PART III

Item 10. Directors, Executive Officers and Corporate Governance

Board of Directors of the Registrant


Michael L. Baur AGE 66 DIRECTOR SINCE December 1995 COMMITTEES None		Experience Michael L. Baur is our Chair and Chief Executive Officer. Mr. Baur has served as either our President or CEO since our inception, as a director since December 1995, and as Chair of the Board since February 2019. Mr. Baur has been employed with the Company since its founding in December 1992. Qualifications Mr. Baur has served the Company since its inception and has developed a deep institutional knowledge and perspective regarding the Company’s strengths, challenges and opportunities. Mr. Baur has more than 40 years of experience in the IT industry, having served in various leadership and senior management roles in the technology and distribution industries before joining ScanSource. Mr. Baur brings strong leadership, entrepreneurial, business building and development skills and experience to the Board.

Peter C. Browning AGE 82 DIRECTOR SINCE June 2014 COMMITTEES Lead Independent Director and Chair of Nominating and Corporate Governance Committee and serves on all committees		Experience Peter C. Browning has served as a director of the Company since June 2014 and as Lead Independent Director since February 2019. He has extensive experience in business, serving as an executive officer of numerous public companies, including Continental Can Company, National Gypsum Company and Sonoco Products Company. He also has served on more than 14 public-company boards, including Acuity Brands from 2001 to 2021, Wachovia from 2002 to 2008, Nucor Corporation from 1999 to 2015, Lowe’s Companies from 1997 to 2014, EnPro Industries, Inc. from 2001 to 2015, and The Phoenix Companies from 1988 to 1999 and from 2000 to 2009, and in a variety of board leadership roles, including serving as non-executive Chair, lead director and Chair of audit, compensation and governance/nominating committees. Mr. Browning currently serves on the board of GMS, Inc. Qualifications Mr. Browning is a well-known authority on board governance and his knowledge and experience in that area are invaluable to our Board. He was the Dean of the McColl Graduate School of Business at Queens University of Charlotte from 2002 to 2005 and has served as the Managing Partner of Peter Browning Partners, a board advisory consulting firm, since 2009. Mr. Browning was selected for the “2011 and 2012 NACD Director 100 List” (a list of the most influential people in corporate governance in the boardroom). He co-authored a book on governance guidance, titled The Directors Manual: A Framework for Board Governance, which offers practical advice on leading an organization’s board.

3


Frank E. Emory, Jr. AGE 66 DIRECTOR SINCE October 2020 COMMITTEES Serves on all committees		Experience Frank E. Emory, Jr. has served as a director of the Company since October 2020. Mr. Emory joined Novant Health in December 2018 and currently serves as Executive Vice President, Chief Legal Officer. From June 2001 to December 2018, he served as a partner with Hunton Andrews Kurth LLP, an international law firm. Qualifications As a former partner of Hunton Andrews Kurth LLP, a former Chair of EDPNC, Inc., and executive of Novant Health (including serving as its Chief Administrative Officer), as well as service on numerous non-profit boards, Mr. Emory brings considerable experience overseeing legal, government relations, risk management, corporate audit, compliance, human resources and diversity, inclusion and health equity teams to the Board.

Charles A. Mathis AGE 63 DIRECTOR SINCE August 2021 COMMITTEES Chair of Audit Committee and serves on all committees		Experience Charles A. Mathis has served as a director of the Company since August 2021. Mr. Mathis served as Executive Vice President and Chief Financial Officer of Amentum, a government and commercial services provider, from December 2021 until June 2023. Previously, Mr. Mathis served as Executive Vice President and Chief Financial Officer for Science Applications International Corporation (“SAIC”), a U.S. government IT services provider, from 2016 to 2021. Prior to joining SAIC, Mr. Mathis served as Chief Financial Officer at the Company, from 2012 to 2016. Prior to joining the Company, Mr. Mathis was Chief Financial Officer from 2008 to 2012 for Force Protection Inc., a global defense company. He also served as the Chief Financial Officer for Fort Worth-based EFW, Inc., the U.S.-based subsidiary of the Israeli defense contractor, Elbit Systems, from 2006 to 2008. Qualifications As a former executive at SAIC, a Fortune 500 company (including serving as its Chief Financial Officer), Mr. Mathis has extensive experience in mergers and acquisitions, finance and accounting, financial controls, and U.S. government contracting and compliance. Mr. Mathis also brings an understanding of our Company and business, previously serving as Chief Financial Officer.

4


Vernon J. Nagel AGE 65 DIRECTOR SINCE August 2023 COMMITTEES Serves on all committees		Experience Vernon J. Nagel has served as a director of the Company since August 2023. Mr. Nagel served as Executive Chair of the Board of Directors of Acuity Brands, Inc., an industrial technology company, from February 2020 until his retirement in December 2020. Mr. Nagel Served as Chair and Chief Executive Officer of Acuity Brands from September 2004 through January 2020 and as President of Acuity Brands from August 2005 to August 2019. Mr. Nagel previously served as Vice Chair and Chief Financial Officer of Acuity Brands from January 2004 through August 2004 and as Executive Vice President and Chief Financial Officer of Acuity Brands from December 2001 to January 2004. Mr. Nagel currently serves as a member of the Board of Directors of The AZEK Company, a provider of sustainable outdoor residential products, and Southwire, a leading provider of wire and cable and other electrical solutions. Qualifications Mr. Nagel has extensive management and leadership experience having previously served as the Chief Executive Officer and Executive Chair of the Board of Directors of a multi-national public company. Over the course of his career, Mr. Nagel has enhanced shareholder value by introducing new technologies, expanding markets served through organic growth and acquisitions and driving company-wide productivity. Mr. Nagel’s background provides the Board with invaluable executive leadership, financial and accounting expertise.

Dorothy F. Ramoneda AGE 64 DIRECTOR SINCE November 2019 COMMITTEES Serves on all committees		Experience Dorothy F. Ramoneda has served as a director of the Company since November 2019. Ms. Ramoneda has been in the role of Executive Vice President and Chief Information Officer of First-Citizens Bank since January 2014. She also has served as Chief Information Officer and Vice President of Information Technology and Telecommunications at Progress Energy. Qualifications Ms. Ramoneda has extensive leadership experience serving as the Chief Information Officer of a Fortune 500 company and in multiple industries. Ms. Ramoneda started her career at Arthur Andersen doing system integration, business process outsourcing and practice management. Over Ms. Ramoneda’s career, she has provided leadership for the continued development of innovative, robust, and secure information technology environments, giving her an understanding of the challenges and issues in our industry and the industries of many of our vendors and customers.

5


Jeffrey R. Rodek AGE 70 DIRECTOR SINCE May 2020 COMMITTEES Serves on all committees		Experience Jeffrey Rodek has served as a director of the Company since May 2020. Mr. Rodek has served as an Executive Network Advisor and Limited Partner of Tensility Venture Partners, a venture capital firm investing in early-stage AI startups, since October 2017, as well as Executive Advisor and member of the Leadership Council for Pathr.ai Inc. since September 2021. From July 2007 to May 2018, Mr. Rodek served as a Senior Lecturer at the Fisher College of Business at The Ohio State University. Prior to that, Mr. Rodek served as Senior Advisor and Executive Partner at Accretive, LLC from July 2007 to December 2009; as Executive Chair, Chair and Chief Executive Officer of Hyperion Solutions Corporation from October 1999 to April 2007; and as President and Chief Operating Officer of Ingram Micro Corporation from 1995 to 1999. Qualifications Mr. Rodek has over 40 years of business and leadership experience spanning across multiple industries. Over Mr. Rodek’s career, he has driven performance growth and improved corporate governance strategies in the logistics, enterprise software and technology solutions industries, giving him a keen understanding of the challenges and issues present in our industry.

Elizabeth O. Temple AGE 58 DIRECTOR SINCE September 2017 COMMITTEES Chair of Compensation Committee and serves on all committees		Experience Elizabeth O. Temple has served as a director of the Company since September 2017. Ms. Temple has served as the Chair and Chief Executive Officer of Womble Bond Dickinson (US) LLP since January 1, 2016.She has been a practicing corporate and securities attorney at the firm since 1989. Prior to serving as Chair and Chief Executive Officer, Ms. Temple served in a number of leadership roles at the firm over the past decade and has been a partner at the firm since 1997. Ms. Temple has also served on the Board of Directors of Messer Construction Co., a construction management and general contractor, since March 2023. Qualifications Ms. Temple has extensive leadership experience serving as the Chief Executive Officer of a global law firm. Over Ms. Temple’s legal career, she has counseled public and private companies on their highest strategic priorities, giving her an understanding of the challenges and issues in the Company’s industry and the industries of many of its vendors and customers. Her background as a legal advisor to public companies and boards provides the Board with additional expertise in the areas of risk management, corporate governance, acquisitions and securities regulation.

6

Charles R.

Whitchurch

LOGO

AGE

77

DIRECTOR SINCE

February 2009

COMMITTEES

Serves on all committees

Experience

Charles R. Whitchurch has served as a director of the Company since February 2009. Mr. Whitchurch served as the Chief Financial Officer of Zebra Technologies Corporation from September 1991 to June 2008. Mr. Whitchurch previously served on the boards of directors of SPSS, Inc., a publicly-held provider of predictive analytic software, from October 2003 to October 2009, Landmark Aviation, a privately-held operator of fixed-base aviation operations throughout the United States and Europe, from October 2008 to October 2012, Tricor Braun Holdings, a privately-held distributor of rigid packaging materials, from July 2010 to November 2016, and Ashworth College, a provider of nationally accredited on-line education, from June 2010 to December 2019. On all boards of other companies, he served as Chair of the Audit Committee.

Qualifications

Mr. Whitchurch’s executive career brings in-depth knowledge of business operations and strategy and broad experience related to financial and corporate governance matters through his tenure serving on the boards of directors of public companies, including serving as the Chair of audit committees. With over three decades of service as a Chief Financial Officer, more than half of which was with a public company, Mr. Whitchurch has a deep understanding of the complex accounting issues often faced by public companies.

7

Executive Officers of the Registrant



Name	Experience and Qualifications	Age
Michael L. Baur	Michael L. Baur is our Chair and Chief Executive Officer. Mr. Baur has served as either our President or CEO since our inception in December 1992, as a director since December 1995, and as Chair of the Board since February 2019.	66

Stephen T. Jones	Stephen T. Jones has served as our Senior Executive Vice President, Chief Financial Officer since December 2020. Prior to joining the Company, Mr. Jones served as the International Chief Financial Officer of Blackbaud, Inc., a leading cloud software company, from 2016 to 2020. Prior to that, Mr. Jones served in finance and management positions at Lexmark International, an imaging solutions and technologies company, from 2000 until 2016.	52

Shana C. Smith	Shana C. Smith joined the Company as Senior Executive Vice President, Chief Legal Officer in February 2023. Prior to joining the Company, Ms. Smith served as Vice President, General Counsel and Corporate Secretary for NII Holdings, Inc., which provided wireless service in South and Central America under the Nextel brand, from 2015 to 2023. Prior to that, Ms. Smith served five years with NII Holdings in various leadership roles, including Vice President, Legal and Assistant Secretary.	50

8



Name	Experience and Qualifications	Age
Rachel A. Hayden	Rachel A. Hayden joined the Company as Senior Executive Vice President, Chief Information Officer in June 2021. Prior to joining the Company, Ms. Hayden served as Chief Information Officer of Just Born, Inc., a family-owned confectionary company, from 2016 to 2021. Prior to that, Ms. Hayden served five years with Berry Global, a manufacturer of innovative packaging and engineered products, in various leadership roles, including Senior Director of IT, Global Business Systems.	47

John C. Eldh	John C. Eldh announced his resignation from the Company effective November 17, 2023. Mr. Eldh joined the Company as Senior Executive Vice President and Chief Revenue Officer in October 2019 and has served as our President since February 2022. Prior to joining the Company, Mr. Eldh served as Senior Vice President of the Global Partner Organization at CA Technologies, a leading provider of application development, management, and security solutions, from September 2014 to November 2018. Prior to that, Mr. Eldh served in various leadership capacities at Symantec Corporation, a cybersecurity and identity protection company, from January 2005 to August 2014.	56

Code of Conduct

Our Code of Conduct applies to all of our executive officers, including our Chief Executive Officer (“CEO”), our Chief Financial Officer (“CFO”), directors and employees. We have posted the Code of Conduct on the “Investors” page of our website, www.scansource.com, under the “Governance” tab. We will provide a copy of the Code of Conduct upon request to any person without charge. Such requests may be transmitted by regular mail in the care of the Corporate Secretary.

We will post on our website, www.scansource.com, under the “Corporate Governance” tab, or will disclose on a Form 8-K filed with the SEC, any amendments to, or waivers from, any provision of the Code of Conduct that applies to our CEO and our CFO, or persons performing similar functions, and that relate to (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us, (iii) compliance with applicable governmental laws, rules and regulations, (iv) the prompt internal reporting of violations of the Code of Conduct to an appropriate person or persons identified in the Code of Conduct, or (v) accountability for adherence to the Code of Conduct. Any waiver granted to an executive officer or a director may only be granted by the Board and will be disclosed, along with the reasons therefor, on a Form 8-K filed with the SEC. No waivers were sought or granted in fiscal 2023.

Audit Committee and Audit Committee Financial Expert

The Board has a standing Audit Committee. The Audit Committee currently is composed of Chair Mathis and directors Browning, Emory, Nagel, Ramoneda, Rodek, Temple and Whitchurch. The functions of the Audit Committee include selecting the independent auditor, reviewing the scope of the annual audit undertaken by our independent auditor and the progress and results of its work, reviewing our financial statements and our internal accounting and auditing procedures and overseeing our internal audit function. The Audit Committee met four times during the 2023 fiscal year. Each member of the Audit Committee meets the definition of independence for audit committee members as set forth in the NASDAQ listing standards and Exchange Act. The Board has determined that Chair Mathis and directors Browning, Nagel, Rodek, Temple and Whitchurch meet the requirements of an “audit committee financial expert” as defined in SEC rules and regulations.

9

Procedures for Shareholder Recommendations of Nominees to the Board of Directors

There were no material changes to the procedures described in the Proxy Statement relating to the 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”) by which shareholders may recommend nominees to our Board of Directors.

Delinquent Section 16(a) Reports

To our knowledge, based solely on a review of the copies of Section 16 reports furnished to us and written representations that no other reports were required, during the fiscal year ended June 30, 2023, all Section 16(a) filing requirements applicable to directors, executive officers and greater than ten percent beneficial owners were complied with by such persons.

Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) outlines our executive compensation program for our named executive officers (“NEOs”) listed below. The CD&A provides information about our compensation objectives and practices for our NEOs and explains how the Compensation Committee of the Board of Directors arrived at the compensation decisions for fiscal 2023.



Name		Title
Michael L. Baur		Chair and Chief Executive Officer
Stephen T. Jones		Senior Executive Vice President and Chief Financial Officer
Shana C. Smith⁽¹⁾		Senior Executive Vice President and Chief Legal Officer
Rachel A. Hayden		Senior Executive Vice President and Chief Information Officer
John C. Eldh⁽²⁾		Exiting President

⁽¹⁾	Ms. Smith joined the Company as Senior Executive Vice President and Chief Legal Officer in February 2023 and was designated an executive officer at that time.

⁽²⁾	On September 26, 2023, the Company announced Mr. Eldh would be resigning from the Company, effective November 17, 2023.

Executive Summary

2023 Business Highlights

Our talented team of sales, marketing and services professionals continue to make progress on our strategic plan of delivering hybrid distribution solutions that allow our channel partners to meet the technology demands of end users. We are enabling our customers by accelerating their transformation in order to take advantage of the new digital opportunity. Our hybrid distribution strategy of devices and digital delivered strong results in fiscal year 2023 as a result of increased sales volumes and operating leverage on expenses. For fiscal year 2023, net sales increased 7.3% to $3.8 billion, or a 7.2% year over year increase on an organic basis. For fiscal year 2023, operating income increased to $135.9 million from $122.2 million in the prior year. Fiscal year 2023 non-GAAP operating income increased to $151.1 million for a 3.99% non-GAAP operating margin, up from $140.1 million for the prior year. On a GAAP basis, net income for fiscal year 2023 totaled $88.1 million, or $3.47 per diluted share, compared to $88.7 million, or $3.44 per diluted share, for the prior year. Non-GAAP net income totaled $97.7 million, or $3.85 per diluted share, compared to $102.1 million, or $3.97 per diluted share, for the prior year. For more information on our non-GAAP measures and reconciliations to GAAP measures, see “Non-GAAP Financial Information” beginning on page 27 of our Annual Report on Form 10-K filed on August 22, 2023.

Fiscal 2023 Pay Mix

The Compensation Committee strives to provide our NEOs with a compensation package that balances short-term and long-term compensation. We believe that our current executive compensation program, consisting primarily of a mix of base salary, annual performance-based cash incentive awards and both performance-based and service-based grants of equity, (i) provides a predictable and transparent structure for executive compensation, (ii) provides a significant percentage of a NEO’s compensation through variable performance-based vehicles and (iii) attracts, retains and motivates our NEOs.

10

Our executive compensation program emphasizes performance-based pay. The elements of compensation and the general mix of compensation among the various elements remained largely unchanged from the previous year. Our financial performance during fiscal 2023 is reflected in the compensation of each of our NEOs for fiscal 2023, particularly with respect to payouts pursuant to our annual cash incentive program. Our cash incentive opportunity is designed so that, if our financial results, as measured by certain consolidated adjusted EBITDA and revenue numbers, reflect an increase in the financial performance of the Company, then our executives should realize a greater cash incentive. Awards are also capped at 200% of each executive’s target bonus regardless of our financial performance.

For fiscal year 2023, the cash incentives paid to our CEO decreased from fiscal 2022 and fiscal 2021 based on (i) our financial performance and (ii) the Compensation Committee’s pre-established Management Incentive Plan (“MIP”) operating targets for the cash incentive opportunity. The value of the equity awarded to our CEO increased in fiscal 2023, with half of such awards being subject to performance targets. We believe this result is appropriately aligned with the Company’s fiscal 2023 financial performance and the Company’s long-term compensation program.

In addition, we believe that it is important to link each of our NEO’s compensation and personal financial interests with long-term shareholder value creation. Accordingly, 57% of our CEO’s total compensation, 54% of Mr. Jones’ total compensation, 52% of Ms. Smith’s total compensation, 37% of Ms. Hayden’s total compensation, and 54% of Mr. Eldh’s total compensation for fiscal 2023 was in the form of long-term equity incentives. For fiscal 2023, variable performance-based compensation in the form of cash and long-term equity incentives constituted 79% of our CEO’s total compensation, 75% of Mr. Jones’ total compensation, 66% of Ms. Smith’s total compensation, 58% of Ms. Hayden’s total compensation, and 80% of Mr. Eldh’s total compensation (each as reported in the Summary Compensation Table).

Consideration of Results of Shareholder Advisory Votes in Executive Compensation

The Compensation Committee monitors the results of the “Say-on-Pay” vote and considers those results along with the objectives listed below in determining compensation policies. A substantial majority (92.6%) of our shareholders voting at the 2023 Annual Meeting approved the compensation described in our 2022 proxy statement. The Compensation Committee interpreted this vote result as a strong indication of support for our fiscal 2023 compensation program.We have conducted a variety of shareholder engagement activities this year, including investor conferences and direct meetings with many of our top shareholders. These engagements have focused on deepening the dialogue with our current shareholder base about our business strategy and performance, culture, governance, executive compensation practices, and ESG efforts. An independent director has participated in several of these dialogues, demonstrating accountability with our shareholders and our commitment to strong governance practices.

Objectives of the Compensation Program

Our executive compensation program is designed to attract, retain and motivate executives through achieving the following three objectives:

•

Pay-for-Performance

Align Interests of Executives with Shareholders

Retain Talented Leadership

Pay-for-Performance

The guiding principle of our compensation philosophy is that pay should be linked to performance and that the interests of executives and shareholders should be aligned. Our compensation program is designed to provide significant performance-based compensation through our cash incentive plan, and a large portion of the compensation is in the form of equity awards. As a result, a significant portion of our NEOs’ compensation is directly contingent on our operating results and/or aligned with shareholder interests.

11

Best-Practice Compensation Policies and Practices

The following compensation policies and practices are designed to align the interests of our NEOs and our shareholders:



ScanSource Does
✓	Require significant stock ownership.	We have adopted minimum ownership guidelines for our CEO. He is required to retain 50% of the net shares resulting from vesting or exercises of equity awards until he owns Company common stock in an amount equal to three times his base salary.

✓	Mandate a claw-back policy tied to a compensation program.	We maintain a “claw-back policy,” which would allow us to recover certain incentive compensation based on financial results in the event those results were restated due at least partially to the recipient’s misconduct.

✓	Seek our shareholders’ input on executive compensation.	We value our shareholders’ input on our executive compensation, and we seek an annual non-binding vote on our executive compensation policies.

✓	Prohibit pledging of our securities by our Named Executive Officers or Board of Directors.	We have a policy that prohibits officers and directors from pledging Company securities in margin accounts or as collateral for a loan.

✓	Prohibit hedging of our securities by our Named Executive Officers or Board of Directors.	We have a policy that prohibits employees (including the NEOs) and directors from trading in options, warrants, puts, calls or similar instruments in connection with our securities, or selling our securities “short.”

✓	Require a “double trigger” for cash severance benefits upon a change in control.	Our employment arrangements with our NEOs provide cash severance only upon a “double trigger.”

✓	Not provide golden parachute tax gross ups or excessive perquisites.	We do not provide excise tax gross-ups for severance benefits received by our NEOs under their employment arrangements. We only provide limited perquisites to our NEOs.

Retain Talented Leadership

We operate in a marketplace characterized by significant competition for talented executives. Our executive compensation program is designed to enable us to attract, motivate, reward and retain the management talent necessary to achieve both long-term and short-term corporate objectives and enhance shareholder value. We also aim to establish executive compensation levels that correlate directly to the NEO’s level of responsibility, with the compensation of our NEOs being tied both to our performance as a whole and to individual performance. To do this effectively, our philosophy is that our compensation program must provide our NEOs with a total compensation package that is reasonable in relation to our performance, and sufficiently competitive with the packages offered by similarly sized companies within or outside our industry.

Material Elements of Our Compensation Programs

In determining the compensation of our NEOs, the Compensation Committee uses the following material compensation elements, which it believes support our compensation objectives.

12



		Compensation Objectives
Compensation Element	Description	Reward Performance	Attract and Retain	Align with Shareholders
Base Salary	Fixed level of compensation		✓

Annual Variable Cash Incentive Awards	Performance-based cash incentives reward Company and individual performance	✓	✓	✓

Time-Vesting Restricted Stock or Restricted Stock Units	Long-term equity award, with four-year vesting	✓	✓	✓

Performance- and Time-Vesting Restricted Stock or Restricted Stock Units	Rewards Company performance; three-year vesting, in addition to performance criteria	✓	✓	✓

The Compensation Committee determines the amounts of each element and the aggregate compensation for our NEOs without using any specific formula or attempting to satisfy any specific ratio for compensation among our NEOs; however, the differences in the aggregate compensation between our CEO and the other NEOs are intended to reflect the individual responsibilities with respect to their respective positions, experience in the applicable role, experience in our industry and market compensation data for peer companies. In determining compensation for our NEOs, the Compensation Committee considers the amount of compensation they receive in cash versus equity, along with the status of outstanding equity awards.

The Compensation Committee views the components of compensation as related, but distinct, and therefore regularly reevaluates the appropriate mix of elements, including the appropriate targets for incentive awards. The Compensation Committee also relies on the independent expertise compiled from the general knowledge, experience and good judgment of its members, both with regard to competitive compensation levels and the relative success that our Company has achieved. The Compensation Committee also retains, and relies on information provided by, compensation consultants.

Process for Determining Named Executive Officer Compensation

Role of the Compensation Committee

The Compensation Committee is responsible for reviewing, approving, and monitoring compensation policies and programs that are consistent with our business strategy and aligned with shareholders’ interests. Specifically, the Compensation Committee is responsible for:

reviewing and approving the corporate goals and objectives relevant to the compensation of the CEO and other NEOs;

negotiating the employment agreement of the CEO;

reviewing and approving any employment letters or contracts and severance plans of all other NEOs;

reviewing and approving annual incentive awards to NEOs; and

reviewing and approving equity-based compensation plans and grants of equity awards under such plans and the Board-approved policies or guidelines applicable to them.

The Compensation Committee meets several times each year to review and approve executive compensation programs and performance and, if necessary, recommend approval to the Board.

Role of Management

The Compensation Committee regularly meets with the CEO to receive reports and recommendations regarding the compensation of our NEOs other than the CEO. In particular, the CEO recommends to the Compensation Committee annual base salaries, annual incentive awards and long-term or performance equity grants for the NEOs other than himself. The Compensation Committee then evaluates each NEO, including the CEO, sets performance criteria for annual cash incentive awards, and makes long-term equity grants, if any. At the beginning

13

of each fiscal year and as necessary throughout the year, MIP targets for certain financial measures are established following consultation with management with consideration for adjustments for one-time expenses or longer-term investments that are planned. As part of its evaluation process, the Compensation Committee considers our performance and consistency, the NEO’s individual performance over the prior year, changes in responsibilities and future potential as well as data available from compensation surveys and compensation consultants. Although the Compensation Committee considers the CEO’s recommendations, the final decisions regarding base salary, annual incentive awards and equity awards of the NEOs are made by the Compensation Committee.

Role of Compensation Consultant

The Compensation Committee has the authority to retain independent compensation consultants to provide counsel and advice. For fiscal 2023, the Compensation Committee retained Pearl Meyer. The Compensation Committee reviewed all factors relevant to the independence of Pearl Meyer, including:

The provision of services to the Company by the consultant other than those requested by the Compensation Committee;

The amount of fees received by the consultant as a percentage of its total revenue;

The policies and procedures adopted by the consultant that are designed to prevent conflicts of interest;

Any business or personal relationship between a consultant and a member of the Compensation Committee;

Any stock of the Company owned by a consultant; and

Any business or personal relationship between a consultant and an executive officer of the Company.

As a result of such evaluation, and a certification from Pearl Meyer regarding its consultant’s independence, the Compensation Committee determined that Pearl Meyer is independent.

Role of Peer Companies and Benchmarking

The Compensation Committee regularly reviews benchmarking and market surveys to ensure that our compensation is competitive with that of our peers. The Compensation Committee also considers analysis and benchmarking by third parties, such as ISS and Equilar, and the different peer groups each firm uses for comparative purposes in order to gain a better understanding of compensation practices and trends in the market.

Our compensation consultants provide the Compensation Committee with general market surveys and other information related to the general market for executive compensation, including best practices and emerging trends. In addition, in fiscal 2023 Pearl Meyer provided information derived from proxy statements from peer companies and from surveys that include publicly traded and privately held technology distributors and other technology industry companies with similar revenues. The peer companies referred to for evaluation of fiscal 2023 compensation included the following:


Applied Industrial Technologies, Inc. ePlus, Inc.	Benchmark Electronics, Inc. Insight Enterprises, Inc.	Diebold Nixdorf, Inc. Itron, Inc.
PC Connection, Inc.	Plexus Corp.	TTM Technologies, Inc.
WESCO International, Inc.

The Compensation Committee reviewed compensation information from this peer group by comparable executive position and level to better understand the market for other participants in the market for all aspects of compensation. In a review of the applicable data, the Compensation Committee sought to ensure that the overall compensation to our NEOs was competitive and within norms for the industry and other companies of similar characteristics based on the executive’s position, level and job performance.

The Compensation Committee took this evaluation into account in determining all elements of NEO compensation for fiscal 2023, including the fiscal 2023 MIP design and equity awards.

14

Named Executive Officer Compensation in Fiscal 2023

In deciding whether to increase a NEO’s compensation, the Compensation Committee considers company performance, market trends, the consistency of the NEO’s individual performance over the prior year, changes in the NEO’s responsibilities and the NEO’s future potential. The Compensation Committee also considers data available from benchmarking studies obtained from a range of industry and general market sources, as well as information that may be provided by its compensation consultants, including comparisons of peer companies comprised of other participants in the industry and other similar companies based on size and other objective factors. In evaluating the Company’s performance in fiscal 2023, the primary consideration was our financial performance for the relevant annual period, with a focus on consolidated adjusted EBITDA and Intelisys revenue.

Base Salary

Base salary generally provides a fixed base level of compensation for our executives for the services they render during the year. The purpose of base salary is to compensate our NEOs in light of their respective roles and responsibilities over time. Base salary is essential to allow us to compete in the employment marketplace for talent and is an important component of total compensation for the NEOs. It is vital to our goal of recruiting and retaining NEOs with proven abilities. A NEO’s base salary is initially set in accordance with the terms of his or her employment agreement or letter and is reviewed annually or as needed.

The Compensation Committee met in August of 2022 to determine Mr. Baur’s, Mr. Jones’, Ms. Hayden’s and Mr. Eldh’s base salaries for fiscal 2023. The Compensation Committee did not award any base salary increases for these NEOs for fiscal 2023, other than a $80,000 increase for Mr. Jones and an $11,000 increase for Ms. Hayden made in light of the considerations described above. Ms. Smith’s base salary was set in her employment letter at $400,000 and remained the same at the time she was hired and when she was named an executive officer in February 2023.

Base salaries for Mr. Baur, Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh, for fiscal 2023 as of July 1, 2022 (or February 21, 2023 for Ms. Smith) were as follows:



Named Executive Officer	Base Salary (standard)
Mr. Baur	$	875,000
Mr. Jones	$	480,000
Ms. Smith	$	400,000
Ms. Hayden	$	361,000
Mr. Eldh	$	625,000

Annual Performance-Based Cash Incentives

Annual variable performance-based cash incentive awards are granted under the Company’s Management Incentive Plan (“MIP”) and are designed to encourage the achievement of various pre-determined Company financial and operating performance goals. Annual performance-based cash incentive opportunities were set based on an analysis of market data and assessing the experience of the respective individual and his or her respective role. The design provides that each NEO’s cash incentive opportunity will be expressed as a percentage of his or her base salary and earned based on non-GAAP operating results as compared to pre-established threshold and stretch goals. The cash incentive opportunities for our NEOs that were employed in fiscal 2022 remained at the same level as fiscal 2022. Each NEO has a variable factor by role or position applied as a percentage against his or her respective base salary, as set forth in the table below.


Named Executive Officer	Base Salary ($)		Target Cash Incentive Opportunity (%)			Target Cash Incentive Opportunity ($)
Mr. Baur	$	875,000		150	%	$	1,312,500
Mr. Jones	$	480,000		100	%	$	480,000
Ms. Smith	$	400,000		75	%	$	300,000
Ms. Hayden	$	361,000		60	%	$	217,000
Mr. Eldh	$	625,000		150	%	$	937,500

15

For fiscal year 2023, the Compensation Committee set MIP targets for consolidated adjusted EBITDA (“Adjusted EBITDA”) and Intelisys revenue (“Agency Revenue”) based on the Compensation Committee’s belief that these measurements have a strong correlation with shareholder value. Management emphasizes these measures in evaluating and monitoring the Company’s financial condition and operating performance. These metrics assist management in comparing the Company’s performance over various reporting periods on a consistent basis because they remove the impact of items that do not reflect our core operating performance from the Company’s operating results.

The performance metrics were established by the Compensation Committee in August 2022. Each performance metric is adopted with certain adjustments to align management’s performance on focused strategic objectives. The maximum incentive award for any NEO is 200% of his or her target bonus.

For fiscal 2023, the Compensation Committee established MIP performance targets as set forth below. The payouts of the awards depend on our results in comparison to these targets, weighted as follows: Adjusted EBITDA, 60% and Agency Revenue, 40%. If performance of any measure does not meet the applicable threshold for that measure, no award will be earned for that measure. If the performance of a measure reaches the applicable threshold, the award earned for that measure will be 50% of the target. The award earned for results between the threshold and the maximum of 200% of the target is calculated using straight-line interpolation.


Fiscal 2023 MIP Performance Targets
Performance Measure	Weights			Performance Range						Actual Results
Performance Measure	Weights			Threshold (50% payout)		Target (100% payout)		Maximum (200% payout)		Actual Results
Adjusted EBITDA		60	%	$	166.7	$	174.0	$	189.0	$	182.6
Agency Revenue		40	%	$	80.5	$	81.2	$	84.5	$	79.5

The Compensation Committee has the discretion to adjust these measurements for extraordinary one-time events, or other items beyond management’s control, and to award cash incentives based on other criteria. For fiscal 2023, the Compensation Committee determined to adjust the MIP attainment calculation for Adjusted EBITDA to reflect a non-GAAP tax recovery benefit of approximately $2.7 million given the operational nature of the recovery and the prior period impacts on the Adjusted EBITDA measure. Apart from the foregoing, the Compensation Committee elected not to make any discretionary modifications to the awards payable under the MIP. As a result of the Adjusted EBITDA and Agency Revenue results for fiscal 2023, the cash incentive award earned by the NEOs under the MIP in fiscal 2023 was 95% of the target, as compared to 161.8% in fiscal 2022 and 154.9% in fiscal 2021.

The specific calculations, targets and cash awards for each NEO under the MIP for fiscal 2023 are detailed below.


Named Executive Officer	Base Salary		Target Bonus as % of Base Salary			Bonus Target		% of Bonus Target			Amount of Cash Incentive
Mr. Baur	$	875,000		150	%	$	1,312,500		95	%	$	1,246,875
Mr. Jones	$	480,000		100	%	$	480,000		95	%	$	456,000
Ms. Smith	$	400,000		75	%	$	300,000		95	%	$	100,726	⁽¹⁾
Ms. Hayden	$	361,000		60	%	$	217,000		95	%	$	206,150
Mr. Eldh	$	625,000		150	%	$	937,000		95	%	$	890,150

(1)	Ms. Smith’s cash incentive award was prorated for her length of employment during fiscal 2023.

16

Supplemental MIP Bonus Program

In August 2023, against the backdrop of losses incurred by the Company in connection with the cybersecurity attack in the fourth quarter of fiscal 2023 (the “Cyberattack”), the Compensation Committee established a supplemental plan under the MIP to provide for the award to the NEOs of an additional cash bonus payment (the “Cyber Insurance Program”). Under the Cyber Insurance Program, each NEO will be eligible to receive an additional cash bonus payment in the event the Company accrues any insurance proceeds to reimburse the Company for the losses incurred in connection with the Cyberattack. Any cash bonus payments that become payable under the Cyber Insurance Program will be paid no later than 30 days after accrual of the reimbursements. The Cyber Insurance Program enables the NEOs to earn the portion of the cash bonus they would have received under the MIP for fiscal 2023 if the insurance proceeds for losses incurred in connection with the Cyberattack were accrued during fiscal 2023.

Long-Term Equity Incentives

General Overview

Equity awards are a significant component of our NEO compensation. The Compensation Committee annually grants equity awards, typically in the form of restricted stock awards and/or restricted stock units and performance-based restricted stock units or awards. We believe this element of our compensation program provides our NEOs with the opportunity to develop a significant ownership stake in the Company and directly aligns their interests with the long-term interests of our shareholders. In addition, equity awards serve as a retention vehicle for the NEOs because, if the applicable criteria are met, they typically vest over a set number of years and generally are forfeited if not vested upon termination of employment. We maintain a formal Equity Award Grant Policy, whereby equity awards to employees are made by, or with the oversight of, the Compensation Committee or the Board. Under the policy, the Compensation Committee must approve any equity awards to the NEOs, and our Principal Accounting Officer and human resources management oversee the documentation of, and accounting for, equity award grants.

The number of shares subject to equity awards granted by the Compensation Committee to NEOs in a given year is based on, among other things, overall Company performance, the number of shares available for awards under the ScanSource, Inc. 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”) or successor plan, the value of the proposed award, the amount and realizable value of equity awards awarded in prior years, total compensation and consideration of the competitive market practice for the respective position level and experience, with the ultimate objective of motivating, rewarding and retaining NEOs while maintaining efficient use of equity and preserving shareholder value. The Compensation Committee determines the number of shares of a value-based restricted stock unit award by using the closing price of our stock on the grant date.

The grant date for annual equity awards provides that the grant date will be the third trading date following the meeting at which the awards are approved, provided that the Company is in an open trading window, and otherwise on the first trading day of the next open window. In addition, vesting of such awards accelerates on a change in control followed by termination in certain instances or upon death, disability or termination due to retirement. In certain circumstances, the vesting term may be reduced due to termination of employment, death or disability of a participant.

The Compensation Committee may also make special grants of equity awards during the year in the case of the hiring or promotion of certain eligible persons, or in other situations not involving annual grants. The grant date for non-annual grants approved by the Compensation Committee on or before the 15th day of the second month of the quarter will be the first day of the third month of such quarter. For non-annual grants approved after the 15th day of the second month of the quarter, the grant date will be the first day of the third month of the following quarter. In any event, all equity awards must be made during an open trading window. In fiscal 2023, the only grant of equity awards to a NEO made outside of the annual equity grant timing was Ms. Smith’s new hire grant, which was intended to serve as her annual grant for fiscal 2023.

17

Fiscal 2023 Annual Long-Term Incentive Awards

The annual grant of long-term equity incentives was awarded to our NEOs in August 2022, except for Ms. Smith’s new hire grant as discussed above. In fiscal 2023, 50% of the long-term equity incentives awarded to our NEOs were in the form of time-based restricted stock units and the remaining 50% were in the form of performance-based restricted stock units. The time-based restricted stock units generally vest and become exercisable in one-fourth increments on the anniversary of the grant date over four years, subject to the continued employment of the NEO on the applicable vesting date. The performance-based restricted stock units generally vest upon the third anniversary of the grant date, subject to the continued employment of the NEO on the applicable vesting date and achievement of the performance targets set by the Compensation Committee over the applicable performance period.

The long-term equity incentives awarded to our NEOs in fiscal 2023 are set forth below:



Named Executive Officer	Form of Equity Incentive Award	Amount of Shares Subject to Award
Mr. Baur	Time-Based Restricted Stock Units		56,699
	Performance-Based Restricted Stock Units		56,700
Mr. Jones	Time-Based Restricted Stock Units		20,935
	Performance-Based Restricted Stock Units		20,936
Ms. Smith	Time-Based Restricted Stock Units		13,067
	Performance-Based Restricted Stock Units		—
Ms. Hayden	Time-Based Restricted Stock Units		6,298
	Performance-Based Restricted Stock Units		6,298
Mr. Eldh	Time-Based Restricted Stock Units		32,711
	Performance-Based Restricted Stock Units		32,712

Fiscal 2023 Performance-Based Equity Awards Performance Metrics

As discussed above, the Compensation Committee grants certain employees, including our NEOs, performance-based restricted stock units that contain both performance and service vesting conditions over a multi-year period. Performance-based awards are conditioned on achievement of pre-established performance targets. New performance periods begin each fiscal year, and performance targets and the target awards for our NEOs are established shortly after the beginning of the applicable performance period.

For fiscal 2023, the performance-based restricted stock units granted will vest, if at all, based on two equally weighted performance metrics: (i) an earnings per share (“EPS”) performance metric based on the achievement of annual target levels of normalized non-GAAP EPS over a two-year performance period (the “Normalized EPS”) and (ii) a return on invested capital (“ROIC”) performance metric based on annual target levels of ROIC over a three-year performance period (the “Adjusted ROIC”), subject to adjustments for certain nonrecurring items as approved by the Compensation Committee. The Compensation Committee considers Normalized EPS and Adjusted ROIC to be key drivers of shareholder value and

18

fundamental to long-term value creation. The Compensation Committee also believes that measuring our performance against multiple metrics provides a more complete picture of our performance. In August 2023, the Compensation Committee determined to adjust the calculation of the Normalized EPS performance metric for the fiscal 2023 performance-based restricted stock awards to account for the accrual of any insurance proceeds to reimburse the Company for the losses incurred in connection with the Cyberattack.

The fiscal 2023 performance-based restricted stock units cliff vest, if at all, on the third anniversary of the grant date, subject to the NEO’s continued employment through the vesting date and achievement of the performance metrics. Achievement of the Normalized EPS and Adjusted ROIC performance targets is determined at the end of the three-year vesting period. The actual number of restricted stock units earned will equal the sum (rounded down to the nearest whole share) of (i) the aggregate target number of restricted stock units for fiscal year 2023 – 2024 multiplied by 50% of the Normalized EPS (subject to the relative total shareholder return modifier) achieved for the applicable two-year performance period and (ii) the aggregate target number of restricted stock units for fiscal 2023 – 2025 multiplied by 50% of the Adjusted ROIC achieved for the three-year performance period. The total sum of restricted stock units earned is capped at 200% of the aggregate target number of restricted stock units for the fiscal 2023 – 2025 vesting period.

The following table summarizes the performance calculations for the fiscal 2023 performance-based equity awards. If the performance targets are achieved at a level between the stated performance levels, vesting will be determined by linear interpolation.


Fiscal Year 2023 Performance-Based Equity Performance Metrics
		Performance Range
Performance Measure	Weight	Threshold (50%)	Target (100%)	Max (200%)
Normalized EPS	50%	95% of EPS Target	100% of EPS Target	115% of EPS Target
Adjusted ROIC	50%	Adj. ROIC > 4.5% + WACC⁽¹⁾	Adj. ROIC > 6.0% + WACC	Adj. ROIC > 8.0% + WACC

(1)	Reflects the Company’s weighted average cost of capital for the applicable performance period.

The awards earned upon achievement of the Normalized EPS performance targets are subject to a relative total shareholder return modifier (“rTSR Modifier”) whereby, at the end of the three-year vesting period, the Normalized EPS payout is adjusted upwards or downwards by up to 25% based on the Company’s rTSR to the TSR of a peer group of companies with high correlation to the Company’s industry (the “TSR Peer Group”), subject to the absolute TSR governor and capped at a maximum of 200% of target. The rTSR Modifier will be the percentage multiplier assigned to the Company’s TSR rank compared to the TSR Peer Group for the applicable two-year performance period. To determine rank, the TSRs of the Company and each company in the TSR Peer Group will be ranked for the performance period to determine the quartile which contains the Company. There will be no interpolation applied to determine the rTSR Modifier.

19

Depending on the Company’s rTSR to the TSRs of the TSR Peer Group, the payout percentage of restricted stock units that will be subject to vesting will be modified as follows:


			rTSR Modifier
			Bottom Quartile	Median (2nd and 3rd Quartile)	Top Quartile
		Preliminary Unadjusted Payout	Multiplier
		Preliminary Unadjusted Payout	75%	100%	125%
Normalized EPS	Below Threshold	0%	0% (0% x 75%)	0% (0% x 100%)	0% (0% x 125%)
	Threshold	50%	37.5% (50% x 75%)	50% (50% x 100%)	62.5% (50% x 125%)
	Target	100%	75% (100% x 75%)	100% (100% x 100%)	125% (100% x 125%)
	Maximum	200%	150.0% (200% x 75%)	200% (200% x 100%)	Capped at 200% (200% x 125%)

For fiscal 2023 performance-based equity awards, the Compensation Committee approved a rTSR comparator group comprised of 31 public companies that serve as a representative index. The comparator group for the rTSR modifier includes constituents of the S&P 600 Technology Hardware & Equipment (Industry Group) Index.

Fiscal 2022 Performance-Based Equity Awards

Certain of our NEOs were granted performance-based restricted stock units in fiscal 2022 which vest on the third anniversary of the date of grant, subject to the NEO’s continued employment through the vesting date. Similar to the fiscal 2023 performance-based equity awards, vesting of the fiscal 2022 awards is subject to attainment of certain performance targets over the applicable performance periods and other terms and conditions established by the Compensation Committee. The fiscal 2022 awards were subject to two equally weighted performance metrics: (i) Normalized EPS (subject to an rTSR Modifier) and (ii) Adjusted ROIC. Achievement of the performance targets for the fiscal 2022 awards will be determined following the applicable performance and vesting periods.

Other Important Compensation Policies Affecting the Named Executive Officers

Claw-Back Policy

If a NEO receives an award under our equity or cash incentive plans based on financial statements that subsequently are restated in a way that would decrease the amount of the award to which such NEO was entitled and the restatement is based in whole or in part on the misconduct of the NEO, then the NEO will be required to refund the Company the difference between what they received and what they should have received. In addition, this policy requires the recoupment of any compensation to the extent mandated by all applicable laws, rules, and regulations. The Compensation Committee monitors laws, rules and regulations on claw-back policies and will amend this policy as required to comply with any new claw-back rules or regulations. The Company will adopt a claw-back policy consistent with the applicable NASDAQ listing standards prior to December 1, 2023.

Stock Ownership Requirements

The Compensation Committee has adopted minimum ownership requirements for Company stock for the CEO. The ownership target for the CEO has been established as three times his annual base compensation. Our CEO is expected to utilize grants under equity compensation plans to maintain the levels of ownership required by the policy. The policy also incorporates an equity retention requirement by requiring him to retain 50% of the net shares resulting from the vesting or exercise of certain awards to obtain the required ownership under the policy.

As of June 30, 2023, our CEO was in compliance with our stock ownership guidelines.

Anti-Hedging and Anti-Pledging Policy

Our NEOs and directors are prohibited from holding Company securities in margin accounts or pledging Company securities as collateral for a loan. All NEOs and directors are in compliance with this policy. Our NEOs and directors are also prohibited from hedging transactions.

20

Perquisites

We provide only limited perquisites to our NEOs, including relocation cost reimbursements and the availability of a voluntary comprehensive physical examination once every fiscal year. The physical examinations help ensure our NEOs’ continued health and ability to render services to the Company. The physicals are provided to encourage senior leaders of the Company to set an example for living positively and active healthy living. We do not provide any other material perquisites to our NEOs.

Health and Insurance Plans

Our NEOs are entitled to participate in our health, vision, dental, paid time off, life, disability and employee stock purchase plans to the same degree that our other employees are entitled to participate. In addition, our NEOs participate in a supplemental long-term disability plan and each receives term life insurance in the amount of $1,000,000 (subject to underwriting) and $500,000 (subject to limited underwriting).

Deferred Compensation Plan

We maintain a deferred compensation plan pursuant to which NEOs may defer a portion of their annual compensation. These deferrals are matched to the extent specified in each NEO’s employment agreement or letter, and such contributions vest over a five-year period. Participants invest their deferrals and Company matching contributions among various funds designated by the plan administrator (and currently may not be invested in our common stock). Participants become fully vested in any employer contributions as long as they are continuously employed until their death, total disability, they reach the date in which the sum of age and years of service equals or exceeds 65, or the occurrence of a change in control. We maintain the deferred compensation plan to provide a competitive benefit and to facilitate adequate savings for retirement on a tax efficient basis for our NEOs.

Retirement Benefits

The NEOs are eligible to participate in our 401(k) Plan, which is a Company-wide, tax-qualified retirement plan. The intent of this plan is to provide all employees with a tax-advantaged savings opportunity for retirement. We sponsor this plan to help employees at all levels save and accumulate assets for use during their retirement. Eligible pay under this plan is capped at Internal Revenue Code annual limits. We provide a 50% matching contribution on the first 6% that an employee contributes. These Company contributions vest over a five-year period.

Employee Stock Purchase Plan

Eligible employees may participate in our Employee Stock Purchase Plan (“ESPP”), which is a Company-wide employee stock purchase plan. The intent of the ESPP is to assist our employees in acquiring a stock ownership interest in the Company.

Employment Agreements and Employment Letters

We have determined that our Company’s and our shareholders’ interests are best served by entering into (i) an employment agreement with our CEO and (ii) employment letters with an accompanying severance plan with our other NEOs. Such agreements, letters and plans are the result of arms’ length negotiations between the Compensation Committee, the Company, the CEO and other NEOs, and all are approved by the Compensation Committee. We believe that these employment arrangements benefit us and our shareholders by permitting us to attract and retain NEOs with demonstrated leadership abilities and to secure their services over an extended period of time. In addition, the employment arrangements align executive interests with the long-term interests of the Company and serve our recruitment and retention goals by providing executive officers with security based on the knowledge of how they will be compensated over the course of their employment, while at the same time providing the Company with significant protections regarding non-competition, non-solicitation of business and employees, and confidential business information.

On June 15, 2017, we entered into a three-year employment agreement, effective July 1, 2017, with Mr. Baur. Mr. Baur’s employment agreement provides for:

a base salary of $875,000 per year;

an annual target variable compensation opportunity of 150% of his base salary (with a maximum opportunity of 200% of target) based upon performance and the attainment of performance goals set by the Compensation Committee;

21

consideration for inclusion in our annual equity grant program at a grant level opportunity of $2,250,000;

the opportunity to participate in our Nonqualified Deferred Compensation Plan by deferring up to 50% of base salary and/or up to 100% of annual variable compensation, with a match of 50% of deferred amounts to be made by the Company, up to a maximum of $200,000 per year; and

•

automatic one-year renewals unless 180 days’ prior notice of non-renewal is given to the other party following the initial term.

In addition, we will make additional payments to Mr. Baur’s deferred compensation account to cover the cost of future premiums for “access only” continuation coverage under our medical and dental plan following termination of employment assuming Mr. Baur is enrolled in Medicare Parts A, B and D, obtains a Medicare supplemental policy until age 80, and pays the full cost for such coverage.

Under Mr. Baur’s employment agreement, variable cash incentive opportunities will continue to be based upon the performance and attainment of performance goals to be established annually by the Compensation Committee, subject to maximum amounts that may be earned. Mr. Baur’s annual equity award opportunity is subject to the Compensation Committee’s discretion and the terms of our equity plan and related equity award agreements.

Mr. Baur’s employment agreement also provides for severance payments to Mr. Baur upon certain events, as further described in the “Severance Plan” section below.

On November 16, 2020, we entered into an employment letter with Mr. Jones in connection with his appointment as our Senior Executive Vice President and Chief Financial Officer, effective December 14, 2020. Under the employment letter, Mr. Jones will be paid an annual base salary and be eligible to participate in the variable cash compensation incentive program. He also will receive other benefits, including relocation benefits, change-in-control payments as a participant in the Severance Plan described below, and is eligible for participation in our other long-term incentive programs and our Nonqualified Deferred Compensation Plan.

On February 9, 2023, we entered into an employment letter with Ms. Smith in connection with her appointment as our Senior Executive Vice President and Chief Legal Officer, effective February 21, 2023. Under the employment letter, Ms. Smith will be paid an annual base salary and be eligible to participate in the variable cash compensation incentive program. She also will receive other benefits, including relocation benefits, change-in-control payments as a participant in a Severance Plan described below, and is eligible for participation in our other long-term incentive programs and our Nonqualified Deferred Compensation Plan.

On May 6, 2021, we entered into an employment letter with Ms. Hayden in connection with her appointment as our Senior Executive Vice President and Chief Information Officer, effective June 7, 2021. Under the employment letter, Ms. Hayden will be paid an annual base salary and be eligible to participate in the variable cash compensation incentive program. She also will receive other benefits, including relocation benefits, change-in-control payments as a participant in a Severance Plan described below, and is eligible for participation in our other long-term incentive programs and our Nonqualified Deferred Compensation Plan.

On September 27, 2019, we entered into an employment letter with Mr. Eldh in connection with his appointment as our Senior Executive Vice President and Chief Revenue Officer, effective October 1, 2019. Under the employment letter, Mr. Eldh was paid an annual base salary and eligible to participate in the variable cash compensation incentive program. He also received other benefits, including relocation benefits, change-in-control payments as a participant in a Severance Plan described below, and was eligible for participation in our other long-term incentive programs and our Nonqualified Deferred Compensation Plan. We entered into a Separation Agreement and General Release with Mr. Eldh in September 2023 which superseded his rights under his employment letter and the Severance Plan.

See the “Employment Arrangements and Potential Payments upon Certain Events” section for more information on Mr. Baur’s, Mr. Jones’, Ms. Smith’s, Ms. Hayden’s, and Mr. Eldh’s employment arrangements that were in effect during fiscal 2023.

22

Severance Plan

We have established a severance plan to provide severance and other benefits to certain executives selected by the Compensation Committee to participate in the severance plan. The Company’s severance plan is uniform for the current executives selected by the Compensation Committee to participate at their respective levels, except for Mr. Eldh, who had several provisions that were individually tailored, as described below. We refer to the Company severance plan and Mr. Eldh’s severance plan collectively as the “Severance Plan.”

The employment arrangements with our NEOs and the Severance Plan provide that, if the employment of any participant in the Severance Plan is terminated by the Company without cause, or if the Executive resigns for good reason, we will be required to pay or provide the executive’s base salary earned through the date of termination. In addition, we will also be required to pay to the executive in such instances any other amounts or benefits the executive is eligible to receive under any Company plan, program, policy, practice, contract or agreement in accordance with their terms. In such instances, we will also be required to provide severance benefits to the executive, subject to the executive’s execution of a release, consisting of compensation equal to the average annual base salary and variable compensation earned by the executive, including any amounts earned but deferred, in the last three fiscal years completed prior to the termination (the “Average Compensation Amount”), multiplied by a severance multiple, less withholdings. In the case of Mr. Baur, the severance multiple is equal to 2.5, in the case of Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh, the severance multiple is 1.5, and in the case of any other executive participating in the Severance Plan, the severance multiple will be set forth in a participation agreement between the Company and such executive (a “Participation Agreement”), but such multiple may not exceed 2.5. In the event the termination occurs within 12 months after or prior to and in contemplation of certain change in control events, Mr. Baur will receive three times his Average Compensation Amount, Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh will receive two times their respective Average Compensation Amountand, in the case of any other executive participating in the Severance Plan, such executive will receive his or her Average Compensation Amount multiplied by his or her change in control multiple, as set forth in a Participation Agreement. In addition, in the event that the executive’s employment is terminated by us without cause, or if the executive resigns for good reason, the executive will be entitled to receive a bonus equal to the pro-rata portion of the then current fiscal year annual variable compensation that otherwise would be payable to the executive based on actual performance. For a period of up to twenty-four months (or in the case of Mr. Eldh, for up to eighteen months) following the date of such a termination (or in the case of Mr. Baur, until he attains 65 years of age), the executives shall be entitled to participate in our medical and dental plans, with the executive paying the full premium charged for such coverage subject to the terms of the employment agreement, the employment letter, and/or the Severance Plan, as applicable.

If the executive’s employment is terminated for cause or if the executive voluntarily terminates his or her employment during the term of the agreement, other than for good reason, we will only be obligated to provide any accrued amounts payable on the executive’s annual base salary or any other amounts not previously paid, but earned, by the executive through the date of termination, and benefits under other plans in accordance with their terms. If the executive dies, becomes disabled, or retires during the term of the employment agreement, the employment letter, and/or the Severance Plan, as applicable, we will only be obligated to provide any accrued amounts payable on the executive’s annual base salary or any other amounts not previously paid, but earned, by the executive as of the date of termination, a bonus equal to the pro-rata portion of the then current fiscal year annual variable compensation that would otherwise be payable to the executive based on actual performance, and benefits under other plans in accordance with their terms.

If we do not renew the employment agreement, or enter into a new employment agreement with the same or similar terms after the end of the employment period, and Mr. Baur remains an employee of the Company in any capacity, Mr. Baur’s employment will be on an at-will basis, and Mr. Baur generally will be eligible to receive the same severance benefits set forth in the employment agreement.

In addition, each employment agreement, employment letter, and/or Severance Plan, as applicable, requires the executive not to, during the term of his or her employment and for a period of two years (or in the case of Mr. Eldh, for a period of 18 months) following the termination of such executive’s employment: (a) compete with the Company; (b) solicit certain customers or suppliers and certain prospective customers or suppliers of the Company; or (c) solicit employees to leave the Company. Each of the employment agreement, the employment letter, and/or the Severance Plan, as applicable, also requires the executive not to use or disclose our confidential information or trade secrets during the term of his or her employment and for a period of five years thereafter or for so long as the trade secrets remain protected. In addition, the Company and each executive agree not to disparage each other during the term of employment or for a period of five years thereafter. If an executive breaches or threatens to breach such restrictions on conduct, we may immediately cease any severance benefits or refuse such payment and shall be entitled to recover from any such executive any amounts previously paid as a severance benefit.

23

Post-Termination Restrictions and Compensation

The Compensation Committee believes that our NEOs should be provided with reasonable severance benefits in the event a NEO is terminated under certain circumstances. Severance benefits for NEOs reflect the fact that the NEO may not be able to find reasonably comparable employment within a reasonable period of time following termination. In addition, the Compensation Committee believes that certain post-termination benefits such as change in control payments will allow the NEOs to focus their time on potential transactions that may be beneficial to the Company, rather than have concern for their own employment prospects following a change in control. Severance benefits are provided under our employment agreements, employment letters and/or the Severance Plan, as applicable.

Non-Compete and Non-Solicitation Agreements

Our NEOs are obligated pursuant to their employment agreements, employment letters, and/or the Severance Plan, as applicable, not to compete with the Company for a period of two years (or in the case of Mr. Eldh, for a period of 18 months) following their termination of employment with the Company. These agreements also restrict the NEOs’ disclosure and use of confidential information to which they were exposed during their employment. In addition, the agreements provide for restrictions on the solicitation of suppliers, customers and employees of the Company for a period of twenty-four months (or in the case of Mr. Eldh, for a period of eighteen months) following termination of employment.

Severance and Change in Control Benefits

In the event of a termination of employment by the Company other than for cause, death, disability, retirement, the expiration of the employment agreement (in the case of Mr. Baur), or by a NEO for good reason, the NEO will be entitled to a severance payment, provided that the NEO is in, and remains in, compliance with the non-competition, confidentiality, non-solicitation and related covenants provided in his or her employment agreement or the Severance Plan. The amount of a severance payment varies based upon the NEO’s historic compensation amounts, up to two and a half times the Chief Executive Officer’s and one and one-half times the other NEO’s average annual base salary and variable compensation over the last three fiscal years prior to a termination. These potential payments are discussed in more detail under the caption “Employment Arrangements and Potential Payments Upon Certain Events” below.

Our NEOs’ employment agreements, employment letters, and/or the Severance Plan, as applicable, provide for severance in the event of certain termination in connection with a change of control. Such severance payments will be made only if a “double trigger” is met. That is, both a change in control and a termination of employment are required. This is discussed in more detail under the caption “Employment Arrangements and Potential Payments Upon Certain Events” below. The Compensation Committee believes this benefit is required to offer competitive benefits to attract and retain highly qualified executives.

Additional Compensation Matters

Risk Assessment of Compensation Policies and Practices

We have assessed our compensation programs for all employees and have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. We believe that our compensation program reflects an appropriate mix of compensation elements and balances current and long-term performance objectives, cash and equity compensation, and risks and rewards. During fiscal 2023, the Compensation Committee reviewed our compensation policies and practices for all employees, including our NEOs, particularly as they relate to risk management practices and risk-taking incentives. As part of its review, the Compensation Committee discussed with management the ways in which risk is effectively managed or mitigated as it relates to our compensation programs and policies.

24

Based on this review, the Compensation Committee believes that our compensation programs do not encourage excessive risk but instead encourage behaviors that support sustainable value creation. The following features of our executive incentive compensation program illustrate this point:

Our compensation program design provides a balanced mix of cash and equity and annual and long-term incentives that are designed to encourage strategies and actions that are in the Company’s and our shareholders’ long-term best interests. Equity awards such as service and performance-based restricted stock awards and restricted stock units reinforce our long-term performance perspective.

Our performance goals and objectives generally reflect a mix of corporate and other performance measures designed to promote progress towards both our annual and longer-term goals.

A significant component of each of our NEOs’ total direct compensation consists of long-term, equity-based incentive awards that are designed to encourage these NEOs to focus on sustained stock price appreciation.

Equity awards typically have vesting schedules of three or four years and, in some cases, have performance-based vesting components as well; thus, NEOs typically will always have unvested awards that could decrease significantly in value if our business is not well-managed for the long term.

Equity incentive awards are granted periodically, typically annually, during open window periods and under an established equity grant program.

The Compensation Committee believes that our overall compensation of our NEOs is at reasonable and sustainable levels, as determined by a review of historical analysis and a review of our economic positions and prospects, as well as the compensation offered by comparable companies.

The Compensation Committee retains discretion to reduce compensation based on corporate and individual performance and other factors.

Equity awards are subject to annual limitations on the number of shares that may be awarded during any year. The typical Company compensation structure has a threshold and maximum for cash bonuses.

The target levels under our annual cash bonus program are designed to be set at a level where achieving the target incentive compensation levels is not guaranteed and the achievement of such levels is rewarding to both the NEO and the shareholders.

NEO base salaries are consistent with the NEOs’ responsibilities so that they are not motivated to take excessive risks to achieve a reasonable level of financial security.

Our internal reporting system ensures a consistent and ongoing assessment of financial results used to determine payouts.

Our stock ownership policy sets out a minimum level of Company share ownership for our CEO so that he has personal wealth tied to the long-term success of Company and is therefore aligned with shareholders and imposes an equity retention requirement to facilitate attaining such levels of ownership.

We maintain a “claw-back policy,” which requires the reimbursement to the Company of any incentive compensation to executive and certain other officers, the payment of which was predicated upon the achievement of financial results that were subsequently the subject of a restatement caused by the recipient’s fraud or misconduct, or otherwise is required under applicable laws, rules, and regulations.

NEOs must obtain permission from the Legal Department before the purchase or sale of any shares, even during an open trading period.

Based on a combination of the above, we believe that (i) our NEOs and other employees are encouraged to manage the Company in a prudent manner because our compensation programs are aligned with our business strategy and risk profile, and (ii) our incentive programs are not designed to encourage our NEOs or other employees to take excessive risks or risks that are inconsistent with the Company’s and shareholders’ best interests. In addition, we have in place various controls and management processes that help mitigate the potential for incentive compensation plans to have a material adverse effect on the Company.

25

Impact of Accounting and Tax Treatment of Compensation

Section 162(m) of the Code generally sets a limit of $1 million on the amount of compensation that we may deduct for federal income tax purposes in any given year with respect to the compensation of each of our NEOs. For years beginning prior to January 1, 2018, the $1 million limitation did not apply to qualified performance-based compensation that satisfied certain requirements, including, among others, approval of the material terms of the plan by our shareholders. Effective for the years beginning on or after January 1, 2018, there is no exception for qualified performance-based compensation from the Section 162(m) limitation, although a transition rule applies in some circumstances for outstanding awards. We consider the impact of the deduction limit under Section 162(m) when developing and implementing our executive compensation programs. We intend to design our executive compensation arrangements to be consistent with the interests of our shareholders. We believe that it is important to preserve flexibility in administering compensation programs to promote various corporate goals. Accordingly, we have not adopted a policy that all compensation must qualify as deductible under Section 162(m) of the Internal Revenue Code. Some amounts paid under our compensation programs may not be deductible as the result of Section 162(m).

EXECUTIVE COMPENSATION

Compensation Tables

2023 Summary Compensation Table

The following table summarizes compensation paid to or accrued on behalf of the NEOs for the fiscal year ended June 30, 2023:


Name and Principal Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards ($)⁽¹⁾		Option Awards ($)⁽¹⁾		Non-Equity Incentive Plan Compensation ($)⁽²⁾		All Other Compensation ($)⁽³⁾		Total ($)
Michael L. Baur Chair and Chief Executive Officer		2023		875,000		—		3,229,036		—		1,246,875		306,573		5,657,484
		2022		875,000		—		2,331,320		—		2,123,625		317,739		5,647,684
		2021		765,625		—		1,262,036		2,428,626		2,033,063		148,463		6,637,813
Stephen T. Jones		2023		480,000		—		1,192,277		—		456,000		82,285		2,210,561
Senior Executive Vice President, Chief Financial Officer		2022		400,000		—		828,927		—		647,200		59,890		1,936,017
		2021		218,462		—		800,001		—		360,500		87,300		1,466,263
Shana C. Smith Senior Executive Vice President, Chief Legal Officer⁽⁴⁾		2023		136,923		—		375,023		—		100,726		103,621		716,293
Rachel A. Hayden		2023		361,000		—		358,671		—		206,150		48,830		974,651
Senior Executive Vice President, Chief Information Officer		2022		350,000		200,000		474,197		—		339,780		22,050		1,386,027
		2021		20,192		—		—		—		27,107		100,000		147,299
John C. Eldh		2023		625,000		—		1,862,920		—		890,150		77,366		3,455,436
Exiting President		2022		548,077		—		1,554,205		—		1,339,569		70,197		3,512,048
		2021		475,000		—		841,366		817,676		1,161,750		91,105		3,386,897

(1)

Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see Note 11 to our audited financial statements for the fiscal year ended June 30, 2023, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

(2)

Reflects the value of cash incentives earned pursuant to our annual incentive plan. For fiscal 2023, the cash incentives were awarded in August 2023. For fiscal 2022, the cash incentives under that program were awarded in August 2022. For fiscal 2021, the cash incentives under that program were awarded in August 2021. See the discussion in “Compensation Discussion and Analysis” herein.

(3)	See the “All Other Compensation” table below for additional information.

(4)	Ms. Smith joined the Company as Senior Executive Vice President and Chief Legal Officer in February 2023 and was designated an executive officer at that time.

26

2023 All Other Compensation Table

The following supplemental table summarizes all other compensation paid to our NEOs for the fiscal year ended June 30, 2023, which is included in the “All Other Compensation” column in the 2023 Summary Compensation Table above:


Name	Fiscal Year		Perquisites ($)⁽¹⁾		Company Contributions to Nonqualified Deferred Compensation Plan ($)⁽²⁾		Company Paid Disability Benefit ($)⁽³⁾		Company Contributions to Deferred Contribution Plans (401(k)) ($)		Other ($)⁽⁴⁾		Total ($)
Michael L. Baur		2023		7,197		200,000		66,406		9,900		23,070		306,573
		2022		6,573		200,000		77,600		9,950		23,616		317,739
		2021		4,085		42,361		77,601		800		23,616		148,463
Stephen T. Jones		2023		2,500		50,724		11,632		7,733		9,696		82,285
		2022		—		34,223		11,632		5,900		8,136		59,890
		2021		1,500		9,000		—		800		76,000		87,300
Shana C. Smith		2023		—		—		—		3,231		100,390		103,621
Rachel A. Hayden		2023		—		29,911		5,719		6,492		6,708		48,830
		2022		—		7,875		5,719		4,576		3,880		22,050
		2021		—		—		—		—		100,000		100,000
John C. Eldh		2023		1,500		22,500		30,367		9,583		13,416		77,366
		2022		2,500		22,500		29,943		9,742		5,512		70,197
		2021		—		22,500		—		800		67,805		91,105

(1)	Represents physical examination costs. For Mr. Jones, also includes physical examination costs for his spouse of $1,000.

(2)	The deferred compensation benefit is provided in connection with the individual’s employment agreement, which is discussed below under “Employment Arrangements and Potential Payments upon Certain Events.”

(3)	Includes supplemental long-term disability benefits.

(4)

Represents life insurance benefits for each of our NEOs. For Mr. Eldh, also includes relocation and related tax gross up benefits of $65,805 in fiscal 2021. For Mr. Jones, also includes relocation benefits of $75,000 in fiscal 2021. For Ms. Hayden, also includes relocation benefits of $100,000 in fiscal 2021. For Ms. Smith, also includes relocation benefits of $100,000 in fiscal 2023.

27

2023 Grants of Plan Based Awards Table

The following table summarizes awards granted to each of the NEOs during the fiscal year ended June 30, 2023 under the 2021 Plan:


			Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of Stock or Units (#)		Grant Date Fair Value of Stock and Option Awards ($)⁽¹⁾⁽²⁾
Name	Grant Date		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)				Grant Date Fair Value of Stock and Option Awards ($)⁽¹⁾⁽²⁾
Michael L. Baur		8/17/2022		656,250		1,312,500		2,625,000
		8/26/2022														56,699		1,624,993
		8/26/2022								14,175		28,350		56,700		28,350		791,532
		8/26/2022								14,175		28,350		56,700		28,350		812,511
Stephen T. Jones		8/17/2022		240,000		480,000		800,000
		8/26/2022														20,935		599,997
		8/26/2022								5,234		10,468		20,936		10,468		292,267
		8/26/2022								5,234		10,468		20,936		10,468		300,013
Shana C. Smith		2/9/2023		150,000		300,000		600,000
		6/1/2023														13,067		375,023
Rachel A. Hayden		8/17/2022		108,500		217,000		420,000
		8/26/2022														6,298		180,501
		8/26/2022								1,575		3,149		6,298		3,149		87,920
		8/26/2022								1,575		3,149		6,298		3,149		90,250
John C. Eldh		8/17/2022		468,500		937,000		1,655,834
		8/26/2022														32,711		937,497
		8/26/2022								8,178		16,356		32,712		16,356		456,660
		8/26/2022								8,178		16,356		32,712		16,356		468,763

(1)	See “Compensation Discussion and Analysis — Material Elements of our Compensation Programs — Annual Performance-Based and Service-Based Equity Awards,” above.

(2)

The grant date fair values of the stock awards and units are based on the closing prices of our common stock on NASDAQ on August 26, 2022. These equity awards were part of an equity grant granted on August 26, 2022, and the performance metrics for the performance-based portion of these awards were set at that time. These performance-and service-based equity awards were computed in accordance with FASB ASC Topic 718. See “Compensation Discussion and Analysis — Material Elements of our Compensation Program — Annual Performance-Based and Service-Based Equity Awards,” above.

28

2023 Outstanding Equity Awards at Fiscal Year End Table

The following table summarizes outstanding equity awards held by each of the NEOs as of June 30, 2023:


			Option Awards								Stock Awards
Name	Grant Date		Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)⁽¹⁾		Option Exercise Price ($)		Option Expiration Date		Grant Date		Number of Shares or Units of Stock that Have Not Vested (#)⁽¹⁾		Market Value of Shares or Units of Stock that Have Not Vested ($)⁽²⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)
Michael L. Baur
		12/6/2013		115,356		—		42.82		12/6/2023
		12/5/2014		164,093		—		41.13		12/5/2024
		12/4/2015		125,000		—		38.19		12/4/2025
		12/2/2016		77,339		—		37.00		12/2/2026
		12/8/2017		53,079		—		34.35		12/8/2027
		11/19/2020		89,712		44,187		24.68		11/19/2030
												11/19/2020		16,875		498,825		—		—
		11/24/2020		79,744		39,277		27.14		11/24/2030
												8/27/2021		23,406		691,881		—		—
												8/27/2021		—		—		53,147		1,571,019
												8/26/2022		56,699		1,676,022		—		—
												8/26/2022		—		—		56,700		1,676,052
Stephen T. Jones
												3/1/2021		9,070		268,109		—		—
												8/27/2021		8,322		245,998		—		—
												8/27/2021		—		—		18,897		558,601
												8/26/2022		20,935		618,839		—		—
												8/26/2022		—		—		20,936		618,868
Shana C. Smith
												6/1/2023		13,067		386,261		—		—
Rachel A. Hayden
												8/27/2021		3,641		107,628		—		—
												8/27/2021		—		—		8,269		244,438
												9/1/2021		3,974		117,471		—		—
												8/26/2022		6,298		186,169		—		—
												8/26/2022		—		—		6,298		186,169
John C. Eldh
		11/19/2020		59,808		29,458		24.68		11/19/2030
												11/19/2020		11,251		332,580		—		—
												8/27/2021		15,603		461,225		—		—
												8/27/2021		—		—		35,432		1,047,358
												8/26/2022		32,711		966,937		—		—
												8/26/2022		—		—		32,712		966,967

(1)	Stock options and restricted stock units granted prior to July 1, 2021 vest ratably over three years beginning on the grant date. Restricted stock units granted on or after July 1, 2021 vest ratably over four years beginning on the grant date.

(2)	The market value is based on achieving performance goals at the threshold performance level for the fiscal 2022 awards and maximum performance level for the fiscal 2023 awards.

29

2023 Option Exercises and Stock Vested Table

The following table summarizes the exercise of options and the vesting of stock awards by each of our NEOs during the fiscal year ended June 30, 2023:


Name	Option Awards				Restricted Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)
Michael L. Baur		—		—		35,208		1,101,971
Stephen T. Jones		—		—		11,843		366,718
Shana C. Smith		—		—		—		—
Rachel A. Hayden		—		—		3,200		96,143
John C. Eldh		—		—		30,508		933,670

2023 Nonqualified Deferred Compensation Table

The following table contains information concerning benefits earned by each of the NEOs under nonqualified deferred compensation plans during the fiscal year ended June 30, 2023:


Name	Executive Contributions in Last Fiscal Year ($)⁽¹⁾⁽²⁾		Registrant Contributions in Last Fiscal Year ($)⁽³⁾		Aggregate Earnings (Loss) in Last Fiscal Year ($)⁽⁴⁾		Aggregate Withdrawals/ Distributions ($)⁽⁴⁾		Aggregate Balance at Last Fiscal Year-End ($)
Michael L. Baur		400,000		200,000		1,224,523		—		13,052,583
Stephen T. Jones		654,480		50,724		56,041		—		919,629
Shana C. Smith		—		—		—		—		—
Rachel A. Hayden		99,702		29,911		20,342		—		180,387
John C. Eldh		75,000		22,500		33,381		—		296,541

(1)	Amounts represent voluntary deferrals of salary, bonus or a combination of both salary and bonus under our Nonqualified Deferred Compensation Plan. Contributions of deferred salary are reported as fiscal year 2023 income in the “Salary” column of the 2023 Summary Compensation Table.

(2)	Amounts reflect voluntary deferrals under our Nonqualified Deferred Compensation Plan associated with plan awards for fiscal year 2023 but paid in fiscal year 2024.

(3)	Amounts represent our matching contributions under our Nonqualified Deferred Compensation Plan. These amounts are reported as fiscal year 2023 income in the “All Other Compensation” column of the 2023 Summary Compensation Table.

(4)	Reflects cash flows for the fiscal year ended June 30, 2023.

Our Nonqualified Deferred Compensation Plan permits our NEOs to elect to defer a portion of their base salary and incentive bonus, and to receive matching contributions from the Company on a portion of the deferred amounts. Mr. Baur may defer up to 50% of his base compensation and 100% of his bonus, and we will provide a matching contribution of 50% of the amount deferred up to a calendar year limit of $200,000 in matching contributions. Each of Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh, may defer up to 50% of his or her base salary and 100% of his or her bonus, and we will provide a matching contribution of 30% on the first 15% of compensation deferred.

30

Deferred amounts are credited to each participant’s account, which are invested in one or more investment alternatives chosen by each participant from a range of mutual fund offerings and other investments available under the plan. Each participant’s account is adjusted to reflect the investment performance of the selected investments. Benefits under the plan are payable in cash and generally will be paid in either a lump sum or in annual installments over a certain term upon retirement, death or other termination of employment, or upon a change in control of the Company, as elected in advance by the participant. A participant may also elect to receive some or all of the deferred amounts and related earnings pursuant to an in-service distribution, subject to a minimum five-year deferral.

Employment Arrangements and Potential Payments Upon Certain Events

We have entered into an employment agreement with Mr. Baur that was effective July 1, 2017 and employment letters with Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh, effective December 14, 2020, February 21, 2023 and June 7, 2021, October 1, 2019, respectively. Mr. Baur, Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh also participate in the Severance Plan. Notwithstanding these employment arrangements, each of Mr. Baur, Mr. Jones, Ms. Smith, Ms. Hayden, and Mr. Eldh, has the right to voluntarily terminate his or her employment at any time. The employment arrangements set forth the general terms and conditions of Mr. Baur’s, Mr. Jones’, Ms. Smith’s, Ms. Hayden’s, and Mr. Eldh’s employment and provide for certain severance benefits upon the occurrence of certain events, which are stated as column headings in the tables below.

The material elements of compensation of each NEO as contained in their employment arrangements are described in the “Compensation Discussion and Analysis” section herein. The following sets forth in tabular format the incremental compensation that would be payable to such NEO in the event of his termination of employment under various scenarios, which we refer to as termination events. In accordance with SEC rules, the following discussion assumes:

That the termination event in question occurred on June 30, 2023, the last day of fiscal 2023; and

With respect to calculations based on our stock price, the reported closing price of our common stock on June 30, 2023, $29.56, was used.

The tables contained in this section do not include payments made to a NEO with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation, in favor of our executive officers and that are available generally to all salaried employees, such as our 401(k) plan. The actual amounts that would be paid upon a termination event can only be determined at the time of such executive officer’s termination. Due to the number of factors that affect the nature and amount of any compensation or benefits provided upon the termination events, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event and our stock price at such time.

Mr. Baur

General

Pursuant to the terms of Mr. Baur’s employment agreement, he was entitled to receive an annual base salary of $875,000 in fiscal 2023. Under his agreement, Mr. Baur is eligible to receive annual incentive cash and equity awards under our equity plans as described in the “Compensation Discussion and Analysis” section herein. Subject to the provisions of his employment agreement, Mr. Baur is obligated to comply with certain provisions relating to non-competition (for two years post termination), confidentiality and non-solicitation of customers and employees (for two years post termination) if his employment is terminated.

Benefits upon the Occurrence of Certain Termination Events

In addition to the amounts listed below, Mr. Baur is entitled to all accrued compensation, unreimbursed expenses and other benefits through the date of termination in the event of his termination.

31


	Before Change in Control Termination w/o Cause or for Good Reason ($)		After Change in Control Termination w/o Cause or for Good Reason ($)		Termination Due to Death ($)		Termination Due to Retirement ($)		Termination Due to Disability ($)		Voluntary Termination ($)
Severance		6,599,323		7,919,188		—		—		—		—
Pro Rata Variable Compensation⁽¹⁾		1,246,875		1,246,875		1,246,875		1,246,875		1,246,875		1,246,875
Equity Acceleration⁽²⁾		—		2,866,729		2,866,729		2,866,729		2,866,729		—
Performance-Based Equity Acceleration⁽³⁾		—		3,247,071		3,247,071		3,247,071		3,247,071		—
Medical Coverage⁽⁴⁾		450,000		450,000		450,000		450,000		450,000		—
Deferred Compensation		—		—		—		—		—		—
Disability⁽⁵⁾		—		—		—		—		437,500		—
TOTAL⁽⁶⁾		8,296,198		15,729,863		7,810,675		7,810,675		8,248,175		1,246,875

(1)

Mr. Baur’s employment agreement provides for the payment of a pro rata portion of the current fiscal year annual variable compensation that would otherwise be payable if Mr. Baur had continued employment through the end of the current fiscal year, based on actual performance. Amounts shown reflect the earned and unpaid portion of Mr. Baur’s fiscal 2023 annual variable compensation as of June 30, 2023.

(2)

Reflects (i) the difference between fair market value as of June 30, 2023 of the underlying shares over the exercise price of all unvested stock options, and (ii) the fair market value of all unearned and unvested non-performance-based restricted stock awards and restricted stock units. Vesting accelerates in the event of a change in control and termination by the Company without cause or by the grantee for good reason.

(3)	Reflects the fair market value as of June 30, 2023, of the shares of all unearned and unvested performance based restricted stock awards, the vesting of which accelerates with a change in control and termination by the Company without cause or by the grantee for good reason.

(4)	Reflects the cost of providing continued health and welfare benefits to the executive officer as provided in the executive officer’s employment arrangements.

(5)

The executive officer’s employment agreement provides that if his employment is terminated by reason of disability, he will continue to receive his salary during the period under which he continues to receive benefits under our short-term disability policy (assumed to be six months for purposes of this disclosure), less any benefits received under our short-term disability policy.

(6)	These amounts do not include the payout of Mr. Baur’s vested balance under our Nonqualified Deferred Compensation Plan, which is reflected and described in the Nonqualified Deferred Compensation Table herein.

Mr. Jones

General

Mr. Jones serves as our Senior Executive Vice President and Chief Financial Officer. At June 30, 2023, Mr. Jones received an annual base salary of $480,000. Mr. Jones is eligible to receive both annual incentive cash compensation and equity awards under the 2021 Plan. Subject to the provisions of his employment arrangements, Mr. Jones is obligated to comply with certain provisions relating to non-competition (for two years post termination), confidentiality and non-solicitation of customers and employees (for two years post termination) if his employment is terminated.

Benefits upon the Occurrence of Certain Termination Events

In addition to the amounts listed below, Mr. Jones is entitled to all accrued compensation, unreimbursed expenses and other benefits through the date of termination in the event of his termination.

32


	Before Change in Control Termination w/o Cause or for Good Reason ($)		After Change in Control Termination w/o Cause or for Good Reason ($)		Termination Due to Death ($)		Termination Due to Retirement ($)		Termination Due to Disability ($)		Voluntary Termination ($)
Severance		1,281,081		1,708,108		—		—		—		—
Pro Rata Variable Compensation⁽¹⁾		456,000		456,000		456,000		456,000		456,000		456,000
Equity Acceleration⁽²⁾		—		1,132,946		1,132,946		1,132,946		1,132,946		—
Performance-Based Equity Acceleration⁽³⁾		—		1,177,469		1,177,469		1,177,469		1,177,469		—
Medical Coverage⁽⁴⁾		31,094		31,094		31,094		31,094		31,094		—
Deferred Compensation		—		—		—		—		—		—
Disability		—		—		—		—		—		—
TOTAL⁽⁵⁾		1,768,175		4,505,617		2,797,509		2,797,509		2,797,509		456,000

(1)

Mr. Jones’ employment arrangements provide for the payment of a pro rata portion of the current fiscal year annual variable compensation that would otherwise be payable if Mr. Jones had continued employment through the end of the current fiscal year, based on actual performance. Amounts shown reflect the earned and unpaid portion of Mr. Jones fiscal 2023 annual variable compensation as of June 30, 2023.

(2)

Reflects (i) the difference between fair market value as of June 30, 2023 of the underlying shares over the exercise price of all unvested stock options, and (ii) the fair market value of all unearned and unvested non-performance-based restricted stock awards and restricted stock units. Vesting accelerates in the event of a change in control and termination by the Company without cause or by the grantee for good reason.

(3)	Reflects the fair market value as of June 30, 2023, of the shares of all unearned and unvested performance based restricted stock awards, the vesting of which accelerates with a change in control and termination by the Company without cause or by the grantee for good reason.

(4)	Reflects the cost of providing continued health and welfare benefits to the executive officer as provided in the executive officer’s employment arrangements.

(5)	These amounts do not include the payout of the executive officer’s vested balance under our Nonqualified Deferred Compensation Plan, which is reflected and described in the Nonqualified Deferred Compensation Table herein.

Ms. Smith

General

Ms. Smith serves as our Senior Executive Vice President and Chief Legal Officer. At June 30, 2023, Ms. Smith’s annual base salary was set at $400,000. Ms. Smith is eligible to receive both annual incentive cash compensation and equity awards under the 2021 Plan. Subject to the provisions of her employment arrangements, Ms. Smith is obligated to comply with certain provisions relating to non-competition (for two years post termination), confidentiality and non-solicitation of customers and employees (for two years post termination) if her employment is terminated.

Benefits upon the Occurrence of Certain Termination Events

In addition to the amounts listed below, Ms. Smith is entitled to all accrued compensation, unreimbursed expenses and other benefits through the date of termination in the event of her termination.

33


	Before Change in Control Termination w/o Cause or for Good Reason ($)		After Change in Control Termination w/o Cause or for Good Reason ($)		Termination Due to Death ($)		Termination Due to Retirement ($)		Termination Due to Disability ($)		Voluntary Termination ($)
Severance		356,474		475,298		—		—		—		—
Pro Rata Variable Compensation⁽¹⁾		100,726		100,726		100,726		100,726		100,726		100,726
Equity Acceleration⁽²⁾		—		386,261		386,261		386,261		386,261		—
Performance-Based Equity Acceleration⁽³⁾		—		—		—		—		—		—
Medical Coverage⁽⁴⁾		27,847		27,847		27,847		27,847		27,847		—
Deferred Compensation		—		—		—		—		—		—
Disability		—		—		—		—		—		—
TOTAL⁽⁵⁾		485,047		990,132		514,834		514,834		514,834		100,726

(1)

Ms. Smith’s employment agreement provides for the payment of a pro rata portion of the current fiscal year annual variable compensation that would otherwise be payable if Ms. Smith had continued employment through the end of the current fiscal year, based on actual performance. Amounts shown reflect the earned and unpaid portion of Ms. Smith’s fiscal 2023 annual variable compensation as of June 30, 2023.

(2)

Reflects (i) the difference between fair market value as of June 30, 2023 of the underlying shares over the exercise price of all unvested stock options, and (ii) the fair market value of all unearned and unvested non-performance-based restricted stock awards and restricted stock units. Vesting accelerates in the event of a change in control and termination by the Company without cause or by the grantee for good reason.

(3)	Reflects the fair market value as of June 30, 2023, of the shares of all unearned and unvested performance based restricted stock awards, the vesting of which accelerates with a change in control and termination by the Company without cause or by the grantee for good reason.

(4)	Reflects the cost of providing continued health and welfare benefits to the executive officer as provided in the executive officer’s employment arrangements.

(5)	These amounts do not include the payout of the executive officer’s vested balance under our Nonqualified Deferred Compensation Plan, which is reflected and described in the Nonqualified Deferred Compensation Table herein.

Ms. Hayden

General

Ms. Hayden serves as our Senior Executive Vice President and Chief Information Officer. At June 30, 2023, Ms. Hayden’s annual base salary was set at $361,000. Ms. Hayden is eligible to receive both annual incentive cash compensation and equity awards under the 2021 Plan. Subject to the provisions of her employment arrangements, Ms. Hayden is obligated to comply with certain provisions relating to non-competition (for two years post termination), confidentiality and non-solicitation of customers and employees (for two years post termination) if her employment is terminated.

Benefits upon the Occurrence of Certain Termination Events

In addition to the amounts listed below, Ms. Hayden is entitled to all accrued compensation, unreimbursed expenses and other benefits through the date of termination in the event of her termination.

34


	Before Change in Control Termination w/o Cause or for Good Reason ($)		After Change in Control Termination w/o Cause or for Good Reason ($)		Termination Due to Death ($)		Termination Due to Retirement ($)		Termination Due to Disability ($)		Voluntary Termination ($)
Severance		652,115		869,486		—		—		—		—
Pro Rata Variable Compensation⁽¹⁾		206,150		206,150		206,150		206,150		206,150		206,150
Equity Acceleration⁽²⁾		—		411,268		411,268		411,268		411,268		—
Performance-Based Equity Acceleration⁽³⁾		—		430,606		430,606		430,606		430,606		—
Medical Coverage⁽⁴⁾		46,107		46,107		46,107		46,107		46,107		—
Deferred Compensation		—		—		—		—		—		—
Disability		—		—		—		—		—		—
TOTAL⁽⁵⁾		904,372		1,963,617		1,094,131		1,094,131		1,094,131		206,150

(1)

Ms. Hayden’s employment agreement provides for the payment of a pro rata portion of the current fiscal year annual variable compensation that would otherwise be payable if Ms. Hayden had continued employment through the end of the current fiscal year, based on actual performance. Amounts shown reflect the earned and unpaid portion of Ms. Hayden’s fiscal 2023 annual variable compensation as of June 30, 2023.

(2)

Reflects (i) the difference between fair market value as of June 30, 2023 of the underlying shares over the exercise price of all unvested stock options, and (ii) the fair market value of all unearned and unvested non-performance-based restricted stock awards and restricted stock units. Vesting accelerates in the event of a change in control and termination by the Company without cause or by the grantee for good reason.

(3)	Reflects the fair market value as of June 30, 2023, of the shares of all unearned and unvested performance based restricted stock awards, the vesting of which accelerates with a change in control and termination by the Company without cause or by the grantee for good reason.

(4)	Reflects the cost of providing continued health and welfare benefits to the executive officer as provided in the executive officer’s employment arrangements.

(5)	These amounts do not include the payout of the executive officer’s vested balance under our Nonqualified Deferred Compensation Plan, which is reflected and described in the Nonqualified Deferred Compensation Table herein.

Mr. Eldh

On September 22, 2023, Mr. Eldh notified us of his decision to resign from his role as President of the Company, effective November 17, 2023. In connection with Mr. Eldh’s departure from the Company, we entered into a Separation Agreement and General Release with Mr. Eldh. The Separation Agreement and General Release modified and superseded his employment letter and the Severance Plan.

Pursuant to the terms of the Separation Agreement and General Release and in consideration of Mr. Eldh’s tenure and contributions to the Company, we agreed to provide Mr. Eldh with (i) a cash separation payment of $1,500,000 and (ii) a pro rata share of the cash incentive awards payable under the MIP for fiscal 2024 (the “Separation Payment”). Mr. Eldh’s receipt of the Separation Payment is conditioned on his continued compliance with the Separation Agreement and General Release, which includes a general release of claims against us, as well as confidentiality, non-disparagement, non-competition, non-solicitation and other customary provisions.

Pay Ratio Disclosure

Pursuant to Item 402(u) of Regulation S-K promulgated under the Exchange Act, we are required to disclose the median annual total compensation of all the Company’s employees, the total compensation of our CEO and the ratio of those two amounts. The pay ratio set forth below is a reasonable estimate and has been calculated in a manner consistent with SEC rules and based on the methodology described below. The SEC rules for identifying median employees allow companies to use a variety of methodologies. As a result, the pay ratio reported by others may not be comparable to our reported pay ratio. For the year ended June 30, 2023:

the total compensation for our median employee was $65,793;

the annual total compensation of Mr. Baur was $5,657,484; and

based on the information above, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees is 86 to 1.

35

During the year ended June 30, 2023, there were no changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure. Therefore, to calculate the pay ratio for the year ended June 30, 2023, we used the same median employee identified as of June 30, 2021. The methodology that we used and the material assumptions, adjustments and estimates that we used to identify the median and determine annual total compensation were as follows:

Employee population. As of June 30, 2021, the date we selected to identify our median employee, our employee population consisted of approximately 2,184 individuals, with 765 employees representing 35% of our total employee population located outside the United States and 1,419 employees representing 65% of our total employee population located in the United States.

Identification of Median. To identify the median of the annual total compensation of all our employees, we reviewed the total cash earnings of all employees for the twelve-month period ending on June 30, 2021 (the “reported compensation”). In making this calculation, we annualized the reported compensation of all our employees who were hired during the period. While we did not make any cost-of-living adjustments to the reported compensation in identifying the median employee, we did convert the reported compensation of our non-United States employees to United States dollars using the applicable conversion rate as of June 30, 2021. Using this methodology, we determined that our median employee was a full-time, salaried employee located in the United States.

COMPENSATION OF DIRECTORS

2023 Director Compensation Table

The following table provides information regarding the compensation paid to each of our non-employee directors for the fiscal year ended June 30, 2023.


Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)⁽¹⁾⁽⁴⁾		Total ($)
Peter C. Browning		165,000		151,898		316,898
Frank E. Emory, Jr.		85,000		151,898		236,898
Michael J. Grainger⁽²⁾		49,583		151,898		201,481
Charles A. Mathis		101,667		151,898		253,565
Vernon J. Nagel⁽³⁾		—		—		—
Dorothy F. Ramoneda		85,000		151,898		236,898
Jeffrey R. Rodek		85,000		151,898		236,898
Elizabeth O. Temple		100,000		151,898		251,898
Charles R. Whitchurch		93,333		151,898		245,231

⁽¹⁾

Amounts shown are the aggregate grant date fair value of restricted stock awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see Note 11 to our audited financial statements for the fiscal year ended June 30, 2023, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Each then-serving non-employee director received a restricted stock award on August 26, 2022 for 5,300 shares that vested in August 2023.

⁽²⁾	Mr. Grainger’s service as a director of the Company ended on January 26, 2023.

⁽³⁾	Mr. Nagel was appointed as a director of the Company effective August 15, 2023.

⁽⁴⁾	Each non-employee director (other than Mr. Nagel) had 5,300 shares of restricted stock awards outstanding as of June 30, 2023.

Cash Retainers for Fiscal 2023

Directors who are not our employees are paid an annual retainer of $85,000. An additional annual retainer of $70,000 is paid, as applicable, to a non-executive Chair or Lead Independent Director of the Board. An additional annual retainer of $25,000 is paid to the Chair of the Audit Committee, and an additional annual retainer of $15,000 is paid to the Chair of the Compensation Committee and the Chair of the Nominating and Corporate Governance Committee. Annual service for this purpose relates to the approximate 12-month periods between annual meetings of our shareholders. All directors are reimbursed for expenses incurred in connection with the performance of their services as directors as well as the cost of any director education. As of January 1, 2019, directors may elect to receive any portion of their cash fees in shares.

36

Equity Retainers for Fiscal 2023

Our non-employee directors receive an annual equity retainer under the 2021 Plan. In addition, non-employee directors also may be eligible to receive other awards under our 2021 Plan. As of January 1, 2019, each non-employee director can elect to receive the award in restricted stock awards or restricted stock units and can elect to defer his or her equity award under the deferred compensation plan.

The number of shares subject to a director’s annual equity award was determined by dividing $150,000by the equity award value per share on the grant date. The equity award value means the closing price of the common stock on the grant date. The date of grant of the annual equity awards for our non-employee directors takes place at the same time as the annual equity awards for our employees.

A person who first becomes a non-employee director on a date other than a regularly scheduled annual meeting of shareholders will receive a restricted stock award for a pro-rated number of shares of common stock. Restricted stock may not be transferred or sold until it has vested.

Restricted stock granted to directors under the 2021 Plan will vest in full on the day that is twelve months after the date of grant, or if earlier, the next annual shareholders’ meeting, provided the director is still in service as a director of the Company on the vesting date and has been in service since the Grant Date; or upon the earlier occurrence of (i) the director’s termination of service as a director by reason of death, disability or retirement or (ii) a change in control of the Company. If a director terminates service for any other reason, he or she will forfeit all of his or her right, title and interest in and to the unvested restricted stock as of the date of termination, unless the Board or the Compensation Committee determines otherwise.

Stock Ownership and Retention Policy

Under the equity ownership policy, non-employee directors are expected to hold five times their annual Board cash retainer in Company securities. The policy also incorporates a retention requirement by requiring such persons to retain 50% of the net shares resulting from the vesting of certain awards until the required ownership under the policy is met. As of the end of the 2023 fiscal year, all directors were in compliance with this policy.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Annual Report on Form 10-K for the year ended June 30, 2023 with management. Based upon such review, the related discussions and such other matters deemed relevant and appropriate to the Compensation Committee, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ended June 30, 2023 and in the Proxy Statement for the 2024 Annual Meeting of Shareholders.

Submitted by the Compensation Committee:

LOGO

Elizabeth O. Temple, Chair

Peter C. Browning

Frank E. Emory, Jr.

Charles A. Mathis

Vernon J. Nagel

Dorothy F. Ramoneda

Jeffrey R. Rodek

Charles R. Whitchurch

The Compensation Committee report does not constitute soliciting material and shall not be deemed to be filed or incorporated by reference into any other filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the Compensation Committee report by reference therein.

37

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the fiscal year ended June 30, 2023, directors Browning, Emory, Mathis, Ramoneda, Rodek, Temple and Whitchurch served on the Compensation Committee. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal 2023, or at any time prior thereto. During fiscal 2023, no member of the Compensation Committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K under the Exchange Act, and no executive officers served on the compensation committee (or equivalent) or the board of directors of another entity whose executive officer(s) served on our Board or Compensation Committee.

Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Shareholder Matters

Equity Compensation Plan Information

The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of June 30, 2023:


Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights			(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights			(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity Compensation Plans Approved by Shareholders 2021 Omnibus Incentive Compensation Plan		515,199	⁽¹⁾		—			1,271,375	⁽²⁾
2013 Long-Term Incentive Plan		1,401,296	⁽³⁾	$	32.76	⁽⁴⁾		—
Equity Compensation Plans Not Approved by Shareholders		—			—			—
TOTAL:		1,916,495		$	32.76			1,271,375

(1)

Includes awards granted under our ScanSource, Inc. 2021 Omnibus Incentive Compensation Plan (“2021 Plan”). The number of securities to be issued upon exercise of outstanding options, warrants and rights includes outstanding time-based restricted stock units of 398,553 and 116,646 shares subject to outstanding performance-based restricted stock units. The number of performance-based restricted stock units reflects the achievement of the maximum amount for awards outstanding as of June 30, 2023. The actual number of shares issued under our performance-based restricted stock unit awards will range between 0% and 200% of the target amount based on our performance relative to the applicable performance goals as determined by our Compensation Committee following the end of the performance period.

(2)

At June 30, 2023, approximately 1,271,375 shares remain available for issuance under the 2021 Plan, which allows for grants of incentive stock options, non-qualified stock options, stock appreciation rights, performance awards, restricted stock awards, restricted stock units, deferred stock units, dividend equivalent awards and other stock-based awards.

(3)

Includes awards granted under our ScanSource, Inc. 2013 Long Term Incentive Plan. The number of securities to be issued upon exercise of outstanding options, warrants and rights includes outstanding stock options of 1,026,671, time-based restricted stock units of 306,662 and 67,963 shares subject to outstanding performance-based restricted stock units. The number of performance-based restricted stock units reflects the achievement of the maximum amount for awards outstanding as of June 30, 2023. The actual number of shares issued under our performance-based restricted stock unit awards will range between 0% and 200% of the target amount based on our performance relative to the applicable performance goals as determined by our Compensation Committee following the end of the performance period.

(4)	The weighted-average exercise price does not reflect the shares that will be issued upon the payment of outstanding awards of time-based restricted stock units or performance-based restricted stock units, which have no exercise price.

38

Stock Ownership Information

Principal Shareholders and Beneficial Ownership

The following table sets forth certain information regarding the beneficial ownership of our common stock as of October 1, 2023 by the following: (i) each of our NEOs; (ii) each of our directors and director nominees; (iii) all of our directors and executive officers as a group; and (iv) each person known to own beneficially more than 5% of our common stock. Unless otherwise indicated, each person possesses sole voting and investment power with respect to the shares identified as beneficially owned. The address for each of our directors and executive officers is 6 Logue Court, Greenville, South Carolina 29615.



Name	Number of Shares Beneficially Owned			Percentage⁽¹⁾

BlackRock, Inc.⁽²⁾		5,018,791			20.11	%

The Vanguard Group, Inc.⁽³⁾		3,097,530			12.41	%

Dimensional Fund Advisors LP⁽⁴⁾		2,071,892			8.30	%

Victory Capital Management Inc.⁽⁵⁾		1,786,653			7.16	%

Pzena Investment Management, LLC⁽⁶⁾		1,541,255			6.17	%

Michael L. Baur⁽⁷⁾		835,804			3.24	%

Peter C. Browning		39,749			*

John C. Eldh⁽⁸⁾		138,120			*

Frank E. Emory, Jr.		20,359			*

Rachel A. Hayden⁽⁹⁾		5,495			*

Stephen T. Jones⁽¹⁰⁾		19,845			*

Charles A. Mathis		14,959			*

Vernon J. Nagel		4,759	*

Dorothy F. Ramoneda		23,459			*

Jeffrey R. Rodek		23,159			*

Shana C. Smith⁽¹¹⁾		—

Elizabeth O. Temple		29,059			*

Charles R. Whitchurch		27,559			*

All directors and executive officers as a group (13 persons)⁽¹²⁾		1,182,326			4.74	%

*	Amount represents less than 1.0%.

(1)

Applicable percentage of ownership is based upon 24,960,231 shares of our common stock outstanding on October 1, 2023. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares shown as beneficially owned. Shares of common stock subject to options currently exercisable or exercisable within 60 days are deemed outstanding for computing the shares and percentage ownership of the person holding such options, but are not deemed outstanding for computing the percentage ownership of any other person or entity. Except as otherwise indicated, the persons or entities listed in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

(2)

The information reported is based on a Schedule 13G/A filed with the SEC on January 23, 2023 reporting sole power of BlackRock, Inc. to vote or direct the vote of 4,835,415 shares and sole power to dispose or direct the disposition of 5,018,791 shares. The business address of BlackRock, Inc. is 55 East 52nd St., New York, NY 10055.

(3)

The information is reported based on a Schedule 13G/A filed with the SEC on February 9, 2023 reporting shared power of The Vanguard Group, Inc. (“Vanguard”) to vote or direct the vote of 23,208 shares, sole power of Vanguard to dispose or direct the disposition of 3,048,119 shares; and shared power of Vanguard to dispose or direct the disposition of 49,411 shares. The business address of Vanguard is 100 Vanguard Boulevard, Malvern, PA 19355.

(4)

The information is reported based on a Schedule 13G/A filed with the SEC on February 10, 2023 reporting the beneficial ownership of Dimensional Fund Advisors LP (“Dimensional”) and the sole power to vote or direct the vote of 2,039,184 shares and sole power to dispose or direct the disposition of 2,071,892 shares. Dimensional is an investment adviser registered under Section 203 of the Investment Advisors Act of 1940. All securities reported in this schedule are owned by the funds advised by Dimensional. Dimensional disclaims beneficial ownership of such securities. The business address of Dimensional is Building One, 6300 Bee Cave Road, Building One, Austin, TX 78746.

(5)

The information reported is based on a Schedule 13G/A filed with the SEC on January 31, 2023, reporting sole power of Victory Capital Management Inc. (“Victory”) to vote or direct the vote of 1,772,267 shares and sole power to dispose or direct the disposition of 1,786,653 shares. The business address of Victory is 4900 Tiedeman Road, 4th Floor, Brooklyn, OH 44144.

(6)

The information reported is based on a Schedule 13G/A filed with the SEC on January 25, 2023, reporting sole power of Pzena Investment Management, LLC (“Pzena”) to vote or direct the vote of 1,185,114 shares and sole power to dispose or direct the disposition of 1,541,255 shares. The business address of Pzena is 320 Park Avenue, 8th Floor, New York, NY 10022.

39

(7)

Includes 83,464 shares pursuant to options which will become exercisable by November 30, 2023. Includes 704,323 shares issuable pursuant to exercisable options. Does not include 117,615 shares underlying unvested restricted stock units that will not vest by November 30, 2023. Includes 16,875 restricted stock units that will vest by November 30, 2023.

(8)

Includes 29,458 shares pursuant to options which will become exercisable by November 30, 2023. Includes 59,808 shares issuable pursuant to exercisable options. Does not include 64,679 shares underlying unvested restricted stock units that will not vest by November 30, 2023. Includes 11,251 restricted stock units that will vest by November 30, 2023.

(9)	Does not include 17,023 shares underlying unvested restricted stock units that will not become exercisable by November 30, 2023.

(10)	Does not include 49,927 shares underlying unvested restricted stock units that will not become exercisable by November 30, 2023.

(11)	Does not include 19,729 shares underlying unvested restricted stock units that will not become exercisable by November 30, 2023.

(12)	Includes 764,131 shares issuable pursuant to exercisable options, 112,922 shares pursuant to which options which will become exercisable by November 30, 2023 and includes 16,875 shares underlying vested restricted stock units that will vest by November 30, 2023.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related-Party Transactions

The Audit Committee reviews all related party transactions (as defined by Item 404 of Regulation S-K) in accordance with NASDAQ listing standards. In addition, the charter of the Audit Committee requires the Audit Committee to review a summary of any director’s or officer’s related-party transactions and potential conflicts of interest on a yearly basis. The charter also requires the Audit Committee to review our conflict of interest policy (which is part of our Code of Conduct) and compliance with that policy on an annual basis.

We are not aware of any related-party transaction since the beginning of fiscal 2023 required to be reported under our policy or applicable SEC rules for which our policies and procedures did not require review or for which such policies and procedures were not followed.

There are no family relationships among the executive officers and directors, and there are no arrangements or understandings between any independent director or any other person pursuant to which that independent director was selected as a director.

Director Independence

In accordance with the listing standards of The NASDAQ Stock Market (“NASDAQ”) and our Corporate Governance Guidelines (the “Guidelines”), our Board consists of a majority of independent directors. The Board has determined that all members of the Board, other than Mr. Baur, meet the requirements for being “independent” as defined in the U.S. Securities and Exchange Commission (“SEC”) rules and regulations and NASDAQ listing standards.

The Board maintains three committees as follows: (1) an Audit Committee, (2) a Compensation Committee, and (3) a Nominating and Corporate Governance Committee. Each committee of the Board is comprised only of independent directors.

In addition, under our Corporate Governance Guidelines, executive officers are prohibited from serving as a director of another company that concurrently employs a director of the Company.

Item 14. Principal Accountant Fees and Services

Fees

As reflected in the table below, we incurred fees in fiscal 2023 and 2022 for services performed by Grant Thornton related to such periods.


	Year Ended June 30, 2023		Year Ended June 30, 2022
Audit Fees	$	1,895,927	$	1,670,906
Tax Fees		209,941		458,500

Total Fees	$	2,105,868	$	2,129,406

40

In the above table, in accordance with applicable SEC rules:

•

“Audit Fees” are fees for professional services for the audit of the consolidated financial statements included in our Form 10-K, the audit of internal control over financial reporting, the review of financial statements included in our Form 10-Qs, and services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements; and

“Tax Fees” are fees for professional services related to foreign tax compliance, tax advice and tax planning.

Audit Committee’s Pre-Approval Policies and Procedures

It is the policy of the Audit Committee to pre-approve all audit and permitted non-audit services proposed to be performed by our independent auditor. All audit and permitted non-audit services performed in fiscal 2023 were pre-approved by the Audit Committee. The process for such pre-approval is typically as follows: Audit Committee pre-approval is sought at one of the Audit Committee’s regularly scheduled meetings following the presentation of information at such meeting detailing the particular services proposed to be performed. The authority to pre-approve non-audit services may be delegated by the Audit Committee, pursuant to guidelines approved by the Audit Committee, to one or more members of the Audit Committee. None of the services described above were approved by the Audit Committee pursuant to the exception provided by the Exchange Act rules.

The Audit Committee has reviewed the non-audit services provided by Grant Thornton and has determined that the provision of such services is compatible with maintaining Grant Thornton’s independence for the period of time during which it has served as our independent auditor.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) and (a)(2): No financial statements or schedules are filed with this report on Form 10-K/A.

(a)(3) Exhibits. The list of exhibits filed as a part of this Annual Report on Form 10-K is set forth on the Exhibit Index and is incorporated by reference in this Item 15(a)(3).

(b) Exhibits. See Exhibit Index.

(c) Separate Financial Statements and Schedules. None.

41

Exhibit
Number

Description

Filed
herewith

Form

Exhibit

Filing
Date

2.1

Letter Agreement between Registrant and Intersmart Comércio Importação Exportação de Equipamentos Eletrônicos, S.A., dated August 14, 2014

8-K

10.1

8/15/2014

2.2

Share Purchase and Sale Agreement for Global Data Network LLP dated January 8, 2015

10-Q

2.1

2/3/2015

2.3

+

Sale and Purchase Agreement, dated November 12, 2020, by and among ScanSource Europe C.V. and SSE Services Holdings, LLC

8-K

2.1

11/13/2020

3.1

Second Amended and Restated Articles of Incorporation and Articles of Amendment

8-K

3.1

1/27/2022

3.2

Amended and Restated Bylaws

8-K

3.2

1/27/2022

4.1

Form of Common Stock Certificate

SB-2

4.1

2/7/1994

4.2

Description of Securities

10-K

4.2

8/22/2019

Executive Compensation Plans and Arrangements

10.1

ScanSource, Inc. Nonqualified Deferred Compensation Plan, as Amended and Restated Effective January 1, 2021

10-Q

10.3

5/10/2021

10.2

2013 Long-Term Incentive Plan

S-8

99

12/5/2013

10.3

ScanSource, Inc. 2021 Omnibus Incentive Compensation Plan

10-K

10.3

8/22/2023

10.4

Employee Stock Purchase Plan

S-8

99

12/5/2013

10.5

Founder’s Supplemental Executive Retirement Plan Agreement

10-Q

10.2

5/6/2011

10.6

Executive Severance Plan

8-K

10.3

6/21/2017

10.7

ScanSource, Inc. Management Incentive Plan

10-K

10.7

8/22/2023

10.8

Form of Restricted Stock Unit Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013

10-Q

10.1

2/6/2014

10.9

Form of Director Restricted Stock Unit Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013

10-Q

10.2

2/6/2014

10.10

Form of Incentive Stock Option Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013

10-Q

10.3

2/6/2014

42

Exhibit
Number

Description

Filed
herewith

Form

Exhibit

Filing
Date

10.11

Form of Non-Qualified Stock Option Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan for grants on or after December 5, 2013

10-Q

10.4

2/6/2014

10.12

Form of Other Stock Based Award Certificate under ScanSource, Inc. 2013 Long-Term Incentive Plan

10-K

10.33

8/28/2014

10.13

Form of Performance and Service - Based Restricted Stock Unit Award Certificate under ScanSource Inc. 2013 Long-Term Incentive Plan

10-K

10.34

8/28/2014

10.14

Form of Restricted Stock Unit Award (Performance and Service-Based) under the 2013 Long-Term Incentive Plan (2017 version)

8-K

10.1

12/8/2017

10.15

Form of Restricted Stock Unit Award (Service-Based) under the 2013 Long-Term Incentive Plan (2017 version)

8-K

10.2

12/8/2017

10.16

Form of Non-Qualified Stock Option Agreement under the 2013 Long-Term Incentive Plan (2017 version)

8-K

10.3

12/8/2017

10.17

Form of Incentive Stock Option Agreement under the 2013 Long-Term Incentive Plan (2017 version)

8-K

10.4

12/8/2017

10.18

Amended and Restated Employment Agreement, effective as of July 1, 2017, of Michael L. Baur

8-K

10.1

6/21/2017

10.19

Employment Letter, dated September 17, 2019 of John C. Eldh

10-K

10.26

8/24/2021

10.20

Severance Plan for John C. Eldh

10-K

10.27

8/24/2021

10.21

Separation Agreement and General Release, dated as of September 22, 2023, by and between the Company and John C. Eldh

8-K

10.1

9/26/2023

10.22

Employment Letter, dated November 16, 2020, of Stephen T. Jones

10-Q

10.1

2/2/2021

10.23

Employment Letter, dated February 9, 2023 of Shana C. Smith

X

10.24

Employment Letter, dated May 6, 2021 of Rachel A. Hayden

10-K

10.29

8/24/2021

10.25

ScanSource, Inc. 2022 Board of Directors Compensation Program

10-K

10.28

8/23/2022

10.26

First Amendment to Nonqualified Deferred Compensation Plan

8-K

10.1

11/30/2018

10.27

Form of Director Restricted Stock Award Certificate for grants on or after January 1, 2019 under the ScanSource, Inc. 2013 Long-Term Incentive Plan

8-K

10.2

11/30/2018

10.28

Form of Director Restricted Stock Unit Certificate for grants on or after January 1, 2019 under the ScanSource, Inc. 2013 Long-Term Incentive Plan

8-K

10.3

11/30/2018

10.29

Form of Director Restricted Stock Award Certificate under the ScanSource, Inc. 2013 Long-Term Incentive Plan

8-K

10.4

11/30/2018

10.30

Form of Restricted Stock Unit Award Certificate under the ScanSource, Inc. 2013 Long-Term Incentive Plan

8-K

10.5

11/30/2018

10.31

Form of Restricted Stock Unit Award Certificate under the ScanSource, Inc. 2013 Long-Term Incentive Plan

8-K

10.1

1/30/2020

43

Exhibit
Number

Description

Filed
herewith

Form

Exhibit

Filing
Date

10.32

Form of Restricted Stock Unit Award Certificate under the ScanSource, Inc. 2013 Long-Term Incentive Plan

10-K/A

10.37

10/26/2021

10.33

Form of Restricted Stock Unit Award Certificate under the ScanSource, Inc. 2013 Long-Term Incentive Plan

10-K

10.38

8/24/2021

10.34

Form of Employee Restricted Stock Award Certificate under the 2021 Omnibus Incentive Compensation Plan

8-K

10.2

1/27/2022

10.35

Form of Director Restricted Stock Award Certificate under the 2021 Omnibus Incentive Compensation Plan

8-K

10.3

1/27/2022

10.36

Form of Restricted Stock Award Certificate (Service-Based) under the 2021 Omnibus Incentive Compensation Plan

8-K

10.4

1/27/2022

10.37

Form of Director Restricted Stock Award Certificate (Service-Based) under the 2021 Omnibus Incentive Compensation Plan

8-K

10.5

1/27/2022

10.38

Form of Employee Restricted Stock Award Certificate (Performance and Service-Based) under the 2021 Omnibus Incentive Compensation Plan

8-K

10.6

1/27/2022

10.39

Form of Incentive Stock Option Award Certificate under the 2021 Omnibus Incentive Compensation Plan

8-K

10.7

1/27/2022

10.40

Form of Non-Qualified Stock Option Award Certificate under the 2021 Omnibus Incentive Compensation Plan

8-K

10.8

1/27/2022

10.41

Form of Director Stock Award Certificate (Stock) under the 2021 Omnibus Incentive Compensation Plan

8-K

10.9

1/27/2022

Bank Agreements

10.42

Third Amended and Restated Credit Agreement

8-K

10.1

9/29/2022

Other Agreements

10.43

+

Industrial Lease Agreement dated April 27, 2007 between Registrant and Industrial Developments International, Inc.

10-K

10.40

8/24/2021

10.44

+

Third Amendment to Industrial Lease Agreement between Registrant and Industrial Developments International, Inc.

10-K

10.41

8/24/2021

10.45

Fourth Amendment to Industrial Lease Agreement

10-Q

10.1

5/9/2019

10.46

+

Nonexclusive Value Added Distributor Agreement between ScanSource, Inc. and Cisco Systems, Inc.

10-K

10.38

8/22/2019

10.47

+

Amendment No. 3 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.39

8/22/2019

10.48

+

Amendment No. 5 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.40

8/22/2019

10.49

+

Amendment No. 6 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.41

8/22/2019

44

Exhibit
Number

Description

Filed
herewith

Form

Exhibit

Filing
Date

10.50

+

Amendment No. 7 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.42

8/22/2019

10.51

Amendment No. 9 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.43

8/22/2019

10.52

+

Amendment No. 11 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.44

8/22/2019

10.53

Amendment No. 12 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.45

8/22/2019

10.54

Amendment No. 13 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.46

8/22/2019

10.55

Amendment No. 14 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.47

8/22/2019

10.56

Amendment No. 16 to Cisco Nonexclusive Value Added Distributor Agreement

10-Q

10.1

5/10/2021

45

Exhibit
Number

Description

Filed
herewith

Form

Exhibit

Filing
Date

10.57

Amendment No. 17 to Cisco Nonexclusive Value Added Distributor Agreement

10-Q

10.2

5/10/2021

10.58

Amendment No. 18 to Cisco Nonexclusive Value Added Distributor Agreement

10-Q

10.1

5/9/2023

10.59

Amendment No. 19 to Cisco Nonexclusive Value Added Distributor Agreement

10-Q

10.2

5/9/2023

10.60

Amendment No. 20 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.58

8/22/2023

10.61

Amendment No. 21 to Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.59

8/22/2023

10.62

+

Addendum to Cisco Nonexclusive Value Added Distributor Agreement dated March 25, 2019

10-K

10.48

8/22/2019

10.63

+

Addendum to Cisco Nonexclusive Value Added Distributor Agreement dated March 2, 2015

10-K

10.49

8/22/2019

10.64

+

Affiliate Agreement under Cisco Nonexclusive Value Added Distributor Agreement

10-K

10.50

8/22/2019

10.65

+

Distribution Agreement with US Motorola (f/k/a Symbol Technologies, Inc.)

10-K

10.58

8/24/2021

10.66

+

Amendment to PartnerEmpower Distribution Agreement with Zebra

10-K

10.59

8/24/2021

10.67

Participation Agreement Relating to Distribution Agreement with Zebra

10-K

10.51

8/29/2016

10.68

+

Amendment to PartnerConnect EVM Distributor Agreement

10-K

10.61

8/24/2021

10.69

+

Addendum to Zebra PartnerConnect Distributor Agreement

10-Q

10.2

5/9/2019

10.70

Letter of Agreement to PartnerConnect EVM Distributor Agreement

10-K

10.55

8/31/2020

10.71

Addendum to Zebra PartnerConnect EVM Distributor Agreement

10-K

10.64

8/24/2021

21.1

Subsidiaries of the Company

10-K

21.1

8/22/2023

23.1

Consent of Grant Thornton LLP

10-K

23.1

8/22/2023

31.1

Certification of the Chief Executive Officer

X

31.2

Certification of the Chief Financial Officer

X

32.1

Certification of the Chief Executive Officer

10-K

32.1

8/22/2023

32.2

Certification of the Chief Financial Officer

10-K

32.2

8/22/2023

104

Cover page Inline XBRL File (formatted as Inline XBRL)

X

+	Portions of this exhibit have been omitted pursuant to Item 601(b) of Regulation S-K.

Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 000-26926.

46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

October 24, 2023


SCANSOURCE, INC.

By:		/s/ Michael L. Baur
		Michael L. Baur
		Chair and Chief Executive Officer

47


Title of each class:	Trading symbol:	Name of exchange on which registered:
Common stock, no par value	SCSC	NASDAQ Global Select Market


Class		Outstanding at October 15, 2023

Common Stock, no par value per share		24,966,931


Auditors Name: Grant Thornton LLP		Auditors Location: Columbia, South Carolina		Auditors Firm ID: PCAOB 248

Large accelerated filer

Smaller reporting company

Accelerated filer

Emerging growth company

Non-accelerated
filer