Core Scientific Inctx

Our named executive officers for the fiscal year ended December 31, 2023 were:

•Adam Sullivan, Chief Executive Officer;

•Michael Levitt, former President and Chief Executive Officer;

•Todd M. DuChene, Executive Vice President, Chief Legal and Administrative Officer, Chief Compliance Officer and Secretary; and

•Denise Sterling, Executive Vice President and Chief Financial Officer.

Summary Compensation Table

The following table provides information regarding total compensation awarded to, earned by, and paid to our named executive officers for services rendered to the Company in all capacities for the fiscal years ended December 31, 2023 and 2022.

(1) Salary amounts represent actual amounts earned and paid during the fiscal year.

(2) Amounts reported represent the aggregate grant date fair value of restricted stock units (“RSUs”) granted to the named executive officer during the fiscal year. The aggregate grant date fair value for 2021 is based upon an estimate of the per share price of Legacy Core common stock at the grant date. The aggregate grant date fair value for 2022, is based on the closing trading price of Core Scientific common stock on Nasdaq on the date of grant. In accordance with the Financial Accounting Standard Board Accounting Standards Codification, Topic 718, or ASC Topic 718, recognition of compensation cost was deferred until consummation of the Business Combination. Assumptions used in the calculation of these amounts are included in the notes to the Company’s audited consolidated financial statements included in this Annual Report on Form 10-K. Values shown do not reflect the actual economic value realized or realizable by the named executive officers.

(3) Amount represents annual bonus earned for fiscal 2023.

(4) Mr. Sullivan was appointed as the Company’s President in May 2023 and Chief Executive Officer in August 2023 in connection with Mr. Levitt’s resignation. The salary represents the pro rata share of his salary in 2023. Mr. Sullivan’s base salary for 2023 is $500,000.

(5) Amount includes rental expense for temporary housing.

(6) Mr. Levitt resigned as the Company’s Chief Executive Officer in August 2023. Mr. Levitt assumed the role of Executive Chairman of the Board of Directors of the Company at his $60,000 per annum salary.

(7) Mr. DuChene was President and Chief Legal Officer of the Company from November 2022 until May 2023. Prior to that time, beginning in April 2019, he served as Executive Vice President and General Counsel. In connection with Mr. Sullivan’s appointment to President in May 2023. Mr. DuChene ceased to serve as President and continued to serve as Chief Legal Officer while assuming his new role of Chief Administrative Officer. All other compensation for the year ended December 31, 2023 includes a $100 gift card.

(8) Amounts shown represent payments under the Key Employee Retention Program (the “KERP”) which provides retention awards to certain key employees, including certain of the Company’s named executive officers. Executive KERP amounts were paid upon adoption of the KERP, subject to possible clawback if the executive voluntarily terminates employment prior to vesting. The executive KERP awards will become vested upon the earlier of (a) twelve (12) months following execution of the KERP agreement and (b) the occurrence of a specified restructuring event, as defined in the KERP. If the Company terminates the executive’s employment for “cause” or the executive voluntarily terminates his or her employment with the Company without “good reason” (each as defined in the KERP) prior to the award becoming vested, the executive will forfeit the award and must repay the Company the gross (pre-tax) amount of such award.

(9) Ms. Sterling assumed the role of Chief Financial Officer of the Company in April 2022.

(10) Amounts shown represent $92,000 payment under Key Employee Incentive Program (the “KEIP”) for Ms. Sterling as well as a $100 gift card.

Narrative Disclosure to Summary Compensation Table

Annual Base Salary

The compensation of the Company’s named executive officers is generally determined and approved by the Compensation Committee of the Board of Directors. The base salaries of each of the named executive officers for the fiscal years ended December 31, 2023 and 2022 are listed in the table below.

(1) Mr. Sullivan was not one of our named executive officers for the year ended December 31, 2022, and was appointed as the Company’s Chief Executive Officer in August 2023.

(2) Mr. Levitt resigned as the Company’s Chief Executive Officer in August 2023 and assumed the role of Executive Chairman of the Board of Directors of the Company at his pre-resignation salary of $60,000 per annum.

(3) Mr. DuChene served as President and Chief Legal Officer of the Company from November 2022 to May 2023. In connection with Mr. Sullivan’s appointment to President in May 2023, Mr. DuChene continued to serve as the Company’s Chief Legal Officer while also assuming the new role of Chief Administrative Officer. Mr. DuChene’s base salary was increased in December 2022 in connection with his appointment as interim President.

(4) Ms. Sterling assumed the role of Chief Financial Officer of the Company in April 2022.

Annual Performance-Based Bonus Opportunity

Our compensation program does not generally provide for cash bonus payments to any executive officer. For the fiscal years ended December 31, 2023 and 2022, executive officers were not eligible to receive performance-based cash bonuses.

Equity-Based Incentive Awards

Our equity-based incentive awards are designed to align our interests and those of our stockholders with those of our executive officers, employees and consultants. The Board of Directors is responsible for approving equity-based grants.

To preserve cash and to incentivize exceptional performance from its executive officers, we have historically used RSUs as an incentive for long-term incentive compensation to our executive officers. Our executives generally are awarded an initial grant in the form of RSUs in connection with their commencement of employment. Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance. We may grant equity awards at such times as our Board of Directors determines appropriate.

Historically, all RSUs were granted pursuant to (i) the Core Scientific, Inc. (f/k/a MineCo Holdings, Inc.) 2018 Omnibus Incentive Plan (as amended, the “2018 Plan”), (ii) the Blockcap, Inc. Equity Incentive Plan, (iii) the Amended and Restated 2018 Equity Incentive Plan, and (iv) the Core Scientific 2021 Equity Incentive Plan (collectively, the “Equity Plans”). For additional information regarding the equity awards held by the named executive officers as of December 31, 2023, please see the section below titled “Outstanding Equity Awards at Fiscal Year-End of 2023.”

Following the Effective Date of the Plan of Reorganization, we no longer grant equity incentive awards under the Equity Plans, although we anticipate adopting a new equity-based long-term incentive plan within 90 days of the Effective Date, under which up to 10% of the New Common Stock issued and outstanding, on a fully diluted basis, on the date of the Effective Date may be issued to the Company’s management and employees..

Employment Agreements with Named Executive Officers

Adam Sullivan. Following the resignation of Mr. Levitt in August 2023, the Board of Directors appointed Mr. Sullivan to serve as interim Chief Executive Officer, effective as of August 2, 2023. Prior to his appointment as interim Chief Executive Officer, Mr. Sullivan served as our President. In connection with his appointment to President, in April 2023, the Company entered into an employment agreement with Mr. Sullivan. Mr. Sullivan’s employment agreement provides for an annual base salary of $500,000 and eligibility for an annual discretionary cash bonus award with a target bonus opportunity of no less than 100% of his base salary. For the year 2023, Mr. Sullivan will be guaranteed a minimum annual bonus amount of $500,000. The terms and criteria applicable to the receipt of the annual bonus will be determined by the Board of Directors. The employment agreement further provides that Mr. Sullivan will be entitled to participate in the Company’s equity incentive plan and receive an award as determined by the Board of Directors, subject to approval by the bankruptcy court overseeing the Company’s corporate reorganization under Chapter 11 of the United States Code. His employment agreement also provides for a severance payment equal to three months’ base salary if Mr. Sullivan’s employment is terminated by Core other than for Cause (as defined in his employment agreement). See also the section below titled “Potential Payments upon Termination or Change in Control.”

Michael Levitt. In October 2021, the Company entered into an amended and restated employment agreement with Mr. Levitt, pursuant to which Mr. Levitt served as our Chief Executive Officer until his resignation in August 2023. Mr. Levitt’s agreement provides for a base salary of $60,000 and an initial award of RSUs convertible into 8,400,000 shares of common stock, which was granted to Mr. Levitt in July 2021. In addition, pursuant to the terms of his employment agreement, Mr. Levitt was granted an award of 3,050,000 RSUs in connection with the Business Combination. Pursuant to a separation agreement between the Company and Mr. Levitt, Mr. Levitt agreed to serve as Executive Chairman of the Board of Directors of the Company until the Company’s emergence from Chapter 11 at his pre-resignation salary of $60,000 per annum.

Todd M. DuChene. In December 2018, the Company entered into a letter agreement with Mr. DuChene, effective upon his first day of employment on April 1, 2019. Mr. DuChene’s letter agreement provides for a base salary of $300,000 and an initial award of RSUs convertible into 1,000,000 shares of common stock. Mr. DuChene’s base salary was increased in December 2022 in connection with his appointment as interim President. His letter agreement also provides for a severance payment equal to three months’ base salary if Mr. DuChene’s employment is terminated by Core other than for Cause (as defined in his letter agreement). See also the section below titled “Potential Payments upon Termination or Change in Control.”

Denise Sterling. In March 2021, the Company entered into a letter agreement with Ms. Sterling. Ms. Sterling’s agreement provides for a base salary of $300,000 and an initial award of RSUs convertible into 480,045 shares of common stock, which was granted to Ms. Sterling in July 2021. Her agreement also provides for a severance payment equal to three months base salary if Ms. Sterling’s employment is terminated by Core other than for Cause (as defined in her letter agreement). See also the section below titled “Potential Payments upon Termination or Change in Control.”

Key Employee Retention Plan

On December 18, 2022, the Board of Directors approved and adopted the Core Scientific Key Employee Retention Plan (the “KERP”), which provides retention awards to certain key employees, including Mr. DuChene and Ms. Sterling. Mr. DuChene’s KERP award is $375,000 and Ms. Sterling’s KERP award is $50,000. Such amounts were paid to Mr. DuChene and Ms. Sterling, respectively, upon adoption of the KERP, and are subject to possible clawback if the executive voluntarily terminates his or her employment prior to vesting. Each KERP award will become vested upon the earlier of (a) twelve (12) months following execution of the KERP agreement and (b) the occurrence of a specified restructuring event, as defined in the KERP. If Mr. DuChene or Ms. Sterling is terminated for “cause” or voluntarily terminates his or her employment with the Company without “good reason” (each as defined in the KERP) prior to the award becoming vested, he or she will forfeit his or her respective award and must repay the Company the gross (pre-tax) amount of such award. Each of Mr. DuChene’s and Ms. Sterling’s KERP awards vested on January 23, 2024.

Other Compensation and Benefits

All of our named executive officers are eligible to participate in our employee benefit plans, including medical, dental, vision, life and accidental death and dismemberment insurance plans, in each case on the same basis as all of our other employees. We generally do not provide perquisites or personal benefits to the named executive officers.

We maintain a 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation up to certain limits under the Internal Revenue Code of 1986 (the “Code”), which are updated annually. We have the ability to make matching and discretionary contributions to the 401(k) plan. Currently, we do not make matching contributions or discretionary contributions to the 401(k) plan. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made and contributions and earnings on those amounts are not generally taxable to the employees until withdrawn or distributed from the 401(k) plan.

Potential Payments upon Termination or Change in Control

The Company has entered into certain agreements that will require Core to provide compensation to our named executive officers in the event of their termination of employment by Core.

In the event of a termination of employment without “cause” (as defined in their respective offer letter), and subject to the delivery to Core of a general release of claims, each of Messrs. Sullivan and DuChene and Ms. Sterling is entitled to three months of base salary.

Clawback Policy

We have adopted a clawback policy as required by the final Dodd-Frank Wall Street Reform and Consumer Protection Act and exchange listing standards. Our policy requires recoupment of excess incentive compensation paid to our executive officers if amounts were based on material noncompliance with any financial reporting requirement that causes an accounting restatement, without regard to any fault or misconduct.

Separation Agreement with Former Chief Executive Officer

On August 2, 2023, Mr. Levitt resigned from his role as Chief Executive Officer of the Company, effective as of August 2, 2023. The Company and Mr. Levitt entered into an agreement regarding Mr. Levitt’s separation from the Company (the “Separation Agreement”).

Pursuant to the Separation Agreement, the Company and Mr. Levitt agreed that (i) Mr. Levitt would assume the role of Executive Chairman of the Board of Directors of the Company at his then-current annual base salary rate of $60,000 and (ii) Mr. Levitt’s unvested restricted stock unit and stock option awards will remain outstanding and eligible to vest in accordance with their terms. Mr. Levitt was also entitled to any accrued but unpaid compensation prior to his August 2, 2023 separation date.

Outstanding Equity Awards at Fiscal Year-End of 2023

The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2023.

(1) Stock awards listed in this table and granted on or prior to January 19, 2022, the date on which the Business Combination was consummated represent RSUs and stock options (as indicated) granted pursuant to the 2018 Plan. Stock Awards granted after January 19, 2022, represent RSUs and other awards granted pursuant to the 2021 Plan.

(2) Based on the closing price per share of Core common stock of $1.45 as of December 29, 2023, as reported on the OTCBB.

(3) Mr. Levitt resigned from his role as Chief Executive Officer effective August 2, 2023, and assumed the role of Executive Chairman of the Board of Directors of the Company. Mr. Levitt’s unvested RSUs and stock options were terminated in accordance with the terms of the Plan of Reorganization.

(4) One fourth of these RSUs vest on each of the first four anniversaries of the vesting commencement date, provided that the recipient remains in continuous service with us through each vesting date.

(5) Represents the unvested stock options from a grant of 8,000,573 granted on January 19, 2022. The original grant on January 19, 2022, was for 5,000,000 stock options having an exercise price of $16.24 per share exercisable 25% on each of the first four anniversaries of the vesting commencement date in connection with the Business Combination. As a result of the Business Combination, each stock option was converted into an option to purchase shares New Core Common Stock based on an exchange ratio of 1.6001528688, increasing this grant to 8,000,764 stock options at a price of $10.15 with the same vesting schedule.

2023 Compensation of Non-Employee Directors

The following table provides information regarding compensation earned by non-employee directors who served during the fiscal year ended December 31, 2023, none of whom are currently directors of the Company having been removed as directors as of January 23, 2024, as a result of the Company’s Plan of Reorganization.

(1) No RSUs were granted to any non-employee director during the fiscal year ended December 31, 2023, under the 2021 Plan. As of December 31, 2023, Mr. Youngblood held 400,038 RSUs, of which 100,010 RSUs were vested. Mr. Youngblood’s remaining RSUs vest 25% per year in each of January 2024, 2025 and 2026. As of December 31, 2023, Mr. Hollingsworth held 405,959 restricted stock awards (“RSAs”) and 300,028 RSUs (collectively “RSUs”). 100,010 of Mr. Hollingsworth’s RSUs were vested as of December 31, 2023. The remaining RSUs vest 25% per year in each of September 2024 and 2025. Messrs. Minnis and Goldman do not currently hold any RSUs. All unvested equity awards held by the non-employee directors at the Company’s emergence from Chapter 11 were cancelled pursuant to the Company’s Plan of Reorganization.

During fiscal year 2023, no RSUs were granted to any non-employee director, and non-employee director compensation was as follows:

1. Annual Board Service Retainer:

a. All Eligible Directors: $300,000

b. Lead Director: $25,000

2. Annual Committee Chair Service Retainer:

a. Chair of the Audit Committee: $20,000

b. Chair of the Compensation Committee: $20,000

c. Chair of the Nominating and Corporate Governance Committee: $20,000

d. Chair of the Special Committee: $25,000

3. Annual Committee Member Service Retainer (not applicable to Committee Chairs):

a. Member of the Audit Committee: $10,000

b. Member of the Compensation Committee: $10,000

c. Member of the Nominating and Corporate Governance Committee: $10,000.

For fiscal year 2024, each non-employee director is eligible to receive an annual grant of RSUs having a fair market value of $150,000 and an annual cash retainer for their service on our Board of Directors and committees as follows. In addition, we reimburse reasonable expenses incurred by our non-employee directors in connection with attendance at Board of Directors or committee meetings.

1. Annual Board Service Retainer:

a. All Eligible Directors: $100,000

b. Chair of the Board: $50,000

2. Annual Committee Chair Service Retainer:

a. Chair of the Audit Committee: $25,000

b. Chair of the Compensation Committee: $25,000

c. Chair of the Nominating and Corporate Governance Committee: $10,000

Limitation on Increases in Non-Employee Director Compensation

Directors are entitled to compensation for their services on the Board of Directors or any committee thereof as may be approved by the Board of Directors, or a committee thereof to which the Board of Directors has delegated such responsibility and authority, including, if so approved, by resolutions of the Board of Directors or a committee thereof to which the Board of Directors has delegated such responsibility and authority, including, without limitation, a fixed sum and reimbursement of expenses incurred, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors, as well as reimbursement for other reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof; provided that prior to the four year anniversary of the Effective Date, (i) any increases in cash compensation in the aggregate of more than twenty-five percent (25.0%) of the cash compensation as of the effective date of the Plan of Reorganization shall require the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class and (ii) any increases in equity compensation shall require the affirmative vote of at least two Class 3 directors.

Compensation Committee Interlocks and Insider Participation

Our Compensation Committee currently consists of three directors, each of whom is a non-employee director: Mr. Rozov (Chair), Mr. Booth and Mr. Weiss. During 2023, our Compensation Committee consisted of Messrs. Youngblood (Chair) and Minnis, neither of whom was an officer or employee of the Company, was formerly an officer of the Company or had any relationship requiring disclosure by us under Item 404 of Regulation S-K. No interlocking relationship as described in Item 407(e)(4) of Regulation S-K exists between any of our executive officers or Compensation Committee members, on the one hand, and the executive officers or compensation committee members of any other entity, on the other hand, nor has any such interlocking relationship existed in the past.