# Exhibit 10.28

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|DATA I/O
CORPORATION | PERFORMANCE AWARD AGREEMENT
|-------------------- | ---------------------------

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|AWARDED TO
_________________________________________ | GRANT DATE
_________________________________________ | NUMBER OF PERFORMANCE 
AWARD SHARES
_________________________________________
|---------------------------------------------------- | ---------------------------------------------------- | -----------------------------------------------------------------------------

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|1. |  | The
Award.    Data I/O Corporation, a Washington corporation (Data I/O)
hereby grants to you as of the above Grant Date the right to receive the
above number of Performance Award Shares (the Performance Shares)
on the terms and conditions contained in this Performance Award Agreement
(this Agreement) and in the Data I/O Corporation 2000 Stock
Compensation Incentive Plan, as amended (the Plan).
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Performance
Period.    The performance period for purposes of determining                whether
the Performance Shares will be paid shall be Data I/Os fiscal                years
2006 through 2008 (the Performance Period).
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|3. |  | Performance
Goals.    The performance goal for purposes of determining                whether the
Performance Shares will be paid is: total revenue for the fiscal                year
ending December 31, 2008 equals or exceeds $34,694,935.
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|4. |  | Payment.   
The Performance Shares shall be paid if and to the extent that                the
Performance Goal is achieved, as determined by the Compensation Committee of
               Data I/Os Board of Directors (the Committee) in its sole
               discretion after the end of the Performance Period.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | Form
and Timing of Payment.    Any Performance Shares payable pursuant to                this
Agreement shall be paid in shares of common stock, no par value per share,
               of Data I/O (the Shares), with one Share issued for each
Performance                Share earned. Payment of the Performance Shares shall be made
as soon as                practicable after the Committee determines, in its sole
discretion after the end                of the Performance Period, whether and to what
extent the performance goals have                been achieved.
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|6. |  | Dividend
Equivalents.    You shall be entitled to receive a cash payment as                soon
as practicable after the end of the Performance Period equal to the amount
               of cash dividends that would have been paid during the Performance Period
on the                number of Shares earned and paid pursuant to Section 5 of this
Agreement, less                any applicable tax withholding amounts.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. |  | Restrictions
on Transfer.    The Performance Shares, and the right to                receive the
Shares and any dividend equivalent payments, may not be sold,                assigned,
transferred or pledged, other than by will or the laws of descent and
               distribution, and any such attempted transfer shall be void.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. |  | Forfeiture.   
In the event your employment is terminated during the                Performance Period,
the Performance Shares and your rights to the Shares shall                be immediately
and irrevocably forfeited, unless your termination is by                reason of:
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | death,
| | - |  | ------

| |  |  | disability,
| | - |  | -----------

| |  |  | retirement
that was approved in advance by the Committee ("Retirement"); or
| | - |  | ---------------------------------------------------------------------------

| |  |  | Change
of Control (as defined in the Plan).
| | - |  | -------------------------------------------

| | In
the event your employment is terminated prior to the end of the Performance Period by
reason of death, disability or Retirement, you or your estate shall be entitled to
receive a pro-rata payout of the Performance Shares after the end of the Performance
Period to the extent that the Performance Goal is achieved, as set forth herein and as
determined by the Committee in its sole discretion.In the event of a Change in
Control prior to the end of the Performance Period, you shall be entitled to receive the
full payment of the Performance Shares and such payment shall be made promptly following
the Change in Control.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. |  | No
Rights as Shareholder.    You shall not have any rights of a shareholder
               of Data I/O common stock unless and until the Shares are actually issued
to you                after the end of the Performance Period as provided in this
Agreement.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. |  | Income
Taxes.    You are liable for any federal and state income or other                taxes
applicable upon the receipt of the Shares or subsequent disposition of the
               Shares, and you acknowledge that you should consult with your own tax
advisor                regarding the applicable tax consequences. Upon issuance of the
Shares by Data                I/O, Data I/O will withhold from the Shares the number of
Shares having a fair                market value equal to the amount of all applicable
taxes required by Data I/O to                be withheld upon issuance of the Shares. In
the alternative, prior to the end of                the Performance Period, you may
notify Data I/O that you shall promptly pay to                Data I/O in cash, or in
previously acquired shares of Data I/O common stock                having a fair market
value equal to the amount of, all applicable taxes required                by Data I/O to
be withheld or collected upon such issuance of the Shares.
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|11. |  | Terms
and Conditions.    This Agreement does not guarantee your continued
               employment or alter the right of Data I/O or its affiliates to terminate
your                employment at any time. By signing below, you and Data I/O agree this
               performance award is granted under and governed by the terms and
conditions of                the Plan. In the event of any conflict between the
provisions of this Agreement                and the Plan, the provisions of the Plan
shall govern.
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|Employee:  _______________________________________
________________________________________________ | DATA I/O CORPORATION
By:  _______________________________________
Its:  _______________________________________
|--------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------

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