Company: AAOI
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001104659-25-036344
Chunk: 43

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 43
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 as a result of the transaction. We believe that having in place reasonable severance benefits, particularly for terminations in connection with a change of control, allow us to attract and retain highly qualified executive officers, permit those officers to focus on the best interests of the Company without undue concern for their own financial position in a change of control, and reduce conflict at the time of a termination through a pre-negotiated package conditioned on signing a release of claims. For detailed descriptions of the post-employment compensation arrangements we maintained with our NEOs for 2024, as well as an estimate of the potential payments and benefits payable under these arrangements, see “Potential Payments Upon Termination and Change of Control” below. Other Compensation Policies and Practices Policies on Hedging and Pledging Our insider trading policy prohibits hedgingand pledging of our equity securities by our employees, including our executive officers, and the non-employee members of the Board, including specifically as follows: • Short sales of our equity securities, as well as transactions in puts, calls, or other derivative securities involving our common stock, on an exchange or in any other organized market, by our employees, including our executive officers, and the non-employee members of the Board are prohibited; • Hedging or monetization transactions involving our equity securities, such as zero-cost collars and forward sale contracts, by our employees, including our executive officers, and the non-employee members of the Board are prohibited; and • Holding our equity securities in a margin account or pledging our securities as collateral for a loan by our employees, including our executive officers, and the non-employee members of the Board are prohibited. These policies are reasonably designed to promote compliance with insider trading laws, rules, and regulations. Clawback Policy In 2023, our Board adopted an Incentive Compensation Recovery Policy for executive officers in compliance with Section 10D of the Exchange Act, Rule 10D-1 promulgated under the Exchange Act and Nasdaq Listing Rule 5608, which requires us to recoup incentive compensation from our executive officers in the event we restate our financial statements. A copy of our Incentive Compensation Recovery Policy was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2023. Stock Ownership Guidelines To further align the interests of senior management and stockholders, we adopted stock ownership and retention guidelines in 2018 that provide for our executive officers and non-employee directors to own minimum amounts of the Company’s common