Company: AAOI
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001104659-25-036344
Chunk: 32

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 32
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 compensation expense, non-recurring expenses (income), unrealized foreign exchange gain (loss), non-recurring tax expenses (benefits), expenses associated with discontinued products, non-cash expenses associated with discontinued products, depreciation expense, and interest income (expense). The 2024 Non-GAAP EBITDA target was Non-GAAP EBITDA losses to not exceed $2,000,000. In 2024, the Company did not reach the minimum to receive this Target 1 bonus. • Target 2 “New Customer Order” . The Company’s success and growth is dependent on the ability to diversify the customer base and obtain significant market share from new customers. “New Customers” is defined as any customer which the Company has received less than $500,000 in total revenue in fiscal year 2023. The New Customer Order target was to receive a total purchase order of $1,000,000 (“Minimum Order”) from each of the two New Customers in 2024. In 2024, the Company exceeded this target by obtaining the Minimum Order set forth under Target 2 from three New Customers, earning the maximum payout for Target 2.

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TABLE OF CONTENTS The compensation committee determined that the Company’s aggregate achievement under the two 2024 Targets for the short-term annual cash incentive plan was 62.5%. Additional details are provided below under the heading “2024 Annual Cash Bonuses.” Objectives of our Compensation Program We have designed our executive compensation program to achieve the following primary objectives: • Management Development and Continuity . Provide compensation and benefit levels that will attract, retain, motivate, and reward a highly talented team of executive officers within the context of responsible cost management; • Pay-for-Performance. Establish a direct link between our financial and operational results and strategic objectives and the compensation of our executive officers; and • Long-Term Focus on Stockholder Value . Align the interests and objectives of our executive officers with those of our stockholders by linking the long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance. 2024 Compensation Program Overview The compensation committee took the following key actions with respect to the compensation of our NEOs for 2024, mindful of the need to balance rigorous pay-for-performance with the need to retain our critical talent: • Base Salary — Approved annual base salary increases were set at a range between 7% to 12% (which percentage, solely with respect to Mr. Yeh, is calculated based on his base salary as den