RIOT PLATFORMS, INC.
POLICY FOR THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
I. | POLICY OVERVIEW |
Riot Platforms, Inc., a Nevada corporation, (together with its consolidated subsidiaries, the “Company”) has adopted this Policy for the Recovery of Erroneously Awarded Compensation (this “Policy”) to set forth the Company’s criteria, process and procedures for the recovery of incentive- based compensation erroneously awarded to, or earned or received by, certain Company officers under the circumstances described herein. This Policy is effective as of October 2, 2023 (the “Effective Date”) and replaces, supplements, and amends all previous Company clawback policies, rules, and procedures.
This Policy has been adopted, and is administered by, the Compensation and Human Resources Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company, which is comprised entirely of independent directors. The Committee will have full and final authority to make any and all determinations required under this policy. Any determination by the Committee with respect to this Policy will be final, conclusive, and binding on all parties. The Committee may amend or terminate this Policy at any time.
This Policy is intended to comply with the applicable rules of The Nasdaq Stock Market (the “Exchange” and the “Exchange Rules”) and with Section 10D (“Section 10D”) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Rule 10D-1 adopted thereunder (“Rule 10D-1” and, together with the Exchange Rules and Section 10D, the “Rules”). This Policy, and all capitalized terms herein, will be interpreted and administered consistent with this intent, and any conflicts or ambiguities between this Policy and the Rules shall be resolved in favor of the Rules.
II. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION |
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III. | DISCLOSURE REQUIREMENTS |
The Company shall file all disclosures with respect to this Policy required by applicable U.S. Securities and Exchange Commission (“SEC”) filings and rules.
IV. | PROHIBITION OF INDEMNIFICATION |
The Company shall not be permitted to insure or indemnify any Executive Officer against (i) the loss of any Erroneously Awarded Compensation that is repaid, returned, or recovered pursuant to the terms of this Policy, or (ii) any claims relating to the Company’s enforcement of its rights under this Policy. Further, the Company shall not enter into any agreement that exempts any Incentive-Based Compensation that is granted, paid or awarded to an Executive Officer from the application of this Policy or that waives the Company’s right to recovery of any Erroneously Awarded Compensation, and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date of this Policy).
V. | ADMINISTRATION AND INTERPRETATION |
This Policy shall be administered by the Committee, and any determinations made by the Committee shall be final and binding on all affected individuals.
The Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy and for the Company’s compliance with the Rules and any other applicable law, regulation, rule or interpretation of the SEC or the Exchange promulgated or issued in connection therewith.
The Committee or Board may amend and/or terminate this Policy from time to time. Unless otherwise determined by the Committee, this Policy will terminate upon the Company ceasing to be a listed issuer within the meaning of Section 10D of the Exchange Act.
VI. | AMENDMENT; TERMINATION |
The Committee may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary. Notwithstanding anything in this Section VI to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws, SEC rules or the Exchange Rules.
VII. | OTHER RECOVERY RIGHTS |
This Policy shall be binding and enforceable against all Executive Officers and, to the extent required by applicable law or guidance from the SEC or the Exchange, their beneficiaries, heirs, executors, administrators, or other legal representatives. The Committee intends that this Policy will be applied to the fullest extent required by applicable law. Any employment agreement, equity award agreement, compensatory plan or any other agreement or arrangement with an Executive Officer shall
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be deemed to include, as a condition to the grant of any benefit thereunder, an agreement by the Executive Officer to abide by the terms of this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available to the Company under applicable law, regulation, or rule or pursuant to the terms of any policy of the Company or any provision in any employment agreement, equity award agreement, compensatory plan, agreement or other arrangement.
VIII. | DEFINITIONS |
For purposes of this Policy, the following capitalized terms shall have the meanings set forth below:
“Accounting Restatement” means an accounting restatement the Company is required to prepare due to the material noncompliance of the Company with any financial reporting requirement under the 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 Eligible Incentive Compensation” means all Incentive-Based Compensation Received by an Executive Officer (i) on or after the effective date of the applicable the Exchange Rules, (ii) after beginning service as an Executive Officer, (iii) who served as an Executive Officer at any time during the applicable performance period relating to any Incentive-Based Compensation (whether or not such Executive Officer is serving at the time the Erroneously Awarded Compensation is required to be repaid to the Company), (iv) while the Company has a class of securities listed on a national securities exchange or a national securities association, and (v) during the applicable Clawback Period (as defined below).
“Clawback Period” means, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date, and if the Company changes its fiscal year, any transition period of less than nine months within or immediately following those three completed fiscal years in accordance with Rule 10D-1 under the Exchange Act.
“Executive Officer” means each individual who is currently or was previously designated as an “officer” of the Company as defined in Rule 16a-1(f) under the Exchange Act, and any other senior executives of the Company, as determined by the Committee. For the avoidance of doubt, the identification of an executive officer for purposes of this Policy shall include each executive officer who is or was identified pursuant to Item 401(b) of Regulation S-K as well as the principal financial officer and principal accounting officer (or, if there is no principal accounting officer, the controller).
“Erroneously Awarded Compensation” means, with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-Based Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without regard to any taxes paid.
“Financial Reporting Measures” means 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. A Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.
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“Incentive-Based Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure. The following items of compensation are not Incentive-Based Compensation under the Policy: salaries, bonuses paid solely at the discretion of the Committee or the Board that are not paid from a bonus pool that is determined by satisfying a Financial Reporting Measure, 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 for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting is contingent solely upon completion of a specified employment period (e.g., time-based vesting equity awards) and/or attaining one or more non-Financial Reporting Measures.
“Received” means, with respect to any Incentive-Based Compensation, actual or deemed receipt, and Incentive-Based Compensation shall be 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 to the Executive Officer occurs after the end of that period.
“Restatement Date” means the earlier to occur of:
Effective as of October 2, 2023, as adopted by the Compensation and Human Resources Committee of the Board of Directors of Riot Platforms, Inc.
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RIOT PLATFORMS, INC. ATTESTATION AND ACKNOWLEDGEMENT OF
POLICY FOR THE
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
By my signature below, I, the undersigned individual, hereby acknowledge and agree as follows:
Signature: Dated:
Printed Name: