This proxy statement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This proxy statement contains forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “forecasts”, “objectives”, “goals”, “aims”, “continue”, “predict”, “would”, “could’, “may”, “will”, “should”, “seeks”, “plans”, “scheduled”, “anticipates” or “intends” or similar expressions. Forward-looking statements contained in this proxy statement may include, for example, statements about: our financial and business performance, including business metrics and our ability to comply with terms governing the convertible notes facility and the senior credit facility; our ability to continue as a going concern; the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements; availability of additional capital to support business growth and our ability to maintain adequate operational and financial resources and generate sufficient cash flows, including our ability to service our debt obligations under our senior credit facility and Convertible Notes Facility; our exploration of potential options for raising additional funds through potential alternatives, which may include, among other things, the issuance of equity, equity-linked, and/or debt securities, debt financings, or other capital sources and/or strategic transactions, and our ability to secure additional financing or execute any transaction on a timely basis, on acceptable terms or at all; our success in retaining or recruiting, or changes required in, our officers, key employees or directors, and our ability to attract and retain key personnel; and the diversion of management’s attention and consumption of resources as a result of potential strategic transactions. For a discussion of the risks and uncertainties involved in our business and investing in our common stock, see the sections titled “Risk Factors” and elsewhere in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 filed with the SEC on May 10, 2023 and Proterra’s subsequent filings with the SEC.

Our Board is divided into three classes, designated as Class I, Class II, and Class III, with one class being elected each year and members of each class holding office for a three-year term. We have four Class II directors, whose terms expire at the Annual Meeting; three Class III directors, whose terms expire at the 2024 Annual Meeting of Stockholders; and two Class I directors, whose terms expire at our 2025 Annual Meeting of Stockholders.

Three of our four Class II directors have been nominated for re-election to the Board for a three-year term. Our fourth Class II director, John J. Allen, who has served our Board with distinction, has not been nominated for re-election. Mr. Allen's service on our Board will expire at our Annual Meeting of Stockholders. As a result, our Board has resolved that effective immediately upon the expiration of Mr. Allen's term of office, the size of the Board will be automatically reduced from nine to eight directors.

At the Annual Meeting, stockholders will have an opportunity to vote for three nominees for Class II directors:

All nominees are currently directors of our Company. Each of the director nominees has consented to being named in this proxy statement and to serve if elected and the Board believes that each of the director nominees will be able to serve if elected. Additional information about Ms. Hauser, Mr. Joyce and Mr. Smith can be found below in the Director Biographies section of this proxy statement beginning on page 13. If elected, each nominee for Class II director will hold office until the 2026 Annual Meeting of Stockholders.

To “WITHHOLD” your vote as to an individual nominee or all nominees you must mark the proxy card to that effect. Proxies cannot be voted for a greater number of persons than the number of nominees named.

In the event that Ms. Hauser, Mr. Joyce or Mr. Smith should be unable to serve, or for good cause will not serve, as a director, proxies will be voted for a substitute nominee designated by the Board or the Board may elect to reduce the size of the board of directors or leave a vacancy.

Forty-three percent of our independent directors were first elected to our Board in 2022, augmenting our board with significant expertise in finance, industry, human capital management, information technology, and executive leadership. For biographies of each of our directors see page 13 below

Our Board is active and engaged. We held 6 board meetings and 20 committee meetings in 2022. On average our Director attendance at meetings was over 98%. Between meetings, our board also participates in periodic updates, status calls and briefings and site visits. For more information on our Board meeting attendance and the activities of the Board see page 27.

In order to develop a balanced Board, our NESG Committee has led a robust director recruitment process and employed a nationally recognized recruiting firm that concentrates on women and diverse candidates. For each director search, our NESG Committee has developed specifications based on the current and expected needs of the Company and the Board that are used to identify and recruit director candidates. We emphasize diversity as part of our recruiting efforts and require diverse slates of candidates for each position. We believe that our use of an independent recruiting firm expands the pool of candidates and further improves our efforts to find qualified candidates for our Board of Directors.

We are a newly public company with a mission is to advance electric vehicle technology to deliver the world’s best performing commercial vehicles and disrupt over a hundred years of reliance on the internal combustion engine. Our industry is growing rapidly and as the Company scales its operations we are committed to refreshing our Board of Directors to add expertise we believe is critical to effective oversight. In 2022, we added three new directors to the Board.

The Board periodically assesses with the recommendation of the Nominating and ESG Committee the independence of non-employee directors under the independence criteria established by the Nasdaq listing standards and applicable rules of the SEC. Nasdaq listing standards require that a majority of the members of our Board be independent, as affirmatively determined by the board of directors. Under the Nasdaq listing standards, a director will only qualify as an “independent director” if the company’s board of directors finds that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and our company, our senior management and our independent registered public accounting firm, our Board affirmatively determined that each of Ms. Krakauer, Mr. Nielsen, Mr. Porter, Ms. Hauser, Ms. Sargent, Ms. Skidmore and Mr. Smith are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. In addition, our Board has determined that each member of the Audit Committee, Compensation and Leadership Development Committee and Nominating and ESG Committee meets the applicable Nasdaq and SEC rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the company.

Ms. Joan Robinson-Berry served on our Board and as a member of our Audit Committee and Nominating and ESG Committee for the year ended December 31, 2022. Ms. Robinson-Berry resigned from our Board effective March 22, 2023. During the time of her service on the Board, Ms. Robinson-Berry qualified as an independent director as defined in the Nasdaq listing standards and applicable SEC rules, and met the applicable Nasdaq and SEC rules for service on the Audit Committee and Nominating and ESG Committee

The Nominating and ESG Committee will consider properly submitted stockholder recommendations for candidates for our Board. The Nominating and ESG Committee does not intend to alter the manner in which it evaluates candidates based on whether or not the candidate was recommended by a stockholder. Please see the FAQ titled "When are stockholder proposals and director nominations due for next year's annual meeting?" on page 98 of this proxy statement. A stockholder of record can nominate a candidate for election to the Board by complying with the procedures in Article I, Section 1.12 of our Restated Bylaws. Any eligible stockholder who wishes to submit a nomination should review the requirements in the Restated Bylaws on nominations by stockholders. Any nomination should be sent in writing to the Secretary, Proterra Inc, 1815 Rollins Road, Burlingame, CA 94010. Submissions must include the full name of the proposed nominee, complete biographical information, a description of the proposed nominee’s qualifications as a director, other information specified in our Restated Bylaws, and a representation that the nominating stockholder is a registered stockholder or a beneficial owner of shares held in street name and has held their stock 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. These candidates are evaluated at meetings of the Nominating and ESG Committee and may be considered at any point during the year.

Our Nominating & ESG Committee assesses with the Board the skills and experiences that we seek in directors to advance the Company's strategy and to provide effective oversight for stockholders as our business grows and evolves in a rapidly developing market for commercial vehicle electrification. Below is a list of the skills and experiences we seek, why it matters, and the number of directors who provide that perspective.

In accordance with Nasdaq Listing Rule 5606, we annually disclose information on each director’s voluntary self-identified characteristics. The table below includes information on the diversity of our Board based upon information voluntarily provided by each director.

The names of the members of the Board who are expected to serve after the 2023 Annual Meeting, their respective ages, their primary occupations, committee membership on our Board, and other biographical information, including information regarding the specific experience, qualifications, attributes or skills that led the Nominating and ESG Committee and our Board to determine that each member of our board of directors should serve as a director is set forth below. All nominees for election and continuing board members other than Mr. Joyce, who is our Chief Executive Officer, are independent, non-employee directors. There are no arrangements or understandings between any of our directors and any third person pursuant to which a director was selected to serve on the Board. There are no family relationships between any of our directors, or between any of our directors and officers.

Our Board adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our President and Chief Executive Officer, Chief Financial Officer, and other executive and senior officers. In addition, we have also adopted Corporate Governance Guidelines, which, along with our Certificate of Incorporation, Restated Bylaws and charters of the standing committees of the Board, form the framework for Proterra’s corporate governance. The full text of our Code of Business Conduct and Ethics and the Corporate Governance Guidelines are each available in the investor relations section of our website at https://ir.proterra.com on the “Governance Documents” page under the “Investor Relations – Governance” section. The references to our website address in this filing do not include or incorporate by reference the information on that website into this filing. We intend to disclose future amendments to our Code of Business Conduct and Ethics, or waivers of these provisions, including to satisfy the disclosure requirements under Item 5.05 of Form 8-K by posting such information on our website at the website address and location specified above. For more information on our committee charters see pages 24. To find out how to obtain our governing documents see page 24..

Our Certificate of Incorporation and Restated Bylaws provide for certain governing provisions that impact our stockholders election of directors and the conduct of stockholder business. After thoughtful consideration and input from our stockholders, the Board determined that these governance provisions to promote stability and orderly conduct of business as we focus on scaling our operations in a rapidly changing market for zero emission vehicles as a newly public company. Our Board reviews our governing documents annually, and will update them as needed to serve the best interests of the Company and its stockholders, adapt to changing regulatory and governance requirements, and reflect best practices. The following table describes these governance provisions, the Board’s rationale for preserving them, and Proterra’s other governance provisions that advance stockholder interests.

All of our corporate governance practices are designed to support effective governance and board oversight of our Company in the interests of our stockholders and other stakeholders. We have implemented the following best practices:

Our Corporate Governance Guidelines provide our Board with the flexibility to create a leadership structure that best serves the Company. John J. Allen has served as our Chief Executive Officer and Chairman of the Board from June 2021 to December 2021, and as our Chairperson of the Board in 2022. Jeannine. Sargent has served as our Lead Independent Director since June 2021. As of the 2023 Annual Meeting, our Board has determined that it is in the best interests of the Company and our Stockholders to appoint an Independent Chairperson for the next phase of the Company's maturity. Immediately upon Mr. Allen's culmination of service at the Annual Meeting, the Board has elected Roger Nielsen to serve as independent Chairperson of the Board. We believe that separation of the positions of Chairperson and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we believe that having an independent Chairperson creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of the Company and our stockholders, including with respect to risk management. As a result, we believe that having an independent Chairperson can enhance the effectiveness of the Board as a whole.

Our Board is responsible for oversight of the strategy, operations and management of the Company and representing the interests of our stockholders and other stakeholders. To perform its oversight responsibilities, our Board has formed three standing committees governed by charters: our Audit Committee, Compensation and Leadership Development Committee and Nominating and ESG Committee. Our Board also forms other ad hoc committees for specific work overseen by the Board as needed. All committee members are independent directors.

Each of our directors attended 75% or more of the aggregate of the total number of meetings of the full Board and the total number of meetings held by all committees of the Board on which the director served. All of our Directors attended the annual meeting in 2022. On average, our directors attended over 98% of scheduled meetings.

In addition:

The Board regularly reviews Proterra’s long-term strategic business plans with the officers and other pertinent issues affecting Proterra’s business. The Board appoints the Chief Executive Officer, acts as management's advisor, provides strategic oversight, and is expected to monitor Proterra's performance in relation to its financial objectives, long term goals, and competitors. The held a full day session to review the Company's strategic plan in 2022 and regularly reviews management's strategic plan with officers and other developments and pertinent issues affecting Proterra's business.

Our Board is responsible for overseeing our risk management process and oversees risk directly and through its standing committees. Our committees report regularly to the Board on their oversight activities and elevate risk review to the Board when appropriate. Our Board focuses on our general risk management strategy, as well as the most significant risks facing us, and oversees management's development of mitigation strategies. Pursuant to their charters, the standing Committees of the Board oversee particular areas of risk. The table below illustrates the allocation of responsibility for risk management.

We maintain a Non-Employee Director Compensation Policy designed to align non-employee director compensation with the achievement of our business objectives and the creation of stockholder value, while enabling us to attract, retain, incentivize and reward directors who contribute to our long-term success.

Our Board reviews director compensation periodically to ensure that director compensation remains competitive and consistent with standards of good governance so that we are able to responsibly recruit and retain qualified directors. The Compensation and Leadership Development Committee considers the responsibilities and time commitment of Proterra’s directors, pay practices of the Company's peer group, and recommendations from its independent compensation consultant to make recommendations regarding the type and amount of compensation for non-employee directors, and makes recommendations to the Board.

The Board amended the policy in December 2021 to provide for a cash retainer for a non-executive chair and to adjust the timing of the grant of annual equity awards from the date of the Annual Meeting to the first fiscal quarter. The Board further amended the policy on December 14, 2022, to (1) eliminate the initial RSU grant of $250,000 in value, (2) increase the annual RSU grant from $100,000 in value to $150,000 in value, and (3) to increase the cash retainers for the Chair of the Compensation and Leadership Development Committee and the Chair of the Nominating and ESG Committee from $10,000 per year to $15,000 per year.

Under the Non-Employee Director Compensation Policy, as amended, each non-employee director is eligible to receive the cash and equity compensation for Board services described below. Each director will also be reimbursed for reasonable, customary and documented travel and other expenses to attend meetings of our Board or its committees and to attend director training. Pursuant to this policy, non-employee directors were eligible to receive the compensation described below.

All cash payments to directors are paid quarterly in arrears prorated for any portion of a quarter that a director is not serving on our Board. Each director may make an annual election to receive their $75,000 annual cash retainer in RSUs. If so elected, the RSUs will vest on March 31, June 30, September 30, and December 31 over a one-year period following the grant date, subject to the director’s continued service on each applicable vesting date and provided the vesting conditions under the 2021 Plan are met. If a Director’s service terminates early in a given quarter, the RSUs for the partial period of service in the quarter that services terminate vest daily for the period of time served

During the first fiscal quarter each year, each non-employee director will be granted RSUs with a value equal to $150,000 at the time of grant pursuant to grant valuation practices determined by the Compensation and Leadership Development Committee. These annual director awards will vest quarterly over a one-year period following the grant date, subject to the director’s continued service on each applicable vesting date. A non-employee director who begins serving on the Board during the year will receive a pro-rated grant for the first partial year of service.

The 2021 Equity Incentive Plan provides that no non-employee director may receive awards with an aggregate fair value on the date of grant that, when combined with cash compensation received for service as a director, exceeds $750,000 in a calendar year.

Our Board adopted stock ownership guidelines that require each member of the Board to achieve stock ownership with a value equal to five times his or her annual cash compensation within five years of becoming a Board member.

The table below summarizes the total compensation awarded to, earned by or paid to our non-employee directors for their service on our Board for the fiscal year ended December 31, 2022.

Section 14A of the Exchange Act requires us to offer our stockholders an opportunity to cast an advisory, non-binding vote on the compensation of our named executive officers, as disclosed in this proxy statement, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010, commonly referred to as a “say-on-pay” vote.

At our 2022 annual meeting, our stockholders voted to conduct this advisory vote on the compensation of our named executive officers every year. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the compensation philosophy, policies and practices described in this proxy statement.

As described in the “Compensation Discussion and Analysis” section of this proxy statement, our executive compensation program is designed to attract, retain, focus and motivate top-level talent who possess the skills and leadership necessary to scale our business and create long-term value. The Board believes that our executive compensation program effectively aligns executive pay with our performance and also enables us to attract and retain talented executives who are critical to our success.

Accordingly, the Board encourages our stockholders to review the compensation actions taken in fiscal year 2022 set forth in the “Compensation Discussion and Analysis” section of this proxy statement and recommends that our stockholders vote “For” the following resolution:

“RESOLVED, that the compensation paid to the named executive officers, as disclosed in the proxy statement furnished for the 2023 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, set forth in the Compensation Discussion and Analysis, compensation tables and related narrative discussion, is hereby APPROVED on an advisory basis.”

The advisory vote is not binding on management or the Board. Nevertheless, we value constructive feedback from our stockholders on executive compensation and other important matters, and the Board and the Compensation and Leadership Development Committee will consider the voting results on this Proposal when making future compensation decisions. Your vote is an important tool that guides the Compensation and Leadership Development Committee and the Board in continuing to improve the alignment of our executive compensation program with our business objectives, performance, and the interests of our stockholders.

This proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of stock entitled to vote on this proposal that are present in person or represented by proxy at the meeting and are voted “For” or “Against” this Proposal to be approved. Only votes “For” or “Against” will affect the outcome. Broker non-votes and abstentions will have no effect.

The following table identifies our executive officers and their respective ages and positions as of May 1,22, 2023.

For information regarding Gareth T. Joyce, please refer to “Proposal 1 — Election of Directors.”

Mr. Bailey has served as our Chief Business Officer since March 1, 2023 and before that as our President of Proterra Powered & Energy since October 2021. Previously, he served as Senior Vice President, Proterra Energy from May 2021 to October 2021. Prior to joining Proterra, Mr. Bailey served as Vice President of Product Innovation & Technology Strategy at Hubbell Incorporated, an international manufacturer of electrical and electronic products, from December 2020 to May 2021. He served as Vice President of Hubbell Integrated Solutions, a manufacturer of electrical and utility solutions, from August 2017 to December 2020. Mr. Bailey also held various leadership positions at Hubbell Lighting from June 2004 to April 2018. Mr. Bailey has multiple patents granted and pending in the fields of mechanical, electronics, optical, and human-machine interface design. Mr. Bailey holds a Bachelor of Science degree in Integrated Studies, with an emphasis in Computer Science & Business Administration from Middle Tennessee State University.

Mr. Soell has served as our Chief Operating Officer since March 1, 2023, and before that as our President of Proterra Transit since May 2022. From January 2021 to April 2022 he served as Chief Operating Officer at Repairify, a high-growth global leader in automotive service, technology and business insights solutions. Prior to that, he served as a Managing Director of Delta Airlines, a global airline based in the United States, from September 2016 to December 2020. Earlier in his career, he held engineering leadership roles at automotive companies including Mercedes Benz USA and Harley-Davidson Motor Company. Mr. Soell holds a Bachelor of Science in Mechanical Engineering from Lehigh University, a Master of Science in Mechanical Engineering from Ohio State University, and a Master of Business Administration from the University of Michigan.

The Compensation and Leadership Development Committee is charged by our Board with to manage and evaluate our executive compensation program. The Committee reviews and approves all the principal components of compensation for our executive officers on an annual basis. In carrying out its responsibilities, the Committee engaged Farient Advisors as its independent compensation consultant to provide counsel and guidance to the Committee in the design of our 2022 executive compensation program. Farient Advisors has advised the Committee since 2020. The Committee has assessed the independence of Farient Advisors in accordance with the Nasdaq Listing Standards and applicable SEC regulations and concluded that the firm’s work does not raise any conflict of interest.

We summarize the allocation of responsibilities for executive compensation decisions in the table below:

To design our executive compensation program, and manage executive compensation decisions, the Committee considers the factors listed below with the input and guidance from our independent compensation consultant and guided by our overall compensation philosophy.

The Committee believes understanding the relevant markets for executive talent is important to inform its decision-making and ensure that our executive compensation program supports our recruitment and retention of talent. The Committee uses a peer group to inform its analysis of pay levels and practices, including program design, share utilization and pay mix, and pay versus performance alignment. In order to inform its compensation decisions and program design for 2022, the Committee approved a peer group in June 2021 recommended by our compensation consultant, with the addition of one peer selected by the Committee, and then updated that peer group in May 2022, again as recommended by our independent compensation consultant, with the addition of one peer selected by the Committee. The Committee reviews the peer group, and the criteria used to identify the peer group, at least annually and more frequently as needed to address rapid changes in the electric vehicle industry, the entrance of new public company competitors and to reflect the growth and development of the Company’s businesses. The June 2021 peer group was comprised of nineteen technology and manufacturing companies listed below, which were selected using one or more of the following criteria:

In this analysis, the size evaluation criteria was weighted less than business model criteria to identify companies most relevant from a talent sourcing and operational needs perspective. Peer companies did not necessarily meet all criteria.

In May 2022, the Committee worked with Farient Advisors to refresh the peer group and refine the relevant industries from which peers were selected to achieve stronger business alignment, and to adjust the market capitalization criteria to capture peers companies with greater than $100 million but less than $3 billion market capitalization in relevant industries. The refreshed peer group removed Allison Transmission Holdings Inc., Sunrun Inc., and Enphase Energy Inc. because additional companies that more closely met the Company's criteria for selecting peers had entered the public market, and then added seven newly public companies to result in a peer group comprised of the following twenty-three companies:

The resulting peer group included sixteen companies with revenue reported in their last fiscal year from $5 million to over $2 billion, and seven public companies selected for their participation in relevant industries with no revenue reported in their last fiscal year. The peer group market capitalization varied from $180 million to greater than $12 billion.

While the Committee considers the data from the peer group helpful in assessing our competitive position for talent and pay practices, as discussed above, the Committee also considers other data to help inform our compensation decisions.

This Annual Meeting will be the first time our stockholders provide an advisory vote on our compensation program. In the fall of 2022 we reached out to over thirty of our largest shareholders and participated in meetings with five of them to gather stockholder input on our corporate governance, executive compensation, and other matters of importance to our stockholders. We took into consideration stockholder expectations for the presentation of our first Compensation Discussion and Analysis. The input from our stockholders is an important consideration in the Committee’s and the Board's evaluation of opportunities to further develop our compensation program and provide useful information to our stockholders.

Consistent with our compensation philosophy, the Committee adopted a program in 2022 emphasizing a pay-for-performance short term cash incentive program and equity-based compensation with long-term vesting requirements that is dependent on long-term company performance, as follows:

Each of our NEOs received an annual base salary. The amount of base salary for each executive was determined by assessing the role and competitive pay practices, individual performance, and other elements of the total compensation package for each executive, consistent with our compensation philosophy. The base salary payable to each NEO is intended to provide a stable source of income that is important to attract and retain our talent and that is reflective of the executive’s skill set, tenure, experience, position, responsibilities, contributions and performance.

We develop an annual cash incentive plan each year under the umbrella of our Key Employee Incentive Plan. Our Key Employee Incentive Plan was filed as an exhibit to our registration statement on Form S-1 on June 29, 2021. This annual cash incentive plan, which we call our Short Term Incentive Plan, provides for performance-based cash awards to participants based on achievement of criteria set by the Committee for the fiscal year.

Each of our NEOs received a performance-based cash award target under the 2022 Short Term Incentive Plan that was expressed as a percentage of each NEOs base salary paid during the fiscal year. The Committee set the target award amount for each NEO in consultation with our independent compensation consultant and after review of market data. For 2022, the target award amounts for each participating NEO were:

Performance measures for fiscal year 2022 included annual financial performance measures, progress against strategic objectives for each of Proterra Transit and Proterra Powered & Energy, achievement of technology objectives on which the CEO was measured, and improvement in diversity, equity and inclusion (“DEI”) goals over the prior fiscal year. The table below describes the performance measures in the 2022 Short Term Incentive Plan. The actual payout of awards is discussed below under “Determination of the Actual 2022 Short Term Incentive Award Payout.”

The Committee then grouped the above performance-based award criteria and provided weightings for each criterion within the grouping and created targeted incentives based on each executive officer's role.

A description of the weighting of each officer's performance-award criteria is included in the section "Determination of the Actual 2022 Short Term Incentive Award Payout" below.

The 2022 Short Term Incentive Plan payouts were determined based on the Committee's assessment of the above described metrics which were carefully chosen to drive particular outcomes and align pay with performance.

Under the 2022 Short Term Incentive Plan, the Committee assigned weighting factors for each executive officer to ensure the appropriate focus for each function in the Company on performance against the above described Financial Metrics, DEI Criteria, and Strategic Criteria.

As Chief Financial Officer, Ms. Padilla’s bonus potential was weighted 60% to the achievement of Corporate Criteria and 40% to the achievement of the business unit financial metrics, divided evenly between the performance of Proterra Powered & Energy and Proterra Transit. Overall, 78% of Ms. Padilla’s bonus potential was weighted to achievement of financial metrics, 6% was weighted to achievement of DEI Criteria, and 6% was weighted to achievement of Strategic Criteria, divided evenly between the two business units, and 10% to strategic technology development criteria.

As President of Proterra Powered and Energy in 2022, Mr. Bailey’s bonus potential was weighted 60% to the achievement of Proterra Powered & Energy objectives, and 40% weighted to the Corporate Criteria. The Corporate Criteria weighting resulted in a cash award incentive of 4% to DEI Criteria and 36% to corporate financial metrics. Overall, 84% of Mr. Bailey’s bonus potential was tied to achievement of financial metrics and 12% was weighted to strategic criteria for Proterra Powered & Energy. The Committee chose to make 40% of Mr. Bailey’s cash award potential dependent on Corporate Criteria to provide significant incentives to advance the overall financial and DEI objectives of the Company including, indirectly, the Proterra Transit business unit’s contributions to the Company’s overall success.

As Chief Legal Officer, Head of Government Relations, and Secretary, Ms. Covington’s bonus potential was weighted 60% to the achievement of Corporate Criteria and 40% to the achievement of the business unit financial metrics, divided evenly between the performance of Proterra Powered & Energy and Proterra Transit. Overall, 78% of Ms. Covington’s bonus potential was weighted to achievement of financial metrics, 6% was weighted to achievement of DEI Criteria, and 6% was weighted to achievement of Strategic Criteria, divided evenly between the two business units, and 10% to the strategic technology development criteria.

The Committee developed the metrics, award potential allocation, and targets in consultation with the full Board, its compensation consultant, and management. In particular, the Committee considered the Company’s fiscal year 2022 business plan, and the Company’s long term business plan and strategy. The Committee set ambitious, but achievable, financial and strategic goals for the Company overall and each business, including achievement of specific milestones that would impact the Company’s success beyond the fiscal year. For Proterra Transit, the strategic business objectives included scaling manufacturing and sales objectives. For Proterra Powered & Energy, these business objectives included the development and launch of the next iteration of the Company’s fleet and energy management SaaS solution, construction of the Powered 1 facility in Greer, South Carolina, and sales objectives. Strategic technology development goals included progress on development of new battery technology and advanced manufacturing achievements for the Powered 1 battery manufacturing lines. The Committee also created the potential to overachieve on both financial and strategic metrics to receive a payout of up to 150% of target if financial performance was substantially over the business plan and if all strategic criteria were achieved.

The financial metrics included the following threshold, target and stretch goals. Potential awards are calculated linearly from the threshold award to the target award and from the target award to the stretch award.

A summary of the Committee’s determination of 2022 Short Term Incentive Plan achievement is illustrated below:

Achievement of the rigorous performance targets set by the Committee in the 2022 Short Term Incentive Plan was impacted by global economic factors including the ongoing effects of the COVID 19 pandemic, macroeconomic conditions, supply chain disruptions, rising inflation, uncertain credit and global financial markets and geopolitical events, such as the conflict between Russia and Ukraine and the related sanctions which combined with other factors, affected both production volume and operating costs, and created significant inflation in raw materials cost which in turn impacted margins, and cash consumption.

In evaluating performance against the performance-based award criteria, all award payouts were determined based on the Company's actual performance pursuant to the strict terms of the plan, with one exception: the Committee exercised its discretion to consider the impact of rising inflation rates and resulting increases in material costs for lithium-ion cells in the fiscal year of approximately $5.38 million over expected costs. Management deemed the purchase of cells as strategically important for the Company in fiscal 2022. The Committee’s consideration of these inflation impacts on the Business Unit Income Before Corporate Expenses for Proterra Powered & Energy resulted in a change to the financial metric that slightly exceeded the threshold performance generating a cash award. As a result, the percentage achievement of target for Mr. Joyce increased by 3.2%, the percentage achievement for Ms. Covington and Ms. Padilla increased 3.1%. The percentage achievement for Mr. Bailey increased 12.6%, and the percentage achievement for Mr. Soell did not increase. The specific achievement levels under the 2022 Short Term Incentive Plan are discussed further below.

The Corporate achievement was 34% of the target payout, per the 2022 Short Term Incentive Plan design. The Company did not meet the thresholds set by the Committee to receive the portion of the cash award based on Adjusted EBITDA or Cash Conversion Cycle targets. As a result, the cash award payout based on these financial metrics was zero. The Company did achieve the threshold required to receive a cash award payout based on Revenue achievement but did not outperform expectations. The Company made significant progress against its DEI targets, improving against three of the four objectives, and earning 100% of the achievement against its goals.

The Transit business achievement was 18% of the target payout, per the 2022 Short Term Incentive Plan design. The business did not achieve the financial targets for Business Unit Revenue or Business Unit Operating Income Before Corporate Expenses. Thus, the cash award payout based on these metrics was zero. The Transit business did make substantial progress against strategic criteria achieving a 90% payout against its strategic objectives, which accounted for 20% of the overall target. Notably, the Transit business executed on a location strategy for scaling manufacturing which resulted in the Company’s January 2023 actions to wind down all operations at the City of Industry location by the end of 2023. Though significant progress was made in Proterra Transit, including significant manufacturing efficiency gains and production improvements under Mr. Soell’s leadership from May 2022 through year end, these successes are not reflected in the 2022 cash award payouts, and the business performed below the goals that were set in the 2022 Short Term Incentive Plan.

The Proterra Powered & Energy business achievement was 95% of the target payout. The Proterra Powered & Energy business performed well against the Business Unit Revenue target, resulting in an award at 114% of target per the plan design. Proterra Powered & Energy also reached the threshold level of payout under Business Unit Operating Income Before Corporate Expenses metric, earning a 52% of target payout after the Committee took into account allowances for spikes in inflation and materials cost increases for battery cells discussed above. Proterra Powered & Energy also over performed against is strategic criteria in 2022, including the development and launch of Valence, the Company's fleet and energy management SaaS platform; meeting its construction targets for the Powered 1 facility; and achieving over 90% of its sales objectives, resulting in a payout of 142% of target per the plan design.

The Company also performed well against its strategic objectives and investments in its battery technology, earning 103% of the target payout per the plan design. Notably the Company introduced its H4 battery pack designed for heavy duty vehicles at IAA Transportation in Hanover Germany, and installed two advanced manufacturing battery lines for module and pack production in the new Powered 1 facility.

The Committee’s decisions on achievement under the 2022 Plan resulted in a payout percentage for each NEO as shown below:

The Company entered into a special retention agreement with Ms. Covington, and certain other executives who are not NEOs in this proxy statement, in September 2021. The retention agreement provided that the Company would pay a cash incentive award of $250,000 provided that Ms. Covington was employed by the Company through September 13, 2022. The Committee determined that these incentive agreements were in the best interests of the Company and its stockholders because the Board executed on leadership succession plans in

2021 that resulted in new leadership for the Company in January 2022 and the Company wanted to ensure Ms. Covington continued to serve as part of the new leadership team. The cash incentive award was paid to Ms. Covington in September 2022.

In October 2022, the Company awarded Ms. Covington a recognition cash bonus of $40,000 in recognition of Ms. Covington's work serving, in addition to her other functions, as head of human resources from July to October 2022 while the Company was recruiting for a Chief People Officer

In connection with Mr. Soell's offer letter to join the Company as President of Proterra Transit, the Company paid a one time sign on bonus of $250,000, which was repayable in full to the Company if Mr. Soell left the company in less than a year.

In connection with Ms. Padilla's offer letter to join the Company as Chief Financial Officer, the Company paid a one time sign on bonus of $250,000, which was repayable in full to the Company if Ms. Padilla left the company in less than a year.

The Committee introduced a long term equity incentive program or “LTIP” grants into the executive compensation structure in the third quarter of 2021. The intent of this program is to ensure that a substantial part of executive compensation is tied to long term stockholder value creation. The Long Term Incentive Program grants are not a guaranteed component of annual compensation, and the Committee can choose to eliminate the LTIP, change the terms of the program, and vary the amounts of LTIP awards in its sole discretion as administrator of the Company's equity plans. The Committee views the LTIP program and equity awards as an important part of its 2022 compensation program and aligns with the Company's compensation philosophy.

The Committee considered target values for LTIP awards for executives other than the CEO in March 2022 and considered market practices, peer group uses of equity in compensation programs, each executive’s equity position, the vesting status of outstanding awards to each executive, and each executive’s role in the Company and performance in determining appropriate LTIP awards. Recognizing the competitive market for talent and the executive transitions of CEO, CFO and President of Transit in the first quarter 2022, and considering the potential holding power of long term equity grants, the Committee set a target value of the LTIP grants at the 50th percentile of equity awards for the Company's peer companies, and an equity vehicle mix of 25% stock options and 75% restricted stock units on the recommendation of the Company’s independent compensation consultant and considering the volatility of the Company’s stock price which could reduce the intended holding power incentive of stock options. Each award vested ratably over four years . The Committee also established stock holding guidelines for executives to drive continued alignment with long term stockholder interests.

The Committee awarded Mr. Joyce's LTIP grant, and on the Committee's recommendation, the Board awarded LTIP grants to our other NEOs in 2022 with the following values.

The Committee set the following target values for these grants made in 2022.

The Company does not have any defined contribution or pension benefit plans. The Company does offer the following additional compensation elements.

The Company introduced one perquisite in 2022 for financial planning assistance, excluding tax preparation for executive officers including our NEOs in 2022. The financial planning program allowed eligible officers to submit for reimbursement expenses related to financial planning in the fiscal year in amounts up to $10,000. This benefit is reflected on the Summary Compensation Table for NEOs who chose to use it.

Our named executive officers are eligible to participate in our employee benefit plans and programs, including medical, dental and vision benefits, life insurance, and disability insurance, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans. In addition, the Company also provides life and accidental death and dismemberment ("AD&D") insurance benefits to executive officers of two times the officer's base salary capped at $700,000. For non-executive officers, company provided life and AD&D insurances are capped at $500,000. The full company paid premium for the life and AD&D insurance coverages to the NEOs are reflected in the Summary Compensation Table.

We sponsor a 401(k) defined contribution plan in which our NEOs may participate, subject to limits imposed by the Internal Revenue Code to the same extent as all of our other full-time employees. We currently match contributions our employees make to the 401(k) plan for the first 4% of the employee’s salary. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package to attract and retain talent. Under our matching program for 401K contributions, our NEOs received the following matching contributions, which are reflected in the Summary Compensation Table.

We have entered into offer letters and change of control and severance agreements with each of our NEOs and a Separation Agreement with Ms. Covington in exchange for continued services as a non-officer employee following her resignation. For a description of the offer letters and the severance benefits and potential payments upon termination or change of control of the Company and the Separation Agreement, please see the Description of Compensation Arrangements following the Summary Compensation table and Grants of Plan Based Awards During Fiscal Year-End 2022 table" section of this proxy statement.

Our compensation governance principles are designed to reflect best practices and promote executive alignment with the interests of our stockholders and other stakeholders.

The Company does not yet have a clawback policy. The Company intends to adopt a clawback policy in compliance with Nasdaq listing rules following their effectiveness.

To create alignment between management and stockholder interests and discourage inappropriate risk-taking, the Board adopted a stock ownership policy for executive officers in 2022 that requires each of our executive officers to maintain a significant equity stake in our common stock within five years of the adoption of these guidelines. The guidelines require stock holdings that are a multiple of 5x the base salary of the Chief Executive Officer and 3x the base salary for all other executive officers. Compliance with guidelines is calculated by valuing common stock owned along with the value of half of vested options held and half of unvested RSUs.

Our Board has adopted an Insider Trading Policy that prohibits all employees, including our NEOs, from using or pledging Proterra securities as collateral in a margin account. No employee may use or pledge Proterra securities as collateral for a loan unless expressly approved in advance by the Company’s Compliance Officer. No loans using or pledging Proterra securities as collateral have been approved by the Compliance Officer.

Our Insider Trading Policy also prohibits our NEOs and other officers against engaging at any time in hedging or monetization transactions involving Proterra securities, such as zero-cost collars and forward sale contracts, or from contributing Proterra securities to exchange funds that could be interpreted as having the effect of hedging in Proterra securities. All other employees are strongly discouraged from engaging in hedging activities.

One of the factors the Committee considers when determining executive compensation is the anticipated tax treatment to the Company and to the executives of the various payments and benefits. Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally provides that a publicly held company may not deduct compensation paid to certain covered executive officers to the extent that such compensation exceeds $1,000,000 per executive officer in any year. While the Committee generally considers this limit when determining compensation, the Committee reserves the discretion to conclude that it is appropriate to exceed the limitation on deductibility under Section 162(m) to ensure that executive officers are compensated in a manner that it believes to be consistent with the Company’s best interests and those of its stockholders. The Committee also considers the accounting treatment of the cash and equity incentive programs that the Company maintains.

During the last fiscal year, Ms. Krakauer, Mr. Porter and Mr. Smith served as members of our Compensation and Leadership Development Committee. None of the members of our Compensation and Leadership Development Committee was an officer or employee of our company at the time of his or her service on the Compensation and Leadership Development Committee or prior to such service. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or Compensation and Leadership Development Committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our Board or Compensation and Leadership Development Committee.

The Compensation and Leadership Development Committee engaged Farient Advisors in 2021 and 2022 to review executive and non-executive compensation programs. The Committee determined, after considering the review by Farient Advisors, that none of the elements of our compensation programs encouraged or created excessive risk-taking or were likely to have a material adverse effect on the Company. In its review, the Committee considered a number of features including the variable pay features of the Short Term Incentive Plan, performance measures that balanced financial and strategic objectives, time horizon of cash incentive and equity incentive plans, and the Company's compensation guiding principles, and internal controls and policies.

The Compensation and Leadership Development Committee has reviewed and discussed with management the Compensation Discussion and Analysis as set forth in this Proxy Statement. Based upon this review and discussion, the Compensation and Leadership Development Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be incorporated in the Amendment to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2022 and included in the Company’s 2023 Proxy Statement filed in connection with the Company’s 2023 Annual Meeting of Stockholders.

Respectfully submitted by the Compensation and Leadership Development Committee of the Board of Directors.

The following tables and accompanying narrative set forth information about compensation provided to our NEOs who are as follows: