APPLIED OPTOELECTRONICS, INC. 8-K

What Happened

• Applied Optoelectronics, Inc. (AAOI) filed an 8-K reporting that on February 13, 2026 its Compensation Committee approved amendments to the employment agreements of four senior executives to increase severance payments and benefits. The affected executives are Stefan J. Murry (CFO & Chief Strategy Officer), Hung‑Lun (Fred) Chang (SVP & North America GM), Shu‑Hua (Joshua) Yeh (SVP & Asia GM), and David C. Kuo (SVP, Chief Legal Officer, Chief Compliance Officer & Corporate Secretary). The original employment agreements were dated August 5, 2016; the form of the amendment is attached as Exhibit 10.1.

Key Details

• If terminated without Cause or resigning for Good Reason (standard contract definitions):
  • Base salary payout increased from 6 months to 9 months.
  • Cash payment equal to 9 months of the executive’s annual target bonus (up from 6 months).
  • COBRA health-premium reimbursement increased to coverage for up to 12 months (previously a $15,000 cap).
• If termination without Cause or resignation for Good Reason occurs within six months before, or 12 months after, a Change of Control:
  • Base salary payout increased from 12 months to 15 months.
  • Cash payment equal to 15 months of the executive’s annual target bonus (up from 12 months).
  • COBRA reimbursement increased to coverage for up to 15 months (previously a $15,000 cap).
• All enhanced severance payments and benefits are subject to the terms of the employment agreements (including execution and non-revocation of a general release of claims).

Why It Matters

• For investors, these amendments strengthen executive severance protections and could increase the company’s potential cash obligations on certain terminations or a change of control. The changes are designed for retention and protection of senior management but do not reflect an immediate cash charge; payouts would occur only if termination conditions are met and required releases are signed.