<SEC-DOCUMENT>0001683168-17-000433.txt : 20170223
<SEC-HEADER>0001683168-17-000433.hdr.sgml : 20170223
<ACCEPTANCE-DATETIME>20170223164906
ACCESSION NUMBER:		0001683168-17-000433
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20170221
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
FILED AS OF DATE:		20170223
DATE AS OF CHANGE:		20170223

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			APPLIED OPTOELECTRONICS, INC.
		CENTRAL INDEX KEY:			0001158114
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				760533927
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-36083
		FILM NUMBER:		17633218

	BUSINESS ADDRESS:	
		STREET 1:		13139 JESS PIRTLE BLVD
		CITY:			SUGAR LAND
		STATE:			TX
		ZIP:			77478
		BUSINESS PHONE:		281-295-1800

	MAIL ADDRESS:	
		STREET 1:		13139 JESS PIRTLE BLVD
		CITY:			SUGAR LAND
		STATE:			TX
		ZIP:			77478

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	APPLIED OPTOELECTRONICS INC
		DATE OF NAME CHANGE:	20010824
</SEC-HEADER>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">UNITED
STATES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Washington, DC 20549</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">______________</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">FORM 8-K</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported):
February 21, 2017</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 12pt"><B>Applied
Optoelectronics, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Exact name of Registrant as specified
in its charter)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
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    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD STYLE="width: 34%; text-align: center"><FONT STYLE="font-size: 10pt"><B>001-36083</B></FONT></TD>
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font-size: 10pt"><B>76-0533927</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>(State or incorporation)</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>(Commission File Number)</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>(I.R.S. Employer Identification No.)</B></FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>13139 Jess Pirtle Blvd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Sugar Land, TX 77478</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(address of principal executive offices
and zip code)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(281) 295-1800</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Registrant&rsquo;s telephone number,
including area code)</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&#9744;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><FONT STYLE="font-size: 10pt"><B>ITEM 5.02.</B></FONT></TD><TD><FONT STYLE="color: black"><B>Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers</B></FONT><B><FONT STYLE="font-size: 10pt">.</FONT></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">(e)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Cash Bonus Awards for Named Executive
Officers</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
February&nbsp;21, 2017</FONT>, the Compensation Committee (the &ldquo;Committee&rdquo;) of the Board of Directors (the &ldquo;Board&rdquo;)
<FONT STYLE="font-family: Times New Roman, Times, Serif">of Applied Optoelectronics, Inc. (the &ldquo;Company&rdquo;) </FONT>approved
cash bonus payments pursuant to the Applied Optoelectronics, Inc. Executive and Key Employee Bonus Plan and performance goals established
by the Compensation Committee for fiscal year 2016 (collectively, the &ldquo;2016 cash incentive plan&rdquo;). The Committee approved
the following plan-based cash bonuses for the Company&rsquo;s principal executive officer, principal financial officer and one
other named executive officer under the 2016 cash incentive plan:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 42%; border: Black 1pt solid; text-align: center"><B>Title</B></TD>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Name</B></TD>
    <TD STYLE="width: 25%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2016 Bonus Amount</B></TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">President and Chief Executive Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Chih-Hsiang (Thompson) Lin</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$332,567</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Chief Financial Officer and Chief Strategy Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Stefan J. Murry</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$137,316</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Senior Vice President of Optical Module Division</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Hung-Lun (Fred) Chang</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$116,512</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Such bonuses are expected to be paid consistent
with, and at the same time as, other bonuses paid under the Company&rsquo;s 2016 cash incentive plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>2017 Salaries</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February&nbsp;21,
2017, the Committee approved increased base salaries for the Company&rsquo;s principal executive officer, principal financial officer
and one other named executive officer, each effective as of March 1, 2017 as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 34%; border: Black 1pt solid; text-align: center"><B>Title</B></TD>
    <TD STYLE="width: 28%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Name</B></TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Prior Base Salary</B></TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>2017 Base Salary</B></TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">President and Chief Executive Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Chih-Hsiang (Thompson) Lin</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$420,085</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$462,094</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Chief Financial Officer and Chief Strategy Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Stefan J. Murry</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$279,287</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$296,044</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Senior Vice President of Optical Module Division</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Hung-Lun (Fred) Chang</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$221,927</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">$251,887</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>2017 Cash Incentive Plan</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
February&nbsp;21, 2017, the Committee also approved </FONT>performance goals and payout formulas for fiscal year 2017 <FONT STYLE="font-family: Times New Roman, Times, Serif">consistent
with the Company&rsquo;s Executive and Key Employee Bonus Plan (collectively, the &ldquo;2017 cash incentive plan&rdquo;). </FONT>The
2017 cash incentive plan provides for the payment of cash bonuses to certain of the Company&rsquo;s executive officers based on
performance measures and payout formulas determined by the Committee and targets for each performance measure established by the
Committee. <FONT STYLE="font-family: Times New Roman, Times, Serif">Pursuant to the 2017 cash incentive plan, each of the Company&rsquo;s
named executive officers has been assigned threshold, target and maximum bonus amounts. The threshold, target and maximum bonuses
as a percentage of the 2017 base salary for the Company&rsquo;s principal executive officer, principal financial officer and one
other named executive officer are as follow:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 34%; border: Black 1pt solid; text-align: center"><B>Title</B></TD>
    <TD STYLE="width: 27%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Name</B></TD>
    <TD STYLE="vertical-align: top; width: 13%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Threshold (percentage of base salary)</B></TD>
    <TD STYLE="width: 13%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Target (percentage of base salary)</B></TD>
    <TD STYLE="vertical-align: top; width: 13%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><B>Maximum (percentage of base salary)</B></TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">President and Chief Executive Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Chih-Hsiang (Thompson) Lin</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">29.2%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">58.3%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">87.5%</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Chief Financial Officer and Chief Strategy Officer</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Stefan J. Murry</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">16.7%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">33.3%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">50.0%</TD></TR>
<TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-align: center">Senior Vice President of Optical Module Division</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">Hung-Lun (Fred) Chang</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">16.7%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">33.3%</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">50.0%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Actual bonus amounts paid to the named executive
officers may be more or less than the target bonus amounts. The Committee has the discretion to award bonus amounts that differ
for attainment of performance goals that fall above or below the specified goals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For each named executive officer participating
in the 2017 cash incentive plan, the total bonus opportunity will be determined by the achievement corporate performance measures
based on revenue and non-GAAP operating income before incentive cash bonus and related tax (&ldquo;Operating Income&rdquo;), <FONT STYLE="font-family: Times New Roman, Times, Serif">with
each measure being weighted 50% when calculating the payout amounts</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The payments for achievement of each corporate
performance measure are subject to certain thresholds. The Company must meet minimum thresholds for each corporate performance
measure in order for the executive officers to receive the portion of the target bonus attributable to such corporate performance
measure. No incentive payment may be earned for performance below the threshold and the maximum bonus may be earned at the
target maximum. The range and target for each component are set forth below:</P>

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    <TD STYLE="width: 34%; border: Black 1pt solid; text-align: center"><FONT STYLE="color: black"><B>Performance Goal</B></FONT></TD>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black"><B>% of Revenue Component Attained</B></FONT></TD>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black"><B>% of Operating Income Attained </B></FONT></TD></TR>
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    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="color: black">Threshold</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">90%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">83%</FONT></TD></TR>
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    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="color: black">Target</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">100%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">100%</FONT></TD></TR>
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    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid"><FONT STYLE="color: black">Maximum</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">105%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="color: black">108%</FONT></TD></TR>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-weight: normal">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.</FONT></P>

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    <TD><FONT STYLE="color: black">Date:&nbsp;&nbsp;February 23, 2017</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt; color: black"><B>APPLIED OPTOELECTRONICS, INC.</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD><FONT STYLE="color: black">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="color: black">/s/&nbsp;DAVID C. KUO</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="color: black">Name:</FONT></TD>
    <TD><FONT STYLE="font-variant: small-caps; color: black">David C. Kuo,</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="color: black">Title:</FONT></TD>
    <TD><FONT STYLE="color: black">General Counsel and Secretary</FONT></TD>
    <TD>&nbsp;</TD></TR>
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