Company: AAOI
Filing Date: 2025-02-28
Form Type: PRE 14A
Source: 0001104659-25-019126
Chunk: 13

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-02-28
Form: PRE 14A
Chunk 13
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 Code that may be incurred in connection with awards under the Amended and Restated 2021 Plan.

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No liberal share recycling. Shares subject to an award will not be available for reuse if such shares are delivered or withheld to satisfy any tax withholding obligation, or not issued upon the settlement of an award or exercise of a stock option.

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No dividends on unearned awards . The Amended and Restated 2021 Plan provides that dividends will be subject to the same vesting and forfeiture conditions as the equity awards to which the dividends relate.

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Limit on non-employee director compensation . The Amended and Restated 2021 Plan limits the maximum compensation, including cash and equity, that may be paid to any individual for service as an outside director.

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No single trigger “change in control” vesting . Grants will not vest automatically upon a change in control, but rather will vest only on the occurrence of a change in control that is accompanied by certain qualifying terminations of an individual’s employment.

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No increase in shares available without stockholder approval . The Amended and Restated 2021 Plan prohibits any amendment that operates to increase the total number of shares that may be issued under the plan (other than customary adjustments in connection with certain corporate reorganizations or other events).

In addition, no amendments can be made without stockholder approval if any such amendment would require stockholder approval pursuant to applicable law or the applicable rules of the national securities exchange on which the Company’s shares are principally listed.

**The Size of Our Share Reserve Request Is Reasonable**

If Proposal No. 1 is approved, we will have 2,130,661 shares available for grant. We currently anticipate that this reserve will be a sufficient amount of equity for attracting, motivating and retaining employees, directors and consultants for approximately one to two years.

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**TABLE OF CONTENTS

Equity Compensation is a Critical Component of our Compensation Program**

Enables Us to Compete in the Market for Talent. There is significant competition for experienced individuals with the skills and credentials necessary to execute our strategy and advance our business. Our success depends on such key employees. To compete in a competitive market for talent within the fiber-optic networking industry, we believe that it is important to offer competitive compensation packages that include equity and cash components. Our internet data center market business is experiencing substantial growth as hyperscale data center operators build and upgrade their infrastructure to support artificial intelligence (“AI”) applications which are compute and bandwidth intensive. As a result of