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DASAN ZHONE SOLUTIONS,
DZS INC.NOTICE OF SPECIALANNUAL MEETING OF STOCKHOLDERS, 2017To our stockholders:Fellow Stockholders:You are cordially invited to attend a specialour 2023 Annual Meeting of Stockholders on Tuesday,May 30, 2023 at 10:00 a.m. Central Time. The meeting of stockholders of DASAN Zhone Solutions, Inc. (DZSI or the Company), which will be held virtually, and the live webcast of the annual meeting will be available at DZSI’s principal executive offices, locatedwww.virtualshareholdermeeting.com/DZSI2023. To access the webcast, go to this website and follow the instructions provided. Electronic entry to the meeting will begin at 7195 Oakport Street, Oakland, California 94621 on , 20179:45 a.m. Central Time.To attend, vote and submit questions during the annual meeting visit www.virtualshareholdermeeting.com/DZSI2023 and enter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instructions form or proxy card. If you encounter difficulties accessing the virtual meeting, please call the technical support number that will be posted at Pacific Time. www.virtualshareholdermeeting.com/DZSI2023.We are holding the specialannual meeting for the following purposes:1.To approve a series of three separate and alternative amendments to DZSI’s Restated Certificate of Incorporation, which would (i) effect a reverse stock split of DZSI’s outstanding common stock at exchange ratios of1-for-3,1-for-4 and1-for-5, as determined by the Company, and (ii) proportionately decrease the number of authorized shares of DZSI common stock, to be effected in the sole discretion of the Board of Directors at any time prior to our 2018 annual meeting of stockholders without further approval or authorization of our stockholders and subject to the Board of Directors’ authority to abandon such amendment;2.To approve the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve Proposal 1.1.To elect the following two members of the Board of Directors to serve for three-year terms as Class I Directors: Barbara Carbone and Joon Kyung Kim;2.To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023;3.To approve an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of our common stock, par value $.001 per share, from 36,000,000 to 72,000,000;4.An advisory vote on a non-binding resolution to approve the compensation of certain of our executive officers disclosed in this proxy statement;5.A non-binding advisory vote to determine the frequency of future advisory votes on the compensation of certain of our executive officers; and6.To transact other business that may properly come before the annual meeting or any adjournments or postponements of the meeting.These items are fully described in the proxy statement, which is part of this notice. We have not received notice of other matters that may be properly presented at the annual meeting.Only stockholders of record at the close of business on , 2017,April 3, 2023, the record date, will be entitled to vote at the specialannual meeting.Your vote is very important. Whether or not you expect to attendparticipate in the specialannual meeting, I encourage you to review the proxy statement and our Annual Report on Form 10-K to learn more about your Company and our achievements in person,2022, and to please complete, sign, datevote your shares as soon as possible. You may vote (a) by signing, dating and returnreturning the enclosed proxy card or vote electronicallycard/voting instruction form, (b) via the Internet or over the telephone as soon as possible to ensure that your shares are represented at the special meeting.(c) by telephone.If your shares are held in “street name,” which means your shares are held of record by a broker, bank or other nominee, you must provide your broker, bank or other nominee with instructions on how to vote your shares. For specific instructions on voting procedures, please refer to the section entitled “Voting Rights and Procedures” beginning on page 12 of the proxy statement and the instructions on the proxy card/voting instruction card.By Order of the Board of DirectorsKirk MisakaChief Financial Officer,Treasurer and SecretaryOakland, California , 2017YOUR VOTE IS IMPORTANT.WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON,PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD OR SUBMITYOUR PROXY ELECTRONICALLY VIA THE INTERNET OR OVER THE TELEPHONE BYFOLLOWING THE ENCLOSED INSTRUCTIONS.
| By order of the Board of Directors | |||||
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| Charles D. Vogt | |||||
| President and Chief Executive Officer | |||||
| YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE VOTE YOUR SHARES BY PHONE, VIA THE INTERNET, OR, IF YOU RECEIVED PAPER COPIES OF THESE PROXY MATERIALS, BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY CARD AT YOUR EARLIEST CONVENIENCE. | ||
we are providing online internet access to the Annual Meeting materials to many of our stockholders (other than those who previously requested electronic or paper delivery or to whom we have elected to furnish a full set of materials). This method of distribution makes our process more efficient and less costly, and limits our impact on the environment. We mailed to these stockholders a notice of internet availability of proxy materials containing instructions on how to access the Annual Meeting materials, including this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), how to vote online, instructions on obtaining a paper copy of the materials, including a proxy card, and how to attend the virtual Annual Meeting. The notice instructs stockholders on how to request delivery of proxy materials in printed form by mail or electronically by e-mail on an ongoing basis for future stockholder meetings. All stockholders who did not receive this notice will receive a full set of the Annual Meeting materials in printed form by mail or electronically by e-mail. held by 377 holders of record. Annual Meeting. ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, is a routine matter and brokers and nominees may vote on this matter without receiving instructions. electronically at the Annual Meeting. •To vote •To vote •To vote on the Internet, •To vote over the telephone, Annual Meeting. rather than from availability of proxy materials to households at which two or more stockholders reside. This practice, known as “householding,” is designed to reduce duplicate mailings, save significant printing and postage costs, and conserve natural resources. Stockholders sharing an address who have been previously notified by their broker, bank or other intermediary, and have consented to householding, either affirmatively or implicitly by not objecting to householding, will receive only one copy of our annual report, proxy statement and any notice of Internet availability of proxy materials. If you would like to opt out of or into this practice for future mailings, and receive separate or multiple annual reports, proxy statements and notices of Internet availability of proxy materials for stockholders sharing the same address, please contact your broker, bank or other intermediary. You may also obtain a separate annual report, proxy statement or any notice of Internet availability of proxy materials without charge by sending a written request to Our Board of Directors has Common Stock Authorized Issued and outstanding Reserved for future issuance pursuant to outstanding stock options Reserved for future issuance pursuant to outstanding restricted stock units Reserved for future issuance pursuant to the 2001 Plan Reserved for future issuance pursuant to the 2017 Plan (1) Reserved for future issuance pursuant to the ESPP first trading day of each calendar year. The Name of Beneficial Owner (1) DASAN Networks, Inc. New Enterprise Associates James Norrod II Yung Kim Kirk Misaka Michael Fischer David Misunas Eric Presworsky Michael Connors SeongGyun Kim C. Richard Kramlich Min Woo Nam Sung-Bin Park All directors, named executives and their affiliates as a group (11 persons)(14) with the following: Twenty-Five Million (25,000,000) shares, par value $.001 per share, shall be shares of preferred stock (the this Restated Certificate of Incorporation (as amended from time to time), each share of Common Stock shall have the same powers, rights and privileges and shall rank equally, share ratably and be identical in all respects as to all matters. partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateDASAN ZHONE SOLUTIONS,DZS INC.7195 Oakport StreetOakland, California 94621
5700 Tennyson Parkway, Suite 400Plano, Texas 75024PROXY STATEMENTDZSI’sThe Board of Directors of DZS Inc. solicits your proxy for use at the specialannual meeting of stockholders to be held on , 2017Tuesday, May 30, 2023 at Pacific10:00 a.m. Central Time by live webcast at DASAN Zhone Solutions, Inc.www.virtualshareholdermeeting.com/DZSI2023, 7195 Oakport Street, Oakland, California 94621, and at any adjournments or postponements of the meeting, for the purposes set forth in the “Notice of SpecialAnnual Meeting of Stockholders.” We made copies ofAs used in this proxy statement, the terms “DZS,” the “Company,” “we,” “us” and “our” refer to DZS Inc. and its consolidated subsidiaries.Why am I receiving DZS’s Annual Meeting materials?DZS Inc. delivered these materials to you in connection with its solicitation of proxies for use at the 2023 annual meeting of stockholders (the “Annual Meeting”) to be held on Tuesday, May 30, 2023 at 10:00 a.m. Central Time, and at any postponement(s) or adjournment(s) thereof. These materials were first sent or made available to stockholders beginning on April 17, 2023.Why did I receive a notice of internet availability of proxy materials instead of a full set of DZS’s Annual Meeting materials, or about vice versa?In accordance with rules and regulations of the Securities and Exchange Commission (the “SEC”), 2017.What is included in DZS’s Annual Meeting materials?•This Proxy Statement for the Annual Meeting;•DZS’s Annual Report; and•If you received a full set of DZS’s Annual Meeting materials, the proxy card or, if you are a beneficial owner of shares held in street name, a voting instruction form.Recommendation of the Board of DirectorsOur Board of Directors unanimously recommends that you vote “FOR” the proposals 1 – 4 and “3 Years” for proposal 5:Proposal Recommendation Page Reference 1 – Election of the Class I Directors FOR 2 – Ratification of Ernst & Young LLP as our independent registered public accounting firm FOR 3 – Approval of Certificate of Amendment to Restated Certificate of Incorporation FOR 4 – Advisory Vote on Executive Compensation FOR 5 – Advisory Vote on Frequency of Advisory Vote on Executive Compensation FOR 1Record Date and Shares Entitled to VoteOnly stockholders of record at the close of business on the record date, 2017, will beApril 3, 2023, are entitled to notice of and to vote at the special meeting.Annual Meeting. These stockholders are entitled to cast one vote for each share of common stock held as of the record date on all matters properly submitted for the vote of stockholders at the special meeting.Annual Meeting. As of the record date, there were approximately shares 31,102,434 shares of DZSIour common stock issued and outstanding, and entitled to vote at the special meeting.Stockholder of Record: Shares Registered in Your NameIf, on , 2017April 3, 2023, your shares arewere registered directly in your name with DZSI’sour transfer agent, Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote in personelectronically at the meeting or vote by proxy. Whether or not you plan to attend the meeting via live webcast, we request that you fill out and return the enclosed proxy card or vote by proxy on the Internet or over the telephone as instructed below to ensure your vote is counted.Beneficial Owner: Shares Registered in the Name of Broker or BankIf, on , 2017April 3, 2023, your shares are registered, not in your name, but rather in an account at a brokerage firm, bank, dealer or similar organization, then you are the beneficial owner of shares held in “street name”name,” and these proxy materials are being forwarded to you by the organization.your bank or broker. The organization holding your account is considered to be the stockholder of record for purposes of voting at the special meeting.Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attendview the special meeting.live webcast of the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in personelectronically at the meeting unless you request and obtain a “legal proxy”16-digit control number from your broker or other agent authorizing you to vote your shares in person.Quorum and Vote RequiredA quorum of stockholders is necessary to hold a valid specialannual meeting. The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of common stock entitled to vote at the special meetingAnnual Meeting, is necessary to constitute a quorum at the special meeting.TheAnnual Meeting. In the election of directors, the two nominees who receive the highest number of affirmative votes will be elected as directors. With respect to the proposal to amendregarding the amendment of our Restated Certificate of Incorporation to effectincrease the reversenumber of shares of authorized common stock, split and the associated reduction in our authorized capitalization (Proposal 1) must receive the affirmative vote of a majority of allour outstanding shares of common stock is required for approval, and with respect to the non-binding resolution as to the frequency of the shares of our common stock outstanding and entitledstockholder advisory vote on executive compensation, stockholders are required to vote for that proposal to be approved. The proposal to adjourn the special meeting, if necessary, to solicit additional proxies (Proposal 2) must receive theselect 1 Year, 2 Years or 3 Years. All other proposals require an affirmative vote of a majority of the votes cast at the special meeting for that proposal to be approved.Abstentions and brokernon-votes will be counted for the purpose of determining whether a quorum is present. Generally, brokernon-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Brokers and nominees may exercise their voting discretion without receiving instructions from the beneficial owner of shares on proposals that are deemed to be routine matters. If a quorumproposal is present, abstentions andnot a routine matter, the brokernon-votes or nominee may not vote the shares with respect to the proposal to amend our Restated Certificate of Incorporation to effectwithout receiving instructions from the reverse stock split and the associated reduction in our authorized capitalization (Proposal 1) will have the effect of a vote AGAINST that proposal. However, because abstentions and brokernon-votes will not be considered votes cast, they will have no effect on the outcomebeneficial owner of the proposal to adjournshares. Proposals #1, #3, #4 and #5 are not routine matters, and a broker or nominee may not vote on this matter without receiving instructions. Proposal #2, the special meeting, if necessary, to solicit additional proxies (Proposal 2).Voting ProceduresYour vote is important. Whether or not you plan to attend the special meeting in person,Annual Meeting via the live webcast, please complete, sign, date and return the enclosed proxy card, vote by proxy on the Internet, or by proxy over the telephone as soon as possible to ensure that your vote is recorded promptly. Voting by proxy does not deprive you of your right to attendview the special meetinglive webcast of the Annual Meeting and to vote your shares in person.Stockholder of Record: Shares Registered in Your NameIf you are a stockholder of record, you may vote in personelectronically at the special meetingAnnual Meeting or vote by proxy using the enclosed proxy card, vote by proxy on the Internet or vote by proxy over the telephone. Whether or not you plan to attendview the meeting,live webcast of the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attendview the meetinglive webcast of the Annual Meeting and vote in person even if you have already voted by proxy.in person, comeelectronically at the Annual Meeting, view the live webcast at www.virtualshareholdermeeting.com/DZSI2023 and follow the instructions on how to the special meeting and we will give you a ballot when you arrive.usingby mail, follow the instructions provided in the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided.card. If you return your signed proxy card to us before the special meeting,Annual Meeting, we will vote your shares as you direct.go to www.envisionreports.com/DZSI to complete an electronicfollow the instructions provided in the Notice of Internet Availability of Proxy Materials or proxy card. Follow the steps outlined on the secured website.dialcall the toll-free1-800-652-VOTE (8683) using a touch-tone phone number found on the proxy card and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by Pacific Time on , 2017 to be counted.2If you return a signed proxy card but do not fill out the voting instructions on the proxy card or if you indicate when voting on the Internet or over the telephone that you wish to vote as recommended by the Board, the persons named as proxies will vote the shares represented by your proxy “FOR” Proposals 1#1, #2, #3 and 2.#4, and “3 Years” on Proposal #5. If any other matters are properly presented for voting at the special meeting,Annual Meeting, or any adjournments or postponements of the special meeting, theAnnual Meeting, your proxy cardvote will confer discretionary authority on the individuals named as proxies to vote the shares represented by the proxies in their discretion. We have not received notice of other matters that may properly be presented for voting at the special meeting.Beneficial Owner: Shares Registered in the Name of Broker or BankIf you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructionsinstruction form with these proxy materials from that organizationDZSI.DZS. Your broker, bank or other nominee may allow you to deliver your voting instructions over the Internet or by telephone. Please see the voting instruction cardform from your broker, bank or other nominee that accompanies this proxy statement.Proxy Statement. If you complete and submit your proxy card,voting instruction form, the persons named as proxies will vote the shares represented by your proxy cardvoting instruction form in accordance with your instructions.Under the rules that govern how brokers may vote shares held in street name, brokers do not have the discretion to vote your shares on anynon-routine matters, which includes matters. The only proposal at the amendmentmeeting that is considered a routine matter under applicable rules is the proposal to ratify the appointment of our Restated Certificate of Incorporation to effectindependent registered public accounting firm for the reverse stock split.fiscal year ending December 31, 2023. Therefore, unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the proposals described in this proxy statement.Proxy Statement other than the ratification of our independent registered public accounting firm. Please voteprovide voting instructions to your proxybroker, banker or agent so your vote on these matters can be counted.RevocationYou may revoke your proxy at any time before your proxy is voted at the special meetingAnnual Meeting by taking any of the following actions: (1) submitting another proxy card bearing a later date,date; (2) delivering written notice of revocation to DZSI’sour Corporate Secretary at 7195 Oakport Street, Oakland, California 94621,5700 Tennyson Parkway, Suite 400, Plano, Texas 75024; or (3) attendinglogging onto the special meetinglive webcast of the Annual Meeting and voting in person,as directed, although attendance at the special meetinglive webcast of the Annual Meeting will not, by itself, revoke a proxy. If your shares are held in “street name,” you must contact your broker, bank or other nominee to revoke any prior instructions.Proxy Solicitation CostsWe will bear the entire cost of this solicitation of proxies, including the preparation, assembly, printing and mailingdissemination of this proxy statementProxy Statement and any additional solicitation material that we may provide to stockholders. The original solicitation of proxies by mail may be supplemented by solicitation by mail, telephone, fax, e-mail, personal interviews or other methods of communication by our directors, officers and employees. We will not pay any additional compensation to directors, officers or other employees for such services, but may reimburse them for reasonableout-of-pocket expenses in connection with such solicitation. DZSI does not currently intend to retain any proxy solicitation firm to assist in soliciting proxies.Admission to the SpecialAnnual MeetingOnly DZSIThe Annual Meeting will be held live via the internet on Tuesday, May 30, 2023 at 10:00 a.m. Central Time, at www.virtualshareholdermeeting.com/DZSI2023. You will not be able to attend the meeting in person. Participation in and attendance at the Annual Meeting is limited to our stockholders as of the close of business on , 2017,April 3, 2023, and other persons holding valid proxies for the special meeting are entitledAnnual Meeting. Online access will begin at 9:45 a.m. Central Time, on May 30, 2023, and we encourage you to attendaccess the special meeting. You should be preparedAnnual Meeting prior to present valid government issued photo identification for admittance. In addition, if you are not a stockholder of record but hold shares in “street name,” you will need to provide proof of ownership by bringing either a copy of the voting instruction card provided by your broker or a copy of a brokerage statement showing your share ownership as of , 2017. If you do not provide photo identification or comply with the other procedures outlined above, you will notstart time. To be admitted to the special meeting. The specialAnnual Meeting at www.virtualshareholdermeeting.com/DZSI2023, you must enter the 16-digit control number found next to the label “Control Number” for the postal mail recipients or within the body of the email sending you the proxy statement. If your shares are held in the name of a bank, broker or other holder of record, you should follow the instructions provided by your bank, broker or other holder of record to be able to participate in the Annual Meeting. If you encounter difficulties accessing the virtual meeting, please call the technical support number that will be heldposted at our principal executive offices, locatedwww.virtualshareholdermeeting.com/DZSI2023.How Can I Access the Webcast of the Annual MeetingWe plan to offer a live webcast of the Annual Meeting at 7195 Oakport Street, Oakland, California 94621. For directions, please call(510) 777-7000.www.virtualshareholdermeeting.com/DZSI2023. To access the Availability of Proxy Materials forwebcast, go to this website and follow the Stockholder Meeting Toinstructions provided.Will I Be Held on , 2017Electronic copies of our proxy statement and our annual report are availableAble to Ask Questions at the Investor Relations sectionAnnual MeetingYou will be able to submit written questions during the Annual Meeting by following the instructions that will be available on the Annual Meeting website during the Annual Meeting. Only questions pertinent to meeting matters of the Company will be answered during the meeting, subject to time constraints. Questions that are substantially similar may be grouped together to avoid repetition.Why Are We Having a Virtual MeetingWe will hold the Annual Meeting in a virtual-only format, which will be conducted over the internet via live webcast, as we believe that a virtual format is more environmentally friendly, allows greater shareholder participation and decreases the costs of holding the meeting. We intend to hold our websitevirtual annual meetings in a manner that affords you the same general rights and opportunities to participate as you would have at www.Zhone.com.3Stockholders Sharing the Same AddressThe rules promulgated by the Securities and Exchange Commission (the SEC) permit companies, brokers, banks or other intermediaries to deliver a single copy of an annual report, proxy statement or notice of InternetDZSI,DZS Inc., Attention: Investor Relations, 7195 Oakport Street, Oakland, California 94621,5700 Tennyson Parkway, Suite 400, Plano, Texas 75024, or by calling us at(510) 777-7013. (469) 327-1531. We will promptly send additional copies of the annual report or proxy statement or any notice of Internet availability of proxy materials upon receipt of such request. Stockholders sharing an address who now receive multiple copies of our annual report, proxy statement and any notice of Internet availability of proxy materials may request delivery of a single copy by contacting us as indicated above, or by contacting their broker, bank or other intermediary. Householding does not apply to stockholders with shares registered directly in their name.Significant StockholderDasan Networks, Inc. (“DNI”) is the Company’s largest stockholder. As of April 3, 2023, DNI owns 9,093,015 shares of Company common stock, which represents approximately 29.2% of the Company’s issued and outstanding common stock. As a result of its substantial interest in the Company, DNI is able to significantly influence the Company’s corporate and management policies and the outcome of any corporate transaction or other matter submitted to stockholders for approval. Such transactions may include mergers and acquisitions, sales of all or some of the Company’s assets or purchases of assets, and other significant corporate transactions. The interests of DNI may not coincide with the interests of the Company’s other stockholders or with holders of the Company’s indebtedness.4CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERSWe are dedicated to maintaining the highest standards of business integrity. It is our belief that adherence to sound principles of corporate governance, through a system of checks, balances and personal accountability, is vital to protecting our reputation, assets, investor confidence and customer loyalty. Above all, the foundation of our integrity is our commitment to sound corporate governance. Our corporate governance principles and Code of Conduct and Ethics can be found in the “Governance” section of our website at https://investor.dzsi.com/governance/governance-documents/default.aspx.Board CompositionOur Board of Directors is presently comprised of seven members. In accordance with our certificate of incorporation, we divide our Board of Directors into three classes, with Class I consisting of two members, Class II consisting of three members, and Class III consisting of two members. One class of directors is elected by the stockholders to serve a three-year term at each annual meeting.The following table sets forth (a) the names of the nominees for election as Class I directors at the Annual Meeting and of the incumbent Class II and Class III directors, (b) the age of each nominee or director, (c) the Company position(s) currently held by each nominee or director, and (d) the year in which each nominee’s or director’s current term will expire.Name Class Age Position Term Expires Director Nominees Barbara Carbone I 64 Director 2023 Joon Kyung Kim I 64 Director 2023 Continuing Directors Matt W. Bross II 62 Director 2024 David Schopp II 74 Lead Independent Director 2024 Choon Yul Yoo II 62 Director 2024 Min Woo Nam III 61 Chairman of the Board 2025 Charles D. Vogt III 59 President, CEO andDirector2025 There are no arrangements or understandings between the Company and any person pursuant to which such person has been elected a director.Our directors bring to the Board of Directors a wealth of executive leadership experience derived from their service as executives or managing directors of small, large and multinational corporations, accounting firms or venture capital firms. They also bring extensive board experience. Information regarding the qualifications, experience and skills of each of our directors that led our Board of Directors to conclude that such director is qualified to serve on our Board of Directors is described in the following paragraphs.Class I Directors Standing for Re-Election at this Annual MeetingBarbara Carbone has served as a director of DZS since January 1, 2021. Ms. Carbone is a recognized business leader and audit partner with deep expertise across the software, media, consumer products, manufacturing and financial spaces. For nearly 40 years, in addition to serving clients, she held several leadership roles at KPMG, including as the leader of a large business unit, the global software practice leader and as the national partner in charge of human resources for the audit practice. Ms. Carbone’s experience transforming businesses through mergers and acquisitions, workforce management, divestitures, spinoffs, IPOs, and navigation of public and private markets has given her a diverse and valuable perspective. She is currently a board member for TrueCar Inc. (NASDAQ: TRUE), Limoneira, Inc. (NASDAQ: LMNR), Bob’s Discount Furniture and Side by Side Services. She is also a Board of Trustee member of Exploratorium. We believe Ms. Carbone is well suited to serve on our Board of Directors given her extensive experience in financial and accounting matters, her extensive experience in advising other organizations and her experience as a director of a public company.Joon Kyung Kim has served as a director of DZS since January 6, 2020.Mr. Kim brings to DZS’s board more than 36 years of experience in audit and advisory services with KPMG. Prior to joining DZS, Mr. Kim served as the National Partner in Charge of KPMG’s Korean practice, a role to which he was appointed in 2005. During his career at KPMG, he progressed through various financial statement audit roles, developing expertise in financial statement audits, operational reviews and special audits of specified areas of operations, regulatory supervisory advice, credit reviews, performance improvement, and internal control related advisory services, and in 1999 was promoted to Partner. Mr. Kim serves on the board of directors of Hope Bancorp, Inc. (NASDAQ: HOPE), the holding company for Bank of Hope, a super-regional bank with over $17 billion in assets. Mr. Kim holds a Bachelor of Science degree in Business Administration from the University of California, Berkeley and is a Certified Public Accountant.We believe Mr. Kim is well suited to serve on our Board of Directors given his extensive experience in financial and accounting matters, his leadership experience and his experience as a director of a public company.5Continuing Class II Directors with Terms Expiring 2024Matt W. Bross has served as a director of DZS since January 1, 2021. Mr. Bross has led a long and distinguished career in the global telecom and technology industries – having previously served as CEO of BT Innovate, Global CTO and President of Huawei Technologies, CTO of Williams Communications (Lumen) and CEO and Director of Rift.io. Today, he serves on the board of Axellio Inc., a provider of high-performance network packet capture, storage, and analysis solutions, is the Chairman of the Global Information Infrastructure Commission (GIIC) and general partner in Cloud Scale Capital Partners. Mr. Bross has previously served on the board of Sonus Networks (Ribbon Communications), the East West Institute, the Alliance for Telecommunications Industry Solutions (ATIS), and CTIA, the trade association representing the U.S. wireless communications industry. He is a Cambridge University Pembroke College, William Pitt Fellow, and a global advisor regarding 5G, IOT, Blockchain, AI, and Virtualization. Mr. Bross is also a Member of IEEE Future Technology Committee, and he formerly led the World Economic Forum "Technology Pioneer Program." We believe Mr. Bross is well suited to serve on our Board of Directors given his extensive knowledge and experience in the telecommunications industry.David Schopp has served as a director of DZS since 2018. Mr. Schopp has served as the Operating Partner for the private equity firm Stonebridge Partners since 2004 and is also a General Partner in Stonebridge Partners Equity Fund IV, L.P. Mr. Schopp was previously President and Chief Executive Officer of Orbis Corporation, a division of Menasha Corp., a manufacturer of plastic returnable containers and logistics management. Prior to Orbis, he was Vice President and General Manager of Promo Edge, also a division of Menasha Corp. Mr. Schopp has built and sold several of his own portfolio companies including US Sample Company, Bates Inc., and Congress Packaging. He was previously a consultant with Booz Allen Hamilton Inc. Mr. Schopp is currently Chairman of the Board of Directors of Specialty Bakers, a commercial bakery, and has held numerous prior board positions, including as Chairman of the Board of Directors of Cast-Crete, American Dryer Corporation, Inland Pipe Rehabilitation, Alpine Engineering, Corbi Plastics and Hydraulex Global. Mr. Schopp holds both a B.S. and M.S. in Aeronautical Engineering from Rensselaer Polytechnic Institute. We believe that Mr. Schopp is a superior business leader who understands our company’s vision to empower global advancement and his experience building companies and advising Fortune 500 companies is valuable to DZS as we lead the way to the new generation of broadband and mobile transport solutions.Choon Yul Yoo has served as a director of DZS since August 8, 2019. Since March 1999, Mr. Yoo has served as the Chief Operating Officer of DNI. Additionally, Mr. Yoo previously served as the Chief Executive Officer of DMC Co., Ltd., an auto parts manufacturing company and affiliate of DNI, and served as the Chief Executive Officer and director of Solueta Co., Ltd., a provider of electromagnetic interference and electromagnetic compatibility solutions. Mr. Yoo also previously served as Chief Executive Officer of DNS Korea from April 2015 until September 2016, when DNS Korea was acquired by the Company. Mr. Yoo holds a Bachelor of Science degree in Mechanical Engineering from Dongyang Technical College. We believe that Mr. Yoo is well suited to serve on our Board of Directors given his extensive leadership experience and his knowledge of DNS Korea’s operations.Continuing Class III Directors with Terms Expiring 2025Min Woo Nam has served as the Chairman of the Board of Directors of DZS since 2016. Mr. Nam currently serves as the Chief Executive Officer and Chairman of the Board of Directors of DNI, a position he has held since March 1993. Mr. Nam currently serves as a director of TL International Inc. and Capstone Partners Inc. He previously served as the Chief Executive Officer of Korea Ready System and Dasan Engineering Co., Ltd. His work has included export of technical services to Silicon Valley, California since 1999. Mr. Nam served as General Chairman of the International Network of Korean Entrepreneurs from 2004 until 2006, and has served as Director of the Korea Entrepreneurship Foundation since November 2011. Previously, he served as Chairman of the Korean Venture Business Association. Mr. Nam completed his B.E. in Mechanical Engineering from Seoul National University in 1984. We believe Mr. Nam is well suited to serve as the Chairman of our Board of Directors given his extensive experience serving in chief executive officer and chairman roles and his in-depth knowledge of the telecommunications industry.Charles D. Vogt joined DZS as President, Chief Executive Officer and as a director in 2020. A lifelong entrepreneur, Mr. Vogt has spent the past two decades building and leading organizations through high growth and rapid change in challenging and competitive environments. Prior to joining the Company, Mr. Vogt was most recently President, Chief Executive Officer and a Director of ATX Networks, a leader in broadband access and media distribution, where he led the company through extensive transformation and growth since February 2018. From July 2013 to January 2018, Mr. Vogt served as President, Chief Executive Officer and a Director of Imagine Communications, where he directed the company through revolutionary change as it evolved its core technology, including large-scale restructuring and rebranding and multiple technology acquisitions as he implemented a disruptive vision and growth strategy. Before joining Imagine Communications, Mr. Vogt was President, Chief Executive Officer and a Director of GENBAND (today known as Ribbon Communications), where he transformed the company from a startup to the industry’s global leader in voice over IP and real-time IP communications solutions. His professional career has also included leadership roles at Taqua (Tekelec), Lucent Technology (Nokia), Ascend Communications (Lucent), ADTRAN, Motorola and IBM. Mr. Vogt was previously a board member for Stryve Foods, Inc. (NASDAQ: SNAX). Mr. Vogt received his B.S. in Economics and Computer Science from Saint Louis University. We believe Mr. Vogt is well suited to be our Chief Executive Officer and serve on our Board of Directors given his extensive chief executive officer experience, his expertise in the business arena, and his in-depth knowledge of the telecommunications industry.Board Leadership StructureDifferent individuals serve as Chairman of the Board of Directors, Lead Independent Director and Chief Executive Officer. The Chairman is Mr. Min Woo Nam, who presides over meetings of the Board of Directors and the stockholders, reviews and approves meeting agendas, meeting schedules and other information, as appropriate, consults on stockholder engagement and governance matters, and performs such other duties as the Board of Directors requires from time to time. The Lead Independent Director is Mr. David Schopp, who presides over meetings of the Board of Directors at which the Chairman is not present, serves as the principal liaison between the Chairman and the independent directors, reviews and approves meeting agendas, meeting schedules and other information, recommends for selection to the membership and chairman positions for each Board committee and interviews all director candidates, and, as appropriate, consults on stockholder engagement matters. The Chief Executive Officer is Mr. Charles D. Vogt, who focuses on operating and managing the Company. Our Board of Directors believes that this separation of the positions of Chairman, Lead Independent Director and Chief Executive Officer6reinforces the independence of the Board of Directors in its oversight of the business and affairs of the Company, leverages the Chairman’s and Lead Independent Director’s experience and perspectives, and enhances the effectiveness of the Board of Directors as a whole.The Board believes that maintaining a healthy mix of qualified independent, non-management, and management directors on the Board is an integral part of effective corporate governance and management of the Company. The Board also believes that the current leadership structure strikes an appropriate balance between independent directors, management directors, and directors affiliated with DNI, the Company’s largest stockholder, which allows the Board to effectively represent the best interests of the Company’s entire stockholder base. Board IndependenceThe Board of Directors has affirmatively determined that each of Matt W. Bross, Barbara Carbone, Joon Kyung Kim, and David Schopp are independent under the criteria established by The Nasdaq Stock Market, or Nasdaq, for independent board members. At the conclusion of the regularly scheduled Board of Directors meetings, the independent directors have the opportunity to and regularly meet outside of the presence of our management. In addition, each member of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee is currently an independent director in accordance with Nasdaq standards.Board DiversityThe Board utilizes a thoughtful approach to board composition to ensure that the composition of the Board reflects the Company’s efforts and commitment to achieving diversity, including with respect to age, gender, race and ethnicity. The table below provides certain information regarding the composition of our Board. Each of the categories listed in the table below has the meaning given it in Nasdaq Rule 5605(f).Board Diversity Matrix (as of December 31, 2022) Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 6 Part II: Demographic Background African American or Black Alaskan Native or Native American Asian 3 Hispanic or Latinx Native Hawaiian or Pacific Islander White 1 3 Two or More Races or Ethnicities LGBTQ+ Did Not Disclose Demographic Background Committee CompositionOur Board of Directors has the following four standing committees: (1) Audit Committee, (2) Compensation Committee, (3) Corporate Governance and Nominating Committee and (4) Strategy Committee. The current membership and the function of each of the committees are described below. Each of the committees operates under a written charter that can be found on the “Governance” section of our website at https://investor.dzsi.com/governance/governance-documents/default.aspx.7Director Independence Financial Expert Audit Committee Compensation
Committee Corporate
Governance and
Nominating
CommitteeStrategyCommitteeMatt W. Bross Independent — — 
Barbara Carbone Independent 
— — Joon Kyung Kim Independent 
— Min Woo Nam — — — — — David Schopp Independent — — Choon Yul Yoo — — — — — — Charles D. Vogt — — — — — — Number of Meetings in 2022 7 6 2 1 Member Chairperson Financial ExpertAudit CommitteeThe Audit Committee reviews the professional services provided by our independent registered public accounting firm, the independence of such independent registered public accounting firm from our management, and our annual and quarterly financial statements. The Audit Committee also reviews such other matters with respect to our accounting, auditing and financial reporting practices and procedures as it may find appropriate or may be brought to its attention. In addition, the Audit Committee reviews and approves any related-party transactions. The responsibilities and activities of the Audit Committee are described in greater detail in the section entitled “Audit Committee Report.”Each member of the Audit Committee is an independent director under the criteria established by Nasdaq and SEC rules. Our Board of Directors has also determined that each of Barbara Carbone and Joon Kyung Kim qualifies as an “audit committee financial expert,” as that term is defined in the rules and regulations established by the SEC. Stockholders should understand that this designation is a disclosure requirement of the SEC related to the experience and understanding of our Audit Committee members with respect to certain accounting and auditing matters. The designation does not impose upon them any duties, obligations or liabilities that are greater than are generally imposed on them as a member of the Audit Committee and the Board of Directors, and their designation as audit committee financial experts pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the Audit Committee or the Board of Directors.Compensation CommitteeThe Compensation Committee is responsible for reviewing all components of executive officer and director compensation and benefits and establishing and monitoring policies governing the compensation of executive officers and directors. In carrying out these responsibilities, the Compensation Committee is responsible for reviewing and approving the performance objectives relevant to compensation, determining salary, bonus and other incentive-based compensation, and approving equity-based compensation for executive officers. The Compensation Committee may delegate its authority to others so long as it is acting within the scope of the powers and responsibilities delegated to it by the Board of Directors. The objectives of the Compensation Committee are to correlate executive officer compensation with our business objectives and financial performance, and to enable us to attract, retain and reward executive officers who contribute to the long-term success of the Company. The Compensation Committee seeks to reward executive officers in a manner consistent with our annual and long-term performance goals, and to recognize individual initiative and achievement among executive officers.Corporate Governance and Nominating CommitteeThe Corporate Governance and Nominating Committee develops and reviews corporate governance principles applicable to the Company, identifies individuals qualified to serve as directors, selects or recommends nominees to the Board of Directors for the election of8directors, and advises the Board of Directors with respect to Board of Directors and committee composition. The Corporate Governance and Nominating Committee is also responsible for reviewing with the Board of Directors from time to time the appropriate skills and characteristics required of Board of Directors members in the context of the current size and make-up of the Board of Directors.In selecting or recommending nominees for election to the Board of Directors, the Corporate Governance and Nominating Committee conducts inquiries into the background and qualifications of any potential nominees, including, but not limited to, professional experience, viewpoint, age, education, skills (such as understanding of manufacturing, technology, finance and marketing) and international background. The Corporate Governance and Nominating Committee recognizes the value of cultivating a Board of Directors with a diversity of backgrounds and experiences for a more balanced and wide-ranging discussions in the boardroom, which we believe enhances the decision-making process. Our stockholders also recognize the value of having diverse representation and a variety of viewpoints on the Company’s Board of Directors.The Corporate Governance and Nominating Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees. The same criteria are used by the Corporate Governance and Nominating Committee to evaluate all candidates, whether he or she was recommended by a director, management or a stockholder. To recommend a prospective nominee for the Corporate Governance and Nominating Committee’s consideration, stockholders should submit the candidate’s name and qualifications to our Corporate Secretary in writing at the following address: DZS Inc., Attention: Corporate Secretary, 5700 Tennyson Parkway, Suite 400, Plano, Texas 75024. When submitting candidates for nomination to be elected at the annual meeting of stockholders, stockholders must also follow the notice procedures and provide the information required by our bylaws.In evaluating the qualification of candidates for potential nomination to the Board of Directors, the Corporate Governance and Nominating Committee reviews the background and qualification of each candidate, engages in internal discussions, interviews with selected candidates and assesses such candidate’s potential to make positive contributions that are responsive to the needs of DZS. In addition, the Corporate Governance and Nominating Committee is committed to consideration of qualified directors of diverse gender, race, age, color, religion, national origin, sexual orientation, genetic information, marital status, disability or covered veterans’ status. There is no specific criteria or minimum qualifications that a nominee must possess; our Corporate Governance and Nominating Committee reviews each candidate in the context of the current and anticipated needs of the Board of Directors and our business at a particular point in time. As a result, the priorities and emphasis of the Corporate Governance and Nominating Committee and of the Board of Directors may change from time to time to take into account changes in business and other trends, and the portfolio of skills and experience of current and prospective Board of Directors members. Therefore, while the Corporate Governance and Nominating Committee is focused on the achievement and the ability of potential nominees to make a positive contribution with respect to such factors, it has not established any specific minimum criteria or qualifications that a nominee must possess. Upon the identification of a qualified candidate, the Corporate Governance and Nominating Committee would select, or recommend for consideration by the full Board of Directors, such candidate as a nominee for election to the Board of Directors.Strategy CommitteeThe Strategy Committee assists and advises in the strategic planning process for the Company and in developing long-term strategic plans for the Company. The Strategy Committee also evaluates strategic actions, including strategic investments, acquisitions, divestitures, financing strategies and assesses such actions for strategic alignment and short and long-term impact on the Company’s objectives and stockholder value, among other things. The Strategy Committee reviews the Company’s performance and progress with respect to the execution of its strategies and related impacts on the Company’s objectives and stockholder value.Director Attendance at Board Meetings and Annual Meetings of StockholdersDuring the fiscal year ended December 31, 2022, the Board of Directors of DZS held 7 meetings. Each director attended or participated in at least 75% of the meetings of the Board of Directors and the total number of meetings held by all committees of the Board of Directors on which he served, in each case during the period for which he was a director or a committee member. In addition to meetings, the Board of Directors and its committees sometimes took action by unanimous written consent in lieu of a meeting, which is permitted under Delaware corporate law.We endeavor to schedule our annual meeting of stockholders at a time and date to maximize attendance by directors taking into account the directors’ schedules. Three of our directors attended last year’s annual meeting of stockholders.Board of Directors’ Role in Risk OversightThe Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit Committee oversees management of financial risks and discusses our policies with respect to risk assessment and risk management. The Corporate Governance and Nominating Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest. The Strategy Committee is responsible for overseeing the Company’s business strategy and make recommendations to the Board on the Company’s strategic direction and objectives.The Board of Directors’ role in our risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic and reputational risks. The full Board of Directors (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within the organization to enable it to understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the Chairman of the relevant committee reports on the discussion to the full Board of Directors during the committee reports portion of the next Board of Directors meeting. This enables the Board of Directors and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.9Communications with the Board of DirectorsAny stockholder wishing to communicate with any of our directors regarding corporate matters may write to the director, c/o Corporate Secretary, DZS Inc., 5700 Tennyson Parkway, Suite 400, Plano, Texas 75024. The Corporate Secretary will forward these communications directly to the director(s). However, certain correspondence such as spam, junk mail, mass mailings, product complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material may be forwarded elsewhere within the Company for review and possible response.Executive OfficersInformation regarding each of the Company’s executive officers and their relevant business experience is summarized below.Charles D. VogtChief Executive OfficerSee “Board Composition - Continuing Class III Directors with Terms Expiring 2025” above for information about Mr. Vogt.Misty KaweckiChief Financial OfficerMisty Kawecki (49) serves as Chief Financial Officer of DZS, bringing over 24 years of finance and accounting experience to the CFO role. Previously, Ms. Kawecki served as CFO and Head of Operations for MediaKind and prior to that, she was VP, Finance and Corporate Controller at Imagine Communications. She also served as Senior Vice President, Finance and Corporate Controller at GENBAND and Senior Director, WW Revenue Controller at McAfee (Intel). She started her career at Big 4 accounting firm EY. Ms. Kawecki has a Master of Science degree in Accounting from Texas Tech University. She is a Certified Public Accountant in the state of Texas.Miguel AlonsoChief Product OfficerMiguel Alonso (55) serves as Chief Product Officer at DZS. In this role, Mr. Alonso is responsible for product strategy, product management, technology, quality and engineering across the Access Edge, Home Edge, Mobile & Optical Edge and Cloud Software teams. Before joining DZS, Mr. Alonso served as Vice President of Cloud Products at Calix, where he led the company’s transformation from hardware products to cloud, software, and systems platforms. Mr. Alonso has also served in multiple senior product management, marketing, and sales executive positions at Nortek Control, mandal.ai, and Advanced Fibre Communications (AFC). Mr. Alonso holds an Engineering Degree in Telecommunications from the Universitat Politècnica de Catalunya (Spain).Tom CarterChief Customer Officer for the Americas and EMEATom Carter (61) serves as the Chief Customer Officer for the Americas and EMEA at DZS with responsibilities for leading the sales organizations in these regions. He leverages a deep track record of global executive sales and strategic business leadership in building high-performance organizations that consistently surpass revenue targets. Mr. Carter excels at driving global sales growth for leading-edge technologies and solutions, transforming businesses to deliver significant value for investors and building upon extensive relationships with numerous tier 1 communications service provider executives around the world. An industry veteran with more than 30 years’ experience, Mr. Carter most recently led global sales at Ciena’s software business unit Blue Planet and previously held senior sales leadership roles at Sandvine and F5 Networks. He holds a US PATENT (7,804,821 B2P) for circuit switched cellular network to internet calling with internet antennas. Mr. Carter earned a business degree from the University of Alberta.Justin K. FergusonChief Legal OfficerJustin K. Ferguson (45) serves as Chief Legal Officer at DZS, responsible for the company’s global legal activities and policies. In addition, Mr. Ferguson serves as Corporate Secretary to the Board of Directors and is responsible for all corporate governance matters and brings more than 20 years of legal experience which includes advising companies in the telecom, technology and cloud security space. Prior to joining DZS, Mr. Ferguson was Executive Vice President, General Counsel and Corporate Secretary to Ribbon Communications Inc. Prior to Ribbon, Mr. Ferguson served as Vice President, General Counsel and Corporate Secretary of Zix Corporation, a Nasdaq listed company that provides email and cloud security solutions. Mr. Ferguson began his career as a corporate attorney at the law firms of Weil, Gotshal & Manges LLP and Baker Botts L.L.P. Mr. Ferguson received a Juris Doctorate degree from Texas Tech University School of Law and a Bachelor’s degree in Business Administration from Texas Tech University. He is a member of the State Bar of Texas.10Norman L. FoustSenior Vice President of Global Supply ChainNorman L. Foust (57) serves as Senior Vice President of Global Supply Chain and is responsible for the strategic direction, transformation and execution of vendor procurement, supply chain management, manufacturing and logistics. Mr. Foust’s operations expertise in the telecom industry spans more than three decades, pioneering the evolution of manufacturing and supply chain through automation and AI Robotics technology. Mr. Foust has spent 20 years in leadership positions with trend-setting access networking companies scaling manufacturing and supply chain. Most recently, Mr. Foust was the Vice President of Operations at Vicarious FPC, an A.I. Robotics Automation company. Prior to Vicarious, he led operations with Cyan (acquired by Ciena), Calix, AFC and DSC Communications.Deok Yeon WonChief Customer Officer – AsiaDeok Yeon Won (60) serves as Chief Customer Officer – Asia, and previously served as Chief Product Officer at DZS and President of DNS Korea in connection with the Merger of Zhone Technologies and DASAN Networks. Mr. Won brings over thirty years of experience in the telecommunications marketplace across several disciplines, including executive management, engineering and sales. Prior to his roles with DZS, Mr. Won held various executive positions at LG and Cisco Systems. Mr. Won holds an MBA from KAIST (Korea Advanced Institute of Science and Technology), and a BS from Seoul National University.11PROPOSAL 1:ELECTION OF DIRECTORSOverviewOur Board of Directors has fixed the number of authorized directors at seven. In accordance with our certificate of incorporation, our Board of Directors is divided into three classes that are as nearly equal in number as is practicable, with Class I consisting of two members, Class II consisting of three members, and Class III consisting of two members. At each annual meeting of stockholders, the stockholders elect one class of directors to serve a three-year term.Class I, the class of directors whose term expires at the 2023 annual meeting of stockholders, currently consists of two persons. In accordance with the recommendation of the Corporate Governance and Nominating Committee, the Board of Directors has unanimously nominated Barbara Carbone and Joon Kyung Kim, the two incumbent directors whose terms expire at 2023 annual meeting of stockholders, to stand for reelection to the Board of Directors. Ms. Carbone and Mr. Kim have been nominated to serve as directors until the 2026 annual meeting of stockholders or until their respective successors have been duly elected and qualified. Information regarding the background and qualification of each nominee for re-election to the Board of Directors is included above in “Corporate Governance Principles and Board Matters–Class I Directors Standing for Re-Election at this Annual Meeting”.Unless proxy cards are otherwise marked, the persons named as proxies will vote all shares represented by signed and returned proxy cards received for the election of Ms. Carbone and Mr. Kim. If any director nominee is unable or unwilling to serve as a nominee at the time of the Annual Meeting, then the persons named as proxies may vote either (1) for a substitute nominee designated by the present Board of Directors to fill the vacancy or (2) for the balance of the nominees, leaving a vacancy. The Board of Directors has no reason to believe that any of the nominees will be unable or unwilling to serve if elected as a director. Abstentions and broker non-votes will have no effect on the vote.Recommendation of the Board of DirectorsThe DZSI Board of Directors unanimously recommends that you vote“FOR” “FOR” the amendmentelection of Barbara Carbone and Joon Kyung Kim as Class I Directors.12PROPOSAL 2:RATIFICATION OF APPOINTMENT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMOverviewThe Audit Committee selected Ernst & Young LLP (“EY” or “Ernst & Young”) as our independent registered public accounting firm for the fiscal year ending December 31, 2023. Representatives of EY have been invited to attend the Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.Stockholder ratification of the selection of EY as our independent registered public accounting firm is not required by our bylaws or otherwise. However, we are submitting the selection of EY to the stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. If the selection is not ratified, the Audit Committee will reconsider whether or not to retain EY, and may retain that firm or another without re-submitting the matter to the stockholders.Change in AccountantsOn June 7, 2021, following receipt and review of a number of proposals from independent registered accounting firms, including Grant Thornton LLP (“GT”), GT was dismissed as the Company’s independent registered public accounting firm. The Company notified GT on June 7, 2021 that it would be dismissed as the Company’s independent registered public accounting firm, effective immediately. The decision to change independent registered public accounting firms was approved by the Audit Committee. GT’s reports on the Company’s financial statements for the year ended December 31, 2020 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. On June 7, 2021, the Audit Committee approved the appointment of EY as the Company’s new independent registered public accounting firm, effective upon the dismissal of GT on June 7, 2021.As previously reported on the Current Report on Form 8-K filed with the SEC on June 10, 2021, during the interim period from January 1, 2021 through June 7, 2021, there were no disagreements, within the meaning of Item 304(a)(1)(iv) of Regulation S-K promulgated under the Exchange Act and the related instructions thereto (“Regulation S-K”), with GT on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of GT, would have caused it to make reference to the subject matter of the disagreements in connection with its reports. Also during the interim period from January 1, 2021 through June 7, 2021, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto.We provided GT with a copy of the Current Report on Form 8-K reporting the change in auditor before filing the Form 8-K with the SEC on June 10, 2021, and requested that GT furnish us with a letter addressed to the SEC stating whether or not GT agreed with the above statements and stating the respects, if any, in which GT did not agree with such statements. The letter from GT was filed as Exhibit 16.1 to the Form 8-K.Principal Accounting Fees and ServicesThe following is a summary of EY’s fees for professional services rendered to the Company for the years ended December 31, 2022 and 2021, respectively:Fee Category 2022 Fees 2021 Fees Audit Fees $ 1,985,300 $ 1,667,271 Audit-Related Fees 254,825 — Tax Fees 124,710 123,075 All Other Fees 3,827 8,000 Total $ 2,368,662 $ 1,798,346 Audit Fees. This category includes the audit of our annual financial statements, review of financial statements, audit of our internal control over financial reporting, review of our Form 10-Q quarterly reports, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.Audit-Related Fees. This category consists of assurance and related services provided by Ernst & Young that are reasonably related to the performance of the audit or review of our financial statements and are not reported above as “Audit Fees.” These services include accounting fees in connection with a registration statement.Tax Fees. This category consists of professional services rendered by Ernst & Young, primarily in connection with tax compliance, tax planning and tax advice activities. These services include assistance with the preparation of tax returns, claims for refunds, value added tax compliance, and consultations on state, local and international tax matters.All Other Fees. This category consists of fees for products and services other than the services reported above, principally including accounting tool subscription services.13Pre-Approval Policy of the Audit CommitteeThe Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year, is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. All fees shown in the table above were pre-approved in accordance with the policies described above.Recommendation of the Board of DirectorsThe Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of Ernst & Young as our independent registered public accounting firm for the fiscal year ending December 31, 2023.14PROPOSAL 3:APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OFINCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARESOF COMMON STOCKOverviewOur Restated Certificate of Incorporation, as further amended (the “Charter”) currently authorizes us to effect the reverse stock splitissue a total of DZSI’s outstanding36,000,000 shares of common stock, at exchange ratiospar value $.001 per share (the “Common Stock”) and 25,000,000 shares of1-for-3,1-for-4 and1-for-5, as determined by the Company, and the associated proportional reduction in our authorized capitalization (Proposal 1), and“FOR” the approval of any adjournment of the special meeting, if necessary, to solicit additional proxies (Proposal 2) preferred stock, par value $.001 per share (the “Preferred Stock”).YOUR VOTE IS IMPORTANT.WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON,PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD OR SUBMIT YOURPROXY ELECTRONICALLY VIA THE INTERNET OR OVER THE TELEPHONE BYFOLLOWING THE ENCLOSED INSTRUCTIONS.AMENDMENT OF RESTATED CERTIFICATE OFINCORPORATION TO EFFECT A REVERSE STOCK SPLITAND REDUCTION IN DZSI’S AUTHORIZED CAPITALIZATIONadopted, declared advisableapproved, and is submitting forseeking stockholder approval a proposalof, an amendment to approve a seriesthe Charter (the “Amendment”) to implement an increase in the number of three separate and alternative amendmentsshares of authorized Common Stock from 36,000,000 to our Restated Certificate of Incorporation to effect, at the discretion of72,000,000.On April 3, 2023, our Board of Directors a reverse stock splitunanimously determined that the Amendment is advisable and in the best interest of the Company and our stockholders and recommended that our stockholders approve the Amendment. In accordance with the General Corporation Law of the State of Delaware, we are hereby seeking approval of the Amendment by our stockholders.No other changes to the Charter are being proposed, and the Amendment will not modify the number of shares held by, or the rights of, existing stockholders.The full text of the proposed Amendment is attached to this proxy statement as Appendix A.Reasons for the Authorized Shares AmendmentThe Board of Directors is proposing the Amendment to increase the number of authorized shares of our common stock at oneCommon Stock in order to provide the Company with the ability to raise the capital necessary to continue and grow its operations and to allow the Company to align the interests of three reverse stock split ratios,1-for-3,1-for-4its stockholders and1-for-5, its employees by means of the Company’s stock-based incentive compensation program.Of the 36,000,000 shares of Common Stock that are currently authorized to be issued under the Charter, as of April 3, 2023, 31,102,434 shares are issued and contemporaneouslyoutstanding and 4,067,558 shares are reserved for issuance under our equity plans. Of the 25,000,000 shares of Preferred Stock that are currently authorized to be issued under the Charter, none are issued and outstanding, and there are currently no outstanding rights to acquire any Preferred Stock.The Board of Directors believes that the current ratio of issued shares to authorized shares of 86% is restrictive and not in line with such reverse stock split,similar technology companies, which we believe to effect a corresponding and proportional reductionbe an average of 43%. The proposed increase in the number of authorized shares of DZSI’s common stock. ByCommon Stock to 72,000,000 will lower our issued shares to authorized shares ratio to 43% and will provide sufficient reserves of authorized but unissued shares (i.e., 40,897,566 shares of Common Stock and 25,000,000 shares of Preferred Stock) to generally support our growth and to provide flexibility for future corporate needs, including but not limited to grants under our equity compensation plans, stock splits, financings, potential strategic transactions, as well as other general corporate transactions. The additional authorized shares would enable us to issue shares in the future in a timely manner and under circumstances we consider favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular insurance.Increasing the number of shares of Common Stock will not alter the number of shares of Common Stock presently issued and outstanding or reserved for issuance and will not change the relative rights and privileges of the shares of Common Stock previously authorized, issued and outstanding.Potential Adverse Effects of Proposed AmendmentIf this Amendment is adopted, the additional authorized shares of Common Stock can be issued or reserved with the approval of the Board of Directors at times, in amounts, and upon terms that the Board of Directors may determine, without additional stockholder approval, except as may be required by applicable law. The issuance of any of the additional authorized shares of Common Stock may dilute the proportionate ownership and voting in favorpower of Proposal 1,existing stockholders, will be approving three separate and distinct amendmentstheir issuance, or the possibility of their issuance, may depress the market price of our Common Stock. Other than pursuant to our Restated Certificate of Incorporation in order to effect a reverse stock splitthe terms of our outstanding common stock options and a corresponding reduction inrestricted stock units, we do not have any existing plans, proposals or arrangements, written or otherwise, to issue any of the number ofadditional authorized shares of common stock on a proportional basis, at eachCommon Stock.The availability of the aforementioned ratios. After the receiptadditional authorized but unissued shares of stockholder approval of these amendments, DZSI will thereafter have the ability, until our 2018 annual meeting of stockholders,to unilaterally decide which amendment to give effect to, if any,Common Stock and in so doing, will abandon each other amendment without further action by our stockholders. Thereafter the selected amendment will be filed with the Secretary of State of the State of Delaware. Pursuant to the law of our state of incorporation, Delaware,Preferred Stock may enable our Board of Directors must adopt any amendment to our Restated Certificate of Incorporation and submit the amendmentrender it more difficult, or discourage an attempt to stockholders for their approval. The affirmative vote of a majorityobtain control of the outstanding sharesCompany, which may adversely affect the market price of common stock is required to approve Proposal 1.The formour Common Stock. If in the due exercise of the proposed amendments to our Restated Certificate of Incorporation to effect the reverse stock split is attached to this Proxy Statement asAppendix A. Our Board of Directors, in its discretion, may elect to effect any one (but not more than one) of the three exchange ratios upon receipt of stockholder approval, or none of them iffiduciary obligations, for example, our Board of Directors determineswere to determine that a takeover proposal were not in its discretionour best interests, such shares could be issued by the Board without stockholder approval in (i) one or more private placements or other transactions that might prevent, render more difficult or make more costly the completion of any attempted takeover transaction by diluting voting or other rights of the proposed acquirer or insurgent stockholder group or creating a substantial voting bloc in institutional or other hands that might support the position of the incumbent Board or (ii) an acquisition that might complicate or preclude the takeover. This proposal is not to proceed with the reverse stock split. The actual numberprompted by any specific effort or takeover threat currently perceived by management.Risks of authorized sharesNon-ApprovalGiven that approximately 98% of our common stock after giving effect tocurrently authorized Common Stock as of April 3, 2023 were either issued and outstanding, or shares reserved for issuance, if the reverse stock split, if and when effected, will depend onstockholders do not approve the reverse stock split ratioAmendment, we may (i) be precluded from pursuing a wide range of potential corporate opportunities that is ultimately determined by DZSI. The table below shows the reverse stock split ratio and the number of authorized shares of our common stock for each of the three alternative amendments, identified as Amendments A through C:AmendmentReverse Stock Split RatioNumber of Authorized Shares ofCommon Stock Following theReverse Stock Split AmendmentA1-for-360,000,000B1-for-445,000,000C1-for-536,000,000We believe that the availability of the three alternative exchange ratios will provide us with the flexibility to implement the reverse stock split in a manner designed to maximize the anticipated benefits for us and our stockholders. In determining which of the three alternative exchange ratios to implement, if any, following the receipt of stockholder approval, the Company may consider, among other things, factors such as:the historical trading price and trading volume of our common stock;the then-prevailing trading price and trading volume of our common stock and the anticipated impact of the reverse stock split on the trading market for our common stock;our ability to continue our listing on the Nasdaq Capital Market;which of the alternative exchange ratios would result in the greatest overall reduction in our administrative costs; andprevailing general market and economic conditions.Under the reverse stock split, the existing shares of our common stock would be combined into new shares of our common stock at a whole number exchange ratio of1-for-3,1-for-4 and1-for-5, with the exact ratio to be determined by the Company. This means that you would receive one new share of our common stock for each three, fourmight require working capital, additional financing or five shares of common stock that you currently hold, depending on which exchange ratio we determine to implement. Except for adjustments that may result from the treatment of fractional shares (as described below), each stockholder will hold the same percentage of outstanding DZSI common stock immediately following the reverse stock split as such stockholder held immediately prior to the reverse stock split. The par value of the common stock would remain unchanged at $0.001 per share.If this proposal is approved by our stockholders, our Board of Directors will have the sole discretion pursuant to Section 242(c) of the Delaware General Corporation Law to elect, as it determines tootherwise be in the best interests of DZSI and itsour stockholders whether or not(ii) struggle to effect the reverse stock split and the associated reduction in DZSI authorized capitalization at anyhire or retain employees. Any of the ratios set forth above. Our Board of Directors reserves the right, even after stockholder approval, to elect not to undertake the reverse stock split and the associated reduction in our authorized capitalization if it determines that it is no longer in the best interests of DZSI and its stockholders.Reasons for the Reverse Stock SplitCompliance with Nasdaq’s Listing StandardsOur common stock is listed on the Nasdaq Capital Market. On September 12, 2016, the Company received a letter from the Listings Qualifications Department of The Nasdaq Stock Market LLC (Nasdaq) notifying the Company that, because the Company did not satisfy Nasdaq’s initial listing standard requiring a minimum bid price of $4 per share (or a minimum closing price of $3 per share for five consecutive trading days or $2 per share for 90 consecutive trading days) at the closing of the acquisition of Dasan Network Solutions, Inc., the Company’s common stock would be subject to delisting unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the Panel). On September 19, 2016, the Company requested a hearing before the Panel with respect to the staff’s delisting determination letter, which was held on November 3, 2016. At the hearing, the Company presented its plan to gain compliance with the initial listing minimum bid or closing price requirement, including via the implementation of a reverse stock split if necessary. On November 8, 2016, the Company received a letter from Nasdaq stating that the Panel had granted the Company’s request for continued listing on Nasdaq, subject to the Company evidencing compliance with the initial listing minimum bid or closing price requirement by March 13, 2017. The compliance period granted by the Panel through March 13, 2017 is subject to the Company filing a preliminary proxy statement and a definitive proxy statement seeking stockholder approval of a reverse stock split with the SEC by no later than January 31, 2017 and February 13, 2017, respectively. If we fail to implement the reverse stock split and demonstrate compliance by March 13, 2017, or fail to file the required proxy statements with the SEC by the applicable deadline, the Panel will issue a final determination to delist the Company’s shares and suspend trading of the Company’s shares on Nasdaq.Delisting from the Nasdaq Capital Marketthese could have ana material adverse effect on our business and on the trading of our common stock. If a delisting of our common stock were to occur, our common stock would trade on the OTC Bulletin Board or on the “pink sheets” maintained by the National Quotation Bureau, Inc. Such alternatives are generally considered to be less efficient markets, and our stock price, as well as the liquidity of our common stock, may be adversely impacted as a result. Delisting from the Nasdaq Capital Market could also have other negative results, including the potential loss of confidence by customers, suppliers and employees, the loss of institutional investor interest and fewer business development opportunities. Our Board of Directors believes that maintaining the listing of our common stock on The Nasdaq Capital Market is in the best interests of DZSI and its stockholders. We expect that the reverse stock split would enable the Company to regain compliance with Nasdaq’s initial listing minimum bid or closing price requirement. Based on the foregoing, the Board of Directors has determined that pursuing the reverse stock split would be in the best interests of DZSI and its stockholders.Increase in Eligible InvestorsWe believe that the increased market price of DZSI common stock that we expect to result from implementing the reverse stock split may allow a broader range of institutions to invest in our common stock. Becauseprospects.15Effectiveness of the trading volatility often associated withlow-priced stocks, some brokerage houses and institutional investors have internal policies and practices that make them reluctant to invest, and some investors may be prohibited from investing, inlow-priced stocks. Accordingly, we believe an increased market price may result in DZSI common stock being viewed more favorably by potential investors and encourage interest and trading in our common stock, which could potentially increase the trading volume and liquidity of our common stock.Increased Analyst and Broker InterestAn increase in market price as a result of the reverse stock split could increase analyst and broker interest in our common stock because their internal policies and practices may in some cases discourage them from following or recommending companies with low stock prices. Because of the trading volatility often associated withlow-priced stocks, many brokerage houses and institutional investors have adopted internal policies and practices that either prohibit or discourage them from investing in such stocks or recommending them to their customers. Some of those internal policies and practices may also function to make the processing of trades inlow-priced stocks economically unattractive to brokers.Decrease in Transaction Costs for StockholdersBrokers’ commissions on transactions onlow-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks. As a result, we believe that individual stockholders seeking to trade DZSI common stock currently pay transaction costs representing a higher percentage of their total share value than would be the case if our share price were substantially higher. Although the reverse stock split would result in a reduced number of shares being outstanding after the reverse stock split, the combination of lower transaction costs and increased interest from institutional investors and investment funds (described above) could have the effect of improving trading liquidity of our common stock.Risk Factors Associated with the Reverse Stock SplitThere are certain risks associated with the reverse stock split, including those described below. You should carefully consider the following risks and other information included in this proxy statement before deciding to approve the proposal to amend our Restated Certificate of Incorporation to effect the reverse stock split and the associated reduction in our authorized capitalization.We cannot assure you that the reverse stock split, if implemented, will have the desired effects of enabling us to satisfy Nasdaq’s initial listing minimum bid or closing price requirement or raising the price of our common stock over the long term, that the total market capitalization of DZSI common stock after the implementation of the reverse stock split will be equal to or greater than the total market capitalization before the reverse stock split or that the per share market price of DZSI common stock following the reverse stock split will increase in proportion to the reduction in the number of shares of DZSI common stock outstanding before the reverse stock splitAlthough the Board of Directors believes that the reverse stock split will increase the market price of DZSI common stock, the effect of the reverse stock split cannot be predicted with certainty. Authorized Shares AmendmentIf the reverse stock split is implemented, there can be no assurance that the market price of DZSI common stock after the effectiveness of the reverse stock split will be sufficient to satisfy Nasdaq’s initial listing minimum bid or closing price requirement or that DZSI would otherwise meet the requirements for continued listing on Nasdaq.In addition, there can be no assurance that the market price per share of DZSI common stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of shares ofDZSI common stock outstanding before the reverse stock split. Moreover, in the future, the market price of DZSI common stock may decline. Other factors, such as DZSI’s financial results, market conditions and the market perception of our business, may adversely affect the price of DZSI common stock. Accordingly, the total market capitalization of DZSI common stock after the reverse stock split, when and if implemented, may be lower than the total market capitalization before the reverse stock split.Even if the reverse stock split is completed, the resultingper-share market price of DZSI common stock may not attract institutional investors or investment funds or may not satisfy the investing guidelines of such investors, and, consequently, the liquidity of DZSI common stock may not improveWhile the Board of Directors believes that a higher stock price may help generate investor interest and enhance liquidity, the reverse stock split may not result in aper-share market price of DZSI common stock that will attract institutional investors or investment funds and may not satisfy the investing guidelines of institutional investors or investment funds. As a result, the liquidity of DZSI common stock may not necessarily improve.A decline in the market price of DZSI common stock after the reverse stock split is implemented may result in a greater percentage decline than would occur in the absence of the reverse stock split, and the liquidity of DZSI common stock could be adversely affected by the reverse stock splitIf the reverse stock split is effected and the market price of DZSI common stock declines, the decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the reverse stock split. Furthermore, the liquidity of DZSI common stock could be adversely affected by the reduced number of shares that would be outstanding after the reverse stock split.There can be no assurance that the reverse stock split, if implemented, will result in decreased transaction costs for our stockholdersWe cannot assure you that the reverse stock split will have the desired effect of raising the price of DZSI common stock over the long term. Shareholders’ transaction costs, which, as discussed above, we believe represent a higher percentage in transactions for lower-priced stocks than higher-priced stocks, may not decrease if the per share market price of DZSI common stock is not substantially higher after the reverse stock split is implemented. In addition, if the proposed reverse stock split is implemented, it would increase the number of DZSI stockholders who own “odd lots” of less than 100 shares of common stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock.If our stockholders approve the amendment to our Restated Certificate of Incorporation to effect the reverse stock split, the determination by the Board of Directors to implement the reverse stock split would be based on various factors, and there is no assurance that the reverse stock split would have any of the anticipated benefitsIf our stockholders approve the amendment to our Restated Certificate of Incorporation to effect the reverse stock split, our Board of Directors may, in its sole discretion, at any time prior to our 2018 annual meeting of stockholders, authorize the reverse stock split at a whole number ratio1-for-3,1-for-4 or1-for-5, with such ratio to be set at our discretion. The determination by the Board of Directors to implement the reverse stock split and to set the exact ratio would be based on various factors, including existing and expected market prices for DZSI common stock, Nasdaq listing requirements, prevailing market conditions and other factors. There can be no assurance that the timing of the reverse stock split and the exact exchange ratio determined by the Board of Directors would, at the time of the implementation of the reverse stock split, result in any of the intended benefits of DZSI having implemented the reverse stock split.Board of Directors Discretion to Implement the Reverse Stock SplitIf the amendment to our Restated Certificate of Incorporation to effect the reverse stock split and the associated reduction in our authorized capitalizationAmendment is approved by our stockholders, it will become effective upon the amendment would beeffected, if at all, only upon a determinationacceptance by our Board of Directors that the reverse stock split (using an exchange ratio determined by us within the range set forth above) and the associated reduction in our authorized capitalization are in the best interests of DZSI and its stockholders. Such determination will be based upon certain factors, including:the historical trading price and trading volume of our common stock;the then-prevailing trading price and trading volume of our common stock and the anticipated impact of the reverse stock split on the trading market for our common stock;our ability to continue our listing on the Nasdaq Capital Market;which of the alternative exchange ratios would result in the greatest overall reduction in our administrative costs; andprevailing general market and economic conditions.Notwithstanding approval by the stockholders of the proposed amendment to our Restated Certificate of Incorporation to effect the reverse stock split and the associated reduction in our authorized capitalization, our Board of Directors may, in its sole discretion, abandon the proposed amendment to our Restated Certificate of Incorporation and determine, prior to the effectiveness of any filing of the amendment with the Secretary of State of the State of Delaware of the filing of the Amendment. Such filing is expected to occur promptly after stockholder approval of this proposal. If the Amendment is not approved, the Charter would remain unchanged, and the number of authorized shares of Common Stock and Preferred Stock would remain 36,000,000 and 25,000,000, respectively. Other than as described herein, this proposed Amendment effects no other changes to effect the Charter, other than the elimination of a provision related to a reverse stock split and the associated reduction inwhich occurred on February 28, 2017, which provision is no longer relevant.Vote RequiredThe affirmative vote of a majority of our authorized capitalization, as permitted under Section 242(c) of the Delaware General Corporation Law.Principal Effects of the Reverse Stock SplitIf approved and implemented, the principal effects of the reverse stock split would include the following:Depending on the ratio for the reverse stock split, as determined by the Company in its sole discretion, you will receive one new share of DZSI common stock for each three, four or fiveoutstanding shares of DZSI common stock that you currently hold (thatCommon Stock is every three, four or five shares would be combined into one share). However,required to amend the reverse stock split will affect all stockholders uniformly and will not affect any stockholder’s percentage ownership interest or voting rights in DZSI (exceptCharter to the extent that the reverse stock split would result in some of our stockholders owning fractional shares as described below). For example, a holder of 2% of the total voting power of DZSI immediately prior to the reverse stock split would continue to hold approximately 2% of the total voting power of DZSI immediately after the reverse stock split.The total number of shares of common stock issued and outstanding will be reduced proportionally based on the ratio of the reverse stock split.The total number of shares of common stock that DZSI is authorized to issue will be reduced proportionally based on the ratio of the reverse stock split.The number of shares of DZSI common stock available for issuance under the DASAN Zhone Solutions, Inc. Amended and Restated 2001 Stock Incentive Plan (the 2001 Plan), the DASAN Zhone Solutions, Inc. 2017 Incentive Award Plan (the 2017 Plan), which are the only equity incentive compensation plans currently active from which we may make new stock awards, and the DASAN Zhone Solutions, Inc. 2002 Employee Stock Purchase Plan, as amended and restated (the ESPP) would also be reduced proportionally to the ratio of the reverse stock split.With respect to outstanding stock options to purchase shares of DZSI common stock, the reverse stock split would effect a reduction in the number of shares subject to such outstanding stock options proportional to the exchange ratio of the reverse stock split (rounded down to the nearest whole share) and would effect a proportionate increase in the exercise price of such outstanding stock options (rounded up to the nearest whole cent). Unless required by the terms of the equity incentive compensation plan pursuant to which a stock award was issued, no cash payment would be made toholders of equity awards in respect of such rounding. With respect to outstanding restricted stock units and restricted stock awards, the reverse stock split would effect a reduction in the number of shares subject to such outstanding restricted stock units and restricted stock awards proportional to the ratio of the reverse stock split (rounded down to the nearest whole share). No cash payment would be made to holders of equity awards in respect of such rounding.The following table contains approximate information relating to our common stock under each of the proposed reverse stock split exchange ratios based on share information as of January 4, 2017 (in thousands): Pre-
Reverse
Split 1-for-3 1-for-4 1-for-5 180,000 60,000 45,000 36,000 81,888 27,296 20,472 16,378 3,931 1,310 983 786 47 16 12 9 35 12 9 7 3,000 1,000 750 600 569 190 142 114 (1)The number of shares of common stock reserved for future issuance pursuant to the 2017 Plan does not include any shares that may become available for issuance pursuant to the 2017 Plan’s evergreen provision, under which the share pool would be automatically increased each year based on a specified formula, or any other terms of the 2017 Plan.The number of stockholders of record will not be affected by the reverse stock split (except to the extent that the reverse stock split would result in some of our stockholders owning only a fractional share as described below).If the proposed reverse stock split is implemented, it would increase the number of DZSI stockholders who own “odd lots” of less than 100authorized shares of common stock. Brokerage commissionour Common Stock to 72,000,000.Recommendation of the Board of DirectorsThe Board of Directors unanimously recommends that you vote “FOR” the proposal to approve the amendment to the Charter to increase the number of authorized shares of Common Stock to 72,000,000.16PROPOSAL 4:AN ADVISORY VOTE ON A NON-BINDING RESOLUTION TO APPROVE THECOMPENSATION OF OUR NAMED EXECUTIVE OFFICERS DISCLOSEDIN THIS PROXYOverviewOur Compensation Committee has described our compensation philosophy in the Compensation Discussion and Analysis contained in this proxy statement. Stockholders are encouraged to read the Compensation Discussion and Analysis, which also discusses how our compensation programs implement our compensation philosophy, as well as the Summary Compensation Table and other costsrelated tables and narrative disclosure, which describe the compensation of transactionsall individuals who served as our chief executive officer or our chief financial officer during any part of 2022 and the other three most highly compensated executive officers of the Company in odd lots2022 who were serving as executive officers at the end of 2022 (our "named executive officers") set forth under "Executive Compensation" below. The Compensation Committee and the Board of Directors believe the policies and procedures articulated in the Compensation Discussion and Analysis are generally higher thaneffective in implementing our compensation philosophy and in achieving our compensation goals, and that the costscompensation of transactionsour executive officers in 2022 reflects and supports these compensation policies and procedures.What am I Voting On?As required pursuant to Section 14A of more than 100 sharesthe Exchange Act, stockholders are being asked to vote on the following resolution:RESOLVED, the stockholders of common stock.SharesDZS Inc. approve, on an advisory basis, the compensation of DZSI common stock resulting from the reverse stock splitcompany's named executive officers, as disclosed in the Compensation Discussion and Analysis, compensation tables, and related disclosures contained in the section of the proxy statement for the 2023 Annual Meeting of Stockholders captioned "Executive Compensation".Is This Vote Binding on the Board of Directors?This advisory vote on executive compensation, commonly referred to as a 'say-on-pay' advisory vote, is not binding on our Board of Directors. However, the Board of Directors and Compensation Committee will remain fully paid andnon-assessable. Our common stock is currently registered under take into account the results of the vote when determining future executive compensation arrangements.Recommendation of the Board of DirectorsThe Board of Directors unanimously recommends that you vote “FOR” adoption of the resolution approving the compensation of our named executive officers.17PROPOSAL 5:A NON-BINDING ADVISORY VOTE TO DETERMINE THE FREQUENCYOF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OURNAMED EXECUTIVE OFFICERSOverviewSection 12(b)14A of the Securities Exchange Act of 1934 requires that, every six years, we provide stockholders with a vote on how frequently we will submit the non-binding advisory vote on compensation of our named executive officers (the Exchange Act), and DZSI is subject"say-on-pay" vote) to our stockholders in the periodic reporting and other requirements of the Exchange Act. The reverse stock split would not affect the registration of the common stock under the Exchange Act. If the reverse stock split is implemented, our common stock would continue to be reportedfuture. We last submitted a vote on the Nasdaq Capital Market underfrequency of future say-on-pay votes to our stockholders in 2017, when, in keeping with the symbol “DZSI” (although Nasdaq would likely addrecommendation of our Board of Directors, our stockholders expressed a preference that future say-on-pay votes be held every three years. Consistent with that preference, our Board of Directors has held a say-on-pay vote every three years since 2017.Our Board of Directors concluded that an advisory vote every three years to obtain stockholder feedback is appropriate for our organization. If we conclude over the letter “D” tonext several years that a vote every three years is not a useful tool for the endmaintenance of the trading symbol for a period of 20 trading days to indicateour compensation structure that the reverse stock split has occurred).If approved byrewards both short-term execution and long-term strategy, we will so advise our stockholders and implementedreduce the frequency as so allowed. We believe this approach is consistent with the type of open and transparent dialogue we strive to have had with our stockholders.What am I Voting On?Stockholders are being asked to vote on a resolution to determine, on an advisory basis, whether the frequency of the say-on-pay vote should be (i) every one year, (ii) every two years, or (iii) every three years. The frequency with the greatest number of votes will be deemed the choice of the stockholders.Is This Vote Binding on the Board of Directors?Although this advisory vote on the frequency of the say-on-pay vote is not binding on our Board of Directors, the Board or Directors and Compensation Committee will take into account the result of the vote when determining the frequency of future say-on-pay votes.Recommendation of the Board of DirectorsThe Board of Directors unanimously recommends a vote of “3 YEARS” on the frequency of future executive compensation votes.18EXECUTIVE COMPENSATIONCompensation Discussion and AnalysisExecutive SummaryOur compensation and benefits programs are designed to reward and retain employees, including our named executive officers (“NEOs”) in a manner that best aligns employees’ interests and stockholders’ interests. We accomplish this goal by a combination of cash compensation, including a base salary and performance bonuses, and equity awards, which create significant upside potential for strong performance, as well as downside exposure for underperformance. NEOs with greater responsibilities and ability to directly impact our long-term results have a greater participation in these equity awards, and therefore have more risk based on the achievement of the Company’s goals and results.The following discussion describes and analyzes our compensation objectives and policies as well as the material components of our compensation program for our NEOs during 2022. Our NEO’s for 2022 were:•Charles D. Vogt, President and Chief Executive Officer•Misty Kawecki, Chief Financial Officer•Justin K. Ferguson, Chief Legal Officer•Norman L. Foust, Senior Vice President of Global Supply Chain•Miguel Alonso, Chief Product OfficerCompensation PhilosophyWe strive to find the best talent, resources and infrastructure to serve our customers and key stakeholders, and execute on our strategy as a global provider of access and optical networking infrastructure and cloud software solutions. Our goal is to attract and retain highly qualified executives to manage and oversee each of our business functions. We seek out individuals who we believe will be able to contribute to our business, long-term success, culture, principles and values and who will promote the long-term interests and growth of our Company. Our compensation philosophy is intended to create a high-performance, outcome-driven and principled culture by holding leaders accountable for delivering results. In addition, we believe that our compensation policies and programs are appropriately balanced, reinforcing both short-term and long-term results, and as such they do not incentivize behavior that could have a material adverse effect on the Company.Our executive compensation program is designed to be market competitive, emphasize pay for performance, share risks and rewards with our stockholders, and reflect our principles and values. Our executive compensation program includes the following components:•base salary;•incentive-based cash compensation;•grants of long-term equity awards; and•health, welfare and retirement benefits.Role of Our Compensation CommitteeOur Compensation Committee approves our executive compensation and all of our executive benefit plans and policies. The Compensation Committee is appointed by the Board of Directors and consists entirely of directors who are non-employee directors for purposes of Rule 16b-3 of the reverse stock splitExchange Act. In 2022, our Compensation Committee approved the compensation for all of our NEOs. Our Chief Executive Officer assesses NEO individual performance and compensation, excluding his own performance and compensation, each year and makes recommendations regarding each element of NEO compensation to the Compensation Committee. The Compensation Committee evaluates the performance of the Chief Executive Officer and determines and approves his compensation based on such evaluation. The Compensation Committee also has oversight over compensation of senior management and the associated reductioneffectiveness of our executive compensation and benefits programs.Competitive Market ReviewOur Compensation Committee determines compensation for our NEOs in DZSI’s authorized capitalization would become effectivelarge part based upon its assessment of competitive market data and individual executive roles and responsibilities to pursue our short and long-term strategy. In setting executive compensation for 2021, our Compensation Committee engaged Korn Ferry to review our NEOs’ compensation, as well as the filingmix of elements used to compensate our NEOs, and compared that to a peer group and survey data from global technology companies with revenues of $200 million to $500 million. The Compensation Committee determined that Korn Ferry is independent and that there is no conflict of interest in retaining their services. Based on its review, the Compensation Committee made revisions to our executive compensation program to be more consistent with market practices.Peer GroupThe criteria for determining the peer group in the Korn Ferry report consisted of comparable companies within the communications equipment industry, and with revenue between $200 million and $4.5 billion and market capitalizations between $249 million and $11.7 billion. Our 2021 peer group consisted of the amendmentfollowing companies:•Adtran Inc.;•Applied Optoelectroncis Inc.;•Aviat Networks, Inc.;•Calix, Inc.;•Casa Systems, Inc.;19•Ciena Corp.;•Digi International Inc.;•Extreme Networks Inc.;•F5 Networks, Inc.;•Harmonic Inc.;•Infinera Corp.;•Juniper Networks Inc; and•Ribbon Communications, Inc.Base SalaryBase salaries for our NEOs are established based on the scope of their responsibilities, individual contribution, prior experience, sustained performance and anticipated level of difficulty of replacing the employee with someone of comparable experience and skill. Decisions regarding salary increases take into account the executive’s current salary and the amounts paid to the NEOs’ peers outside the Company. In addition to considering the competitive pay practices of our peer group of companies, we also consider the amounts paid to a NEO’s peers internally by conducting an internal pay equity analysis which compares the pay of each NEO to other members of the management team. Base salaries are reviewed periodically, but are not automatically increased if the Compensation Committee believes that other elements of compensation are more appropriate in light of our stated objectives. This strategy is consistent with our intent of offering compensation that is contingent on the achievement of performance objectives.As of December 31, 2022, the base salaries for our named executive officers were as follows: Charles D. Vogt $600,000, Misty Kawecki $300,000, Justin K. Ferguson $325,000, Norman L. Foust $250,000 and Miguel Alonso $235,000.Annual Bonus PlanMr. Vogt, Ms. Kawecki, Mr. Ferguson, Mr. Foust and Mr. Alonso are eligible to participate in a DZS annual bonus program, to be earned and paid quarterly. The Compensation Committee evaluates and approves bonus payments, if any, on a quarterly basis by reviewing the Company’s overall results against the annual budget as approved by the Board of Directors with respect to various financial metrics as well as individual key performance goals. As of December 31, 2022, Mr. Vogt’s target quarterly bonus is $150,000, Ms. Kawecki’s target quarterly bonus is $37,500, Mr. Ferguson’s target quarterly bonus is $40,625, Mr. Foust’s target quarterly bonus is $31,250, and Mr. Alonso’s target quarterly bonus is $29,375. For 2022, the Compensation Committee determined that the financial metrics under the annual bonus program would be based on two metrics – 50% weighted on the Company’s revenue and 50% weighted on the Company’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), but, for purposes of the Adjusted EBITDA calculation and taking into account (for 2022 only) the unusual and extreme nature of foreign currency exchange fluctuations during 2022, excluding any impacts as a result of foreign currency exchange fluctuations.We define Adjusted EBITDA as net income (loss) plus (i) interest expense, net, (ii) other income and expense, (iii) provision (benefit) for taxes, (iv) depreciation and amortization, (v) stock-based compensation, and (vi) the impact of material transactions or events that we believe are not indicative of our core operating performance, such as acquisition costs, impairment of goodwill, intangibles or long-lived assets, loss on debt extinguishment, legal costs related to certain litigation, restructuring and other charges, including termination related benefits, headquarters and facilities relocation, executive transition, and bad debt expense primarily related to a large customer in India, any of which may or may not be recurring in nature.Following completion of each quarter, the Compensation Committee determined the quarterly cash bonus payout for each executive officer. Such payout was calculated by multiplying the aggregate percentage achievement of the two financial metrics for each quarter by the bonus target for each such executive officer, subject to any adjustments determined appropriate by the Compensation Committee as described below. Any achievement for an applicable quarter in excess of 100% is not paid out until the end of the year.The performance targets relating to the Company’s revenues and Adjusted EBITDA under the annual bonus plan for each of the executive officers, as well as the actual results of these financial measurements for 2022, were as follows:ANNUAL BONUS PLAN Target Bonus Metrics (in millions USD) Company Payout Minimum Target Maximum Actual '22 FX Calculated Performance Metric 25% 100% 200% Results Impact 22 Results Payout Weighting First Quarter 2022 Revenues 79.74 88.60 99.68 77.04 1.13 78.17 0% 12.5% Adjusted EBITDA (1.58) 0.80 4.37 (0.23) 0.43 0.20 69% 12.5% Second Quarter 2022 Revenues 82.83 92.03 103.53 91.08 4.96 96.04 135% 12.5% Adjusted EBITDA 1.95 5.00 9.22 (3.17) 2.69 (0.48) 0% 12.5% Third Quarter 2022 Revenues 86.68 96.31 108.35 107.40 7.61 115.01 200% 12.5% Adjusted EBITDA 3.06 6.52 11.27 3.73 3.46 7.19 114% 12.5% Fourth Quarter 2022 Revenues 89.74 99.71 112.18 100.18 7.17 107.34 161% 12.5% Adjusted EBITDA 2.00 5.19 9.93 (3.15) 2.98 (0.17) 0% 12.5% Total Year 2022 Revenues 338.98 376.65 423.73 375.70 20.86 396.56 143% 50.0% Adjusted EBITDA 5.43 17.50 34.78 (2.82) 9.56 6.73 36% 50.0% Total Weighted Payout Normalized for FX: 89% 20The Compensation Committee retained its discretion to adjust overall bonuses under the annual bonus plan. The Company overachieved its revenue target with a 143% performance and achieved a 36% performance of its Adjusted EBITDA target under the annual bonus plan. The Compensation Committee acknowledged that the Company’s performance under the annual bonus plan achieved an 89% bonus payout. However, the Compensation Committee determined that, irrespective of the achievement by the officers of their individual key performance metrics and taking into account the Company’s Adjusted EBITDA performance prior to the exclusion of the foreign currency exchange fluctuations, the achievement under the annual bonus plan should be reduced to a 75% target bonus payout for each executive officer.As a result, the amounts paid under the Company’s annual bonus plan for 2022 were as follows:Executive Officer Total Received under the DZS Annual Bonus Plan Charles D. Vogt $ 450,000 Misty Kawecki $ 112,500 Justin K. Ferguson $ 121,875 Miguel Alonso $ 88,125 Norman L. Foust $ 70,313 Equity AwardsTo reward and retain employees in a manner that best aligns employees’ interests with stockholders’ interests, we use restricted stock units (“RSUs”) and stock options as the primary incentive vehicle for long-term compensation opportunities. All of the equity awards incrementally vest over a period of years, in order to promote employee retention and focus on long-range goals. The Compensation Committee does not target specific percentiles for long-term incentive awards for our NEOs and uses a number of factors in establishing the long-term incentive award levels for each individual, including a review of each individual’s accumulated vested and unvested awards, the current and potential realizable value over time using stock appreciation assumptions, vesting schedules, comparison of individual awards between executives and in relation to other compensation elements, market data, shareholder dilution and accounting expense. Should we perform well against our long-term goals, the long-term equity incentive awards will become a significant portion of the total compensation of each NEO. For more information on the 2022 long-term equity grants, see the 2022 Grants of Plan-Based Awards table below.During 2022, the Compensation Committee reviewed the stock options issued to employees as incentive compensation during 2021. Due to a drop in the trading price of the Company’s common stock, which the Compensation Committee did not feel was reflective of the efforts and achievement of the Company’s employees, including the NEOs, the Compensation Committee determined that certain of the stock options issued during 2021 were unlikely to be exercised, due to the high exercise price, and consequently these options no longer served as incentive compensation to the holders. As stated, the Compensation Committee believes that long-term incentive awards are an important vehicle to align the interests of employees and the Company’s stockholders. Consequently, the Compensation Committee approved an exchange program, whereby holders of certain options issued during 2021 had the right to exchange their options for restricted stock units, at the ratio of one restricted stock unit for every two shares issuable under the option. The vesting period for the restricted stock units was the same as the options, with the exception that the vesting schedule was shortened by one year, to reflect the fact that the options had been held for one year at the time of the exchange, and the vesting was restarted upon issuance of the exchanged restricted stock units. While the Compensation Committee does not generally endorse option re-pricings, given the unique facts of this situation, it believed this exchange was appropriate in order to continue to align the interests of employees with stockholders. Ms. Kawecki, Mr. Ferguson, and Mr. Alonso participated in this exchange.We do not have any program, plan, or practice to time equity grants to take advantage of the release of material information. During fiscal year 2022, equity awards were granted in July 2022 to NEOs following one of our regularly scheduled Compensation Committee meetings. Additionally, in May 2022, the Compensation Committee approved an equity award to certain employees and executive officers in recognition of the effort in closing the acquisition of certain assets of Adaptive Spectrum and Signal Alignment, Incorporated (“ASSIA”).Stockholder Advisory Vote on Executive CompensationWe hold an advisory, non-binding stockholder vote on executive compensation every three years. At our 2020 Annual Meeting of Stockholders, our stockholders voted to approve the compensation of our NEOs, with approval of 99.55% of the votes cast. The Compensation Committee intends to continue to take into consideration the outcome of our stockholders’ advisory “say-on-pay” votes along with market practices and the recommendations of its executive compensation advisor when making future compensation decisions for the NEOs. We also regularly engage in discussions with our largest institutional shareholders and solicit feedback on executive compensation as well as other areas.Insider Trading Policy; No Hedging or PledgingDirectors, officers (including our NEOs) and employees must comply with our Insider Trading Policy and may not engage in any transaction in our securities without first obtaining pre-clearance of the transaction from our Chief Legal Officer. We believe this plan is reasonably designed to promote compliance with the insider trading laws, rules and regulations, as well as the Nasdaq listing standards.No director, executive officer or other employee is permitted to (i) engage in short sales, transactions in put options, call options or other derivative securities on an exchange or in any other organized market, or in any other inherently speculative transactions with respect to our Restated Certificatestock, (ii) transact through mechanisms that hedge against our securities, or (iii) hold our securities in a margin account or otherwise pledging our securities as collateral for a loan. These provisions are part of Incorporationour overall program to prevent any of our directors, officers or employees from trading on material non-public information.21Health and Welfare BenefitsOur NEOs are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life and disability insurance, generally on the same basis as other employees. We believe that these health and welfare benefits help ensure that the Company has a productive and focused workforce.Other BenefitsWe provide our NEOs with other benefits when it is appropriate or necessary to incentivize them to join the Company or to retain them.Compensation Risk AssessmentThe Compensation Committee reviews the risks arising from our compensation policies and practices applicable to our NEOs and evaluates the policies and practices that could mitigate any such risk. Based on these reviews, the Compensation Committee does not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on our Company.Tax And Accounting ConsiderationsSection 280G of the Internal Revenue CodeSection 280G of the Internal Revenue Code disallows a tax deduction for “excess parachute payments” and Section 4999 of the Code imposes a 20% excise tax on any person who receives excess parachute payments. Our NEOs are not eligible to receive any tax gross-up payments in the event any payments made or that may be made to them become subject to this excise tax. The Compensation Committee will take into account the implications of Section 280G in determining potential payments to be made to our executives in connection with a change in control. Nevertheless, to the extent that certain payments upon a change in control are classified as excess parachute payments, such payments may not be deductible under Section 280G.Section 409A of the Internal Revenue CodeSection 409A of the Internal Revenue Code, which governs the form and timing of payment of deferred compensation, imposes a 20% tax and an interest penalty on the recipient of deferred compensation that is subject to but does not comply with Section 409A. As a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our NEOs, so that they are either exempt from, or satisfy the requirements of, Section 409A of the Code. The Compensation Committee will take into account the implications of Section 409A in determining the form and timing of compensation awarded to our executives and will strive to structure any nonqualified deferred compensation plans or arrangements to be exempt from or to comply with the Secretaryrequirements of StateSection 409A.Section 162(m) of the StateInternal Revenue CodeSection 162(m) disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1 million in any taxable year for our CEO, our CFO, any employee who is one of Delaware. At the effective time, sharestop three highest compensated executive officers for the tax year; or for any employee who was an NEO for any preceding taxable year beginning after December 31, 2016 referred to as “covered employees.” Further, since the enactment of DZSI common stock issuedtax reform legislation on December 22, 2017 (the “2017 Tax Reform Act”), “qualified performance-based compensation” is exempt from this $1 million limitation only if payable pursuant to a written binding contract in effect on November 2, 2017 (and that has not subsequently been materially modified). The Compensation Committee has not previously taken the deductibility limit imposed by Section 162(m) into consideration in setting compensation and outstanding immediately prior thereto will be combined and converted, automatically and without any action on the part of stockholders, into new shares of DZSI common stock in accordance with the exchange ratio determined by us from among the possible ratios set forth above.Treatment of Fractional SharesNo scrip or fractional shares will be issued if, as a result of the reverse2017 Tax Reform Act, a deduction for any compensation paid to our NEOs in excess of $1 million is disallowed.Accounting for Stock-Based CompensationWe follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) for our stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of stock split,options, restricted stock, RSUs and other stock-based awards under our equity incentive award plans will be accounted for under ASC Topic 718. Our Compensation Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.22Severance and Change in Control BenefitsWe have employment, severance, change of control or release agreements with certain of the NEOs, as described below.Employment Agreement with Charles D. Vogt On July 30, 2020, the Company announced the appointment of Charles D. Vogt as the Company’s President and Chief Executive Officer, effective August 1, 2020. In connection with his appointment, Mr. Vogt entered into an employment agreement with the Company (such agreement, as subsequently amended, the “Vogt Employment Agreement”) that is discussed in greater detail below. The Vogt Employment Agreement provides that Mr. Vogt will have an annual base salary of $600,000, which will be reviewed on at least an annual basis by the Board of Directors or the Compensation Committee. Mr. Vogt will be eligible to participate in a stockholder would otherwise become entitledperformance-based annual bonus program approved by the Board of Directors, pursuant to a fractional share. Instead, DZSIwhich bonuses will paybe earned and paid, if at all, in equal quarterly installments. Mr. Vogt’s initial target quarterly bonus is $150,000, provided that Mr. Vogt’s actual bonus for each of the first four quarters following his commencement of employment (commencing with the quarter ending September 30, 2020) will be no less than $125,000, subject to his continued employment through the end of each applicable quarter. Mr. Vogt is also eligible to participate in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements generally available to the stockholder, in cash,Company’s other officers.In connection with his appointment, the valueBoard of any fractional share arising fromDirectors granted to Mr. Vogt: (i) an option to purchase 370,370 shares of the reverseCompany’s common stock split.(the “Special Option”), (ii) an option to purchase 148,148 shares of the Company’s common stock (the “Initial Option”), and (iii) an award of 44,444 restricted stock units (the “Initial RSUs”). The cash payment will equalSpecial Option and the average closingInitial Option have a ten-year term and an exercise price per share equal to the fair market value of DZSIthe Company’s common stock as reportedon the date of grant. The Special Option will vest on the third anniversary of Mr. Vogt’s commencement of employment, and the Initial Option will vest with respect to 33% of the shares underlying the Initial Option on the first anniversary of Mr. Vogt’s commencement of employment, and the remainder will vest ratably over 24 months thereafter. The Initial RSUs vest in three annual installments on June 10, 2021, 2022 and 2023. Vesting of the equity awards will be immediately accelerated if, following a change in control, Mr. Vogt resigns for “good reason” (as defined below) or his employment is terminated by the Nasdaq Capital MarketCompany for any reason other than by reason of death, disability or “cause” (as defined below). Future equity grants will be made at the five trading days immediately preceding the effective datediscretion of the reverse stock splitmultiplied byBoard of Directors.Under the number of shares ofpre-split common stock heldVogt Employment Agreement, Mr. Vogt will receive certain compensation in the event that he resigns for “good reason” or his employment is terminated by the stockholder that would otherwise have been exchangedCompany for such fractional share. No transaction costs would be assessed to stockholders forany reason other than by reason of death, disability or “cause” (each, a “Qualifying Termination”). In the cash payment. Stockholders would notevent Mr. Vogt’s employment is terminated by reason of a Qualifying Termination, Mr. Vogt will be entitled to receive interest for(i) his base salary through the period of time between the effective date of termination, reimbursable business expenses in accordance with company policies, and any accrued, vested benefits, in each case to the reverse stock splitextent not previously paid and (ii) a lump-sum payment equal to Mr. Vogt’s annual salary as in effect immediately prior to the date paymentof termination. In addition, all unvested equity awards shall immediately vest (with the exception that the Special Option shall only vest if such termination occurs within twelve months of a change in control).Employment Agreement with Misty Kawecki On July 29, 2021, the Company announced the appointment of Misty Kawecki as the Company’s Chief Financial Officer, effective July 29, 2021. In connection with her appointment, Ms. Kawecki entered into an employment agreement with the Company (the “Kawecki Employment Agreement”) that is made for their fractional shares.If you do not hold sufficient sharesdiscussed in greater detail below. The Kawecki Employment Agreement provides that Ms. Kawecki will have an initial annual base salary ofpre-split DZSI common stock to receive $300,000. The base salary will be reviewed on at least one post-split sharean annual basis by the Board of DZSIDirectors or the Compensation Committee. Ms. Kawecki will be eligible to participate in a performance-based annual bonus program approved by the Board of Directors, pursuant to which bonuses will be earned and paid, if at all, in equal quarterly installments. Ms. Kawecki’s initial target annual bonus is $37,500 per quarter. Ms. Kawecki also received a one-time sign-on bonus in the amount of $50,000. Ms. Kawecki is eligible to participate in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements generally available to the Company’s other officers, including a cell phone allowance.In connection with her appointment, the Board of Directors granted Ms. Kawecki stock options to purchase 100,000 shares of the Company’s common stock and you want50,000 restricted stock units under the Company’s equity plan. Such options, which have a ten-year term and an exercise price per share equal to continue to hold DZSIthe fair market value of the Company’s common stock afteron the reversedate of grant, will vest over a three-year period, with 33% vesting on the first anniversary of Ms. Kawecki’s commencement of employment and the remainder vesting ratably over 24 months thereafter. The restricted stock split, you may do sounits will vest in three equal installments on August 2, 2022, 2023 and 2024. Vesting of the equity awards will be immediately accelerated if Ms. Kawecki resigns for “good reason” (as defined below) or her employment is terminated by taking eitherthe Company for any reason other than by reason of death, disability or “cause” (as defined below), within twelve months following a change in control.Under the Kawecki Employment Agreement, Ms. Kawecki will receive certain compensation in the event that she resigns for “good reason” or her employment is terminated by the Company for any reason other than by reason of death, disability or “cause” (each, a “Qualifying Termination”). In the event Ms. Kawecki’s employment is terminated by reason of a Qualifying Termination, Ms. Kawecki will be entitled to receive (i) her base salary through the date of termination, reimbursable business expenses in accordance with company policies, and any accrued, vested benefits, in each case to the extent not previously paid, (ii) a lump-sum payment equal to the greater of (A) Ms. Kawecki’s annual salary as in effect immediately prior to the date of termination or (B) $300,000, and (iii) Ms. Kawecki’s bonus for the quarter in which the termination occurs based on actual Company performance. Vesting of the equity awards will be immediately accelerated if Ms. Kawecki resigns for “good reason” (as defined below) or her employment is terminated by the Company for any reason other than by reason of death, disability or “cause” (as defined below), within twelve months following a change in control. Future equity grants will be made at the discretion of the Board of Directors. 23Employment Agreement with Justin K. Ferguson On September 28, 2020, the Company announced the appointment of Justin K. Ferguson as the Company’s Chief Legal Officer, effective September 28, 2020. In connection with his appointment, Mr. Ferguson entered into an employment agreement with the Company (the “Ferguson Employment Agreement”) that is discussed in greater detail below. The Ferguson Employment Agreement provides that Mr. Ferguson will have an initial annual base salary of $300,000. The base salary will be reviewed on at least an annual basis by the Board of Directors or the Compensation Committee. Mr. Ferguson will be eligible to participate in a performance-based annual bonus program approved by the Board of Directors, pursuant to which bonuses will be earned and paid, if at all, in equal quarterly installments. Mr. Ferguson’s initial target annual bonus is $37,500 per quarter. Mr. Ferguson is eligible to participate in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements generally available to the Company’s other officers, including a cell phone allowance. Mr. Ferguson’s base salary was increased to $325,000 effective January 1, 2022.In connection with his appointment, the Board of Directors granted Mr. Ferguson stock options to purchase 37,500 shares of the Company’s common stock and 37,500 restricted stock units under the Company’s equity plan. Such options, which have a ten-year term and an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant, will vest over a three-year period, with 33% vesting on the first anniversary of Mr. Ferguson’s commencement of employment and the remainder vesting ratably over 24 months thereafter. The restricted stock units will vest in three equal installments on June 10, 2021, 2022 and 2023. Vesting of the equity awards will be immediately accelerated if Mr. Ferguson resigns for “good reason” (as defined below) or his employment is terminated by the Company for any reason other than by reason of death, disability or “cause” (as defined below).Under the Ferguson Employment Agreement, Mr. Ferguson will receive certain compensation in the event that he resigns for “good reason” or his employment is terminated by the Company for any reason other than by reason of death, disability or “cause” (each, a “Qualifying Termination”). In the event Mr. Ferguson’s employment is terminated by reason of a Qualifying Termination, Mr. Ferguson will be entitled to receive (i) his base salary through the date of termination, reimbursable business expenses in accordance with company policies, and any accrued, vested benefits, in each case to the extent not previously paid, (ii) a lump-sum payment equal to Mr. Ferguson’s annual salary as in effect immediately prior to the date of termination and (iii) Mr. Ferguson’s bonus for the quarter in which the termination occurs based on actual Company performance. Vesting of the equity awards will be immediately accelerated if Mr. Ferguson resigns for “good reason” (as defined below) or his employment is terminated by the Company for any reason other than by reason of death, disability or “cause” (as defined below). Future equity grants will be made at the discretion of the Board of Directors.Offer Letter to Miguel AlonsoOn December 29, 2022, the Company offered Mr. Alonso the position of Chief Product Officer. In connection with such offer, the Company sent Mr. Alonso a letter (the “Alonso Offer Letter”) that is discussed in greater detail below. The Alonso Offer Letter provides that Mr. Alonso will have an initial annual base salary of $300,000 effective January 1, 2023. Mr. Alonso’s base salary in 2022 was $235,000. Under the Alonso Offer Letter, Mr. Alonso will be eligible to participate in a performance-based annual bonus program approved by the Board of Directors, pursuant to which bonuses will be earned and paid, if at all, in equal quarterly installments. Mr. Alonso’s initial target annual bonus is $37,500 per quarter. Mr. Alonso is eligible to participate in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements generally available to the Company’s other officers. Additionally, Mr. Alonso will receive relocation assistance to move from California to Texas. In the event that Mr. Alonso voluntarily leaves the Company within 12 months of his relocation, he will be responsible for reimbursing the Company for the pro-rata amount of the relocation assistance.Under the Alonso Offer Letter, Mr. Alonso will receive certain compensation in the event that his employment is terminated by the Company without “cause.” In such event, and only in the event that Mr. Alonso is a resident of the Dallas/Fort Worth metroplex, Mr. Alonso will be entitled to receive (i) his base salary through the date of termination, reimbursable business expenses in accordance with company policies, and any accrued, vested benefits, in each case to the extent not previously paid, (ii) a lump-sum payment equal to six months of Mr. Alonso’s salary as in effect immediately prior to the date of termination, (iii) Mr. Alonso’s bonus for the quarter in which the termination occurs based on actual Company performance, pro-rated for the number of days actually worked in the quarter, (iv) payment of the cost of COBRA continuation coverage for six months, and (v) vesting of all equity awards will be immediately accelerated.Offer Letter to Norman FoustOn November 29, 2022, the Company offered Mr. Foust the position of Senior Vice President of Global Supply Chain. In connection with such offer, the Company sent Mr. Foust a letter (the “Foust Offer Letter”) that is discussed in greater detail below. The Foust Offer Letter provides that Mr. Foust will have an initial annual base salary of $300,000 effective January 1, 2023. Mr. Foust’s base salary in 2022 was $250,000. Under the Foust Offer Letter, Mr. Foust will be eligible to participate in a performance-based annual bonus program approved by the Board of Directors, pursuant to which bonuses will be earned and paid, if at all, in equal quarterly installments. Mr. Foust’s initial target annual bonus is $37,500 per quarter. Mr. Foust is eligible to participate in all health benefits, insurance programs, pension and retirement plans and other employee benefit and compensation arrangements generally available to the Company’s other officers.Under the Foust Offer Letter, Mr. Foust will receive certain compensation in the event that his employment is terminated by the Company without “cause.” In such event, and only in the event that Mr. Foust is a resident of the Dallas/Fort Worth metroplex, Mr. Foust will be entitled to receive (i) his base salary through the date of termination, reimbursable business expenses in accordance with company policies, and any accrued, vested benefits, in each case to the extent not previously paid, (ii) a lump-sum payment equal to six months of Mr. Foust’s salary as in effect immediately prior to the date of termination, (iii) Mr. Foust’s bonus for the quarter in which the termination occurs based on actual Company performance, pro-rated for the number of days actually worked in the quarter, (iv) payment of the cost of COBRA continuation coverage for six months, and (v) vesting of all equity awards will be immediately accelerated.24Defined Terms in Employment Agreements and Offer LettersFor purposes of the employment agreements and offer letters described above, “cause” is generally defined to include: (1) the executive’s willful or continued failure to substantially perform his or her duties with the Company, or any failure to carry out, or comply with, in any material respect any lawful and reasonable directive of the Board of Directors (or, with respect to Ms. Kawecki, Mr. Ferguson, or Mr. Foust, the Chief Executive Officer) consistent with the terms of his or her employment agreement or offer letter, which failure continues for 15 days following the executive’s receipt of written notice from the Board of Directors, (2) the executive’s conviction of, guilty plea to, or entry of a nolo contendere plea to a felony or a crime of moral turpitude or commission of an act of fraud, embezzlement or misappropriation against us, (3) the executive’s willful or reckless misconduct that has caused or is reasonably likely to cause demonstrable and material financial injury to the Company, or (4) the executive’s willful and material breach of his or her employment agreement (with respect to Ms. Kawecki and Mr. Ferguson) or his Employee Confidentiality and Proprietary Rights Assignment Agreement (with respect to Mr. Foust), which breach remains uncured for 15 days following his or her receipt of written notice by the Board of Directors or the Chief Executive Officer.For purposes of the employment agreements, “good reason” is generally defined to include the occurrence of any of the following actions far enoughevents without his or her consent: (1) a material diminution in advance sothe executive’s base compensation, (2) a material diminution in the executive’s authority, duties or responsibilities, (3) a material change in the geographic location at which the executive must perform his or her duties, or (4) any other action or inaction that it is completed beforeconstitutes a material breach by the reverse stock split is effected:purchase a sufficient numberCompany of sharesits obligations under the employment agreement.Compensation Committee ReportThe Compensation Committee of DZSI common stock so that you would hold at least that numberthe Board of sharesDirectors has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of common stock in your account priorRegulation S-K. Based on such review and discussions, the Compensation Committee recommended to the implementationBoard of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022(including through incorporation by reference to this Proxy Statement).Respectfully Submitted by the Compensation Committee Barbara Carbone (Chairman) Matt W. Bross Joon Kyung Kim Compensation Committee Interlocks and Insider ParticipationThe directors who served on the Compensation Committee during fiscal year 2022 were Ms. Carbone (Committee Chair), Mr. Bross, and Mr. Kim. During the 2022 fiscal year, there were no members of the reverse stock split that would entitle you to receive at least one shareCompensation Committee who were officers or employees of DZSI common stock on a post-split basis;the Company orif applicable, consolidate your accounts so that you hold at least that number any of sharesits subsidiaries, were formerly officers of DZSI common stock in one account priorthe Company, or had any relationship otherwise requiring disclosure hereunder. Summary Compensation TableThe following table sets forth the compensation earned during the years ended December 31, 2022, 2021 and 2020 for our “named executive officers.”25Name and Principal Position Year Salary($) (1)Bonus($) (2)Stock Awards($) (3)Option Awards($) (3)Non-Equity Incentive Plan Compensation($) (4)Change in Pension Value and Non qualified Deferred Compensation on Earnings($)All Other Compensation($) (5)Total($)Charles D. Vogt 2022 600,000 80,000 3,520,008 — 450,000 — 52,521 4,702,529 President & CEO 2021 550,192 — 4,180,000 — 550,000 — 27,881 5,308,073 2020 203,173 446,250 449,329 2,964,751 — — 9,325 4,072,828 Misty Kawecki 2022 300,000 18,000 872,002 — 112,500 — 15,067 1,317,569 CFO 2021 126,923 50,000 944,000 1,012,414 62,500 — 10,488 2,206,325 2020 — — — — — — — — Justin K. Ferguson 2022 325,000 24,000 895,997 — 121,875 — 33,332 1,400,204 CLO & Corporate Secretary 2021 300,000 — 451,400 113,741 150,000 — 32,196 1,047,337 2020 82,048 37,500 357,000 190,655 — — 7,049 674,252 Miguel Alonso 2022 235,000 18,000 710,801 — 88,125 — 22,670 1,074,596 Chief Product Officer 2021 — — — — — — — — 2020 — — — — — — — — Norman L. Foust 2022 226,351 25,000 828,600 — 70,313 — 26,541 1,176,805 SVP of Global Supply Chain 2021 — — — — — — — — 2020 — — — — — — — — (1) Represents the actual base salary payments made to the reverse stock split that would entitle you to at least one share of DZSI common stock on a post-split basis.DZSI common stock held in registered form (that is, shares held by you in your own name onNEOs. See the DZSI share register maintained by our transfer agent)employment agreements discussion above for further information.(2) Represents sign-on and DZSI common stock held in “street name” (that is, shares held by you through a bank, broker or other nominee) for the same investor would be considered held in separate accounts and would not be aggregated when implementing the reverse stock split. Also, shares of DZSI common stock held in registered form but in separate accounts by the same investor would not be aggregated when implementing the reverse stock split.After the reverse stock split, then-current stockholders would have no further interest in DZSI with respect to their fractional shares. A person otherwise entitled to a fractional share would not have any voting, dividend or other rights in respect of their fractional share except to receive the cash payment as described above. Such cash payments would reduce the number of post-split stockholders to the extent that there are stockholders holding fewer than that number ofpre-split shares within the exchange ratio that is determined by us as described above. Reducing the number of post-split stockholders, however, is not the purpose of this proposal.Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where DZSI is domiciled and where the funds for fractional shares would be deposited, sums due to stockholders in payment for fractional shares that are not timely claimed after the effective date may be required to bediscretionary performance bonuses paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitledNEOs. For 2022, these amounts include a $25,000 sign-on bonus paid to receive such funds may haveNorman Foust and $80,000, $18,000, $24,000, and $18,000 ASSIA transaction close recognition bonuses paid to seekCharles Vogt, Misty Kawecki, Justin Ferguson, and Miguel Alonso, respectively.(3) Represents the grant date fair value of the stock and option awards granted during the applicable fiscal year to obtain them directly fromour named executive officers, calculated in accordance with FASB ASC Topic 718. Pursuant to SEC rules, the stateamounts shown exclude the impact of estimated forfeitures related to which they were paid.Effectservice-based vesting conditions. For additional information onNon-Registered StockholdersBanks, brokers and other nominees will be instructed to effect the reverse stock split, if implemented, for their beneficial holders holding shares in “street name.”Non-registered stockholders holding our common stock in “street name” should note that such banks, brokers or other nominees may have different procedures for processing the consolidation than those that would be put in place by DZSI for registered stockholders, and their procedures may result, for example, in differencesvaluation assumptions used in the precise cashcalculation of these amounts, being paid by such nomineesrefer to Note 9 to the audited financial statements included in lieuour Annual Report on Form 10-K for the year ended December 31, 2022. In 2022, Misty Kawecki, Justin Ferguson, and Miguel Alonso were provided an opportunity to exchange two stock options granted in 2021 under 2017 Incentive Award Plan for one restricted stock unit with the vesting period equal the remaining vesting period for options as of a fractional share. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.Exchange of Stock Certificates and Payment for Fractional SharesThe combination of and reduction in the number of our outstanding shares of common stock asexchange date. As a result of the reversetransaction, a total of 120,000 stock split would occur automatically on the effective date without any action on the part of stockholders and without regardoptions granted to the date thataforementioned NEOs were cancelled and 60,000 restricted stock certificates representingpre-split sharesunits were granted in exchange. The Company accounted for the exchange as a modification of commonshare-based payments. No incremental expense was recorded in conjunction with the modification. Since restricted stock are physically surrenderedunits issued represented an exchange transaction and not a new grant, these awards were not included into the Summary Compensation Table.(4) Represents compensation earned as a performance-based incentive bonus, pursuant to the DZS Annual Bonus Plan. The bonus plan was implemented in 2021, and any performance bonuses paid prior to 2021 were discretionary in nature.26(5) Represents the incremental cost to the Company of providing certain perquisites and other personal benefits. For 2022, these amounts include:Company Contributions to 401(k) Plan($)Medical and Other Insurance($)Spousal Travel($)Charles D. Vogt 13,500 25,587 13,434 Misty Kawecki 8,824 6,244 — Justin K. Ferguson 7,745 25,587 — Miguel Alonso 5,464 17,206 — Norman L. Foust 6,805 19,736 — Grants of Plan-Based Awards in 2022The following table lists grants of plan-based awards to our NEOs in 2022 and their related fair value as of the respective grant date.Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) Estimated Future Payouts Under Equity Incentive Plan Awards All Other Stock Awards: Number of Shares of Stock or Units (#) (2) All Other Option Awards: Numbers of Securities Underlying Options Exercise or Base Price of Options Awards Grant Date Fair Value of Stock and Option Awards ($) (3) Name Award Type Grant Date Threshold($)Target($)Maximum($)Threshold($)Target($)Maximum($)Charles D. Vogt Annual Bonus Plan — 150,000 600,000 1,200,000 — — — — — — — Time-Based Restricted Stock Units 05/30/22 — — — — — — 18,391 — — 320,003 Time-Based Restricted Stock Units 07/01/22 — — — — — — 200,376 — — 3,200,005 Misty Kawecki Annual Bonus Plan — 37,500 150,000 300,000 — — — — — — Time-Based Restricted Stock Units 05/30/22 — — — — — — 4,138 — — 72,001 Time-Based Restricted Stock Units 07/01/22 — — — — — — 50,094 — — 800,001 Justin K. Ferguson Annual Bonus Plan — 40,625 162,500 325,000 — — — — — — — Time-Based Restricted Stock Units 05/30/22 — — — — — — 5,517 — — 95,996 Time-Based Restricted Stock Units 07/01/22 — — — — — — 50,094 — — 800,001 Miguel Alonso Annual Bonus Plan — 29,375 117,500 235,000 — — — — — — Time-Based Restricted Stock Units 05/30/22 — — — — — — 4,138 — — 72,001 Time-Based Restricted Stock Units 07/01/22 — — — — — — 40,000 — — 638,800 Norman L. Foust Annual Bonus Plan — 28,646 114,583 229,166 — — — — — — — Time-Based Restricted Stock Units 02/03/22 — — — — — — 25,000 — — 349,500 Time-Based Restricted Stock Units 07/01/22 — — — — — — 30,000 — — 479,100 27(1) Represents potential payout under the DZS Annual Bonus Plan reported at the "threshold", "target" and "maximum" levels. See "Annual Bonus Plan" above for new stock certificates representing post-split sharesthe plan discussion. The actual amount earned in 2022 by each NEO under the DZS Annual Bonus Plan is reflected in the “Non-Equity Incentive Plan Compensation” column of common stock.As soon as practicable after the effective date, transmittal forms will be mailed to each holder of record of certificates for shares of DZSI common stock to be used in forwarding such certificates for surrender in exchange for any cash payment due for fractional shares and, if so elected by the holder, certificates representingSummary Compensation Table.(2) Represents the number of sharestime-based restricted stock units granted in 2022 under the Company's 2017 Incentive Award Plan. The May 30, 2022 grants to NEOs are expected to vest in one equal installment on May 30, 2023. The July 1, 2022 grants to NEOs are expected to vest in three equal installments on July 1, 2023, 2024, and 2025. The February 3, 2022 grant to Norman Foust is expected to vest in four equal installments on February 3, 2023, 2024, 2025, and 2026. The vesting of the stock awards held by our post-split commonNEOs may accelerate under certain circumstances as described under “Potential Payments Upon Termination.” In 2022, Misty Kawecki, Justin Ferguson, and Miguel Alonso were provided an opportunity to exchange two stock such stockholder is entitled to receiveoptions granted in 2021 under 2017 Incentive Award Plan for one restricted stock unit with the vesting period equal the remaining vesting period for options as of the exchange date. As a result of the reversetransaction, a total of 120,000 stock split. Our transfer agent will actoptions granted to the aforementioned NEOs were cancelled and 60,000 restricted stock units were granted in exchange. The Company accounted for the exchange as a modification of share-based payments. No incremental expense was recorded in conjunction with the modification. Since restricted stock units issued represented an exchange agent for purposestransaction and not a new grant, these awards were not included into the Grants of implementingPlan-Based Awards summary.(3) Represents the payment in lieu of fractional shares and exchange of stock certificates. The transmittal forms will be accompanied by instructions specifying other detailsgrant date fair value of the exchange. Upon receiptstock awards granted during the fiscal year, calculated in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions used in the calculation of these amounts, refer to Note 9 to the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.Outstanding Equity Awards at December 31, 2022The following table lists all outstanding equity awards held by our NEOs as of December 31, 2022.Option Awards (1) Stock Awards (1) Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of shares or units of stock that have not vested (#) Market value of shares or units of stock that have not vested ($) Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) Charles D. Vogt 115,222 (2) 403,296 (2) — 10.11 — — — 366,917 (3) 4,652,508 Misty Kawecki — — — — — — — 137,566 (4) 1,744,337 Justin K. Ferguson 28,115 (5) 9,385 (5) — 9.52 — — — 93,945 (6) 1,191,223 Miguel Alonso 13,530 (7) 11,470 (7) — 10.39 — — — 72,888 (8) 924,220 Norman L. Foust — — — — — — — 55,000 (9) 697,400 (1) The vesting of the transmittal form, each stockholder should surrenderstock and option awards held by our named executive officers may accelerate under certain circumstances as described below under “Potential Payments Upon Termination.”(2) Option to purchase 370,370 shares of the certificates representingCompany’s common stock (the “Special Option”) and an option to purchase 148,148 shares of the Company’s common stock (the “Initial Option”). The Special Option vests on the third anniversary of Mr. Vogt’s commencement of employment, and the Initial Option vests with respect to 33% of the shares underlying the Initial Option on the first anniversary of Mr. Vogt’s commencement of employment, and the remainder vests ratably over 24 months thereafter.(3) Restricted stock units that vest in equal installments on the following dates:- August 1, 2020 grant vests on June 10, 2021, 2022 and 2023- July 1, 2021 grant vests on July 1, 2022, 2023 and 2024- May 30, 2022 grant vests on May 30, 2023- July 1, 2022 grant vests on July 1, 2023, 2024 and 2025(4) Restricted stock units that vest in equal installments on the following dates:- August 2, 2021 grant vests on August 2, 2022, 2023 and 2024- May 30, 2022 grant vests on May 30, 2023- July 1, 2022 grant vests on July 1, 2023, 2024 and 2025- July 1, 2022 grant vests on June 30, 2023 and 2024 (this grant was issued in conjunction with the stock option to RSUs exchange discussed above)(5) Option to purchase 37,500 shares of the Company’s common stock. Thirty-three percent (33%) of the options vest on September 28, 2021 and the remainder vest in twenty-four (24) equal monthly installments thereafter.(6) Restricted stock units that vest in equal installments on the following dates:- September 28, 2020 grant vests on June 10, 2021, 2022 and 2023- July 1, 2021 grant vests on July 1, 2022, 2023, 2024, and 2025- October 1, 2021 grant vests on October 1, 2022, 2023, and 202428- May 30, 2022 grant vests on May 30, 2023- July 1, 2022 grant vests on July 1, 2023, 2024 and 2025- July 1, 2022 grant vests on June 30, 2023 and 2024 (this grant was issued in conjunction with the stock options to RSUs exchange discussed above)(7) Option to purchase 25,000 shares of the Company’s common stock. Twenty-five percent (25%) of the options vest on October 12, 2021 and the remainder vests in 36 equal monthly installments.(8) Restricted stock units that vest in equal installments on the following dates:- October 12, 2020 grant vests on June 10, 2021, 2022, 2023 and 2024- July 1, 2021 grant vests on July 1, 2022, 2023, 2024, and 2025- October 1, 2021 grant vests on October 1, 2022, 2023, 2024, and 2025- May 30, 2022 grant vests on May 30, 2023- July 1, 2022 grant vests on July 1, 2023, 2024 and 2025- July 1, 2022 grant vests on June 30, 2023 and 2024 (this grant was issued in conjunction with the stock options to RSUs exchange discussed above)(9) Restricted stock units that vest in equal installments on the following dates:- February 3, 2022 grant vests on February 3, 2024, 2025, and 2026- July 1, 2022 grant vests on July 1, 2023, 2024, and 2025Option Exercises and Stock Vested in 2022The following table provides information on options exercised during 2022 and stock awards vested during 2022.Stock Awards Name Number of Shares Acquired on Vesting (1) Value Realized on Vesting
($) (2)Charles D. Vogt 81,480 1,328,345 Misty Kawecki 16,666 239,490 Justin K. Ferguson 21,666 337,751 Miguel Alonso 10,000 165,300 Norman L. Foust — — (1) Represents the time-based RSUs vested in 2022 in accordance with the vesting schedules discussed within Outstanding Equity Awards summary above.(2) The value realized upon the vesting of the time-based RSUs is calculated based upon the closing price of our common stock prioron Nasdaq on the applicable vesting dates.Pay-Ratio InformationThe annual total compensation of Mr. Vogt, our President and CEO, was $4,702,529 in fiscal year 2022, as reflected in the Summary Compensation Table. Based on reasonable estimates, the median annual total compensation of all employees of the company and its consolidated subsidiaries, excluding our President and CEO, was $71,389 for fiscal year 2022. Accordingly, for fiscal year 2022, the ratio of the annual total compensation of our President and CEO to the reversemedian of the annual total compensation of all of our employees and our consolidated subsidiaries’ other employees was 66 to 1.To identify our median employee, we examined the 2022 base salary of all employees globally, excluding our CEO, who were employed by us on December 31, 2022. We converted all relevant employee compensation, on a country-by-country basis, to U.S. Dollars based on the applicable average exchange rate for the last two months of fiscal 2022. After identifying the median employee, we collected annual total compensation for this employee using the same methodology we use for our named executive officers as disclosed in the Summary Compensation Table.Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the CEO pay ratio disclosed above may not be comparable to the pay ratio reported by other companies, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratio.29Potential Payments upon Termination, Change in Control or Corporate TransactionThe following table shows the estimated value of the aggregate payments and benefits that would be paid to each NEO assuming an involuntary separation of service for other than cause effective as of the last day of fiscal 2022.Name Salary and Bonus Payment($)Equity Awards Acceleration($) (1)Charles D. Vogt 665,500 4,915,496 Misty Kawecki 318,376 — Justin K. Ferguson 340,407 1,267,747 Miguel Alonso 161,743 1,014,955 Norman L. Foust 167,812 697,400 (1) Represents fair value of stock splitand option awards as of the last day of fiscal 2022 that would be realized upon acceleration. The fair value was computed in accordance with the methodology used for financial reporting purposes.The following table shows the estimated value of the aggregate payments and benefits that would be paid to each NEO assuming a termination upon a change in control effective as of the last day of fiscal 2022.Name Salary and Bonus Payment($)Equity Awards Acceleration($) (1)Charles D. Vogt 665,500 7,873,731 Misty Kawecki 318,376 1,744,337 Justin K. Ferguson 340,407 1,267,747 Miguel Alonso 161,743 1,014,955 Norman L. Foust 167,812 697,400 (1) Represents fair value of stock and option awards as of the last day of fiscal 2022 that would be realized upon acceleration. The fair value was computed in accordance with the methodology used for financial reporting purposes.Pay Versus PerformanceAs required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the following disclosure (the “Pay Versus Performance Disclosure”) describes the relationship between executive compensation and the Company’s performance with respect to select financial measures. For a complete description regarding the Company’s compensation program, please see “Compensation Discussion and Analysis.”Value of initial fixed $100 investment based on (4) Year (1) SummaryCompensationTable Total for PEO(Charles D. Vogt) (2)SummaryCompensationTable Total for PEO(Il Yung Kim) (2)CompensationActually Paid to PEO(Charles D. Vogt) (3)CompensationActually Paid to PEO(Il Yung Kim) (3)Average SummaryCompensation TableTotal for Non-PEO NEOs (2)AverageCompensationActually Paid to Non-PEO NEOs (3)Total Shareholder Return Peer Group Total Shareholder Return (5) Net Income(in thousands)Revenue(in thousands)Adjusted EBITDA(in thousands) (6)2022 $ 4,702,529 $ — $ 2,437,283 $ — $ 1,242,294 $ 860,265 $ 143.12 $ 95.61 $ (37,431) $ 375,691 $ (2,822) 2021 $ 5,308,073 $ — $ 4,929,066 $ — $ 2,117,939 $ 1,223,767 $ 183.07 $ 127.87 $ (34,683) $ 350,206 $ 10,605 2020 $ 4,072,828 $ 1,631,408 $ 6,478,745 $ 980,462 $ 542,840 $ 1,415,280 $ 174.60 $ 122.04 $ (23,082) $ 300,640 $ 8,930 (1) The Company’s Principal Executive Officer (“PEO”) and Non-PEO NEOs for the applicable instructions. Each stockholder who surrenders certificates willyears were as follows:2022: Charles D. Vogt served as the Company’s PEO for the entirety of 2022. Non-PEO NEOs included Misty Kawecki, Justin K. Ferguson, Miguel Alonso, and Norman L. Foust.2021: Charles D. Vogt served as the Company’s PEO for the entirety of 2021. Non-PEO NEOs included Misty Kawecki, Thomas Cancro, and Justin K. Ferguson. Misty Kawecki served as the Company's CFO starting her appointment effective July 29, 2021. Thomas Cancro served as the Company's CFO until then.2020: Charles D. Vogt served as the Company’s PEO starting his appointment effective August 1, 2020. Il Yung Kim served as the Company’s PEO until his resignation effective July 31, 2020. Non-PEO NEOs included Thomas Cancro and Justin K. Ferguson.30(2) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year for the PEOs, and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s Non-PEO NEOs. Since Mr. Cancro did not receive any cash payment dueequity-based awards in 2020, the stock awards compensation included into 2020 average compensation represented half of the equity grants received by Mr. Ferguson, who was the only other Non-PEO NEO in 2020. Since Mr. Cancro and Ms. Kawecki both served as the Company's CFO at certain period of time in 2021, we considered their compensation as one for fractional sharesthe purposes of average compensation calculation.(3) To calculate compensation actually paid, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments is set forth following the footnotes to this table.(4) Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2019. Historic stock price performance is not necessarily indicative of future stock price performance.(5) The Total Shareholder Return (“TSR”) Peer Group consists of the Nasdaq Telecommunications (IXTC), an independently prepared index that includes companies in the telecommunication industry.(6) We define Adjusted EBITDA as net income (loss) plus (i) interest expense, net, (ii) other income and new certificates representingexpense, (iii) provision (benefit) for taxes, (iv) depreciation and amortization, (v) stock-based compensation, and (vi) the whole numberimpact of material transactions or events that we believe are not indicative of our core operating performance, such as acquisition costs, impairment of goodwill, intangibles or long-lived assets, loss on debt extinguishment, legal costs related to certain litigation, restructuring and other charges, including termination related benefits, headquarters and facilities relocation, executive transition, and bad debt expense primarily related to a large customer in India, any of which may or may not be recurring in nature.The following table summarizes adjustments used to calculate compensation actually paid to PEOs.2022 2021 2020 Charles D. Vogt Charles D. Vogt Charles D. Vogt Il Yung Kim Total Compensation as reported in Summary Compensation Table (a) $ 4,702,529 $ 5,308,073 $ 4,072,828 $ 1,631,408 - Grant Date Fair Value of Stock and Option Awards Granted in Fiscal Year (b) (3,520,008) (4,180,000) (3,414,080) (751,927) + Fair Value at Fiscal Year-End of Outstanding and Unvested Stock and Option Awards Granted in Fiscal Year (c) 2,773,966 3,244,000 5,819,997 — ± Change in Fair Value of Outstanding and Unvested Stock and Option Awards Granted in Prior Fiscal Years (d) (1,479,931) 347,470 — — + Fair Value at Vesting of Stock and Option Awards Granted in Fiscal Year that Vested During Fiscal Year (e) — — — 88,600 ± Change in Fair Value as of Vesting Date of Stock and Option Awards Granted in Prior years that Vested During Fiscal Year (f) (39,273) 209,523 — 12,381 - Fair Value as of Prior Fiscal Year-End of Stock and Option Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year (g) — — — — Compensation Actually Paid $ 2,437,283 $ 4,929,066 $ 6,478,745 $ 980,462 The following table summarizes adjustments used to calculate compensation actually paid to Non-PEO NEOs. See footnote 1 above for the Non-PEO NEOs included in the average for each year.2022 2021 2020 Total Compensation as reported in Summary Compensation Table (a) $ 1,242,294 $ 2,117,939 $ 542,840 - Grant Date Fair Value of Stock and Option Awards Granted in Fiscal Year (b) (826,850) (1,526,579) (273,828) + Fair Value at Fiscal Year-End of Outstanding and Unvested Stock and Option Awards Granted in Fiscal Year (c) 662,470 1,104,827 438,798 ± Change in Fair Value of Outstanding and Unvested Stock and Option Awards Granted in Prior Fiscal Years (d) (194,413) 30,902 634,110 + Fair Value at Vesting of Stock and Option Awards Granted in Fiscal Year that Vested During Fiscal Year (e) — — — ± Change in Fair Value as of Vesting Date of Stock and Option Awards Granted in Prior years that Vested During Fiscal Year (f) (23,236) 1,369 73,360 - Fair Value as of Prior Fiscal Year-End of Stock and Option Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year (g) — (504,691) — Compensation Actually Paid $ 860,265 $ 1,223,767 $ 1,415,280 (a) Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the Non-PEO NEOs, amounts shown represent averages.(b) Represents the grant date fair value of the stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.(c) Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes.31(d) Represents the change in fair value during the indicated fiscal year of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.(e) Represents the fair value at vesting of the stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.(f) Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.(g) Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid, Company TSR and Peer Group TSRThe following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company’s cumulative TSR over the three most recently completed fiscal years, and the peer group TSR for the same period.
32Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net IncomeThe following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the three most recently completed fiscal years.
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and RevenueThe following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and Revenue during the three most recently completed fiscal years.
33Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Adjusted EBITDAThe following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and Adjusted EBITDA during the three most recently completed fiscal years.
Tabular List of Most Important Financial Performance MeasuresThe following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEOs and our Non-PEO NEOs for 2022 Company performance. The measures in this table are not ranked.Revenue Adjusted EBITDA Equity Compensation Plan InformationThe following table provides information as of December 31, 2022 with respect to shares of our common stock that hemay be issued under existing equity compensation plans. The table does not include information with respect to shares subject to outstanding options granted under equity compensation arrangements assumed by us in connection with mergers and acquisitions of the companies that originally granted those options.Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column Equity compensation plans approved by security holders 3,602,503 (1) $ 12.74 (1) 1,046,380 (2) Equity compensation plans not approved by security holders 518,518 (3) $ 10.11 — (1) Includes 2,625,090 shares of unvested or she holdsunissued restricted stock units outstanding as of December 31, 2022 and 977,413 shares underlying options under the 2017 Plan. The weighted average exercise price of those outstanding options is $12.74 per share.(2) Includes shares available for future issuance under our 2017 Plan and the 2018 Employee Stock Purchase Plan. As of December 31, 2022, 708,044 shares of common stock were available for future issuance under the 2018 Employee Stock Purchase Plan.(3) Includes 518,518 options issued in connection with the Non-Qualified Inducement Stock Option Grant Notices and Stock Option Agreements, each dated August 1, 2020 between the Company and Charles D. Vogt.34DIRECTOR COMPENSATIONCharles D. Vogt, who also serves as an officer of the Company, does not receive any additional compensation for his service as a resultdirector. Under our non-employee director compensation program, each non-employee director is entitled to receive an annual cash retainer of the reverse$35,000 (pro-rated for partial years) that is paid quarterly. Directors may elect to receive an equivalent amount of fully vested shares of our common stock split. No new certificates and no payments in lieu of fractional shares will be issued to a stockholder until the stockholder has surrendered its outstanding stock certificate(s) togetherannual cash retainer. To align the interests of directors with the properly completed and executed transmittallong-term interests of stockholders, each non-employee director is also entitled to receive an annual equity grant in the form toof restricted stock units. The restricted stock units are granted on the exchange agent.STOCKHOLDERS SHOULD NOT DESTROY ANYPRE-SPLIT STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.parnumber of restricted stock units granted is determined by dividing $100,000 by the fair market value per share of our common stock would remain unchanged at $0.001 per share after the reverse stock split. As a result, on the effective date of grant. The annual equity grant of restricted stock units will vest in four equal installments at the reverseend of each quarter over the course of one year following the grant date, assuming continued service as a director of the Company. In addition, (i) members of the Audit Committee receive an annual cash retainer of $15,000, (ii) members of the Compensation Committee receive an annual cash retainer of $10,000, (iii) members of the Nominating and Corporate Governance Committee and Strategy Committee receive an annual cash retainer of $5,000, (iv) the chairman of the Board is entitled to receive an annual cash retainer of $10,000, and (v) the chairs of the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Strategy Committee are each entitled to receive an annual cash retainer of $5,000. All cash retainers are paid quarterly for continued service on the committees. Non-employee directors are also entitled to reimbursement of reasonable out-of-pocket expenses incurred attending Board and committee meetings, and in connection with Board related activities.The following table sets forth the compensation earned during the year ended December 31, 2022 by each of our non-employee directors.Name (1) Fees Earned or Paid in Cash($)Stock Awards($) (3)Option Awards($)Non-Equity Incentive Plan Compensation($)Nonqualified Deferred Compensation Earnings($)All Other Compensation($)Total($)Min Woo Nam (2) 42,500 82,472 — — — — 124,972 Matt W. Bross (1) 55,000 82,472 — — — — 137,472 Barbara Carbone (1) 62,500 82,472 — — — — 144,972 Joon Kyung Kim (1) 67,500 82,472 — — — — 149,972 David Schopp (1) 60,000 82,472 — — — — 142,472 Choon Yul Yoo (1) 35,000 82,472 — — — — 117,472 (1) As of December 31, 2022, there were no stock split,options or unvested stock awards held by these members of the stated capital on our balance sheet attributableboard of directors.(2) As of December 31, 2022, Mr. Nam held options to ourpurchase 20,000 shares of the Company’s common stock would be reduced proportionally, based onthat were vested and exercisable.(3) This column represents the actual exchange ratiogrant date fair value of the reverse stock split, from its present amount, andequity awards granted in 2022 to the additionalpaid-in capital account would be creditednon-employee directors, as calculated in accordance with ASC Topic 718. For these awards, the amount by whichgrant date fair value is calculated using the stated capital is reduced. DZSI’s stockholders’ equity, in the aggregate, would remain unchanged. The per share common stock net loss and net book value would be increased because there would be fewer sharesclosing price of our common stock outstanding. We do not anticipate that any other accounting consequences would arise as a result of the reverse stock split.Under the Delaware General Corporation Law, stockholders are not entitled to dissenters’ rights with respect to the proposed amendment to our Restated Certificate of Incorporation to effect the reverse stock split and we will not independently provide our stockholders with any such right.Certain U.S. Federal Income Tax Consequences of the Reverse Stock SplitThe following discussion is a general summary of certain U.S. federal income tax consequences of the reverse stock split that may be relevant to U.S. Holders (as defined below) of our common stock, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local ornon-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986,grant date as amended (the Code), Treasury regulations promulgated thereunder (the Treasury Regulations), judicial decisions,if these awards were vested and published rulings and administrative pronouncements ofissued on the U.S. Internal Revenue Service (the IRS), in each case in effect as ofgrant date. Pursuant to SEC rules, the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a holder of our common stock.We have not sought and will not seek an opinion of counsel or any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the reverse stock split.This discussion is limited to holders that hold our common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a holder’s particular circumstances, includingamounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For additional information on the Medicare contribution tax on net investment income. In addition, it does not address consequences relevantvaluation assumptions used in the calculation of these amounts, refer to holders subject to special rules, including, without limitation:persons that are not U.S. Holders (as defined below);persons subjectNote 9 to the alternative minimum tax;U.S. Holders (as defined below) whose functional currency is not the U.S. dollar;persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;banks, insurance companies, and otheraudited consolidated financial institutions;real estate investment trusts or regulated investment companies;brokers, dealers or traders in securities;corporations that accumulate earnings to avoid U.S. federal income tax;S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);tax-exempt organizations or governmental organizations;persons deemed to sell our common stock under the constructive sale provisions of the Code;persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; and;tax-qualified retirement plans.If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. HOLDERS OF OUR COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS), UNDER THE LAWS OF ANY STATE, LOCAL ORNON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.For purposes of this discussion, a U.S. Holder is any beneficial owner of shares of our common stock that, for U.S. federal income tax purposes, is or is treated as:an individual who is a citizen or resident of the United States;a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;an estate, the income of which is subject to U.S. federal income tax regardless of its source; ora trust that (a) is subject to the primary supervision of a U.S. court and the control of one of more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (b) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.The reverse stock split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a U.S. Holder generally should not recognize any gain or loss upon the reverse stock split, except with respect to cash received in lieu of a fractional share of our post-split common stock, as discussed below. A U.S. Holder’s aggregate tax basis in the shares of our common stock received pursuant to the reverse stock split should equal the aggregate tax basis of the shares of our common stock surrendered (excluding any portion of such basis that is allocated to any fractional share of our post-split common stock), and such U.S. Holder’s holding period in the shares of our common stock received should include the holding period in the shares of our common stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of our common stock surrendered to the shares of our common stock received pursuant to the reverse stock split. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.A U.S. Holder that receives cash in lieu of a fractional share of our post-split common stock pursuant to the reverse stock split should recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. Holder’s tax basis in the shares of our common stock surrendered that is allocated to such fractional share of our post-split common stock. Such capital gain or loss should be long-term capital gain or loss if the U.S. Holder’s holding period for our common stock surrendered exceeded one year at the effective time of the reverse stock split. Long-term capital gains recognized by certainnon-corporate U.S. Holders, including individuals, generally will be taxable at reduced rates. The deductibility of capital losses is subject to limitations.Information Reporting and Backup WithholdingA U.S. Holder (other than corporations and certain other exempt recipients) may be subject to information reporting and backup withholding when such holder receives cash in lieu of a fractional share of our post-split common stock pursuant to the reverse stock split. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and such holder does not provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the U.S. Holder’s federal income tax liability, if any, provided the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.Vote Required and Recommendation of our Board of DirectorsApproval of this Proposal 1 requires the affirmative vote of a majority of all of the shares of our common stock outstanding and entitled to vote for the proposal.This means that an abstention or a failure to submit a proxy or vote in person at the special meeting will have the same effect as a vote “Against” Proposal 1.The Board of Directors unanimously recommends a voteFORthe proposal to approve a series of three separate and alternative amendments to DZSI’s Restated Certificate of Incorporation to effect the reverse stock split of DZSI’s outstanding common stock at exchange ratios of1-for-3,1-for-4 and1-for-5, as determined by the Company, and a corresponding decrease in the number of authorized shares of DZSI’s common stock on a proportional basis, subject to the Board of Directors’ authority to abandon such amendment.ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIESIN FAVOR OF PROPOSAL 1At the special meeting and any adjournment or postponement thereof, our stockholders may be asked to consider and vote upon a proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal 1.Recommendation of the Board of DirectorsThe Board of Directors unanimously recommends a voteFORany proposal to adjourn the special meeting of stockholders, if necessary, to solicit additional proxies in favor of Proposal 1.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSThis proxy statement contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Exchange Act. These forward-looking statements include, among others, statements related to the completion of the reverse stock split, the Company gaining compliance with the Nasdaq initial listing standards and the consequences of delisting the Company’s common stock from the Nasdaq Capital Market. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and similar expressions to identify forward-looking statements. In addition, statements that refer to plans, objectives and strategies for future operations and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those identified under the heading “Risk Factors Associated with the Reverse Stock Split” on page 7 hereof, elsewhere in this proxy statement and our other filings with the SEC. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to revise or update any forward-looking statements for any reason. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled “Risk Factors” included in our Annual Report on Form10-K for the year ended December 31, 2015, as updated by our Quarterly Report on Form10-Q for the quarter ended September 30, 2016 and future filings.35OWNERSHIP OF SECURITIESBeneficial Ownership TableThe following table sets forth information known to us regarding ownership of DZSIour common stock on January 4, 2017March 24, 2023 by (1)(i) each person or entity, including any “group” as that term is used in Section 13(d)(3) of the Exchange Act, who beneficially ownedor which was known to the Company to be the beneficial owner of more than 5% of DZSIthe issued and outstanding common stock, (2) each current director(ii) the directors and director nominee, (3) eachnominees of the Company, (iii) the executive officers of the Company named executives (as such term is defined in Item 402(a)(3) of RegulationS-K under the Exchange Act);Summary Compensation Table above, and (4)(iv) all directors, named executivesdirector nominees and their affiliatesexecutive officers of the Company as a group. We are not awareName of Beneficial Owner (1) Number of Shares Beneficially Owned (2) Percent Owned (3) DASAN Networks, Inc. (4) 9,093,015 29.2 % AIGH Capital Management, LLC (5) 1,787,275 5.7 % Charles D. Vogt 219,502 (6) * Min Woo Nam 50,006 (7) * Matt Bross 11,210 (8) * Barbara Carbone 11,210 (9) * Joon Kyung Kim 18,391 (10) * David Schopp 25,675 (11) * Choon Yul Yoo 21,070 (12) * Misty Kawecki 22,107 (13) * Justin K. Ferguson 55,413 (14) * Miguel Alonso 26,133 (15) * Norman L. Foust 7,463 (16) * All directors, named executive officers and their affiliates as a group (11 persons) 468,180 * * Denotes less than 1%.(1) Under the rules of any arrangements, including any pledgethe SEC, a person is the beneficial owner of securities if that person has sole or shared voting or investment power. Except as indicated in the footnotes to this table and subject to applicable community property laws, to our knowledge, the persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned. Unless otherwise indicated, the address for each person or entity named below is c/o DZS Inc., 5700 Tennyson Parkway, Suite 400 Plano, Texas, 75024. (2) In computing the number of shares beneficially owned by a person named in the table and the percentage ownership of that person, shares of common stock that could result in a change in control. Number of Shares
Beneficially Owned (2) Percent
Owned (3) 47,465,082 (4) 58.0 % 4,781,273 (5) 5.8 % 164,165 (6) * — * 678,623 (7) * 14,040 (8) * — * 36,842 (9) * 406,708 (10) * — * 159,372 (11) * 5,205 (12) * 5,205 (13) * 53,716,515 65.0 % *Denotes less than 1%.(1)Under the rules of the SEC, a person is the beneficial owner of securities if that person has sole or shared voting or investment power. Except as indicated in the footnotes to this table and subject to applicable community property laws, to our knowledge, the persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned. Unless otherwise indicated, the address for each person or entity named below is c/o DASAN Zhone Solutions, Inc., 7195 Oakport Street, Oakland, California 94621.(2)In computing the number of shares beneficially owned by a person named in the table and the percentage ownership of that person, shares of common stock that such person had the right to acquire within 60 days after January 4, 2017 are deemed outstanding, including without limitation, upon the exercise of options or vesting of restricted stock units. These shares are not, however, deemed outstanding for the purpose of computing the percentage ownership of any other person.(3)such person had the right to acquire within 60 days after March 24, 2023 are deemed outstanding, including without limitation, upon the exercise of options or vesting of restricted stock units. These shares are not, however, deemed outstanding for the purpose of computing the percentage ownership of any other person. (3) For each person included in the table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person by the sum of (a) 31,102,434 shares of common stock outstanding on March 24, 2023 plus (b) the number of shares of common stock that such person had the right to acquire within 60 days after March 24, 2023. (4) The address of DASAN Networks, Inc. is DASAN Tower, 49, Daewangpangyo-ro 644 Beon-gil Budang-gu, Sungnam-si, Gyeonggi-do, 463-400, Korea. (5) The address of AIGH Investment Partners, L.P. is 6006 Berkeley Avenue, Baltimore MD 21209, USA. (6) Consists of (a) 83,705 shares held by Mr. Vogt, (b) 127,567 shares subject to stock options exercisable by Mr. Vogt, and (c) 8,230 shares subject to stock options held by Mr. Vogt that will vest within 60 days after March 24, 2023. (7) Consists of (a) 28,055 shares held by Mr. Nam, (b) 20,000 shares subject to stock options exercisable by Mr. Nam, and (c) 1,951 Restricted Stock Units held by Mr. Nam that will vest within 60 days after March 24, 2023. (8) Consists of (a) 9,259 shares held by Mr. Bross, and (b) 1,951 Restricted Stock Units held by Mr. Bross that will vest within 60 days after March 24, 2023. (9) Consists of (a) 9,259 shares held by Ms. Carbone, and (b) 1,951 Restricted Stock Units held by Ms. Carbone that will vest within 60 days after March 24, 2023. (10) Consists of (a) 16,440 shares held by Mr. Kim, and (b) 1,951 Restricted Stock Units held by Mr. Kim that will vest within 60 days after March 24, 2023. (11) Consists of (a) 23,724 shares held by Mr. Schopp, and (b) 1,951 Restricted Stock Units held by Mr. Schopp that will vest within 60 days after March 24, 2023.36 (12) Consists of (a) 19,119 shares held by Mr. Yoo, and (b) 1,951 Restricted Stock Units held by Mr. Yoo that will vest within 60 days after March 24, 2023.(13) Consists of 22,107 shares held by Ms. Kawecki.(14) Consists of (a) 23,134 shares held by Mr. Ferguson, (b) 30,197 shares subject to stock options exercisable by Mr. Ferguson, and (c) 2,082 shares subject to stock options held by Mr. Ferguson that will vest within 60 days after March 24, 2023.(15) Consists of (a) 10,003 shares held by Mr. Alonso, (b) 15,090 shares subject to stock options exercisable by Mr. Alonso, and (c) 1,040 shares subject to stock options held by Mr. Alonso that will vest within 60 days after March 24, 2023.(16) Consists of 7,463 shares held by Mr. Foust.Section 16(a) ReportsSection 16(a) of the Exchange Act requires the Company’s directors, officers, and greater than 10% shareholders to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors, and greater than 10% shareholders were complied with during the fiscal year ended December 31, 2022.37CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSOn October 31, 2022, DNS Korea, the Company’s wholly owned subsidiary, entered into a Loan Agreement with DNI (the “November 2022 DNI Loan”). The November 2022 DNI Loan was negotiated and approved on behalf of the Company and its subsidiaries by the audit committee of the Board of Directors of the Company which consists of directors determined to be independent from DNI. The November 2022 DNI Loan consists of a term loan in the amount of KRW 7.2 billion ($5.0 million USD), with interest payable monthly at an annual rate of 6.0% and maturing on January 31, 2023. As of December 31, 2022, KRW 7.2 billion ($5.7 million USD) was outstanding. As security for the November 2022 DNI Loan, DNS Korea granted a security interest to DNI in inventory of KRW 28.2 billion ($22.4 million USD) in its Janghowon warehouse, which should be maintained at a minimum of KRW 10.0 billion ($7.9 million USD), and account receivable for 2 certain customers in the amount to KRW 20 billion ($15.8 million USD). In the first quarter of 2023, the entire outstanding balance on this term loan was repaid and DNS Korea entered into a new short-term loan arrangement with DNI and borrowed KRW 5 billion ($4.1 million USD).The Company has entered into sales agreements with DNI to sell certain services and finished goods produced by the Company. The Company also has an agreement with DNI in which DNI acts as a sales channel to third party customers. During the year ended December 31, 2022, the Company recorded revenues of $1.7 million related to the sales to DNI.DNS Korea has a lease agreement with DNI related to the lease of a warehouse facility. DNS Korea also had a separate office lease agreement with DNI. In the first quarter of 2022, DNI sold the office building to the unrelated third party, and the respective lease was reassigned to the new landlord. Operating lease cost related to DNI leases totaled $0.5 million for the year ended December 31, 2022. As of December 31, 2022, the right-of-use asset and operating lease liability related to DNI leases were $1.7 million.The Company also pays a license fee under the Trademark License Agreement with DNI. The license fee is calculated as 0.4% of DNS Korea annual sales. For the year ended December 31, 2022, license related expense was $0.7 million.DNI has also provided payment guarantees relating to certain of our borrowings, and we pay DNI a guarantee fee which is calculated as 0.9% of the guaranteed amount. We paid approximately $0.1 million to DNI in respect of its payment guarantees during the year ended December 31, 2022.See Note 12 to the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 (which is incorporated herein by reference) for information regarding related party transactions involving DNI and its affiliates.Daniel Vogt is employed by the Company in the sales department. During the year ended December 31, 2022, Mr. Vogt’s total compensation received from the Company was $216,659. Mr. Vogt is the son of Charles D. Vogt, our Chief Executive Officer and a Director of the Company. The Company believes that the consideration paid to Daniel Vogt is consistent with the compensation paid to other similarly situated employees of the Company.38AUDIT COMMITTEE REPORTThe Audit Committee has been established for the purpose of overseeing the accounting and financial reporting processes of the Company and audits of DZS’ financial statements and internal control over financial reporting. DZS’ Audit Committee is made up solely of independent directors, as defined in the applicable Nasdaq and SEC rules, and it operates under a written charter adopted by the Board of Directors. The composition of the Audit Committee, the attributes of its members and its responsibilities, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. As described more fully in the charter, the purpose of the Audit Committee is to assist the Board of Directors in its general oversight of DZS’ financial reporting, internal controls and audit functions. Management is responsible for the preparation, presentation and integrity of DZS’ financial statements, accounting and financial reporting principles, internal controls, and procedures designed to assure compliance with accounting standards, applicable laws and regulations. Ernst & Young, LLP, DZS’ independent registered public accounting firm, is responsible for performing an independent audit of DZS’ consolidated financial statements in accordance with generally accepted auditing standards. The Audit Committee periodically meets with Ernst & Young, with and without management present, to discuss the results of their examinations, their evaluations of DZS’ internal controls and the overall quality of DZS’ financial reporting. The functions of the Audit Committee members are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm, Ernst & Young. The Audit Committee serves a board level oversight role, in which it provides advice, counsel and direction to management and Ernst & Young on the basis of the information it receives, discussions with management and Ernst & Young, and the experience of the Audit Committee’s members in business, financial and accounting matters.In performing its oversight role, the Audit Committee reviewed and discussed the audited financial statements with management and Ernst & Young. The Audit Committee also discussed with Ernst & Young the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Audit Committee has received the written disclosures and the letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young its independence from management and the Company. In reliance on these reviews and discussions, and the reports of Ernst & Young, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited financial statements in DZS’ Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.Respectfully Submitted by the sum of (a)81,888,408 shares of common stock outstanding on January 4, 2017 plus (b) the number of shares of common stock that such person had the right to acquire within 60 days after January 4, 2017.Audit CommitteeJoon Kyung Kim (Chairman) Barbara Carbone David Schopp (4)The address of DASAN Networks, Inc. is DASAN Tower, 49,Daewangpangyo-ro 644Beon-gilBudang-gu,Sungnam-si,Gyeonggi-do,463-400, Korea.(5)Consists of (a) 363,426 shares held by New Enterprise Associates VIII, L.P., (b) 258,836 shares held by New Enterprise Associates 8A, L.P., (c) 1,788,067 shares held by New Enterprise Associates 9, L.P., and (d) 2,370,944 shares held by New Enterprise Associates 10, L.P.. Each separate New Enterprise Associates entity disclaims beneficial ownership over shares with respect to which it is not the direct holder, except to the extent of its pecuniary interest therein. The address of the entities affiliated with New Enterprise Associates is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.(6)Consists of (a) 60,000 shares held by Mr. Norrod, and (b) 104,165 shares subject to options exercisable by Mr. Norrod within 60 days after January 4, 2017.(7)Consists of (a) 446,543 shares held by Mr. Misaka, and (b) 232,080 shares subject to options exercisable by Mr. Misaka within 60 days after January 4, 2017.(8)Consists of 14,040 shares subject to options exercisable by Mr. Fischer within 60 days after January 4, 2017.(9)Consists of (a) 1,842 shares held by Mr. Presworsky, and (b) 35,000 shares subject to options exercisable by Mr. Presworsky within 60 days after January 4, 2017.(10)Consists of (a) 127,823 shares held by Dr. Connors, (b) 16,667 shares held by Suaimhneas LLC, of which Dr. Connors is the sole manager and his adult children are the owners, and (c) 262,218 shares subject to options exercisable by Dr. Connors within 60 days after January 4, 2017.(11)Consists of (a) 26,074 shares held by Mr. Kramlich, and (b) 133,298 shares subject to options exercisable by Mr. Kramlich within 60 days after January 4, 2017.(12)Consists of 5,205 shares subject to options exercisable by Mr. Nam within 60 days after January 4, 2017.(13)Consists of 5,205 shares subject to options exercisable by Mr. Park within 60 days after January 4, 2017.(14)Includes 791,211 shares subject to options exercisable within 60 days after January 4, 2017.39OTHER MATTERSWe have not received notice of other matters that may be properly presented at the Annual Meeting other than those listed on the Notice of Annual Meeting of Stockholders and discussed above. If other matters should properly come before the meeting, however, the persons named in the accompanying proxy will vote all proxies in their discretion.Stockholder Proposals for Inclusion in the Proxy Statement for the 20172024 Annual Meeting.Stockholders of DZSIDZS may submit proposals on matters appropriate for stockholder action at meetings of our stockholders in accordance with Rule14a-8 promulgated under the Exchange Act. The Company has tentatively set May 9, 2017 asTo be eligible for inclusion in the date for its 2017 annual meeting of stockholders. The date will be significantly earlier than the anniversary of last year’s annual meeting of stockholders, which was held on September 8, 2016. Because the date of the meeting is expectedproxy statement relating to be more than 30 days earlier than the anniversary of the Company’s 2016our 2024 annual meeting of stockholders, proposals to be included in the Company’s proxy statement for the 2017 annual meeting of stockholders in accordance with Rule14a-8 under the Exchange Act, must be received at the Company’sour principal executive offices no later than the close of business on February 8, 2017December 19, 2023 (being 90120 calendar days prior to the proposedanniversary of the release date of the 2017proxy statement for our 2023 annual meeting), which the Company believes is a reasonable time before it expects to begin to print and send its proxy materials, and must otherwise satisfy the conditions established by the SEC for stockholder proposals to be included in the proxy statement for that meeting.Stockholder Proposals for Presentation at the 20172024 Annual Meeting.If a stockholder wishes to present a proposal, including a director nomination, at our 20172024 annual meeting of stockholders and the proposal is not intended to be included in our proxy statement relating to that meeting, the stockholder must give advance notice in writing to our Corporate Secretary prior to the deadline for such meeting determined in accordance with our bylaws. As described above, the Company has tentatively set May 9, 2017 as the date for its 2017 annual meeting of stockholders. The date will be significantly earlier than the anniversary of last year’s annual meeting of stockholders, which was held on September 8, 2016. Because the date of the meeting is expected to be more than 30 days earlier than the anniversary of the Company’s 2016 annual meeting of stockholders, ourOur bylaw notice deadline with respect to the 20172024 annual meeting of stockholders is the close of business on February 8, 2017 (being 90March 1, 2024 (90 calendar days prior to the proposed dateanniversary of the 2017our 2023 annual meeting). If a stockholder gives notice of a proposal outside of the bylaw notice deadline, the stockholder will not be permitted to present the proposal to the stockholders for a vote at our 20172024 annual meeting. However, in the event that the 2024 annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary of the 2023 annual meeting, to be timely, notice by the stockholder must be received by the later of (1) the close of business 90 days prior to the 2024 annual meeting or (2) the 10thday following the day on which public announcement of the date of the 2024 annual meeting is first made. A stockholder’s notice must set forth the information required by our bylaws with respect to each matter the stockholder proposes to bring before the annual meeting.Matters Presented at the Special Meeting. As of the date of this proxy statement, our Board of Directors does not intend to bring any other business before the special meeting, and does not know of any other matter to be presented at the special meeting. If any additional matters are properly presented at the special meeting, the persons named on the enclosed proxy card will have discretion to vote the shares of common stock they represent in accordance with their own judgment on such matters.Notices. All notices of proposals by stockholders, whether or not included in our proxy statement, should be delivered to DASAN Zhone Solutions,DZS Inc., Attn: Corporate Secretary, 7195 Oakport Street, Oakland, California 94621.40Appendix ACERTIFICATE OF AMENDMENTOFTO THERESTATED CERTIFICATE OF INCORPORATIONOFDASAN ZHONE SOLUTIONS,DZS INC.Pursuant to Section 242 of the GeneralCorporation Law of the State of DelawareDASAN Zhone Solutions,DZS Inc., a corporation duly organized and validly existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”“Corporation”), does hereby certify as follows:1. The namecertify:FIRST: That a resolution was duly adopted by the Board of Directors of the Corporation is DASAN Zhone Solutions, Inc.2. Thesetting forth a proposed amendment to the Restated Certificate of Incorporation of the Corporation, as amended, through September 9, 2016,in the form set forth below (the “Amendment”), declaring the Amendment to be advisable and calling for consideration of said proposed Amendment by the stockholders of the Corporation.“RESOLVED, that, having determined that an increase in the Corporation’s authorized Common Stock to 72,000,000 shares is hereby amended as follows:The first sentencein the best interest of the Corporation and its stockholders, subject to the consideration and approval of the Corporation’s stockholders, Article IV thereofof the Restated Certificate of Incorporation of the Corporation, as amended, be, and it hereby is, amended so that, as amended, such sentence shall read in its entirety as follows:“IV. (A) The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is[Amendment A: Eighty-Five Ninety-Seven Million (85,000,000); Amendment B: Seventy Million (70,000,000); Amendment C:Sixty-One Million (61,000,000)]*(97,000,000) shares, of which:[Amendment A: Sixty Seventy-Two Million (60,000,000); Amendment B: Forty-Five Million (45,000,000); Amendment C:Thirty-Six Million (36,000,000)]*(72,000,000) shares, par value $.001 per share, shall be shares of common stock (the “Common Stock”“Common Stock”); and“Preferred Stock”“Preferred Stock”).”Paragraph A of Article IV thereof is amended so that, as amended, such Paragraph A shall read in its entirety as follows: “(A)(B) Common Stock. Except as (1) otherwise required by law or (2) expressly provided in*Stockholders are being asked to approve a series of three separate and alternative amendments to our Restated Certificate of Incorporation to effect, at the discretion of our Board of Directors, a reverse stock split of our common stock at one of three reverse stock split ratios,1-for-3,1-for-4 or1-for-5, and contemporaneously with such reverse stock split, to effect a corresponding and proportional reduction in the number of authorized shares of DZSI’s common stock. The Certificate of Amendment filed with the Secretary of State of the State of Delaware will include the actual exchange ratio determined by the Company to be in the best interests of DZSI and its stockholders (being either1-for-3,1-for-4 or1-for-5) and a corresponding proportionate reduction in the total number of shares of common stock that DZSI is authorized to issue. The Board of Directors may also elect not to effect the reverse stock split and the associated reduction in our authorized capitalization, in which case this amendment to our Restated Certificate of Incorporation will be abandoned. In accordance with the resolutions to be adopted by the stockholders, we will not implement any amendment providing for an exchange ratio outside the range described in this proxy statement. Upon the filing and effectiveness of this amendment(1) Dividends. Subject to the Corporation’srights of the holders of Preferred Stock, and to the other provisions of this Restated Certificate of Incorporation (the “Effective Time”)(as amended from time to time), holders of Common Stock shall be entitled to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore.(2) Voting Rights. At every annual or special meeting of stockholders of the Corporation, each holder of Common Stock shall be entitled to cast one (1) vote for each share of Common Stock standing in such holder’s name on the stock transfer records of the Corporation.(3) Liquidation Rights. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, issuedwhether voluntary or involuntary, after payment or provision for payment of the Corporation’s debts and outstandingamounts payable upon shares of Preferred Stock entitled to a preference, if any, over holders of Common Stock upon such dissolution, liquidation or held as treasurywinding up, the remaining net assets of the Corporation shall be distributed among holders of shares immediately prior toof Common Stock equally on a per share basis. A merger or consolidation of the Effective Time (the “Old Shares”) shall automatically be reclassified and continued, withoutCorporation with or into any action on theother corporation or other entity, or a sale or conveyance of all or any part of the holder thereof, as [Amendment A:one-third (1/3rd); Amendment B:one-fourth (1/4th); Amendment C:one-fifth (1/5th)]assets of one sharethe Corporation (which shall not in fact result in the liquidation of Commonthe Corporation and the distribution of assets to its stockholders) shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Paragraph (A)(3).(C) Preferred Stock (the “Reverse Stock Split”). The Corporation shall not issue fractional shares in connection with the Reverse Stock Split. HoldersBoard of Old Shares who would otherwise be entitledDirectors is authorized, subject to receive a fraction of a share on account of the Reverse Stock Split shall receive, upon surrender of any stock certificates formerly representing the Old Shares, in lieu of such fractional share, an amount in cash equallimitations prescribed by law, to the product of (i) the average closing price per share of the Common Stock as reportedprovide by the Nasdaq Capital Marketresolution or resolutions for the five (5) trading days immediately preceding the Effective Time, by (ii)issuance of shares of Preferred Stock in one or more series, to establish the number of Old Shares held byshares to be included in each such holder that would otherwise have been exchanged for such fractional share interests.”3. This Amendmentseries, and to fix the voting powers (if any), designations, powers, preferences, and relative, participating, optional or other rights, if any, of the Restated Certificateshares of Incorporationeach such series, and any qualifications, limitations or restrictions thereof. Irrespective of the provisions of Section 242(b)(2) of the DGCL, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote, without the separate vote of the holders of the Preferred Stock as a class.”SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware on [May 30, 2023], at which meeting the necessary number of shares as required by statute were voted in favor of the Amendment.THIRD: That the Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. On January 4, 2017, the Board of Directors of the Corporation duly adopted resolutions setting forth the Amendment, declaring its advisability and calling for submission of the Amendment to the stockholders of the Corporation for vote at a special meeting. The stockholders approved the Amendment at the special meeting of stockholders held on , 2017.IN WITNESS WHEREOF, the Corporation has caused this certificateCertificate of Amendment to the Restated Certificate of Incorporation of the Corporation to be signed by its Chief Financial Officer this day __ of , 201 ._____________, 2023.DASAN ZHONE SOLUTIONS, INC.By:Kirk MisakaChief Financial Officer
IMPORTANT SPECIAL MEETINGINFORMATIONElectronic Voting InstructionsYou can vote by Internet or telephone!Available 24 hours a day, 7 days a week!Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.Proxies submitted by the Internet or telephone must be received by Pacific Time, on , 2017.
Vote by Internet• Log on to the Internet and go towww.envisionreports.com/DZSI• Follow the steps outlined on the secured website.
Vote by telephone• Call toll free1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There isNO CHARGEto you for the call.• Follow the instructions provided by the recorded message.BY: _____________________________ Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas.☒Special Meeting Proxy Cardq IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. qTitle: President and Chief Executive Officer A Proposal 1The DZSI Board of Directors unanimously recommends that stockholders vote“FOR” Proposal 1.FORAGAINSTABSTAIN1.To approve a series of three separate and alternative amendments to DZSI’s Restated Certificate of Incorporation, which would (i) effect a reverse stock split of DZSI’s outstanding common stock at exchange ratios of1-for-3,1-for-4 and1-for-5, as determined by the Company, and (ii) proportionately decrease the number of authorized shares of DZSI common stock, to be effected in the sole discretion of the Board of Directors at any time prior to our 2018 annual meeting of stockholders without further approval or authorization of our stockholders and subject to the Board of Directors’ authority to abandon such amendment.☐☐☐Proposal 2The DZSI Board of Directors unanimously recommends that stockholders vote“FOR” Proposal 2.FORAGAINSTABSTAIN2. To approve the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve Proposal 1.☐☐☐Name: Charles D. Vogt B Non-Voting Items—Change of Address — Please print new address below. C Authorized Signatures — This section must be completedd public accounting firm for your instructions to be executed. —Date and Sign BelowPlease sign your name(s) EXACTLY as your name(s) appear(s) on this proxy card. If shares are held jointly, each joint holder must sign. When signing as trustee, executor, administrator, guardian, attorney or corporate officer, please print your full title.Signature 1 — Please keep signature within the boxSignature 2 (Joint Owner) —Please keep signature within the boxDate (mm/dd/yyyy) — Please print date below. / / q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.qProxy — DASAN ZHONE SOLUTIONS, INC.SPECIAL MEETING OF STOCKHOLDERS , 2017THIS PROXY IS SOLICITED ON BEHALF OF THE DZSI BOARD OF DIRECTORSThe undersigned revokes all previous proxies, acknowledges receipt of the notice of specialfiscal year ending December 31, 2022. NOTE: Such other business as may properly come before the meeting of stockholders and the accompanying proxy statement, and hereby appoints James Norrod, Il Yung Kim and Kirk Misaka, jointly and severally, withor any adjournment thereof Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full power of substitution totitle as such. Joint owners should each as proxies of the undersigned, to represent the undersigned and to vote all shares of common stock of DZSI that the undersigned is entitled to vote, either on hissign personally. All holders must sign. If a corporation or her own behalfpartnership, please sign in full corporate or on behalf of an entity or entities, at the special meeting of stockholders of DZSI to be held on , 2017 at Pacific Time at 7195 Oakport Street, Oakland, California 94621, and at any adjournments or postponements thereof, with the same force and effect as the undersigned might or could do if personally present.THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS INSTRUCTED BY THE STOCKHOLDER. IF NO INSTRUCTIONS ARE SPECIFIED, THE SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE SPECIAL MEETING, OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF, THIS PROXY CARD WILL CONFER DISCRETIONARY AUTHORITY ON THE INDIVIDUALS NAMED AS PROXIES TO VOTE THE SHARES REPRESENTED BY THE PROXIES IN ACCORDANCE WITH THEIR BEST JUDGMENT.A-1
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on , 2017:DZSI’s proxy statementAnnual Meeting:The Notice and annual reportProxy Statement and Annual Report are available electronically at the Investor Relations section of DZSI’s website at www.Zhone.com.
www.proxyvote.com.SEE REVERSE SIDETO BE SIGNED AND DATED ON REVERSE SIDESEE REVERSE SIDE