DEF 14A of Alpha & Omega Semiconductor Ltd, Sep 25, 2023

DEF 14A of Alpha & Omega Semiconductor Ltd

Filed Sep 25, 2023 · FY20230001387467-23-000060

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Company's directors are elected annually to serve until the next annual general meeting of shareholders or until their successors are duly elected and qualified. Upon recommendation from our Nominating and Corporate Governance Committee, our Board has nominated each of the nine (9) director nominees named below for election to the Board at the Annual Meeting. Unless otherwise directed by shareholders, the proxy holders will vote all shares represented by proxies held by them for the election of such nominees.

  2. Director Nominees

    Director Nominees Information concerning the director nominees as of September 15, 2023 is set forth below:

  3. Director Nominees

    | Name | Age | Position | | Mike F. Chang, Ph.D. | 78 | Chairman of the Board and Executive Chairman | | Lucas S. Chang, Ph.D. (2)(3) | 68 | Director | | Stephen C. Chang | 46 | Director and Chief Executive Officer | | Claudia Chen (1)(3) | 58 | Director | | So-Yeon Jeong (2) | 51 | Director | | Hanqing (Helen) Li (1) | 46 | Director | | King Owyang, Ph.D. (2)(3) | 77 | Director | | Michael L. Pfeiffer (1) | 71 | Director | | Michael J. Salameh (1)(2)(4) | 68 | Director |

  4. Director Nominees

    (1) Member of the Audit Committee (2) Member of the Compensation Committee (3) Member of the Nominating and Corporate Governance Committee (4) Lead Independent Director Mike F. Chang, Ph.D., is the founder of our company and serves as our Executive Chairman and Chairman of the Board. Dr. Chang has extensive experience in both technology development and business operations in the power semiconductor industry. Prior to establishing our company, Dr. Chang served as the Executive Vice President at Siliconix Incorporated, a subsidiary of Vishay Intertechnology Inc., a global manufacturer and supplier of discrete and other power semiconductors, or Siliconix, from 1998 to 2000. Dr. Chang also held various management positions at Siliconix from 1987 to 1998. Earlier in his career, Dr. Chang focused on product research and development in various management positions at General Electric Company from 1974 to 1987. Dr. Chang received his B.S. in electrical engineering from National Cheng Kung University, Taiwan, and M.S. and Ph.D. in electrical engineering from the University of Missouri. Dr. Chang’s extensive technological expertise and business experiences in the power semiconductor industry and his knowledge of our operations, strategic objectives and key relationships with partners and customers, provide our Board with valuable insights and in-depth understanding of our Company. Lucas S. Chang, Ph.D., has been a director of our company since November 2016. Since January 2018, Dr. Chang has been serving as Vice President, General Counsel to United Microelectronics Corporation, a semiconductor manufacturing company listed on the New York Stock Exchange and Taipei Stock Exchange. From December 2016 to January 2018, Dr. Chang served as vice president, general counsel to Senhwa Biosciences, Inc., a drug development company listed on the Taipei Stock Exchange. From February 2006 to September 2016, Dr. Chang was a senior partner at the global law firm Morgan, Lewis & Bockius LLP, which is our principal outside counsel. Dr. Chang’s legal practice at Morgan Lewis focused on general corporate, cross-border investment and M&A transactions, and intellectual property. Prior to that and from 1995 to 2006, Dr. Chang was a partner and an associate at several leading law firms, including Wilson Sonsini Goodrich & Rosati, Heller Ehrman & McAuliffe, and Coudert Brothers. From 1991 to 1995, he served as a staff attorney and a patent agent at IBM Intellectual Property and Licensing Services. From 1985 to 1991, he was a research staff member and technical team leader at IBM Research Division. From 1983 to 1985, Dr. Chang served as a Senior Development Scientist at Union Carbide Corporation. Dr. Chang holds a B.S.E. in chemical engineering from National Taiwan University; a Ph.D. in chemical engineering from the University of Washington, and a J.D. from Santa Clara University School of Law. Dr. Chang’s extensive experience and knowledge in legal, regulatory compliance, corporate governance, and intellectual property matters in the U.S. and Asia, as well as his scientific and technical background in the semiconductor and computer industries, provide the Board with important expertise and skills in analyzing legal and business issues affecting our operations. Stephen C. Chang has served as our Chief Executive Officer since March 2023 and as a director since November 2022. Mr. Chang previously served as the Company’s President from January 2021 to February 2023. Prior to that, he served in various management positions in our company including Executive Vice President of Product Line Management, Senior VP of Marketing, VP of the MOSFET Product Line, and Senior Director of Product Marketing. Mr. Chang has over 20 years of industry experience and leads our Product Line Marketing with various managerial responsibilities, including new product development, product lifecycle management, business development, and business strategy. He received his B.A. in Electrical Engineering from University of California, Berkeley and M.B.A. from Santa Clara University. Mr. Chang’s extensive experience in all aspects of our business, including marketing, operations and technology management, as well as his deep knowledge and understanding of our day to day business operations, strategic directions, customer profile and industry trends, will enhance the ability and expertise of our Board to provide oversight and management of our company. Claudia Chen has been a director of our company since November 2019. Ms. Chen also serves as an advisor and consultant for both public and private companies. Since December 2021, she serves as a Vice President of Finance at Avivalinks, Inc., a privately held company building advanced connectivity solutions for next generation autonomous systems. From July 2018 to April 2019, Ms. Chen served as the Head of Finance and Acting President of Sonatus, Inc, a company focusing on the development of in-vehicle and cloud platforms, where she also served as an advisor from May 2019 to July 2020. From 2008 to 2017, Ms. Chen served as the head of finance department (2010 to 2017 as Vice President of Finance and 2008 to 2009 as Director of Finance) of Atoptech, Inc, an EDA software company. Prior to that, Ms. Chen held various management positions at technology companies, including Director of Finance of Polaris Networks, Inc. from 2000 to 2005; Director of Finance of Transmedia Communications, Inc., which was acquired by Cisco Systems, Inc.; and Director of Finance of NeoParadigm Labs, Inc. Ms. Chen holds a B.S. in Accounting from National Taiwan University, Taipei, Taiwan, and an M.S. in Taxation from the University of Illinois, Urbana. Ms. Chen’s extensive skills and experience in the areas of financial and accounting matters, and her managerial expertise with respect to technology companies, will contribute significantly to the Board’s ability to perform oversight and other responsibilities. So-Yeon Jeong has been a director of our company since November 2021. From April 2020 to May 2022, she served as the Head of Investor Relations at Magnachip Semiconductor Corporation based in Seoul, Korea, a designer and manufacturer of analog and mixed-signal semiconductor platform solutions. From 2011 to August 2020, she served as Consultant, Investor Relation for the Company. From 2007 to 2008, Ms. Jeong served as the Vice President of Investor Relations and Marketing Communications of Photon Dynamics, Inc. (acquired by Orbotech, now a KLA company), a global supplier of array test and repair equipment for LCD flat panel display manufacturers. From 2004 to 2007, Ms. Jeong served as the Head of Investor and Board Relations of Nextest Systems Corp. (acquired by Teradyne), a leading manufacturer of automatic test equipment for semiconductor IC manufacturers. Ms. Jeong received her M.B.A. from Fuqua School of Business, Duke University and B.A. from Ewha University, Seoul, Korea. Ms. Jeong’s extensive experience in public relations and ESG matters, as well as her familiarity with communications issues in the semiconductor industry, provide important expertise and capabilities to the Board in the areas of marketing and public communications.

  5. Director Nominees

    Hanqing (Helen) Li has been a director of our company since November 2021. She has been a Managing Director and Head of China Investment Banking of Needham & Company, LLC, a full-service investment banking and asset management firm since 2011, and she has been an independent board member of Kandou Holding, S. A. since November 2022, an innovative leader in high-speed, energy efficient, chip-to-chip link solutions critical to the evolution of the electronics industry. Prior to that, Ms. Li served as Strategic Sales Manager of TDK/Invensense, a leading provider of MEMS-based motion sensors. From October 2006 to 2008, Ms. Li served as the Senior Design Engineer of Marvell Technology Group, a global supplier of infrastructure semiconductor solutions designed to process, move, store and secure data. From 2002 to October 2006, Ms. Li served as Design Engineer for Micron Technology, the largest memory device and solution provider in the United States. Ms. Li received her M.B.A. from the MIT Sloan School of Management, MSEE from the University of Southern California, and B.A. from Tsinghua University. Ms. Li’s substantial experience in the financial and investment banking sectors, particularly in capital markets and strategic transactions of semiconductor industries in Asia, together with her knowledge of semiconductor technology and engineering processes, enhance the Board’s ability to oversee business and financial strategies of the Company. King Owyang, Ph.D., has been a director of our company since April 2013. He was the Chief Executive Officer and Executive Director of Computime Group Limited, a Hong Kong listed company and a leading global provider of electronic control technologies from April 30, 2010 to October 1, 2020. Prior to joining Computime, Dr. Owyang held various positions at Siliconix Inc., a U.S. semiconductor company, for over 21 years, including the President and Chief Executive Officer. He was instrumental in leading Siliconix to become a highly profitable company with industry leading products. Under his leadership and management, Siliconix established itself as the world leader in power switching and management products and its sales grew to a record level in 2008. Prior to joining Siliconix, Dr.Owyang held various technical and managerial positions at General Electric Company, where he was responsible for developing many enabling semiconductor technologies. Dr. Owyang is a recognized leader in the power semiconductor industry. He has published over 20 technical papers and has been awarded more than 25 patents. Dr Owyang obtained his B.S. in Physics and his Ph.D in the field of Material Science in 1968 and 1974 respectively from the Massachusetts Institute of Technology, USA. Dr. Owyang’s broad experience in the power semiconductor industry, including his background in leadership positions at major technology companies, as well as his knowledge in the technical and operational aspects of semiconductor companies, provide the Board with an in-depth understanding of our business and operations. Michael L. Pfeiffer has been a director of our company since January 2014. From 2008 to 2013, Mr. Pfeiffer served as a member of the board of directors of BCD Semiconductor Manufacturing Limited, a company listed on NASDAQ until it was acquired in 2013. From 2009 to 2014, Mr. Pfeiffer served as a member of the board of directors of Integrated Memory Logic, Ltd., a semiconductor company listed on the Taiwan Stock Exchange until it was acquired in 2014. From 2014 to 2016, Mr. Pfeiffer served on the board of directors of Razer, Inc., a computer peripherals company. Mr. Pfeiffer, who is a certified public accountant in California and Oregon, worked for PricewaterhouseCoopers LLP for over 30 years, including 18 years as the engagement partner on the audits of the financial statements of high technology companies in the Silicon Valley. Mr. Pfeiffer received an MBA from the University of Oregon and a BA from Eckerd College in Florida. Mr. Pfeiffer’s extensive experience and expertise in the area of finance, accounting and auditing of publicly traded companies in the semiconductor industry, and his knowledge and background in working with companies with international operations, make him a valuable member of our Board, particularly in its role of exercising oversight and risk management of the Company’s accounting and financial reporting process. Michael J. Salameh has been a director of our company since November 2013. Mr. Salameh co-founded PLX Technology, Inc., a semiconductor company (PLXT), in May 1986 and served as its Chief Executive Officer until 2008. Mr. Salameh also served as a member of the Board of Directors of PLXT since its inception until it was acquired in August 2014 by Avago Technology. PLXT was a NASDAQ-listed company from 1999 until it was acquired. During his tenure at PLXT, Mr. Salameh personally participated in many of the key company functions including sales, marketing, engineering, accounting, and operations. Since 2015, Mr. Salameh has served as a strategic advisor to Scaleflux Inc., a privately held enterprise storage company. From 2010 to 2020, Mr. Salameh served as a consultant to the Chief Executive Officer and Board of Directors of Analogix Semiconductor, Inc., a privately held semiconductor company. From 1980 through 1986, Mr. Salameh was employed in various marketing management positions with Hewlett-Packard Company. Mr. Salameh received a B.S. in Engineering and Applied Science from Yale University and an M.B.A. from Harvard Business School. Mr. Salameh’s chief executive and marketing experience in the semiconductor industry, and his knowledge of the semiconductor business landscape, including customers, markets, suppliers and competition, provide the Board with critical understanding of our business and operations.

  6. Board of Directors

    Board of Directors Our Bye-laws provide that our Board shall consist of not less than two directors. Our Board of Directors currently has nine (9) directors and will continue to have nine directors following the Annual Meeting assuming all director nominees are elected. Our Board is the decision-making body responsible for, among other things, determining policies and guidelines for our business. Our Board also supervises our executive officers and monitors their implementation of policies and guidelines established from time to time by our Board. No shareholder has the contractual right to designate persons to be elected to our Board, and our Bye-laws provide that directors be elected upon a resolution passed at a duly convened shareholders meeting, to hold office for such term as the shareholders may determine or until their successors are appointed or elected in accordance with our Bye-laws. There is no age limit requirement for qualification to serve as a member of our Board. While share ownership is not a required qualification for a director nominee, our Board has adopted stock ownership guidelines for executive officers and non-employee directors who are elected to serve on the Board. We have determined that each of our directors and director nominees, except for Dr. Mike F. Chang, our Executive Chairman and Mr. Stephen Chang, our Chief Executive Officer, is an “independent director” under the current corporate governance rules of the NASDAQ Global Select Market and applicable rules and regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

  7. Nominations for Election of Directors

    Nominations for Election of Directors

  8. Director Qualifications

    Director Qualifications The Nominating and Corporate Governance Committee utilizes a variety of criteria to evaluate the qualifications and skills necessary to serve as members of our Board. The Nominating and Corporate Governance Committee may assess character, judgment, diversity, business acumen, scientific expertise, familiarity with issues affecting the semiconductor industry and other backgrounds and attributes that are needed to help strengthen and balance the Board. Other qualifications will be determined on a case-by-case basis, depending on whether the Nominating and Corporate Governance Committee desires to fill a vacant seat or increase the size of the Board to add new directors. In addition, while the Nominating and Corporate Governance Committee does not prescribe specific diversity standards, the Committee considers diversity in the context of the Board as a whole and takes into account the personal characteristics and experiences of current and prospective directors, as well as other traits and attributes, that reflect a broad range of perspectives and diverse backgrounds in the Board's decision making process.

  9. Identification and Evaluation of Nominees for Directors

    Identification and Evaluation of Nominees for Directors The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Corporate Governance Committee assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee considers various potential candidates for director. In addition, the Board and the Nominating and Corporate Committee may form ad-hoc sub-committees to consider potential nominees and their qualification. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current members of the Board, executive officers, professional search firms, shareholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee recommends the director nominees to our Board for approval for election at each annual general meeting of shareholders. Under our Bye-Laws, any director appointed by our Board is subject to re-election by shareholders at our next annual general meeting of shareholders. The nominees for election at this annual general meeting were recommended and approved unanimously by members of our Nominating and Corporate Governance Committee and the Board, respectively. A shareholder seeking to recommend a prospective nominee for the Nominating and Corporate Governance Committee's consideration should submit the candidate's name and qualifications to our Corporate Secretary at our business office in the United States at 475 Oakmead Parkway, Sunnyvale, California 94085. The Nominating and Corporate Governance Committee will consider a properly submitted shareholder nomination that meets the requirements under our Bye-laws and applicable U.S. federal securities laws. Our Bye-laws require, among other things, an advance written notice of the nomination in writing of not less than sixty (60) nor more than one hundred and eighty (180) days from the date of the annual general meeting. This notice must also include certain information relating to the nominee and the nominating shareholders, as described in more detail below in “Future Shareholder Proposals and Nominations for the 2024 Annual General Meeting.”

  10. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    COMPENSATION OF NON-EMPLOYEE DIRECTORS Our non-employee director compensation policy (as amended in February 2023 based on a recommendation and competitive data provided by Compensia to better align with market) provides for the following cash and equity compensation: Cash Retainer and Fees: Each non-employee director serving as a member of the Board at the beginning of the Company's fiscal year will receive an annual retainer of $45,000 and the Lead Independent director will receive an additional retainer of $15,000. In addition, each non-employee director serving as the chairperson of a committee of the Board will receive an additional retainer as follows: Audit Committee - $25,000; Compensation Committee - $15,000; Nominating and Governance Committee - $15,000; Special Litigation Committee - $100,000 (reduced to $50,000 effective January 1, 2023); Shareholders Communications Subcommittee - $10,000 and Cybersecurity Committee - $10,000. Each non-employee director serving as a member of a committee of the Board will receive an additional retainer as follows: Audit Committee - $12,000; Compensation Committee - $7,500; Nominating and Governance Committee - $5,000; and Special Litigation Committee - $25,000 (reduced to $12,500 effective January 1, 2023). Non-employee directors will not receive any additional compensation for attending regular Board or committee meetings. However, with respect to special meetings of the Board or a committee, the Board shall determine whether such meetings will be eligible for payment of special fees, and if so, each non-employee director will receive $2,000 for a meeting attended in person and $1,000 for a meeting attended via teleconference. Equity Grants: Each individual who is elected by the Company’s shareholders to serve as a non-employee director at the Company’s Annual Shareholders Meeting (commencing with this year’s Annual Meeting) and each individual who is to continue to serve as a non-employee director following such meeting whether or not that individual is standing for re-election at that meeting, will be granted on the date of such meeting, an award of restricted share units under the 2018 Omnibus Incentive Plan (the "Plan"). The number of shares subject to each such annual award will be determined by dividing $135,000 (increased to $160,000 for grants on or after the date of this Annual Meeting) by the Average Per Share Price, up to a maximum of 10,000 shares. The Average Per Share Price for an award means the average closing price per common share over the 90 day-period immediately prior to the date of grant of the award. The award will vest in four (4) equal quarterly installments upon the non-employee director’s completion of each quarter of Board service following the grant date; provided, however, that if the Company’s Annual Shareholders Meeting for the year following the year of grant occurs prior to the end of the one-year period measured from the grant date, the last quarterly installment will become vested upon the date of such subsequent Annual Shareholders Meeting, provided, the Non-Employee Director continues in Board service until such date. In the event a new non-employee director is elected or appointed to the Board on a date other than at the Company’s Annual Shareholders Meeting, such individual will be granted on the date of such election or appointment, an award of restricted share units for a number of shares determined by dividing $135,000 ($160,000 for grants after this Annual Meeting) as pro-rated based on the period from the date of appointment or election to the anticipated date of the next Annual Shareholders Meeting by the Average Per Share Price (as determined based on the grant date of the award to such Non-Employee Director), provided such individual has not previously been in the employ or service of the Company. The award shall vest on the same dates that the annual grants made at the preceding Annual Shareholders Meeting vest with the number of shares vesting on each vesting date based on the period of service. The awards (to the extent outstanding) will vest in full (i) upon the non-employee director’s termination of Board service by reason of death or permanent disability (as defined in the Plan) and (ii) immediately prior to the consummation of a Change in Control (as defined in the Plan). Shares that vest under a restricted share unit award will be issued on the earlier of (i) the date of the Annual Shareholders Meeting that is coincident with or next following the applicable vesting date or (ii) the date of the non-employee director’s termination of Board service. Shares that vest upon a Change in Control will be issued as soon as practicable following the Change in Control. Reimbursements: All non-employee directors receive reimbursement from the Company for their reasonable expenses of travel (including airfare and ground transportation) to and from meetings of the Board, and reasonable lodging and meal expenses. Director Compensation for Fiscal Year 2023 The following table sets forth certain information regarding the compensation of each individual who served as a non-employee member of our Board during fiscal year 2023.

  11. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | | Lucas S. Chang | 132,500(2) | 136,531 | — | 269,031 | | Claudia Chen | 90,750(2) | 136,531 | — | 227,281 | | So-Yeon Jeong | 56,053 | 136,531 | — | 192,584 | | Hanqing (Helen) Li | 57,559 | 136,531 | — | 194,090 | | King Owyang | 67,500 | 136,531 | — | 204,031 | | Michael L. Pfeiffer | 70,000 | 136,531 | — | 206,531 | | Michael J. Salameh | 105,750(2) | 136,531 | — | 242,281 |

  12. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    (1) The dollar value shown represents the grant date fair value of the awards determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). The valuation assumptions used in determining such amounts are described in Note 10 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the Securities and Exchange Commission on August 29, 2023. No stock option was granted to any non-employee director in fiscal year 2023. As of June 30, 2023, our non-employee directors held outstanding restricted share units granted for services on the Board as follows:

  13. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    | Name | Number of Shares Subject to RSUs | | Lucas S. Chang | 2,031 | | Claudia Chen | 2,031 | | So-Yeon Jeong | 2,031 | | Hanqing (Helen) Li | 2,031 | | King Owyang | 2,031 | | Michael L. Pfeiffer | 2,031 | | Michael J. Salameh | 2,031 |

  14. COMPENSATION OF NON-EMPLOYEE DIRECTORS

    (2) Reflects the reduction in the additional retainer fees for the chairperson and members of the Special Litigation Committee that applied retroactively commencing on January 1, 2023.

  15. Executive Compensation Practices

    | WHAT WE DO | | | Use performance-based annual and long-term incentives to align our executive pay with performance | Maintain a clawback policy | | Make payouts under our annual bonus plan only if threshold Company performance is met | Hold an annual “say-on-pay” advisory vote | | Use multi-year vesting periods for our equity awards | Maintain share ownership guidelines for our executive officers and Board members | | Set challenging performance objectives for our performance-based equity awards and annual bonus | Maintain an independent compensation committee | | Include caps on individual payouts in short- and long-term incentive plans | •Place a substantial majority of executive pay at risk |

  16. Executive Compensation Practices

    | WHAT WE DON’T DO | | | X Offer contracts with multi-year guaranteed salary or bonus increases | X Offer guaranteed retirement benefits or non-qualified deferred compensation plans | | X Provide tax gross-ups except in connection with certain perquisites | X Provide excessive perquisites | | X Time the release of material non-public information to affect the value of executive compensation | |

  17. Compensation Decision-Making Process

    Compensation Decision-Making Process The Compensation Committee meets on a regular schedule throughout the year to manage our compensation programs. The Compensation Committee reviews the principal components of compensation for our executive officers on an annual basis, typically at its first meeting in the calendar year. As part of that review process, the Compensation Committee reviews and may adjust the base salaries of our named executive officers. The Compensation Committee also establishes the cash bonus plan for the year and determines the cash bonuses payable to our named executive officers for the preceding year based on achievement of the pre-specified performance goals for that prior year and grants equity awards to our named executive officers to ensure their interests are aligned with shareholders and for retention. In setting executive compensation, the Compensation Committee takes into account a number of factors, including the nature and scope of the named executive officer's responsibilities, his or her individual performance level and contribution to the achievement of our corporate objectives, the experience level of the executive, the recommendations of our Chief Executive Officer for each individual's compensation package (other than his own) and the compensation trends in the industry. Role of Compensation Consultant The Compensation Committee retained Compensia to advise the committee on the compensation for executive officers and other senior officers for fiscal year 2023. Compensia assisted the Compensation Committee to develop a peer group that represents companies that are comparable in business and/or size to the Company and with which the Company competes for talent. Compensia and management recommended a revised peer group of companies to exclude from the peer group used in fiscal year 2022 two companies that were acquired during the fiscal year and two companies that were based outside the United States and to replace them with companies based in the Bay Area that together with the remaining companies in the prior peer group, would more accurately reflect companies with which the Company competes for talent. Based on such recommended change, the Compensation Committee approved the peer group set forth below. The peer group was used primarily in connection with a review of competitive compensation for our chief executive officers and chief financial officer.

  18. Compensation Structure

    Mr. Stephen Chang’s salary was increased to $490,000 effective March 1, 2023 in connection with his promotion to the position of our Chief Executive Officer. Performance-Based Bonuses Our named executive officers are eligible to receive a bonus under our annual Executive Incentive Plan. Each year, our Compensation Committee establishes the performance objectives to be attained and the target bonuses payable based on the level of attainment of the specified goals. The bonus is determined on a calendar year basis with performance goals based on the Company’s annual operating plan which is established on a calendar year basis. In February 2022, the Compensation Committee established the Executive Incentive Plan for calendar year 2022. The aggregate amount of the award was to be determined based on the level of attainment of a range of non-GAAP earnings per share ("EPS") goal for calendar year 2022 from $3.90 at threshold bonus, $4.20 at target bonus and $4.65 at maximum bonus. The revenue multiplier for calendar year 2022 revenue ranged from 0.8 at threshold revenue of $760 million, 1.0 at target revenue of $800 million and 1.1 at maximum revenue of $820 million. The specified minimum amount of each of EPS and revenue goals had to be achieved before payment of an award under the plan was earned. The Compensation Committee believes that the EPS and revenue goals are the appropriate criteria for our performance- based compensation because they focus our executives on key goals for the success of our business. The revenue goal relates to the importance of growing the Company’s total revenues which is an important measure of success in our competitive industry and is helpful in showing the marketplace that our business has the size and scale required to serve large customers. The EPS goal ties to our corporate emphasis on increasing shareholder value through the improvement of the Company’s earnings per share. For these reasons, the same annual performance criteria are used for our performance-based restricted share unit awards which have a 4-year service requirement for vesting thus requiring sustained performance to achieve meaningful value from the awards and providing more retention value. The actual aggregate amount of the award earned by a named executive officer for the year could range from $0 to the maximum amount established for that officer (as a percentage of base salary at the time of payment as specified below) depending on the level of attainment of the performance goals. The amount of any earned bonus award was payable in cash and/or our common shares as determined by the Compensation Committee. The threshold, target and maximum bonuses payable to each of our named executive officers for calendar year 2022 based on level of attainment of the performance goals were as follows:

  19. Compensation Structure

    | Named Executive Officer | Performance Bonus Amount | | Stephen C. Chang | $296,384 | | Mike F. Chang | $412,580 | | Yifan Liang | $218,078 | | Wenjun Li | $201,575 | | Bing Xue | $206,290 |

  20. Compensation Structure

    Equity Incentive Awards Our equity award program is the primary vehicle for offering long-term incentives to our named executive officers and providing an inducement for long-term retention. Equity compensation represents a significant component of the total compensation package we provide to each of our named executive officers. We believe this weighting is appropriate because it aligns the interests of our named executive officers with those of our shareholders and focuses their attention on the creation of shareholder value in the form of stock price appreciation. The Compensation Committee may use both options and restricted share units as part of the Company’s long-term incentive program for named executive officers although in recent years, only restricted share units have been awarded to the named executive officers. The Company believes that there are several advantages of using restricted share units including ongoing concerns over the dilutive effect of option grants on the Company’s outstanding shares, the Company’s desire to have a more direct correlation between the compensation expense it must record for financial accounting purposes and the actual value delivered to executive officers, and the fact that the incentive and retention value of a restricted share unit award is less affected by market volatility than stock options. In addition to time-based restricted share units that vest based on continued service, we also grant performance-based restricted share units that vest based on the level of attainment of Company performance goals and continued service. The Compensation Committee believes that including performance-based restricted share units as part of our equity-based compensation program strengthens focus on the Company’s financial performance and shareholder value creation and performance-based restricted share units now generally represent 50% each executive officers’ equity awards. In 2019, the Compensation Committee added market performance restricted share units that vest based on our long-term stock price performance with a multiplier based on revenue growth and therefore further focus our executives on long-term stock price appreciation. Our Compensation Committee reviews our equity compensation program annually and may, at its discretion, grant additional equity awards to existing named executive officers consistent with our named executive officer compensation objectives. In determining the size of those additional grants, our Compensation Committee typically takes into account the recommendations of our Chief Executive Officer, data provided by (and recommendation of) Compensia and its own subjective assessment of the named executive officer’s performance and the retention value of his or her existing equity awards. Any options granted to our employees, including executive officers, and to our directors are granted with a per share exercise price equal to the closing price of our common shares on the date of grant as reported on the NASDAQ Global Select Market. A subcommittee comprised of our Chief Executive Officer and Chief Financial Officer is authorized to grant options and restricted share unit awards to existing and newly-hired employees, other than executive officers, within prescribed limits specified by position and location of the employee pursuant to authority delegated to the subcommittee by the Board. These grants are generally made on the 15th day of each month. The awards granted to our named executive officers in fiscal year 2023 and previously granted awards that vested in fiscal year 2023 are summarized below. For more information concerning the awards we granted to our named executive officers in 2023, please see “Grants of Plan-Based Awards 2023” below. February 2023 Grants: On February 22, 2023, the Compensation Committee authorized, effective as of March 15, 2023, the grant of restricted share units to each of our named executive officers for the number of our common shares allocated between time-based restricted share units and performance-based restricted share units as indicated below.

  21. Compensation Structure

    | Named Executive Officer | Time-Based Restricted Share Units (Shares) | Performance -Based Restricted Share Unit (Target Shares) | | Stephen C. Chang | 57,500 | 63,150 | | Mike F. Chang | 37,500 | 53,320 | | Yifan Liang | 17,500 | 21,455 | | Wenjun Li | 10,000 | 11,808 | | Bing Xue | 20,000 | 18,390 |

  22. Compensation Structure

    Each time-based restricted share unit entitles the holder to receive one common share following vesting. Each such award will vest with respect to 25% of the units annually upon the participant’s completion of each year of service over the four-year period measured from March 15, 2023. Each performance-based restricted share unit award will vest based on the level of attainment of specified non-GAAP earnings per share and revenue goals over the period January 1, 2023 to December 31, 2023 and the participant’s continued service over a four-year period measured from March 15, 2023. Vesting of March 2022 Grants: On February 24, 2022, the Compensation Committee authorized, effective as of March 15, 2022, the grant of restricted share units to each of our named executive officers for the number of our common shares allocated between time-based restricted share units and performance-based restricted share units as indicated below.

  23. Compensation Structure

    | Named Executive Officer | Time-Based Restricted Share Units (Shares) | Performance -Based Restricted Share Unit (Target Shares) | | Stephen C. Chang | 25,000 | 25,000 | | Mike F. Chang | 70,000 | 70,000 | | Yifan Liang | 22,500 | 17,500 | | Wenjun Li | 8,000 | 8,000 | | Bing Xue | 15,000 | 15,000 |

  24. Compensation Structure

    Each time-based restricted share unit entitles the holder to receive one common share following vesting. Each such award vests with respect to 25% of the units annually upon the participant’s completion of each year of service over the four-year period measured from March 15, 2022. Accordingly, the time-based award vested with respect to 25% of the units on March 15, 2023. Each performance-based restricted share unit award was to vest based on the level of attainment of specified non-GAAP earnings per share and revenue goals over the period January 1, 2022 to December 31, 2022 and the participant’s continued service over a four-year period measured from March 15, 2022. The applicable performance conditions were (i) non-GAAP earnings per share of at least $3.90 per share as the qualifying criterion which if not met would lead to the award vesting at 0% (regardless of level of attainment of revenues) and (ii) increase in the Company’s revenue over the threshold revenue of $760 million up to a target revenue of $800 million with a range of payout based on actual increase in revenue and earnings per share. In February 2023, based on revenue and non-GAAP earnings per share for the performance period of $794 million and of $4.16 per share, respectively, the Compensation Committee determined that the performance-based restricted share unit awards were earned at 77.4% of target. Accordingly, 19.35% of the target units subject to the awards vested on March 15, 2023. Performance Vesting of 2018 Market Performance Restricted Share Unit Grants: In 2018, the Compensation Committee approved a special grant of market performance-based awards to provide significant long-term incentives to directly align the interests of the executive officers with those of shareholders and at the same time to further enhance retention. Performance vesting was tied to share price performance over a 3-year period and revenue achieved in calendar year 2021 (subsequently amended to a 4-year share price performance period and revenue for calendar year 2022). The number of earned shares is then subject to a 4-year service vesting commencing January 1, 2023. Accordingly, there is a 7-year combined performance and service vesting period applicable to each award. The number of shares earned was to be determined upon completion of performance period based on the highest average price of the Company’s common shares for any period of 20 consecutive trading days (“Average Company Price”) attained during the period January 1, 2019 to December 31, 2022, with $26.24 at threshold performance (representing an increase of 83% from the Average Company Price on the grant date) to $45.00 at target performance (representing a 214% increase from the Average Company Price on the grant date) and a multiplier based on the Company’s revenue for calendar year 2022 ranging from 0.5 at threshold revenue of $550 million and 1 for target revenue of $600 million. In February 2023, based on the Average Company Price of $45.237 during the performance period and revenue of $794 million for 2022, the Compensation Committee determined that the market performance-based awards were earned at 100% of target. The table below sets forth the target number of our common shares subject to the market performance-based restricted share units awarded to each of our named executive officers. Each officer will vest in these shares in 4 equal installments upon completion of each year of service over the 4-year period measured from January 1, 2023.

  25. Compensation Structure

    | Named Executive Officer | Market Performance -Based Restricted Share Unit (Target Shares) | | Stephen C. Chang | 90,000 | | Mike F. Chang | 180,000 | | Yifan Liang | 90,000 |

  26. Compensation Structure

    Termination and Change in Control Benefits We entered into an employment agreement with Mr. Stephen Chang who became our Chief Executive Officer effective March 1, 2023 which sets forth certain terms and conditions governing his period of continued employment with us including certain benefits to which he would become entitled were his employment to be terminated involuntarily. We had previously entered into an employment agreement with our Mr. Mike Chang who was our Chief Executive Officer until March 1, 2023 (which was amended effective March 1, 2023 in connection with his transition to our Executive Chairman of the Board) which sets forth certain terms and conditions governing his period of continued employment with us including certain benefits to which he would become entitled were his employment to be terminated involuntarily. In addition, we have entered into retention agreements with each of Messrs. Liang, Li, and Xue pursuant to which such officers are entitled to certain severance benefits upon an involuntary termination of employment. Mr. Stephen Chang’s employment agreement, Mr. Mike Chang’s amended employment agreement, and the retention agreements for the other officers are summarized below in the section of this proxy entitled “Agreements Regarding Employment, Change in Control and Termination of Employment”. Pursuant to the terms of our equity plans, outstanding options and time-based restricted share unit awards held by our named executive officers and our other employees will accelerate upon a change in control unless those options or awards are assumed, replaced or otherwise continued by the acquiring entity. The performance-based restricted share unit awards (other than the market performance restricted share unit awards) will convert into the right to receive 50% of the target number of shares or the actual number of shares based on level of attainment of performance goals depending on when the change in control occurs and will be paid out at the time of the change in control unless those awards are assumed, replaced or otherwise continued by the acquiring entity. The performance qualified shares under the market performance restricted share unit awards (for which the performance period is already completed) will be paid out at the time of the change in control unless those awards are assumed, replaced or otherwise continued by the acquiring entity, Any awards that are assumed, replaced or otherwise continued will continue to vest over the service period for the award subject to accelerated vesting of the market performance share unit awards upon the executive officer’s involuntary termination within 18 months following the change in control (12 months for our named executive officers under their employment and retention agreements with respect to awards other than the market performance restricted share unit awards). The Compensation Committee believes that accelerated vesting under such a limited circumstance is appropriate because it protects a significant component of the named executive officer's total compensation in the event those options and awards would otherwise terminate in the acquisition or upon a subsequent involuntary termination and allows our named executive officers to remain focused on the Company's business without undue concern over this significant component of their compensation package should the Company become an acquisition target in a transaction in which the outstanding equity awards would not be assumed or replaced or following which the named executive officer may be terminated. Our severance and change of control provisions for the named executive officers are discussed in more detail in "Potential Payments upon Termination or Change in Control" below. Benefits and Other Compensation We maintain broad-based employee benefit plans, which are provided to all eligible employees, including our named executive officers. These plans provide group medical and dental coverage, life insurance, disability insurance, flexible spending accounts and a 401(k) savings program for our employees based in the United States. We believe these benefits are consistent with the benefits offered by companies with which we compete for employees and are necessary to attract and retain qualified employees. Perquisites We believe that cash and equity compensation are the key components needed to attract and retain our executive management. As a result, we generally do not provide any substantial perquisites to our named executive officers. Mr. Xue is provided a Company vehicle for his use in connection with his sales activities and other Company business and his personal use. He receives a payment of up to $10,000 each year to cover the taxes payable as a result of this benefit. We also offer bonuses for patented inventions, authoring technical articles and making technical presentations at major symposiums; our named executive officers are eligible to receive bonuses under these programs on the same basis as our other employees. In fiscal year 2023, we also provided mobile phones and reimbursement for fitness membership fees to our named executive officers. Stock Ownership Guidelines We have adopted stock ownership guidelines for our executive officers and the non-employee members of our Board. Under these guidelines, each executive officer is required to own shares with a value equal to a specified multiple of his or her annual base salary and each non-employee member of our Board is required to own shares with a value equal to a specified multiple of his or her annual cash retainer for services on the Board and standing committees of the Board as follows:

  27. Compensation Structure

    Shares that count towards satisfaction of the guidelines include shares beneficially owned by the individual or immediate family members, shares held in trust for the benefit of the individual or immediate family members and deferred shares subject to vested restricted share units or performance share units and other vested equity awards. Unvested restricted share units, unvested performance units or restricted shares, and unexercised stock options do not count towards satisfaction of the guidelines. Our executive officers and the non-employee members of our Board are required to meet these ownership requirements within five years of the later of (1) May 3, 2018 (the date of adoption of the guidelines) or (2) becoming an executive officer or non-employee member of our Board, as applicable. The Compensation Committee believes that this stock ownership aligns the financial interests of our executive officers with those of our shareholders. The following table shows each named executive officer's and each Board member’s share ownership as of June 30, 2023:

  28. Summary Compensation Table

    Summary Compensation Table The following table provides information regarding the compensation paid during our fiscal year ended June 30, 2023 to each of two individuals who served as our principal executive officer, the individual who served as our principal financial officer and our two other executive officers with aggregate compensation in excess of $100,000. We refer to these individuals as our named executive officers.

  29. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | | Stephen C. Chang | 2023 | 470,765 | — | 3,070,543 | 296,384 | 3,290 | 3,840,982 | | Chief Executive Officer | 2022 | 351,000 | — | 2,432,500 | 617,760 | 2,730 | 3,403,990 | | | 2021 | 312,230 | 88,500 | 1,269,450 | 88,500 | 4,324 | 1,763,004 | | Mike F. Chang | 2023 | 508,062 | — | 2,311,369 | 412,580 | 3,050 | 3,235,061 | | Executive Chairman and Former Chief Executive Officer | 2022 | 467,352 | — | 6,811,000 | 514,087 | 22,550 | 7,814,989 | | | 2021 | 467,352 | 233,676 | 5,077,800 | 233,676 | 2,704 | 6,015,208 | | Yifan Liang | 2023 | 383,573 | — | 991,405 | 218,078 | 3,050 | 1,596,106 | | Chief Financial Officer and Corporate Secretary | 2022 | 350,662 | — | 1,946,000 | 501,930 | 2,550 | 2,801,142 | | | 2021 | 340,000 | 102,000 | 1,269,450 | 102,000 | 4,204 | 1,817,654 | | Wenjun Li | 2023 | 354,565 | — | 555,014 | 201,575 | 4,376 | 1,115,530 | | Chief Operating Officer | 2022 | 321,308 | — | 778,400 | 464,750 | 2,366 | 1,566,824 | | | 2021 | — | — | — | — | — | — | | Bing Xue | 2023 | 362,665 | — | 977,026 | 206,290 | 23,056 | 1,569,037 | | Executive Vice President of Worldwide Sales and Business Development | 2022 | 327,000 | — | 1,568,700 | 476,610 | 28,574 | 2,400,884 | | | 2021 | 305,981 | 88,500 | 1,088,100 | 88,500 | 6,304 | 1,577,385 |

  30. Summary Compensation Table

    | (1) The amount of the fiscal year 2023 and 2022 cash incentive compensation payable based on attainment of the corporate performance goals is reported in the Non-Equity Incentive Plan Compensation column. For fiscal year 2021, the disclosed amount represents the portion of the annual cash incentive compensation paid at the discretion of the Compensation Committee based on the strong financial performance and business accomplishments of the Company and the reduced bonus opportunity under the performance-based bonus plan for fiscal year 2021. | | (2) The dollar value shown represents the grant date fair value of the award determined in accordance with FASB ASC Topic 718 without taking into account any estimated forfeitures related to service vesting conditions. For assumptions used in determining such grant date fair value, see Note 10 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the Securities Exchange Commission on August 29, 2023. For time-based restricted share unit awards, the grant date fair value was determined using the closing share price of the Company’s common shares on the date of grant. For the performance-based restricted share unit awards, the grant-date fair value is calculated based on the probable outcome of the attainment of the respective pre-established performance objectives as of the grant date at target attainment (which is the maximum level of attainment). | | (3) Amounts reported reflect the amount of the bonus earned under the annual performance-based bonus program plan. | | (4) Amounts reported represent bonuses paid under our inventions, publication, long-service bonus, and presentation awards, personal use of Company vehicle and related tax payment and other de minimus compensation. |

  31. Summary Compensation Table

    | | Invention, Publication and Long-Service Bonus ($) | Personal Use of Company Vehicle ($) | Tax Gross Up Payments ($) | Phone and Fitness Fee Reimbursement ($)(1) | Total ($) | | Stephen C. Chang | — | — | — | 3,290 | 3,290 | | Mike F. Chang | — | — | — | 3,050 | 3,050 | | Yifan Liang | — | — | — | 3,050 | 3,050 | | Wenjun Li | 1,250 | — | — | 3,126 | 4,376 | | Bing Xue | 2,000 | 13,750 | 4,256(2) | 3,050 | 23,056 | | (1) Represents the value of a mobile phone in the amount of $3,050 ($3,126 for Mr. Li) and $240 in fitness member fee reimbursement under the company's fitness program for Mr. Stephen C. Chang. | | | | | | | (2) Represents a payment to Mr. Xue to cover taxes due on the taxable income imputed to Mr. Xue as a result of the use of the Company vehicle. | | | | | |

  32. Grants of Plan-Based Awards 2023

    Grants of Plan-Based Awards 2023 The following table sets forth information concerning each grant of an award made to our named executive officers during the fiscal year ended June 30, 2023 under our compensation plans.

  33. Grants of Plan-Based Awards 2023

    | | | | Potential Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Award (2) | | All Other RSUs Number of Securities Underlying Awards (#) (3) | Grant Date Fair Value of Options and RSUs ($)(4) | | Name | Grant Date | Approval Date | Minimum ($) | Target ($) | Maximum ($) | Minimum | Target | | | | Stephen C. Chang | N/A | N/A | 78,400 | 392,000 | 862,400 | | | — | — | | | 3/15/2023 | 2/22/2023 | — | — | — | 15,787 | 63,150 | | 1,607,168 | | | 3/15/2023 | 2/22/2023 | — | — | — | | | 57,500 | 1,463,375 | | Mike F. Chang | N/A | N/A | 98,000 | 490,000 | 1,078,000 | | | — | — | | | 3/15/2023 | 2/22/2023 | — | — | — | 13,330 | 53,320 | | 1,356,994 | | | 3/15/2023 | 2/22/2023 | — | — | — | | | 37,500 | 954,375 | | Yifan Liang | N/A | N/A | 51,800 | 259,000 | 529,100 | | | — | — | | | 3/15/2023 | 2/22/2023 | — | — | — | 5,363 | 21,455 | | 546,030 | | | 3/15/2023 | 2/22/2023 | — | — | — | | | 17,500 | 445,375 | | Wenjun Li | N/A | N/A | 47,880 | 239,400 | 489,060 | | | — | — | | | 3/15/2023 | 2/22/2023 | — | — | — | 2,952 | 11,808 | | 300,514 | | | 3/15/2023 | 2/22/2023 | — | — | — | | | 10,000 | 254,500 | | Bing Xue | N/A | N/A | 49,000 | 245,000 | 500,500 | | | — | — | | | 3/15/2023 | 2/22/2023 | — | — | — | 4,597 | 18,390 | | 468,026 | | | 3/15/2023 | 2/22/2023 | — | — | — | | | 20,000 | 509,000 |

  34. Grants of Plan-Based Awards 2023

    | (1) Reflects potential payouts under the annual bonus program tied to attainment of Company performance goals. Awards were payable based on target or maximum performance. Based on the actual level of attainment of performance goals, the bonus awards were earned at 84.2% of target. The earned amounts are reported in the Non-Equity Incentive Compensation column in the Summary Compensation Table. | | (2) Each named executive officer was granted a performance- based restricted share units award under our 2018 Omnibus Incentive Plan covering the target number of shares specified in the table which represents the maximum number of shares that may be earned under the award. The number of shares to be ultimately earned under award is determined based on the level of predetermined financial goals during the performance period from January 1, 2023 to December 31, 2023. The units earned based on performance vest in four equal annual installments over the four-year period of service measured from March 15, 2023 subject to accelerated vesting in the event of a change in control of our company as further described in “Agreements Regarding Employment, Change in Control and Termination of Employment” section below. The minimum number of shares that can be earned under the awards assumes that each goal is attained at or higher than the threshold level; attainment of either goal at lower than the threshold will result in no payout. | | (3) Each named executive officer was granted a time-based restricted share units award under our 2018 Omnibus Incentive Plan. The units vest in four equal annual installments over a four-year period of service measured from March 15, 2023. Such units are also subject to accelerated vesting in the event of a change in control of our company as further described in “Agreements Regarding Employment, Change in Control and Termination of Employment.” | | (4) Reflects the grant-date fair value of the restricted share unit awards as calculated in accordance with FASB ASC Topic 718 without taking into account any estimated forfeitures related to service vesting conditions. For assumptions used in determining such grant date fair value, see Note 10 to the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the Securities Exchange Commission on August 29, 2023. For the performance-based restricted share unit awards, the grant-date fair value is calculated based on the probable outcome of the attainment of the pre-established performance objectives as of the grant date at target attainment (which is the maximum level of attainment). |

  35. Outstanding Equity Awards at June 30, 2023

    Outstanding Equity Awards at June 30, 2023 The following table sets forth information regarding equity awards held by the named executive officers as of June 30, 2023.

  36. Outstanding Equity Awards at June 30, 2023

    | | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($) | Equity Incentive Awards Number of Units of Stock That Have Not Vested (#) | Equity Incentive Awards Market Value of Units of Stock That Have Not Vested ($) | | Stephen C. Chang | — | — | — | — | 3,000(2) | 98,400 | 63,150(10) | 2,071,320 | | | — | — | — | — | 3,000(3) | 98,400 | — | — | | | — | — | — | — | 8,750(4) | 287,000 | — | — | | | — | — | — | — | 8,750(5) | 287,000 | — | — | | | — | — | — | — | 18,750(6) | 615,000 | — | — | | | — | — | — | — | 14,514(7) | 476,059 | — | — | | | — | — | — | — | 57,500(8) | 1,886,000 | — | — | | | — | — | — | — | 90,000(9) | 2,952,000 | — | — | | Total | — | — | — | — | 204,264 | 6,699,859 | 63,150 | 2,071,320 | | Mike F. Chang | 180,000 | — | 7.44 | 3/16/2024 | — | — | — | — | | | — | — | — | — | 17,500(2) | 574,000 | 53,320(10) | 1,748,896 | | | — | — | — | — | 17,500(3) | 574,000 | — | — | | | — | — | — | — | 35,000(4) | 1,148,000 | — | — | | | — | — | — | — | 35,000(5) | 1,148,000 | — | — | | | — | — | — | — | 52,500(6) | 1,722,000 | — | — | | | — | — | — | — | 40,635(7) | 1,332,828 | — | — | | | — | — | — | — | 37,500(8) | 1,230,000 | — | — | | | — | — | — | — | 180,000(9) | 5,904,000 | — | — | | Total | 180,000 | — | — | — | 415,635 | 13,632,828 | 53,320 | 1,748,896 | | Yifan Liang | 70,000 | — | 7.44 | 3/16/2024 | — | — | — | — | | | 10,000 | — | 9.07 | 8/14/2024 | — | — | — | — | | | — | — | — | — | 4,375(2) | 143,500 | 21,455(10) | 703,724 | | | — | — | — | — | 4,375(3) | 143,500 | — | — | | | — | — | — | — | 8,750(4) | 287,000 | — | — | | | — | — | — | — | 8,750(5) | 287,000 | — | — | | | — | — | — | — | 3,750(6) | 123,000 | — | — | | | — | — | — | — | 13,125(6) | 430,500 | — | — | | | — | — | — | — | 10,159(7) | 333,215 | — | — | | | — | — | — | — | 17,500(8) | 574,000 | — | — | | | — | — | — | — | 90,000(9) | 2,952,000 | — | — | | Total | 80,000 | — | — | — | 160,784 | 5,273,715 | 21,455 | 703,724 | | Wenjun Li | — | — | — | — | 750(2) | 24,600 | 11,808(10) | 387,302 | | | — | — | — | — | 500(3) | 16,400 | — | — | | | — | — | — | — | 2,500(4) | 82,000 | — | — | | | — | — | — | — | 2,500(5) | 82,000 | — | — | | | — | — | — | — | 6,000(6) | 196,800 | — | — | | | — | — | — | — | 4,644(7) | 152,323 | — | — | | | — | — | — | — | 10,000(8) | 328,000 | — | — | | | — | — | — | — | 30,000(9) | 984,000 | — | — | | Total | — | — | — | — | 56,894 | 1,866,123 | 11,808 | 387,302 | | Bing Xue | — | — | — | — | 3,000(2) | 98,400 | 18,390(10) | 603,192 | | | — | — | — | — | 3,000(3) | 98,400 | — | — | | | — | — | — | — | 7,500(4) | 246,000 | — | — | | | — | — | — | — | 7,500(5) | 246,000 | — | — |

  37. Outstanding Equity Awards at June 30, 2023

    | | — | — | — | — | 3,000(11) | 98,400 | — | — | | | — | — | — | — | 11,250(6) | 369,000 | — | — | | | — | — | — | — | 8,708(7) | 285,622 | — | — | | | — | — | — | — | 20,000(8) | 656,000 | — | — | | | — | — | — | — | 90,000(9) | 2,952,000 | — | — | | Total | — | — | — | — | 153,958 | 5,049,822 | 18,390 | 603,192 |

  38. Outstanding Equity Awards at June 30, 2023

    | (1) Each stock option was granted pursuant to one of our equity incentive plans for employees and other service providers. Unless described otherwise in the footnotes below, each option becomes exercisable over a five-year period, with 20% of the shares to become exercisable upon completion of one year of service measured from the vesting commencement date and the balance to become exercisable in 48 successive equal monthly installments upon the completion of each additional month of service thereafter. Each option is fully vested. | | (2) This restricted share unit award vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from the award date on March 16, 2020. | | (3) This restricted share unit award represents a performance-based award that was granted in March 2020 and vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from March 16, 2020 with the number of units based on the level of attainment of performance goals over the calendar year 2020. The performance period for this award was completed on December 31, 2020, and the number of shares subject to the award is based on actual performance attainment at 100% of target. | | (4) This restricted share unit award vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from the award date on March 15, 2021. | | (5) This restricted share unit award represents a performance-based award that was granted in March 2021 and vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from March 15, 2021 with the number of units based on the level of attainment of performance goals over the calendar year 2021. The performance period for this award was completed on December 31, 2021, and the number of shares subject to the award is based on actual performance attainment at 100% of target. | | (6) This restricted share unit award vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from the award date on March 15, 2022. | | (7) This restricted share unit award represents a performance-based award that was granted in March 2022 and vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from March 15, 2022 with the number of units based on the level of attainment of performance goals over the calendar year 2022. The performance period for this award was completed on December 31, 2022, and the number of shares subject to the award is based on actual performance attainment at 77.4% of target. | | (8) This restricted share unit award vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from the award date on March 15, 2023. | | (9) This restricted share unit award represents the market performance restricted share unit award that was granted in June 2018 (as amended in August 2020) and vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service over the period commencing January 1, 2023 and ending December 31, 2026 with the number of units based on level of attainment of the performance goals measured over the performance period commencing January 1, 2019 and ending December 31, 2022. The performance period for this award was completed on December 31, 2022, and the number of shares subject to the award is based on actual performance attainment at 100% of target. | | (10) This restricted share unit award represents a performance-based award that was granted in March 2023 and vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from March 15, 2023 with the number of units based on the level of attainment of performance goals over the calendar year 2023. The reported number and market value of the shares underlying those unvested units assumes attainment at target level . | | (11) This restricted share unit award vests in a series of four (4) successive equal annual installments upon the individual’s completion of each year of service measured from the award date on August 12, 2021. |

  39. Option Exercises and Shares Vested

    Option Exercises and Shares Vested The following table provides information regarding option exercises and vesting of awards held by the named executive officers during the fiscal year ended June 30, 2023.

  40. Option Exercises and Shares Vested

    | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Stephen C. Chang | — | — | 28,087 | 714,814 | | Mike F. Chang | 56,400 | 1,212,916 | 113,545 | 2,889,720 | | Yifan Liang | 6,600 | 142,230 | 29,761 | 757,417 | | Wenjun Li | — | — | 7,923 | 201,640 | | Bing Xue | — | — | 23,402 | 613,971 |

  41. Option Exercises and Shares Vested

    (1) The value realized is determined by multiplying (i) the fair market value per common share on the applicable vesting date by (ii) the number of shares which vested on such date.

  42. Pension Benefits and Nonqualified Deferred Compensation

    Pension Benefits and Nonqualified Deferred Compensation We do not provide a pension plan for our named executive officers, and none of our named executive officers participated in a nonqualified deferred compensation plan during the fiscal year ended June 30, 2023.

  43. CEO Pay Ratio

    CEO Pay Ratio We are required to disclose the median annual total compensation of our worldwide employees, the total compensation of our Chief Executive Officer and the ratio of these two amounts. For fiscal year ended June 30, 2023, we had two individuals who served as our Chief Executive Officers: Dr. Mike Chang served as our Chief Executive Officer from July 1, 2022 to February 28, 2023, and Mr. Stephen Chang served as our Chief Executive Officer from March 1, 2023 to June 30, 2023. Because we had two Chief Executive Officers during the fiscal year and pursuant to applicable SEC rules, we have elected to calculate the total annual compensation of Chief Executive Officer for purposes of the pay ratio disclosure by combining the compensation provided to Dr. Mike Chang and Mr. Stephen Chang for the time each person served as the Chief Executive Officer during the fiscal year. Based on this calculation, the total annual compensation of Chief Executive Officer was $3,437,035, and the total annual compensation for our median employee, located in China, was $20,893, resulting in a pay ratio of 165:1. To help understand this disclosure, it is important to provide context to our operations and employee population. Of our total employee population of 2,443 employees based on 2022 data, only 744 employees (i.e. approximately 30%) are located in the U.S. and 70% are located outside the U.S., and 63% of our employees work in China. The majority of the positions in China are hourly direct labor. The median employee is an hourly-paid factory worker at our manufacturing facilities in China who in fiscal year 2023 earned the U.S. dollar equivalent of $20,893, which is competitive pay for this position in China but significantly lower than the salary paid for a similar position in the U.S. Our ratio is thus impacted by our strategy to source our core manufacturing in China. In light of the significant percentage of employees located outside of the U.S., and in the interest of providing additional disclosures that investors and shareholders may find meaningful, we also conducted two supplemental pay ratio calculations based on the same methodology and assumptions used in calculating the pay ratio for the median employee based on the entire employee population, as described below. For the first one, we compared Chief Executive Officer pay with compensation of all our employees other than hourly direct labor employees in China (this alternate group was comprised of 1,577 employees worldwide, including China) which resulted in a median employee with total U.S. dollar equivalent compensation of $83,577 and a pay ratio of 41:1. For the second calculation, we included only our U.S. employees which resulted in a median employee with compensation equal to $113,677 and a pay ratio of 30:1. There has been no significant change in our employee population or employee compensation arrangements for 2023 as compared to 2022 that we believe would significantly impact the pay ratio disclosure. Accordingly, as permitted by Item 402(u) of Regulation S-K, we used the same median employee as identified for 2022 to determine the median of the annual total compensation of all employees for 2023. We used the following methodology and assumptions to identify the median employee and calculate the annual total compensation of the median-paid employee for all three ratios presented herein: •We selected June 23, 2022 as the date on which to determine our median employee. As of that date, we had approximately 2,443 employees, of which approximately 1,699 were located outside the U.S. •SEC regulations allow employers to identify the median based on a “consistently applied compensation measure” (CACM). We used (A) annualized base salary plus (B) overtime pay plus (C) bonus or other incentive compensation for fiscal year ended June 30, 2022 as our CACM because these elements are consistently available across all countries where we have employees. Base pay for hourly employees was calculated based on a reasonable estimate of hours worked (including overtime) in fiscal 2022, and on salary levels for all remaining employees. •We ranked this compensation measure for our employees from lowest to highest. This calculation was performed for all employees except our CEO, Dr. Mike Chang, whether employed on full-time or part-time. We converted amounts paid in foreign currencies to the U.S. dollar based on the exchange rates on June 23, 2022. •As indicated above, we performed two additional calculations: one involved excluding our direct labor employees in China and the second one involved including only our U.S. employees. We also elected to use the same median employee as identified for 2022 to determine the median of the annual total compensation of such employees for 2023 for purposes of providing such two supplemental pay-ratio disclosures. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee populations and compensation practices, our pay ratio may not be comparable to the pay ratios reported by other companies.

  44. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE In accordance with Section 953(a) of the Dodd-Frank Wall Street and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (“CAP”) as calculated under applicable SEC rules to each of our chief executive officers, also referred to as our principal executive officers (the “PEOs”) and our other named executive officers (the “Non-PEO NEOs”) and certain measures of company performance for the fiscal years listed below. In determining the CAP to our PEOs and the CAP to our Non-PEO NEOs, we are required to make various adjustments to the total compensation amounts that have been reported in the Summary Compensation Table (“SCT”) for each such individual, as the SEC’s valuation methods for this section differ from those required in the SCT. Information regarding the methodology for calculating CAP to our PEO(s) and the CAP to our non-PEO NEOs, including details regarding the amounts that were deducted from, and added to, the SCT totals to arrive at the values presented for CAP, are provided in the footnotes to the table. A narrative discussion of the relationship between CAP and the financial performance measures is also presented below. Note that for non-PEO NEOs, compensation is reported as an average. For information on our compensation philosophy, please see “Compensation Discussion and Analysis.” The compensation setting process for our NEOs as described therein is done independently from the disclosure requirements shown in this section. Accordingly, the Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. Pay Versus Performance Table

  45. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEOs | | Compensation Actually Paid to PEOs | | Average Summary Compensation Table Total for Non-PEO NEOs (4) | Average Compensation Actually Paid to Non-PEO NEOs (5) | Value of Initial Fixed $100 (6) | | Net Income ($ in thousands) | Company Selected Financial Measure ($ in thousands) (8) | | | Stephen C. Chang (1)(2) | Mike F. Chang (1)(2) | Stephen C. Chang (1) (3) | Mike F. Chang (1) (3) | | | Total Shareholder Return | Peer Group Total Shareholder Return (7) | | | | 2023 | 3,840,982 | 3,235,061 | 4,297,765 | 2,409,988 | 1,426,891 | 1,394,101 | 301 | 184 | 12,364 | 691,321 | | 2022 | — | 7,814,989 | — | 8,064,189 | 2,543,210 | 2,439,585 | 306 | 128 | 453,163 | 777,552 | | 2021 | — | 6,015,208 | — | 11,307,686 | 1,425,320 | 2,559,442 | 279 | 168 | 58,116 | 656,902 |

  46. PAY VERSUS PERFORMANCE

    | (1) Stephen C. Chang served as the Company’s PEO during fiscal year 2023 beginning as of March 1, 2023. Mike F. Chang served as the Company’s PEO for the entirety of fiscal years 2021 and 2022, and during fiscal year 2023 until February 28, 2023. | | | | | (2) Represents the total compensation reported for each PEO for each corresponding year in the “Total” column of the Summary Compensation Table. | | | | | (3) The dollar amounts reported in this column represent the amount of compensation actually paid to each of our PEOs for the applicable fiscal year, computed in accordance with Item 402(v) of Regulation S-K, which do not reflect the compensation actually earned, realized, or received by our PEOs in the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, we have made certain adjustments to each PEO’s total compensation, as reported in the Summary Compensation Table for each year, to determine the compensation actually paid, and a reconciliation of such adjustments is set forth below under “Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for PEOs” | | | | | (4) Represents the average of the amounts reported for the Company’s Non-PEO NEOs as a group in the “Total” column of the Summary Compensation Table in each applicable year. Mr. Ho resigned his position as the Chief Operating Officer effective January 1, 2021, therefore the amount of his compensation in fiscal year 2021 included in the calculation herein reflects only his compensation earned from July 1, 2020 to January 1, 2021. The Company’s Non-PEO NEOs for each year presented are as follows: | | | | | | 2021 | 2022 | 2023 | | | Stephen C. Chang | Stephen C. Chang | Yifan Liang | | | Yifan Liang | Yifan Liang | Wenjun Li | | | Yueh-Se Ho | Wenjun Li | Bing Xue | | | Bing Xue | Bing Xue | | | (5) The dollar amounts reported in this column is the average compensation actually paid for our Non-PEO NEOs in each applicable year, computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, we have made certain adjustment to the average of the non-PEO NEO’s total compensation, as reported in the Summary Compensation Table for each applicable year, and a reconciliation of such adjustment is set forth below under “Reconciliation to Average Summary Compensation Table Total to Average Compensation Actually Paid for non-PEO NEOs” | | | | | (6) The amounts reported represent the cumulative total shareholder return (“TSR”) calculated in accordance with Item 201(e) of Regulation S-K, assuming an initial fixed investment of $100, and that all dividends, if any, were reinvested. | | | | | (7) The Peer Group consists of the Philadelphia Semiconductor Index, an independently prepared index composed of the 30 largest U.S. companies primarily involved in the design, distribution, manufacture, and sale of semiconductors. | | | | | (8) The metric in this column, the Company’s revenue in the Company’s audited financial statements, in our assessment, represents the most important Company financial performance measure (that is not otherwise disclosed in this table) used to link Compensation Actually Paid to the Company’s performance for our PEOs and non-PEO NEOs for all years presented. We believe revenue is the most important financial performance measure because as a technology company, our ability to grow and expand our market is a critical element of our success, and our investors and shareholders evaluate our success by the amount of sales we make to customers. Other key financial performance measures linked to executive compensation are described in the section below titled “Financial Performance Measures”. | | | |

  47. PAY VERSUS PERFORMANCE

    Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for PEOs

  48. PAY VERSUS PERFORMANCE

    | | Fiscal Year | | Fiscal Year | Fiscal Year | | | 2023 ($) | | 2022 ($) | 2021 ($) | | | Stephen C. Chang | Mike F. Chang | Mike F. Chang | Mike F. Chang | | Summary Compensation Table Total | 3,840,982 | 3,235,061 | 7,814,989 | 6,015,208 | | Adjustments for Equity Awards | | | | | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (3,070,543) | (2,311,369) | (6,811,000) | (5,077,800) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 3,957,320 | 2,978,896 | 4,667,600 | 4,254,600 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (30,653) | (106,993) | 553,125 | 3,219,150 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (211,003) | (858,168) | 1,839,475 | 2,896,528 | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (188,338) | (527,439) | — | — | | Compensation Actually Paid | 4,297,765 | 2,409,988 | 8,064,189 | 11,307,686 |

  49. PAY VERSUS PERFORMANCE

    Reconciliation of Average Summary Compensation Table Total to Average Compensation Actually Paid for non-PEO NEOs

  50. PAY VERSUS PERFORMANCE

    | | Fiscal Year | Fiscal Year | Fiscal Year | | | 2023 ($) | 2022 ($) | 2021 ($) | | Average of Summary Compensation Table Total | 1,426,891 | 2,543,210 | 1,425,320 | | Adjustments for Equity Awards (The information below represents the average adjustment for non-PEO NEOs) | | | | | Grant Date Fair Value of Option and Stock Awards Granted in Fiscal Year | (841,148) | (1,681,400) | (920,061) | | Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | 1,084,073 | 1,166,900 | 771,648 | | Change in Fair Value of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | (20,544) | 99,470 | 682,850 | | Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | — | — | 8,266 | | Change in Fair Value as of Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (153,442) | 311,405 | 591,419 | | Fair Value as of Prior Fiscal Year-End of Option and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (101,729) | — | — | | Compensation Actually Paid | 1,394,101 | 2,439,585 | 2,559,442 |

  51. PAY VERSUS PERFORMANCE

    Relationship Between Compensation Actually Paid and Performance “Compensation Actually Paid”, as calculated in accordance with Item 402(v) of Regulation S-K, reflects adjusted values to unvested and vested equity awards during the years presented based on year-end stock prices, various accounting valuation assumptions, and projected performance modifiers, but does not reflect actual amounts paid out for those awards. “Compensation Actually Paid” generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. The following graphs show the relationship between “Compensation Actually Paid” to our PEO and other NEOs in the years presented and (1) TSR of both our Common Stock and the Philadelphia Semiconductor Index, (2) our net income, and (3) our financial measurement. Financial Performance Measures As described in further detail in this Compensation Discussion and Analysis, our executive compensation program incorporates various financial performance measures. Such measures are used in both our long-term and short-term incentive awards and are selected with the objective of incentivizing our PEO and non-PEO NEOs to increase the long-term value of our company for shareholders. The most important financial performance measures used in fiscal year 2023 to link Compensation Actually Paid to our PEO and non-PEO NEOs to our financial performance are as follows (listed in no particular order of importance):

  52. PAY VERSUS PERFORMANCE

    | Revenue | | EBITDA | | Gross Margin | | Non-GAAP Gross Margin |