What changed in this filing

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Item 9A. Controls and Procedures

2023-08-28 compared with 2022-08-29 · 467 added, 336 removed, 1173 unchanged (41% of the section changed)

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August 25, 2023

Other Information

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Other Information

Disclosure Pursuant to Section 13(r) of the Exchange Act

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which amended the Exchange Act to add Section 13(r) thereof, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether, during the relevant reporting period, it or any entity acting on its behalf knowingly engaged in certain activities, transactions or dealings relating to parties sanctioned pursuant to Executive Order 13382 or other specified authorities.

Such sanctions are administered by the Office of Foreign Assets Control (“OFAC”) within the U.S.

Department of the Treasury, even if those transactions are authorized by law.

On March 2, 2021, pursuant to Executive Order 13382, the Russian Federal Security Service (the “FSB”) was designated by the U.S.

government as a blocked party.

Notwithstanding such designation, OFAC has issued General License No.

1B, authorizing certain transactions involving the FSB, including all transactions ordinarily incident and necessary to requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the FSB for the importation, distribution, or use of information technology products in the Russian Federation, subject to certain limitations.

Section 13(r) of the Exchange Act requires disclosure of dealings with FSB, even where the activities were conducted in compliance with applicable laws and regulations, and where such activities, transactions, or dealings did not have a material financial or other impact on the issuer.

As previously disclosed in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, we had previously, before the designation of the FSB in Executive Order 13382, authorized certain third parties to periodically file notifications with, or apply for import licenses and permits from, the FSB on our behalf in connection with the importation of our products into Russia, as permitted under OFAC authorizations.

During various periods during fiscal year 2023, third parties filed notifications with, applied for import licenses and permits from, and/or received the associated approvals from the FSB on our behalf.

However, no sales of any products actually occurred in the Russian Federation during fiscal year 2023, and accordingly, these filing activities did not result in any revenue or otherwise contribute to our net income during fiscal year 2023.

We believe we have terminated all these authorizations.

The Company and its subsidiaries do not sell products or provide services to the FSB.

The Company and its subsidiaries had last recorded revenue from Russia on February 23, 2022.

Submission of Matters to a Vote of Security Holders

At our Annual Meeting of Stockholders held on May 19, 2023, a non-binding, advisory vote was taken on the frequency of future advisory votes regarding the compensation of our named executive officers.

As previously reported in the Current Report on Form 8-K we filed with the SEC on May 23, 2023, among the options presented to stockholders (every one year, every two years, or every three years), the greatest number of votes were cast in favor of holding such an advisory vote every one year, which was also the frequency recommended to the stockholders by our Board of Directors.

In light of these results and consistent with the previous recommendation and determination of our Board of Directors, we intend to continue to hold a non-binding advisory vote on executive compensation every one year until the next required vote on the frequency of stockholder votes on executive compensation.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers, and Corporate Governance

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Judy Lin (2)(4)

Robert Blair 75 Director

Sherman Tuan (2)(3)(4)

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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.

Liang has been granted many server technology patents.

Liang has been granted 23 U.S.

server technology patents.

Liang holds an M.S.

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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.

Sara Liu co-founded Super Micro in September 1993, has been a member of our Board since our inception in September 1993 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.

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Fairfax should serve on the Board based on his skills, experience, his financial literacy and his familiarity with technology businesses.

Robert Blair has been a member of our Board since December 2022.

Blair was President and Chief Executive Officer of ESS Technology, Inc., a fabless semiconductor company for 19 years from September 1999 through July 2018 where he also served as a director from September 1999 through August 2019.

During this time, ESS Technology, Inc.

was a publicly listed company on NASDAQ for 9 years.

Blair has been a director of Pictos, Inc., a technology licensing company that owns a portfolio of fundamental CMOS imaging patents, since July 2008 where he also previously served as President and Chief Executive Officer between 2008 and 2013.

His professional background also includes more than 35 years of experience in marketing, sales, engineering, operations, and general management, principally in the computer hardware, software, and semiconductor industries.

His experience includes roles at Global Semiconductor Alliance, Logistix Corporation, and XEGMAG (a division of Xidex Corporation).

Blair holds twelve issued U.S.

patents plus additional patents worldwide, and studied electrical engineering at Arizona State University and applied economics at the University of San Francisco.

Our Governance Committee concluded that Mr.

Blair should serve on the Board based on his familiarity with technology businesses, skills and experience with business operations at technology companies, and public company experience.

Judy Lin has been a member of our Board since April 2022.

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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.

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Sherman Tuan has been a member of our Board since February 2007.

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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.

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Shiu Leung (Fred) Chan has been a member of our Board since October 2020.

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Composition of the Board

Our authorized number of directors is currently seven.

There are currently seven directors.

Our authorized number of directors is currently eight.

There are currently eight directors.

Our Amended and Restated Certificate of Incorporation provides for a classified Board of Directors divided into three classes.

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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.

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The current composition of the Board of Directors is:

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Class II Directors (2)

Sara Liu Judy Lin

Robert Blair Sara Liu Judy Lin

Class III Directors (3)

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(3) The term of Class III directors expires at the annual meeting of stockholders following fiscal year 2024.

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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.

We have adopted “Corporate Governance Guidelines” to help ensure that the Board is independent from management, that it 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.

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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.

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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.

Based on these standards, our Board has determined that six of its current eight members, Daniel Fairfax, Judy Lin, Robert Blair, 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

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If you wish to send any communications to the Board, you may use one of the following methods:

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• Write to the Board at the following address:

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MEETINGS AND COMMITTEES OF THE BOARD

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Board Meetings

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We held an annual meeting of stockholders on May 19, 2023, for our fiscal year 2022.

The Board held eleven meetings during fiscal year 2022, four of which were regularly scheduled meetings and seven of which were special meetings.

The Board held nine meetings during fiscal year 2023, four of which were regularly scheduled meetings and five 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 2023.

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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.

In October 2022, each of the three standing committees conducted their periodic review of their charters, and, in April 2023, the Governance Committee conducted a further review of its charter and amended it in connection with such review.

A description of the 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.

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Audit Committee Compensation Committee Governance Committee

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Shiu Leung (Fred) Chan (1)

Fairfax Tally Liu Sherman Tuan

Daniel Fairfax Daniel Fairfax Sherman Tuan

Shiu Leung (Fred) Chan

Tally Liu Judy Lin

(1) Committee Chairperson

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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.

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The Audit Committee met ten times in fiscal year 2023, four of which were regularly scheduled meetings and six 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 (including Rule 5605(c)(2)(A)) and the rules of the SEC (including Rule 10A-3 promulgated under the Exchange Act).

The Board has also determined that our Audit Committee has the required number of “audit committee financial experts” as defined in Item 407 of Regulation S-K promulgated by the SEC.

As outlined more specifically in the Audit Committee charter, the Audit Committee has, among other duties, the following responsibilities:

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• Reviews and evaluates, at least annually, the adequacy of the Audit Committee charter and recommends any proposed changes to the Board for approval.

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Compensation Committee

The Compensation Committee has two members currently.

The Compensation Committee has three 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 met eleven times in fiscal year 2023, four of which were regularly scheduled meetings and seven of which were special meetings.

The Compensation Committee is comprised solely of non-employee directors.

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• Reviews and approves our incentive compensation plans and equity compensation plans;

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• 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;

• 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 other equity awards to participants other than certain individuals subject to Section 16 of the Exchange Act as provided in the applicable plan;

• 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.

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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 “2023 Director Compensation” sections of this Annual Report.

Nominating and Corporate Governance Committee

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 charter provides that the Governance Committee shall be comprised of no fewer than two members.

The Governance Committee met six times in fiscal year 2023, four of which were regularly scheduled meetings and two of which were special meetings.

The Governance Committee is comprised solely of non-employee directors.

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• Identifies individuals qualified to become directors;

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• Evaluates and selects, or recommends to the Board, director nominees for each election of directors;

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• 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;

• Conducts an annual evaluation of director independence that considers applicable 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;

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• Periodically reviews succession planning for executive officers;

• Periodically reviews and discusses with management our practices with respect to environmental, social and corporate governance issues;

• Periodically assesses, reports, and provides guidance to management and the full Board on our practices with respect to environmental, social and corporate governance issues, including monitoring climate-related issues, as well as review of any environmental sustainability performance report;

• Provides guidance and recommendations to the Board regarding legal compliance matters as appropriate relating to current environmental public policy trends;

• 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.

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In accordance with our bylaws, our Board establishes additional committees for specific delegated purposes, roles and responsibilities that are temporary in nature.

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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.

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, 2023, our directors, executive officers, and greater than 10% stockholders complied with all applicable Section 16(a) filing requirements.

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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”).

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, 2023, which was the end of our fiscal year 2023 (collectively referred to as our “named executive officers” or “NEOs”).

Our named executive officers and their positions at the end of fiscal year 2023 were:

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(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.

No equivalent chart is presented for CEO compensation because, through all of fiscal year 2023, and continuing for about the next three 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.

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Compensation Philosophy and Objectives—Our Continued Move Toward Performance-Based Compensation Arrangements

Compensation Philosophy and Objectives—Continuing Improvement of 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.

Efforts in fiscal year 2021 were primarily focused on our CEO (Mr.

Charles Liang), but, in fiscal year 2022, the Compensation Committee expanded the linkage of compensation to corporate performance to certain other named executive officers.

During fiscal year 2023, the Compensation Committee continued to refine the link between compensation and corporate performance for these other two named executive officers.

While the Compensation Committee continued to use a similar balance 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”) and stock options) from fiscal year 2022 to fiscal year 2023, the Compensation Committee for fiscal year 2023 carefully re-evaluated the specified objective metrics (“key performance indicators” or “KPIs”) used under the performance-based portion of such programs, as well as the fixed bonus component of such programs.

These efforts culminated in the adoption of a new fiscal year 2023 compensation program for each of Messrs.

Weigand and Clegg in January 2023 (the “FY2023 Performance Program for Other Named Executive Officers”).

Under such programs, the Compensation Committee determined to use the same KPIs and fixed bonus component as fiscal year 2022 for Mr.

Weigand’s program, but determined to use an updated and different mix of KPIs and an adjusted fixed bonus component for Mr.

Clegg for fiscal year 2023 compared to his program for fiscal year 2022.

See “FY2023 Performance Program for Other Named Executive Officers” below for more specific information about the design and operation of the compensation program for Messrs.

Weigand and Clegg for fiscal year 2023.

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, fiscal year 2023 was the second year of evaluating and monitoring the results of performance-based compensation arrangements made with Mr.

Liang in fiscal year 2021.

In March 2021, we had changed Mr.

In March 2021, we 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.

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Liang agreed that he would not be eligible for any increase in base salary, or any other cash compensation, until June 30, 2026.

Similar to fiscal year 2022, Mr.

Liang’s compensation for fiscal year 2023 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.

During fiscal year 2022, one of the five tranches under the 2021 CEO Performance Award (representing 200,000 options granted under such award) was earned, and during fiscal year 2023 an additional three tranches under the 2021 CEO Performance Award (representing an additional 600,000 options granted under such award) were earned.

This is because, during fiscal year 2023, each of the second, third, and fourth revenue goals of $4.8 billion, $5.8 billion, and $6.8 billion, respectively, in annualized revenue were achieved and the second, third, and fourth stock price goals of $60.00, $75.00, and $95.00, respectively, were achieved.

In addition, during fiscal year 2023 and through the date of this report, the Compensation Committee also certified the achievement of the fifth and final stock price goal of $120.00.

As a result, as of the date of this report, only 200,000 of the original 1,000,000 options granted under the 2021 CEO Performance Award remain unearned, and the only remaining goal under the 2021 CEO Performance Award is the fifth revenue goal of $8.0 billion in annualized revenue.

Liang received a base salary of $1 during fiscal year 2023.

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).

In summary, through all of fiscal year 2023 (and similar to the latter part of fiscal year 2021 and all of fiscal year 2022), almost all of Mr.

Liang’s compensation has been based only upon us achieving the revenue goals described below and the common stock price targets described below.

Unless all the goals under the 2021 CEO Performance Award are achieved and all such options awarded thereunder are fully earned prior to such time, Mr.

Liang’s compensation is expected to be similarly based upon awards he earns under the 2021 CEO Performance Award for about the next three years.

To fully achieve those goals, our revenue must continue to increase to $8 billion over a rolling four-quarter period (from $3.6 billion for the last full fiscal year before the award).

The 60-trading-day average stock price of our common stock has already reached the final goal of $120.00 per share (from $34.08 on the day the award was provided).

As a result, as of the date of this report, the 2021 CEO Performance Award has been earned and is exercisable at a per share price of $45 with respect to 800,000 shares.

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Fiscal Year 2023 Business Performance Highlights

The following are highlights of our performance for fiscal year 2023.

When given, comparisons are between fiscal year 2023 and fiscal year 2022 results.

• Revenue was $7,123.5 million, up 37.1%;

• Gross margin was 18.0%, an improvement from 15.4%;

• Net income was $640.0 million, an improvement of 124.4%;

• Diluted net income per common share was $11.43 million, up 114.8%;

• The sixty-trading-day average stock price of our shares exceeded $120.00, reaching $120.87 during the period from March 6, 2023 through May 30, 2023;

• During fiscal year 2023 and the period from July 1, 2022 to June 30, 2023, our stock price reached a high of $261.66 on June 9, 2023;

• We recorded a $36.6 million increase in inventory reserve charges between fiscal year 2022 and fiscal year 2023.

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.

At the end of fiscal year 2023, the Compensation Committee was comprised of three non-employee directors, although during the period from July 1, 2022 through October 25, 2022, the Compensation Committee was principally comprised of two non-employee directors.

All of the non-employee directors who served on the Compensation Committee during fiscal year 2023 were independent pursuant to the applicable listing rules of NASDAQ and Rule 16b-3 under the Exchange Act.

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The agenda for meetings is determined by the Chair of the Compensation Committee with the assistance of our Chief Financial Officer and General Counsel.

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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) :

As part of making an overall assessment of each named executive officer’s role and performance, and structuring our compensation programs for fiscal year 2023, the Compensation Committee (among other things) (1) reviewed recommendations of our Chief Executive Officer, (2) considered publicly available peer group compensation data, and (3) considered compensation data previously assembled for the Compensation Committee by Radford (an Aon Hewitt company ("Radford")) from a sample of public companies previously selected by us, with input on the selection of this sample from Radford.

The sample previously selected by us consisted of the following companies:

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Benchmark Electronics, Inc.

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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.

The Compensation Committee utilized for fiscal year 2023 the independent consultant report developed for fiscal year 2022 as it believed the report continued to be relevant.

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:

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* Is formula based;

Key Fiscal Year 2023 Executive Compensation Decisions and Actions

Key fiscal year 2023 executive compensation decisions and actions included the following:

• As a part of its philosophy to link compensation to corporate performance, the Compensation Committee adopted the FY2023 Performance Program for Other Named Executive Officers in January 2023.

Similar to the program for these persons utilized during the prior fiscal year, in addition to base salary and fixed bonus components, the program continued to include 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 a period of four years.

The performance-based annual incentive award continues to have each of the following features:

* Formula-based;

* Utilizes company performance metrics that are individualized based upon the role of the officer;

* 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.

* Utilizes company performance metrics tied closely to stockholder value, including percentage appreciation in stock price from the prior fiscal year and percentage increase in worldwide revenue from the prior fiscal year.

See “- FY2023 Performance Program for Other Named Executive Officers” below for more information.

• As a part of continued efforts to evolve the approach to named executive officer compensation and to further improve the linkage of compensation to corporate performance to other named executive officers, the Compensation Committee carefully re-evaluated the KPIs utilized under the performance-based portion of the FY2023 Performance Program for Other Named Executive Officers and the fixed bonus component of the FY2023 Performance Program for Other Named Executive Officers:

* Under such program, the Compensation Committee determined to utilize the same KPIs for fiscal year 2023 as were utilized in fiscal year 2022 for Mr.

These included a Stock Price Increase KPI and a Long-Term Investor Increase KPI, as well as a subjective Individual Performance Evaluation KPI determined by the CEO.

The Compensation Committee believed such KPIs continued to accurately reflect the most relevant factors to measure the CFO’s performance in a manner that aligns with stockholder value and stockholder interests.

The weightings given to such KPIs were also unchanged between the programs for fiscal year 2022 and fiscal year 2023.

See “- FY2023 Performance Program for Other Named Executive Officers – Performance Incentive Award” below for more information.

SMCI | 2023 Form 10-K | 114

In addition, the Compensation Committee decided to leave unchanged the fixed bonus component for Mr.

Weigand at 30% of his base salary for fiscal year 2023.

See “- FY2023 Performance Program for Other Named Executive Officers – Fixed bonus component” below for more information.

* Under such program, the Compensation Committee determined to utilize an updated and different mix of KPIs for fiscal year 2023 for Mr.

Clegg’s program.

For fiscal year 2023, Mr.

Clegg’s KPIs continued to include a Worldwide Revenue KPI, as well as a subjective Individual Performance Evaluation KPI determined by the CEO (features similar to those used for fiscal year 2022).

However, for fiscal year 2023, Mr.

Clegg’s other KPIs included both a Growth in Top 3000 Customer KPI and a Slow Moving & Excess and Obsolete Inventory KPI (the “Inventory KPI”), which are new.

Previously, in fiscal year 2022, Mr.

Clegg’s other KPIs included both a Stock Price Increase KPI and a Worldwide Net Profit KPI, which the Compensation Committee determined not to utilize for fiscal year 2023, as the Compensation Committee believed the new KPIs more accurately reflected the appropriate objectives of a Senior Vice President of Worldwide Sales in a manner that aligns with stockholder value and stockholder interests.

In addition, the Compensation Committee also determined for fiscal year 2023 to adjust the weightings of the various KPIs selected for Mr.

Clegg to more finely tune the program.

For example, while the Worldwide Revenue KPI had been double weighted in Mr.

Clegg’s program for fiscal year 2022, for fiscal year 2023 this KPI was triple weighted.

See “- FY2023 Performance Program for Other Named Executive Officers – Performance Incentive Award” below for more information.

In addition, the Compensation Committee decided to adjust the fixed bonus component for Mr.

Clegg to 20% of his base salary for fiscal year 2023, compared to 25% of his base salary for the prior fiscal year 2022.

See “- FY2023 Performance Program for Other Named Executive Officers – Fixed bonus component” 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 FY2023 Performance Program for Other Named Executive Officers for fiscal year 2023:

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;

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;

* 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.

Weigand received a fixed bonus amount of $148,568 paid in semi-monthly installments during fiscal year 2023, earned a cash payment of $167,127 and earned an aggregate grant of $668,509 in RSUs that were granted on August 24, 2023 and August 25, 2023.

These RSUs generally vest in annual installments over four years;

Clegg received a fixed bonus amount of $88,888 paid in semi-monthly installments during fiscal year 2023, earned a cash payment of $157,923, and earned an aggregate grant of $157,923 in RSUs that were granted on August 24, 2023 and August 25, 2023.

These RSUs generally vest in annual installments over four years.

• Base salaries for the named executive officers other than the CEO were also adjusted during fiscal year 2023 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 previously 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.

With the adjustments made during fiscal year 2023, based upon the previously prepared compensation study for fiscal year 2022 (prepared in July 2021), the base salaries for the named executive officers other than the CEO were generally at the 50 th percentile in the market according to such study;

* Consideration of the continued inflationary market conditions in fiscal year 2023.

SMCI | 2023 Form 10-K | 115

• Fiscal year 2023 was the second full fiscal year in which the CEO operated under the 2021 CEO Performance Award, and related agreements, which was granted in March 2021.

During the preceding fiscal year 2022, one of the five tranches under the 2021 CEO Performance Award (representing 200,000 options granted under such award) was earned.

During fiscal year 2023, 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 2023, 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.

• During fiscal year 2023, an additional three tranches under the 2021 CEO Performance Award (representing 600,000 options granted under such award) were earned.

More specifically:

* The Company’s annualized revenue exceeded $4.8 billion (representing the second revenue goal under the 2021 CEO Performance Award) for the four quarters ended June 30, 2022.

The trailing 60-trading-day average of closing prices of the Company’s Common Stock reached $60.00 (representing the second stock price goal under the 2021 CEO Performance Award) on October 11, 2022.

Based upon the matching of the relevant revenue goal with the corresponding stock price goal, the Compensation Committee certified the vesting of the second 200,000 shares subject to the 2021 CEO Performance Award on October 25, 2022;

* The Company’s annualized revenue exceeded $5.8 billion (representing the third revenue goal under the 2021 CEO Performance Award) for the four quarters ended September 30, 2022.

The trailing 60-trading-day average of closing prices of the Company’s Common Stock reached $75.00 (representing the third stock price goal under the 2021 CEO Performance Award) on December 23, 2022.

Based upon the matching of the relevant revenue goal with the corresponding stock price goal, the Compensation Committee certified the vesting of the third 200,000 shares subject to the 2021 CEO Performance Award on January 4, 2023;

* The Company’s annualized revenue exceeded $6.8 billion (representing the fourth revenue goal under the 2021 CEO Performance Award) for the four quarters ended June 30, 2023.

The achievement of the $6.8 billion annualized revenue milestone is expected to be certified by the Compensation Committee after the Annual Report on Form 10-K for the year ended June 30, 2023, is filed with the SEC.

The trailing 60-trading-day average of closing prices of the Company’s Common Stock reached $95.00 (representing the fourth stock price goal under the 2021 CEO Performance Award) on April 17, 2023.

Based upon the matching of the relevant revenue goal with the corresponding stock price goal, the Compensation Committee is expected to certify the vesting of the fourth 200,000 shares subject to the 2021 CEO Performance Award after the Annual Report on Form 10-K for the year ended June 30, 2023, is filed with the SEC, and concurrently with the certification of the achievement of the $6.8 billion annualized revenue milestone.

• The trailing 60-trading-day average of closing prices of the Company’s Common Stock reached $120.00 (representing the fifth and final stock price goal under the 2021 CEO Performance Award) on May 30, 2023.

The fifth and final annualized revenue goal of $8.0 billion under the 2021 CEO Performance Award remains to be achieved.

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.

As of the date of this report, the 2021 CEO Performance Award has been earned and is exercisable at a per share price of $45 with respect to 800,000 shares.

SMCI | 2023 Form 10-K | 116

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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.

Feedback received from stockholders has previously 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 2023, the Compensation Committee continued to take such prior feedback into consideration when it developed, designed, and implemented the FY2023 Performance Program for Other Named Executive Officers, and particularly the re-evaluation of the KPIs utilized under the performance-based portion of such program.

Our last annual meeting of stockholders was held on May 19, 2023 (the “Fiscal Year 2022 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.

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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).

In particular, in fiscal year 2023, 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, equity incentives, and the KPIs utilized under the performance-based portion of such program).

The Compensation Committee believes the participation of such named executive officers in the process which culminated in the adoption in fiscal year 2023 of the FY2023 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.

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Overview of Fiscal Year 2023 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.

Fiscal year 2023 was the second 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.

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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”).

As of July 31, 2023, four of the five Revenue Goals have been achieved and all of the Stock Price Goals have been achieved.

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.

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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

Achievement Status

$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

$5.8 billion 74% Achieved (5)

$6.8 billion 104% Achieved (6)

$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.

(2) Revenue reported in the Company’s Form 10-K for the fiscal year ended June 30, 2020, was $3.34 billion.

(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.

(5) Revenue reported for the four quarters ended September 30, 2022 was $6.02 billion.

(6) Revenue reported for the four quarters ended June 30, 2023 was $7.1 billion.

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, 2023:

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Absolute Change in Stock Price From $45 Exercise Price

Achievement Status as of July 31, 2022

Achievement Status

$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

$60 76% 33% Achieved (4)

$75 120% 67% Achieved (5)

$95 179% 111% Achieved (6)

$120 252% 167% Achieved (7)

(1) Sustained stock price performance is required for each Stock Price Goal to be met, other than in connection with a change in control.

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(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.

(4) The sixty-trading day average stock price from July 19, 2022 through October 11, 2022 was $60.16.

(5) The sixty-trading day average stock price from September 30, 2022 through December 23, 2022 was $75.40.

(6) The sixty-trading day average stock price from January 20, 2023 through April 17, 2023 was $95.11.

(7) The sixty-trading day average stock price from March 6, 2023 through May 30, 2023 was $120.87.

SMCI | 2023 Form 10-K | 118

(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.

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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.

For these purposes, we note that all Stock Price Goals have now been achieved.

As stated above, during fiscal year 2023, 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.

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 at that time that the performance thresholds could take many years to achieve, if they could be achieved at all.

As of the date of this report, the 2021 CEO Performance Award has been earned and is exercisable at a per share price of $45 with respect to 800,000 shares.

FY2023 Performance Program for Other Named Executive Officers

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.

On January 24, 2023, after consultations with Mr.

Liang, and consideration of such other factors as the Compensation Committee considered appropriate (including input previously received from the Compensation Committee’s compensation consultant and an executive compensation study from prior years), the Compensation Committee approved an executive compensation program for fiscal year 2023 for two of the Company’s NEOs, Mr.

Weigand (the “CFO Compensation Program”) and Mr.

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Clegg at the end of each of fiscal year 2022 and 2023:

Principal Position During Fiscal Year 2022 End of Fiscal Year 2021 Base Salary Rate (1)(2)

Name Principal Position During Fiscal Year 2023 End of Fiscal Year 2022 Base Salary Rate (1)(2)

End of Fiscal Year 2023

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(1) The base salary amounts actually paid to each named executive officer for fiscal year 2022 and 2023 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.

(2) 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:

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Clegg, increases to $376,640 effective July 1, 2021, to $384,173 effective March 1, 2022, and to $403,382 effective May 1, 2022.

(3) For fiscal year 2023, salary amounts disclosed in the Summary Compensation Table for each named executive officer differ from the amounts disclosed in the table above because of the timing of adjustments made to Base Salary during fiscal year 2023, which were:

Weigand, increase to $520,969 effective October 1, 2022;

Clegg, increase to $435,652 effective October 1, 2022.

In addition, salary amounts disclosed in the Summary Compensation Table for such named executive officers also include amounts for paid out vacation and sick days.

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.

Clegg were made during fiscal year 2023 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;

• Consideration of inflationary market conditions in the second half of fiscal year 2022.

• Analyses provided in the prior compensation study for fiscal year 2022 which indicated that even after multiple adjustments to base salaries for such executive officers made during the prior fiscal year 2022 (which were discussed in the prior year’s Compensation Discussion & Analysis), the base salaries for such executive officers were still generally below the 50 th percentile in the market.

With the adjustments made during fiscal year 2023, based upon the previously prepared compensation study for fiscal year 2022, the base salaries for Mr.

Weigand and Mr.

Clegg were generally at the 50 th percentile in the market according to such study;

• Consideration of continuing inflationary market conditions in fiscal year 2023.

In addition, while not participating in the FY2023 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.

George Kao, another named executive officer, also received an adjustment to his base salary rate during fiscal year 2023 based upon the same factors the Compensation Committee considered for each of Mr.

Weigand and Mr.

During fiscal year 2023, 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.

Kao’s base salary rate increased from $373,411 to $395,816 effective January 1, 2023, an aggregate increase of 6.0% during fiscal year 2023.

SMCI | 2023 Form 10-K | 120

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The Compensation Committee included the Fixed Bonus as a part of the FY2023 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 Fixed Bonus percentage of Base Salary for fiscal year 2023 was 30% for Mr.

While the Fixed Bonus percentage of Base Salary remain unchanged between fiscal year 2022 and fiscal year 2023 for Mr.

Clegg’s Fixed Bonus percentage of Base Salary was adjusted between fiscal year 2022 and fiscal year 2023.

Clegg’s Fixed Bonus percentage was 25% from July 1, 2022 to September 30, 2022 (“Mr.

Clegg’s Prior Fixed Bonus Percentage”) and 20% from October 1, 2022 to June 30, 2023 (Mr.

Clegg’s New Fixed Bonus Percentage”).

The Compensation Committee believed such adjustment with a smaller amount of Mr.

Clegg’s compensation being fixed was appropriate given his role, when also coupled with the increased weighting adjustment given to Mr.

Clegg’s worldwide revenue KPI under the Performance Incentive Award component of his award.

See “- Performance Incentive Award” below.

The Compensation Committee decided to retain the Fixed Bonus component for the FY2023 Performance Program for Other Named Executive Officers because the Committee believed the aggregate total cash compensation for these two officers, based on their base salaries effective on October 1, 2022, amount of cash earned under the Fixed Bonus percentages, and the amount of cash which the Committee believed would likely be earned under the cash portion of the Performance Incentive Award (see “- Performance Incentive Award” below), was likely to still be less than the market 50 th percentile for comparable positions based upon the prior compensation study for fiscal year 2022.

The following table sets forth the total amount of Fixed Bonus received by such persons for fiscal year 2023:

Principal Position During Fiscal Year 2022 Fiscal Year 2022 Fixed Bonus Received (1)

Name Principal Position During Fiscal Year 2023 Fiscal Year 2023 Fixed Bonus Received

David Weigand Senior Vice President, Chief Financial Officer and Chief Compliance Officer

Don Clegg Senior Vice President, Worldwide Sales 88,888 (2)

(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”).

Weigand, the Fixed Bonus paid from July 1, 2022 to September 30, 2022 was determined based upon a base salary of $418,000 at the beginning of fiscal year 2022.

The Fixed Bonus paid from October 1, 2022 to June 30, 2023 was determined based upon Mr.

Weigand’s increase in base salary to $520,969.

Clegg, the Fixed Bonus paid from July 1, 2022 to September 30, 2022 was determined based upon a base salary of $376,640 at the beginning of fiscal year 2022 and Mr.

Clegg’s Prior Fixed Bonus Percentage.

The Fixed Bonus paid from October 1, 2022 to June 30, 2023 was determined based upon Mr.

Clegg’s increase in base salary to $435,652 and Mr.

Clegg’s New Fixed Bonus Percentage.

George Kao, another named executive officer, does not participate in the FY2023 Performance Program for Other Named Executive Officers, but during fiscal year 2023 was eligible for the Company’s regular semi-annual bonus payouts available to employees pursuant to which he received $14,362.

Such bonus payouts are discretionary on the part of the Company, but (when made based upon Company performance) are available to a broad base of Company employees with amounts subject to CEO discretion and approval.

Kao’s discretionary bonus payout was equal to less than 4% of his base salary at the end of fiscal year 2023.

SMCI | 2023 Form 10-K | 121

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.

Under the Performance Incentive Award portion of the FY2023 Performance Program for Other Named Executive Officers, participants have the ability to earn Performance Incentive Awards based upon the achievement of certain specified KPIs and the CEO’s subjective evaluation of each participant’s performance during the fiscal year.

Any Performance Incentive Awards earned by Mr.

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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.

Performance RSUs for the annual award are (for purposes of administration of shares available under the amended and restated 2020 Equity and Incentive Compensation Plan) capped for each of Messrs.

Weigand and Clegg at a level unlikely to be earned.

• 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”).

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Weigand, the KPIs for fiscal year 2023 were based upon:

SMCI | 2022 Form 10-K | 119

• Percentage appreciation in Company stock price from June 30, 2022, to June 30, 2023, with a 100% increase in the stock price counting as 1.00 towards determination of the final aggregate Multiple;

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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;

The 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) added during fiscal year 2023 or (2) an existing long-term investor who had increased its holdings by at least 50% during fiscal year 2023;

provided, however, that index funds, hedge funds, and broker-dealers are excluded from the definition of long-term investors.

A list of potential long-term investors at the end of fiscal year 2022 had been identified based upon certain SEC filings made by such investors, and the foregoing evaluation criteria was then applied to such list.

SMCI | 2023 Form 10-K | 122

Clegg, the KPIs for fiscal year 2023 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 number of our top 3,000 customers from June 30, 2022, to June 30, 2023, with a 100% increase in the number of our top 3,000 customers counting as 1.00 towards determination of the final aggregate Multiple.

For these purposes, new top 3,000 customers are identified based upon new customer accounts which were set up in our internal accounting system during fiscal year 2023 based upon approximately 900+ accounts which were targeted for marketing efforts in the fiscal year;

* Such KPI is “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.

• 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;

* 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;

• 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;

* 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.

* This KPI is “triple weighted,” meaning that such percentage increase in worldwide revenue is then multiplied by three, and that resulting percentage is then used in the calculation of the aggregate Multiple as described above and illustrated below.

During the prior fiscal year 2022, Mr.

Clegg had this same KPI, but it was only “double weighted.” The Compensation Committee believed it was appropriate to increase the weighting of this KPI to “triple weighted” for fiscal year 2023 given Mr.

Clegg’s role as Senior Vice President, Worldwide Sales, as achievement against this metric has high correlation with the Company's stock price;

• Change in Slow Moving & Excess and Obsolete Inventory KPI, or Inventory KPI, which is calculated by dividing slow moving and excess and obsolete inventory for fiscal year 2022 by slow moving and excess and obsolete inventory for fiscal year 2023, and subtracting 1.00 from such quotient;

* The Inventory KPI is “double weighted,” meaning that such resulting number from the calculation described above is then multiplied by two, and that resulting number is then used in the calculation of the aggregate Multiple as described above and illustrated below;

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.

SMCI | 2022 Form 10-K | 120

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.

Clegg, a decrease in stock price, number of long-term investors, number of our top 3,000 customers, and/or worldwide revenue 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.

In addition, for Mr.

Clegg, an increase in slow moving and excess and obsolete inventory from the prior fiscal year results in a multiple of zero for the Inventory KPI for purposes of determining the aggregate Multiple.

Slow moving and excess and obsolete inventory apply written guidelines that have been established which categorize products based upon various criteria (such as price sensitivity based upon age (e.g.

CPUs, GPUs), volume/cost of product, and product lead time), and then for each such category define a time period after which they are considered slow moving.

SMCI | 2023 Form 10-K | 123

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, 2023, 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 2023 Performance against the Performance Incentive Award .

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Performance RSUs Payout Value (80%)

Number of Performance RSUs to be Granted in August 2022 (3)

Number of Performance RSUs Granted in August 2023 (4)

(1) Our closing stock price on June 30, 2022 and June 30, 2023 was $40.35 and $249.25, respectively.

(2) Utilizing the definition of long-term investor specified above, it was determined the number of Long-Term Investors increased from 50 to 72 during fiscal year 2023.

(3) 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.

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(4) 2,046 and 433 RSUs were granted on August 24, 2023 and August 25, 2023, respectively, based on the average 60-trading day closing stock price of $269.46 and $269.94, respectively.

The following sets forth the determination of the Performance Incentive Award based upon fiscal year 2023 performance for Mr.

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Final Weighted Score

Stock Price Increase KPI

14.7% (or 0.147) 1X

Top 3,000 Customers KPI

92% (or 0.92) (1)

Worldwide Revenue KPI

46.1% (or 0.461) 2X

Worldwide Net Profit KPI

138.0% (or 1.293) 2X

37% (or 0.37) (2)

Inventory KPI

Individual Performance Evaluation

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Performance RSUs Payout Value (50%)

Number of Performance RSUs to be Granted in August 2022 (2)

Number of Performance RSUs Granted in August 2023 (5)

(1) Using the definition of new top 3,000 customer specified above, it was determined that 123 such customers were added during fiscal year 2023.

(2) In our consolidated financial statements, we recorded revenues of $5,196.1 million and $7,123.5 million for fiscal year 2022 and fiscal year 2023, respectively.

(3) The final weighted score for this performance measure was determined to be zero.

In our consolidated financial statements, we recorded a $36.6 million increase in inventory reserve charges between fiscal year 2022 and fiscal year 2023

(4) 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.

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(5) 320 and 265 RSUs were granted on August 24, 2023 and August 25, 2023, respectively, based on the average 60-trading day closing stock price of $269.46 and $269.94, respectively.

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.

While participants in the FY2023 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 amended and restated 2020 Equity and Incentive Compensation Plan.

In continuing to award other equity-based incentive compensation to participants in the FY2023 Performance Program for Other Named Executive Officers, the Compensation Committee noted that the prior compensation study described above 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 FY2023 Performance Program for Other Named Executive Officers.

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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 amended and restated 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

For fiscal year 2023, which commenced July 1, 2022, 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.

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David Weigand

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

7,687 Special grant

3,752 Performance grant

1,000 Recognition grant

Don Clegg RSUs (2)

3,184 Performance grant

1,000 Recognition grant

George Kao RSUs (3)

1,500 Recognition grant

RSUs 2,930 Refresh grant

George Kao Stock options — —

Weigand received a special stock option award with 2-year vesting.

Stock Options 6,500 Refresh grant

(1) As discussed in the Compensation Discussion & Analysis in the prior year Annual Report on Form 10-K, during fiscal year 2022, Mr.

Weigand received a special award of 30,000 stock options (the “Special Award”) 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 Committee originally commenced discussion of granting such Special Award in January 2022, but the grant was delayed until April 2022.

The Company’s stock price, however, had appreciated significantly during such period.

Taking this information into consideration, the Committee, upon the recommendation of the CEO, awarded this special grant of RSUs to Mr.

Weigand on August 12, 2022 specifically regarding this difference in Special Award grant timing, which special grant of RSUs has vesting dates generally in line with the vesting dates of the Special Award, vesting at the rate of seven equal quarterly installments with the initial vesting date on November 10, 2022, and the final vesting date will be May 10, 2024.

(2) Such RSUs were earned by Messrs.

Weigand and Clegg as payouts pursuant to their Performance Incentive Awards under the FY2022 performance program.

See the Compensation Discussion & Analysis discussion in the prior year Annual Report on Form 10-K for additional information.

The RSUs were actually granted on August 29, 2022, and vest at an annual rate of 25% per year commencing July 1, 2023, with the final installment vesting on July 1, 2026.

(3) Such grants made on September 15, 2022 were part of a special recognition grant made to a broad set of employees which included Messrs.

Weigand, Clegg, and Kao.

These grants, consistent with certain prior practices over recent years to these same NEOs in connection with other broad-based special recognition rewards, vested 50% on October 25, 2022 and 50% on March 25, 2023, and were intended to recognize the Company’s general assessment of awardees’ recent collective achievement for and contributions to the Company.

The CEO made the

SMCI | 2023 Form 10-K | 125

recommendation on size of grants for the other NEOs to the Committee based on his subjective assessment of their contributions to the Company.

For context, Company-wide, an aggregate of 170,365 RSUs were granted in connection with this special recognition grant to approximately 1,321 employees, with awards ranging in sizes up to a maximum of 2,000 units.

The average award was for 129 RSUs, and (based upon the recommendation of the CEO) an aggregate of 29 employees received awards of 1,000 RSUs or more.

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.

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.

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.

The stock options described above for Mr.

Kao were part of his regular periodic refresh grant cycle, and were granted on November 4, 2022 with a 10-year term and an exercise price equal to the closing market price of our common stock on the grant date ($76.63).

Subject generally to the continued service of Mr.

Kao, such stock options vest and become exercisable at the rate of 25% of the shares on November 4, 2023, and then an additional 1/16th of the shares at the end of each successive calendar quarter thereafter.

The particular size of the stock option grants to Mr.

Kao 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.

In general, RSUs represent the right to receive payout of a defined number of shares of our common stock subject generally to continued employment through the vesting date.

The RSUs granted to Mr.

Weigand on August 12, 2022 were a special grant that vests at the rate of seven equal quarterly installments, with the initial vesting date on November 10, 2022 and the final vesting date on May 10, 2024.

See the table above for additional information with respect to this special grant.

The RSUs granted to Messrs.

Weigand and Clegg on August 29, 2022 were earned by Messrs.

Weigand and Clegg pursuant to their Performance Incentive Awards under the prior year FY2022 performance program.

Subject generally to the continued service of such named executive officers, these RSUs vest at an annual rate of 25% per year commencing July 1, 2023, with the final installment vesting on July 1, 2026.

On September 15, 2022, a special recognition grant was made to a broad set of employees which included 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

These grants vested 50% on October 25, 2022 and 50% on March 25, 2023.

See the table above for additional information with respect to this special recognition grant.

On November 4, 2022, a regular periodic refresh grant was made to Mr.

These RSUs generally vest at the rate of 25% of the total number of units on November 10, 2023, and then an additional 1/16th of the units at the end of each successive calendar quarter thereafter.

See the table above for additional information with respect to this refresh grant.

The particular sizes 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.

Stock Ownership Guidelines

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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).

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

SMCI | 2023 Form 10-K | 126

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.

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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.

As of June 30, 2023, each of the covered persons subject to the Guidelines met his or her stock ownership target.

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.

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See “Discussion and Analysis of 2021 CEO Performance Award.”

SMCI | 2022 Form 10-K | 124

Recoupment Policy

We established a recoupment policy that is applicable to our named executive officers (the “Recoupment Policy”).

Clawback Policy

Prior to calendar year 2023, we established a recoupment policy 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.

This Recoupment Policy applied 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.

In light of new rules promulgated by the Nasdaq National Market on which we are listed and requirements of the Securities and Exchange Commission, during the course of fiscal year 2024 we intend to re-evaluate our Recoupment Policy and put in place a policy compliant with the required standards.

Other Benefits

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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.

SMCI | 2023 Form 10-K | 127

We do not provide perquisites or personal benefits to any of our named executive officers.

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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

plans, arrangements and agreements may, in certain instances, result in the deferral of compensation that is subject to the requirements of Section 409A.

Participation in, and compensation paid under, our 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.

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Sherman Tuan, Chair

Daniel Fairfax

SMCI | 2023 Form 10-K | 128

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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.

Weigand and Clegg’s Performance Incentive Award provided for fiscal year 2023, based on probable outcome, as of January 2023.

The RSU portion of each award was capped at a level unlikely to be earned.

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.

Weigand and Clegg for their Performance Incentive Awards were granted in early fiscal year 2024, as disclosed in CD&A above.

(4) The amount disclosed for fiscal year 2023 represents the grant date fair values of the stock option award 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 10 “Stock-based Compensation and Stockholders’ Equity”, to our consolidated financial statements for fiscal year 2023 included in this Annual Report on Form 10-K.

(5) Amounts disclosed for fiscal year 2023 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.

Weigand and Clegg’s Performance Incentive Awards for fiscal 2023, as further described above in CD&A.

(6) As discussed in the Prior Year CD&A, in March 2020, Mr.

Liang received a special performance-based cash incentive award opportunity.

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’s award, for a cash incentive opportunity of up to $8,076,701 (the “Maximum Value”), was specifically linked to Company stock price performance, as further described below under “- Update on Special Performance-Based Cash Incentive Award Granted in March 2020.” 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.

As further described below under “- Update on Special Performance-Based Cash Incentive Award Granted in March 2020” 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 | 2023 Form 10-K | 129

Fiscal Year 2023 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.

The following table provides information concerning all plan-based awards granted during fiscal year 2023 to each of our named executive officers, which grants were made under the amended and restated Super Micro Computer, Inc.

2020 Equity and Incentive Compensation Plan.

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9/15/2022 — — — — — — 1,000 — — 65,360

3/26/2022 — — — (2) (2) 250,000 — — — 126,393

Don Clegg 1/24/2023 20,169 (2) — — — — — — — —

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9/15/2022 — — — — — — 1,000 — — 65,360

3/26/2022 — — — (2) (2) 250,000 — — — 97,198

George Kao 9/15/2022 — — — — — — 1,500 — — 98,040

11/4/2022 — — — — — — 2,930 — — 224,526

11/4/2022 — — — — — — — 6,500 76.63 269,815

(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.

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Weigand and $40,338 for Mr.

Clegg, and the award was capped at a payout of no more than 250,000 RSUs.

Clegg, and the award was capped at a level unlikely to be earned.

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.

Weigand and Clegg are reported in the “Non-Equity Incentive Plan Compensation” column of the Fiscal Year 2023 Summary Compensation Table, and the fair values of the RSU portions disclosed in this table, based on probable outcome, as of January 2023 are included in the “Stock Awards” column of the Fiscal Year 2023 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.

Weigand and Clegg for their Performance Incentive Awards were granted in early fiscal year 2024, as disclosed in CD&A above.

Grants made in fiscal year 2023 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 2023 is provided under the "Employment Arrangements, Severance and Change of Control Benefits" under the “Compensation Discussion and Analysis”.

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Outstanding Equity Awards at 2023 Fiscal Year-End

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OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END TABLE

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Option Awards Stock Awards

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45.00 3/2/2031 — — — —

David Weigand 16,072 — — 22.10 7/31/2028 — — — —

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— 53.04 5/5/2032 — — — —

— — — — — 900 (6)

— — — — — 3,210 (7)

— — — — — 4,393 (8)

1,094,955 — —

— — — — — 3,752 (9)

Don Clegg 2,000 — — 20.54 8/3/2026 — — — —

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— — — — — 2,930 (13)

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(1) Represents the closing stock price per share of our common stock as of June 30, 2023 ($249.25) multiplied by the number of shares underlying RSUs that had not vested as of June 30, 2023.

(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.

(2) These stock options are performance-based and 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.

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.

The options vest in tranches of 200,000 shares each only when coordinating Stock Price Goals and

SMCI | 2023 Form 10-K | 131

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 could have been earned based on performance was 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.

However, even if those goals are achieved, if the Company’s stock price had remained at $45.00 per share, based on the $45.00 exercise price for these stock options, there would have been no appreciation value in those stock options for Mr.

For more information about the operation of this award, see “2023 CEO Performance Award Granted in March 2023” above.

(3) These incentive and nonqualified stock options vest at the rate of 25% on May 1, 2021 and 1/16th per quarter thereafter, such that the granted options will be fully vested on May 1, 2024.

(4) These nonqualified stock options vest at the rate of 1/8th of the shares on the first quarter of the vesting commencement date on August 5, 2022, and 1/8th at the end of each successive calendar quarter thereafter.

(5) These incentive and nonqualified stock option vest the rate of 25% on May 5, 2023 and 1/16th per quarter thereafter, such that the granted options will be fully vested on May 5, 2026.

(6) The RSUs vest at the rate of 25% on May 10, 2021 and 1/16th per quarter thereafter, such that the RSUs will be fully vested on May 10, 2024.

(7) The RSUs vest at the rate of 25% on May 10, 2023 and 1/16th per quarter thereafter, such that the RSUs will be fully vested on May 10, 2026.

(8) The RSUs vest equally at the rate of 14.3% in seven quarters on November 10, 2022, such that the RSUs will be fully vested on May 10, 2024.

(9) The RSUs vest in four equal annual increments on July 1 of each year, beginning on July 1, 2023, such that the RSUs will be fully vested on July 1, 2026.

(10) These incentive stock options vest at the rate of 25% on October 27, 2021 and 1/16th per quarter thereafter, such that the granted options will be fully vested on October 27, 2024.

(11) These incentive and nonqualified stock options vest at the rate of 25% on November 4, 2023 and 1/16th per quarter thereafter, such that the granted options will be fully vested on November 4, 2026.

(12) These RSUs vest at the rate of 63% on May 10, 2021 and at a rate of 6% per quarter thereafter, such that the RSUs will be fully vested on November 10, 2024.

(13) These RSUs vest at the rate of 25% on November 10, 2023 and 1/16th per quarter thereafter, such that the RSUs will be fully vested on November 10, 2026.

(14) As further described in CD&A, as of the end of fiscal year 2023, each of Messrs.

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Clegg 50% in cash and 50% in Performance RSUs, which Performance RSUs will vest over four years from July 1, 2023.

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.

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 level unlikely to be earned.

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.

Weigand and Clegg for their Performance Incentive Awards were granted in early fiscal year 2024, as disclosed in CD&A above, and will appear in this table in subsequent years.

Fiscal Year 2023 Option Exercises and Stock Vested

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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.

See “Discussion and Analysis of 2021 CEO Performance Award.” The final two tranches of 400,000 options under the 2021 CEO Performance Award would have been earned thereunder for a change in control occurring on June 30, 2023 (based on the closing stock price of $249.25 on such date).

The exercise price under the 2021 CEO Performance Award is $45.00.

As a result, the intrinsic value of these 400,000 options would have been $81.7 million at June 30, 2023.

Fiscal Year 2023 Chief Executive Officer Pay Ratio

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Liang, our Chief Executive Officer (“2023 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.

Liang (“2023 Median Annual Compensation”), was 0.095 (or ninety-five hundredths) to 1.

For purposes of this pay ratio disclosure, 2023 CEO Compensation was determined to be $7,104 which represents the total compensation reported for Mr.

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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.

For fiscal year 2023, we continued to use the same employee identified for fiscal year 2022.

Compensation Program Risk Assessment

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During fiscal year 2023, each of Messrs.

Chan, Fairfax and Liu attended six Excess Meetings.

Tseng and Mr.

Tuan did not attend any Excess Meetings during fiscal year 2022.

Fairfax and Liu attended eight Excess Meetings, Mr.

Tuan attended two Excess Meetings, and Mr.

Chan attended one Excess Meeting.

Blair did not attend any Excess Meetings during fiscal year 2023.

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.

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2020 Equity and Incentive Compensation Plan on August 2, 2022, to such persons serving on such date, which grants had a vesting date of June 30, 2023.

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.

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.

Robert Blair was appointed as a non-employee director on December 19, 2022.

In connection with his appointment, Mr.

Blair received during fiscal year 2023 a pro-rated portion of the annual non-employee director retainer and, on February 3, 2023, an RSU grant with a value equal to a pro-rated portion of $220,000 from the date of his appointment with a vesting date of June 30, 2023.

The following table shows for fiscal year 2023 certain information with respect to the compensation of all of our non-employee directors who served in such capacities during fiscal year 2023:

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Daniel Fairfax 97,821 219,979 — 317,800

16,875 54,832 180 71,887

Saria Tseng (2)

Judy Lin 67,500 219,979 — 287,479

Robert Blair (1)

32,120 116,895 — 149,015

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Tally Liu 116,000 219,979 — 335,979

Judy Lin was appointed to the Board in April 2022.

Saria Tseng served as a director until May 18, 2022.

Robert Blair was appointed to the Board in December 2022.

(2) This column consists of annual director fees, non-employee committee chairman fees, and other committee member fees, in each case earned for fiscal year 2023.

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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 10, “Stock-based Compensation and Stockholders’ Equity” to our consolidated financial statements for fiscal year 2023 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.

Each grant of 3,917 RSUs to each of the directors other than Mr.

Blair had a grant date fair value of $56.16 per share, and Mr.

Blair's grant of 1,386 RSUs had a grant date fair value of $84.34 per share.

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, 2023.

Name Stock Awards Option Awards

Name Stock Awards (1)

Option Awards

Daniel Fairfax — —

Saria Tseng — 27,000

Robert Blair — —

Sherman Tuan — 2,500

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Tally Liu — —

(1) For fiscal year 2023, we made grants for non-employee director service under the Super Micro Computer, Inc.

2020 Equity and Incentive Compensation Plan on August 2, 2022, to such persons serving on such date, which grants had a vesting date of June 30, 2023.

Robert Blair who was appointed as a non-employee director in December 2022, we made a pro-rated grant for his non-employee director service under the Super Micro Computer, Inc.

2020 Equity and Incentive Compensation Plan on February 3, 2023, which grant also had a vesting date of June 30, 2023.

All such awards granted to the non-employee directors vested on June 30, 2023.

As a result, because all such awards had vested, there are no shares underlying stock awards for such persons as of June 30, 2023.

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.

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.

None of the members of the Compensation Committee as of the date of this Annual Report is a current or former officer or employee of our Company or had any relationship with our Company requiring disclosure.

In addition, during fiscal year 2023, 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.

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.

Sherman Tuan and Mr.

Tally Liu served on the Compensation Committee during all of fiscal year 2023.

Dan Fairfax served on the Compensation Committee during a portion of fiscal year 2023 with his appointment commencing on October 26, 2022.

SMCI | 2023 Form 10-K | 135

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Judy Lin 4,863 *

All directors and executive officers as a group (10 persons) (10)

Robert Blair 1,386 *

All directors and executive officers as a group (10)

8,080,277 14.9 %

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(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.

As a result, amounts reported by beneficial owners in this table may differ from amounts reported in Section 16 filings made by such person.

(3) Calculated on the basis of 52,905,947 shares of common stock outstanding as of July 31, 2023, provided that any additional shares of common stock that a stockholder has the right to acquire within 60 days after July 31, 2023 are deemed to be outstanding for the purposes of calculating that stockholder’s percentage of beneficial ownership.

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Liang and Sara Liu, his spouse, 1,827 shares held directly by Ms.

Liu and 38,996 options exercisable and 433 RSU shares issuable within 60 days after July 31, 2022.

Liu and 1,333 RSU shares issuable within 60 days after July 31, 2023.

See footnote 9.

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(8) Includes 2,500 shares issuable upon the exercise of options exercisable within 60 days after July 31, 2023.

(9) Includes 38,996 options exercisable and 433 RSU shares issuable within 60 days after July 31, 2022.

(9) Includes 1,333 RSU shares issuable within 60 days after July 31, 2023.

Also includes 2,647,752 shares jointly held by Ms.

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Suite 2550, Minneapolis, MN 55402.

SMCI | 2023 Form 10-K | 136

(12) The information is based solely on the Amendment No.

1 to Schedule 13G filed on February 3, 2022.

2 to Schedule 13G filed on January 6, 2023.

BlackRock, Inc.

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The address for the reporting person is 55 East 52nd Street, New York, New York 10055.

SMCI | 2022 Form 10-K | 134

(13) The information is based solely on the Amendment No.

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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.

SMCI | 2023 Form 10-K | 137

Transactions with Related Parties, Promoters and Certain Control Persons

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Equity-Based Awards

SMCI | 2022 Form 10-K | 135

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 2023.

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As of June 30, 2023, 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.

Liu received total compensation of approximately $376,563 in fiscal year 2022.

Liu received total compensation of $557,452 in fiscal year 2023.

The total compensation includes salary, bonus and equity awards.

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.

Kao received total compensation of approximately $175,042 in fiscal year 2022.

As of June 30, 2023, 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 information systems organization in San Jose, California.

Kao received total compensation of $321,944 in fiscal year 2023.

The total compensation includes salary, bonus and equity awards.

Kao reports through the finance and accounting organization, which reports to Mr.

Weigand, our Chief Financial Officer.

As of June 30, 2023, Mien-Hsia (Michelle) Hung, who is a sister-in-law of Sara Liu, our Co-Founder and Senior Vice President and a director, is employed in our marketing organization in Taiwan.

Hung received total compensation of $139,953 in fiscal year 2023.

The total compensation includes salary, bonus and equity awards.

As of June 30, 2023, Sara Liu, who is Charles Liang's spouse and is related to Mr.

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.

Hung as outlined above, is a Co-Founder, Senior Vice President, and director of the Company, and received total compensation of $9,353,127 in fiscal year 2023.

The total compensation includes equity gain of $8,811,517 (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

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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

Super Micro Asia Science and Technology Park, Inc .

We and Ablecom jointly established Super Micro Asia Science and Technology Park, Inc.

(the "Management Company") in Taiwan to manage the common areas shared by us and Ablecom for its separately constructed manufacturing facilities.

In fiscal year 2012, each party contributed $0.2 million for a 50% ownership interest of the Management Company.

Certain affiliates of Ablecom serve as directors of the Management Company.

See Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding the Management Company.

SMCI | 2023 Form 10-K | 139

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.

Tripartite Agreement .

On November 8, 2021, Super Micro Computer Inc., Taiwan (the “Subsidiary”), a Taiwan corporation and wholly-owned subsidiary of the Company, entered into a Tripartite Agreement (the “Agreement”) with Ablecom and Compuware related to a three-way purchase of land.

Ablecom has advised that its underlying agreements to acquire land from the third-party landowners in proximity to the Company’s campus in Bade, Taiwan have been terminated, and during the quarter ended December 31, 2022, the Agreement was terminated.

In October 2018, our Chief Executive Officer, Charles Liang, personally borrowed approximately $12.9 million from Chien-Tsun Chang, the spouse of Steve Liang.

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As of June 30, 2023, the amount due on the unsecured loan (including principal and accrued interest) was approximately $16.0 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 | 2023 Form 10-K | 140

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The Audit Committee appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 2023.

As we previously disclosed in our Current Report on Form 8-K filed with the SEC on March 15, 2023, Deloitte & Touche LLP has been dismissed effective upon completion of the audit of the financial statements for fiscal year 2023.

The Audit Committee approved the engagement of Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the fiscal year ending June 30, 2024, and EY has been engaged.

Independent Registered Public Accounting Firm Fees and Services

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Index to Consolidated Financial Statements Page

Report of Independent Registered Public Accounting Fir m ( PCAO B ID:

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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(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 | 2023 Form 10-K | 141

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.

See the Exhibit Index which precedes the signature page of this Annual Report, which is incorporated herein by reference.

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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)

10.1* 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.

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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)

10.5* 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

10.6* 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 from the Company's Current Report on Form 8-K (Commission File No.

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333-210881) filed with the Securities and Exchange Commission on April 22, 2016)

SMCI | 2023 Form 10-K | 142

10.10* 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.

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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)

10.20* Form of Notice of Grant of Stock Option under 2020 Equity and Incentive Compensation Plan (Incorporated by reference to Exhibit 10.2 from the Company’s Quarterly Report on Form 10-Q (Commission File No.

001-33383) filed with the Securities and Exchange Commission on May 5, 2023)

10.21* 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.

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001-33383) filed with the Securities and Exchange Commission on August 31, 2020)

SMCI | 2022 Form 10-K | 141

10.24* 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.

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001-33383) filed with the Securities and Exchange Commission on March 4, 2021)

SMCI | 2023 Form 10-K | 143

10.28* Nonqualified Stock Option Award Agreement associated with the Notice of Grant of Performance Based Stock Option to Mr.

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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.

10.31 Agreement for Individually Negotiated Terms and Conditions dated as of October 3, 2022 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)

(Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on 10-Q (Commission File No.

001-33383) filed with the Securities and Exchange Commission on November 4, 2022)

10.32 Summary of Short-Term Credit Facilities and 75 Month Term Loan Facility from CTBC Bank Co., Ltd.

22 unchanged sentences

001-33383) filed with the Securities and Exchange Commission on October 12, 2021)

SMCI | 2022 Form 10-K | 142

10.39 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.

6 unchanged sentences

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)

SMCI | 2023 Form 10-K | 144

10.42 General Loan, Export/Import Financing, Overdraft Facilities and Securities Agreement dated as of January 7, 2022 between Super Micro Computer, Inc.

7 unchanged sentences

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)

10.45+ English language translation of the Omnibus Credit Authorization Agreement dated as of June 17, 2023 between Super Micro Computer, Inc.

Taiwan and Mega International Commercial Bank

10.46 English language translation of the Credit Authorization Agreement dated as of April 25, 2022 between Super Micro Computer, Inc.

1 unchanged sentence

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)

10.47+ English language translation of the Credit Authorization Approval Notice dated as of M ay 25, 2023 between Super Micro Computer, Inc.

Taiwan and Mega International Commercial Bank (Linkou Branch)

10.48* Super Micro Computer, Inc.

5 unchanged sentences

10.50 English language translation of Credit Approval Notice dated as of May 13, 2022 from Chang Hwa Commercial Bank, Ltd.

(Incorporated by reference to Exhibit 10.55 from the Company’s Annual Report on Form 10-K (Commission File No.

001-33383) filed with the Securities and Exchange Commission on August 29, 2022)

10.51 General Credit Agreement dated as of August 9, 2022, between Super Micro Computer, Inc.

1 unchanged sentence

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 .

10.52 Notification and Confirmation of Credit Conditions, dated as of August 9, 2022 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 August 12, 2022)

SMCI | 2022 Form 10-K | 143

10.53 First Amendment to Loan Agreement dated as of August 17, 2022 by and between Cathay Bank and Super Micro Computer, Inc.

(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 August 29, 2022)

10.54 Second Amendment to Loan Agreement dated as of October 13, 2022 by and between Cathay Bank and Super Micro Computer, Inc.

(Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on 10-Q (Commission File No.

001-33383) filed with the Securities and Exchange Commission on November 4, 2022)

10.55 Facility Letter dated as of February 7, 2023 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 February 10, 2023)

10.56† Notification and Confirmation of Credit Conditions, dated as of June 17, 2023 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 June 23, 2023)

10.57+ Form of Restricted Stock Units Notice of Grant and Agreement ( Assoc iated with the Director Compensation Plan adop ted in August 2023 )

10.58+ Form of Notice of Grant of Stock Option and Nonqualified Stock Option Award Agreement ( Associated with the Director Compensation Plan adopted in August 2023 )

SMCI | 2023 Form 10-K | 145

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)

19.1+ Insider Trading Policy

21.1+ Subsidiaries of Super Micro Computer, Inc.

14 unchanged sentences

‡ 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)

† Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)

Form 10-K Summary

19 unchanged sentences

/s/ Judy Lin Director August 25, 2023

/s/ Robert Blair Director August 25, 2023

/s/ Sherman Tuan Director August 25, 2023

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures