered Officer and (ii) who did not serve as a Covered Officer at any time
during the performance period for that Incentive Compensation. For the avoidance of doubt, in the case of any Restatement, Recoverable Incentive Compensation may include Incentive Compensation Received by a person while serving as an employee
if such person previously served as a Covered Officer and then transitioned to an employee role. For Incentive Compensation based on (or derived from) stock price or total shareholder return where the amount of Recoverable Incentive
Compensation is not subject to mathematical recalculation directly from the information in the applicable Restatement, the amount will be determined by the Compensation Committee based on a reasonable estimate of the effect of the Restatement
on the stock price or total shareholder return upon which the Incentive Compensation was Received (in which case,
the Company will maintain documentation of such determination of that reasonable estimate and provide such documentation to the
Company’s applicable listing exchange).
“
Restatement” means an accounting restatement of any of
the Company’s financial statements filed with the Securities and Exchange Commission under the Exchange Act, or the Securities Act of 1933, as
amended, due to
the Company’s material noncompliance with any financial reporting requirement under U.S. securities laws, regardless of whether
the Company or Covered Officer misconduct was the cause for such restatement.
“Restatement”
includes any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (commonly referred to as
“Big R” restatements), or that would result in
a material misstatement if the error were corrected in the current period or left uncorrected in the current period (commonly referred to as
“little r” restatements).