Company: AAOI
Filing Date: 2025-03-10
Form Type: DEF 14A
Source: 0001104659-25-022149
Chunk: 13

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-03-10
Form: DEF 14A
Chunk 13
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 of our compensation strategy, and thus we grant equity compensation to multiple levels of our organization to provide opportunities to participate in ownership of the Company. Aligns with Our Pay-for-Performance Compensation Philosophy . We believe that equity-based compensation is fundamentally performance-based. As the value of our stock appreciates, our employees receive greater compensation at the same time that our stockholders are receiving a greater return on their investment. Conversely, if the stock price does not appreciate following the grant of an equity award, then our employees would receive lower compensation pursuant to their awards. Aligns Employee and Director Interests with Stockholder Interests . Providing our employees and non-employee directors with compensation in the form of equity incentives directly aligns the interests of those employees and non-employee directors with the interests of our stockholders. If the proposed amendment to the Amended and Restated 2021 Plan is approved by stockholders, we will be able to continue granting equity-based incentives that foster this alignment between our employees and non-employee directors and our stockholders. We believe that employees with a stake in the future success of our business are highly motivated to achieve long-term growth and are well-aligned with the interests of our other stockholders to increase stockholder value. Avoids Significant Cash Expenditures That Could Impact the Business. As noted above, the ability to award long-term incentives that align employees with stockholders is a critical tool to attract and retain key talent. The absence of an available equity pool requires the Company to grant cash-based long-term incentives, which can be significantly more volatile with respect to the expense and utilize our cash reserves. Additionally, a limited available equity pool may lead to reassessment of our current hiring practices and scaling back our current employee equity award granting practices, which in turn could lead to less growth and increased employee turnover. The Company strongly prefers to grant long-term incentives in equity to mitigate these concerns. Shares Available for Future Awards As of February 24, 2025, we had 130,661 shares remaining available for grants of new awards under the Amended and Restated 2021 Plan. As of February 24, 2025, 49,651,482 shares of our common stock were outstanding. On February 27, 2025, the closing price of our common stock on Nasdaq was $24.04. Summary of the Amended and Restated 2021 Plan The principal features of the Amended and Restated 2021 Plan are summarized below. This summary does not contain all the information about the Am