Interlink Electronics Inc

This proposal seeks a non-binding shareholder endorsement of the Company’s disclosed executive compensation (a ‘say on pay’ vote) as required by the Dodd-Frank Act. Management frames the vote as advisory—it does not change fiduciary duties nor void prior awards—but the Board and compensation committee will consider the outcome when setting future pay. The Company states its compensation objective is to attract and retain experienced executives to drive long-term value; the compensation program for 2025 consisted mainly of base salaries and discretionary cash bonuses, with limited equity awards granted to executives during the year. As a smaller reporting company, Interlink’s disclosed pay levels appear modest compared with larger peers, but its pay-versus-performance data shows multi-year net losses and mixed total shareholder returns, which could cause some shareholders to scrutinize the link between pay and company performance. The vote requires a simple majority of shares present and entitled to vote; brokers do not have discretionary voting power on this non-routine matter, so broker non-votes could affect the outcome. A FOR vote signals support for current compensation policies and gives management latitude to continue similar programs; an AGAINST vote or significant negative investor feedback could prompt the compensation committee to revise incentive structures, grant more equity-based pay, or increase disclosure. Because the vote is advisory, any changes would be voluntary, but repeated shareholder opposition can lead to reputational pressure and engagement with the Board. Evaluating this proposal requires weighing the Company’s justification for current pay practices, the apparent lack of recent executive equity grants, and the Company’s historical financial performance against the need to retain talent in a competitive technology/manufacturing sector. Overall, the Board recommends FOR to indicate alignment between management’s pay design and corporate objectives, but investors should monitor whether pay is increasingly performance- and equity-linked going forward.

This management proposal asks shareholders to approve the 2026 Omnibus Incentive Plan, which reserves 1,500,000 shares for a broad menu of equity awards (stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares/units) and authorizes the Compensation Committee to administer the plan. Management argues the plan is necessary to attract, retain and motivate key employees and directors and align their interests with stockholders; the Board conditioned adoption on shareholder approval and attached the full plan as Annex A. The plan contains governance protections including a prohibition on repricing options or SARs without shareholder approval (except for customary adjustments for stock splits and similar events), clawback/recoupment provisions tied to the company’s compensation recovery policy, transfer restrictions, and change-in-control acceleration and treatment provisions. Material plan mechanics—exercise-price floors, 10-year maximum terms for awards (5-year for >10% owners for ISOs), and the Compensation Committee’s authority to set performance goals and payment forms—are typical but give substantial discretion to the committee. From a shareholder perspective the reserved pool represents meaningful potential dilution (1,500,000 shares is approximately 9.5% of the 15.75 million shares outstanding as of the record date), so investors should weigh prospective incentive alignment against dilution. The plan also clarifies that forfeited or withheld shares generally become available again on a one-for-one basis, which can increase the effective run rate of share usage. The Compensation Committee may, subject to limits, delegate grant authority to officers for non-executive employees, potentially accelerating grant activity. Overall, approval would provide management with a flexible tool to implement long-term incentive programs, but investors should seek monitoring of grant practices, dilution metrics, and performance-based vesting to ensure pay-for-performance alignment.