DIODES INCORPORATED (NASDAQ:DIOD) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02.

Amendment to Employment Agreement with Dr.Keh-Shew
Lu

On February22, 2017, Diodes Incorporated (the Company) and
Dr.Keh-Shew Lu, the Companys President and Chief Executive
Officer, entered into Amendment No.1 (the Amendment) to the
Employment Agreement between the Company and Dr.Lu dated as of
July21, 2015. The Amendment reflects the replacement of
Performance Stock Units covering 700,000 shares of the Companys
common stock granted to Dr.Lu on July21, 2015 with Performance
Stock Units covering 62,905 shares, all to the Companys 2013
Equity Incentive Plan (the Incentive Plan).

The foregoing summary does not purport to be a complete summary
of the Amendment and is qualified in its entirety by reference to
the Amendment, a copy of which is filed herewith as Exhibit
99.1 and is incorporated herein by reference.

2017 Executive Salaries

On February21, 2017, the Committee established the base salaries
of the Companys principal executive officer, principal financial
officer and three other most highly compensated executive
officers (collectively, the NEOs) effective March6, 2017 as
follows:

2016 Executive Bonuses

On February21, 2017, the Compensation Committee of the Board of
Directors of the Company (the Committee) approved the payment of
a cash bonus to certain executive officers of the Company for
their services rendered in fiscal 2016 to an executive bonus
formula adopted by the Committee on February26, 2016.

The executive bonus formula established the target bonus for each
executive officer based on (1)the growth in the Companys revenues
compared to that of its serviceable area market (SAM) (excluding
Japan) in fiscal 2016 and (2)the growth in the Companys net
income in fiscal 2016 compared to that of the prior year. Each
executive officer would be entitled to receive a
performance-based bonus equal to 70% of the target bonus
determined by the executive bonus formula, and the remaining 30%
of each target bonus would be distributed among the executive
officers in the discretion of the Compensation Committee. No
bonus would be paid if the Companys actual revenue growth and net
income were less than 80% of the prior years performance.

In December 2016, based upon (1)the unaudited results of
operations of the Company for the nine months ended September30,
2016, (2)the performance of the SAM (excluding Japan) for the ten
months ended October31, 2016 compared to 2015, (3)the projected
results of operations of the Company and change in the SAM for
November and December 2016, (4)the workload and area of
responsibilities of each executive officer, and (5)the
accomplishments and contributions of each executive officer to
the achievement of the Companys financial and strategic
objectives in 2016, the Committee estimated the performance-based
and discretionary bonuses to which each executive officer was
entitled for fiscal 2016 and approved the payment of 80% of such
bonuses on or before December31, 2016. On February21, 2017, the
Committee, based on the actual performance of the Company and its
SAM for fiscal 2017, determined the actual bonuses to which each
executive officer was entitled for fiscal 2017 and approved the
payment of the balance of the bonuses.

For 2016, the Committee awarded cash bonuses to the NEOs as
follows:

2017 Executive Bonuses

On February21, 2017, the Committee also established the
performance targets and objectives for cash bonuses for certain
executive officers for services rendered in fiscal 2017.

The cash bonus for each executive is based on a multiple of that
executives salary and consists of two components: a Company-wide
performance component which accounts for 80% of the bonus; and an
individual performance component which accounts for 20% of the
bonus. The Company-wide performance component is based on
achievement of a revenue target and a non-GAAP earnings per share
target, which are weighted 70% and 30%, respectively. The
performance targets were selected from a stockholder-approved
list. The individual performance component is based on
achievement of individual objectives.

If the Company achieves the Company-wide performance targets and
the executive achieves his individual performance objectives, the
executive will be entitled to receive 50% of his target bonus.
Achievement of 80% of the performance targets and individual
objectives would result in a bonus equal to 50% of the target
bonus, and achievement of 120% of the performance targets and
individual objectives would result in a bonus of 200% of the
target bonus. Achievement of less than 80% of the performance
targets and individual objectives would result in the payment of
no bonus, and achievement of more than 120% would not result in
the payment of a bonus of more than 200% of the target bonus.

The table below sets forth the target bonus award for the NEOs as
a percentage of each executives salary:

2017 Long-term Incentive (LTI)

On February21, 2017, the Committee also granted long-term
incentive (LTI) awards for certain executive officers for
services rendered in fiscal 2017.

Each LTI award consists of restricted stock units (RSUs) which
vest over four years and performance stock units (PSUs) which
contain a time vesting requirement of four years and performance
vesting condition in which the PSUs will vest upon the Company
achieving a cumulative 3-year non-GAAP operating income
target of $204.6million.