Super Micro Computer, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision, and with the participation, of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2022. Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2022. Management’s Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with U.S. GAAP. Management’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are appropriately recorded to permit preparation of financial statements in accordance with U.S. GAAP and that our receipts and expenditures are made only in accordance with authorizations of management, acting under authority delegated to them by the Board, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Management, including our CEO and CFO, assessed our internal control over financial reporting as of June 30, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its Internal Control - Integrated Framework (2013) (the “COSO Framework”). Based on this assessment, management has concluded that our internal control over financial reporting was effective as of June 30, 2022, to provide reasonable assurance regarding the reliability of financial reporting and preparation of consolidated financial statements in accordance with U.S. GAAP. The effectiveness of our internal control over financial reporting as of June 30, 2022, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and their opinion is stated in their report which is included in this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. SMCI | 2022 Form 10-K | 100 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Super Micro Computer, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Super Micro Computer, Inc. and subsidiaries (the “Company”) as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2022, of the Company and our report dated August 29, 2022, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP San Jose, California August 29, 2022 Item 9B. Other Information None. SMCI | 2022 Form 10-K | 101 Table of Contents Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III Item 10. Directors, Executive Officers, and Corporate Governance Executive Officers and Directors The following table sets forth information regarding our current directors and executive officers and their ages as of July 31, 2022: Name Age Position(s) Charles Liang 64 President, Chief Executive Officer and Chairman of the Board David Weigand 64 Senior Vice President, Chief Financial Officer and Chief Compliance Officer Don Clegg 63 Senior Vice President of Worldwide Sales George Kao 61 Senior Vice President of Operations Sara Liu 60 Co-Founder, Senior Vice President and Director Daniel Fairfax (1)(4) 66 Director Judy Lin (2)(4) 69 Director Sherman Tuan (2)(3)(4) 68 Director Shiu Leung (Fred) Chan (1)(2)(4) 74 Director Tally Liu (1)(3)(4) 72 Director (1) Member of the Audit Committee (2) Member of the Nominating and Corporate Governance Committee (the “Governance Committee”) (3) Member of the Compensation Committee (4) Determined by the Board of Directors to be “independent” SMCI | 2022 Form 10-K | 102 Table of Contents The following Board Diversity Matrix is provided pursuant to Nasdaq Rule 5606. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f). Board Diversity Matrix (As of July 31, 2022) Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 5 0 0 Part II: Demographic Background African American or Black 0 0 0 0 Alaskan Native or Native American 0 0 0 0 Asian 2 4 0 0 Hispanic or Latinx 0 0 0 0 Native Hawaiian or Pacific Islander 0 0 0 0 White 0 1 0 0 Two or More Races or Ethnicities 0 0 0 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Executive Officers and Management Directors Charles Liang founded Super Micro and has served as our President, Chief Executive Officer and Chairman of the Board since our inception in September 1993. Mr. Liang has been developing server and storage system architectures and technologies for the past three decades. From July 1991 to August 1993, Mr. Liang was President and Chief Design Engineer of Micro Center Computer Inc., a high-end motherboard design and manufacturing company. From January 1988 to April 1991, Mr. Liang was Senior Design Engineer and Project Leader for Chips & Technologies, Inc., a chipset technology company, and Suntek Information International Group, a system and software development company. Mr. Liang has been granted many server technology patents. Mr. Liang holds an M.S. in Electrical Engineering from the University of Texas at Arlington and a B.S. in Electrical Engineering from National Taiwan University of Science & Technology in Taiwan. Our Governance Committee concluded that Mr. Liang should serve on the Board based on his skills, experience and qualifications in managing technology businesses, his technical expertise, and his long familiarity with our company’s business. David Weigand has served as our Senior Vice President, Chief Financial Officer since February 2021 and as Chief Compliance Officer since May 2018. Prior to his employment with our company, Mr. Weigand was a Vice President at Hewlett Packard Enterprise (HPE) from November 2016 until April 2018 and served as Vice President, Tax at Silicon Graphics International, Inc., from September 2013 until its acquisition by HPE in November 2016. Prior to that he was Vice President, Chief Financial Officer of Renesas Electronics America, a semiconductor company formed by the merger of the semiconductor businesses of NEC Corporation, Hitachi and Mitsubishi Electric from October 2010 until April 2013, and Vice President, Controller of NEC Electronics America from October 2004 until September 2010. Mr. Weigand holds a M.S. degree in Taxation from the University of Hartford and a B.S. degree in Accounting from San Jose State University and is a Certified Public Accountant in California (Inactive). Don Clegg serves as our Senior Vice President of Worldwide Sales. He previously served as our Vice President of Marketing and Worldwide Business Development. Mr. Clegg has been an employee since April 2006 and has held various senior sales and marketing roles with the Company during that time. Mr. Clegg started his career as a Design Engineer and evolved from Engineer to Vice President of Sales and Marketing working at several established and startup Silicon Valley system and semiconductor companies. Mr. Clegg graduated with high honors from Brigham Young University, where he earned a B.S. in Electrical Engineering. SMCI | 2022 Form 10-K | 103 Table of Contents George Kao serves as our Senior Vice President of Operations and previously served as our Vice President of Operations. Mr. Kao joined the Company in October 2016. Mr. Kao was Vice President of Operations of Pericom Semiconductor Corp. from October 2006 to September 2016. Mr. Kao served as a Chief Operating Officer of Orient Semiconductor Electronics Philippines, Inc., a subsidiary of Orient Semiconductor Electronics Ltd., from July 2003 to March 2006. Mr. Kao joined Orient Semiconductor Electronics Philippines, Inc. from Santa Clara-based Foveon after a 20-year career in technology in the United States that began at National Semiconductor. Mr. Kao holds a B.S. in Electrical Engineering from California State Polytechnic University in San Luis Obispo. Sara Liu co-founded Super Micro in September 1993, has been a member of our Board since March 2007 and currently serves as our Co-Founder, Senior Vice President, and a director. She has held a variety of positions with the Company, including Treasurer from inception to May 2019, Senior Vice President of Operations from May 2014 to February 2018, and Chief Administrative Officer from October 1993 to May 2019. From 1985 to 1993, Ms. Liu held accounting and operational positions for several companies, including Micro Center Computer Inc. Ms. Liu holds a B.S. in Accounting from Providence University in Taiwan. Ms. Liu is married to Mr. Charles Liang, our Chairman, President and Chief Executive Officer. Our Governance Committee concluded that Ms. Liu should serve on the Board based on her skills, experience, her general expertise in business and operations and her long familiarity with our company’s business. Non-Management Directors Daniel Fairfax has been a member of our Board since July 2019. Mr. Fairfax served as Senior Vice President and Chief Financial Officer of Brocade Communications, a networking equipment company (“Brocade”) from June 2011 to November 2017. Brocade was acquired by Broadcom in November 2017. Mr. Fairfax previously served as Brocade’s Vice President of Global Services from August 2009 to June 2011 and Brocade’s Vice President of Business Operations from January 2009 to August 2009. Prior to Brocade, Mr. Fairfax served as Chief Financial Officer of Foundry Networks, Inc., from January 2007 until December 2008. Foundry Networks was acquired by Brocade in December 2008. Earlier in his career Mr. Fairfax served in executive financial management and/or general management positions at GoRemote Internet Communications, Ironside Technologies, Acta Technology, NeoVista Software, Siemens and Spectra-Physics. He began his career as a consultant with the National Telecommunications Practice Group of Ernst & Young. Mr. Fairfax is a certified public accountant with an inactive license in California and holds an MBA degree from The University of Chicago Booth School of Business and a Bachelor of Arts degree, with a major in Economics, from Whitman College. Our Governance Committee concluded that Mr. Fairfax should serve on the Board based on his skills, experience, his financial literacy and his familiarity with technology businesses. Judy Lin has been a member of our Board since April 2022. Ms. Lin is a retired executive who has 30 years of experience in the disk drive industry. She served as an Independent Board Director of MORESCO Corporation, a leading manufacturer of specialty chemicals based in Japan, from June 2014 to May 2022. Ms. Lin served as Vice President of Western Digital Media Operations, a leader in data infrastructure, from September 2007 until her retirement in September 2012. Prior to Western Digital, Ms. Lin served as Vice President at Komag Inc., a leading supplier of thin-film disks to the hard disk drive industry and held various management positions from April 1994 until Western Digital acquired Komag in September 2007. Before joining Komag, Ms. Lin was with IBM Almaden Research Center Storage Systems Division for 11 years as a Senior Scientist from January 1983 to April 1994. Ms. Lin holds a MSc degree in Materials Science and Mineral Engineering from University of California, Berkeley where she was also a PhD candidate, and a BS in Chemical Engineering from National Cheng Kung University in Taiwan. Our Governance Committee concluded that Ms. Lin should serve on the Board based on her substantial leadership and management experience and, considering she is well versed in technology innovation, product development, engineering and global operations, she will add valuable perspective to the Board. Sherman Tuan has been a member of our Board since February 2007. Mr. Tuan is founder of PurpleComm, Inc. (doing business as 9x9.tv), a platform for connected TV, where he has served as Chief Executive Officer since January 2005 and Chairman of the Board since June 2003. From September 1999 to May 2002, he was director of Metromedia Fiber Network, Inc., a fiber optical networking infrastructure provider. Mr. Tuan was co-founder of AboveNet Communications, Inc., an internet connectivity solutions provider, where he served as President from March 1996 to January 1998, Chief Executive Officer from March 1996 to May 2002 and director from March 1996 to September 1999. Mr. Tuan holds a degree in Electrical Engineering from Feng-Chia University in Taiwan. Our Governance Committee concluded that Mr. Tuan should serve on the Board based on his skills, experience and qualifications in managing technology businesses, his technical expertise, and his familiarity with our company’s business. SMCI | 2022 Form 10-K | 104 Table of Contents Shiu Leung (Fred) Chan has been a member of our Board since October 2020. Mr. Chan is the founder and currently the president of KCR Development, Inc. which has developed real estate projects in excess of $1 billion in California and Hawaii specializing in high-density residential and retail projects. Mr. Chan also has more than three decades of experience in the high technology sector and as an entrepreneur. He most recently served as chairman of ESS Technology, Inc., a privately held semiconductor company which he had founded, from 2015 to 2019. ESS Technology was previously a public company listed on Nasdaq from 1995 until 2008, where he had held a variety of senior executive roles, including as chairman, president and chief executive officer, and served as a director. Mr. Chan has also previously served as chairman of a privately-held consumer electronic company, founder and an executive officer of a VLSI chip design center providing computer aided design, engineering and other design services, and co-founder and an executive officer of a company in the business of computer aided engineering systems development. Mr. Chan holds B.S.E.E. and M.S.C. degrees from the University of Hawaii. Our Governance Committee concluded that Mr. Chan should serve on the Board based on his skills and experience in growing companies and familiarity with technology businesses. Tally Liu was appointed to our Board and our Audit Committee in January 2019 and was appointed as the chair of the Audit Committee in June 2019. Mr. Liu has been retired since 2015. Prior to his retirement, Mr. Liu was Chief Executive Officer of Wintec Industries, a supply chain solutions company for high-tech manufacturers, from 2012 to 2015. Prior to Wintec, Mr. Liu served as Chairman of the Board and Chief Executive Officer of Newegg, Inc., an internet consumer technology retailer, from 2008 to 2010, and as President of Newegg in 2008. Prior to Newegg, Mr. Liu held various positions with Knight Ridder Inc., including Vice President, Finance & Advanced Technology and Vice President of Internal Audit. Mr. Liu served as President of the International Newspapers Financial Executives (INFE) for one year before it merged with other media associations. A Certified Public Accountant from 1982-2007, Mr. Liu is a member of the American Institute of Certified Public Accountants (AICPA) with retired status and was previously a member of the Florida Institute of Certified Public Accountants (FICPA). Mr. Liu is also a Certified Information System Auditor (CISA) and Certified Information Security Manager (CISM), with non-practice status, with the Information Systems Audit and Control Association (ISACA) and has also been certified in Control Self-assessment (CCSA) by the Institute of Internal Auditors (IIA). After earning his BA of Commerce from National Chengchi University, Taipei, Taiwan, and MBA from Florida Atlantic University, Mr. Liu received executive leadership training at the Stanford Advanced Finance Program in 1986 and at Harvard Business School in the Advanced Management Program (AMP) in 1998. Mr. Liu is not related to any member of our Board or any of our officers. Our Governance Committee concluded that Mr. Liu should serve on the Board based on his skills, experience, his financial literacy and his familiarity with technology businesses. Except for Mr. Charles Liang and Ms. Sara Liu who are married to each other, there are no other family relationships among any of our directors or executive officers. Composition of the Board Our authorized number of directors is currently seven. There are currently seven directors. Our Amended and Restated Certificate of Incorporation provides for a classified Board of Directors divided into three classes. The members of each class are elected to serve a three-year term with the term of office for each class ending in consecutive years. Vacancies may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Alternatively, the Board of Directors, at its option, may reduce the number of directors, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Directors chosen to fill newly created directorships hold office for a term expiring at the next annual meeting of stockholders to which the term of the office of the class to which they have been elected expires. The current composition of the Board of Directors is: Class I Directors (1) Charles Liang Sherman Tuan Tally Liu Class II Directors (2) Sara Liu Judy Lin Class III Directors (3) Daniel W. Fairfax Shiu Leung (Fred) Chan (1) The term of Class I directors expires at the annual meeting of stockholders following fiscal year 2022. (2) The term of the Class II director expires at the annual meeting of stockholders following fiscal year 2023. (3) The term of Class III directors expires at the annual meeting of stockholders following fiscal year 2024. SMCI | 2022 Form 10-K | 105 Table of Contents CORPORATE GOVERNANCE Corporate Governance Guidelines We have adopted “Corporate Governance Guidelines” to help ensure that the Board is independent from management, appropriately performs its function as the overseer of management, and that the interests of the Board of Directors and management align with the interests of our stockholders. The “Corporate Governance Guidelines” are available at https://ir.supermicro.com/governance/governance-documents/default.aspx Code of Ethics We have adopted a “Code of Business Conduct and Ethics” that is applicable to all directors, executive officers and employees and embodies our principles and practices relating to the ethical conduct of our business and our long-standing commitment to honesty, fair dealing and full compliance with all laws affecting our business. Our “Code of Business Conduct and Ethics” is available at https://ir.supermicro.com/governance/governance-documents/default.aspx . Any substantive amendment or waiver of the Code relating to executive officers or directors will be made only after approval by our Board of Directors and will be promptly disclosed on our website within four business days. Director Independence The listing requirements of The Nasdaq Stock Market generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit committee, compensation committee, and nominating and corporate governance committees be independent. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the listing requirements of The Nasdaq Stock Market. In addition, compensation committee members must satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act and the listing requirements of The Nasdaq Stock Market. Each year, the Board affirmatively assesses the independence of each director and nominee for election as a director in accordance with the listing requirements of The Nasdaq Stock Market. Based on these standards, our Board has determined that five of its current seven members, Daniel Fairfax, Judy Lin, Sherman Tuan Shiu Leung (Fred) Chan and Tally Liu, are “independent directors” under the applicable rules and regulations of the SEC and the listing requirements and rules of The Nasdaq Stock Market. Executive Sessions Non-management directors meet in executive session without management present each time the Board holds its regularly scheduled meetings. Communications with the Board of Directors The Board welcomes the submission of any comments or concerns from stockholders or other interested parties. If you wish to send any communications to the Board, you may use one of the following methods: • Write to the Board at the following address: Board of Directors Super Micro Computer, Inc. c/o General Counsel 980 Rock Avenue San Jose, California 95131 • E-mail the Board of Directors at BODInquiries@supermicro.com Communications that are intended specifically for the independent directors or non-management directors should be sent to the e-mail address or street address noted above, to the attention of the “Independent Directors”. MEETINGS AND COMMITTEES OF THE BOARD SMCI | 2022 Form 10-K | 106 Table of Contents Board Meetings Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of his or her duties and to attend all Board and committee meetings. We encourage, but do not require, each Board member to attend our annual meeting of stockholders. We held an annual meeting of stockholders on May 18, 2022, for our fiscal year 2021. The Board held eleven meetings during fiscal year 2022, four of which were regularly scheduled meetings and seven of which were special meetings. All directors attended at least 75% of the meetings of the Board and the committees on which they served during the time they were members of the Board or such committees during fiscal year 2022. Board Leadership Structure Our Chairman, Charles Liang, is also our Chief Executive Officer. The Board and our Governance Committee believe that it is appropriate for Mr. Liang to serve as both the Chief Executive Officer and Chairman due to the relatively small size of our Board, and the fact that Mr. Liang is the founder of our company with extensive experience in our industry. We do not currently have a lead independent director. Board Role in the Oversight of Risk The Board oversees our risk management activities, requesting and receiving reports from management. The Board conducts this oversight directly and through its committees. The Board has delegated primary responsibility for oversight of risks relating to financial controls and reporting to our Audit Committee. The Audit Committee also assists the Board in oversight of certain other risks, including internal controls and review of related party transactions. The Audit Committee reports to the full Board on such matters as appropriate. Our management, with oversight from our Compensation Committee, has reviewed our compensation policies and practices with respect to risk-taking incentives and risk management and does not believe that potential risks arising from our compensation polices or practices are reasonably likely to have a material adverse effect on our company. Committees of the Board of Directors The Board has three standing committees to facilitate and assist the Board in discharging its responsibilities: the Audit Committee, the Compensation Committee and the Governance Committee. In accordance with applicable listing requirements of The Nasdaq Stock Market, each of these committees is comprised solely of non-employee, independent directors. The charter for each committee is available at https://ir.supermicro.com/governance/governance-documents/default.aspx . In October 2021, the each of the three standing committees conducted their periodic review of their charters, and a description of such charters is set forth below. The charter of each committee also is available in print to any stockholder who requests it. The following table sets forth the current members of each of the standing Board committees. Audit Committee Compensation Committee Governance Committee Tally Liu (1) Sherman Tuan (1) Shiu Leung (Fred) Chan (1) Daniel W. Fairfax Tally Liu Sherman Tuan Shiu Leung (Fred) Chan Judy Lin (1) Committee Chairperson Audit Committee The Audit Committee has three members currently. The Audit Committee met sixteen times in fiscal year 2022, four of which were regularly scheduled meetings and twelve of which were special meetings. The Board has determined that each member of our Audit Committee meets the requirements for independence under the applicable listing requirements of The Nasdaq Stock Market and the rules of the SEC. The Board has also determined that our Audit Committee has the required number of “audit committee financial experts” as defined under applicable SEC rules. SMCI | 2022 Form 10-K | 107 Table of Contents As outlined more specifically in the Audit Committee charter, the Audit Committee has, among other duties, the following responsibilities: • Appoints, retains and approves the compensation of our independent auditors, and reviews and evaluates the auditors’ qualifications, independence and performance; • Oversees the independent auditors’ audit work and reviews and pre-approves all audit and non-audit services that may be performed by them; • Reviews and discusses with the independent auditors any audit problems, or difficulties and management’s response to them, and all matters that the Public Company Accounting Oversight Board and the SEC require to be discussed with the committee; • Reviews and discusses with management press releases regarding our financial results, as well as financial information and earnings guidance provided to securities analysts and rating agencies; • Reviews and approves the planned scope of our annual audit; • Monitors the rotation of partners of the independent auditors on their engagement team as required by law; • Reviews our financial statements and discusses with management and the independent auditors the results of the annual audit and the review of our quarterly financial statements; • Reviews our critical accounting policies and estimates; • Oversees the adequacy of our financial controls; • Periodically reviews and discusses with management and the independent auditors our disclosure controls and procedures and our internal control over financial reporting; • Reviews, discusses and approves the internal audit function’s (i) internal audit plan, (ii) all major changes to the internal audit plan, (iii) the scope, progress and results of executing the internal audit plan, and (iv) the annual performance of the internal audit function; • Reviews, approves and oversees all related party transactions; • Establishes and oversees procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters and oversees enforcement, compliance and remedial measures under our Code of Business Conduct and Ethics; • Initiates investigations and hires legal, accounting and other outside advisors or experts to assist the Audit Committee, as it deems necessary to fulfill its duties; • Periodically reviews and discusses with management our major financial risk exposures and steps management has taken to monitor and control the exposures, including our risk assessment and risk management guidelines and policies; and • Reviews and evaluates, at least annually, the adequacy of the Audit Committee charter and recommends any proposed changes to the Board for approval. Compensation Committee The Compensation Committee has two members currently. The Compensation Committee charter provides that the Compensation Committee shall be comprised of no fewer than two members. The Compensation Committee met six times in fiscal year 2022, four of which were regularly scheduled meetings and two of which were special meetings. The Compensation Committee is comprised solely of non-employee directors. The Board has determined that each member of our Compensation Committee meets the requirements for independence under the applicable listing requirements of The Nasdaq Stock Market. As outlined more specifically in the Compensation Committee charter, the Compensation Committee has, among other duties, the following responsibilities: • Periodically reviews and advises the Board concerning our overall compensation philosophy, policies and plans, including a review and approval of a group of companies for general executive compensation competitive comparisons, approval of target pay and performance objectives against this group (and broader industry reference), and monitoring of our executive compensation levels and their performance relative to this group; • Reviews and approves corporate goals and objectives relevant to compensation of the Chief Executive Officer and other executive officers; • Evaluates the performance of the Chief Executive Officer and other executive officers in light of those goals and objectives, including generally against the overall performance of executive officers at comparable companies, all while taking into account our risk management policies and practices, and any other factors the Compensation Committee deems appropriate; • Reviews and approves the compensation of the Chief Executive Officer and other executive officers and other key employees; • Reviews and approves our incentive compensation plans and equity compensation plans; SMCI | 2022 Form 10-K | 108 Table of Contents • Monitors and assesses risks associated with our compensation policies, including whether such policies could lead to unnecessary risk-taking behavior, and consults with management regarding such risks; • Administers the issuance of restricted stock grants, stock options and other equity awards to executive officers, directors and other eligible individuals under our equity compensation plans, provided that the Compensation Committee may delegate the approval of grants of options and equity awards to participants other than certain individuals subject to Section 16 of the Exchange Act as provided in the applicable plan; and • Reviews and evaluates, at least annually, the performance of the Compensation Committee, including compliance of the Compensation Committee with its charter and the adequacy of the Compensation Committee charter. In general, the Compensation Committee discharges the Board’s responsibilities regarding the determination of executive compensation, and reviews and makes recommendations to the full Board in the determination of non-employee director compensation. The Compensation Committee also makes recommendations to the full Board regarding non-ordinary course executive compensation matters, including with respect to new or amended employment contracts, severance or change-in-control plans or arrangements, and may adopt, amend and terminate such agreements, arrangements or plans. The Compensation Committee may delegate its responsibilities, along with the authority to take action in relation to such responsibilities, to subcommittees comprised of one or more Compensation Committee members, subject to requirements of our bylaws and applicable laws, regulations and the terms of our executive compensation plans. Additional information about the Compensation Committee’s processes for determining executive and non-employee director compensation, including the role of the Compensation Committee’s compensation consultant and our executive officers, can be found in the “Executive Compensation” and “2022 Director Compensation” sections of this Annual Report. Nominating and Corporate Governance Committee The Governance Committee has three members currently. The Governance Committee met 7 times in fiscal year 2022, four of which were regularly scheduled meetings and three of which were special meetings. The Governance Committee is comprised solely of non-employee directors. The Board has determined that each member of our Governance Committee meets the requirements for independence under the applicable listing requirements of The Nasdaq Stock Market. As outlined more specifically in the Governance Committee charter, the Governance Committee has, among other duties, the following responsibilities: • Reviews and makes recommendations to the Board regarding the size of the Board; • Identifies individuals qualified to become directors; • Evaluates and selects, or recommends to the Board, director nominees for each election of directors; • Develops and recommends to the Board criteria any other factors that the Governance Committee deems relevant, including those that promote diversity, for selecting qualified director candidates in the context of the current make-up of the Board; • Considers any nominations of director candidates validly made by our stockholders; • Conducts an annual evaluation of director independence according to Nasdaq rules, applicable law and our Corporate Governance Guidelines to enable the Board to make a determination of each director’s independence; • Reviews committee structures and compositions and recommends to the Board concerning qualifications, appointment and removal of committee members; • Develops, recommends for approval by the Board and reviews on an ongoing basis the adequacy of the corporate governance principles applicable to us; • Reviews, on a periodic basis, the adequacy of our Corporate Governance Guidelines and recommends any proposed changes to the Board; • Oversees compliance with our Corporate Governance Guidelines and reports on such compliance to the Board; • Assists the Board in the evaluation of the Board and each committee; • Periodically reviews succession planning for executive officers; • Periodically reviews and discusses with management our practices with respect to environmental, social and corporate governance issues; and • Periodically reviews the scope of responsibilities of the Governance Committee and the committee's performance of its duties. The Governance Committee may delegate its responsibilities, along with the authority to take action in relation to such responsibilities, to subcommittees comprised of one or more Governance Committee members, subject to requirements of our bylaws, applicable laws and regulations. SMCI | 2022 Form 10-K | 109 Table of Contents In accordance with our bylaws, our Board establishes additional committees for specific delegated purposes, roles and responsibilities that are temporary in nature. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers, and holders of more than 10% of our common stock to file reports regarding their ownership and changes in ownership of our securities with the SEC, and to furnish us with copies of all Section 16(a) reports that they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us and certain written representations provided to us, we believe that during the fiscal year ended June 30, 2022, our directors, executive officers, and greater than 10% stockholders complied with all applicable Section 16(a) filing requirements, except that one late Form 4 was filed on June 3, 2022 for each of Mr. Charles Liang and Ms. Sara Liu (as the spouse of Mr. Charles Liang) to reflect certification on March 26, 2022 of the achievement of one of the revenue goals associated with the 2021 CEO Performance Award (as defined below) previously granted to Mr. Liang. SMCI | 2022 Form 10-K | 110 Table of Contents Item 11. Executive Compensation EXECUTIVE COMPENSATION Compensation Discussion and Analysis (“CD&A”) In this section we provide an explanation and analysis of the material elements of the compensation provided to our Chief Executive Officer, Chief Financial Officer, and both of our other two executive officers who were serving on June 30, 2022, which was the end of our fiscal year 2022 (collectively referred to as our “named executive officers”). Our named executive officers and their positions at the end of fiscal year 2022 were: Charles Liang President, Chief Executive Officer (“CEO”) and Chairman of the Board David Weigand Senior Vice President, Chief Financial Officer and Chief Compliance Officer Don Clegg Senior Vice President, Worldwide Sales George Kao Senior Vice President, Operations Overview of Compensation (1) The chart presents the percentage compensation by compensation component received by the three non-CEO named executive officers together (aggregate compensation) as a group, as well as the split between cash and equity compensation for all such persons received in the aggregate as a group. No equivalent chart is presented for CEO compensation because, through all of fiscal year 2022, and continuing for about the next four years, almost all of Mr. Liang’s compensation has been, and is expected to be, based only upon his ability to earn the 2021 CEO Performance Award, as further described below. SMCI | 2022 Form 10-K | 111 Table of Contents Compensation Philosophy and Objectives—Our Continued Move Toward Performance-Based Compensation Arrangements Our executive compensation philosophy is to link compensation to corporate performance. Efforts in years before fiscal year 2022 were primarily focused on our CEO, Mr. Charles Liang, and are discussed further below. However, during fiscal year 2022, the Compensation Committee further expanded the linkage of compensation to corporate performance to certain other named executive officers. During the early part of fiscal year 2022, the Compensation Committee reviewed the results of a new compensation study it had requested from its independent compensation consultant, and continued to explore (with Mr. Liang) the appropriate balance for other named executive officers between fixed and regular compensation components (like base salary and regularly refreshed equity grants with time-based vesting) and performance-based equity awards (like performance-based restricted stock units (“PRSUs”)). These efforts culminated in the adoption of a new fiscal year 2022 compensation program for Messrs. Weigand and Clegg in March 2022 (the “FY2022 Performance Program for Other Named Executive Officers”). See “FY2022 Performance Program for Other Named Executive Officers” below for more specific information about the design and operation of this new compensation program. With respect to our CEO, Mr. Liang, fiscal year 2022 was a year of evaluating and monitoring the initial results of performance-based compensation arrangements made with Mr. Liang in fiscal year 2021. In March 2021, we had changed Mr. Liang’s compensation to be almost completely performance-based. As discussed in more detail below, in March 2021, we converted nearly 100% of Mr. Liang’s compensation to performance-based compensation through the issuance of performance-based options (the “2021 CEO Performance Award”) to purchase 1,000,000 shares of our common stock at an exercise price of $45.00 per share, which price was 32% higher than the market price of our common stock on the date the award was provided ($34.08). The 2021 CEO Performance Award is comprised of five tranches that vest only if the market price of our common stock reaches various prices (ranging from $45.00 to $120.00 per share) and we achieve certain specified revenue goals, all as described in greater detail below. In connection with the 2021 CEO Performance Award, Mr. Liang’s base salary was reduced to $1.00 per year and Mr. Liang agreed that he would not be eligible for any increase in base salary, or any other cash compensation, until June 30, 2026. Mr. Liang’s compensation for fiscal year 2022 was based entirely upon the 2021 CEO Performance Award and related agreements. As of the date of this report, one of the five tranches under the 2021 CEO Performance Award (representing 200,000 options granted under such award) has been earned because the first revenue goal of $4.0 billion in annualized revenue was achieved and the first stock price goal of $45.00 was achieved. In addition, while not yet certified by the Compensation Committee as of the date of this report, the second revenue goal of $4.8 billion in annualized revenue has also been achieved based upon the financial results for fiscal year 2022. Mr. Liang received a base salary of $1 during fiscal year 2022. In summary, since the latter part of fiscal year 2021, through all of fiscal year 2022, and continuing for about the next four years, almost all of Mr. Liang’s compensation has been, and is expected to be, based only upon us achieving the revenue goals described below and the common stock price targets described below. To fully achieve those goals and targets, our revenue must increase to $8 billion over a rolling four-quarter period (from $3.6 billion for the last full fiscal year before the award) and the market price of our common stock must reach $120.00 per share (from $34.08 on the day the award was provided). Process Overview The Compensation Committee of the Board discharges the Board’s responsibilities relating to compensation of all of our executive officers. During fiscal year 2022, the Compensation Committee was principally comprised of two non-employee directors, although for a brief period from April 27, 2022 through May 18, 2022, the Compensation Committee was comprised of three non-employee directors. All of the non-employee directors who served on the Compensation Committee during fiscal year 2022 were independent pursuant to the applicable listing rules of NASDAQ and Rule 16b-3 under the Exchange Act. SMCI | 2022 Form 10-K | 112 Table of Contents The agenda for meetings is determined by the Chair of the Compensation Committee with the assistance of our Chief Financial Officer and General Counsel. Committee meetings are regularly attended by our Chief Financial Officer and our General Counsel. However, during the meetings, neither our Chief Financial Officer nor our General Counsel participates in the consideration of his own performance or compensation, although he may provide an introduction of the topic to be considered to the Compensation Committee. Our Chief Financial Officer and General Counsel support the Compensation Committee in its work by providing information relating to our financial plans and certain personnel-related data. In addition, the Compensation Committee has the authority under its charter to hire, terminate and approve fees for advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities. As part of making an overall assessment of each named executive officer’s role and performance, and structuring our compensation programs for fiscal year 2022, the Compensation Committee reviewed recommendations of our Chief Executive Officer, as well as publicly available peer group compensation data and data compiled by our independent compensation consultant. During fiscal year 2022, the Compensation Committee considered various sources of information and comparative data when structuring the compensation awards issued and determining executive compensation levels, including information and compensation data assembled for the Compensation Committee by Radford, an Aon Hewitt company ("Radford"), from a sample of public companies selected by us, with input on the selection of this sample from Radford. The sample selected by us consisted of the following companies (1) : Benchmark Electronics, Inc. NetApp, Inc. Ciena Corporation NETGEAR, Inc. Diebold Nixdorf, Inc. Plexus Corp. Extreme Networks, Inc. Pure Storage, Inc. F5, Inc. Teradata Corporation Infinera Corporation TTM Technologies, Inc. Juniper Networks, Inc. Viasat, Inc. Lumentum Holdings Inc. Vishay Intertechnology, Inc. (1) For purposes of its consideration of 2022 executive compensation, the Compensation Committee modified the group of companies it had used for 2021 executive compensation determinations by adding Benchmark Electronics, Inc., Lumentum Holdings Inc., Pure Storage, Inc., Teradata Corporation, TTM Technologies, Inc., Viasat, Inc., and Vishay Intertechnology, Inc. These changes were made primarily to emphasize companies that we believe compete against us for executive talent. Recognizing that over-reliance on external comparisons can be of concern, the Compensation Committee used external comparisons as only one point of reference and was mindful of the value and limitations of comparative data. Key Fiscal Year 2022 Executive Compensation Decisions and Actions Key fiscal year 2022 executive compensation decisions and actions included the following: • The Compensation Committee had Radford prepare a compensation study that was presented in August 2021 that included information and compensation data from a sample of public companies selected by us, as discussed above. The Compensation Committee utilized the information in the newly prepared compensation study as one point of reference in its consideration of named executive officer compensation in fiscal year 2022. Before receiving Radford’s information and assistance in fiscal year 2022, the Compensation Committee assessed the independence of Radford in the light of all relevant factors, including additional services and other factors required by the SEC, that could give rise to a potential conflict of interest with respect to Radford. Based on these reviews and assessments, the Compensation Committee did not identify any conflicts of interest raised by the work performed by Radford. • As a part of continuing efforts to evolve the approach to executive officer compensation and to further expand the linkage of compensation to corporate performance to other named executive officers, the Compensation Committee adopted the FY2022 Performance Program for Other Named Executive Officers in March 2022. In addition to base salary and fixed bonus components, the new program includes a performance-based annual incentive award, most of which is payable in the form of service-based restricted stock units (“RSUs”) that generally vest over an extended period of four years. The performance-based annual incentive award: SMCI | 2022 Form 10-K | 113 Table of Contents * Is formula based; * Utilizes company performance metrics that are individualized based upon the role of the officer; and * Utilizes company performance metrics tied closely to stockholder value, including percentage appreciation in stock price from the prior fiscal year, percentage increase in worldwide revenue from the prior fiscal year, and percentage increase in worldwide net profit from the prior fiscal year. See “- FY2022 Performance Program for Other Named Executive Officers” below for more information. • Based on effective base salaries and the Compensation Committee’s review and certification of actual performance (as described further below) under the FY2022 Performance Program for Other Named Executive Officers for fiscal year 2022: * Mr. Weigand received a fixed bonus amount of $94,050 paid in semi-monthly installments starting October 1, 2021, earned a cash payment of $48,973 and earned a grant of $195,892 in RSUs that are expected to be granted on August 29, 2022 and will generally vest in annual installments over four years; and * Mr. Clegg received a fixed bonus amount of $70,620 paid in semi-monthly installments starting October 1, 2021, earned a cash payment of $166,250, and earned a grant of $166,250 in RSUs that are expected to be granted on August 29, 2022 and will generally vest in annual installments over four years. • Base salaries for the named executive officers other than the CEO were adjusted several times during fiscal year 2022 as a part of a perceived critical need to enhance retention value for key personnel, and were based in part upon: * Analyses provided in the newly prepared compensation study for fiscal year 2022 that indicated that base salaries for such named executive officers (prior to the increases) were generally below the 25 th percentile in the market; and * Consideration of inflationary market conditions in the second half of fiscal year 2022. • Fiscal year 2022 was the first full fiscal year in which the CEO operated under the 2021 CEO Performance Award, and related agreements, which was granted in March 2021. During fiscal year 2022, the Compensation Committee closely monitored the Company’s performance and the CEO’s performance against not only the key metrics of the 2021 CEO Performance Award, but also the objectives of the 2021 CEO Performance Award, for alignment with stockholder value and stockholder interests. During fiscal year 2022, the CEO received a base salary of only $1, no short-term cash bonus awards, and no time-based or performance-based equity awards. • The Company’s revenue exceeded $4 billion for the four quarters ended December 31, 2021. The trailing 60 trading day average of closing prices of the Company’s Common Stock reached $45.00 on June 8, 2022. Accordingly, the Compensation Committee has certified that both the revenue condition and the stock price condition for the vesting of the first 200,000 shares subject to the 2021 CEO Performance Award have been met. • The Company’s revenue further increased to $5.2 billion for the four quarters ended June 30, 2022. As a result, while not yet certified by the Compensation Committee as of the date of this report, the second revenue goal of $4.8 billion in annualized revenue set forth in the 2021 CEO Performance Award has also been achieved based upon the financial results for fiscal year 2022. The Compensation Committee will continue to closely monitor the Company’s performance and the CEO’s performance against both the key metrics and objectives of the 2021 CEO Performance Award. • Based on Compensation Committee action in October 2021, discretionary bonuses were awarded to Messrs. Weigand, Clegg and Kao in the amounts of $160,000, $150,000 and $40,000, respectively. The primary rationale for the payment of these discretionary one-time bonuses was to recognize the progress in remediating the material weaknesses in the Company's internal control over financial reporting and to reward Company employees who had contributed to such achievements. See “- Additional discretionary bonus in FY2022” below. SMCI | 2022 Form 10-K | 114 Table of Contents The Role of the Most Recent Stockholder Say-on-Pay Vote The Compensation Committee, the entire Board, and our management value the opinions of our stockholders. Feedback received from stockholders has included a desire that a more significant portion of executive compensation be tied to performance based upon the achievement of pre-established goals. For fiscal year 2022, the Compensation Committee took such prior feedback into consideration when it developed, designed, and implemented the FY2022 Performance Program for Other Named Executive Officers. In addition, prior to implementing the FY2022 Performance Program for Other Named Executive Officers, the Compensation Committee (through management) sought to solicit views of the external compensation consultant on the proposed program, including compensation philosophy embodied therein, potential size, appropriate performance metrics, the time period over which performance awards granted under such program should vest to achieve objectives (such as creating both long-term sustained value for stockholders and retention incentive), and other terms. Our last annual meeting of stockholders was held on May 18, 2022 (the “Fiscal Year 2021 Annual Meeting”), and we provided our stockholders the annual opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement for such meeting. At the meeting, stockholders representing approximately 98% of the stock present and entitled to vote on this “say-on-pay” proposal approved the compensation of our named executive officers. Although the Fiscal Year 2021 Annual Meeting was held during the latter part of fiscal year 2022 when significant decisions affecting compensation matters for fiscal year 2022 for the named executives had already been made by the Compensation Committee and the say-on-pay vote was non-binding, the Compensation Committee expects to continue to consider the outcome of that vote when making future compensation decisions for our named executive officers. Role of Executive Officers in the Compensation Process Each year, management provides recommendations to the Compensation Committee regarding compensation program design and evaluations of executive and Company performance. In particular, in fiscal year 2022, both our Chief Executive Officer and Chief Financial Officer provided the Compensation Committee with their views on the merits of a performance-based compensation program for certain named executive officers (other than the CEO), and the design of such program (including components thereof such as base salary, short-term cash incentives, and equity incentives). The Compensation Committee believes the participation of such named executive officers in the process which culminated in the adoption in fiscal year 2022 of the FY2022 Performance Program for Other Named Executive Officers, and the willingness of such named executive officers to participate in the program developed, is evidence of the commitment of these named executive officers to our Company and their confidence in our future. At the end of fiscal year 2022, our Chief Financial Officer provided the Compensation Committee with information about the Company’s performance against the objective metrics set forth in the FY2022 Performance Program for Other Named Executive Officers and the Chief Executive Officer provided the Compensation Committee with his evaluation of the subjective performance of such participating named executive officers, which is one of performance metrics contained in the FY2022 Performance Program for Other Named Executive Officers. This performance evaluation provided by the CEO included his views as to the impact of individual named executive officers on strategic initiatives and organizational goals, as well as their functional expertise and leadership. The Chief Executive Officer also provided the Compensation Committee with his views of the nature and extent of our performance against expectations. While the Compensation Committee carefully considers all recommendations made by members of management, ultimate authority for all compensation decisions regarding our named executive officers rests with the Compensation Committee and the Board. Fiscal Year 2022 CEO Compensation Overview of Fiscal Year 2022 CEO Compensation Fiscal year 2022 was the first full fiscal year in which the CEO operated under the 2021 CEO Performance Award, and related agreements. In connection with the grant of the 2021 CEO Performance Award, Mr. Liang receives a de minimis salary of $1 per year and no cash bonuses through June 30, 2026. Mr. Liang must also remain as the Company’s CEO (or such other position with the Company as Mr. Liang and the Board may agree) at the time each goal is met in order for the corresponding tranche to vest. This helps ensure Mr. Liang’s active leadership of the Company over the long term. SMCI | 2022 Form 10-K | 115 Table of Contents Discussion and Analysis of 2021 CEO Performance Award On March 2, 2021, the Compensation Committee granted to our Chief Executive Officer, Mr. Liang, the 2021 CEO Performance Award, which is a long-term performance-based option award to purchase up to 1,000,000 shares of the Company’s common stock that may vest in five equal tranches. Each of the five tranches vests if a specified revenue goal (each, a “Revenue Goal”) and a specified stock price goal (each, a “Stock Price Goal”) is achieved. Revenue Goals must be achieved by June 30, 2026 (the “Revenue Performance Period”) and Stock Price Goals must be achieved by September 30, 2026 (the “Stock Price Performance Period”). The 2021 CEO Performance Award will generally expire on March 2, 2031, and includes, among other terms and conditions, a restriction on the sale of any shares issued upon exercise of the 2021 CEO Performance Award until March 2, 2024, the third anniversary of the date of grant. The following table sets forth the Revenue Goals which must be achieved by the end of the Revenue Performance Period of June 30, 2026, together with its achievement status as of July 31, 2022: Revenue Goals (1) Absolute Change From Revenue Reported for the Fiscal Year Ended Prior to the Grant of the CEO Performance Award (June 30, 2020) (2) Achievement Status as of July 31, 2022 $4.0 billion 20% Achieved (3) $4.8 billion 44% Achieved (4) $5.8 billion 74% Not yet achieved $6.8 billion 104% Not yet achieved $8.0 billion 140% Not yet achieved (1) Revenue means the Company’s total revenues, as reported by the Company in its financial statements on Forms 10-Q and 10-K filed with the SEC (but without giving effect to any rounding used in reporting the amounts in Form 10-Q and Form 10-K), for the previous four consecutive fiscal quarters of the Company. (2) Revenue reported in the Company’s Form 10-K for the fiscal year ended June 30, 2020, was $3,339.3 million. (3) Revenue reported for the four quarters ended December 31, 2021, was $4.17 billion. (4) Revenue reported for the four quarters ended June 30, 2022 was $5.20 billion. Achievement of the $4.8 billion revenue goal has not yet been certified by the Compensation Committee. The following table sets forth the Stock Price Goals which must be achieved by September 30, 2026, together with its achievement status as of July 31, 2022: Stock Price Goals (1) Absolute Change in Stock Price from Grant Date Stock Price (2) Absolute Change in Stock Price From $45 Exercise Price Achievement Status as of July 31, 2022 $45 32% 0% Achieved (3) $60 76% 33% Not yet achieved $75 120% 67% Not yet achieved $95 179% 111% Not yet achieved $120 252% 167% Not yet achieved (1) Sustained stock price performance is required for each Stock Price Goal to be met, other than in connection with a change in control. For each Stock Price Goal to be met, the sixty-trading day average stock price must equal or exceed the Stock Price Goal. (2) Utilizes closing stock price on March 2, 2021, of $34.08 per share. The July 29, 2022 closing stock price was $54.01 per share. (3) The sixty-trading day average stock price from March 15, 2022 through June 8, 2022 was $45.12. SMCI | 2022 Form 10-K | 116 Table of Contents (1) Achievement of the $4.8 billion revenue goal has not yet been certified by the Compensation Committee as of the date of this report. Each of the five tranches vests only when both the applicable Revenue Goal and Stock Price Goal for such tranche are certified by the Compensation Committee as having been met. A Revenue Goal and a Stock Price Goal that are matched together can be achieved at different points in time and vesting will occur at the later of the achievement certification dates for such Revenue Goal and Stock Price Goal. Subject to any applicable clawback provisions, policies or other forfeiture terms described in the 2021 CEO Performance Award, once a goal is achieved, it is forever deemed achieved for determining the vesting of a tranche. There is no automatic acceleration of vesting of the 2021 CEO Performance Award upon a future “change in control,” but any tranches that are unvested as of the date of the change in control will vest upon the change in control if the Stock Price Goal related to that tranche is achieved (the Revenue Goals will be disregarded). For purposes of determining whether any Stock Price Goal has been achieved, the stock price shall equal the greater of (1) the most recent closing price per share immediately prior to the effective time of such change in control, or (2) the per share common stock price (plus the per share of common stock value of any other consideration) received by our stockholders in the change in control. To the extent any tranche of the 2021 CEO Performance Award has not vested prior to the change in control and does not vest in connection with the change of control based on attainment of the relevant Stock Price Goal, as described above, such tranche under the 2021 CEO Performance Award will terminate as of the effective date of the change in control. As stated above, during fiscal year 2022, the Compensation Committee closely monitored the Company’s performance and the CEO’s performance against not only the key metrics of the 2021 CEO Performance Award, but also the objectives of the 2021 CEO Performance Award, for alignment with stockholder value and stockholder interests. The Compensation Committee designed the 2021 CEO Performance Award to be a challenging long-term incentive for future performance, and the Compensation Committee noted in particular that the performance thresholds could take many years to achieve, if they can be achieved at all. FY2022 Performance Program for Other Named Executive Officers Overview On March 26, 2022, after consultations with Mr. Liang, and consideration of input received from the Compensation Committee’s compensation consultant, which included the results of an executive compensation study, the Compensation Committee approved an executive compensation program for fiscal year 2022 for two of the Company’s NEOs, Mr. Weigand (the “CFO Compensation Program”), and Mr. Clegg, (the “SVP Sales Compensation Program”). SMCI | 2022 Form 10-K | 117 Table of Contents The Compensation Committee believes the FY2022 Performance Program for Other Named Executive Officers furthers the Company’s executive compensation philosophy to link compensation to corporate and individual performance. The principal compensation elements of the FY2022 Performance Program for Other Named Executive Officers are: • A base salary in the form of cash and representing fixed compensation to reward individual performance and contributions (“Base Salary”); • A fixed bonus component payable in semi-monthly installments in the form of cash and based upon a percentage of Base Salary (the “Fixed Bonus”); and • A performance-based annual incentive award (“Performance Incentive Award”) which, for Mr. Weigand, is payable 20% in the form of cash (the “Performance Cash”) and 80% in the form of service-based RSUs (the “Performance RSUs”) and, for Mr. Clegg, is payable 50% in the form of Performance Cash and 50% in the form of Performance RSUs. Performance RSUs will generally vest in equal annual installments over a period of approximately four years. Base Salary The following table sets forth Base Salaries for Mr. Weigand and Mr. Clegg at the end of each of fiscal year 2021 and 2022: Principal Position During Fiscal Year 2022 End of Fiscal Year 2021 Base Salary Rate (1)(2) End of Fiscal Year 2022 Base Salary Rate (1)(3) Base Salary % Change David Weigand Senior Vice President, Chief Financial Officer and Chief Compliance Officer $ 380,000 $ 465,151 22.4 % Don Clegg Senior Vice President, Worldwide Sales $ 352,000 $ 403,382 14.6 % (1) The base salary amounts actually paid to each named executive officer for fiscal year 2021 and 2022 are disclosed in the Summary Compensation Table. (2) For fiscal year 2021, for Mr. Weigand, the salary amount disclosed in the Summary Compensation Table is lower than the amount disclosed in the table above because Mr. Weigand only commenced receiving the amount set forth in the table following his appointment in February 2021 as Senior Vice President, Chief Financial Officer and Chief Compliance Officer. (3) For fiscal year 2022, salary amounts disclosed in the Summary Compensation Table for each named executive officer are less than the amounts disclosed in the table above because of the adjustments made to Base Salary during fiscal year 2022, which were: for Mr. Weigand, increases to $418,000 effective July 1, 2021, to $434,720 effective March 1, 2022, and to $465,151 effective May 1, 2022; and for Mr. Clegg, increases to $376,640 effective July 1, 2021, to $384,173 effective March 1, 2022, and to $403,382 effective May 1, 2022. Adjustments to Base Salaries for Mr. Weigand and Mr. Clegg were made several times during fiscal year 2022 after the Compensation Committee considered recommendations from the CEO. Primary factors the Compensation Committee considered in connection with these increases included the following: • Analyses provided in the compensation study for fiscal year 2022 that indicated that base salaries for such executive officers were generally below the 25 th percentile in the market; and • Consideration of inflationary market conditions in the second half of fiscal year 2022. In addition, while not participating in the FY2022 Performance Program for Other Named Executive Officers, Mr. George Kao, another named executive officer, also received several adjustments to his base salary rate during fiscal year 2022 based upon the same factors the Compensation Committee considered for each of Mr. Weigand and Mr. Clegg. During fiscal year 2022, Mr. Kao’s base salary rate increased from $325,728 as of the end of fiscal to 2021 to $345,272 effective July 1, 2021, to $355,630 effective March 1, 2022, and to $373,411 effective May 1, 2022, an aggregate increase of 14.6% during fiscal year 2022. SMCI | 2022 Form 10-K | 118 Table of Contents Fixed bonus component Under the FY2022 Performance Program for Other Named Executive Officers, Mr. Weigand and Mr. Clegg receive a fixed bonus component payable in semi-monthly installments in the form of cash, which is based upon a percentage of Base Salary (the “Fixed Bonus”). The Compensation Committee included the Fixed Bonus as a part of the FY2022 Performance Program for Other Named Executive Officers for their continued achievements and contributions to the Company. The Fixed Bonus percentage of Base Salary for fiscal year 2022 were 30% for Mr. Weigand and 25% for Mr. Clegg and were payable effective October 1, 2021 (the “Fixed Bonus Effective Date”). The aggregate cash compensation for these two officers, based on their base salaries effective on July 1, 2022, and the Fixed Bonus percentages, was determined to still be less than the market 50 th percentile for comparable positions. The following table sets forth the total amount of Fixed Bonus received by such persons for fiscal year 2022: Principal Position During Fiscal Year 2022 Fiscal Year 2022 Fixed Bonus Received (1) David Weigand Senior Vice President, Chief Financial Officer and Chief Compliance Officer $94,050 (2) Don Clegg Senior Vice President, Worldwide Sales $70,620 (1) The Fixed Bonus percentages were applied to the Base Salaries of Mr. Weigand and Mr. Clegg that were effective as of July 1, 2021, which were $418,000 and $376,640, respectively. (2) In addition to the Fixed Bonus amount, Mr. Weigand also received during fiscal year 2022 a $10,000 per month fixed cash bonus for the months of July, August, and September 2021 (aggregating $30,000) under his short-term bonus program that was in place prior to the Fixed Bonus Effective Date (the “Prior Fiscal Year Bonus Program”). Mr. George Kao, another named executive officer, does not participate in the FY2022 Performance Program for Other Named Executive Officers, but during fiscal year 2022 was eligible for the Company’s regular semi-annual bonus payouts available to employees pursuant to which he received $4,980. Performance Incentive Award Description of Performance Incentive Award . Under the Performance Incentive Award portion of the FY2022 Performance Program for Other Named Executive Officers, participants have the ability to earn Performance Incentive Awards annually, based upon the achievement of certain specified objective metrics (“key performance indicators” or “KPIs”) and the CEO’s subjective evaluation of each participant’s performance during the fiscal year. Any Performance Incentive Awards earned by Mr. Weigand are payable 20% in cash and 80% in Performance RSUs, and any Performance Incentive Awards earned by Mr. Clegg are payable 50% in cash and 50% in Performance RSUs. The cash portion of the award is paid out promptly after the amount of any Performance Incentive Award is determined and approved by the Compensation Committee following the end of the fiscal year, and the Performance RSUs are granted at approximately the same time. The number of Performance RSUs granted to the participants is determined by dividing the value of the Performance RSU portion of the Performance Incentive Award by an average closing price of our stock, as described in more detail below. These Performance RSUs generally vest in equal annual installments over a period of four years from the first day of the new fiscal year, so long as the individual continues to be employed. Performance RSUs are capped at no more than 250,000 RSUs for each of Messrs. Weigand and Clegg for the annual award. In addition: • The amount of the earned Performance Incentive Award is determined as a multiple (the “Multiple”) of a base incentive target (calculated as a set percentage of Base Salary) set for each participant (the “Base Incentive Target”). • The Base Incentive Target for fiscal year 2022 was set at 10% of Base Salary for each of Messrs. Weigand and Clegg. • Each KPI and the CEO’s subjective evaluation of performance contribute to the calculation of the Multiple, which is applied to the Base Incentive Target to determine the total amount of the earned Performance Incentive Award: ◦ For Mr. Weigand, the KPIs for fiscal year 2022 were based upon: SMCI | 2022 Form 10-K | 119 Table of Contents • Percentage appreciation in Company stock price from June 30, 2021, to June 30, 2022, with a 100% increase in the stock price counting as 1.00 towards determination of the final aggregate Multiple; and • This KPI is “double weighted” meaning that such percentage increase in stock price is then multiplied by two, and that resulting percentage is then used in the calculation of the aggregate Multiple as described above and illustrated below; and • Percentage increase in number of long-term investors in the Company from June 30, 2021, to June 30, 2022, with a 100% increase in the number of long-term investors counting as 1.00 towards the determination of the final aggregate Multiple; and * Such KPI is also “double weighted” meaning that such percentage increase is multiplied by two, and that resulting percentage is then used in the calculation of the aggregate Multiple as described above and illustrated below. ◦ For Mr. Weigand, an individual performance evaluation rating (on a scale from 1.0 to 5.0) was also given by the CEO for the fiscal year, with each 1.00 of rating counting as 1.00 towards determination of the final aggregate Multiple. The various scores arising from these KPI results, and the performance evaluation are then added together to determine the final aggregate Multiple that is applied to the Base Incentive Target to determine the value of the Performance Incentive Award. For these purposes, long-term investors in the Company are defined as either (1) a new long-term investor with at least 100,000 shares (which represents approximately about 0.2% of the total number of shares outstanding) accumulated during fiscal year 2022 or (2) an existing long-term investor who had increased its holdings by at least 50% during fiscal year 2022; provided, however, that index funds, hedge funds, and broker-dealers are excluded from the definition of long-term investors. ◦ For Mr. Clegg, the KPIs for fiscal year 2022 are based upon: • Percentage appreciation in Company stock price from June 30, 2021, to June 30, 2022, with a 100% increase in the stock price counting as 1.00 towards determination of the final aggregate Multiple (and the KPI is not double-weighted, in Mr. Clegg’s case); • Percentage increase in worldwide revenue from the prior fiscal year, with a 100% increase in revenue counting as 1.00 towards determination of the final aggregate Multiple; and * This KPI is “double weighted” meaning that such percentage increase in worldwide revenue is then multiplied by two, and that resulting percentage is then used in the calculation of the aggregate Multiple as described above and illustrated below; and • Percentage increase in worldwide net profit from the prior fiscal year, with a 100% increase in worldwide net profit counting as 1.00 towards determination of the final aggregate Multiple; and * Such KPI is “double weighted” meaning that such percentage increase in worldwide net profit is then multiplied by two, and that resulting percentage is then used in the calculation of the aggregate Multiple as described above and illustrated below. ◦ For Mr. Clegg, an individual performance evaluation rating (on a scale from 1.0 to 5.0) was also given by the CEO for the fiscal year, with each 1.00 of rating counting as 1.00 towards determination of the final aggregate Multiple. The various scores arising from these KPI results, and the performance evaluation are then added together to determine the final aggregate Multiple that is applied to the Base Incentive Target to determine the value of the Performance Incentive Award. SMCI | 2022 Form 10-K | 120 Table of Contents For each of Mr. Weigand and Mr. Clegg, a decrease in stock price, number of long-term investors, worldwide revenue, and/or worldwide net profit from the prior fiscal year (as may be applicable) results in a multiple of zero for that KPI for purposes of determining the aggregate Multiple. For these purposes, worldwide revenue is defined as our net sales for the fiscal year as reported in our consolidated financial statements and worldwide net profit is defined as our non-GAAP income from operations for the fiscal year as reported in our earnings materials. Performance Cash is paid in the next payroll cycle following the Compensation Committee’s certification and approval of the calculation of the Performance Incentive Award after the end of the fiscal year. Performance RSUs are to be granted to the respective participating officer on a grant date within 10 days of the Compensation Committee’s certification and approval of the results of the Performance Incentive Award (the “Grant Date”), but in no event later than August 31, 2022, subject to the recipient remaining employed with, or otherwise continuing to provide services to, the Company through such Grant Date. The number of Performance RSUs earned will be determined by dividing the value of the portion of the Performance Incentive Award earned thereunder allocated to the Performance RSUs portion by the sixty-trading day average closing stock price of the Company’s common stock as of (and including) the date immediately prior to the Grant Date (rounded to the nearest whole RSU, and subject to a maximum cap of 250,000 RSUs for such grant). Measurement of Fiscal Year 2022 Performance against the Performance Incentive Award . The following sets forth the determination of the Performance Incentive Award based upon fiscal year 2022 performance for Mr. Weigand: Performance Measure Achievement Weighting Factor Final Weighted Score Stock Price Increase KPI 14.7% (or 0.147) 2X 0.294 Long-Term Investor Increase KPI 28.2% (or 0.282) (1) 2X 0.564 Individual Performance Evaluation 5.00 (2) 1X 5.00 Total Multiple 5.858 Base Incentive Target $41,800 Final Earned Performance Incentive Award Value $244,865 Performance Cash Payout Value (20%) $48,973 Performance RSUs Payout Value (80%) $195,892 Number of Performance RSUs to be Granted in August 2022 (3) 3,773 (1) Utilizing the definition of long-term Investor specified above, it was determined the number of Long Term Investors increased from 39 to 50 during fiscal year 2022. (2) Based upon the CEO’s evaluation. Due to efforts from Mr. Weigand, the Company exceeded the financial targets which had been set for the year. (3) Estimated based on the average 60-trading day closing stock price as of and including August 25, 2022 of $51.91. The actual number of Performance RSUs granted may differ slightly based on the expected grant date of August 29, 2022. SMCI | 2022 Form 10-K | 121 Table of Contents The following sets forth the determination of the Performance Incentive Award based upon fiscal year 2022 performance for Mr. Clegg: Performance Measure Achievement Weighting Factor Final Weighted Score Stock Price Increase KPI 14.7% (or 0.147) 1X 0.147 Worldwide Revenue KPI 46.1% (or 0.461) 2X 0.921 Worldwide Net Profit KPI 138.0% (or 1.293) 2X 2.760 Individual Performance Evaluation 5.00 (1) 1X 5.00 Total Multiple 8.828 Base Incentive Target $37,664 Final Earned Performance Incentive Award Value $332,499 Performance Cash Payout Value (50%) $166,250 Performance RSUs Payout Value (50%) $166,250 Number of Performance RSUs to be Granted in August 2022 (2) 3,202 (1) Based upon the CEO’s evaluation. Due to efforts from Mr. Clegg, the Company exceeded the financial targets which had been set for the year. (2) Estimated based on the average 60-trading day closing stock price as of and including August 25, 2022 of $51.91. The actual number of Performance RSUs granted may differ slightly based on the expected grant date of August 29, 2022. Other Equity-Based Incentive Compensation While participants in the FY2022 Performance Program for Other Named Executive Officers are eligible to receive performance-based awards under the Performance Incentive Award portion of such program, such persons also continue to be eligible to receive other equity-based incentive compensation, along with our other named executive officers and other persons eligible for awards under the 2020 Equity and Incentive Compensation Plan. In continuing to award other equity-based incentive compensation to participants in the FY2022 Performance Program for Other Named Executive Officers, the Compensation Committee noted that the compensation study presented in August 2021 indicated that the historical level of equity awards made had low retention power, and that equity vehicles that included a mix of both time-based RSUs and PRSUs should be considered. As a result, the Compensation Committee elected to continue its practice of making regular periodic refresh grants of time-based equity incentives of both RSUs and options to the named executive officers participating in the FY2022 Performance Program for Other Named Executive Officers. For such named executive officers participating in the FY2022 Performance Program for Other Named Executive Officers, the Compensation Committee views stock options and other equity-based awards as an important component of the total compensation. We believe that equity-based awards also align the interests of a named executive officer with those of our stockholders. They also provide named executive officers a significant, long-term interest in our success and help retain key named executive officers in a competitive market for executive talent. The 2020 Equity and Incentive Compensation Plan authorized the Compensation Committee to grant stock options and other equity-based awards to eligible named executive officers. The number of shares owned by, or subject to equity-based awards held by, each named executive officer is periodically reviewed and additional awards are considered based upon a generalized assessment of past performance, expected future performance and the relative holdings of executive officers. In addition to equity-based awards made in connection with events such as promotions, the Compensation Committee has historically granted refresh equity awards to employees (including executive officers) on a two-year cycle. SMCI | 2022 Form 10-K | 122 Table of Contents For fiscal year 2022, which commenced July 1, 2021, in addition to the Performance RSUs discussed above under “- Performance Incentive Award,” the Compensation Committee determined to provide the awards of service-based stock options and RSUs to named executive officers as outlined in the table below. Type of Award Quantity (at Target) of Award Rationale for Providing the Award David Weigand (1) Stock options 30,000 Special grant Stock options 9,500 Refresh grant RSUs 4,280 Refresh grant Don Clegg Stock options 3,630 Refresh grant RSUs 1,630 Refresh grant George Kao Stock options — — RSUs — — (1) Mr. Weigand received a special stock option award with 2-year vesting. Stock Options . In general, the Compensation Committee uses stock options to directly align the compensation interests of participating named executive officers with the investment interests of our stockholders. The stock options described above for each of Messrs. Weigand and Clegg were granted on May 5, 2022 with a 10-year term and an exercise price equal to the closing market price of our common stock on the grant date ($53.04). Subject to the continued service of such named executive officers, the stock options vest and become exercisable at the rate of 25% of the shares on May 5, 2023, and then an additional 1/16th of the shares at the end of each successive calendar quarter thereafter (excluding the 30,000 stock options granted to Mr. Weigand). The 30,000 stock options for Mr. Weigand vest and become exercisable at the rate of 12.5% of the shares after one quarter, and 1/8th at the end of each successive calendar quarter thereafter. Such award of 30,000 stock options to Mr. Weigand was made to further incent him as a result of his promotion to Chief Financial Officer in February 2021, at which time no additional equity incentive had been awarded to him. The particular size of the stock option grants to each of these named executive officers was determined based upon the recommendation of Mr. Liang which was reviewed and approved by the Compensation Committee. RSUs . In general, RSUs represent the right to receive a defined number of shares of our common stock subject to the continued employment through the vesting date. The RSUs described above for each of Messrs. Weigand and Clegg were granted on May 5, 2022. Subject to the continued service of such named executive officers, these RSUs vest at the rate of 25% of the total number of units on May 10, 2023, and then an additional 1/16th of the units at the end of each successive calendar quarter thereafter. The particular size of the RSU grants to each of these named executive officers was determined based upon the recommendation of Mr. Liang which was reviewed and approved by the Compensation Committee. Additional Discretionary Bonuses in FY2022 Prior to the adoption of the FY2022 Performance Program for Other Named Executive Officers and in addition to the Prior Fiscal Year Bonus Program for Mr. Weigand, discretionary bonuses were also paid during fiscal year 2022 to each of Messrs. Weigand, Clegg and Kao. As previously discussed in our Compensation Discussion & Analysis in our 2022 definitive proxy statement, the Board had in September 2021 considered that the Company had made adequate progress in remediating certain material weaknesses in its internal control over financial reporting. At that time, the Board in particular considered the impact of accomplishments of Company employees other than Mr. Liang in achieving this adequate progress (the “Remediation Progress”), and approved establishment of a $2 million discretionary bonus program for Company employees to recognize the Remediation Progress achievement completed in fiscal year 2022. The program was designed specifically to reward the Company’s employees who contributed to such Remediation Progress achievements (the “Discretionary Program”). While the Board had delegated to management authority to administer such Discretionary Program, awards thereunder to persons who were executive officers were subject to the review and approval by the Compensation Committee. Based on Compensation Committee action in October 2021, which included the Compensation Committee considering input on awards under the Discretionary Program to executive officers from the external compensation consultant, Messrs. Weigand, Clegg and Kao received discretionary one-time bonuses in the amounts of $160,000, $150,000 and $40,000, respectively, as a result of their contributions to the Remediation Progress. In addition, each of Messrs. Weigand, Clegg and Kao received an end of calendar year holiday bonus generally available to employees of $1,000. SMCI | 2022 Form 10-K | 123 Table of Contents Stock Ownership Guidelines In January 2022, our Board adopted stock ownership guidelines that apply to the Chief Executive Officer and our non-executive directors (the “Guidelines”). Under the Guidelines, the Chief Executive Officer has a target holding of 3x his then-current annual base salary; provided, however, that for so long as the Chief Executive Officer is Mr. Charles Liang, and his then-current annual base salary is less than his annual base salary as in effect immediately prior to the grant of his 2021 CEO Performance Award on March 2, 2021 (which annual base salary was $522,236 (the “Pre-grant CEO Salary”)), then for purposes of determination of the Chief Executive Officer’s target holding, his target shall be three times the Pre-grant CEO Salary. Under the Guidelines, non-employee directors have a target holding of 3x the then-current annual Board member retainer (regardless of whether such director actually receives such retainer). For purposes of determining such target holding for non-employee directors, other director cash fees such as fees for Committee member/chair service or excess per meeting fees are not considered as part of then-current annual Board member retainer. Under the Guidelines, each target is expected to be attained by the later of (1) five years from the effective date of the Guidelines or (2) five years from the effective date of a covered person’s assumption of the applicable role or responsibilities (or applicable designation as a covered person with a specific stock ownership target by the Compensation Committee) subjecting the covered person to the then-applicable stock ownership target. After the applicable five-year period has concluded, the covered person will be required to retain at least 50% of the common stock received (net of applicable withholding taxes) under our equity awards earned by, vested with respect to or exercised by the covered person if the covered person does not comply with his or her stock ownership target. Once a covered person has initially achieved his or her stock ownership target, the covered person will be considered to continue to be in compliance with the Guidelines unless as of the annual measurement the covered person’s common stock ownership drops to less than 85% of the covered person’s stock ownership target (in which case the covered person will have one year to again achieve compliance with the Guidelines). Annual compliance with the stock ownership target will be measured, for each fiscal year, at the end of such fiscal year. Compliance with the stock ownership targets at any point in time will be based on the average closing price for the common stock for the immediately prior 60 days. For purposes of determining compliance with the stock ownership target, the following holdings by the covered person and his or her immediate family members sharing his or her household will be considered the equivalent of owning the corresponding applicable underlying common stock: (1) outright ownership of common stock; (2) vested common stock held in retirement or deferred compensation accounts; and (3) service-based restricted share, restricted stock unit and/or deferred share awards regarding common stock (whether or not vested). As of June 30, 2022, each of the covered persons subject to the Guidelines met his or her stock ownership target, except for Ms. Lin who was appointed as a director in April 2022. Our insider trading policy prohibits any of our directors, executive officers, employees or contractors from engaging in any transactions in publicly-traded options, such as puts and calls, and other derivative securities, including any hedging or similar transaction, with respect to our common stock. Stock Retention Policy We have adopted a stock retention policy which requires that our Chief Executive Officer hold a significant portion of the shares of our common stock acquired under our equity incentive plans for at least 36 months. Generally, under the policy, the Chief Executive Officer must retain at least 50% of all “net” shares received (“net” shares means those shares remaining after the sale or withholding of shares in payment of the exercise price, if applicable, and withholding taxes) for at least 36 months following the date on which an equity award is vested, settled or exercised, as applicable. In addition, in connection with the 2021 CEO Performance Award previously granted to our Chief Executive Officer, the Board required a restriction on the sale of any shares issued upon the exercise of the options associated with such award until March 2, 2024, the third anniversary of the grant date. See “Discussion and Analysis of 2021 CEO Performance Award.” SMCI | 2022 Form 10-K | 124 Table of Contents Recoupment Policy We established a recoupment policy that is applicable to our named executive officers (the “Recoupment Policy”). Under the Recoupment Policy, if we are required to prepare an accounting restatement due to material noncompliance with the financial reporting requirements under United States securities laws, the Compensation Committee shall be entitled to have the Company recover from any current or former executive officer any excess incentive-based compensation received by such person during the three-year period prior to the date on which we are required to prepare the restatement. This Recoupment Policy applies to both equity-based and cash-based incentive compensation awards. The “excess incentive-based compensation” is the difference between the actual amount that was paid, and the amount that would have been paid under the restated financial results. Other Benefits Health and Welfare Benefits. Our named executive officers receive the same health and welfare benefits as are offered to our other employees, including medical, dental, vision, life, accidental death and dismemberment and disability insurance coverage, flexible spending account participation and holiday pay. The same contribution amounts, percentages and plan design provisions are applicable to all employees. We offer these health and welfare benefits generally to help provide a competitive compensation package to employees to assist with the attraction, hiring and retention of employees. Retirement Program. Our named executive officers may participate in the same tax-qualified, employee-funded 401(k) plan that is offered to all our other employees. We do not maintain a supplemental executive retirement plan, nor do we offer any defined benefit retirement plans or other defined contribution plans to our named executive officers. We offer these retirement program benefits generally to help provide a competitive compensation package to employees to assist with the attraction, hiring and retention of employees. Perquisites. We do not provide perquisites or personal benefits to any of our named executive officers. Employment Arrangements, Severance and Change of Control Benefits. We have not entered into employment agreements with any of our named executive officers. Each of Messrs. Clegg, Kao and Weigand currently has a signed offer letter which provides for at-will employment. Each such offer letter provides for an initial base salary rate, an initial stock option grant and rights to participate in our employee benefit plans as described above. We do not have any written employment arrangements with Mr. Liang. Other than as described in the following sentence, we do not have any arrangements with any of our named executive officers that provide for any severance or other benefits in the event of termination or change of control of our Company. See also “- Fiscal Year 2022 Potential Payments Upon Termination or Change of Control.” The 2021 CEO Performance Award has certain provisions related to the treatment of such award in the event of a change of control of our Company. See “Discussion and Analysis of 2021 CEO Performance Award.” Tax and Accounting Considerations. In our review and establishment of named executive officer compensation programs and payments, we consider, but do not place substantial emphasis on, the anticipated accounting and tax treatment of our compensation programs to us and our named executive officers. Among other factors that receive greater consideration are the net costs to us and our ability to effectively administer executive compensation in the short and long-term interests of stockholders. Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), generally limits a Company’s ability to deduct for tax purposes compensation in excess of $1.0 million paid in any single tax year to certain executive officers (and, beginning in 2018, certain former executive officers). We expect to continue to design and maintain executive compensation arrangements that we believe will attract and retain the executive talent that we need to compete successfully, even if in certain cases such compensation is not deductible for federal income tax purposes. In addition, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m) will in fact be deductible. We account for equity compensation paid to our employees in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock-Compensation (“ASC Topic 718”), which requires us to estimate and record expenses for each award of equity compensation over the service period of the award. We intend that our plans, arrangements and agreements will be structured and administered in a manner that complies with (or is exempt from) the requirements of Section 409A of the Code. Participation in, and compensation paid under, our SMCI | 2022 Form 10-K | 125 Table of Contents plans, arrangements and agreements may, in certain instances, result in the deferral of compensation that is subject to the requirements of Section 409A. If our plans, arrangements and agreements as administered fail to meet certain requirements under or exemptions from Section 409A, compensation earned thereunder may be subject to immediate taxation and tax penalties. Summary The Compensation Committee believes that our compensation philosophy and programs are designed to foster a performance-oriented culture that aligns our named executive officers’ interests with those of our stockholders. The Compensation Committee also believes that the compensation of our named executive officers is both appropriate and responsive to the goal of building stockholder value. Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with our management. Based on this review and these discussions, the Compensation Committee recommended to the Board that the CD&A be included in this Annual Report. This report has been furnished by the Compensation Committee. Sherman Tuan, Chair Tally Liu SMCI | 2022 Form 10-K | 126 Table of Contents Fiscal Year 2022 Summary Compensation Table The following table sets forth information concerning the reportable compensation for our named executive officers for the fiscal years ended 2022, 2021 and 2020, as applicable. FISCAL YEAR 2022 SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) (1) Bonus ($) (2) Stock Awards ($) (3) Option Awards ($) (4) Non-Equity Incentive Plan Compensation ($) (5) All Other Compensation ($) Total ($) Charles Liang 2022 1 — — — — — 1 President, Chief Executive Officer and Chairman of the Board 2021 421,785 3,360 — 11,616,000 6,057,526 (6) — 18,098,671 2020 423,346 — — — 875,635 — 1,298,981 David Weigand 2022 442,601 285,050 353,404 1,074,005 48,973 — 2,204,033 Senior Vice President, Chief Financial Officer and Chief Compliance Officer 2021 367,709 43,360 109,188 113,280 — — 633,537 2020 300,347 222,107 — — 78,970 — 601,424 Don Clegg 2022 398,470 221,620 183,653 98,700 166,250 — 1,068,693 Senior Vice President, Worldwide Sales 2021 362,140 9,990 102,515 106,200 — — 580,845 2020 348,459 108,970 — — 290,581 — 748,010 George Kao 2022 364,409 45,980 — — — — 410,389 Senior Vice President, Operations 2021 333,858 6,273 57,688 60,213 — — 458,032 2020 324,807 4,524 68,851 15,288 152,333 — 565,803 (1) Amounts disclosed under "Salary" for fiscal year 2022 include leave pay earned by the named executive officers. (2) Amounts disclosed under “Bonus” for fiscal year 2022 reflect, as applicable, fixed amount bonuses, special bonuses, profit sharing amounts, holiday bonuses and/or our sales bonus program, all as further described above in the CD&A. (3) Amounts disclosed for fiscal year 2022 represent the grant date fair values of RSU awards granted during fiscal year 2022 calculated in accordance with ASC Topic 718 and are based on the closing market price of our common stock on the date of grant. Amounts also include the fair values of the RSU portion of Messrs. Weigand and Clegg’s Performance Incentive Award provided for fiscal year 2022, based on probable outcome, as of March 2022. The RSU portion of each award was capped at 250,000 RSUs. The actual number of RSUs earned by Messrs. Weigand and Clegg for their Performance Incentive Awards are expected to be granted in early fiscal year 2023, as disclosed in CD&A above. (4) The amounts disclosed for fiscal year 2022 represent the grant date fair values of the stock option awards calculated in accordance with ASC Topic 718, using the Black Scholes option pricing model. Assumptions used in the calculation of this amount are included in Part II, Item 8, "Financial Statements and Supplementary Data", and Part II, Item 8, Note 13 “Stock-based Compensation and Stockholders’ Equity”, to our consolidated financial statements for fiscal year 2022 included in this Annual Report on Form 10-K. (5) Amounts disclosed for fiscal year 2022 represent payouts of the cash portion of Messrs. Weigand and Clegg’s Performance Incentive Awards, as further described above in CD&A. (6) As discussed in prior year proxy statements and Annual Reports, in March 2020, Mr. Liang received a special performance-based cash incentive award opportunity. Mr. Liang’s award, for a cash incentive opportunity of up to $8,076,701 (the “Maximum Value”), was specifically linked to Company stock price performance. The applicable stock price performance conditions for the award were achieved during fiscal year 2021 and, as a result, 50% of the Maximum Value (or $4,038,351) was paid to Mr. Liang in fiscal year 2021. However, the Board had discretion to reduce the payout value of the remaining portion of the award under certain circumstances. In September 2021, the Board exercised this discretion and reduced the payout for the remaining portion of the award to 25% of the Maximum Value (or $2,019,175), for a total award payout for 2021 of $6,057,526. SMCI | 2022 Form 10-K | 127 Table of Contents Fiscal Year 2022 Grants of Plan-Based Awards The following table provides information concerning all plan-based awards granted during fiscal year 2022 to each of our named executive officers, which grants were made under the Super Micro Computer, Inc. 2020 Equity and Incentive Compensation Plan. FISCAL YEAR 2022 GRANTS OF PLAN-BASED AWARDS TABLE Estimated Possible Payouts Under Non-Equity Incentive Plan Awards Estimated Possible Payouts Under Equity Incentive Plan Awards All Other Stock Awards: Number of Shares of Stock or Units (#) All Other Option Awards: Number of Securities Underlying Options (#) Exercise or Base Price of Option Awards ($/Sh) Grant Date Fair Value of Stock and Option Awards ($) (1) Name Grant Date Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#) Charles Liang — — — — — — — — — — — David Weigand 5/5/2022 — — — — — — — 30,000 53.04 815,700 5/5/2022 — — — — — — — 9,500 53.04 258,305 5/5/2022 — — — — — — 4,280 — — 227,011 3/26/2022 8,360 (2) — — — — — — — — 3/26/2022 — — — (2) (2) 250,000 — — — 126,393 Don Clegg 5/5/2022 — — — — — — — 3,630 53.04 98,700 5/5/2022 — — — — — — 1,630 — — 86,455 3/26/2022 18,832 (2) — — — — — — — — 3/26/2022 — — — (2) (2) 250,000 — — — 97,198 George Kao — — — — — — — — — — — (1) Amounts disclosed in this column represent the fair value of the RSU and stock option awards as of the date of grant or award opportunity computed in accordance with ASC Topic 718, excluding the effect of estimated forfeitures. (2) As further described in CD&A, each of Messrs. Weigand and Clegg received a Performance Incentive Award for fiscal year 2022 payable for Mr. Weigand 20% in cash and 80% in Performance RSUs, and payable for Mr. Clegg 50% in cash and 50% in Performance RSUs, which Performance RSUs will vest over four years from July 1, 2022. Based on the design of the Performance Incentive Award, there was essentially no target or maximum cash amount to be earned, and essentially no target number of Performance RSUs to be earned, but the threshold amount of the award was equal to $41,800 for Mr. Weigand and $37,664 for Mr. Clegg, and the award was capped at a payout of no more than 250,000 RSUs. The cash portions earned by Messrs. Weigand and Clegg are reported in the “Non-Equity Incentive Plan Compensation” column of the Fiscal Year 2022 Summary Compensation Table, and the fair values of the RSU portions disclosed in this table, based on probable outcome, as of March 2022 are included in the “Stock Awards” column of the Fiscal Year 2022 Summary Compensation Table. The actual Performance RSUs earned by Messrs. Weigand and Clegg for their Performance Incentive Awards are expected to be granted in early fiscal year 2023, as disclosed in CD&A above. Grants made in fiscal year 2022 are described more fully in the “Compensation Discussion and Analysis” section of this Annual Report. More information concerning the terms of the employment arrangements, if applicable, in effect with our named executive officers during fiscal year 2022 is provided under the "Employment Arrangements, Severance and Change of Control Benefits" under the “Compensation Discussion and Analysis”. SMCI | 2022 Form 10-K | 128 Table of Contents Outstanding Equity Awards at 2022 Fiscal Year-End The following table provides information concerning the outstanding equity-based awards as of June 30, 2022, held by our named executive officers. OUTSTANDING EQUITY AWARDS AT 2022 FISCAL YEAR-END TABLE Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) (1) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (13) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (13) Charles Liang 231,260 — — 20.70 1/21/2023 — — — — 166,750 — — 35.07 1/19/2025 — — — — 130,000 — — 26.95 8/2/2027 — — — — — — 1,000,000 (2) 45.00 3/2/2031 — — — — David Weigand 16,072 — — 22.10 7/31/2028 — — — — 3,928 — — 22.10 7/31/2028 — — — — 737 3,378 (3) — 30.33 8/4/2030 — — — — 3,263 262 (3) — 30.33 8/4/2030 — — — — — 5,127 (4) — 53.04 5/5/2032 — — — — — 4,373 (4) — 53.04 5/5/2032 — — — — — 30,000 (5) — 53.04 5/5/2032 — — — — — — — — — 1,800 (6) 72,630 — — — — — — — 4,280 (7) 172,698 — — Don Clegg 6,000 — — 26.75 8/4/2024 — — — — 4,000 — — 20.54 8/3/2026 — — — — 14,679 — — 22.10 7/31/2028 — — — — 5,321 — — 22.10 7/31/2028 — — — — 737 3,551 (3) — 30.33 8/4/2030 — — — — 3,013 199 (3) — 30.33 8/4/2030 — — — — — 3,083 (4) — 53.04 5/5/2032 — — — — — 547 (4) — 53.04 5/5/2032 — — — — — — — — — 1,690 (6) 68,192 — — — — — — — 1,630 (7) 65,771 — — George Kao 14,840 — — 26.95 8/2/2027 — — — — 5,160 — — 26.95 8/2/2027 — — — — 2,229 743 (8) — 13.00 10/30/2028 — — — — 2,968 — — 13.00 10/30/2028 — — — — 1,364 196 (9) — 20.37 3/27/2030 — — — — 2,028 3,382 (10) — 23.74 10/27/2030 — — — — — — — — — 424 (11) 17,108 — — — — — — — 1,520 (12) 61,332 — — SMCI | 2022 Form 10-K | 129 Table of Contents (1) Represents the closing stock price per share of our common stock as of June 30, 2022 ($40.35) multiplied by the number of shares underlying RSUs that had not vested as of June 30, 2022. (2) These stock options are performance-based and shall vest and become exercisable depending upon the degree of satisfaction of both the Stock Price Goals and Revenue Goals discussed above in CD&A. The Stock Price Goals must be achieved on or prior to September 30, 2026, and the Revenue Goals must be achieved on or prior to June 30, 2026. The options may vest in tranches of 200,000 shares each only when coordinating Stock Price Goals and Revenue Goals, respectively, of $45.00 sixty-trading-day-average stock price and $4.0 billion in four-consecutive-fiscal-quarter revenue, $60.00 sixty-trading-day-average stock price and $4.8 billion four-consecutive-fiscal-quarter revenue, $75.00 sixty-trading-day-average stock price and $5.8 billion four-consecutive-fiscal-quarter revenue, $95.00 sixty-trading-day-average stock price and $6.8 billion four-consecutive-fiscal-quarter revenue, and $120.00 sixty-trading-day-average stock price and $8.0 billion four-consecutive-fiscal-quarter revenue, are achieved. The smallest amount of these stock options (threshold) that can be earned based on performance is vested stock options for 200,000 shares for achieving a Stock Price Goal of $45.00 sixty-trading-day-average stock price and a Revenue Goal of $4.0 billion in four-consecutive-fiscal-quarter revenue (and the Compensation Committee certified the vesting of the first 200,000 shares based upon achievement of the $45 Stock Price Goal on August 2, 2022, and $4.0 billion Revenue Goal on March 26, 2022). However, even with these achievements if the Company’s stock price remained at $45.00 per share, based on the $45.00 exercise price for these stock options, there would be no appreciation value in those stock options for Mr. Liang. For more information about the operation of this award, see “Discussion and Analysis of 2021 CEO Performance Award” above. (3) These incentive and nonqualified stock options vested at the rate of 25% on May 1, 2021 and vested (or generally will vest) at a rate of 1/16th per quarter thereafter, such that the granted options will be fully vested on May 1, 2024. (4) These incentive and nonqualified stock options vest at the rate of 25% on May 5, 2023, and 1/16th per quarter thereafter, such that the shares will be fully vested on May 5, 2026. (5) These nonqualified stock options vest at the rate of 12.5% on August 5, 2022, and 1/8th per quarter thereafter, such that the shares will be fully vested on May 5, 2024. (6) These RSUs vested at the rate of 25% on May 10, 2021, and vested (or generally will vest) at a rate of 1/16th per quarter thereafter, such that the RSUs will be fully vested on May 10, 2024. (7) These RSUs vested at the rate of 25% on May 10, 2023, and vested (or generally will vest) at a rate of 1/16th per quarter thereafter, such that the RSUs will be fully vested on May 10, 2026. (8) These incentive and nonqualified stock options vested at the rate of 25% on October 30, 2019, and vested (or generally will vest) at a rate of 1/16th per quarter thereafter, such that the granted options will be fully vested on October 30, 2022. (9) These nonqualified stock options vested at the rate of 56% on March 27, 2021 and vested (or generally will vest) at a rate of 6% per quarter thereafter, such that the granted options will be fully vested on December 27, 2022. (10) These incentive stock options vested at the rate of 25% on October 27, 2021, and generally will vest at a rate of 1/16th per quarter thereafter, such that the granted options will be fully vested on October 27, 2024. (11) These RSUs vested at the rate of 63% on May 10, 2021, and vested (or generally will vest) at a rate of 6% per quarter thereafter, such that the RSUs will be fully vested on November 10, 2022. (12) These RSUs vested at the rate of 25% on November 10, 2021, and generally will vest at a rate of 1/16th per quarter thereafter, such that the RSUs will be fully vested on November 10, 2024. (13) As further described in CD&A, as of the end of fiscal year 2022, each of Messrs. Weigand and Clegg participated in a Performance Incentive Award for fiscal year 2022 payable for Mr. Weigand 20% in cash and 80% in Performance RSUs, and payable for Mr. Clegg 50% in cash and 50% in Performance RSUs, which Performance RSUs will vest over four years from July 1, 2022. Based on the design of the Performance Incentive Award, there was essentially no target number of Performance RSUs to be earned, but the award was capped at a payout of no more than 250,000 RSUs. The actual Performance RSUs earned by Messrs. Weigand and Clegg for their Performance Incentive Awards are expected to be granted in early fiscal year 2023, as disclosed in CD&A above, and will appear in this table in subsequent years. Fiscal Year 2022 Option Exercises and Stock Vested The following table sets forth the dollar amounts realized by each of our named executive officers pursuant to the exercise or vesting of equity-based awards during fiscal year 2022. FISCAL YEAR 2022 OPTION EXERCISES AND STOCK VESTED TABLE Option Awards Stock Awards Name Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) (1) Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) (2) Charles Liang — — — — David Weigand — — 3,400 147,097 Don Clegg 6,800 244,607 2,345 101,384 George Kao — — 1,754 76,487 (1) The value disclosed in this column is based on the difference between the price of our common stock at the time of exercise and the exercise price. (2) The values disclosed in this column are based on the closing price of our common stock on the date of vesting, multiplied by the gross number of shares vested. Fiscal Year 2022 Pension Benefits and Nonqualified Deferred Compensation We do not provide any nonqualified deferred compensation arrangements or pension plans. As such, the Pension Benefits disclosure and Nonqualified Deferred Compensation disclosure for fiscal year 2022 are omitted from this Annual Report. SMCI | 2022 Form 10-K | 130 Table of Contents Fiscal Year 2022 Potential Payments Upon Termination or Change of Control Other than as set forth below or described elsewhere in this Item 11, “Executive Compensation,” we do not currently, and did not during fiscal year 2022 have, any arrangements with any of our named executive officers that provide for any additional or enhanced severance or other compensation or benefits in the event of termination or change of control of our Company. Other than with respect to the 2021 CEO Performance Award, the Company’s stock option agreements generally provide for three months of exercise of vested options after termination of service, one year of exercise after disability, and one year of exercise after death. The 2021 CEO Performance Award has certain provisions related to the treatment of such award in the event of a change of control of our Company. See “Discussion and Analysis of 2021 CEO Performance Award.” None of the tranches under the 2021 CEO Performance Award would have been earned thereunder for a change in control occurring on June 30, 2022 (based on the closing stock price of $40.35 on such date, plus an assumption that any aggregate consideration per share in a hypothetical change of control occurring on such date would have been less than $45), and therefore there is no change in control value attributed to the award for a hypothetical change of control situation. Fiscal Year 2022 Chief Executive Officer Pay Ratio For fiscal year 2022, the ratio of the annual total compensation of Mr. Liang, our Chief Executive Officer (“2022 CEO Compensation”), to the median of the annual total compensation of all of our employees and those of our consolidated subsidiaries other than Mr. Liang (“2022 Median Annual Compensation”), was 0.10 (or one-tenth) to 1. For purposes of this pay ratio disclosure, 2022 CEO Compensation was determined to be $8,124 which represents the total compensation reported for Mr. Liang under the “Fiscal Year 2022 Summary Compensation Table,” plus the Company’s contribution to certain non-discriminatory group health and welfare benefits provided to Mr. Liang. The 2022 Median Annual Compensation for the identified median employee was determined to be $80,413, also including the Company’s contribution to the same non-discriminatory group health and welfare benefits provided to the median employee. Please see the CD&A above for more information about Mr. Liang’s compensation arrangements in place for fiscal year 2022, which included participation in the 2021 CEO Performance Award. Due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this pay ratio disclosure is a reasonable estimate. To identify the median employee, we examined our total employee population as of June 30, 2021 (the “Determination Date”). We included all 2,367 U.S. full-time, part-time, seasonal and temporary employees of the Company and our consolidated subsidiaries. We also included all 1,665 full-time, part-time, seasonal and temporary employees of the Company and our consolidated subsidiaries in The Netherlands and Taiwan. We excluded independent contractors and “leased” workers. We also excluded all our employees in European countries, which together represented approximately 1% of our total employees worldwide (4,155 individuals), which countries consisted of France (8 individuals), Germany (13 individuals), Italy (5 individuals), Spain (1 individual) and United Kingdom (15 individuals). We also excluded all our employees in China (46 individuals), Japan (30 individuals), and South Korea (5 individuals), which together represented an additional approximately 2% of our total employees worldwide. Our analysis identified 4,032 individuals who were not excluded. To determine the median of the annual total compensation of all of such employees, other than Mr. Liang, we generally reviewed compensation for the period beginning on July 1, 2020, and ending on the Determination Date. We totaled, for each included employee other than Mr. Liang, base earnings (salary, hourly wages and overtime, as applicable) and cash bonuses paid during the measurement period, plus the Company’s contribution to group health and welfare benefits. We did not use any statistical sampling or cost-of-living adjustments for those purposes. A portion of our employee workforce (full-time and part-time) worked for less than the full fiscal year (due to mid-measurement period start dates, disability status or similar factors, etc.). In determining the median employee, we generally annualized the total compensation for such individuals other than temporary or seasonal employees (but avoided creating full-time equivalencies) based on reasonable assumptions and estimates relating to our employee compensation program. SMCI | 2022 Form 10-K | 131 Table of Contents In calculating our Chief Executive Officer pay ratio for fiscal year 2022, we did not go through a renewal of the process (described above) of identifying a median employee as was conducted for fiscal year 2021. This is because we believe that there has been no change in our employee population or employee compensation arrangements during fiscal year 2022 that would result in a significant change to our Chief Executive Officer pay ratio disclosure. However, due to a change in the circumstances of the median employee that was identified as of the Determination Date (the “Original Median Employee”), as such Original Median Employee departed from the Company during the course of fiscal year 2022, it was no longer appropriate to use the Original Median Employee for these pay ratio purposes. As a result, for fiscal year 2022, we used another employee whose compensation was substantially similar to the Original Median Employee based on the compensation measures discussed above used to select the Original Median Employee. Compensation Program Risk Assessment We have assessed our compensation programs for fiscal year 2022 and have concluded that risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us. We concluded that our compensation policies and practices do not encourage excessive or inappropriate risk-taking. We believe our programs are appropriately designed to encourage our employees to make decisions that result in positive short-term and long-term results for our business and our stockholders. DIRECTOR COMPENSATION 2022 Director Compensation Under our director compensation policy, we reimburse non-employee directors for reasonable expenses in connection with attendance at Board and committee meetings. Charles Liang and Sara Liu, who are employees and also serve as directors, do not receive any additional compensation from us specifically for their service as directors. For their service during fiscal year 2022, our non-employee directors received an annual retainer of $60,000, payable quarterly in cash. In addition, the Chairperson of our Audit Committee received an additional annual retainer of $30,000 and the Chairperson of each of our Compensation Committee and our Governance Committee received an additional annual retainer of $20,000 and $15,000, respectively, in each case payable quarterly in cash. Each director serving in a non-chairperson capacity on our Audit Committee received an additional annual retainer of $15,000, each director serving in a non-chairperson capacity on our Compensation Committee received an additional annual retainer of $10,000 and each director serving in a non-chairperson capacity on our Governance Committee received an additional annual retainer of $7,500, in each case payable quarterly in cash. Finally, non-employee directors were entitled to $2,000 per meeting for each meeting attended in excess of (1) the regular meetings of the Board and (2) up to 10 additional meetings beyond such regular meetings, provided that notice of the meeting was properly given, a quorum was present, and the meeting was recorded (“Excess Meetings”). During fiscal year 2022, each of Messrs. Chan, Fairfax and Liu attended six Excess Meetings. Each of Ms. Lin, Ms. Tseng and Mr. Tuan did not attend any Excess Meetings during fiscal year 2022. Our director compensation policy also provides for annual RSU grants to the non-employee directors with a value equal to $220,000, with the ultimate number of RSUs granted based on our closing stock price on the date of grant. For fiscal year 2022, we made such grants for non-employee director service under the Super Micro Computer, Inc. 2020 Equity and Incentive Compensation Plan on August 3, 2021, to such persons serving on such date, which grants had a vesting date of June 30, 2022. Ms. Saria Tseng, a non-employee director, was a recipient of such grants and served during fiscal year 2022 until the expiration of her term of office at our annual general meeting of stockholders on May 18, 2022. Prior to the end of her service, the Compensation Committee exercised discretion to accelerate the vesting date of the awards granted to her to May 18, 2022. Awards granted to the other non-employee directors vested on June 30, 2022. Ms. Judy Lin was appointed as a non-employee director on April 1, 2022. In connection with her appointment, Ms. Lin received during fiscal year 2022 a pro-rated portion of the annual non-employee director retainer and, on April 1, 2022, an RSU grant with a value equal to a pro-rated portion of $220,000 with a vesting date of June 30, 2022. The following table shows for fiscal year 2022 certain information with respect to the compensation of all of our non-employee directors who served in such capacities during fiscal year 2022: SMCI | 2022 Form 10-K | 132 Table of Contents FISCAL YEAR 2022 DIRECTOR COMPENSATION Name Fees Earned or Paid in Cash ($) (3) Stock Awards ($) (4)(5) All Other Compensation ($) (6) Total ($) Daniel Fairfax 87,000 219,969 180 307,149 Judy Lin (1) 16,875 54,832 180 71,887 Saria Tseng (2) 68,345 245,985 180 314,510 Sherman Tuan 87,500 219,969 180 307,649 Shiu Leung (Fred) Chan 88,750 219,969 180 308,899 Tally Liu 103,786 219,969 180 323,935 (1) Ms. Judy Lin was appointed to the Board in April 2022. (2) Ms. Saria Tseng served as a director until May 18, 2022. (3) This column consists of annual director fees, non-employee committee chairman fees, and other committee member fees, in each case earned for fiscal year 2022. (4) The dollar amounts in this column represent the aggregate grant date fair values of the RSU awards granted during fiscal year 2022 calculated in accordance with ASC Topic 718. Assumptions used in the calculation of the grant date fair value amounts are included in Part II, Item 8, "Financial Statements and Supplementary Data", and Item II, Part 8, Note 13, “Stock-based Compensation and Stockholders’ Equity” to our consolidated financial statements for fiscal year 2022 included in the Annual Report. Each grant of 5,807 RSUs to each of the directors other than Ms. Lin had a grant date fair value of $37.88 per share, and Ms. Lin’s grant of 1,446 RSUs had a grant date fair value of $37.92 per share. (5) The value disclosed in this row under the “Stock Awards” column also reflects, for Ms. Tseng, the modification fair value of $42.36 per share for the acceleration of the vesting date of her fiscal year 2022 RSU grant from June 30, 2022, to May 18, 2022. This acceleration was approved because Ms. Tseng was a recipient of such grants and served during fiscal year 2022 until the expiration of her term of office at our annual general meeting of stockholders on May 18, 2022. (6) Value of Company Christmas gift. The table below sets forth the aggregate number of shares underlying stock and option awards held by our non-employee directors as of June 30, 2022. Name Stock Awards Option Awards Daniel Fairfax — — Judy Lin — — Saria Tseng — 27,000 Sherman Tuan — 5,000 Shiu Leung (Fred) Chan — — Tally Liu — — Compensation Committee Interlocks and Insider Participation None of the members of the Compensation Committee is a current or former officer or employee of our Company or had any relationship with our Company requiring disclosure, except for Saria Tseng, who serves as Vice President of Strategic Corporate Development, General Counsel and Secretary of MPS, with which we have engaged in certain transactions. See “Part III. Item 13. Certain Relationships and Related Transactions and Director Independence-Transactions with Monolithic Power Systems.” Ms. Tseng served during fiscal year 2022 until the expiration of her term of office at our annual general meeting of stockholders on May 18, 2022, and she ceased being a director and member of the Compensation Committee on such date. In addition, during fiscal year 2022, none of our executive officers served as a member of the compensation committee of the board of directors of any other entity that has one or more executive officers who served on our Compensation Committee of the Board. Mr. Sherman Tuan served on the Compensation Committee during all of fiscal year 2022, Ms. Saria Tseng served on the Compensation Committee during a portion of fiscal year 2022 until May 18, 2022, and Mr. Tally Liu served on the Compensation Committee during a portion of fiscal year 2022 with his appointment commencing on April 27, 2022. SMCI | 2022 Form 10-K | 133 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information known to us regarding beneficial ownership of our common stock as of July 31, 2022, by: • Each of the named executive officers during fiscal year 2022; • Each of our directors; • All directors and executive officers as a group; and • All persons known to us who beneficially own 5% or more of our outstanding common stock. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Percent of Common Stock Outstanding (3) Executive Officers and Directors: Charles Liang (4) 7,464,719 14.1 % Don Clegg (5) 43,943 * George Kao (6) 37,945 * David Weigand (7) 36,062 * Sherman Tuan (8) 35,696 * Sara Liu (9) 7,464,719 14.1 % Tally Liu 29,396 * Daniel Fairfax 17,070 * Shiu Leung (Fred) Chan 10,975 * Judy Lin 1,446 * All directors and executive officers as a group (10 persons) (10) 7,677,252 14.1 % 5% Holders Not Listed Above: Disciplined Growth Investors Inc. (11) 4,512,092 8.6 % BlackRock, Inc. (12) 3,169,548 6.1 % The Vanguard Group (13) 4,348,912 8.3 % Total executives, directors & 5% or more stockholders 37.4 % * Represents beneficial ownership of less than one percent of the outstanding shares of common stock (1) Except as otherwise indicated, to our knowledge the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws applicable and to the information contained in the footnotes to this table. Except as otherwise provided, the address of each stockholder listed in the table is 980 Rock Avenue, San Jose, CA 95131. (2) Under the SEC rules, a person is deemed to be the beneficial owner of shares that can be acquired by such person within 60 days upon the exercise of options or RSUs subject to vesting. (3) Calculated on the basis of 52,347,039 shares of common stock outstanding as of July 31, 2022, provided that any additional shares of common stock that a stockholder has the right to acquire within 60 days after July 31, 2022, are deemed to be outstanding for the purposes of calculating that stockholder’s percentage of beneficial ownership. (4) Includes 728,010 shares issuable upon the exercise of options exercisable within 60 days after July 31, 2022. Also includes 2,663,752 shares jointly held by Mr. Liang and Sara Liu, his spouse, 46,051 shares held directly by Ms. Liu and 38,996 options exercisable and 433 RSU shares issuable within 60 days after July 31, 2022. See footnote 9. (5) Includes 34,218 options exercisable and 211 RSU shares issuable within 60 days after July 31,2022. (6) Includes 29,396 options exercisable and 364 RSU shares issuable within 60 days after July 31, 2022. (7) Includes 28,250 options exercisable and 225 RSU share issuable within 60 days after July 31, 2022. (8) Includes 5,000 shares issuable upon the exercise of options exercisable within 60 days after July 31, 2022. (9) Includes 38,996 options exercisable and 433 RSU shares issuable within 60 days after July 31, 2022. Also includes 2,663,752 shares jointly held by Ms. Liu and Mr. Liang, her spouse, 3,987,477 shares held by Charles Liang, and 728,010 shares issuable upon the exercise of options exercisable within 60 days after July 31, 2022. See footnote 4. (10) Includes 865,103 shares issuable upon the exercise of options exercisable within 60 days after July 31, 2022. (11) The information is based solely on the Schedule 13-F filed on May 16, 2022. The address for the reporting person is 150 S. Fifth St. Suite 2550, Minneapolis, MN 55402. (12) The information is based solely on the Amendment No. 1 to Schedule 13G filed on February 3, 2022. BlackRock, Inc. has sole voting power over 3,080,779 shares of common stock and sole dispositive power over 3,169,548 shares of common stock. The address for the reporting person is 55 East 52nd Street, New York, New York 10055. SMCI | 2022 Form 10-K | 134 Table of Contents (13) The information is based solely on the Amendment No. 1 to Schedule 13G filed on February 10, 2022. The Vanguard Group has shared voting power over 37,940 shares of common stock, sole dispositive power over 4,278,159 shares of common stock and shared dispositive power over 70,753 shares of common stock. The address for the reporting person is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Equity Compensation Plan Information We currently maintain three compensation plans that provide for the issuance of our Common Stock to officers and other employees, directors and consultants. These plans consist of the 2006 Equity Incentive Plan, the 2016 Equity Incentive Plan and the 2020 Equity and Incentive Compensation Plan. All three of these plans have been approved by our stockholders. We no longer grant any equity-based awards under the 2006 Equity Incentive Plan or the 2016 Equity Incentive Plan. On May 18, 2022, our stockholders approved an amendment and restatement of our 2020 Equity and Incentive Compensation Plan (the “2020 Plan”) which (among other things) made available for awards under the 2020 Plan an additional 2,000,000 shares of our common stock. The following table sets forth information regarding outstanding options and RSUs and shares reserved and remaining available for future issuance under the foregoing plans as of June 30, 2022: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(1) Weighted-average exercise price of outstanding options, warrants and rights (b)(2)(3) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)(c)(4) Equity compensation plans approved by security holders 6,190,489 $ 29.99 3,604,025 Equity compensation plans not approved by security holders — — Total 6,190,489 3,604,025 (1) This number includes 4,311,416 shares subject to outstanding options and 1,879,073 shares subject to outstanding RSU awards. (2) The weighted average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs which have no exercise price. (3) The weighted-average remaining contractual term of our outstanding options as of June 30, 2022 was 5.6 years. (4) All of these shares may be issued with respect to award vehicles other than just stock options or other rights to acquire shares. Item 13. Certain Relationships and Related Transactions and Director Independence CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Procedures for Approval of Related Person Transactions Pursuant to our Audit Committee charter, the Audit Committee has the responsibility for the review and approval of any related person transactions; provided that if the matter or transaction involves employment or compensation terms for services to our company, including retention or payment provisions relating to expert services, then it is presented to the Compensation Committee. In approving or rejecting a proposed transaction, or a relationship that encompasses many similar transactions, our Audit Committee will consider the relevant facts and circumstances available and deemed relevant, including but not limited to the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. Our Audit Committee approves only those transactions that, in light of known circumstances are not inconsistent with our best interests, as the Audit Committee determines in the good faith exercise of its discretion. In addition, we annually require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions as such term is defined by SEC rules and regulations. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer. Transactions with Related Parties, Promoters and Certain Control Persons Director and Officer Indemnification We have entered into agreements to indemnify our directors and executive officers to the fullest extent permitted under Delaware law. In addition, our certificate of incorporation contains provisions limiting the liability of our directors and our bylaws contain provisions requiring us to indemnify our officers and directors. Equity-Based Awards SMCI | 2022 Form 10-K | 135 Table of Contents Please see the “Grants of Plan-Based Awards” table and the “Director Compensation” table above for information on stock option and restricted stock unit grants to our directors and named executive officers in fiscal year 2022. Employment Relationships As of June 30, 2022, Hung-Fan (Albert) Liu, who is a brother of Sara Liu, our Co-Founder and Senior Vice President and a director, is employed in our operations organization in San Jose, California. Mr. Liu received total compensation of approximately $376,563 in fiscal year 2022. The total compensation includes salary, bonus and equity awards. Mr. Albert Liu reports to Mr. Kao, our Senior Vice President of Operations. As of June 30, 2022, Shao Fen (Carly) Kao, who is a sister-in-law of Sara Liu, our Co-Founder and Senior Vice President and a director, is employed in our finance and accounting organization in San Jose, California. Ms. Kao received total compensation of approximately $175,042 in fiscal year 2022. The total compensation includes salary, bonus and equity awards. Ms. Kao reports through the finance and accounting organization, which reports to Mr. Weigand, our Chief Financial Officer. As of June 30, 2022, Sara Liu, who is Charles Liang's spouse and is related to Mr. Liu and Ms. Kao as outlined above, is a Co-Founder, Senior Vice President, and director of the Company, and received total compensation of approximately $1,270,946 in fiscal year 2022. The total compensation includes equity gain of $841,939 (principally from the exercise of stock options), in addition to salary and bonus. In August 2022, Bill Liang, who is the son of Sara Liu and Charles Liang and nephew of Bill Liang, who serves as the Chief Executive Officer of Compuware, commenced employment in our systems engineering organization in San Jose, California. Bill Liang’s annual base salary rate is $83,000 and he will be eligible to receive equity incentive awards. The amount and value of his 2022 award has not been determined as of the date of this Annual Report but is currently expected to be in the range of 410 to 700 time-based restricted stock units. Transactions with Ablecom and Compuware We have entered into a series of agreements with Ablecom Technology Inc. ("Ablecom"), a Taiwan corporation, and one of its affiliates, Compuware Technology, Inc ("Compuware"). Ablecom’s ownership of Compuware is below 50% but Compuware remains a related party as Ablecom still has significant influence over the operations. Ablecom’s Chief Executive Officer, Steve Liang, is the brother of Charles Liang, our President, Chief Executive Officer and Chairman of the Board. Steve Liang and his family members owned approximately 28.8% of Ablecom’s stock and Charles Liang and his spouse, Sara Liu, who is also an officer and director of our company, collectively owned approximately 10.5% of Ablecom’s capital stock as of June 30, 2022. Bill Liang, a brother of both Charles Liang and Steve Liang, is a member of the Board of Directors of Ablecom. Bill Liang is also the Chief Executive Officer of Compuware, a member of Compuware’s Board of Directors and a holder of a significant equity interest in Compuware. Steve Liang is also a member of Compuware’s Board of Directors and is an equity holder of Compuware. Neither Charles Liang nor Sara Liu own any capital stock of Compuware and the Company does not own any of Ablecom or Compuware's capital stock. We have entered into a series of agreements with Ablecom, including multiple product development, production and service agreements, product manufacturing agreements, manufacturing services agreements and lease agreements for warehouse space. Under these agreements, we outsource a portion of our design activities and a significant part of our server chassis manufacturing of components such as server chassis to Ablecom. Ablecom agrees to design products according to our specifications. Additionally, Ablecom agrees to build the tools needed to manufacture the products. We have agreed to pay for the cost of chassis and related product tooling and engineering services and will pay for those items when the work has been completed. We entered into a distribution agreement with Compuware, under which we appointed Compuware as a non-exclusive distributor of our products in Taiwan, China and Australia. We believe that the pricing and terms under the distribution agreement are similar to the pricing and terms of distribution arrangements we have with similar third-party distributors. SMCI | 2022 Form 10-K | 136 Table of Contents We have also entered into a series of agreements with Compuware, including a multiple product development, production and service agreements, product manufacturing agreements, and lease agreements for office space. Under these agreements, we outsource to Compuware a portion of our design activities and a significant part of our manufacturing of components, particularly power supplies. With respect to design activities, Compuware generally agrees to design certain agreed-upon products according to our specifications, and further agrees to build the tools needed to manufacture the products. We pay Compuware for the design and engineering services, and further agree to pay Compuware for the tooling. We retain full ownership of any intellectual property resulting from the design of these products and tooling. With respect to the manufacturing aspects of the relationship, Compuware purchases most of materials needed to manufacture the power supplies from outside markets and uses these materials to manufacture the products and then sell to us. We review and frequently negotiate with Compuware the prices of the power supplies that we purchase from Compuware. Compuware also manufactures motherboards, backplanes and other components used on our printed circuit boards. We sell to Compuware most of the components needed to manufacture the above products. Compuware uses these components to manufacture and then sells back the products to us at a purchase price equal to the price at which we sold the components to Compuware, plus a “manufacturing value added” fee and other miscellaneous material charges and costs. We frequently review and negotiate with Compuware the amount of the “manufacturing value added” fee that will be included in the price of the products we purchase from Compuware. Ablecom’s sales to us comprise a substantial majority of Ablecom’s net sales. For fiscal years ended June 30, 2022, 2021 and 2020, we purchased products from Ablecom totaling $192.4 million , $122.2 million and $152.5 million, respectively. Amounts owed to Ablecom by us as of June 30, 2022, 2021 and 2020, were $46.0 million, $41.2 million and $40.1 million, respectively. For the fiscal years ended June 30, 2022, 2021 and 2020, we paid Ablecom $8.3 million , $8.6 million and $7.6 million, respectively, for design services, tooling assets and miscellaneous costs. Compuware’s sales of our products to others comprise a majority of Compuware’s net sales. For fiscal years ended June 30, 2022, 2021 and 2020, we sold products to Compuware totaling $26.1 million , $27.9 million and $23.9 million, respectively. Amounts owed to us by Compuware as of June 30, 2022, 2021 and 2020, were $20.0 million, $18.4 million and $14.3 million, respectively. The price at which Compuware purchases the products from us is at a discount from our standard price for purchasers who purchase specified volumes from us. In exchange for this discount, Compuware assumes the responsibility to install our products at the site of the end customer and administers first-level customer support. For the fiscal years ended June 30, 2022, 2021 and 2020, we purchased products from Compuware totaling $170.3 million, $113.4 million and $130.6 million, respectively. Amounts we owed to Compuware as of June 30, 2022, 2021 and 2020 were $60.0 million, $46.4 million and $46.5 million, respectively. For the fiscal years ended June 30, 2022, 2021 and 2020, we paid Compuware $1.5 million, $1.8 million and $1.2 million, respectively, for design services, tooling assets and miscellaneous costs. Our exposure to financial loss as a result of our involvement with Ablecom is limited to potential losses on our purchase orders in the event of an unforeseen decline in the market price and/or demand for our products such that we incur a loss on the sale or cannot sell the products. Our outstanding purchase orders to Ablecom were $36.0 million, $40.2 million and $23.2 million at June 30, 2022, 2021 and 2020, respectively, representing the maximum exposure to financial loss. We do not directly or indirectly guarantee any obligations of Ablecom, or any losses that the equity holders of Ablecom may suffer. Our exposure to financial loss as a result of our involvement with Compuware is limited to potential losses on our purchase orders in the event of an unforeseen decline in the market price and/or demand for our products such that we incur a loss on the sale or cannot sell the products. Our outstanding purchase orders to Compuware were $44.3 million, $71.0 million and $45.7 million at June 30, 2022, 2021 and 2020, respectively, representing the maximum exposure to financial loss. We do not directly or indirectly guarantee any obligations of Compuware, or any losses that the equity holders of Compuware may suffer. Tripartite Agreement . On November 8, 2021, our wholly-owned Taiwan subsidary (the “Subsidiary”) entered into a Tripartite Agreement (the “Tripartite Agreement”) with Ablecom and Compuware related to a three-way purchase of land. Pursuant to the Tripartite Agreement, the Subsidiary will participate in purchasing 33.33% of the 137,225.97 square meters (approximately 34 acres) of land Ablecom has agreed to acquire from third-party landowners in proximity to our campus in Bade, Taiwan. Compuware will acquire 17.21% of such land and Ablecom will retain the remaining 49.46% of the land. Under the Tripartite Agreement, fees and costs related to such land purchase would be borne by the parties according to their proportionate share of the land purchased. We intend to fund our proportionate share of the land purchased under the Tripartite Agreement which is estimated to be approximately NTD 789 million (or approximately US$28.3 million) from either available cash and/or borrowings under loan agreements the Subsidiary is party in Taiwan. Amounts payable related to the purchase of SMCI | 2022 Form 10-K | 137 Table of Contents the land are due in three installments based upon the achievement of specified milestones. The transaction is subject to various customary conditions precedent, including the receipt of government approvals, the discharge of mortgages and leases on the land, and the completion of due diligence. As of June 30, 2022 due diligence and discussions with government officials are continuing, and no installment payments have been made with respect to the transaction. If the transaction does not close within 12 months, Ablecom may offer the land to other parties. Loans In October 2018, our Chief Executive Officer, Charles Liang, personally borrowed approximately $12.9 million from Chien-Tsun Chang, the spouse of Steve Liang. The loan is unsecured, has no maturity date and bore interest at 0.8% per month for the first six months, increased to 0.85% per month through February 28, 2020, and reduced to 0.25% effective March 1, 2020. The loan was originally made at Mr. Liang's request to provide funds to repay margin loans to two financial institutions, which loans had been secured by shares of our common stock that he held. The lenders called the loans in October 2018, following the suspension of our common stock from trading on NASDAQ in August 2018 and the decline in the market price of our common stock in October 2018. As of June 30, 2022 the amount due on the unsecured loan (including principal and accrued interest) was approximately $15.7 million. Transactions with Monolithic Power Systems MPS is a supplier that provides high-performance analog and mixed signal semiconductors for use in our products. Saria Tseng, who served as a member on the Board of Directors until May 18, 2022, also serves as Vice President of Strategic Corporate Development, General Counsel and Secretary of MPS. We purchased $8.3 million, $3.9 million and $5.2 million of semiconductor products from MPS for use in our manufacturing process during the years ended June 30, 2022, 2021 and 2020, respectively. The amounts due to MPS as of June 30, 2022, 2021 and 2020 were not material. SMCI | 2022 Form 10-K | 138 Table of Contents Item 14. Principal Accounting Fees and Services The Audit Committee appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 2022. Independent Registered Public Accounting Firm Fees and Services The following table sets forth the aggregate audit fees billed to us by our independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”), and fees paid to Deloitte for services in the fee categories indicated below for fiscal years 2022 and 2021. The Audit Committee has considered the scope and fee arrangements for all services provided by Deloitte, taking into account whether the provision of non-audit services is compatible with maintaining Deloitte’s independence, and has pre-approved the services described below. Years Ended Amounts in '000s June 30, 2022 June 30, 2021 Audit Fees (1) $ 4,488 $ 4,405 Audit-Related Fees — — Tax Fees 276 225 All Other Fees 2 2 Total $ 4,766 $ 4,632 (1) Audit fees consist of the aggregate fees for professional services rendered for the audit of our consolidated financial statements, review of interim condensed consolidated financial statements and certain statutory audits. Audit Committee Pre-Approval Policies and Procedures The Audit Committee has determined that all services performed by Deloitte & Touche LLP are compatible with maintaining the independence of Deloitte & Touche LLP. The Audit Committee’s policy on approval of services performed by the independent registered public accounting firm is to pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm during the fiscal year. The Audit Committee reviews each non-audit service to be provided and assesses the impact of the service on the firm’s independence. PART IV Item 15. Exhibits and Financial Statement Schedules (a) Documents filed as part of this report (1) Financial Statements Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Fir m ( PCAO B ID: 34) 52 Consolidated Balance Sheets 54 Consolidated Statements of Operations 55 Consolidated Statements of Comprehensive Income 56 Consolidated Statements of Stockholders’ Equity 57 Consolidated Statements of Cash Flows 58 Notes to Consolidated Financial Statements 60 (2) Financial Statement Schedules All financial statement schedules have been omitted because they are either not applicable or the required information is shown in the consolidated financial statements or notes thereto. SMCI | 2022 Form 10-K | 139 Table of Contents (3) Exhibits See the Exhibit Index which precedes the signature page of this Annual Report, which is incorporated herein by reference. (b) Exhibits EXHIBIT INDEX Exhibit Number Exhibit Description 3.3 Amended and Restated Certificate of Incorporation of Super Micro Computer, Inc. (Incorporated by reference to Exhibit 3.3 filed with the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 3.4 Amended and Restated Bylaws of Super Micro Computer, Inc. (Incorporated by reference to Exhibit 3.4 filed with the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 4.1 Specimen Stock Certificate for Shares of Common Stock of Super Micro Computer, Inc. (Incorporated by reference to Exhibit 4.1 filed with the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 4.5 Description of Securities (Incorporated by reference to Exhibit 4.5 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 19, 2019) 10.1* Form of Restricted Stock Agreement under Super Micro Computer, Inc. 2006 Equity Incentive Plan (Incorporated by reference to Exhibit 10.7 from the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 10.2* Form of Restricted Stock Unit Agreement under Super Micro Computer, Inc. 2006 Equity Incentive Plan (Incorporated by reference to Exhibit 10.8 from the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 10.3* Form of Directors’ and Officers’ Indemnity Agreement (Incorporated by reference to Exhibit 10.9 from the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 10.4* Offer Letter for Sara Liu (Incorporated by reference to Exhibit 10.20 from the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 10.5* Product Manufacturing Agreement dated January 8, 2007 , between Super Micro Computer, Inc. and Ablecom Technology Inc. (Incorporated by reference to Exhibit 10.24 from the Company’s Registration Statement on Form S-1 (Registration No. 333-138370), declared effective by the Securities and Exchange Commission on March 28, 2007) 10.6* Form of Notice of Grant of Stock Option under 2006 Equity Incentive Plan (Incorporated by reference to Exhibit 10.5 from the Company's Registration Statement on Form S-8 (Commission File No. 333-142404) filed with the Securities and Exchange Commission on April 27, 2017) 10.7* Form of Notice of Grant of Restricted Stock under 2006 Equity Incentive Plan (Incorporated by reference to Exhibit 10.7 from the Company's Registration Statement on Form S-8 (Commission File No. 333-142404) filed with the Securities and Exchange Commission on April 27, 2017) 10.8* Form of Notice of Grant of Restricted Stock Unit under 2006 Equity Incentive Plan (Incorporated by reference to Exhibit 10.9 from the Company's Registration Statement on Form S-8 (Commission File No. 333-142404) filed with the Securities and Exchange Commission on April 27, 2017) 10.9* 2006 Equity Incentive Plan, as amended (Incorporated by reference to Appendix A from the Company’s Definitive Proxy Statement on Schedule 14A (Commission File No. 001-33383) filed with the Securities and Exchange Commission on January 18, 2011) SMCI | 2022 Form 10-K | 140 Table of Contents 10.10* 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 from the Company's Current Report on Form 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on March 14, 2016) 10.11* Form of Notice of Grant of Stock Option under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 99.9 from the Company's Registration Statement on Form S-8 (Commission File No. 333-210881 filed with the Securities and Exchange Commission on April 22, 2016) 10.12* Form of Stock Option Agreement under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 99.10 from the Company's Registration Statement on Form S-8 (Commission File No. 333-210881) filed with the Securities and Exchange Commission on April 22, 2016) 10.13* Form of Notice of Grant of Restricted Stock Units under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 99.11 from the Company's Registration Statement on Form S-8 (Commission File No. 333-210881) filed with the Securities and Exchange Commission on April 22, 2016) 10.14* Form of Restricted Stock Units Agreement under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 99.12 from the Company's Registration Statement on Form S-8 (Commission File No. 333-210881) filed with the Securities and Exchange Commission on April 22, 2016) 10.15 Loan and Security Agreement with Bank of America, N.A., dated April 19, 2018 (Incorporated by reference to Exhibit 10.51 from the Company's Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on May 17, 2019) 10.16 Extension of Loan and Security Agreement with Bank of America, N.A., dated September 7, 2018 (Incorporated by reference to Exhibit 10.52 from the Company's Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on May 17, 2019) 10.17 Second Amendment to Loan and Security Agreement, dated as of June 27, 2019 (Incorporated by reference to Exhibit 10.1 from the Company's Current report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on July 2, 2019) 10.18*‡ Offer Letter for Don Clegg (Incorporated by reference to Exhibit 10.56 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 19, 2019) 10.19*‡ Offer Letter for George Kao (Incorporated by reference to Exhibit 10.57 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 19, 2019) 10.20*‡ Offer Letter for David Weigand (Incorporated by reference to Exhibit 10.58 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 19, 2019) 10.21 Letter Agreement with Bank of America, N.A., dated October 28, 2019 (Incorporated by reference to Exhibit 10.59 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 19, 2019) 10.22 Third Amendment to Loan and Security Agreement with Bank of America, N.A. dated May 12, 2020 by and among Super Micro Computer, Inc., the lenders party thereto and Bank of America, N.A., as administrative agent for the lenders (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on Form 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on May 13, 2020) 10.23 Summary of Terms & Conditions 10-Year Term Loan Facility, dated May 6, 2020 between Super Micro Computer Inc. Taiwan and CTBC Bank (Incorporated by reference to Exhibit 10.28 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) 10.24* Form of Notice of Grant of Stock Option under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.31 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) 10.25* Form of Incentive Stock Award Option Agreement under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.32 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) 10.26* Form of Nonqualified Stock Option Agreement under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.33 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) 10.27* Form of Notice of Grant of Restricted Stock Units under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.34 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) SMCI | 2022 Form 10-K | 141 Table of Contents 10.28* Form of Restricted Stock Units Agreement under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.35 from the Company’s Annual Report on Form 10-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 31, 2020) 10.29 General Credit Agreement dated as of December 2, 2020 between Super Micro Computer, Inc. Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 4, 2020) 10.30 Notification and Confirmation of Conditions for Import Loan, dated as of December 2, 2020 between Super Micro Computer, Inc. Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on December 4, 2020) 10.31* Form of Notice of Grant of Performance Based Stock Option to Mr. Charles Liang dated March 2, 2021 (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on March 4, 2021) 10.32* Nonqualified Stock Option Award Agreement associated with the Notice of Grant of Performance Based Stock Option to Mr. Charles Liang dated March 2, 2021 (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on March 4, 2021) 10.33 Fourth Amendment to Loan and Security Agreement with Bank of America, N.A. dated to be effective as of June 28, 2021 by and among Super Micro Computer, Inc., the lenders party thereto, and Bank of America, N.A., as administrative agent for the lenders (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on June 29, 2021) 10.34 General Agreement for Omnibus Credit Lines dated as of July 20, 2021 between Super Micro Computer, Inc. Taiwan and CTBC Bank Co., Ltd. (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on July 26, 2021) 10.35 Agreement for Individually Negotiated Terms and Conditions dated as of December 21 , 2021 between Super Micro Computer, Inc. Taiwan and CTBC Bank Co., Ltd. (Incorporated by reference to Exhibit 10.6 from the Company’s Quarterly Report on 10-Q (Commission File No. 001-33383) filed with the Securities and Exchange Commission on February 4, 2022) 10.36 Summary of Short-Term Credit Facilities and 75 Month Term Loan Facility from CTBC Bank Co., Ltd. dated as of July 7, 2021 (Incorporated by reference to Exhibit 10.3 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on July 26, 2021) 10.37 English language translation of the Medium-to-Long Term Loan Agreement dated as of September 13, 2021 between Super Micro Computer, Inc. Taiwan and Mega International Commercial Bank (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on September 17, 2021) 10.38 General Credit Agreement dated as of September 13, 2021 between Super Micro Computer, Inc. Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on September 17, 2021) 10.39 Notification and Confirmation of Credit Conditions, dated as of September 13, 2021 between Super Micro Computer, Inc. Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.3 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on September 17, 2021) 10.40 English language translation of the Credit Authorization Agreement dated as of October 5, 2021 between Super Micro Computer, Inc. Taiwan and Chang Hwa Commercial Bank, Ltd. (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on October 12, 2021) 10.41 English language translation of the Imported Goods Loan Agreement dated as of October 5, 2021 between Super Micro Computer, Inc. Taiwan and Chang Hwa Commercial Bank, Ltd. (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on October 12, 2021) 10.42 English language translation of the Export Loan Agreement dated as of October 5, 2021 between Super Micro Computer, Inc. Taiwan and Chang Hwa Commercial Bank, Ltd. (Incorporated by reference to Exhibit 10.3 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on October 12, 2021) SMCI | 2022 Form 10-K | 142 Table of Contents 10.43 English language translation of the Loan Agreement for the Action Plan for Accelerated Investments by Domestic Corporations dated as of October 5, 2021 between Super Micro Computer, Inc. Taiwan and Chang Hwa Commercial Bank, Ltd. (Incorporated by reference to Exhibit 10.4 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on October 12, 2021) 10.44* Form of Notice of Grant of Restricted Stock Units (One-Year Vesting, Pro-Rata at Termination) under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.11 from the Company’s Quarterly Report on Form 10-Q (Commission File No. 001-33383) filed with the Securities and Exchange Commission on November 5, 2021) 10.45* Form of Restricted Stock Units Agreement (One-Year Vesting, Pro-Rata at Termination) under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.12 from the Company’s Quarterly Report on Form 10-Q (Commission File No. 001-33383) filed with the Securities and Exchange Commission on November 5, 2021) 10.46 Tripartite Agreement dated as of November 8, 2021 between Ablecom Technology Inc., Super Micro Computer, Inc. Taiwan and Compuware Technology, Inc. (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on November 12, 2021) 10.47 General Loan, Export/Import Financing, Overdraft Facilities and Securities Agreement dated as of January 7, 2022 between Super Micro Computer, Inc. Taiwan and HSBC Bank (Taiwan) Limited (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on January 13, 2022) 10.48 Facility Letter dated as of January 7, 2022 between Super Micro Computer, Inc. Taiwan and HSBC Bank (Taiwan) Limited (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on January 13, 2022) 10.49 Fifth Amendment to Loan and Security Agreement with Bank of America, N.A. dated to be effective as of March 3, 2022 by and among Super Micro Computer, Inc., the lenders party thereto, and Bank of America, N.A., as administrative agent for the lenders (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on March 4, 2022) 10.50 English language translation of the Omnibus Credit Authorization Agreement dated as of April 25, 2022 between Super Micro Computer, Inc. Taiwan and Mega International Commercial Bank (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on April 28, 2022) 10.51 English language translation of the Credit Authorization Agreement dated as of April 25, 2022 between Super Micro Computer, Inc. Taiwan and Mega International Commercial Bank (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on April 28, 2022) 10.52 English language translation of the Credit Authorization Approval Notice dated as of March 4, 2022 between Super Micro Computer, Inc. Taiwan and Mega International Commercial Bank (Linkou Branch) (Incorporated by reference to Exhibit 10.3 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on April 28, 2022) 10.53* Super Micro Computer, Inc. 2020 Equity and Incentive Compensation Plan, as amended and restated, effective May 18, 2022 (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on May 19, 2022) 10.54 Loan Agreement dated as of May 19, 2022 between Cathay Bank and Super Micro Computer, Inc. (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on May 23, 2022) 10.55+ English language translation of Credit Approval Notice dated as of May 13, 2022 from Chang Hwa Commercial Bank, Ltd. 10.56 General Credit Agreement dated as of August 9, 2022, between Super Micro Computer, Inc. Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 12, 2022) 10.57 No tification and Confirmation of Credit Conditions, dated as of August 9, 2022 between Super Micro Compu ter , Inc . Taiwan and E.SUN Bank (Incorporated by reference to Exhibit 10.2 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on August 12, 2022) SMCI | 2022 Form 10-K | 143 Table of Contents 10.58+ First Amendment to Loan Agreement dated as of August 17, 2022 by and between Cathay Bank and Super Micro Computer, Inc. 14.1 Code of Business Conduct and Ethics (Incorporated by reference to Exhibit 14.1 from the Company’s Current Report on 8-K (Commission File No. 001-33383) filed with the Securities and Exchange Commission on February 5, 2019) 21.1+ Subsidiaries of Super Micro Computer, Inc. 23.1+ Consent of Independent Registered Public Accounting Firm 24.1+ Power of Attorney (included in signature pages) 31.1+ Certification of Charles Liang, President and CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2+ Certification of David Weigand , CFO and Secretary Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1+ Certification of Charles Liang, President and CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2+ Certification of David Weigand, CFO and Secretary Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS+ XBRL Instance Document 101.SCH+ XBRL Taxonomy Extension Schema Document 101.CAL+ XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF+ XBRL Taxonomy Extension Definition Linkbase Document 101.LAB+ XBRL Taxonomy Extension Label Linkbase Document 101.PRE+ XBRL Taxonomy Extension Presentation Linkbase Document + Filed herewith * Management contract, or compensatory plan or arrangement ‡ Certain portions of this document, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, have been redacted in accordance with Regulation S-K Item 606(a)(6) Item 16. Form 10-K Summary None. SMCI | 2022 Form 10-K | 144 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 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. SUPER MICRO COMPUTER, INC. Date: August 29, 2022 /s/ Charles Liang Charles Liang President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer) SMCI | 2022 Form 10-K | 145 Table of Contents POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles Liang and David Weigand, jointly and severally, his or her attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might do or could do in person hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Charles Liang President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer) August 29, 2022 CHARLES LIANG /s/ David Weigand Senior Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) August 29, 2022 DAVID WEIGAND /s/ Sara Liu Director August 29, 2022 SARA LIU /s/ Daniel Fairfax Director August 29, 2022 DANIEL FAIRFAX /s/ Judy Lin Director August 29, 2022 JUDY LIN /s/ Sherman Tuan Director August 29, 2022 SHERMAN TUAN /s/ Shiu Leung (Fred) Chan Director August 29, 2022 SHIU LEUNG (FRED) CHAN /s/ Tally Liu Director August 29, 2022 TALLY LIU SMCI | 2022 Form 10-K | 146