CLAWBACK POLICY FOR INCENTIVE-BASED COMPENSATION
“Accounting Restatement” shall mean an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the applicable U.S. federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).
“Clawback Period” shall mean, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date and any transition period (that results from a change in the Company’s fiscal year) of less than nine months within or immediately following those three completed fiscal years. A transition period that comprises a period of at least nine months shall count as a completed fiscal year.
“Clawback Rules” means Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 promulgated thereunder, Nasdaq Rule 5608, and any applicable rules, standards, or other guidance adopted by the SEC or Nasdaq.
“Committee” shall mean the Compensation Committee of the Board.
“Erroneously Awarded Compensation” shall mean, with respect to each current or former Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive-Based Compensation Received by such current or former Executive Officer that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received had such Clawback Eligible Incentive-Based Compensation been determined based on the restated amounts, computed without regard to any taxes paid. For Incentive-Based Compensation based on stock price or total shareholder return, where the amount of erroneously awarded compensation is not subject to mathematical recalculation directly from the information in an accounting restatement: (i) The amount must be based on a reasonable estimate of the effect of the accounting restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was Received; and (ii) The Company must maintain documentation of the determination of that reasonable estimate and provide such documentation to Nasdaq.
“Executive Officer” shall mean each individual who the Company determines is an “officer” of the Company in accordance with Section 16 of the Exchange Act.
“Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and all other measures that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall for purposes of this Policy be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.
“Impracticable” shall mean that either of the following two conditions is met:
“Incentive-Based Compensation” shall mean any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.
“Nasdaq” shall mean the Nasdaq Stock Market LLC, or if the Company’s class of securities is not listed on Nasdaq, the term “Nasdaq” shall instead refer to the national securities exchange or association upon which the Company’s class of securities is listed.
“Received” shall mean that Incentive-Based Compensation is deemed “Received” in the Company’s fiscal period during which the financial reporting measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the Incentive-Based Compensation occurs after the end of that period.
“Restatement Date” shall mean the earlier to occur of (i) the date the Board, a committee of the Board or the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date of court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.
“SEC” shall mean the U.S. Securities and Exchange Commission.
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EXHIBIT A
CLIMB GLOBAL SOLUTIONS, INC.
acknowledgement OF CLAWBACK POLICY
FOR INCENTIVE-BASED COMPENSATION
I have received a copy of the Clawback Policy for Incentive-Based Compensation (the “Policy”) adopted by the Board of Directors of Climb Global Solutions, Inc., a Delaware corporation (the “Company”), and have read and understood the Policy. Capitalized terms used but not defined herein shall have the meanings set forth in the Policy.
As a condition to the receipt of any Incentive-Based Compensation that is Received on and after the Effective Date, I acknowledge and agree to be fully bound by and, subject to all of the terms and conditions of the Policy both during and after my employment with the Company terminates, and to return or reimburse any Erroneously Awarded Compensation to the extent required by, and in a manner required by, the Policy. I further understand and acknowledge that the Policy applies to me, and all of my beneficiaries, heirs, executors, administrators or other legal representatives, and that the Company’s right to recovery in order to comply with applicable law will apply, regardless of the terms of any release of claims, separation agreement, employment agreement, grant agreement or incentive plan document that I have signed or will sign in the future, or in which I participate or will participate in the future.
To the extent the Policy conflicts with any other indemnification, contractual or other rights (now or hereafter in effect) I may have with the Company, I understand and agree that the terms of the Policy shall supersede any such rights with respect to any Incentive-Based Compensation Received on and after the Effective Date. The recovery of Erroneously Awarded Compensation under this Policy will not give rise to any right to voluntarily terminate employment by me for “good reason” or due to a “constructive termination” (or any similar term of like effect) under any plan, program or policy of or agreement with the Company or any of its affiliates.
___________________________Signature
___________________________Name
___________________________Date