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DEF 14A
1
daioproxy_2024v6.htm
daioproxy_2024v6.htm - Generated by SEC Publisher for SEC Filing
black face=calibri,sans-serif lang=EN-US style="background:white;font-size:10.0pt;">DEF
14A
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">1proxy_2024.htm
left>
0 cellspacing=0 border=0 style="width:6.8in;">
top width=100% style="padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
top width=100% style="padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:8.0pt;margin-left:0in;margin-right:0in;margin-top:8.0pt;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">SCHEDULE 14A
top width=100% style="padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Proxy Statement Pursuant to Section
14(a) of the Securities
Exchange Act of 1934
top width=100% style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Data I/O Corporation
top width=100% style="padding:0in 0in 0in 0in;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">(Name of Registrant as Specified In
Its Charter)
top width=100% style="padding:0in 0in 0in 0in;">
calibri,sans-serif style="font-size:12.0pt;">
top width=100% style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">
calibri,sans-serif style="font-size:12.0pt;">
top width=100% style="padding:0in 0in 0in 0in;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
calibri,sans-serif lang=EN-US style="font-size:12.0pt;"> You are cordially invited to
attend the 2024 Annual Meeting of Data I/O Corporation, which will be held at
Data I/O’s headquarters at 6645 185
th
Ave NE, Suite 100, Redmond,
Washington 98052. The meeting will begin at 10:00 a.m. Pacific Daylight Time
on Thursday, May16, 2024.
calibri,sans-serif lang=EN-US style="font-size:12.0pt;"> Officers of Data I/O will be
attending and will respond to questions after the meeting. Formal business
will include the election of directors, ratification of the continued
appointment of Grant Thornton LLP as Data I/O’s independent auditors, and advisory
votes on executive compensation
EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:12.0pt;">and the frequency of future advisory votes.
calibri,sans-serif lang=EN-US style="font-size:12.0pt;"> Please read the proxy materials
carefully. Your vote is important. Data I/O appreciates you considering and
acting on the proposals presented. The meeting is not being held as a virtual
or hybrid meeting, so
calibri,sans-serif lang=EN-US style="font-size:12.0pt;">in order to attend and vote at the meeting
calibri,sans-serif lang=EN-US style="font-size:12.0pt;"> (as
opposed to voting by proxy), you must attend the meeting in person. However,
the Company encourages shareholders to vote on the matters before the meeting
by proxy, and if you wish to listen to the annual meeting matters and voting
results via conference call, we encourage you to use the conference call,
rather than attend the meeting in person. There is no other business
presentation planned for the meeting. The conference call information will be
available on the Company’s website at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:12.0pt;text-decoration:none;">https://www.dataio.com/Company/Investor-Relations/Annual-Meeting
calibri,sans-serif lang=EN-US style="font-size:12.0pt;"> or contact the
corporate Secretary.
calibri,sans-serif lang=EN-US style="font-size:12.0pt;line-height:13.0pt;">President and Chief
Executive Officer
align="center" width="100%" size=2>
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:18.0pt;line-height:18.0pt;">DATA
I/O CORPORATION
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="border:none;margin:0in;padding:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:13.0pt;line-height:18.0pt;">NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS – May 16, 2024
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">NOTICE IS HEREBY GIVEN that the Annual
Meeting of Shareholders of Data I/O Corporation (the “Company” or “DataI/O”)
will be held at 10:00 a.m. Pacific Daylight Time, on Thursday, May 16, 2024, at
Data I/O’s principal offices, 6645 185
th
Ave NE, Suite 100, Redmond,
Washington 98052, for the following purposes:
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">(1)
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">Election
of Directors:
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">To elect five directors, each to serve until
the next annual meeting of shareholders or until his or her successor is
elected and qualified or until such director’s earlier death, resignation, or
removal.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">(2)
calibri,sans-serif lang=EN-US style="font-size:10.5pt;"> Ratification
of Independent Auditors:
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">To
ratify the continued appointment of Grant Thornton LLP as Data I/O’s
independent auditors for the calendar year ended December 31, 2024.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">(3)
calibri,sans-serif lang=EN-US style="font-size:10.5pt;"> Say
on Pay – Advisory Vote on Executive Compensation:
calibri,sans-serif lang=EN-US style="font-size:10.5pt;"> To consider and vote on an
advisory resolution on the compensation of our named executive officers.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">(4)
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">Say on Frequency – Advisory
Vote on the Frequency of Advisory Votes on Executive Compensation:
calibri,sans-serif lang=EN-US style="font-size:10.5pt;"> To consider and vote on an
advisory basis on the frequency of future advisory votes on the compensation of
our named executive officers.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">To
consider and vote upon such other business as may properly come before the
meeting or any adjournments or postponements thereof.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">Important
Notice Regarding the Availability of Proxy Materials for the Shareholder
Meeting to Be Held on May 16, 2024. The proxy statement and annual report to
security holders are also available at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.5pt;">http://www.dataio.com/company/investorrelations/annualmeeting.aspx
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">.
calibri,sans-serif lang=EN-US style="font-size:10.5pt;">The Board of Directors has fixed the close of
business on March 18, 2024 as the Record Date for the determination of
shareholders entitled to notice of, and to vote at, the 2024 Annual Meeting and
any adjournment or postponement thereof.
center style="border:none;margin:0in;padding:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="border:none;margin:0in;padding:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">YOUR VOTE IS IMPORTANT
center style="border:none;margin:0in;padding:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Whether or not you expect to attend
the meeting in person, we urge you to sign, date, and return the accompanying
proxy card at your earliest convenience, or you may vote as provided in the
instructions on the proxy card (for Computershare accounts: by the internet at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">http://www.envisionreports.com/DAIO
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> or by telephone at 1-800-652-8683,
and for other accounts: by internet at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">www.ProxyVote.com
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> or by phone at 1-800-579-1639). This
will ensure the presence of a quorum at the meeting.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Promptly returning a
signed and dated proxy card, or voting by the internet or by telephone, will
save Data I/O the extra expense of additional solicitation.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Your proxy is
revocable at your request any time before it is voted. If you attend the
meeting, you may vote in person if you wish, even if you have previously
returned your proxy card. If you vote by mail, an addressed, postage-paid
envelope is provided in order to make certain that your shares will be
represented at the Annual Meeting.
align="center" width="100%" size=2>
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">DATA I/O CORPORATION
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:18.0pt;">6645 185
th
Ave NE, Suite 100
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:18.0pt;">Redmond, Washington 98052
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">____________________
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">PROXY STATEMENT
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">ANNUAL MEETING OF SHAREHOLDERS
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:18.0pt;">May 16, 2024
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">This Proxy
Statement and the accompanying form of proxy are furnished in connection with
the solicitation of proxies by the Board of Directors (“Board of Directors”) of
Data I/O Corporation (the “Company” or “Data I/O”) for use at the Annual
Meeting of Shareholders to be held on Thursday, May 16, 2024, at 10:00a.m.
Pacific Daylight Time at Data I/O’s principal office, 6645 185
th
Ave
NE, Suite 100, Redmond, Washington 98052, and at any adjournment of the meeting
(the “Annual Meeting”). Shareholders of record at the close of business on March
18, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the
Annual Meeting. This Proxy Statement and a copy of Data I/O’s 2023 Annual
Report to Shareholders are being mailed to shareholders on or about April 5,
2024.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">A
proxy card is enclosed for your use.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">You are requested on behalf of the
Board of Directors to sign, date, and return the proxy card in the accompanying
envelope
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, which is postage-paid if mailed in the United States or Canada.
Alternatively, you may vote as provided in the instructions on the proxy card
(for Computershare accounts: by the internet at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">http://www.envisionreports.com/DAIO
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> or by telephone at 1-800-652-8683,
and for other accounts: by internet at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">www.ProxyVote.com
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> or by phone at 1-800-579-1639). If
you vote by the internet or by telephone, you do not need to mail back the
proxy card.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">A
proxy in the accompanying form, which is properly signed, dated and returned
and not revoked, will be voted in accordance with its instructions. To vote on
the election of directors, check the appropriate box under Proposal 1 on your
proxy card. You may (a) vote “FOR” all of the director nominees as a group,
(b) “WITHHOLD” authority to vote for all director nominees as a group, or (c)
vote “FOR” all director nominees as a group except those nominees indicated to
the contrary. To vote on Proposal 2 to ratify the continued appointment of
Grant Thornton LLP as Data I/O’s independent auditors for the calendar year
ended December 31, 2024, check the appropriate box under Proposal 2 on your
proxy card. You may (a) vote “FOR” approval of the ratification of Grant
Thornton LLP as Data I/O’s independent auditors, (b) vote “AGAINST” approval of
the ratification of Grant Thornton LLP as Data I/O’s independent auditors, or
(c) “ABSTAIN” from voting on the ratification of Grant Thornton LLP as Data
I/O’s independent auditors. To vote on Proposal 3, Say on Pay – Advisory Vote
on Executive Compensation, you may vote (a) “FOR” the advisory resolution, (b)
“AGAINST” the advisory resolution, or (c) “ABSTAIN” from voting on the advisory
resolution on executive compensation. To vote on Proposal 4, Say on Frequency
– Advisory Vote on the Frequency of Advisory Vote on Executive Compensation,
you may vote (a) “FOR” (a) every year, (b) every two years, (c) every three
years, or (d) “ABSTAIN” from voting.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Proxies
which are returned to Data I/O without instructions will be voted as
recommended by the Board of Directors. Any shareholder who returns a proxy may
revoke it at any time prior to voting on any matter (without, however,
affecting any vote taken prior to such revocation) by (i) delivering written
notice of revocation to the Secretary of Data I/O at Data I/O’s principal
office, (ii) executing and delivering to Data I/O another proxy dated as of a
later date, or (iii) voting in person at the Annual Meeting.
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">VOTING SECURITIES AND PRINCIPAL
HOLDERS
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
only outstanding voting securities of Data I/O are shares of common stock (the
“Common Stock”). As of the Record Date, there were 9,023,200 shares of Common
Stock issued and outstanding, and each such share is entitled to one vote at
the Annual Meeting. The presence in person or by proxy of holders of record of
a majority of the outstanding shares of Common Stock is required for a quorum
for transacting business at the Annual Meeting. Shares of Common Stock
underlying abstentions will be considered present at the Annual Meeting for the
purpose of calculating a quorum. Under Washington law and Data I/O’s charter
documents, if a quorum is present, the five nominees for election to the Board
of Directors who receive the greatest number of affirmative votes cast at the
Annual Meeting will be elected directors. Abstentions and broker non-votes
will have no effect on the election of directors because they are not cast in
favor of any particular candidate.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The proposal to ratify the continued
appointment of Grant Thornton LLP as Data I/O’s independent auditors will be
approved, if a quorum is present, if the number of votes cast in favor of the
proposal exceeds the number of votes cast against the proposal. Abstentions
and broker non-votes on the proposals will have no effect because approval of
the proposal is based solely on the votes cast.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Say
on Pay – The advisory vote on the compensation of Data I/O’s named executive
officers will be approved, if a quorum is present, if the number of votes cast
in favor of the advisory resolution exceeds the number of votes cast against
the advisory resolution. Abstentions and broker non-votes on the advisory
resolution will have no effect because approval of the advisory resolution is
based solely on the votes cast.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Say
on Frequency – The advisory vote on the frequency of future advisory votes on
the compensation of Data I/O’s named executive officers will be determined by
the frequency alternative receiving the greatest number of votes—every year,
every two years, or every three years. You may vote ”FOR” holding future
advisory votes on executive compensation every year, every two years, or every
three years, or you may choose to abstain. Abstentions and broker non-votes
have no effect in determining the frequency alternative.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Proxies
and ballots will be received and tabulated by Computershare, an independent
business entity not affiliated with Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">If
you hold your shares in street name, it is critical that you instruct your
broker or bank how to vote if you want it to count in Proposal 1, the election
of directors, Proposal 3, Say on Pay and Proposal 4, Say on Frequency.
Regulations no longer allow your bank or broker to vote your uninstructed
shares in the election of directors on a discretionary basis. If you hold your
shares in street name and you do not instruct your bank or broker how to vote on
Proposal 1, election of directors, Proposal 3, Say on Pay, and Proposal 4, Say
on Frequency, votes will not be cast on your behalf for these Proposals. Your
bank or broker will, however, continue to have discretion to vote any
uninstructed shares on Proposal 2, ratification of the appointment of Data
I/O’s independent auditors. If you are a shareholder of record and you do not
cast your vote, votes will not be cast on your behalf on any of the items of
business at the Annual Meeting.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Common
Stock is traded on The NASDAQ Capital Market under the symbol “DAIO”. The last
sale price for the Common Stock, as reported by The NASDAQ Capital Market on March
18, 2024, was $3.57 per share.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
following table sets forth information for all shareholders known by Data I/O
to be the beneficial owners of more than five percent of its outstanding Common
Stock as of March 18, 2024. Except as noted below, each person or entity has
sole voting and investment powers for the shares shown.
calibri,sans-serif style="font-size:10.0pt;">800
Third Avenue
calibri,sans-serif style="font-size:10.0pt;">New
York, NY 10022
calibri,sans-serif style="font-size:10.0pt;">
top width=5% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
right style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=20% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">
center style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">542,643
center style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">
top width=8% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">
calibri,sans-serif style="font-size:10.0pt;">(1)
calibri,sans-serif style="font-size:10.0pt;">
calibri,sans-serif style="font-size:10.0pt;">
calibri,sans-serif style="font-size:10.0pt;">
top width=8% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">
top width=20% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">6.01%
top width=39% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">David L.
Kanen
calibri,sans-serif style="font-size:10.0pt;">Philotimo
Focused Growth and Income Fund
calibri,sans-serif style="font-size:10.0pt;">5850
Coral Ridge Drive, Suite 309
calibri,sans-serif style="font-size:10.0pt;">Coral
Springs, FL33076
calibri,sans-serif style="font-size:10.0pt;">
top width=5% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
right style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=20% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">826,421
top width=8% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">(2)
top width=8% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">
top width=20% style="height:39.15pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">9.16%
calibri,sans-serif lang=EN-US style="font-size:9.0pt;">(1)
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The holding reported as of December 29,
2023, as jointly reported by Renaissance Technologies LLC (“RTC”) and
Renaissance Technologies Holding Corporation (“RTHC”) on the most recent (filed
February 13, 2024) Schedule 13G filed under the Securities Exchange Act of
1934. The Schedule 13G indicates that RTC has sole voting power for 528,960 shares
and dispositive power for 542,643 shares. The Schedule 13G further indicates
that RTHC has sole voting power for 528,960 shares and dispositive power for 542,643
shares, comprising the shares beneficially owned by RTHC, because of RTHC’s
majority ownership of RTC.
calibri,sans-serif lang=EN-US style="font-size:9.0pt;">(2)
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The holding reported as of January 2,
2024, as jointly reported by Philotimo Fund, LP, Philotimo Focused Growth and
Income Fund (“PHLOX”), David L. Kanen and Kanen Wealth Management LLC (“KWM”),
on the most recent (filed January 5, 2024) Schedule 13G filed under the
Securities Exchange Act of 1934. The Schedule 13G indicates that Philotimo
Fund, LP has 479,127 sole voting, 479,127 sole dispositive power, 0 shared
voting power and 0 shared dispositive power for shares. PHLOX has 0 shares sole
voting, 0 shares sole dispositive power, 327,401 shared voting power and 327,401
shared dispositive power for shares. KWM has 0 shares sole voting, 0 shares sole
dispositive power, 806,528 shared voting power and 806,528 shared dispositive
power for shares. Mr. Kanen has 19,893 shares sole voting, 19,893 shares sole
dispositive power, 806,528 shared voting power and 806,528 shared dispositive
power for shares, with aggregate amount beneficially owned by each reporting
person of 826,421. KWM is the General Partner of Philotimo Fund, LP, KWM is the
advisor to PHLOX and Mr. Kanen is the managing member of KWM. KWM may be deemed
to beneficially own the shares owned by Philotimo and PHLOX and Kanen may be
deemed to beneficially own the shares owned by each of Philotimo, PHLOX, and
KWM.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The following table indicates
ownership of Data I/O’s Common Stock by each director of Data I/O, each
executive officer named in the compensation tables appearing later in this
Proxy Statement, and by all directors and executive officers as a group, all as
of March 18, 2024. Data I/O is not aware of any family relationships between
any director, director nominee or executive officer of Data I/O.
center style="margin:0in;margin-bottom:.0001pt;margin-left:0pt;margin-right:0pt;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:4.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Amount
and Nature of
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center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Percent of Shares
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
top width=16% style="height:22.65pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">319,026
top width=15% style="height:22.65pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:22.65pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">3.5%
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">106,681
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">1.2%
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">93,041
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">1.0%
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Gerald Y. Ng
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">0
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">(1)
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Douglas W. Brown
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">64,359
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">(1)
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Sally A. Washlow
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">38,251
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">(1)
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Edward J. Smith
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">23,715
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">(1)
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
top width=16% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">10,400
top width=15% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">(1)
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calibri,sans-serif style="font-size:10.0pt;">All current directors and executive officers
calibri,sans-serif style="font-size:10.0pt;">as a group (8 persons)
(2)
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right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">655,473
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center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="border-top:solid windowtext 1.0pt;height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">7.3%
top width=43% style="height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">
top width=16% style="border-top:solid windowtext 1.0pt;height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:right;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=15% style="border-top:solid windowtext 1.0pt;height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=26% style="border-top:solid windowtext 1.0pt;height:12.1pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Data I/O is
not aware of any arrangement the operation of which may at a subsequent date
result in a change of control of Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Neither Data
I/O nor any of its property is currently subject to any material legal
proceedings or other adverse regulatory proceedings. Data I/O does not
currently know of any material legal proceedings against it or its subsidiaries
involving its directors, proposed directors, or executive officers, or any
associate of any such director or executive officer, or any material interest
adverse to Data I/O or its subsidiaries. None of Data I/O’s directors, proposed
directors or executive officers has, during the past ten years, been involved
in any material bankruptcy, criminal or securities law proceedings.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Board of Directors has adopted Corporate Governance and Nominating Committee,
Audit Committee and Compensation Committee Charters. All our Charters are
reviewed and updated periodically by our Board of Directors. All of our
Charters were reviewed during 2023 and again in early 2024 and no changes were
made. The current versions of our Charters are posted on the corporate
governance page of our website at https://www.dataio.com/Company/Investor-Relations/Corporate-Governance.aspx.
All of these Charters are consistent with the applicable requirements of United
States security laws and our NASDAQ listing standards.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our
Code of Ethics was reviewed by our Board of Directors during 2023 and again in
early 2024 and no substantive changes were made. The current version of our
Code of Ethics is posted on the Corporate Governance page of our website at https://www.dataio.com/Company/Investor-Relations/Corporate-Governance.aspx.
Data I/O’s Code of Ethics apply to all directors, officers and employees of
Data I/O, including the named executive officers. The key principles of the
Code are to act legally, and with integrity in all work for Data I/O. We will
post any amendments to our Code of Ethics on the corporate governance page of
our website at
www.dataio.com/company/investorrelations/corporategovernance.aspx. In the
unlikely event that the Board of Directors approves any waiver to the Code of
Ethics for our executive officers or directors, information concerning such
waiver will also be posted on our website. In addition to posting information
regarding amendments and waivers on our website, the same information will be
included in a Current Report on Form 8-K within four business days following
the date of the amendment or waiver, unless website posting of such amendments
or waivers is permitted by the rules of The NASDAQ Stock Market LLC.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">On October 25, 2023, the Board adopted
an Incentive Compensation Recovery Policy (“Clawback Policy), which is
further discussed in the
calibri,sans-serif lang=EN-US style="font-size:10.0pt;text-transform:uppercase;">EXECUTIVE COMPENSATION
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">section under
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Clawback of
Executive Compensation
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">in this document.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our
current Board of Directors consists of five independent directors, and one
non-independent director, our Chief Executive Officer. Risk oversight is
generally handled by our entire Board of Directors, although certain risk
oversight areas such as internal control and cyber risk are handled by our
Audit Committee, and compensation is handled by our Compensation Committee.
The Board leadership structure promotes effective oversight of the Company's
risk management for the same reasons that the structure is most effective for
the Company in general, that is, by providing the Chief Executive Officer and
other members of senior management with the responsibility to assess and manage
the Company's day-to-day risk exposure and providing the Board, and
specifically the Audit Committee of the Board, with the responsibility to
oversee these efforts of senior management.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Messrs. Brown, Smith and Wentworth, and
Ms. Washlow are independent directors as defined by applicable U.S. Securities
and Exchange Commission (“SEC”) rules and NASDAQ listing standards. Ms. Bo-Linn
was also independent, but was no longer a director as of May 18, 2023. Mr.
Ambrose, our Chief Executive Officer, is not an independent director.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our Board Chair, Ms. Washlow, is an
independent director and Mr. Ambrose is our Chief Executive Officer, President,
and Director.
center style="margin:0in;margin-left:.5in;text-align:center;text-indent:-.5in;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">PROPOSAL
1: ELECTION OF DIRECTORS
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">At
the 2023 Annual Meeting, the shareholders elected five directors to serve until
the next Annual Meeting or until such director’s successor has been qualified
and elected or such director’s earlier death, resignation or removal. For the 2024
Annual Meeting, the Board of Directors has approved the five nominees named
below. All five nominees are currently members of the Board of Directors.
Each of the nominees has indicated that they are willing and able to serve as
directors. However, should one or more of the nominees not accept the
nomination, or otherwise be unwilling or unable to serve, it is intended that
the proxies will be voted for the election of a substitute nominee or nominees
designated by the Board of Directors.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;text-transform:uppercase;">Recommendation:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> The Board of Directors recommends a vote FOR each of
the director nominees.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Anthony
Ambrose
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, age 62, was
appointed a director of Data I/O effective October 25, 2012. He joined
Data I/O October 25, 2012 and has served as President and Chief Executive
Officer (“CEO”). Prior to Data I/O, Mr. Ambrose was Owner and Principal
of Cedar Mill Partners, LLC, a strategy consulting firm since 2011. From
2007 to 2011, he was Vice President and General Manager at RadiSys Corporation,
a leading provider of embedded wireless infrastructure solutions, where he led
all product divisions and worldwide engineering. Until 2007, he was
general manager and held several other progressively responsible positions at
Intel Corporation, where he led development and marketing of standards-based
telecommunications platforms, and grew the industry standard server business to
over $1B in revenues. He is Chair of the EvergreenHealth Foundation Board
of Trustees. He previously served as a board member of SideChannel, Inc.
(OTCQB: SDCH) until February 2024 having been retained after their 2022 merger
with Cipherloc Corporation (OTCQB: CLOK) where he joined the board in 2019 and had
also been lead independent director since 2019. Mr. Ambrose has a Bachelor of
Science in Engineering from Princeton University. He has completed the
Stanford Graduate School of Business Director Symposium and earned the Carnegie
Mellon University Certificate in Cybersecurity Oversight.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Mr.
Ambrose has extensive semiconductor, systems and networking industry operating
experience. He has significant executive experience in strategy
development, business management, marketing, engineering, and new product
development. His role as our President and CEO gives him knowledge as
well as unique insight into our challenges, opportunities and operations, for
which the Board of Directors believes he is qualified to serve as a director of
Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Douglas
W. Brown
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, age 68, was
appointed a director of Data I/O effective April 1, 2011. Mr. Brown retired in
2019 from Executive Chairman of All Star Directories, Inc., Seattle,
Washington, a Web-based publisher of post-secondary online and career school
directories which he joined as President in 2005 and served in that capacity
until 2016. From 2003 to 2005, he provided governance and interim executive
services, with engagements including Interim President and Board member, to
venture-backed clients. From 1998 to 2003, he was a Board member of GoAhead
Software and was appointed its President in 2001. From 1993 to 1999, he was a
President of a Seattle-area manufacturing company which became a Division of
Leggett Platt in 1996. Prior to that time, he was the Chief Financial
Officer (“CFO”) of Seattle Silicon, and Executive Vice President, Finance and
Operations at Phamis. He started his career as a Certified Public Accountant
at Arthur Young Co, now Ernst Young, in Seattle. Mr. Brown has a
Bachelor’s degree in Business from University of Idaho.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Mr.
Brown has extensive software, financial, CEO, CFO, and board level experience for
which the Board of Directors believes he is qualified to serve as a director of
Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Sally
A. Washlow
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, age 52,
was appointed a director of Data I/O effective October 28, 2020. Ms. Washlow is
a Practice Lead for LHH’s International Center for Executive Options working
with senior level and C-Suite executives from companies ranging from Fortune 10
to privately held. She operates SW Consulting LLC supporting companies with
executive management, strategy initiatives and board service to privately held
companies since 2017. From 2015 to 2017, Ms. Washlow was the Chief Executive
Officer of Cedar Electronics Corporation, a supplier of radar detectors, GPS
systems, dash cameras and other electronic products, and led the integration of
the Cobra and Escort electronics businesses. Prior to that, she worked for 13
years at Cobra Electronics Corporation (COBR) in various capacities, including
as President from 2013 until 2015. Prior roles included leadership positions
in product development, marketing and supply chain with Motorola in the
automotive and telecommunication sectors along with LG/ Zenith and the launch
of Digital Television. Ms. Washlow serves on the board of Orion Energy Systems
(NASDAQ: OESX) and chairs the Compensation Committee. She is also on the board
of the Northbrook Bank and Trust Company, N.A., a Wintrust Community Bank
(NASDAQ: WTFC). She formerly was a member of the Consumer Technology
Association and served on the audit committee as well as the Board of Industry
Leaders. Until August 2023, she was a board member and served as Chair of
Costar Technologies, Inc. (OTC Markets Group: CSTI). Ms. Washlow received an
MBA in Marketing from DePaul University and a BA in Supply Chain Management
from Michigan State University.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Ms.
Washlow, as a consultant and former Chief Executive Officer, has extensive
experience as an operating leader in the security and automotive electronics
markets, for which the Board of Directors believes she is qualified to serve as
a director of Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Edward J. Smith
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, age 61, was appointed a director of
Data I/O effective February 23, 2022. He is President and Chief Executive
Officer of SMTC Corporation. Mr. Smith is a seasoned and successful executive
with more than 25 years of experience in the electronic manufacturing services
(EMS) industry and the electronic components distribution industry. Prior to
joining SMTC he served as President of Avnet Inc. for 7 years and held various
other senior positions since 1994. Mr. Smith served, as President and Chief
Executive Officer of SMTEK International Inc., from 2002 to 2004, a tier II
manufacturer in the EMS industry. Mr. Smith has served on numerous private
company and non-profit boards and currently serves on the board of directors at
Aqua Metals, Inc. (NASDAQ: AQMS) and on the board of directors of SMTC
Corporation (NASDAQ: SMTX) which was taken private in 2021. Mr. Smith is the
founder and currently runs the We Will Never Forget charitable foundation.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Mr.
Smith has extensive board, CEO and industry expertise, for which the Board of
Directors believes he is qualified to serve as a director of Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">William
Wentworth,
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">age 58,
was appointed a director of Data I/O effective May 18, 2023. He has been the Chief
Strategy Officer of Planar Semiconductor since February 2022. He was a
co-founder of Source Electronics Corporation in 1988, and he led a majority
exit with HIG Capital in 2001. He navigated the business through the 2001
technology recession with a successful exit in 2008 to Avnet Inc. Mr.
Wentworth was Senior Vice President and General Manager at Avnet Logistics
Services from 2008 to 2012. In January of 2013 he joined Avnet Technology
Solutions serving as Senior Vice President and Global Leader of Services until
2016. Currently, he consults with IT Services Firms to launch GTM Strategies
(Services, Solutions) in the Cloud, and Data and Analytics space
(Snowflake/Databricks). He works with several Private Equity firms/Family
Offices advising on Technology acquisitions.is the Managing Director of Blankfactor,
a global technology partner that provides end-to-end digital services. He
served as a board member of Excellarate, a Frontenac Company, and Synerzip/Prime
Technology Group (led the business/investment rational) from January 2020
through February 2023. Mr. Wentworth was named New Hampshire’s Entrepreneur of
the Year in 2001 and was a finalist for the Ernst Young Entrepreneur of
the Year Award in 1999, 2000, and 2001.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Mr.
Wentworth has extensive experience in the semiconductors and technology sector
for which the Board of Directors believes he is qualified to serve as a
director of Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Shareholders may communicate with the
Board of Directors by sending an email to investorrelations@dataio.com or by sending a letter to Data I/O
Corporation Board of Directors, c/o the Secretary, 6645 185
th
Ave
NE, Suite 100, Redmond, WA 98052. The Secretary will receive the
correspondence and forward it to the Chair of the applicable Board of Directors
Committee or to any individual director or directors to whom the communication
is directed.
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">BOARD COMMITTEES
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">During the year ended December 31, 2023,
there were eight meetings of the Board of Directors. Each of the incumbent
directors who was on the Board of Directors during 2023 attended 100% of the aggregate of the total number of meetings of the
Board of Directors during their term of service on the Board of Directors.
Data I/O does not have a policy requiring members of the Board of Directors to
attend the Annual Meeting, although we typically encourage our Board of
Directors to attend. Ms. Washlow, Mr. Smith, and Mr. Wentworth attended our 2023
Annual Meeting telephonically and Mr. Ambrose and Mr. Brown attended in person.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Board of Directors had three standing Committees during 2023: The Audit
Committee, the Compensation Committee and the Corporate Governance and
Nominating Committee. Each committee was comprised solely of independent
directors during 2023, as defined by applicable SEC rules, NASDAQ listing
standards including director independence generally as well as additional
independence requirements for audit and compensation committees, and the
Sarbanes-Oxley Act of 2002. The following table shows the composition of the
Board Committees and Board Leadership structure during 2023 and through the
date of this Proxy Statement.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Audit Committee appoints, oversees, evaluates, and engages independent
certified public accountants for the ensuing year and approves the compensation
and other terms of such engagement; reviews the scope of the audit;
periodically reviews Data I/O’s program of internal control and audit
functions; receives and reviews the reports of the independent accountants; and
reviews the annual financial report to the directors and shareholders of Data
I/O. Each member of the Audit Committee is an independent director, as defined
by applicable NASDAQ listing standards and the Sarbanes-Oxley Act of 2002.
During 2023 and through the date of this Proxy statement, at least 2 Audit
Committee members are “audit committee financial experts” as defined by the
applicable SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002. The
Audit Committee met four times during 2023 and recorded 100% committee
attendance at such meetings held during their term of service. See the “Report
of the Audit Committee” for additional information.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Corporate Governance and Nominating Committee, or “CGNC”, develops, recommends
to the Board of Directors, and monitors a set of corporate governance
principles applicable to Data I/O. The CGNC seeks qualified candidates to
serve on the Board of Directors, recommends them for the Board of Directors’
consideration for election as directors at the Annual Meeting of Shareholders
and proposes candidates to fill vacancies on the Board of Directors. The CGNC met
thirteen times in 2023 and recorded no less than 92% committee attendance at
such meetings held during their term of service. The CGNC continues to seek
qualified candidates and recommends the director nominees to the Board of
Directors. The CGNC identifies, evaluates, and recommends director nominees
and Committee assignments which are described in greater detail below.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Compensation Committee is composed entirely of independent directors, as
defined by applicable NASDAQ listing standards for compensation committees.
The Compensation Committee is responsible for setting and administering the
policies which govern all of the compensation programs of Data I/O. The
Compensation Committee may delegate its authority and duties to subcommittees
or individual members of the Compensation Committee as it considers
appropriate.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Compensation Committee makes
recommendations to the Board of Directors concerning the compensation of Data
I/O’s executive officers. The Compensation Committee administers Data I/O’s
long-term equity incentive plans. The Compensation Committee reviews all
employee benefit programs and approves significant changes in major programs
and all new programs. The Compensation Committee met five times during 2023
and recorded 100% committee attendance at such meetings held during their term
of service.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">As
authorized by the Compensation Committee charter, the Compensation Committee
may retain consultants or other advisors, as well as purchase compensation
surveys, to assist in carrying out its responsibilities.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Corporate Governance and
Nominating Committee has developed, and the Board has approved, Board
Responsibilities and Director Recruitment Objectives, which further outline our
directors’ roles and responsibilities and desired traits, diversity,
characteristics, experience and criteria for selection. The Corporate
Governance and Nominating Committee in evaluating and determining whether to
recommend a person as a candidate for election as a director consider, in light
of the Board Responsibilities and Director Recruitment Objectives, considers the
relevant management and/or technology industry experience of potential director
candidates (such as experience as chief executive, operations or financial
officer, or similar positions); business development, mergers and acquisitions
experience; public/corporate board experience, diversity, knowledge of Data
I/O; educational experience; commitment to maximizing shareholder value;
certain values such as integrity, accountability, judgment and adherence to
high performance standards; independence pursuant to applicable guidelines;
ability and willingness to undertake the required time commitment to Board
functions; shareholder input; and an absence of conflicts of interest with Data
I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Corporate Governance and
Nominating Committee also considers issues of diversity, such as diversity of
gender, race and national origin, education, professional experience and
differences in viewpoints and skills. The CGNC does not have a formal policy
on Board diversity; however, the CGNC believes that it is important for Board
members to represent diverse viewpoints and comply with specific applicable
laws. The composition and quantity of board members may be potentially
impacted as we maintain compliance with these and future requirements. In
considering candidates for the Board, the CGNC considers the entirety of each
candidate’s credentials in the context of these standards. With respect to
evaluating the nomination of continuing directors for re-election, the CGNC
considered each director’s contributions to the company as well as the results
of the Board of Directors self-evaluations process. The following table
presents a Board Diversity Matrix per NASDAQ requirements:
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Board Diversity Matrix
(As of March 18, 2024)
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Corporate Governance and
Nominating Committee may employ a variety of methods for identifying and
evaluating nominees for directors. The CGNC regularly assesses the size of the
Board, the need for particular expertise on the Board, and whether any
vacancies on the Board are expected due to retirement or otherwise. In the
event that vacancies are anticipated, or otherwise arise, the CGNC considers
various potential candidates for director which may come to the CGNC’s
attention through current Board members, professional search firms,
shareholders, or other persons and evaluates these candidates in light of the
Board Responsibilities and Director Recruitment Objectives. These candidates
are evaluated at regular or special meetings of the CGNC and may be considered
at any point during the year.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Corporate Governance and Nominating Committee will consider candidates
recommended by shareholders, when the nominations are properly submitted, under
the criteria summarized above in “Consideration of Director Nominees” and in
accordance with the procedures described below in “Shareholder Nominations and
Proposals for the 2024 Annual Meeting of Shareholders.” Following verification
of the shareholder status of persons proposing candidates, the CGNC makes an
initial analysis of the qualifications of any candidate recommended by
shareholders or others pursuant to the criteria summarized above to determine
if the candidate is qualified for service on the Data I/O Board of Directors
before deciding to undertake a complete evaluation of the candidate. If any
materials are provided by a shareholder or professional search firm in
connection with the nomination of a director candidate, such materials are
forwarded to the CGNC as part of its review. Other than the verification of
compliance with procedures and shareholder status, and the initial analysis
performed by the CGNC, a potential candidate nominated by a shareholder is
treated like any other potential candidate during the review process by the
CGNC. For eligible shareholder nominees to be placed on the ballot for the 2024
Annual Meeting of Shareholders, shareholders were required to deliver
nominations for proposed director nominees to Data I/O by February 16, 2024. No
formal candidate nominations were made by shareholders for election at the 2024
Annual Meeting. Existing Directors were identified as follows: Mr. Wentworth
was initially identified by a current Board member; Mr. Smith was initially
identified by discussions with significant shareholders and the Board; Ms.
Washlow was initially identified and introduced by a former Board member; and
Mr. Brown was initially identified and introduced by a member of management.
left style="margin:0in;page-break-after:avoid;text-align:left;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Certain
Relationships and Related Transactions
left style="margin:0in;page-break-after:avoid;text-align:left;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our Audit Committee is charged with monitoring and
reviewing issues involving potential conflicts of interest, and reviewing and
approving related party transactions as set forth in the Code of Ethics, which
is posted on the corporate governance page of our website at https://www.dataio.com/Company/Investor-Relations/Corporate-Governance.aspx.
Under our Code of Ethics, our directors, officers and employees are expected to
avoid conflicts of interest with Data I/O and are required to report any such
conflicts of interest to our Chief Executive Officer or Chief Financial
Officer, or to the Chair of our Audit Committee. Our Audit Committee reviews
all such transactions and relationships by our directors and executive officers
that come to its attention either through the director and officer
questionnaires or otherwise, and considers whether to approve or take other
appropriate action with respect to such transactions or relationships. During 2022
and 2023, no related party transactions that were significant or material
occurred.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Employee
directors (Anthony Ambrose) do not receive additional compensation for serving
on the Board of Directors. During 2023, non-employee directors received a cash
retainer of $7,750 for each quarter of service. Data I/O paid additional
quarterly compensation to the non-employee directors who served as Chair of the
Board of Directors or as a Committee chair: $3,750 for Chair of the Board of
Directors; $2,500 for Chair of the Audit Committee; $2,000 for Chair of the
Compensation Committee; and $2,000 for Chair of the Corporate Governance and
Nominating Committee. Fees are prorated based on time served for changes in
directors and assignments.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">In
addition, each non-employee Board of Directors member as of May 18,
2023, was granted a restricted stock award for 10,400 shares
of Data I/O stock. The restricted stock awards were granted under the
provisions and terms of the 2023
Omnibus Incentive Compensation Plan (“2023 Plan”) and generally vest in one year or on the date of the
next Annual Meeting, if earlier. Data I/O also reimburses non-employee
directors for actual travel and out-of-pocket expenses incurred in connection
with service to Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Each
Data I/O non-employee member of the Board of Directors is required to achieve
ownership of Data I/O stock at least equal to three times the annual director
cash retainer fee based on Data I/O’s then current share price. Non-employee
directors have five years from their initial election or appointment to meet the
ownership target requirement. Amounts that count toward meeting the target
requirement include: shares owned; shared ownership (shares owned or held in
trust by immediate family); and the gain amount from any in-the-money vested
options. If the stock ownership target requirement has not been met by any
non-employee director, until such time as such director reaches the target
requirement, he or she will be required to retain any Data I/O shares issued by
Data I/O to such director (other than those disposed of to pay for the exercise
and associated taxes on those shares). As of the Record Date, Mr. Brown has met
the stock ownership target requirement and Ms. Washlow, Mr. Smith and Mr.
Wentworth, as a result of their recent appointments, have not yet met the
requirement.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Chief Executive Officer (“CEO”) is required to achieve ownership of Data I/O
stock of at least two times the base pay of the CEO based on Data I/O’s then
current share price. The CEO has five years from appointment to meet the
ownership target requirement. Amounts that count toward meeting the target
requirement are the same as for the Board of Directors. If the stock ownership
target requirement has not been met by the CEO, until such time as the CEO
reaches the requirement amount, he or she will be required to retain any Data
I/O shares issued by Data I/O (other than those disposed of to pay for the
exercise and associated taxes on those shares). As of the Record Date, the CEO
has met the stock ownership target requirement.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Data
I/O has a Securities Trading Policy that includes a prohibition against hedging
transactions.
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">$14,893
EN-US style="font-size:12.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(1) Each outside director elected
at the annual meeting in 2023 was awarded 10,400 shares of restricted stock with a
fair value of $4.45 on May 18, 2023, vesting in one
year or the next annual meeting, if earlier.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(2) No outside director had option
awards outstanding on December 31, 2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(3) William Wentworth was elected
as a director at the at the Annual Meeting on May 18, 2023 and had prorated
compensation in 2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(4) Cheemin Bo-Linn did not stand
for re-election at the Annual Meeting on May 18, 2023 and had prorated
compensation in 2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Section
16(a) of the Securities Exchange Act of 1934 requires Data I/O’s directors,
certain officers and persons who own more than ten percent (10%) of Data I/O’s
Common Stock (“Reporting Persons”) to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of Data I/O. Reporting Persons are required by SEC regulations to
furnish Data I/O with copies of all Section 16(a) reports. Based on the
information provided to Data I/O, no Reporting Person filed Section 16(a)
reports late.
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;text-transform:uppercase;">Report of the
Audit Committee
left style="margin:0in;text-align:left;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Audit
Committee oversees Data I/O’s financial reporting process on behalf of the
Board of Directors. Management has the primary responsibility for the
consolidated financial statements and the reporting process, including the
systems of internal controls. Audit Committee members are not professional
accountants or auditors and their functions are not intended to duplicate or to
certify the activities of management or the independent auditors. In
fulfilling its oversight responsibilities, the Committee reviewed the audited
consolidated financial statements in the Annual Report (Form 10-K) with
management, including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited consolidated financial
statements with generally accepted accounting principles in the United States,
their judgments as to the quality, not just the acceptability, of Data I/O’s
accounting principles and such other matters as are required to be discussed by
the applicable requirements of the Public Company Accounting Oversight Board
(“PCAOB”) and the Commission, with the Committee under generally accepted
auditing standards. In addition, the Committee has discussed with the
independent auditors the auditors’ independence from management and Data I/O,
including the matters in the written disclosures and the letter provided by the
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">independent auditors, as required by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC for
independent auditor communications with Audit Committees concerning
independence, and considered the compatibility of non-audit services with the
auditors’ independence.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Committee selects and engages Data I/O’s independent auditors, is involved in
selecting and approving the independent auditors’ lead audit partner, and
discusses the overall scope and plans for the audits. The Committee meets with
the independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of Data I/O’s internal
controls, and the overall quality of Data I/O’s financial reporting. The
Committee held four meetings during 2023, of which four were attended by Data
I/O’s independent auditors.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">In
reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited consolidated financial statements be included in Data I/O’s Annual
Report (Form 10-K) for the year ended December 31, 2023, for filing with the
Securities and Exchange Commission. The Committee has considered the
Shareholder vote of approval of 97.5%
on May 18, 2023, as well
as the impact of changing independent auditors and has selected Grant ThorntonLLP
as Data I/O’s auditors for the current year.
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">PRINCIPAL ACCOUNTANT’S FEES AND
SERVICES
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Audit Fees:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
Aggregate fees billed by Grant Thornton LLP for professional services rendered
for the audit of Data I/O’s financial statements for each of the years ended
December 31, 2023 and 2022 and for review of the financial statements included
in each of Data I/O’s quarterly reports on Form 10-Q during each of the years
ended December 31, 2023 and 2022, were approximately $241,500
and $232,050, respectively.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Audit
Related Fees:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> No
aggregate fees were billed for the years ended December 31, 2023 and 2022 for
assurance and subsidiary related services by Grant Thornton LLP that are
reasonably related to the performance of the audit or review of Data I/O’s
financial statements that are not reported under the caption “Audit Fees”
above, including accounting treatment consultations.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Tax
Fees:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> No aggregate
fees were billed for the years ended December 31, 2023 and 2022 for professional
tax services rendered by Grant Thornton LLP.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">All
Other Fees
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">: No
aggregate fees were billed for the years ended December 31, 2023 and 2022, for
all other products and services provided by Grant Thornton LLP that are not
otherwise disclosed above.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Audit Committee’s policy is to
pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, non-audit
services, tax services and other services. Pre-approval is detailed as to the
particular service or category of service and is subject to a specific
engagement authorization.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">During
the year, circumstances may arise when it may become necessary to engage the
independent auditors for additional services not contemplated in the original
pre-approval. In those circumstances, the Audit Committee has delegated
pre-approval authority to the Chair of the Audit Committee for those instances
when pre-approval is needed prior to a scheduled Audit Committee meeting.
These additional approvals should be reported at the next scheduled Audit
Committee meeting.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">At our 2023 Annual Meeting of Shareholders,
our shareholders approved, in an advisory vote, the compensation of our Named
Executive Officers, as disclosed in the Executive Compensation discussion and
analysis, the compensation tables and the related disclosures in our Proxy Statement.
The proposal was approved by our shareholders with 93% of the votes cast voting
“for” approval and 6% voting “against” approval. In light of the level of
approval by our stockholders, the Compensation Committee considered the result
of the vote and did not make changes to our compensation policies or practices
specifically in response to the stockholder vote.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Annual executive officer compensation consists of the
following elements which are described in more detail below:
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Annual base
salary;
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Management
Incentive Compensation Plan or “MICP”;
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Long-term equity
incentives;
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Benefits;
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Perquisites and
other perceived benefits; and
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">It
is the Compensation Committee’s policy to set total executive officer
compensation at competitive levels based on compensation surveys with similar
positions in similar sized company revenue ranges and at levels sufficient to
attract and retain a strong, motivated leadership team. Our philosophy for
compensation of executive officers is based on the following two principles:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">i.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> Executive base compensation levels should be
established by comparison of job responsibility to similar positions in
comparable companies and be adequate to retain highly-qualified personnel; and
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">ii.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;"> Variable compensation should be a critical element of
compensation and be set to be comparably competitive and to provide strong incentives
to improve performance and shareholder value.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Annual Base
Salary.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Compensation Committee establishes a base salary structure for each executive
officer position. This structure defines the salary levels and the
relationship of base salary to total cash compensation. The Compensation
Committee reviews the salary structure periodically.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">MICP.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The MICP offers each executive officer
a performance-based opportunity to earn the variable component of annual cash
compensation in an amount tied to a percentage of the executive officer’s base salary.
The Compensation Committee’s philosophy in setting executive MICP percentages
and the formulas for MICP payout is to pay above average total compensation for
better than average historical or expected financial performance and below
average compensation for lower than or average historical or expected financial
performance. The percentages of base salary targeted for MICP payout (“the
MICP Target”) for specific executive officers for a given year are generally
the same as the previous year but can be changed by the Compensation Committee
on an annual basis. The MICP payout can range from 0% to 200% of each
executive’s MICP Target based upon the achieved MICP Measures for the period.
The 2022 and 2023 MICP Target amounts for our executive officers (Ng prorated
amount for the period actually worked in 2023 is $65,000) were as follows:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Compensation Committee determined for 2022 and again for 2023 that it was
critical to emphasize profitability. For the profitability measure: Financial
Performance (“FP”), which is based on achievement of various levels of
operating income as percentage of revenue. (See below for the Financial
Performance Matrix.)
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">For
2022, the focus was split with 80% on FP as measured on operating income as a
percentage or revenue, and 20% on SentriX Qualifying Revenue growth targets
over a minimum threshold. For 2023, it was determined that profitability
was the most critical focus and that 100% of the MICP measure would be FP. For
2024, it was determined that again,
profitability was the most critical focus, however the measurement target was
modified to EBITDA (Earnings Before Interest Taxes Depreciation Amortization)
and translated the prior Operating Profit target percentages to EBITDA
approximate equivalents.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Compensation Committee believes that for 2022, 2023 and 2024, the applicable
measures of key results for Data I/O have affected or will affect near-term and
long-term shareholder value. A greater or lesser percentage of MICP Target is
to be paid based on Data I/O’s actual achievement of these measures with the payout
target typically based on company financial plans as the Board determines
appropriate. For 2022, as a result of the
operating loss the FP
measurement resulted in no payout for that measure and for the SentriX portion
the growth target threshold was not achieved, so for 2022 no MICP payout was
earned. For 2023, the
operating income measure resulted in a payout of 27% for the MICP. The Compensation Committee retains
discretion to adjust the calculation of the two measures for changes outside
normal business operations such as acquisitions or asset sales.
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Range of Payouts
calibri,sans-serif style="font-size:10.0pt;">(actual results interpolated)
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The 2022 2023 MICP Variable
Compensation Matrix consisted of two possible measures: Financial Performance
(FP) and a SentriX performance objective.
top width=10% style="background:white;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">
top width=10% style="background:white;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=10% style="background:white;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Payout
top width=10% style="background:white;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=16% style="background:white;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Payout
top width=44% style="height:17.25pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">Operating Profit as a % of Revenue
calibri,sans-serif style="font-size:10.0pt;">
top width=10% style="background:white;border:solid windowtext 1.0pt;height:17.25pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">0.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">3.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">6.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">9.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">0%
top width=10% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:12.35pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">50%
top width=10% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:12.35pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">100%
top width=10% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:12.35pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">150%
top width=16% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:12.35pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
black face=calibri,sans-serif style="font-size:10.0pt;">200%
top width=15% style="background:white;height:14.75pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Minimum
top width=11% style="background:white;height:14.75pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=11% style="background:white;height:14.75pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Payout
top width=12% style="background:white;height:14.75pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">
top width=12% style="background:white;height:14.75pt;padding:0in 1.5pt 0in 1.5pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Payout
top width=39% style="height:18.85pt;padding:0in 1.5pt 0in 1.5pt;">
calibri,sans-serif style="font-size:10.0pt;">SentriX Revenue Growth over
Threshold %
top width=15% style="background:white;border:solid windowtext 1.0pt;height:18.85pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">Threshold %
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">20.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">40.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">130.0%
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">0%
top width=11% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">50%
top width=11% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">100%
top width=12% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:right;text-indent:-.25in;">
black face=calibri,sans-serif style="font-size:10.0pt;">150%
top width=12% style="background:white;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;height:13.5pt;padding:0in 1.5pt 0in 1.5pt;">
right style="margin:0in;page-break-after:avoid;text-align:right;">
black face=calibri,sans-serif style="font-size:10.0pt;">200%
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Long-Term
Equity Incentives.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Compensation Committee approves grants under the Data I/O Corporation 2023 Omnibus Incentive Compensation
Plan (the “2023 Plan”) formerly from the Data I/O Corporation 2000 Stock Compensation Incentive Plan
(the “2000 Plan”). The
2023 Plan is Data I/O’s
only long-term employee incentive plan. The primary purpose of the 2023 Plan is to make a significant element of executive pay a
reward for taking actions which maximize shareholder value over time.
Generally, new options,
restricted stock unit and/or performance stock unit awards are granted under the 2023 Plan. New options or stock awards may also be granted to
the Board of Directors under the 2023
Plan. When the 2023 Plan was approved, all shares remaining in the 2000 Plan were transferred to the 2023 Plan, and future awards will be
made under it. Starting
in 2023, under the provisions of the 2023 Plan, a portion of the equity awards
to executives were Performance Stock Units (“PSU”) (roughly 20% based on
achieving the target level performance) and 80% Restricted Stock Units (“RSU”).
The performance measures for the PSUs awarded are revenue growth targets for
the three-year period ending December 31, 2025. Achieving a threshold growth
measure earns 50% of the PSU target award; achieving the target growth measure
earns 100% of the PSU target award; and achieving the maximum target growth
measure earns 150% of the PSU target award.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Compensation
Committee grants options, RSU and/or PSU awards based primarily on its
perception of the executive’s ability to affect future shareholder value and
secondarily on the competitive conditions in the market for highly-qualified executives
who typically command compensation packages which include a significant equity
incentive. All RSU and PSU awards granted to our executive
officers in 2023 and 2022 were based on these criteria.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Historically, all options granted by
Data I/O have been granted with an exercise price equal to the fair market
value (an average of the day’s high and low selling price) of Data I/O’s Common
Stock on the date of grant and, accordingly, will only have value if Data I/O’s
stock price increases. Options granted to employees are non-qualified.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Vesting and Exercise
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Options granted to
employees generally vest quarterly over four years at a rate of 6.25% per
quarter and have a six-year term. Options granted to non-employee Directors
are also non-qualified options and vest quarterly over a three-year period. The
current primary form of equity compensation is restricted stock unit grants. RSU grants to employees typically vest
annually over a four-year period. For
2023, RSU grants to executives vest annually over a three- or four-year period. All the 2023 PSU
awards vest upon the three-year performance achievement on December 31, 2025.
RSU grants to non-employee Directors vest in one year or on the date of the next
Annual Meeting of Shareholders, if earlier. All grants are subject to possible
acceleration of vesting in connection with certain events leading to a change
in control of Data I/O or in the event in a change in control or at any other
time at the discretion of the Compensation Committee. All options granted (none recently) to executive officers are issued in
tandem with limited stock appreciation rights (“SARs”), which become
exercisable only in the event of a change in control of Data I/O. See: “Change
in Control and other Termination Arrangements.”
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Award Process
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The timing of our typical
grant/award is usually determined well in advance, with approval at a scheduled
meeting of our Board of Directors or its Compensation Committee with the grant
date generally to be effective on the date of our next Annual Meeting of
Shareholders or, for employees, the first day of the following month. The
Annual Meeting of Shareholders does not coincide with any of our scheduled
earning releases. We do not anticipate option, RSU or PSU awards at other
dates, except for grants/awards to new employees based on generally the first
of the month following their first date of employment or in specific
circumstances approved by the Compensation Committee. The grant/award date is
established when the Compensation Committee approves the grant/award and all
key terms have been determined. If at the time of any planned grant/award date,
any member of our Board of Directors or Executive Officers is aware of material
non-public information, the Company would not generally make the planned grant/award.
In such an event, as soon as practical after material information is made
public, the Compensation Committee would authorize the delayed grant/award.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Benefits.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Executive Officers of Data I/O are
eligible for the same benefits as other Data I/O employees. Data I/O has no
defined benefit pension programs. Data I/O has a 401(k) tax qualified
retirement savings plan in which all U.S. based employees, including U.S. Executive
Officers are able to contribute the lesser of up to 100% of their annual salary
or the limit prescribed by the IRS on a Roth or pre-tax basis. Data I/O’s match
formula is 100% on the first 2% and 50% on the next 4%, which requires a 6%
contribution to receive a 4% matching contribution. Matching contributions in
any year require employment on December 31, except in the case of retirement
per the plan, and vest after three years of service credit.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Perquisites and
Other Personal Benefits.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">We
believe perquisites are not conditioned upon performance, create divisions
among employees, undermine morale, and are generally inconsistent with our
compensation philosophy and policy of equitable treatment of all employees
based upon their contribution to our business. No executive officer received
perquisites valued at $10,000 or more in 2023 or 2022.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Individual
Executive Officers’ Performance.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
base salary of each executive officer is reviewed annually by the President and
Chief Executive Officer. This is done on the basis of a review by the
President and Chief Executive Officer, evaluating the executive’s prior year
performance against their individual job responsibilities and attainment of
corporate objectives and Data I/O’s financial performance. In developing
executive compensation packages to recommend to the Compensation Committee, the
President and Chief Executive Officer considers, in addition to each
executive’s prior year performance, the executive’s long-term value to Data
I/O, the executive’s pay relative to that for comparable surveyed jobs, the
executive’s experience and ability relative to executives in similar positions,
and the current year increases in executive compensation projected in industry
surveys.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Compensation Committee then
reviews the President and Chief Executive Officer’s recommendations for
executive officers’ total compensation and approves final decisions on pay for
each executive officer based on the President and Chief Executive Officer’s
summary of the executive officer’s performance and on the other criteria and
survey data described above. In this process, the Compensation Committee
consults with Data I/O’s President and Chief Executive Officer.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The base salary, total cash
compensation, and long-term equity incentive compensation for the President and
CEO are reviewed annually by the Compensation Committee. This review includes
a written evaluation of the CEO’s performance for the previous year. The
Compensation Committee meets annually without the President and Chief Executive
Officer to evaluate his performance and to develop a recommendation for his
compensation for the coming year. In addition to reviewing Data I/O’s
financial performance for the prior year, the Committee reviewed compensation
surveys for chief executive officers and the President and Chief Executive
Officer’s individual performance, including development and execution of short-term
and long-term strategic objectives, Data I/O revenue growth and profitability,
the achievement of which is expected to increase shareholder value.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Compensation Committee determined
the compensation package, including salary, bonus, MICP participation, PSU
awards, RSU awards, and other benefits for Mr. Ambrose, President and Chief
Executive Officer, based on the Committee’s perception of his qualifications
for the position and his ability to affect future shareholder value, results
delivered, compensation surveys and the competitive conditions in the market.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Compensation Committee believes
that promoting the creation of long-term value discourages behavior that leads
to excessive risk. The Compensation Committee believes that the following
features of our compensation programs provide incentives for the creation of
long-term shareholder value and encourage high achievement by our executive
officers without encouraging inappropriate or unnecessary risks:
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our long-term
incentives in the form of stock options, RSU, and/or PSU awards are at the
discretion of the Compensation Committee and not formulaic.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Stock options
become exercisable over a four-year period and remain exercisable for up to six
years from the date of grant and RSU awards vest over a three- or four-year
period, and PSU awards vest based on achievement over a three-year performance
period, encouraging executives to look to long-term appreciation in equity
values.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">We balance short
and long-term decision-making with the annual cash incentive program and stock
options, RSU, and/or PSU that vest over three- or four-years.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Because of the
extent of the CEO direct stock ownership, they could lose significant wealth if
Data I/O were exposed to inappropriate or unnecessary risks which in turn
affected our stock price.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The metric used in
the MICP measure is set by the Compensation Committee, which believes it will drive
shareholder value. Moreover, the Committee attempts to set ranges for these
measures that encourage success without encouraging excessive risk-taking to
achieve short-term results. The PSU growth measure further balances longer-term
with short-term outcomes.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">In addition, the
overall MICP incentive compensation cannot exceed two times the MICP Target
amount, no matter how much performance exceeds the measures established for the
year.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Accounting and Tax Considerations of our Compensation
Program
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Options
granted to employees are non-qualified options, when awarded, because of the
more favorable tax treatment for Data I/O. We are required to value granted
stock options under the fair value method and expense those amounts in the
income statement over the stock option’s remaining vesting period. Restricted
stock is valued at its fair value on the award date and is expensed over its
vesting period.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">We
have structured our compensation program in the past to comply with Internal
Revenue Code Sections 162(m) and 409A. Under Section 162(m) of the Internal
Revenue Code, a limitation was placed on tax deductions of any publicly-held
corporation for individual compensation to covered employees (generally the chief
executive officer and the three other most highly compensated executive
officers, other than the chief financial officer, whose compensation must be
disclosed pursuant to rules and regulations under the Securities Exchange Act
of 1934) exceeding $1 million in any taxable year, unless the compensation is
performance-based. Tax reform in 2017 has revised and eliminated the
performance-based pay exception for new or modified compensation arrangements
for 2018 and beyond. The Compensation Committee is aware of this limitation
and believes that no compensation paid in 2022 or 2023, or expected to be paid
in 2024, by Data I/O will exceed the $1 million limitation of Section 162(m) except
possibly related to a change of control. The Section 162(m) treatment will continue
to be part of future compensation considerations.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Clawback of Executive Compensation
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board of Directors believes
that it is in the best interests of the Company and its shareholders to create
and maintain a culture that emphasizes integrity and accountability and that
reinforces the Company's compensation philosophy. On October 25, 2023, the
Board adopted an Incentive Compensation Recovery Policy (“Clawback
Policy) which provides for the recovery of erroneously awarded incentive
compensation in the event that the Company is required to prepare an accounting
restatement due to material noncompliance of the Company with any financial
reporting requirements under the federal securities laws. This Clawback Policy
is designed to comply with Section 10D of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), related rules and the listing standards of the
Nasdaq Stock Market or any other securities exchange on which the Company’s
shares are listed in the future.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Change in
Control Arrangements
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">.
Data I/O has entered into agreements (the “Executive Agreements”) with Messrs.
Ambrose, Gulati, Tidwell and Ng which entitle them to receive payments if they
are terminated without cause or resign with good reason within specified
periods before or after the occurrence of certain events deemed to involve a
change in control of Data I/O. Effective January 31, 2023, the Executive
Agreements of Messrs. Ambrose, Gulati, Hatlen and Tidwell were amended and
restated, and the term of their Executive Agreements was extended with
automatic renewal provisions. Mr. Ng entered into an Executive Agreement upon
his hiring. The Executive Agreements ensure appropriate incentives are in
place for Messrs. Ambrose, Gulati, Tidwell and Ng to complete any change in
control related transaction and transition, as well as comply with the
provisions of Section 409A of the Internal Revenue Code. The Executive
Agreements state that the resulting additional severance will be calculated
under the Executive Agreements based on DataI/O’s severance arrangements
in place immediately preceding the date of a change in control (See: “Other
Termination Arrangements” below for current severance policy). The Executive
Agreements provide for continuation and vesting in DataI/O’s matching
401(k) contributions through the date of termination after a change in control
and include a reimbursement allowance of $20,000 for outplacement services.
The Executive Agreements also have a transaction closing incentive of one-half
year’s annual salary for Messrs. Ambrose, Gulati, Tidwell and Ng to encourage
the consideration of all forms of strategic alternatives.
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">Data I/O’s 2023 RSU
and PSU awards have been granted pursuant to the provisions of the 2023 Plan.
Prior year’s awards were under the 2000 Plan. The Change in Control provision
applicable to the 2000 Plan and the 2023 Plan are as follows:
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;letter-spacing:0pt;">2000 Plan
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">The 2000 Plan allows for the granting of
“Awards”, which include options, restricted stock and other awards made
pursuant to the 2000 Plan. Subject to any different terms set forth in the
award agreement, vesting of “qualifying” options and restricted stock awards
may be affected by a Change in Control as described out in the table below. A
“Change in Control” is defined to include (i) a merger or consolidation of the
Company in which more than 50% of the voting power of the Company’s outstanding
stock after the transaction is owned by persons who are not shareholders
immediately prior to such transaction, and (ii) the sale or transfer of all or
substantially all of the Company’s assets. A “Qualifying Award’ is defined as
an option or other Award that has been held for at least 180 days as of the
Change of Control. “Qualifying Shares” means common stock issued pursuant to a
Qualifying Award which are subject to the right of Data I/O to repurchase some
or all of such shares at the original purchase price (if any) upon the holder’s
termination of services to Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">2023 Plan
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The 2023 Omnibus Incentive
Compensation Plan (“2023 Plan”) replaced the 2000 Plan going forward for new
awards, and was approved by the shareholders at the 2023 Annual Meeting. The
2023 Plan has substantially similar treatment of an award as the amended 2000
Plan in the event of a Change in Control.
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">The outstanding Awards do not remain
outstanding or are not assumed by the surviving entity or replaced with
comparable Awards.
top width=50% style="border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">Subject to certain limitations, the vesting
of Qualifying Awards is accelerated in full. Restricted stock will vest and
options will be exercisable in full prior to the effective date of the Change
of Control.
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">The outstanding Awards remain
outstanding after a Change of Control or are assumed by the surviving entity
or replaced with comparable Awards.
top width=50% style="border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">Subject to certain limitations, the
vesting of outstanding Qualifying Awards will be accelerated to the extent of
25% of the unvested portion thereof. The remaining 75% of the unvested
portion will vest in accordance with the vesting schedule set forth in the
applicable Award agreement.
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">The outstanding Awards remain
outstanding after a Change of Control or are assumed by the surviving entity
or replaced with comparable Awards, but the holder of a Qualifying Award is
terminated involuntarily within one year of the Change of Control.
top width=50% style="border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">
windowtext face=calibri,sans-serif style="font-size:10.0pt;letter-spacing:0pt;text-decoration:none;">All Awards held by such person will be
accelerated in full. Restricted stock will vest and options will be
exercisable in full for a period of 90 days commencing on the effective date
of the involuntary termination, or if shorter, the remaining term of the
option.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">In 1983, Data I/O adopted a SAR Plan
which allows the Board of Directors to grant to each director, executive
officer or holder of 10% or more of the stock of Data I/O a SAR with respect to
certain options granted to these parties. A SAR has been granted in tandem
with each option granted to an executive officer of Data I/O. SARs granted
which have been held for at least six months are exercisable for a period of 20
days following the occurrence of either of the following events: (i) the close
of business on the day that a tender or exchange offer by any person (with
certain exceptions) is first published or sent or given if, upon consummation
thereof, such person would be the beneficial owner of 30% or more of the shares
of Common Stock then outstanding; or (ii) approval by the shareholders of Data
I/O (or, if later, approval by the shareholders of a third party) of any
merger, consolidation, reorganization or other transaction providing for the
conversion or exchange of more than 50% of the outstanding shares of Data I/O’s
Common Stock into securities of a third party, or cash, or property, or a
combination of any of the foregoing. Currently, only one option grant remains
outstanding that includes a SAR.
symbol lang=EN-US style="font-size:10.0pt;">·
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Other
Termination Arrangements.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Data
I/O has a severance policy for U.S. employees that provides for severance
payouts for terminations without cause based upon years of service. The
current formula, effective March 1, 2014, is 1 week pay for each year of
service with a limit of six months’ pay. Mr. Ambrose, Mr. Gulati, Mr. Ng and
Mr. Tidwell had at March 18, 2024, approximately 12, 11, 1 and 4 years of
service, respectively. Mr. Ambrose is entitled to a one year of base salary
severance, except in the case of a change in control, as part of his employment
arrangement. Mr. Gulati, Mr. Ng and Mr. Tidwell are entitled to a one-half
year of base salary severance, except in the case of a change in control, as
part of their employment arrangement. Data I/O does not have a formal policy
regarding executive severance but has generally provided an amount it believes
is consistent with severance typically provided for executives in similar
positions and with similar periods of service.
top width=18% style="height:45.95pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">
top width=18% style="border-bottom:solid windowtext 1.0pt;height:45.95pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Termination without
cause and Change in Control not applicable
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Termination without
cause and Change in Control applicable
center style="margin:0in;page-break-after:avoid;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">Change in Control
applicable without termination
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$347,000
top width=15% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$686,948
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">195,000
top width=17% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$173,500
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">195,000
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$125,000
top width=15% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$482,078
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">61,250
top width=17% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$125,000
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">61,250
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$122,500
top width=15% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$445,618
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">68,750
top width=17% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$122,500
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">68,750
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
calibri,sans-serif style="font-size:10.0pt;">Gerald Ng
(5)
top width=18% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$137,500
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=15% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$454,016
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">80,000
top width=17% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">$137,500
top width=16% style="height:23.5pt;padding:0in 5.4pt 0in 5.4pt;">
center style="margin:0in;margin-bottom:12.0pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:center;text-indent:-.25in;">
calibri,sans-serif style="font-size:10.0pt;">80,000
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(1) Maximum vesting on Change in
Control as of March 18, 2024 (includes PSU awards at target performance
achievement).
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(2) Represents the Data I/O standard
employee severance, alternative Executive/Employment Agreement severance,
change in control transition/closing incentive, and outplacement expense
reimbursement, as applicable as of March 18, 2024.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(3) Represents change in control
transition/closing incentive as of March 18, 2024.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(4) Mr. Ambrose is entitled to a
year of base salary severance, except in the case of a change in control, as
part of his employment arrangement.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(5) Mr. Gulati, Mr. Ng and Mr.
Tidwell are entitled to a half year of base salary severance, except in the
case of a change in control, as part of their employment arrangement.
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">SUMMARY COMPENSATION TABLE
center style="margin:0in;text-align:center;">
calibri,sans-serif lang=EN-US style="font-size:9.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
following table shows compensation paid by Data I/O for services rendered
during 2023 and 2022 to each of our named executive officers.
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">
black face=calibri,sans-serif style="font-size:10.0pt;">Name
1
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(1) Data I/O currently has four named
executive officers. Mr. Ng joined Data I/O in July 2023 as Vice President of
Finance and effective August 16, 2023, became Data I/O's Vice President and Chief
Financial Officer. On August 16, 2023, Mr. Hatlen retired as the Company’s
Vice President, Chief Financial Officer, Chief Operating Officer, Corporate
Secretary and Treasurer, but continued to provide financial advisory services
on a part-time basis through December 31, 2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(2) Mr. Hatlen’s base pay was
adjusted effective January 2022. Mr. Ambrose, Mr. Gulati, and Mr. Tidwell had
base pay adjustments effective July 1, 2023. Mr. Ng's salary earned is based on
his start date of July 1, 2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(3) Employee service awards paid in
2023 or 2022.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(4) Amount includes the fair value
of RSU and PSU awards granted during 2023. PSU awards are included above at the
threshold level which is 50% of the target 100% level with a maximum level of
150% of target. See the Outstanding Equity table.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(5) No options were granted to
executive officers are granted in tandem with an equal number of SARs. SARs
are only exercisable upon the occurrence of certain events leading to a change
in the control of Data I/O. See “Change in Control and Other Termination
Arrangements.” No options or SARs were awarded to executive officers in 2022 or
2023.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(6) Amounts earned under the MICP
variable compensation arrangement in place for the year as approved by the
Board.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(7) Not applicable for Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(8) These amounts represent for Mr.
Ambrose, Mr. Hatlen, Mr. Ng, Mr. Gulati and Mr. Tidwell, Data I/O’s matching
contributions to Data I/O’s 401(k) Plan, and the value of group term life
insurance in excess of premiums paid by each of the executive officers under
the standard employee benefit plans. In
addition, Mr. Gulati’s 2022
and 2023 amount includes
a payout of accumulated PTO (paid time off) of $13,847 and $4,616, respectively. Mr.
Hatlen’s 2023 amount includes a retirement payout of accumulated PTO of $68,991.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>(1) Anthony Ambrose was our PEO (principal executive officer) for each year presented.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>(2) The individuals comprising the Non-PEO NEOs presented for 2021 and 2022 are: Hatlen, Gulati and Tidwell with the Non-PEO NEOs presented for 2023 are: Hatlen, Ng, Gulati and Tidwell. Hatlen retired as a NEO 8/15/2023. He fully resigned and forfeited unvested shares 12/31/2023. Ng started 7/3/2023 and received hiring grants on that date.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>(3) 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 (4) below.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>(4) 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 column are the totals from the Stock Awards column set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension Value are not applicable for Data I/O Corporation and accordingly are not reported in the Summary Compensation Table. Amounts in the Inclusion of Pension Service Cost are not applicable for Data I/O Corporation.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>(5) The Peer Group TSR and Company Selected Measures disclosure is not applicable for a Smaller Reporting Company.
EN-US style="FONT-SIZE: 10pt" face=calibri,sans-serif>The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
right>
calibri,sans-serif>Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO
bottom width="13%">
right>
calibri,sans-serif>Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO
bottom width="14%">
right>
calibri,sans-serif>Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO
bottom width="14%">
right>
black face=calibri,sans-serif>Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO
bottom width="12%">
right>
calibri,sans-serif>Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO
bottom width="14%">
right>
calibri,sans-serif>Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for PEO
bottom width="13%">
right>
calibri,sans-serif>Total - Inclusion of Equity Values for PEO
right style="margin:0in;page-break-after:avoid;text-align:right;">
black face=calibri,sans-serif style="font-size:10.0pt;">Average Year-End Fair
Value of Equity Awards Granted During Year That Remained Unvested as of Last
Day of Year for Non-PEO NEOs
right style="margin:0in;page-break-after:avoid;text-align:right;">
black face=calibri,sans-serif style="font-size:10.0pt;">Average Change in Fair
Value from Last Day of Prior Year to Last Day of Year of Unvested Equity
Awards for Non-PEO NEOs
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">Average Vesting-Date Fair Value of
Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs
right style="margin:0in;page-break-after:avoid;text-align:right;">
black face=calibri,sans-serif style="font-size:10.0pt;">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
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">Average Fair Value at Last Day of
Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">Average Value of Dividends or Other
Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO
NEOs
right style="margin:0in;page-break-after:avoid;text-align:right;">
calibri,sans-serif style="font-size:10.0pt;">Total - Average Inclusion of Equity
Values for Non-PEO NEOs
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Number of Securities
Underlying Unexer-cised Options Exercisable
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Number of Securities
Underlying Unexe-rcised Options Unexer-cisable
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Equity Incentive Plan
Awards: Number of Securities Underlying Unexercised Unearned Options
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Number of Shares or
Units of Stock Held That Have Not Vested (#)
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Market Value of Shares
or Units of Stock That Have Not Vested
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Equity Incentive Plan
Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
center style="margin:0in;text-align:center;">
black face=calibri,sans-serif style="font-size:10.0pt;">Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That
Have Not Vested
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(1)
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Mr. Hatlen retired
fully effective 12/31/2023 and all of his remaining unvested awards were
forfeited at that time.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">(2)
EN-US style="font-size:7.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">PSU awards are
included in column (i) (j) above and are disclosed at the threshold level
of the award which is 50% of the target level with a maximum level of 150% of
the target level. If maximum performance is achieved the number of shares
would be triple the amount in the table above in column (i).
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The following
table gives information about our Common Stock that may be issued upon the
exercise of options and rights under all of our existing equity compensation
plans as of December 31, 2023.
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">(a) Number of securities to be
issued upon the exercise of outstanding options, warrants and rights
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">(b) Weighted–average exercise price
of outstanding options, warrants and rights
center style="margin:0in;text-align:center;">
calibri,sans-serif style="font-size:10.0pt;">(c) Number of securities remaining
available for future issuance under equity compensation plans (excluding
securities reflected in column (a))
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:12.0pt;">(1) Represents
shares of our Common Stock issuable pursuant to the Data I/O Corporation 2023
Omnibus Incentive Compensation Incentive Plan, 2000 Stock Compensation
Incentive Plan, and 1982 Employee Stock Purchase Plan. Table excludes
unvested: RSU awards of 353,525 from the 2000 Plan, RSU awards of 270,100 from
the 2023 Plan, and PSU awards of 25,000 from the 2023 Plan.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:12.0pt;">(2) Stock
Appreciation Rights Plan (“SAR”) provides that directors, executive officers or
holders of 10% or more of our Common Stock have an accompanying SAR with
respect to each exercisable option. While the plan has been approved by the
security holders, no amounts are included in columns (a), (b), or (c) relating
to the SAR.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;line-height:12.0pt;">(3) Inducement
grant remaining to Michael Tidwell of non-qualified stock options, fully
vested, with 12,500 remaining unexercised. Table excludes unvested inducement
grants to Gerald Ng of 75,000 RSU and 5000 PSU awards.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Board of Directors requests that the shareholders ratify the continued
appointment of Grant Thornton LLP to serve as Data I/O’s independent auditors
for calendar year 2024. Grant Thornton LLP examined the consolidated financial
statements of Data I/O for the year ended December 31, 2023. Representatives
of Grant Thornton LLP are invited to be present at the Annual Meeting to make a
statement if they desire to do so and to respond to questions by shareholders.
They confirmed that they expect to be present.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Board recommends a vote “FOR” the continued
appointment of Grant Thornton LLP to serve as Data I/O’s independent auditors
for calendar year 2024.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">In
accordance with Section 951 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and Section 14A of the Exchange Act, the Board of Directors
requests that the shareholders approve, on an advisory basis, the compensation
paid to Data I/O’s Named Executive Officers, as described in “Executive
Compensation”, pursuant to the following Advisory Resolution:
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">“RESOLVED,
that Data I/O’s shareholders approve, on an advisory basis, the compensation of
Data I/O’s named executive officers, as disclosed in Data I/O’s Proxy Statement
for the 2024 Annual Meeting of Shareholders pursuant to the compensation
disclosure rules of the Securities and Exchange Commission, including the 2023 Summary
Compensation Table and the other related tables and disclosure.”
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Our executive compensation program
contains elements of cash, incentive and equity-based compensation and is
designed to align the interests of our executives with those of our
shareholders. The “Executive Compensation” section of this Proxy Statement,
describes in detail our executive compensation programs.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board has implemented an executive
compensation program that is intended to reward financial performance based on
goals established by the Board. The
Board fosters a performance-oriented culture by linking a significant portion
of each executive officer’s compensation to overall Company financial
performance, as measured in 2024 by EBITDA targets, which the Company believes is
the critical metric for Data I/O and its shareholders. We believe that equity awards align
the interests of our executives with those of our long-term shareholders by
encouraging long-term performance and incentivizing our executives to increase
long-term shareholder value. Equity awards represent a key component, and are
a significant portion, of our executive compensation.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board has designed Data I/O’s
executive compensation program to attract, motivate, reward and retain our
executive officers to achieve Data I/O’s corporate objectives and increase
shareholder value.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Say on Pay vote is advisory and
not binding on Data I/O or the Board of Directors; however, the Board will
consider the outcome of the vote when making future compensation decisions for
our executive officers.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board recommends a vote “FOR” the
Advisory Resolution (Say on Pay) approving the compensation of the Company’s
named executive officers as described in this Proxy Statement.
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
center style="margin:0in;margin-bottom:.0001pt;margin-left:.5in;margin-right:.5in;margin-top:0in;page-break-after:avoid;text-align:center;">
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">PROPOSAL 4: SAY ON FREQUENCY - ADVISORY VOTE ON FREQUENCY OF
FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board of Directors requests that the shareholders vote, on an
advisory basis, whether the frequency of future advisory votes on the
compensation of our named executive officers shall occur “every year”, “every
two years”, or “every three years”. The Board recommends that the future
advisory votes on the compensation of our named executive officers occur “every
year”.
black face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The
Board believes that an annual executive compensation advisory vote will
facilitate more direct shareholder input about executive compensation. An
annual executive compensation advisory vote is consistent with our policy of
reviewing our compensation program annually, as well as seeking frequent input
from our shareholders on corporate governance and executive compensation
matters.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Board of Directors believes that
holding the executive compensation advisory vote every year is in the best
interests of the Company and its shareholders and recommends voting for a
frequency of “EVERY YEAR”.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The Company will report the voting
results in a current report on Form 8-K that will be filed after the Annual
Shareholders Meeting. In addition, the Company will disclose in a current
report on Form 8-K within the time frame required by SEC rules the decision by
the Company as to the frequency of shareholder advisory votes on executive
compensation in light of the results of this shareholder advisory vote.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">As of the
date of this Proxy Statement, Data I/O is not aware of any other business to be
acted upon at the Annual Meeting. If any other business calling for a vote of
the shareholders is properly presented at the meeting, the holders of the
proxies will vote or refrain from voting in accordance with their best
judgment.
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calibri,sans-serif lang=EN-US style="font-size:10.0pt;">SHAREHOLDER NOMINATIONS AND PROPOSALS
FOR THE 2024 AND 2025 ANNUAL MEETING OF SHAREHOLDERS
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Data I/O’s Bylaws provide that advance
notice of nominations for the election of directors at a meeting of
shareholders must be delivered to or mailed and received by Data I/O at its
principal offices on or before February 16, 2024, in the case of the 2024 Annual
Meeting of Shareholders, and in the case of a special meeting of shareholders
to elect directors, the close of business on the 10th day following the date on
which notice of such meeting is first given to shareholders. Data I/O’s Bylaws
also provide that advance notice of business to be brought before the 2024 Annual
Meeting of Shareholders by a shareholder must be submitted in writing and
delivered to, or mailed and received by, Data I/O on or before February 16, 2024.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Each
notice of a nomination or proposal of business must contain, among other
things: (i) the name and address of the shareholder who intends to make the
nomination or proposal; (ii) a representation that the shareholder is a holder
of record of stock of Data I/O entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice or to vote at the meeting for the proposal; (iii) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the shareholder
and any material interest of such shareholder in any proposal to be submitted
to the meeting; (iv) such other information regarding each nominee or proposal
as would be required to be included in a proxy statement filed pursuant to the
proxy rules of the SEC; and (v) with respect to the nominations, the consent of
each nominee to serve as a director of Data I/O if elected.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">A
copy of the full text of the provisions of Data I/O’s Bylaws dealing with
shareholder director nominations and proposals is available to shareholders
from the Secretary of Data I/O upon written request. The Bylaws may also be
accessed online, as a Form 10-K exhibit as referenced in our Annual Report on
Form 10-K. SEC rules establish a deadline for submission of shareholder nominations
proposals that are not intended to be included in Data I/O’s proxy statement
with respect to discretionary voting (the “Discretionary Vote Deadline”). The
Discretionary Vote Deadline for the 2024 Annual Meeting was February 16, 2024.
If a shareholder gives notice of such a nomination or proposal after the
Discretionary Vote Deadline, Data I/O’s proxy holders will be allowed to use
their discretionary voting authority to vote against the shareholder nomination
or proposal when and if the proposal is raised at the 2024 Annual Meeting.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Eligible
shareholders who intend to have a nomination or proposal considered for
inclusion in Data I/O’s proxy materials for presentation at the 2025 Annual
Meeting must submit the proposal to Data I/O at its principal offices no later than
December 6, 2024. Shareholders who intend to present
a nomination or proposal at the 2024 Annual Meeting without inclusion of such nomination
or proposal in Data I/O’s proxy materials are required to provide notice of
such nomination or proposal to Data I/O no later than February 14, 2025, as further directed above.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">To
qualify as an “eligible” shareholder, a shareholder must have been a record or
beneficial owner of at least one percent (1%) of DataI/O’s outstanding
Common Stock, or shares of Common Stock having a market value of at least
$2,000, for a period of at least one (1) year prior to submitting the proposal,
and the shareholder must continue to hold the shares through the date on which
the meeting is held.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Data
I/O reserves the right to reject, rule out of order, or take appropriate action
with respect to any nomination or proposal that does not comply with these and
other applicable requirements, but only after Data I/O has notified the
shareholder(s) who have submitted the nomination or proposal of the problem and
such shareholder(s) have failed to correct it. This obligation to notify the
appropriate shareholder(s) does not apply to the failure to submit such
nomination or proposal prior to the deadlines discussed above.
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calibri,sans-serif lang=EN-US style="font-size:10.0pt;">STOCKHOLDERS
SHARING THE SAME ADDRESS
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">To
reduce the expenses of delivering duplicate materials, we are taking advantage
of the SEC’s “house holding” rules which permit us to deliver only one set of
proxy materials (or one Notice of Internet Availability of Proxy Materials) to
shareholders who share an address unless otherwise requested. If you share an
address with another shareholder and have received only one set of these
materials, you may request a separate copy at no cost to you by contacting
Investor Relations by email at
windowtext face=calibri,sans-serif lang=EN-US style="font-size:10.0pt;">investorrelations@dataio.com
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">, by phone at (425) 881-6444, by fax
at (425) 881-2917, or by writing to Data I/O Investor Relations, attention
Corporate Secretary (Gerald Ng), 6645 185
th
Avenue NE, Suite 100,
Redmond WA 98052. For future annual meetings, you may request separate
materials, or request that we send only one set of materials to you if you are
receiving multiple copies, by contacting Investor Relations as noted above.
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calibri,sans-serif lang=EN-US style="font-size:10.0pt;">
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calibri,sans-serif lang=EN-US style="font-size:10.0pt;">SOLICITATION OF PROXIES
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">The proxy accompanying this Proxy Statement is solicited
by the Board of Directors on behalf of the Company. Proxies may be solicited
by officers, directors and regular supervisory and executive employees of Data
I/O, none of whom will receive any additional compensation for their services.
In addition, Data I/O may engage an outside proxy solicitation firm to render
proxy solicitation services and, if so, will pay a fee for such services.
Solicitations of proxies may be made personally, or by mail, telephone,
telegraph or messenger. Data I/O will pay persons holding shares of Common
Stock in their names or in the names of nominees, but not owning such shares
beneficially, such as brokerage houses, banks and other fiduciaries, for the
expense of forwarding soliciting materials to their principals. All such costs
of solicitation of proxies will be paid by Data I/O.
calibri,sans-serif lang=EN-US style="font-size:10.0pt;">Copies of
our annual report on Form 10-K for the year ended December 31, 2023, are being
mailed with this Proxy Statement to each shareholder of record. If you did not
receive a copy of our annual report Form 10-K, you may obtain a copy (without
exhibits) without charge by writing c/o Secretary, 6645 185
th
Avenue
NE, Suite 100, Redmond, WA 98052 or by calling (425) 881-6444. Copies of the
exhibits to our annual report on Form 10-K are available for a nominal fee or
may be viewed at https://www.dataio.com/Company/Investor-Relations/Annual-Meeting.aspx
or www.sec.gov in the EDGAR filing of our report.
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