EX-97.1 7 ex97-1.htm POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

abrdn Precious Metals Basket ETF Trust 10-K

Exhibit 97.1

abrdn Gold ETF Trust

abrdn Silver ETF Trust

abrdn Platinum ETF Trust

abrdn Palladium ETF Trust

abrdn Precious Metals Basket ETF Trust

POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Platinum ETF Trust, abrdn Palladium ETF Trust and abrdn Precious Metals Basket ETF Trust (each a “Trust” and collectively, the “Trusts”) adopt this Policy for Recovery of Erroneously Awarded Compensation (the “Policy”), which provides for the recovery of certain incentive compensation in the event of an Accounting Restatement (as defined below). This Policy is designed to comply with, and shall be interpreted to be consistent with, Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 promulgated under the Exchange Act (“Rule 10D-1”), New York Stock Exchange (“NYSE”) Arca listing standards and NYSE Arca Rule 5.3-E(p) (collectively, the “Listing Standards").

| 1. | Administration

Except as specifically set forth herein, this Policy shall be administered by abrdn ETFs Sponsor LLC (the “Sponsor”) or, if so designated by the Sponsor, a committee thereof (the Sponsor or such committee charged with administration of this Policy, the “Administrator”). The Administrator is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy. Any determinations made by the Administrator shall be final and binding on all affected individuals and need not be uniform with respect to each individual covered by the Policy. In the administration of this Policy, the Administrator is authorized and directed to consult with the Sponsor or such other committees of the Sponsor. Subject to any limitation of applicable law, the Administrator may authorize and empower any officer or employee of the Sponsor to take any and all actions necessary or appropriate to carry out the purpose and intent of this Policy (other than with respect to any recovery under this Policy involving such officer or employee).

| 2. | Definitions

As used in this Policy, the following definitions shall apply:

| ● | “Accounting Restatement” means an accounting restatement of the Trust’s financial statements due to the Trust’s material noncompliance 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, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

| ● | “Administrator” has the meaning set forth in Section 1 of this Policy.

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| ● | “Applicable Period” means the three completed fiscal years immediately preceding the date on which the Trust is required to prepare an Accounting Restatement, as well as any transition period (that results from a change in the Trust’s fiscal year) within or immediately following those three completed fiscal years (except that a transition period that comprises a period of at least nine months shall count as a completed fiscal year). The “date on which the Trust is required to prepare an Accounting Restatement” is the earlier to occur of (a) the date the Sponsor, a committee of the Sponsor, or the officer or officers of the Sponsor are authorized to take such action if the Sponsor action is not required, concludes or reasonably should have concluded, that the Trust is required to prepare an Accounting Restatement or (b) the date a court, regulator or other legally authorized body directs the Trust to prepare an Accounting Restatement, in each case regardless of if or when the restated financial statements are filed.

| ● | “Covered Executives” means the current and former president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller) of the Trusts (or persons performing such functions for the Trusts in their capacities as officers of the Sponsor), any vice-president of the Trusts in charge of a principal business unit, division, or function (such as sales, administration, or finance) of the Trusts, any other officer who performs a policy-making function for the Trusts, or any other person who performs similar policy-making functions for the Trusts, in each case, as determined by the Administrator in accordance with the definition of executive officer set forth in Rule 10D-1 and the Listing Standards; provided that, an executive officer of a Trust’s parent or subsidiary is deemed a Covered Officer if the executive officer performs such policy making functions for the Trusts. Although a Covered Executive would include officers or employees of the respective Trust’s trustee who perform policy-making functions for the Trust, there are no such individuals.

| ● | “Erroneously Awarded Compensation” has the meaning set forth in Section 5 of this Policy.

| ● | A “Financial Reporting Measure” is any measure that is determined and presented in accordance with the accounting principles used in preparing the Trust’s financial statements, and any measure that is derived wholly or in part from such measure. Financial Reporting Measures include but are not limited to the following (and any measures derived from the following): Trust stock price; total shareholder return (“TSR”); revenues; net income; operating income; profitability of one or more reportable segments; financial ratios (e.g., accounts receivable turnover and inventory turnover rates); earnings before interest, taxes, depreciation and amortization; funds from operations and adjusted funds from operations; liquidity measures (e.g., working capital, operating cash flow); return measures (e.g., return on invested capital, return on assets); earnings measures (e.g., earnings per share); sales per square foot or same store sales, where sales is subject to an Accounting Restatement; revenue per user, or average revenue per user, where revenue is subject to an Accounting Restatement; cost per employee, where cost is subject to an Accounting Restatement; any of such financial reporting measures relative to a peer group, where the Trust’s financial reporting measure is subject to an Accounting Restatement; and tax basis income. A Financial Reporting Measure need not be presented within the Trust’s financial statements or included in a filing with the Securities Exchange Commission.

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| ● | “Incentive-Based Compensation” means any compensation that is paid by the Trusts to a Covered Executive, and that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure. Incentive-Based Compensation is “received” for purposes of this Policy in the Trust’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 such Incentive-Based Compensation occurs after the end of that period.

| 3. | Covered Executives; Incentive-Based Compensation

This Policy applies to Incentive-Based Compensation received by a Covered Executive (a) after beginning services as a Covered Executive; (b) if that person served as a Covered Executive at any time during the performance period for such Incentive-Based Compensation; (c) while the Trust had a listed class of securities on a national securities exchange and (d) during the Applicable Period.

| 4. | Required Recoupment of Erroneously Awarded Compensation in the Event of an Accounting Restatement

In the event that the Trust is required to prepare an Accounting Restatement, the Trust shall promptly recoup the amount of any Erroneously Awarded Compensation received by any Covered Executive, as calculated pursuant to Section 5 of this Policy, during the Applicable Period. Recovery under this Policy with respect to a Covered Executive shall not require the finding of any misconduct by such Covered Executive or such Covered Executive being found responsible for the accounting error leading to an Accounting Restatement.

| 5. | Erroneously Awarded Compensation: Amount Subject to Recovery

The amount of Erroneously Awarded Compensation subject to recovery under this Policy, as determined by the Administrator, is the amount of Incentive-Based Compensation received by the Covered Executive that exceeds the amount of Incentive-Based Compensation that would have been received by the Covered Executive had it been determined based on the restated amounts.

Erroneously Awarded Compensation shall be computed by the Administrator without regard to any taxes paid by the Covered Executive in respect of the Erroneously Awarded Compensation.

With respect to any compensation plans or programs that take into account Incentive-Based Compensation, the amount of Erroneously Awarded Compensation subject to recovery hereunder includes, but is not limited to, the amount contributed to any notional account based on Erroneously Awarded Compensation and any earnings accrued to date on that notional amount.

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For Incentive-Based Compensation based on stock price or TSR: (a) the Administrator shall determine the amount of Erroneously Awarded Compensation based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or TSR upon which the Incentive-Based Compensation was received and (b) the Sponsor shall maintain documentation of the determination of that reasonable estimate and provide such documentation to NYSE Group, Inc. (“NYSE Group”).

| 6. | Method of Recoupment

The Administrator shall determine, in its sole discretion, the timing and method for promptly recouping Erroneously Awarded Compensation hereunder, which may include without limitation (a) seeking reimbursement of all or part of any cash or equity-based award, (b) cancelling prior cash or equity-based awards, whether vested or unvested or paid or unpaid, (c) cancelling or offsetting against any planned future cash or equity-based awards, (d) forfeiture of deferred compensation, subject to compliance with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder and (e) any other method authorized by applicable law or contract. Subject to compliance with any applicable law, the Administrator may affect recovery under this Policy from any amount otherwise payable to the Covered Executive, including amounts payable to such individual under any otherwise applicable Sponsor plan or program, including base salary, bonuses or commissions and compensation previously deferred by the Covered Executive.

The Trust is authorized and directed pursuant to this Policy to recoup Erroneously Awarded Compensation in compliance with this Policy unless the Administrator has determined that recovery would be impracticable solely for the following limited reasons, and subject to the following procedural and disclosure requirements:

| ● | The direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on the expense of enforcement, the Administrator must make a reasonable attempt to recover such Erroneously Awarded Compensation, document such reasonable attempt(s) to recover and provide that documentation to NYSE Group;

| ● | Recovery would violate home country law of the issuer where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on a violation of home country law of the issuer, the Administrator must satisfy the applicable opinion and disclosure requirements of Rule 10D-1 and the Listing Standards; or

| ● | Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Sponsor, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.

| 7. | No Indemnification of Covered Executives

Notwithstanding the terms of any indemnification or insurance policy or any contractual arrangement with any Covered Executive that may be interpreted to the contrary, the Trust shall not indemnify any Covered Executives against the loss of any Erroneously Awarded Compensation, including any payment or reimbursement for the cost of third-party insurance purchased by any Covered Executives to fund potential clawback obligations under this Policy.

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| 8. | Administrator Indemnification

Any members of the Administrator, and any other members of the Sponsor who assist in the administration of this Policy, shall not be personally liable for any action, determination or interpretation made with respect to this Policy and shall be fully indemnified by the Trust to the fullest extent under applicable law and Trust policy with respect to any such action, determination or interpretation. The foregoing sentence shall not limit any other rights to indemnification under applicable law or Trust policy.

| 9. | Effective Date; Retroactive Application

This Policy shall be effective as of December 1, 2023 (the “Effective Date”). The terms of this Policy shall apply to any Incentive-Based Compensation that is received by Covered Executives on or after the Effective Date, even if such Incentive-Based Compensation was approved, awarded, granted or paid to Covered Executives prior to the Effective Date. Without limiting the generality of Section 6 of this Policy, and subject to applicable law, the Administrator may effect recovery under this Policy from any amount of compensation approved, awarded, granted, payable or paid to the Covered Executive prior to, on or after the Effective Date.

| 10. | Amendment; Termination

The Trust may amend, modify, supplement, rescind or replace all or any portion of this Policy at any time and from time to time in its discretion, and shall amend this Policy as it deems necessary to comply with applicable law or any rules or standards adopted by a national securities exchange on which the Trust’s securities are listed.

| 11. | Other Recoupment Rights; Company Claims

The Trust intends that this Policy shall be applied to the fullest extent of the law. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Trust under applicable law or pursuant to the terms of any similar policy in any employment agreement, equity award agreement or similar agreement and any other legal remedies available to the Trust.

Nothing contained in this Policy, and no recoupment or recovery as contemplated by this Policy, shall limit any claims, damages or other legal remedies the Trust or any of its affiliates may have against a Covered Executive arising out of or resulting from any actions or omissions by the Covered Executive.

| 12. | Successors

This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.

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| 13. | Governing Law; Venue

This Policy and all rights and obligations hereunder are governed by and construed in accordance with the internal laws of Delaware, excluding any choice of law rules or principles that may direct the application of the laws of another jurisdiction.

| 14. | Exhibit Filing Requirement

A copy of this Policy and any amendments thereto shall be filed as an exhibit to each Trust’s annual report, if applicable.

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