DEF 14A of Applied Optoelectronics, Inc., Mar 10, 2025

DEF 14A of Applied Optoelectronics, Inc.

Filed Mar 10, 2025 · FY20240001104659-25-022149

Open on EDGAR

  1. 2024 CEO Target Total Direct Compensation

    | Executive | Base Salary ($) | Target Annual Incentive ($) | 2024 Target Long-Term Incentive: PSUs ($) | 2024 Long-Term Incentive: RSUs ($) | Total ($) | | Chih-Hsiang (Thompson) Lin | 631,450 | 631,450 | 1,200,000 | 1,200,000 | 3,662,900 | | % of Total | 17.24% | 17.24% | 32.76% | 32.76% | 100% | | % of Long Term Incentive | | | 50% | 50% | |

  2. 2024 CEO Target Total Direct Compensation

    • 50% of CEO and Other NEO Long-Term Incentive Compensation is Performance-Based: Rigorous, Pre-Set Three-Year Financial Goals. In addition, 50% of our CEO’s and other NEOs’ target long-term incentive annual equity grant was in the form of performance restricted stock units (“PSUs”). The PSUs are based 50% on a relative TSR goal and 50% on the attainment of a stock price hurdle, both measured over a three-year performance period. The threshold levels of performance that must be met before any PSUs are earned are rigorous and challenging. The compensation committee views the inclusion of a metric that includes relative TSR as critical because it ties executive officer compensation with the creation of stockholder value and aligns the interests of executive officers with those of the Company and its stockholders. By measuring our stock performance relative to peers, it mitigates the impact of macroeconomic factors, both positive and negative, that affect the industry and/or stock price performance and are beyond the control of management. Additionally, it provides rewards that are more directly aligned with performance through different economic cycles. The other 50% of our CEO’s long-term incentive equity grant was in the form of restricted stock units (“RSUs”), which drives longer-term retention. The proportion of total compensation that was variable and at-risk and the other performance-based metrics further enhanced the link between pay and performance for the CEO and NEOs in 2024 and strengthened the alignment of the interests of the executive officers with those of our stockholders. • Short-Term Annual Cash Incentive: Rigorous, Pre-Set Annual Operational Goals. At the beginning of 2024, we established annual cash incentive plan targets for achieving certain operational milestones (“2024 Targets”) as outlined below. We believe the 2024 Targets were rigorous, aggressive and challenging, attainable only by demonstrated commitment and strong performance by the management team. The 2024 Targets took into account the relevant opportunities and risks, including the significant continuing headwinds we were facing. • Target 1 “Non-GAAP EBITDA”. Non-GAAP EBITDA is our GAAP operating income (loss) as defined under generally accepted account principles, excluding amortization of intangible assets, share-based 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. 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.”

  3. Elements of 2024 Compensation Program

    | Element | Fixed or Variable | Purpose | | Base Salary | Fixed | To attract and retain executives by offering fixed compensation that is competitive with market opportunities and that recognizes each executive’s position, role, responsibility and experience. | | Annual Cash Incentive | Variable | To attract and retain our executive officers consistent with market practice, to reward our executive officers for achievement of our corporate objectives, and to recognize outstanding individual contributions. | | Equity Awards | Variable | To align executives’ interests with the long-term interests of stockholders through equity-based compensation with performance-based and time-based vesting periods, and to promote the long-term retention of our executives and key management personnel. |

  4. Elements of 2024 Compensation Program

    | What We Do | What We Don’t Do | | ✓ Succession Planning. We review the risks associated with our key executive officer positions to ensure adequate succession plans are in place. | ✘ No Dividends or Dividend Equivalents Payable on Unvested Equity Awards. We do not pay dividends or dividend equivalents on unvested RSU awards. | | ✓ Clawback Policy and Stock Ownership Guidelines. We have a clawback policy and stock ownership guidelines for our executive officers to align their interest with those of our stockholders. | |

  5. Governance of Executive Compensation Program

    Governance of Executive Compensation Program Role of the Compensation Committee The compensation committee has the primary responsibility of developing, implementing and overseeing our executive and incentive compensation policies and programs. While the compensation committee reports its decisions to and takes into account the feedback of the Board, the compensation committee generally makes the final decisions regarding the compensation of our Chief Executive Officer and NEOs. Compensation-Setting Process The compensation committee determines the target total direct compensation opportunities for our executive officers, including our NEOs. In any given year, the compensation committee considers some or all of the following factors: • the financial and operational objectives established by the Board for the year at issue; • the anticipated role that officer will play in the coming year in achieving those objectives and the cost and difficulty of replacing that individual; • internal pay equity among our executive officers; • each individual executive officer’s skills, experience, qualifications and role relative to other similarly-situated executives at the companies in our compensation peer group; • the annual performance review for each executive officer, including contributions to our overall performance, demonstrated leadership and significant individual achievements; • our financial performance relative to our peers; • the compensation practices of our compensation peer group and the positioning of each executive officer’s compensation as compared to our peer group; and • the recommendations provided by our CEO with respect to the compensation of our other executive officers. These factors provide a framework, with no single factor being determinative in setting pay levels. Role of Our Officers The compensation committee relies on the observations and information provided by our executive officers. Our Chief Executive Officer provides evaluations of the performance of the other executive officers and makes recommendations regarding changes to executive officer compensation (other than for himself), the broader Company-wide cash incentive plan, and budgets for equity awards. Our Chief Financial Officer provides information and recommendations regarding our annual corporate operating budget and the related performance goals for our equity and cash incentive programs. Our in-house legal team, including our Chief Legal Officer, provides additional guidance as requested by the compensation committee. Finally, the benefits committee, consisting of members of our human resources, legal, and accounting departments, provides guidance to the compensation committee on broad-based health, welfare and retirement benefit plans and proposed changes to those plans. Our officers recuse themselves from discussions and recommendations regarding their own compensation. Role of Compensation Consultant The compensation committee retained Aon to assist with establishing an updated peer group for 2024 and to perform benchmarking for executive officer and director compensation. Aon reported directly to the compensation committee and to the compensation committee chair. While Aon coordinated with our management for data collection, including for obtaining the job descriptions for our executive officers, Aon did not provide any other compensation related services to us. The compensation committee evaluated Aon’s independence pursuant to the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”) and the relevant SEC rules and determined Aon was independent and that no conflict of interest arose as a result of the work performed by Aon. Competitive Positioning For purposes of comparing the compensation of our NEOs against the competitive market, the compensation committee periodically reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of companies within the industry with a similar size profile in terms of revenue and market capitalization. In the third quarter of 2023, the compensation committee assessed the appropriateness of the peer group to ensure it was aligned with the Company’s profile. Due to a significant increase in the Company’s valuation, as well as increases in revenues and headcount, the compensation committee approved changes to the peer group. The following criteria were used to establish the 2024 peer group: • Industry: Focus on companies within the communications equipment industry and other similar technology hardware companies, including semiconductors and systems software companies; • Market capitalization: Focus on companies with market capitalizations of $150 million to $1.2 billion based on the Company’s market capitalization of approximately $500 million at the time; represented a range of approximately 0.3x to 3x the average of the Company’s 30-day average and spot market capitalization; • Revenue: Focus on companies with revenues of $150 million to $900 million based on the Company’s 2023 actual and 2024 revenue projections; represented a range of approximately 0.4x to 2.5x 2024 revenue projections; and • Headcount: Focus on companies with headcounts of 1,100 employees to 6,750 employees based on the Company’s year-end 2023 and projected 2024 headcounts; represented a range of approximately 0.4x to 2.5x 2024 headcount projections. Using the criteria identified above, the compensation committee determined it was appropriate to make the following changes: • Removed Axcelis Technologies, CalAmp, Calix, Casa Systems, DSP Group, EMCORE, Inseego, KVH Industries, and NeoPhotonics; and • Added A10 Networks, ACM Research, CEVA, Clearfield, Comtech Telecommunications, indie Semiconductor, NETGEAR, OneSpan, Semtech, SkyWater Technology, and Vishay Precision Group. Accordingly, the compensation committee established the following compensation peer group for 2024 to assist with the determination of compensation for our executive officers (the “2024 Peer Group”):

  6. 2024 Compensation Decisions

    The preceding table shows the base salary changes that went into effect on March 1, 2024. Amounts for Mr. Yeh are paid in NTD (New Taiwan dollar) and RMB (Chinese Yuan Renminbi) but are disclosed in USD (United States dollar) based on the exchange rate in effect on December 31, 2024, and reflect the effect of fluctuations in the applicable exchange rates over time. The actual base salary amounts paid to our NEOs in 2024 are set forth in the “2024 Summary Compensation Table” below. 2024 Annual Cash Bonuses We use annual cash incentive opportunities to attract and retain our executive officers consistent with market practice, to reward our executive officers for achievement of our corporate objectives, and to recognize outstanding contributions. 2024 Target Annual Cash Bonus Opportunities In 2023, the compensation committee reduced target bonus opportunities as a percent of salary by approximately 8% due to the Company’s financial situation at that time. In establishing the target annual cash bonus opportunities for 2024, the compensation committee considered the market information provided by Aon as well as the Company’s financial situation and opportunities, in order to allow the Company to provide an adequate incentive to retain our critical leadership and align pay with performance. In light of these considerations and in positioning the cash bonuses for the executives closely to the 50th percentile compared to the 2024 Peer Group, the compensation committee went back to prior target percentages for the 2024 annual cash bonus as compared to 2023 to provide our NEOs with an appropriate level of reward for achievement of target performance of our critical corporate objectives described below and taking into account the Company’s much stronger financial position.

  7. 2024 Compensation Decisions

    | Named Executive Officer | Performance Below Threshold Level | Threshold Performance | Target Performance | Performance At or Above Maximum Level | | Chih-Hsiang (Thompson) Lin | 0 | 50% | 100% | 125% | | Stefan J. Murry | 0 | 25% | 50% | 62.5% | | Hung-Lun (Fred) Chang | 0 | 25% | 50% | 62.5% | | Shu-Hua (Joshua) Yeh | 0 | 25% | 50% | 62.5% | | David C. Kuo | 0 | 25% | 50% | 62.5% |

  8. 2024 Compensation Decisions

    | Named Executive Officer | Target Cash Bonus Opportunity | Achievement Percentage | Actual Cash Bonus Earned | | Chih-Hsiang (Thompson) Lin | $631,450 | 62.5% | $394,656 | | Stefan J. Murry | $212,154 | 62.5% | $132,596 | | Hung-Lun (Fred) Chang | $190,876 | 62.5% | $119,298 | | Shu-Hua (Joshua) Yeh | $175,846 | 62.5% | $109,905 | | David C. Kuo | $145,559 | 62.5% | $90,974 |

  9. 2024 Compensation Decisions

    (1) Amounts for Mr. Yeh are paid in NTD and RMB, and the disclosed amounts reflect the effect of the applicable exchange rates. Equity Incentive Compensation We use equity incentive compensation to attract and retain our talent, to motivate them to achieve our corporate goals and to align their financial incentives with stockholder returns. Awards for 2024 Performance In 2024, the compensation committee granted awards of RSUs to the NEOs, 50% of which vest quarterly over a four-year period based on continued service and the remaining 50% of which are earned with respect to a variable number of shares (between 0 and 200% of the target number of shares) based on the Company’s achievement of preset performance goals. The PSUs granted in 2024 will vest 50% based on achievement of specified levels of relative TSR vs. the 2024 Peer Group (as summarized in the section above entitled “Competitive Positioning”), and 50% based on achievement of a specified stock price hurdle for a three-year performance period ending April 29, 2027. The relative TSR payout and performance curve is summarized below. Payouts will be interpolated on a straight-line basis for performance in-between the percentiles noted below.

  10. 2024 Compensation Decisions

    | Performance Level | Percentile Rank vs. 2024 Peer Group | Earned Units as a % of Target | | Below Threshold | Below 25th percentile | 0% | | Threshold | 25th percentile | 25% | | Target | 50th percentile | 100% | | Maximum | 75th percentile | 200% | | Above Maximum | Above 75th percentile | 200% |

  11. 2024 Compensation Decisions

    | Performance Level | Stock Price | Earned Units as a % of Target | | Below Threshold | Below $11.98 | 0% | | Threshold | $13.87 (5% CAGR) | 25% | | Target | $15.95 (10% CAGR) | 100% | | Maximum | $20.70 (20% CAGR) | 200% | | Above Maximum | Above $20.70 (20% CAGR) | 200% |

  12. 2024 Compensation Decisions

    In establishing the appropriate level of equity to our executive officers, the compensation committee considered the market information provided by Aon as well as the Company’s 2024 financial outlook, opportunities, and Company performance. The goal is to provide an adequate equity incentive to motivate our critical leadership while aligning management interest with stockholder’s interests and expectations. In light of these considerations, the compensation committee made some slight increases in equity awards to our NEOs in 2024 as compared to 2023. In April 2024, the compensation committee approved the amounts for awards of RSUs to be granted to the NEOs pursuant to this approach as follows:

  13. 2024 Compensation Decisions

    | Named Executive Officer | Time-Vesting Restricted Stock Units* | Target Amount Performance-Vesting Restricted Stock Units* | Total Value at Target Performance | | Chih-Hsiang (Thompson) Lin | $1,200,000 | $1,200,000 | $2,400,000 | | Stefan J. Murry | $360,000 | $360,000 | $720,000 | | Hung-Lun (Fred) Chang | $325,000 | $325,000 | $650,000 | | Shu-Hua (Joshua) Yeh | $290,000 | $290,000 | $580,000 | | David C. Kuo | $250,000 | $250,000 | $500,000 |

  14. 2024 Compensation Decisions

    * Value was converted to number of shares on the applicable grant date based on the average closing price for the prior 30 trading-days. The compensation committee granted these RSUs to the NEOs under the 2021 Equity Incentive Plan (the “2021 Plan”). The number of shares and grant date fair values for these awards are disclosed in the “2024 Summary Compensation Table” and “2024 Grants of Plan-Based Awards” table below. Earned 2021-2024 Performance-Based Restricted Stock Units We had insufficient shares remaining in the pool under the 2021 Plan to cover the vesting of the PSUs for the 2021-2024 performance period that were earned at the maximum performance level. Accordingly, consistent with the terms of the 2021 Plan, we used the available share capacity under the 2021 Plan to settle the PSUs for the 2021-2024 performance period in shares and settled the remainder in cash. The amounts for the target 2021-2024 PSU opportunity as compared to the amounts earned are as follows:

  15. 2024 Compensation Decisions

    | Named Executive Officer | Target PSU Opportunity | Achievement Percentage | Actual PSUs Earned | | Chih-Hsiang (Thompson) Lin | 126,422 | 200% | 252,844 | | Stefan J. Murry | 44,247 | 200% | 88,495 | | Hung-Lun (Fred) Chang | 40,455 | 200% | 80,910 | | Shu-Hua (Joshua) Yeh | 40,455 | 200% | 80,910 | | David C. Kuo | 25,284 | 200% | 50,568 |

  16. Employment Agreements & Post-Employment Compensation

    Employment Agreements & Post-Employment Compensation We have entered into written employment agreements providing for at will employment with our CEO and each of our other NEOs. These employment agreements provided for their initial base salary and target bonus opportunity, as well as severance eligibility in the event of qualifying terminations of employment, including a termination of employment following a change of control of the Company (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention value following a change of control of the Company and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically 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.

  17. Other Compensation Policies and Practices

    Directors who are not also executive officers of the Company are required to hold shares of the Company’s common stock with a value equal to three times the amount of the annual retainer paid to directors. Stock ownership levels must be achieved by each executive officer and director within five years of the adoption of the guidelines or within five years of the individual’s first appointment as an executive officer or director, as applicable, whichever is later. Until the applicable stock ownership guideline is achieved, individuals are encouraged to retain an amount equal to 50% of the net shares obtained through the Company’s stock incentive plans. Stock that counts toward satisfaction of the guidelines includes: (i) shares of common stock owned directly by the executive officer or director; (ii) shares of common stock owned indirectly by the executive officer or director (e.g., by a spouse or other immediate family member residing in the same household or a trust for the benefit of the executive officer or director or his or her family), whether held individually or jointly; (iii) shares of common stock held under the Company’s employee stock purchase plan; (iv) shares granted under the Company’s long-term incentive plans; (v) shares represented by amounts invested in the Company’s 401(k) plan; and (vi) shares purchased in the open market. As of the date of this filing all of our executive officers and directors are in compliance with the guidelines. In February 2025, we amended our stock ownership and retention guidelines to make it clear that shares underlying unexercised stock options and unvested PSUs do not count toward the satisfaction of the minimum levels of stock ownership.

  18. 2024 Summary Compensation Table

    2024 Summary Compensation Table The following table presents summary information regarding the total compensation awarded to, earned by, and paid to our NEOs for services rendered during the fiscal years ended December 31, 2024, 2023 and 2022, as applicable for the years that the individuals were deemed to be NEOs.

  19. 2024 Summary Compensation Table

    | Name and Principal Position | Year | Salary(1) | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | | Chih-Hsiang (Thompson) Lin President and Chief Executive Officer | 2024 | $693,251 | $2,522,729 | $394,656 | $84,785 | $3,695,421 | | | 2023 | $596,747 | $4,816,714 | $594,334 | $41,675 | $6,049,470 | | | 2022 | $583,851 | $949,776 | $588,113 | $35,327 | $2,157,067 | | Stefan J. Murry Chief Financial Officer and Chief Strategy Officer | 2024 | $454,179 | $756,824 | $132,596 | $39,451 | $1,383,050 | | | 2023 | $400,564 | $1,685,852 | $199,684 | $37,611 | $2,323,710 | | | 2022 | $384,095 | $332,422 | $193,794 | $13,732 | $924,043 | | Hung-Lun (Fred) Chang Senior Vice President and North America General Manager | 2024 | $404,039 | $683,234 | $119,298 | $20,726 | $1,227,297 | | | 2023 | $350,169 | $1,517,260 | $179,657 | $17,156 | $2,064,242 | | | 2022 | $352,976 | $303,926 | $177,777 | $13,414 | $848,093 | | Shu-Hua (Joshua) Yeh(5) Senior Vice President and Asia General Manager | 2024 | $350,403 | $609,643 | $109,905 | $19,173 | $1,089,124 | | | 2023 | $334,706 | $1,300,510 | $174,445 | $17,013 | $1,826,674 | | | 2022 | $364,698 | $303,926 | $193,977 | $19,233 | $881,834 | | David C. Kuo Senior Vice President, Chief Legal and Compliance Officer and Secretary | 2024 | $311,736 | $525,566 | $90,974 | $14,353 | $942,629 | | | 2023 | $268,296 | $1,059,669 | $137,003 | $12,675 | $1,477,643 | | | 2022 | $258,686 | $189,952 | $130,453 | $12,898 | $591,989 |

  20. 2024 Summary Compensation Table

    (1) Includes amounts earned but deferred at the election of the NEOs under our 401(k) plan established under Section 401(k) of the Code. Includes the following amounts paid in the year indicated for unused Paid Time Off: Dr. Lin — $61,801 (2024), $32,952 (2023), $31,111 (2022); Dr. Murry — $29,871 (2024), $21,717 (2023), $19,820 (2022); Dr. Chang — $22,286 (2024), $9,318 (2023), $18,809 (2022); Mr. Yeh — $10,093 (2024); and Mr. Kuo — $20,619 (2024), $8,370 (2023), $13,473 (2022). (2) Amounts for 2024 consist of the aggregate grant date fair value of the time-based RSUs plus the PSUs assuming target performance, both as granted by the compensation committee in April 2024 (aggregate grant fair value assuming maximum performance: Dr. Lin — $5,045,485; Dr. Murry — $1,513,648; Dr. Chang — $1,366,467; Mr. Yeh — $1,219,313; and Mr. Kuo — $1,051,133). Amounts for 2023 consist of the aggregate grant date fair value of the time-based RSUs plus the PSUs assuming target performance, both as granted by the compensation committee in June 2023 (aggregate grant fair value assuming maximum performance: Dr. Lin — $7,978,637; Dr. Murry — $2,792,523; Dr. Chang — $2,513,268; Mr. Yeh — $2,154,226; and Mr. Kuo — $1,755,293). Amounts for 2022 consist of the aggregate grant date fair value of the time-based RSUs plus the PSUs assuming target performance, both as granted by the compensation committee in June 2022 (aggregate grant fair value assuming maximum performance: Dr. Lin — $1,504,462; Dr. Murry — $526,563; Dr. Chang — $481,427; Mr. Yeh — $481,427; and Mr. Kuo — $300,890). The amounts included for RSUs granted in 2024, 2023 and 2022 represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, disregarding the estimate of time-based forfeitures. The assumptions used in calculating the grant date fair value of the RSUs are reported in Note B to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”). The amounts reported in this column do not correspond to the actual economic value that may be received by the NEOs for the RSUs. See the “2024 Grants of Plan-Based Awards” table below for additional information. (3) Amounts in this column for 2024, 2023, and 2022 reflect amounts earned pursuant to our annual cash incentive plan based on the Company’s achievement of performance metrics and targets established by the compensation committee. The performance metrics and targets for these awards are described in the section titled “Compensation Discussion and Analysis” above. See the “2024 Grants of Plan-Based Awards” table below for additional information. Includes life insurance premiums paid by us for the benefit of the NEOs and the Company’s 401(k) matching contributions and mandatory foreign pension contribution made by the Company on behalf of the executive officers. The 401(k) matching contributions for each executive in the 2024 year were as follows: for each of Dr. Lin — $13,200, Dr. Murry — $13,200, Dr. Chang — $13,200 and Mr. Kuo — $13,200. The foreign pension contribution made by the Company on behalf of Mr. Yeh for 2024 was $3,366. The 401(k) matching contributions for each executive in the 2023 year were as follows: for each of Dr. Lin — $12,200, Dr. Murry — $12,200, Dr. Chang — $12,200 and Mr. Kuo — $11,535. The foreign pension contribution made by the Company on behalf of Mr. Yeh for 2023 was $3,366. The 401(k) matching contributions for each executive in the 2022 year were as follows: for each of Dr. Lin, Dr. Murry, Dr. Chang and Mr. Kuo — $8,550. The foreign pension contribution made by the Company on behalf of Mr. Yeh for 2022 was $3,888. In addition, the cost of personal use of a Company provided car for 2024 is included for Dr. Lin, with the amount determined based on the cost of the lease of the corporate car related to the proportion of mileage the car was driven for non-business trips, which was $31,438, and housing in Taiwan for 2024 while on business, which was $32,540. We also provided Mr. Yeh with a housing allowance for an apartment in Ningbo, China, given his responsibilities for managing operations in both China and Taiwan. The amount disclosed for Dr. Murry also includes $23,600 donated to a charitable organization for which Dr. Murry serves on the board of directors, consisting of $15,050 matching donation by the Company and $8,550 donated by Dr. Lin and other AOI employees, excluding Dr. Murry. The amounts shown for Mr. Yeh for 2024 have been converted from NTD (New Taiwan dollars) and RMB (Chinese Yuan Renminbi), as applicable, to USD (United States dollars), using the exchange rate on December 31, 2024, which was 32.80 NTD = $1 USD and 7.30 RMB = $1 USD, respectively. The amounts shown for Mr. Yeh for 2023 have been converted from NTD (New Taiwan dollars) and RMB (Chinese Yuan Renminbi), as applicable, to USD (United States dollars), using the exchange rate on December 29, 2023, which was 30.70 NTD = $1 USD and 7.11 RMB = $1 USD, respectively. The amounts shown for Mr. Yeh for 2022 have been converted from NTD (New Taiwan dollars) and RMB (Chinese Yuan Renminbi), as applicable, to USD (United States dollars), using the exchange rate on December 30, 2022, which was 30.64 NTD = $1 USD and 6.90 RMB = $1 USD, respectively. Changes in Mr. Yeh’s compensation from year-to-year as reported in this table reflect the effect of fluctuations in the applicable exchange rates.

  21. 2024 Grants of Plan-Based Awards

    2024 Grants of Plan-Based Awards The following table presents information about grants of plan-based awards made to our NEOs during the year ended December 31, 2024:

  22. 2024 Grants of Plan-Based Awards

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)(2) | | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | Named Executive Officer | Grant Date | Minimum ($) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Chih-Hsiang (Thompson) Lin | | 0 | 315,725 | 631,450 | 789,313 | | | | | | | | April 29, 2024 | | | | | | | | 94,786(5) | $968,713 | | | April 29, 2024 | | | | | 23,696 | 94,786 | 189,573 | | $1,554,016 | | Stefan J. Murry | | 0 | 106,077 | 212,154 | 265,193 | | | | | | | | April 29, 2024 | | | | | | | | 28,436(5) | $290,616 | | | April 29, 2024 | | | | | 7,109 | 28,436 | 56,872 | | $466,208 | | Hung-Lun (Fred) Chang | | 0 | 95,438 | 190,876 | 238,596 | | | | | | | | April 29, 2024 | | | | | | | | 25,671(5) | $262,358 | | | April 29, 2024 | | | | | 6,417 | 25,671 | 51,342 | | $420,876 | | Shu-Hua (Joshua) Yeh | | 0 | 87,923 | 175,846 | 219,808 | | | | | | | | April 29, 2024 | | | | | | | | 22,906(5) | $234,099 | | | April 29, 2024 | | | | | 5,726 | 22,906 | 45,813 | | $375,544 | | David C. Kuo | | 0 | 72,779 | 145,559 | 181,948 | | | | | | | | April 29, 2024 | | | | | | | | 19,747(5) | $201,814 | | | April 29, 2024 | | | | | 4,936 | 19,747 | 39,494 | | $323,752 |

  23. 2024 Grants of Plan-Based Awards

    (1) Amounts in these columns reflect cash bonus amounts that each NEO could have potentially earned under the annual cash incentive program for performance in 2024, based on the Company’s achievement of corporate performance metrics established by the compensation committee. For a description of the 2024 Cash Incentive Plan, see the section titled “Compensation Discussion and Analysis” above, and for a description of the cash bonus amounts that were earned and awarded under the annual cash incentive program, see the “2024 Summary Compensation Table” above. (2) The compensation committee selected two targets as the performance metrics for purposes of the cash incentive plan. See the section titled “Compensation Discussion and Analysis” above for how these metrics are defined. (3) Amounts reflect awards of PSUs that will vest following the end of a three-year performance period based on achievement of stock price appreciation and relative TSR performance goals. (4) Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, disregarding the estimate of time-based forfeitures. The grant date fair value of the PSUs is based on the target number of shares. Amounts reflect awards of time-based RSUs that will vest quarterly over a 4-year period commencing on January 21, 2024.

  24. Outstanding Equity Awards at 2024 Fiscal Year-End

    Outstanding Equity Awards at 2024 Fiscal Year-End The following table sets forth information regarding outstanding equity awards held by our NEOs as of December 31, 2024.

  25. Outstanding Equity Awards at 2024 Fiscal Year-End

    | Name | Grant Year | Stock Awards | | | | | | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Chih-Hsiang (Thompson) Lin | 2021 | 23,705 | $873,766 | — | — | | | 2021 | 11,344 | $418,140 | — | — | | | 2022 | 69,755 | $2,571,169 | 223,214 | $8,227,668 | | | 2022 | — | — | — | — | | | 2023 | 200,178 | $7,378,561 | 355,871 | $13,117,405 | | | 2023 | — | — | — | — | | | 2024 | 77,014 | $2,838,736 | 94,786 | $3,493,812 | | | 2024 | — | — | — | — | | Stefan J. Murry | 2021 | 8,297 | $305,827 | — | — | | | 2021 | 3,744 | $138,004 | — | — | | | 2022 | 24,415 | $899,937 | 78,125 | $2,879,688 | | | 2022 | — | — | — | — | | | 2023 | 70,063 | $2,582,522 | 124,555 | $4,591,097 | | | 2023 | | | | | | | 2024 | 23,105 | $851,650 | 28,436 | $1,048,151 | | | 2024 | | | — | — | | Hung-Lun (Fred) Chang | 2021 | 7,586 | $279,620 | — | — | | | 2021 | 3,739 | $137,820 | — | — | | | 2022 | 22,322 | $822,789 | 71,428 | $2,632,836 | | | 2022 | — | — | — | — | | | 2023 | 63,056 | $2,324,244 | 112,099 | $4,131,969 | | | 2023 | — | — | — | — | | | 2024 | 20,858 | $768,826 | 25,671 | $946,233 | | | 2024 | — | — | — | — | | Shu-Hua (Joshua) Yeh | 2021 | 7,586 | $279,620 | — | — | | | 2021 | 3,848 | $141,837 | — | — | | | 2022 | 22,322 | $822,789 | 71,428 | $2,632,836 | | | 2022 | — | — | — | — | | | 2023 | 54,048 | $1,992,209 | 96,085 | $3,541,693 | | | 2023 | — | — | — | — | | | 2024 | 18,612 | $686,038 | 22,906 | $844,315 | | | 2024 | — | — | — | — | | David C. Kuo | 2021 | 4,741 | $174,753 | — | — | | | 2021 | 2,337 | $86,142 | — | — | | | 2022 | 13,951 | $514,234 | 44,642 | $1,645,504 | | | 2022 | — | — | — | — | | | 2023 | 44,037 | $1,623,204 | 78,291 | $2,885,806 | | | 2023 | — | — | — | — | | | 2024 | 16,045 | $591,419 | 19,747 | $727,874 | | | 2024 | — | — | | |

  26. Outstanding Equity Awards at 2024 Fiscal Year-End

    The amounts reported reflect RSUs granted under our 2021 Plan, including RSUs granted in 2021, 2022, 2023 and 2024 in settlement of the awards approved by the compensation committee in the prior year that were denominated in dollars and to be settled in RSUs following achievement of the annual performance goals. The RSUs vest in substantially equal installments each quarter over a four-year period commencing in January of the specified calendar year, subject to continued service through each applicable vesting date. (2) The market value of the stock awards was calculated using the closing price of our common stock on December 31, 2024 (the last trading day of 2024) of $36.86. (3) The amounts reported reflect PSUs granted in the specified calendar year under our 2021 Plan based on achieving target performance goals, which would result in 100% of the subject shares vesting.

  27. 2024 Option Exercises and Stock Vested

    2024 Option Exercises and Stock Vested The following table sets forth information regarding stock options that were exercised and stock awards that vested for each of our NEOs during 2024.

  28. 2024 Option Exercises and Stock Vested

    | Named Executive Officer | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Vesting ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Chih-Hsiang (Thompson) Lin | — | — | 377,613 | $4,854,279 | | Stefan J. Murry | — | — | 130,367 | $1,674,295 | | Hung-Lun (Fred) Chang | — | — | 119,915 | $1,540,899 | | Shu-Hua (Joshua) Yeh | 1,000 | $6,941 | 116,051 | $1,487,394 | | David C. Kuo | — | — | 77,792 | $1,002,730 |

  29. 2024 Option Exercises and Stock Vested

    (1) The value realized on exercise of stock option awards was calculated using the closing price of our common stock on the day prior to the applicable exercise date for each option less the exercise price applicable to the option. (2) The value realized on vesting of stock awards was calculated using the closing price of our common stock on the applicable vesting date for each award.

  30. Potential Payments Upon Termination and Change of Control

    Potential Payments Upon Termination and Change of Control The following discussion reflects the payments and benefits that each of the NEOs would have been eligible to receive in the event of certain terminations, assuming that each such termination occurred on December 31, 2024. Employment Agreements We maintain employment agreements with Dr. Lin, Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo. The employment agreement with Dr. Lin provides that, if our Board terminates his employment for any reason other than Cause or if he resigns for Good Reason outside of the Change of Control Period, each as defined below, he will be entitled to receive (i) a payment equal to one year’s base salary as in effect immediately prior to termination, (ii) a payment equal to his full target bonus as in effect immediately prior to termination and (iii) $15,000, (which may be used for benefit continuation under COBRA or for any other purpose), which amounts will be paid periodically in installments over the 12 months following his separation from service. The employment agreements with Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo each provide that, if our Board terminates his employment for any reason other than Cause or if he resigns for Good Reason outside of the Change of Control Period (each as defined below), he will be entitled to receive (i) a payment equal to fifty percent (50%) of base salary as in effect immediately prior to termination, (ii) a payment equal to fifty percent (50%) of his full target bonus as in effect immediately prior to termination and (iii) $15,000, (which may be used for benefit continuation under COBRA or for any other purpose). The severance benefits that may arise as a result of a termination prior to a Change of Control will be paid in a lump sum. Dr. Lin, Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo, each have provisions in their employment agreements that provide for “double-trigger” severance. Specifically, if, within the Change of Control Period, the executive’s employment is terminated by the executive for Good Reason or by our Company other than for Cause, then in lieu of the severance benefits described in the preceding paragraph, the executive will be entitled to receive the following: (i) a lump sum payment equal to one year’s base salary as in effect immediately prior to termination; (ii) a lump sum payment equal to his full target bonus as in effect immediately prior to termination; (iii) $10,000 ($15,000 for Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo) which may be used for benefit continuation under COBRA or for any other purpose; and (iv) accelerated vesting of the executive’s awards granted under any incentive share plan or equity incentive plan of the Company, with all vested options becoming exercisable for an extended period following termination of employment. For Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo, the severance benefits that may arise as a result of termination during the Change of Control Period will be paid in a lump sum. For Dr. Lin, the severance benefits that may arise as a result of termination within one year following a Change of Control will be paid in a lump sum. Additionally, Dr. Lin’s employment agreement provides him with a potential tax gross-up payment to make him whole for any excise taxes that he would owe resulting from the application of the excise tax provisions under Section 280G of the Code. None of the other employment agreements with our executive officers provide any right to a tax gross-up. To receive the severance benefits described above, each executive must execute a release agreement in favor of the Company and its affiliates, which will include a reasonable agreement to cooperate for a period of six months following the employment termination date and a mutual non-disparagement clause. In consideration of the severance benefits described above, each executive has also agreed to be subject to a non-compete provision for a period of 12 months following his separation from service and to maintain the confidentiality of Company information. Each employment agreement generally defines “Cause” as, following written notice to the executive and the executive’s failure to cure such occurrence(s): (i) conviction or plea of nolo contendere to any felony offense or to a crime of moral turpitude; (ii) commission of willful misconduct or violation of law in connection with the performance of his duties, including (a) misappropriation of funds or property, (b) attempting to secure personally any profit in connection with any transaction entered into on behalf of our Company, or (c) making any material misrepresentation to our Board, our Company or its affiliates; (iii) material violation or failure to comply with our Company policy; (iv) material breach of the employment agreement; or (v) the willful and continued failure or neglect to substantially perform his duties with our Company. “Good Reason” is generally defined to include: (i) the executive’s assignment of duties inconsistent with his position or title; (ii) a reduction in his base compensation, except as part of an overall cost reduction program that affects all senior executives and does not disproportionately affect the executive; (iii) any purported termination of the executive by our Company other than for disability or Cause or a voluntary resignation initiated by the executive, except for a voluntary termination for Good Reason; (iv) failure of any successor entity to our Company to expressly assume the employment agreement; and (v) material breach by the Company of the employment agreement. Each employment agreement generally provides that a “Change of Control” is deemed to occur if: (i) individuals who constitute the Board of the Company on the date of the employment agreement (“Incumbent Directors”) cease to constitute at least a majority of our Board; provided, that any individual whose election or nomination for election by the stockholders was approved by a majority of the then Incumbent Directors shall be considered an Incumbent Director, with certain exceptions; or (ii) the stockholders of our Company approve (1) any merger, consolidation or recapitalization of our Company or any sale of substantially all of its assets where (a) the stockholders of our Company prior to the transaction do not, immediately thereafter, own at least 51% of both the equity and voting power of the surviving entity or (b) the Incumbent Directors at the time of the approval of the transaction would not immediately thereafter constitute a majority of the Board of the surviving entity, or (2) any plan of liquidation or dissolution of our Company. Under the employment agreements, the “Change of Control Period” means: with respect to Dr. Lin, one year after a Change of Control and with respect to Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo, within six months prior to a Change of Control or within one year after a Change of Control. Restricted Stock Unit Awards The time-based RSU awards we have granted to our NEOs provide for full acceleration upon a NEO’s termination of employment due to death or disability, as well as on a termination without cause or resignation for good cause during the Change of Control Period. In addition, if the acquiring entity in a Change of Control refuses to assume or replace outstanding time-based awards of any plan participant, that participant’s awards will become fully vested.

  31. Potential Payments Upon Termination and Change of Control

    The PSU awards we have granted to our NEOs provide for different acceleration treatment based on the applicable performance goal. The portion of the awards that vests based on achievement of the relative TSR goal: upon termination of employment due to death or disability, will vest in full at the target level; for termination of employment in connection with a change of control, will vest following the end of the performance period with respect to the greater of actual or target performance (based on unreduced performance goals); for retirement, will vest following the end of the performance period with respect to a pro-rated amount based on actual performance; and upon other termination of employment, will be forfeited. The portion of the award that vests based on achievement of the stock price goal: upon termination of employment due to death or disability, will vest in full to the extent already earned; for termination of employment in connection with a change of control, will vest immediately to the extent already earned, and will vest following the end of the performance period to the extent earned at that time; for retirement, will vest following the end of the performance period to the extent earned; and upon other termination of employment, will be forfeited. The following table reflects the payments and benefits that each of the NEOs would have been eligible to receive in the event of certain terminations or a Change of Control, assuming that each such event occurred on December 31, 2024. The acceleration of equity awards was calculated using the closing price of our common stock on December 31, 2024 (the last trading day of 2024) of $36.86. Amounts that could actually become due upon any termination cannot be known with certainty until the event occurs.

  32. Potential Payments Upon Termination and Change of Control

    | Name and Principal Position | Termination Without Cause or Resignation For Good Reason, Outside of the Change of Control Period ($)(1) | Termination Without Cause or Resignation For Good Reason, Within the Change of Control Period ($)(2) | Termination Due to Death or Disability ($)(3) | Termination Due to Retirement ($)(4) | Change of Control- Awards Not Assumed ($)(5) | | Chih-Hsiang (Thompson) Lin | | | | | | | Salary and Bonus | $1,262,900 | $1,262,900 | — | — | — | | Other Cash Payments | $15,000 | $10,000 | — | — | — | | Accelerated Equity | — | — | $51,338,742 | $36,184,330 | $50,264,702 | | Tax Gross-Up | — | $254,580 | — | — | | | Total | $1,277,900 | $1,527,480 | $51,338,742 | $36,184,330 | $50,264,702 | | Stefan J. Murry | | | | | | | Salary and Bonus | $318,231 | $591,001 | — | — | — | | Other Cash Payments | $15,000 | $15,000 | — | — | — | | Accelerated Equity | — | $18,996,188 | $17,556,344 | $12,470,424 | $17,248,365 | | Total | $333,231 | $19,602,189 | $17,556,344 | $12,470,424 | $17,248,365 | | Hung-Lun (Fred) Chang | | | | | | | Salary and Bonus | $286,315 | $531,727 | — | — | — | | Other Cash Payments | $15,000 | $15,000 | — | — | — | | Accelerated Equity | — | $17,216,334 | $15,899,895 | $11,304,301 | $15,637,600 | | Total | $301,315 | $17,763,061 | $15,899,895 | $11,304,301 | $15,637,600 | | Shu-Hua (Joshua) Yeh | | | | | | | Salary and Bonus | $258,078 | $514,958 | — | — | — | | Other Cash Payments | $15,000 | $15,000 | — | — | — | | Accelerated Equity | — | $15,767,239 | $14,450,800 | $10,436,818 | $14,359,311 | | Total | $273,078 | $16,297,197 | $14,450,800 | $10,436,818 | $14,359,311 | | David C. Kuo | | | | | | | Salary and Bonus | $218,338 | $405,485 | — | — | — | | Other Cash Payments | $15,000 | $15,000 | — | — | — | | Accelerated Equity | — | $11,701,336 | $10,878,566 | $7,604,396 | $10,594,148 | | Total | $233,338 | $12,121,821 | $10,878,566 | $7,604,396 | $10,594,148 |

  33. Potential Payments Upon Termination and Change of Control

    Amounts shown in this column reflect the payments and benefits that the NEOs would have been eligible to receive in the event of a termination without Cause or resignation for Good Reason on December 31, 2024 assuming that such date was not during the Change of Control Period. (2) Amounts shown in this column reflect the payments and benefits that the NEOs would have been eligible to receive in the event of a termination without Cause or resignation for Good Reason on December 31, 2024 assuming that such date was during the Change of Control Period, which (1) with respect to Dr. Lin, means one year after a Change of Control and (2) with respect to Dr. Murry, Dr. Chang, Mr. Yeh and Mr. Kuo, means within six months prior to a Change of Control or within one year after a Change of Control. Amounts in this column assume that PSUs will vest at the maximum level for the portion subject to the 2022, 2023 and 2024 stock price goals and relative TSR goals. (3) Amounts shown in this column reflect the payments and benefits that the NEOs would have been eligible to receive in the event of a termination due to death or disability on December 31, 2024, assuming that time-based RSUs vested in full (for death or disability) and assuming that PSUs will vest at the target level for the portion subject to the relative TSR goals and maximum for the portion subject to the 2022, 2023 and 2024 stock price goals. (4) Amounts shown in this column reflect the payments and benefits that the NEOs would have been eligible to receive in the event of retirement on December 31, 2024, assuming that PSUs will vest at the maximum level for the portion subject to the 2022, 2023 and 2024 stock price goals and relative TSR goals. Amounts shown in this column reflect the payments and benefits that the NEOs would have been eligible to receive in the event of a Change of Control transaction in which the successor company refused to assume or replace outstanding awards, resulting in the vesting in full of time-vesting RSUs and vesting of a prorated portion of PSUs based on actual results measured against the performance goals as of December 31, 2024. The amounts shown assume PSUs will vest at maximum for the portion subject to the 2022, 2023 and 2024 stock price goals and relative TSR goals.

  34. Pay vs. Performance

    Pay vs. Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The compensation committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

  35. Pay vs. Performance

    | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($) (Thousands) | Non-GAAP EBITDA(5) ($) (Thousands) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2024 | 3,695,421 | 33,286,022 | 1,160,525 | 9,517,874 | 310.27 | 123.89 | (194,415) | (30,216) | | 2023 | 6,049,470 | 38,409,964 | 1,923,067 | 11,430,710 | 162.63 | 102.83 | (56,048) | (364) | | 2022 | 2,157,067 | 456,994 | 811,490 | 311,906 | 15.91 | 109.42 | (66,397) | (18,501) | | 2021 | 3,659,008 | 2,725,556 | 1,251,466 | 988,822 | 43.27 | 169.88 | (54,162) | (8,413) | | 2020 | 2,476,271 | 2,242,974 | 899,965 | 870,688 | 71.63 | 137.07 | (58,452) | (3,212) |

  36. Pay vs. Performance

    Chih-Hsiang (Thompson) Lin was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below.

  37. Pay vs. Performance

    | 2020 – 2024 | | Stefan J. Murry | | Hung-Lun (Fred) Chang | | Shu-Hua (Joshua) Yeh | | David C. Kuo |

  38. Pay vs. Performance

    (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table.

  39. Pay vs. Performance

    | Year | Summary Compensation Table Total for PEO ($) | Exclusion of Stock Awards and Option Awards for PEO ($) | Inclusion of Equity Values for PEO ($) | Compensation Actually Paid to PEO ($) | | 2024 | 3,695,421 | (2,522,729) | 32,113,330 | 33,286,022 |

  40. Pay vs. Performance

    | Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2024 | 1,160,525 | (643,817) | 9,001,166 | 9,517,874 |

  41. Pay vs. Performance

    The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

  42. Pay vs. Performance

    | Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO ($) | Total – Inclusion of Equity Values for PEO 1 ($) | | 2024 | 9,599,146 | 25,761,959 | 238,772 | (3,486,547) | 32,113,330 |

  43. Pay vs. Performance

    | Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Total – Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2024 | 2,449,764 | 7,524,673 | 60,936 | (1,034,207) | 9,001,166 |

  44. Pay vs. Performance

    The Peer Group TSR set forth in this table utilizes the peer companies used for compensation benchmarking purposes, which are summarized in the Compensation Discussion and Analysis section of this Proxy Statement, for the years reflected in the table above but excludes companies that had ceased to be publicly traded as of the end of each fiscal year.

  45. Pay vs. Performance

    | 2020 | 2021 | 2022 – 2023 | 2024 | | Axcelis Technologies, Inc. ADTRAN Holdings, Inc. Alpha and Omega Semiconductor Limited Aviat Networks, Inc. Calix, Inc. CalAmp Corp. Casa Systems, Inc. Cohu, Inc. Digi International Inc. DSP Group, Inc. EMCORE Corporation Harmonic Inc. Inseego Corp. KVH Industries, Inc. NeoPhotonics Corporation Photronics, Inc. Ribbon Communications Inc. Xperi Inc. | Axcelis Technologies, Inc. ADTRAN Holdings, Inc. Alpha and Omega Semiconductor Limited Aviat Networks, Inc. Calix, Inc. CalAmp Corp. Casa Systems, Inc. Cohu, Inc. Digi International Inc. EMCORE Corporation Harmonic Inc. Inseego Corp. KVH Industries, Inc. NeoPhotonics Corporation Photronics, Inc. Ribbon Communications Inc. Xperi Inc. | Axcelis Technologies, Inc. ADTRAN Holdings, Inc. Alpha and Omega Semiconductor Limited Aviat Networks, Inc. Calix, Inc. CalAmp Corp. Casa Systems, Inc. Cohu, Inc. Digi International Inc. EMCORE Corporation Harmonic Inc. Inseego Corp. KVH Industries, Inc. Photronics, Inc. Ribbon Communications Inc. Xperi Inc. | A10 Networks, Inc. ADTRAN Holdings, Inc. ACM Research, Inc. Alpha and Omega Semiconductor Limited Aviat Networks, Inc. CEVA, Inc. Clearfield, Inc. Cohu, Inc. Comtech Telecommunications Digi International Inc. Harmonic Inc. indie Semiconductor, Inc. NETGEAR, Inc. OneSpan, Inc. Photronics, Inc. Ribbon Communications Inc. Semtech Corporation SkyWater Technology, Inc. Vishay Precision Group, Inc. Xperi Inc. |

  46. Pay vs. Performance

    The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the compensation benchmarking peers, respectively. Historical stock performance is not necessarily indicative of future stock performance. As described in the Compensation Discussion and Analysis section of this Proxy Statement, after the compensation committee reviewed our compensation peer group in the third quarter of 2023, the compensation committee updated the peer group criteria and the peer group companies that were used to assist with the determination of compensation for our executive officers for fiscal 2024. If the previous peer group had been used to calculate the peer group TSR, the amounts shown for 2024, 2023, 2022, 2021 and 2020 would have been $156.26, $178.88, $178.07, $215.25 and $142.68, respectively (5) We determined Non-GAAP EBITDA to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2024. A definition of Non-GAAP EBITDA is provided in the Compensation Discussion and Analysis section of this Proxy Statement, and a reconciliation of Non-GAAP EBITDA to GAAP is attached to this Proxy Statement as Appendix B. Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s and Peer Group’s cumulative TSR over the five most recently completed fiscal years. Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the five most recently completed fiscal years. Relationship Between PEOs and Other NEO Compensation Actually Paid and Non-GAAP EBITDA The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Non-GAAP EBITDA during the five most recently completed fiscal years. Tabular List of Most Important Financial Performance Measures The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2024 to Company performance. The measures in this table are not ranked.

  47. Pay vs. Performance

    | Non-GAAP EBITDA Relative TSR |

  48. 2024 Director Compensation

    2024 Director Compensation The table below sets forth, for each person who served as a non-employee director during 2024, information regarding compensation for service on our Board during 2024.

  49. 2024 Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | William H. Yeh | 79,368 | 149,995 | 229,363 | | Richard B. Black | 72,847 | 149,995 | 222,843 | | Min-Chu (Mike) Chen | 73,132 | 149,995 | 223,127 | | Cynthia (Cindy) DeLaney | 57,847 | 149,995 | 207,843 | | Che-Wei Lin | 55,132 | 149,995 | 205,127 | | Elizabeth Loboa | 52,847 | 149,995 | 202,843 |

  50. 2024 Director Compensation

    (1) Reflects the aggregate dollar amount of fees earned or paid in cash for services as a non-employee director, including committee membership fees, fees for serving as a committee chairperson, and board and committee meeting fees. Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of RSU awards granted in 2024. The assumptions used in calculating the grant date fair value of the RSUs are reported in Note B to the consolidated financial statements included in the Annual Report. The amounts reported in this column reflect the accounting cost for these RSUs and do not correspond to the actual economic value that may be received by the non-employee directors for the RSUs. As of December 31, 2024, each of the current non-employee directors held the following number of outstanding RSUs: Mr. Yeh, 8,242; Mr. Black, 8,242; Dr. Chen, 8,242; Ms. DeLaney, 8,242; Mr. Lin, 8,242 and Dr. Loboa, 8,242. In the first quarter of 2024, the compensation committee engaged Aon to assess the market competitiveness of the Company’s Board compensation program relative to the 2024 Peer Group. Based on an assessment of peer group practices and improved Company financial performance, the compensation committee approved changes to the 2024 Board compensation program. A summary of 2023 and 2024 Board compensation is summarized in the table below:

  51. 2024 Director Compensation

    | Board Compensation Element | 2023 | 2024 | | Annual Cash Retainer | $45,000 | $50,000 | | Audit Committee Compensation • Chair • Member | | | | | $20,000 | $20,000 | | | $10,000 | $10,000 | | Compensation Committee Compensation • Chair • Member | | | | | $15,000 | $15,500 | | | $7,000 | $8,000 | | Nominating and Corporate Governance Committee Compensation • Chair • Member | | | | | $10,000 | $10,000 | | | $5,000 | $5,000 | | Annual Equity Retainer | $115,000 | $150,000 |

  52. 2024 Director Compensation

    Cash retainers paid to non-employee directors were paid on a quarterly basis and pro-rated for time served, as appropriate. In addition, the number of equity awards granted to our non-employee directors for 2024 under the 2021 Plan was calculated by dividing $150,000 by the closing price of our common stock on the date of grant. All RSU awards granted to our non-employee directors vest in equal monthly amounts over the first twelve months following the date of grant, subject to early termination in accordance with their terms. The grant of RSU awards was made following the election of directors at the 2024 Annual Meeting with a grant date of June 21, 2024. Directors were also reimbursed for out-of-pocket expenses incurred in the course of their service on the Board or its committees. Dr. Lin did not receive any compensation from the Company other than compensation received for serving as an executive officer of the Company.