APPLIED OPTOELECTRONICS, INC.

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The currently applicable voting standards and requirements for reverse stock splits or increases or decreases to the authorized number of shares of common stock may require us to expend significant time and resources, including with respect to the engagement of proxy solicitors to help solicit the requisite votes or, if we are not able to reach the required voting thresholds, could result in such proposals either not receiving stockholder approval or requiring the adjournment of the meeting for further solicitation.

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Our ability to offer equity incentives to our directors, officers, and employees, conduct equity offerings, and engage in strategic transactions may also require us to increase the number of shares of our common stock.

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In the future we may need to implement reverse stock splits in order to comply with Nasdaq continued listing requirements or implement forward stock splits or reverse stock splits for other strategic reasons.

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The Vote Clarification Amendment

If effected, the Vote Clarification Amendment would (i) amend ARTICLE X to provide that the Company expressly elects to be governed by amended Section 242(d) of the DGCL and clarify the voting standard applicable for stockholders to approve changes in the authorized number, and reverse stock splits, of our common stock and (ii) amend Article IV to effect a conforming change. The proposed text of amended ARTICLES X and IV is set forth on Appendix B to this Proxy Statement (with additions shown as underlined and deletions shown as strike-outs) and incorporated herein by reference. The Company encourages stockholders to review the full text of the Vote Clarification Amendment. The general description of our Certificate of Incorporation and the Vote Clarification Amendment set forth herein is qualified in its entirety by reference to the text of Appendix B. Section 242(d) is publicly available at https://delcode.delaware.gov/title8/c001/sc08/index.html, and the description of Section 242(d) is qualified by reference to the text of that section.

If this proposal is not approved by the Company’s stockholders, the approval of amendments to our Certificate of Incorporation to effect reverse stock splits or increases or decreases to the number of shares of our common stock will continue to require the affirmative vote of a majority of the outstanding shares of capital stock entitled to vote on such amendment, and the affirmative vote of a majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose.

Timing of Effectiveness of Amendment

Approval of this proposal is not contingent on the approval of any other proposals in this Proxy Statement. If the Vote Clarification Amendment is approved by stockholders, then we intend to file a certificate of amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware setting forth the Vote Clarification Amendment, which will become effective upon filing. However, the Board of Directors retains the discretion to abandon and not implement the Vote Clarification Amendment at any time before it becomes effective. In addition, we intend to file a restated certificate of incorporation to integrate into a single document the proposed amendments discussed in this Proxy Statement that are approved by our stockholders.

The affirmative vote of not less than 662∕3% of the outstanding shares of capital stock entitled to vote thereon and the affirmative vote of not less than 662∕3% of the outstanding shares of each class entitled to vote thereon as a class are required for the approval of this Proposal No. 4. Abstentions and broker non-votes will have the same effect as votes AGAINST Proposal No. 4.