Company: AAOI
Filing Date: 2025-03-10
Form Type: DEF 14A
Source: 0001104659-25-022149
Chunk: 12

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-03-10
Form: DEF 14A
Chunk 12
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 vest only on the occurrence of a change in control that is accompanied by certain qualifying terminations of an individual’s employment. • 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. 6 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 these trends, fiber-optic networking technology is becoming essential in all four of our target markets, as it is often the only economical way to deliver the desired bandwidth. Equity compensation is an important part of our employment value proposition as we try to attract, retain and reward our high-performing employees and as we compete with many technology companies for a limited pool of talent during the rapid adoption of AI. Incentivizes, Retains and Motivates Talent . It is critical to our success that we incentivize, retain and motivate the best talent amidst a competitive labor market. Our equity-based compensation program has always been and will continue to be a key component in our ability to pay market-competitive compensation to our employees. We generally grant equity awards to key employees upon hire and on an annual basis thereafter, subject to satisfactory performance. Equity incentives link long-term performance and payouts through the value of our shares. These valuable aspects of equity compensation have made it a key element