Motorcar Parts Of America Inc 10-K/A, filed Jun 28, 2024
Motorcar Parts Of America Inc (MPAA)
10-K/A
2024-06-28
For: 2024-03-31
View Original
Added on
April 05, 2026
About this 10-K/A
Motorcar Parts Of America Inc filed this 10-K/A on June 28, 2024, covering the fiscal year ended March 31, 2024.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended March 31, 2024
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____________ to ______________
Commission File No. 001-33861
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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Zip Code
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Registrant’s telephone number, including area code: (310 ) 212-7910
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark
whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required
a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
As of September 30, 2023, which was the last business day of the registrant’s most recently completed fiscal second quarter, the aggregate market value of
the registrant’s common stock held by non-affiliates of the registrant was approximately $151,868,000 based on the closing sale price as
reported on the NASDAQ Global Select Market.
There were 19,662,380 shares of common stock
outstanding as of June 4, 2024.
DOCUMENTS INCORPORATED BY REFERENCE:
In accordance with General Instruction G (3) of Form 10-K, the information required by Part III hereof will either be incorporated into this annual report
on Form 10-K by reference to the registrant’s Definitive Proxy Statement for the registrant’s next Annual Meeting of Stockholders filed within 120 days of March 31, 2024 or will be included in an amendment to this annual report on Form 10-K filed
within 120 days of March 31, 2024.
| PCAOB ID No. |
Explanatory Note
Motorcar Parts of America, Inc. (which may be referred to as “the Company,” “we,” “us,” “MPA,” and “our”) is filing this Amendment No. 1 to Annual Report on
Form 10-K/A (this “Amended Form 10-K”) to amend our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 11, 2024 (the “Original Form 10-K”), to
include Exhibit 97.1, which was omitted from Original Form 10-K.
This Amended Form 10-K also updates, amends, and supplements Item 15 of the Original Form 10-K to include the filing of new Exhibits 31.4, 31.5 and 31.6,
certifications of our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
No other changes have been made to the Original Form 10-K. This Amended Form 10-K does not amend or otherwise update any other information in the Original
Form 10-K. Accordingly, this Amended Form 10-K should be read in conjunction with the Original Form 10-K and with our subsequent filings with the SEC. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Original Form 10-K.
PART IV
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Exhibits, Financial Statement Schedule
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Documents filed as part of this report:
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(1) See Item 15(a)(1) of the Original Form 10-K.
(2) See
Item 15(a)(2) of the Original Form 10-K.
(3) The
documents listed in the Exhibit Index of this Amendment No. 1 to the Annual Report on Form 10-K/A are incorporated by reference or are filed with this Amendment No. 1 to the Annual Report on Form 10-K/A, in each case as indicated therein (numbered
in accordance with Item 601 of Regulation S-K).
Exhibits:
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Number
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Description of Exhibit
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Method of Filing
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3.1
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Certificate of Incorporation of the Company
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Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form SB-2 declared effective on March 22, 1994 (the “1994 Registration Statement”).
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3.2
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Amendment to Certificate of Incorporation of the Company
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Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (No. 33-97498) declared effective on November 14, 1995 (the “1995 Registration Statement”).
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3.3
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Amendment to Certificate of Incorporation of the Company
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3.4
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Amendment to Certificate of Incorporation of the Company
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3.5
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Amendment to Certificate of Incorporation of the Company
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3.6
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Amended and Restated By-Laws of the Company
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3.7
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Certificate of Amendment of the Certificate of Incorporation of the Company
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3.8
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Amendment to the Amended and Restated By-Laws of the Company
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Number
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Description of Exhibit
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Method of Filing
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3.9
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Amendment to the Amended and Restated By-Laws of the Company
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3.10
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Third Amendment to the Amended and Restated By-Laws of the Company
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4.1
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Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
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4.2
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2004 Non-Employee Director Stock Option Plan
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4.3
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2010 Incentive Award Plan
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4.4
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Amended and Restated 2010 Incentive Award Plan
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4.5
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Second Amended and Restated 2010 Incentive Award Plan
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4.6
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2014 Non-Employee Director Incentive Award Plan
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4.7
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Third Amended and Restated 2010 Incentive Award Plan
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4.8
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Fourth Amended and Restated 2010 Incentive Award Plan
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4.9
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2022 Incentive Award Plan
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4.10
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Form of Convertible Promissory Note
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4.11
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Form of Common Stock Warrant
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4.12
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First Amended and Restated Convertible Promissory Note
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4.13
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First Amended and Restated Common Stock Warrant
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Number
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Description of Exhibit
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Method of Filing
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10.1
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Form of Indemnification Agreement for officers and directors
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10.2
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Amended and Restated Employment Agreement, dated as of December 31, 2008, by and between the Company and Selwyn Joffe
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10.3
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Employment Agreement, dated as of May 18, 2012, between Motorcar Parts of America, Inc., and Selwyn Joffe
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10.4
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Form of Stock Option Notice for use in connection with stock options granted to Selwyn Joffe pursuant to the Motorcar Parts of America, Inc. 2010 Incentive Award Plan
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10.5
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Form of Stock Option Agreement for use in connection with stock options granted to Selwyn Joffe pursuant to the Motorcar Parts of America, Inc. 2010 Incentive Award Plan
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10.6*
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Revolving Credit, Term Loan and Security Agreement, dated as of June 3, 2015, among Motorcar Parts of America, Inc., each lender from time to time party thereto, and PNC
Bank, National Association, as administrative agent
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10.7
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First Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of November 5, 2015, among Motorcar Parts of America, Inc., each lender from time to time
party thereto, and PNC Bank, National Association, as administrative agent
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10.8
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Consent and Second Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of May 19, 2016, among Motorcar Parts of America, Inc., each lender from
time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.9
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Third Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of March 24, 2017, among Motorcar Parts of America, Inc., each lender from time to time
party thereto, and PNC Bank, National Association, as administrative agent
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Number
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Description of Exhibit
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Method of Filing
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10.10
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Fourth Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of April 24, 2017, among Motorcar Parts of America, Inc., each lender from time to time
party thereto and PNC Bank, National Association, as administrative agent
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10.11
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Fifth Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of July 18, 2017, among Motorcar Parts of America, Inc., each lender from time to time
party thereto and PNC Bank, National Association, as administrative agent
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10.12*
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Amended and Restated Credit Facility, dated as of June 5, 2018, among Motorcar Parts of America, Inc., each lender from time to time party thereto and PNC Bank, National
Association, as administrative agent
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10.13
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First Amendment to Amended and Restated Loan Agreement, dated as of November 14, 2018, among Motorcar Parts of America, Inc., D & V Electronics Ltd., each lender
from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.14
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Amendment No. 2 to Employment Agreement, dated as of February 5, 2019, between Motorcar Parts of America, Inc., and Selwyn Joffe
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10.15
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Second Amendment to Amended and Restated Loan Agreement, dated as of June 4, 2019, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd.,
Dixie Electric Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.16
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Amendment No. 3 to Employment Agreement, dated as of March 30, 2020, between Motorcar Parts of America, Inc., and Selwyn Joffe
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10.17
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Amendment No. 4 to Employment Agreement, dated as of May 21, 2020, between Motorcar Parts of America, Inc., and Selwyn Joffe
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Number
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Description of Exhibit
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Method of Filing
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10.18
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Third Amendment to Amended and Restated Loan Agreement, dated as of May 28, 2021, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd.,
Dixie Electric Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.19
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Amendment No. 5 to Employment Agreement, dated as of June 18, 2021, between Motorcar Parts of America, Inc., and Selwyn Joffe
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10.20
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Fourth Amendment to Amended and Restated Loan Agreement, dated as of November 3, 2022, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric
Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.21
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Fifth Amendment to Amended and Restated Loan Agreement, dated as of February 3, 2023, among Motorcar Parts of America, Inc., D&V Electronics Ltd., Dixie Electric Ltd., Dixie Electric Inc.,
each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.22
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Note Purchase Agreement
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10.23
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Registration Rights Agreement
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10.24
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Sixth Amendment to Amended and Restated Loan Agreement, dated as of May 28, 2021, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric
Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.25
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Amendment No. 6 to Employment Agreement, dated March 29, 2023, between Motorcar Parts of America, Inc. and Selwyn Joffe.
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10.26
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First Amendment to Note Purchase Agreement
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10.27
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Seventh Amendment to Amended and Restated Loan Agreement, dated as of August 3, 2023, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie Electric
Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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10.28
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Second Amendment to the Note Purchase Agreement
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10.29
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Eighth Amendment to Amended and Restated Loan Agreement, dated as of December 12, 2023, among Motorcar Parts of America, Inc., D & V Electronics Ltd., Dixie Electric Ltd., and Dixie
Electric Inc., each lender from time to time party thereto, and PNC Bank, National Association, as administrative agent
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21.1
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List of Subsidiaries
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23.1
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Consent of Independent Registered Public Accounting Firm Ernst & Young LLP
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31.1
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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31.2
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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31.3
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Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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Filed herewith.
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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Filed herewith.
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Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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Filed herewith.
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32.1
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Certifications of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer pursuant to Section 906 of the Sarbanes Oxley Act
of 2002
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Policy for Recovery of Erroneously Awarded Compensation
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Filed herewith.
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101.INS
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the
XBRL document)
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101.SCM
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Inline XBRL Taxonomy Extension Schema Document
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Filed herewith.
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document
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Filed herewith.
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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Filed herewith.
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104
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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Filed herewith.
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| * |
Portions of this exhibit have been granted confidential treatment by the SEC.
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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with
respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in those agreements or other documents were made solely within the
specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
SIGNATURES
Pursuant to the requirements of Section 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.
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MOTORCAR PARTS OF AMERICA, INC.
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Dated: June 28, 2024
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By:
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/s/ David Lee
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David Lee
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Chief Financial Officer
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Dated: June 28, 2024
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By:
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/s/ Kamlesh Shah
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Kamlesh Shah
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Chief Accounting Officer
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Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K/A has been signed by the following persons on behalf of the
Registrant in the capacities and on the dates indicated:
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/s/ Selwyn Joffe
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Chief Executive Officer and Director
(Principal Executive Officer)
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June 28, 2024
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Selwyn Joffe
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/s/ David Lee
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Chief Financial Officer
(Principal Financial Officer)
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June 28, 2024
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David Lee
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/s/ Kamlesh Shah
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Chief Accounting Officer
(Principal Accounting Officer)
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June 28, 2024
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Kamlesh Shah
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/s/ Rudolph Borneo
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Director
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June 28, 2024
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Rudolph Borneo
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/s/ David Bryan
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Director
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June 28, 2024
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David Bryan
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/s/ Joseph Ferguson
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Director
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June 28, 2024
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Joseph Ferguson
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/s/ Philip Gay
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Director
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June 28, 2024
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Philip Gay
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/s/ Jeffrey Mirvis
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Director
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June 28, 2024
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Jeffrey Mirvis
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/s/ Jamy Rankin
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Director
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June 28, 2024
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Jamy Rankin
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/s/ Douglas Trussler
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Director
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June 28, 2024
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Douglas Trussler
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/s/ Patricia Warfield
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Director
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June 28, 2024
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Patricia Warfield
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/s/ Barbara Whittaker
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Director
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June 28, 2024
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Barbara Whittaker
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Exhibit 31.4
CERTIFICATIONS
I, Selwyn Joffe, certify that:
1. I have reviewed this report on Form 10-K/A of Motorcar Parts of America, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused, such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
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Date: June 28, 2024
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/s/ Selwyn Joffe
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Selwyn Joffe
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Chief Executive Officer
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Exhibit 31.5
CERTIFICATIONS
I, David Lee, certify that:
1. I have reviewed this report on Form 10-K/A of Motorcar Parts of America, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused, such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
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Date: June 28, 2024
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/s/ David Lee
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David Lee
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Chief Financial Officer
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Exhibit 31.6
CERTIFICATIONS
I, Kamlesh Shah, certify that:
1. I have reviewed this report on Form 10-K/A of Motorcar Parts of America, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused, such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
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Date: June 28, 2024
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/s/ Kamlesh Shah
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Kamlesh Shah
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Chief Accounting Officer
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Exhibit 97.1
MOTORCAR PARTS OF AMERICA, INC. POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Motorcar Parts of America, Inc. (the “Company”) has adopted this Policy
for Recovery of Erroneously Awarded Compensation (the “Policy”), effective as of October 2, 2023 (the “Effective Date”).
Capitalized terms used in this Policy but not otherwise defined herein are defined in Section 11.
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Persons Subject to Policy
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This Policy shall apply to current and former Officers of the Company. Each Officer shall be required to sign an Acknowledgment
Agreement pursuant to which such Officer will agree to be bound by the terms of, and comply with, this Policy; however, any Officer’s failure to sign any such Acknowledgment Agreement shall not negate the application of this Policy to the Officer.
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2.
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Compensation Subject to Policy
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This Policy shall apply to Incentive-Based Compensation received on or
after the Effective Date. For purposes of this Policy, the date on which Incentive-Based Compensation is “received” shall be determined under the Applicable Rules, which
generally provide that Incentive-Based Compensation is “received” in the Company’s fiscal period during which the relevant Financial Reporting Measure is attained or satisfied, without regard to whether the grant, vesting or payment of the
Incentive-Based Compensation occurs after the end of that period.
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3.
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Recovery of Compensation
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In the event that the Company is required to prepare a Restatement, the Company shall recover, reasonably promptly, the portion of any
Incentive-Based Compensation that is Erroneously Awarded Compensation, unless the Committee has determined that recovery would be Impracticable. Recovery shall be required in accordance with the preceding sentence regardless of whether the applicable
Officer engaged in misconduct or otherwise caused or contributed to the requirement for the Restatement and regardless of whether or when restated financial statements are filed by the Company. For clarity, the recovery of Erroneously Awarded
Compensation under this Policy will not give rise to any person’s right to voluntarily terminate employment 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.
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4.
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Manner of Recovery; Limitation on Duplicative Recovery
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The Committee shall, in its sole discretion, determine the manner of recovery of any Erroneously Awarded Compensation, which may
include, without limitation, reduction or cancellation by the Company or an affiliate of the Company of Incentive-Based Compensation, Erroneously Awarded Compensation or time-vesting equity awards, reimbursement or repayment by any person subject to
this Policy of the Erroneously Awarded Compensation, and, to the extent permitted by law, an offset of the Erroneously Awarded Compensation against other compensation payable by the Company or an affiliate of the Company to such person.
Notwithstanding the foregoing, unless otherwise prohibited by the Applicable Rules, to the extent this Policy provides for recovery of Erroneously Awarded Compensation already recovered by the Company pursuant to Section 304 of the Sarbanes-Oxley Act
of 2002 or Other Recovery Arrangements, the amount of Erroneously Awarded Compensation already recovered by the Company from the recipient of such Erroneously Awarded Compensation may be credited to the amount of Erroneously Awarded Compensation
required to be recovered pursuant to this Policy from such person.
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5.
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Administration
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This Policy shall be administered, interpreted and construed by the Committee, which is authorized to make all determinations
necessary, appropriate or advisable for such purpose. The Board of Directors of the Company (the “Board”) may re-vest in itself the authority to administer, interpret and construe this
Policy in accordance with applicable law, and in such event references herein to the “Committee” shall be deemed to be references to the Board. Subject to any permitted review by the applicable national securities exchange or association pursuant to
the Applicable Rules, all determinations and decisions made by the Committee pursuant to the provisions of this Policy shall be final, conclusive and binding on all persons, including the Company and its affiliates, equityholders and employees. The
Committee may delegate administrative duties with respect to this Policy to one or more directors or employees of the Company, as permitted under applicable law, including any Applicable Rules.
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6.
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Interpretation
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This Policy will be interpreted and applied in a manner that is consistent with the requirements of the Applicable Rules, and to the
extent this Policy is inconsistent with such Applicable Rules, it shall be deemed amended to the minimum extent necessary to ensure compliance therewith.
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7.
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No Indemnification; No Liability
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The Company shall not indemnify or insure any person against the loss of any Erroneously Awarded Compensation pursuant to this Policy,
nor shall the Company directly or indirectly pay or reimburse any person for any premiums for third-party insurance policies that such person may elect to purchase to fund such person’s potential obligations under this Policy. None of the Company,
an affiliate of the Company or any member of the Committee or the Board shall have any liability to any person as a result of actions taken under this Policy.
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8.
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Application; Enforceability
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Except as otherwise determined by the Committee or the Board, the adoption of this Policy does not limit, and is intended to apply in
addition to, any other clawback, recoupment, forfeiture or similar policies or provisions of the Company or its affiliates, including any such policies or provisions of such effect contained in any employment agreement, bonus plan, incentive plan,
equity-based plan or award agreement thereunder or similar plan, program or agreement of the Company or an affiliate or required under applicable law (the “Other Recovery Arrangements”). The
remedy specified in this Policy shall not be exclusive and shall be in addition to every other right or remedy at law or in equity that may be available to the Company or an affiliate of the Company.
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9.
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Severability
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The provisions in this Policy are intended to be applied to the fullest extent of the law; provided, however, to the extent that any
provision of this Policy is found to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted, and shall automatically be deemed amended in a manner consistent with its objectives to the
extent necessary to conform to any limitations required under applicable law.
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10.
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Amendment and Termination
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The Board or the Committee may amend, modify or terminate this Policy in whole or in part at any time and from time to time in its
sole discretion. This Policy will terminate automatically when the Company does not have a class of securities listed on a national securities exchange or association.
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11.
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Definitions
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“Applicable Rules” means Section 10D of the Exchange Act, Rule 10D-1
promulgated thereunder, the listing rules of the national securities exchange or association on which the Company’s securities are listed, and any applicable rules, standards or other guidance adopted by the Securities and Exchange Commission or any
national securities exchange or association on which the Company’s securities are listed.
“Committee” means the committee of the Board responsible for executive
compensation decisions comprised solely of independent directors (as determined under the Applicable Rules), or in the absence of such a committee, a majority of the independent directors serving on the Board.
“Erroneously Awarded Compensation” means the amount of Incentive-Based
Compensation received by a current or former Officer that exceeds the amount of Incentive-Based Compensation that would have been received by such current or former Officer based on a restated Financial Reporting Measure, as determined on a pre-tax
basis in accordance with the Applicable Rules.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financial Reporting Measure” means any measure determined and presented
in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such measures, including GAAP, IFRS and non-GAAP/IFRS financial measures, as well as stock or share
price and total equityholder return.
“GAAP” means United States generally accepted accounting principles.
“IFRS” means international financial reporting standards as adopted by the
International Accounting Standards Board.
“Impracticable” means (a) the direct costs paid to third parties to assist
in enforcing recovery would exceed the Erroneously Awarded Compensation; provided that the Company has (i) made reasonable attempts to recover the Erroneously Awarded Compensation, (ii) documented such attempt(s), and (iii) provided such
documentation to the relevant listing exchange or association, (b) to the extent permitted by the Applicable Rules, the recovery would violate the Company’s home country laws pursuant to an opinion of home country counsel; provided that the Company
has (i) obtained an opinion of home country counsel, acceptable to the relevant listing exchange or association, that recovery would result in such violation, and (ii) provided such opinion to the relevant listing exchange or association, or (c)
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 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations
thereunder.
“Incentive-Based Compensation” means, with respect to a Restatement, any compensation that is granted,
earned, or vested based wholly or in part upon the attainment of one or more Financial Reporting Measures and received by a person: (a) after beginning service as an Officer; (b) who served as an Officer at any time during the performance period
for that compensation; (c) while the Company has a class of securities listed on a national securities exchange or association; and (d) during
the applicable Three-Year Period.
“Officer” means each person who serves as an executive officer of the
Company, as defined in Rule 10D‑1(d) under the Exchange Act.
“Restatement” means an accounting restatement to correct the Company’s
material noncompliance with any financial reporting requirement under securities laws, including restatements that correct an error in previously issued financial statements (a) that is material to the previously issued financial statements or (b)
that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
“Three-Year Period” means, with respect to a Restatement, the three completed fiscal years immediately
preceding the date that 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 the Company is required to
prepare such Restatement, or, if earlier, the date on which a court, regulator or other legally authorized body directs the Company to prepare such Restatement. The “Three-Year 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. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine to 12 months shall be deemed
a completed fiscal year.
FORM OF ACKNOWLEDGMENT AGREEMENT
PERTAINING TO THE MOTORCAR PARTS OF AMERICA, INC. POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
In consideration of, and as a condition to, the receipt of future cash and equity incentive compensation from Motorcar Parts of
America, Inc. (the “Company”), _________________ (“Executive”) and the Company are entering into this Acknowledgment Agreement.
| 1. |
Executive agrees that compensation received by Executive may be subject to reduction, cancellation, forfeiture and/or recoupment to the extent necessary to comply with the Policy for Recovery of Erroneously
Awarded Compensation (as amended from time to time, the “Policy”). Executive acknowledges that Executive has received and has had an opportunity to review the Policy.
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| 2. |
Executive acknowledges and agrees to the terms of the Policy, including that any compensation received by Executive shall be subject to and conditioned upon the provisions of the Policy.
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| 3. |
Executive further acknowledges and agrees that Executive is not entitled to indemnification in connection with any enforcement of the Policy and expressly waives any rights to such indemnification under the
Company’s organizational documents or otherwise.
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| 4. |
Executive agrees to take all actions requested by the Company in order to enable or facilitate the enforcement of the Policy (including, without limitation, any reduction, cancellation, forfeiture or recoupment
of any compensation that Executive has received or to which Executive may become entitled).
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| 5. |
To the extent any recovery right under the Policy conflicts with any other contractual rights Executive may have with the Company or any affiliate, Executive understands that the terms of the Policy shall
supersede any such contractual rights. Executive agrees that no recovery of compensation under the Policy will be an event that triggers or contributes to any right of Executive to resign for “good reason” or “constructive termination” (or
similar term) under any agreement with the Company or any affiliate.
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EXECUTIVE
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(Signature)
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(Print Name)
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(Title)
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(Date)
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| MOTORCAR PARTS OF AMERICA, INC. | |
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(Signature)
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(Print Name)
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(Title)
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(Date)
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