<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
DIODES INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 30, 1995
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING ("MEETING") OF
THE STOCKHOLDERS ("STOCKHOLDERS") OF DIODES INCORPORATED (THE "COMPANY") WILL
BE HELD AT THE RADISSON HOTEL, 30100 AGOURA ROAD, AGOURA HILLS, CALIFORNIA
91301, ON JUNE 30, 1995 AT THE HOUR OF 10:00 A.M. FOR THE FOLLOWING PURPOSES:
TO RECEIVE AND CONSIDER:
The report of the Board of Directors on the business of the
Company and the Company's audited financial statements for the fiscal year
ended December 31, 1994, together with the report of Moss Adams, the Company's
independent accountants for such period, on those audited financial statements.
TO ACT ON:
PROPOSAL 1:
To elect seven persons to the Board of Directors of the
Company, each to serve until the next Annual Meeting and until their successors
have been elected and qualified. The Board of Directors' nominees are:
Michael R. Giordano, David Lin, Shing Mao, Michael Rosenberg, Raymond Soong,
M.K. Lu, and Leonard M. Silverman.
ONLY PERSONS WHO ARE STOCKHOLDERS OF RECORD ON MAY 12, 1995
ARE ENTITLED TO VOTE IN PERSON OR BY PROXY AT THE MEETING OR ANY ADJOURNMENT
THEREOF.
The Proxy Statement which accompanies this notice contains
additional information regarding the proposals to be considered at the Meeting
and Stockholders are encouraged to read it in its entirety.
As set forth in the enclosed Proxy Statement, the Proxy is
solicited by and on behalf of the Board of Directors of the Company. All
proposals set forth above are proposals of the Company. It is expected that
these materials will be first mailed to Stockholders on or about May 19, 1995.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE TO BE SURE THAT YOUR STOCK IS VOTED. YOUR VOTE IS IMPORTANT, WHETHER
YOU OWN A FEW SHARES OR MANY.
Dated at Westlake Village, California, this 19th day of May,
1995.
By Order of the Board of Directors,
/s/ JOSEPH LIU
Joseph Liu, Secretary
<PAGE> 3
DIODES INCORPORATED
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION FOR STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MATTERS TO BE CONSIDERED AT ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . . . . 3
PROPOSAL ONE - ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 . . . . . . . . . . . . . . . . 8
EXECUTIVE COMPENSATION AND RELATED INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Summary of Cash and Certain Other Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 9
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Option Exercises and Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Report of the Compensation Committee of the Board of Directors to Stockholders . . . . . . . . . 12
Stockholder Return Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PROPOSALS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ANNUAL REPORT AND FORM 10-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 4
DIODES INCORPORATED
3050 E. HILLCREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91362
(805) 446-4800
PROXY STATEMENT
ANNUAL MEETING: JUNE 30, 1995
GENERAL INFORMATION FOR STOCKHOLDERS
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors ("Board of Directors") of
Diodes Incorporated (the "Company") for use at the annual meeting ("Meeting")
of the stockholders ("Stockholders") of the Company to be held on June 30,
1995, at the Radisson Hotel 30100 Agoura Road, Agoura Hills, California 91301,
at 10:00 a.m. and at any adjournment thereof. Joseph Liu and Carl Wertz, the
designated proxyholders ("Proxyholders"), are members of the Company's
management. This Proxy Statement and the enclosed proxy card ("Proxy") and
other enclosures will be first mailed to Stockholders on or about May 19, 1995.
Only Stockholders of record on May 12, 1995 ("Record Date") are entitled to
vote in person or by proxy at the Meeting or any adjournment thereof.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
The matters to be considered and voted upon at the Meeting
will be:
PROPOSAL 1:
To elect seven persons to the Board of Directors of
the Company, each to serve until the next Annual Meeting and until
their successors have been elected and qualified. The Board of
Directors' nominees are: Michael R. Giordano, David Lin, Shing Mao,
Michael Rosenberg, Raymond Soong, M.K. Lu, and Leonard M. Silverman.
AND, to transact such other business as may properly be transacted at the
Meeting or at any adjournment thereof.
COSTS OF SOLICITATIONS OF PROXIES
The solicitation will be made by mail and may be supplemented
by telephone or other personal contact to be made without special compensation
by regular officers and employees of the Company. If it should appear
desirable to do so to ensure adequate representation at the Meeting, officers
and regular employees may communicate with Stockholders, banks, brokerage
houses, custodians, nominees and others, by telephone, facsimile transmissions,
telegraph, or in person to request that proxies be furnished. The Company will
reimburse banks, brokerage houses, and other custodians, nominees and
fiduciaries, for their reasonable expenses in forwarding proxy materials to
their principals. The total estimated cost for such reimbursement is $12,000.
OUTSTANDING SECURITIES AND VOTING RIGHTS; REVOCABILITY OF PROXIES
The authorized capital of the Company consists of 9,000,000
shares of common stock ("Common Stock"), $0.66-2/3 par value, of which
4,626,009 shares were issued and outstanding on the Record Date with an
additional 717,115 shares held as Treasury Stock. In addition, 1,000,000
shares of Preferred Stock, $1.00 par value, are authorized of which 169,629
shares of Class A Preferred Stock ("Class A Preferred Stock") were issued and
outstanding on the Record Date (the Common Stock and the Class A Preferred
Stock shall herein be collectively referred to as the "Stock"). Each share of
Class A Preferred Stock is entitled to one vote and is convertible into one
share of Common Stock. A majority of the outstanding shares of the Stock
constitutes a quorum for the conduct of business at the Meeting. Abstentions
will be treated as shares present and entitled to vote for purposes of
determining the presence of a quorum.
Each Stockholder is entitled to one vote, in person or by
proxy, for each share of Stock standing in his or her name on the books of the
Company as of the Record Date on any matter submitted to the Stockholders.
<PAGE> 5
The Company's Certificate of Incorporation authorizes
cumulative voting. Each Stockholder has the right to cumulate votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which such Stockholder's shares are
entitled, or to distribute such Stockholder's votes on the same principle among
as many candidates as the Stockholder shall think fit, and the candidates
receiving the highest number of votes up to the number of directors to be
elected, shall be elected.
As to any matters, other than the election of directors, which
may properly come before the Meeting, each Stockholder is entitled to cast one
vote for each share held of record on the Record Date. In the election of
directors, the seven persons receiving the highest number of votes will be
elected.
On the Record Date there were a total of 4,795,638 voting
shares of Stock issued and outstanding consisting of the Common Stock and the
Class A Preferred Stock referred to herein, each such share of Stock being
entitled to one vote at the Meeting. Of these voting shares of Stock,
2,230,093 (or approximately 46.5%) (the "Shares") were held in name by Lite-On
Power Semiconductor Corporation ("LPSC"), a subsidiary controlled by Silitek
Corporation ("Silitek"). Silitek has disclaimed beneficial ownership of the
Shares. See "Security Ownership of Certain Beneficial Owners and Management"
and "Certain Relationships and Related Transactions" for a discussion of the
relationship between Silitek, LPSC and the Company. LPSC has informed the
Company that it will vote "FOR" the election of the nominees to the Board of
Directors identified herein.
A Proxy for use at the Meeting is enclosed. The Proxy must be
signed and dated by you or your authorized representative or agent.
Telegraphed or cabled Proxies are also valid. You may revoke a Proxy at any
time before it is exercised at the Meeting by submitting a written revocation
to the Secretary of the Company or a duly executed Proxy bearing a later date
or by voting in person at the Meeting.
If you hold your Stock in "street name" and you fail to
instruct your broker or nominee as to how to vote your Stock, your broker or
nominee may, in its discretion, vote your Stock "FOR" the election of the Board
of Director's nominees.
Unless revoked, the shares of Stock represented by Proxies
will be voted in accordance with the instructions given thereon. Discretionary
authority to cumulate votes in the election of directors is solicited. In the
absence of any instruction in the Proxy, your shares of Stock will be voted
"FOR" the election of the nominees for director set forth herein.
The enclosed Proxy confers discretionary authority with
respect to any other proposals which properly may be brought before the
Meeting. As of the date hereof, management is not aware of any other matters
to be presented for action at the Meeting. However, if any other matters
properly come before the Meeting, the Proxies solicited hereby will be voted
by the Proxyholders in accordance with the recommendations of the Board of
Directors. Such authorization includes authority to appoint a substitute
nominee or nominees to the slate of management nominees for directors where
death, illness or other circumstances arise which prevent any management
nominee or nominees for directors from serving in such positions and to vote
such proxy for such substitute nominee or nominees.
2
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of
Common Stock as of the Record Date by each person known to the Company to be
the beneficial owner of more than five percent of the outstanding shares of
Common Stock by each executive officer (i.e., President and Chief Executive
Officer; Executive Vice President; and Vice President-Operations, Chief
Financial Officer and Secretary of the Company), director and nominee for
director of the Company, and by all directors and executive officers as a
group:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent of
of Beneficial Owner(1) Ownership(2) Title of Class Class(3)
---------------------- ------------ -------------- ----------
<S> <C> <C> <C>
Silitek Corporation 2,060,464(4) Common Stock 44.5%
Raymond Soong, 66,666(5) Common Stock 1.4%
Chairman of the Board
Shing Mao, 63,333(6) Common Stock 1.4%
Director
Michael A. Rosenberg, 30,000(7) Common Stock *
Director
Michael R. Giordano, 41,000(8) Common Stock *
Director
David Lin, 46,666(9) Common Stock 1.0%
President, Chief
Executive Officer,
Director
M.K. Lu, 0 N/A *
Director-Nominee
Leonard M. Silverman, 0 N/A *
Director-Nominee
Joseph Liu, 65,000(10) Common Stock 1.4%
Vice President -
Operations, Chief
Financial Officer and
Secretary
Pedro Morillas, 16,666(11) Common Stock *
Executive Vice President
Directors and Executive 329,331(12) Common Stock 7.1%
Officers as a group
(9 persons)
</TABLE>
* Less than 1%.
(Footnotes continued on following page)
3
<PAGE> 7
(footnotes continued from previous page)
(1) The address of Silitek is 10 FL. NO. 25, Sec. 1, Tung Hua S. Rd.,
Taipei, Taiwan, Republic of China. The address of the directors and
executive officers of the Company is 3050 E. Hillcrest Drive, Westlake
Village, California 91362.
(2) The named shareholder has sole voting power and investment power with
respect to the shares listed, except as indicated.
(3) Shares which the person (or group) has the right to acquire within 60
days after May 12, 1995 are deemed to be outstanding in calculating
the percentage ownership of the person (or group) but are not deemed
to be outstanding as to any other person or group. Percent of class
total does not take into account 717,115 shares held as Treasury
Stock.
(4) Includes 2,060,464 shares of Common Stock to which Silitek disclaims
beneficial ownership. Also includes 169,629 shares of voting
Preferred Stock which are convertible into Common Stock on a one share
for one share basis, to which Silitek disclaims beneficial ownership.
LPSC, which holds 2,060,464 shares of Common Stock and 169,624 shares
of Preferred Stock, as the record holder in the Company's stock
records, is a controlled subsidiary of Silitek. The address of LPSC
is 28-1 Wu Shin St., Ta Wu Lung Industrial Zone, Keelung, Taiwan,
Republic of China.
The 2,060,464 shares of Common Stock and 169,629 shares of Preferred
Stock to which Silitek disclaims beneficial ownership and which are
held in name by LPSC include (a) 1,945,800 shares of Common Stock
transferred to LPSC from Silitek during the year ended December 31,
1991 in connection with a consolidation of the semiconductor rectifier
activities of Silitek into its LPSC subsidiary; (b) 214,987 shares of
Common Stock and 169,629 shares of Preferred Stock which are
convertible into Common Stock on a one share for one share basis,
acquired in May 1993 pursuant to a private placement transaction with
the Company. Silitek purchased the 214,987 shares of Common Stock and
the 169,629 shares of Preferred Stock for investment purposes for its
own benefit. Silitek intends to continue to review its investment in
the Common Stock with the view to maximizing its investment. Future
actions by Silitek, if any, will be made in light of the then current
financial conditions of Silitek, LPSC and the Company, prevailing
market prices, and other factors deemed relevant by Silitek.
(5) Represents 66,666 shares of Common Stock which Mr. Soong has the right
to acquire within 60 days of May 12, 1995, by the exercise of vested
stock options.
(6) Represents 63,333 shares of Common Stock which Dr. Mao has the right
to acquire within 60 days of May 12, 1995 by the exercise of vested
stock options.
(7) Represents 30,000 shares of Common Stock which Mr. Rosenberg has the
right to acquire within 60 days of May 12, 1995 by the exercise of
vested stock options.
(8) Represents 1,000 shares of Common Stock held in the name of
PaineWebber Trust for the IRA of Mr. Giordano and 40,000 shares of
Common Stock which Mr. Giordano has the right to acquire within 60
days of May 12, 1995 by the exercise of vested stock options.
(9) Represents 46,666 shares of Common Stock which Mr. Lin has the right
to acquire within 60 days of May 12, 1995 by the exercise of vested
stock options.
(10) Includes 55,000 shares of Common Stock which Mr. Liu has the right to
acquire within 60 days of May 12, 1995 by the exercise of vested stock
options.
(11) Represents 16,666 shares of Common Stock which Mr. Morillas has the
right to acquire within 60 days of May 12, 1995 by the exercise of
vested stock options.
(12) Includes 318,331 shares which the Directors and Officers have the
right to acquire within 60 days of May 12, 1995 by the exercise of
vested stock options.
4
<PAGE> 8
Other than as disclosed in the foregoing table, to the
knowledge of the Company, no other person (other than Cede & Co., a depository
company) owns of record or beneficially more than 5 percent of the issued and
outstanding Common Stock of the Company.
The following table sets forth the beneficial ownership of
Preferred Stock as of May 12, 1995, by each person known to the Company to be
the beneficial owner of more than five percent (5%) of the outstanding shares
of the Class A, Convertible Preferred Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL
OF BENEFICIAL OWNER OWNERSHIP TITLE OF CLASS PERCENT OF CLASS
------------------- ---------- -------------- ----------------
<S> <C> <C> <C>
Silitek Corporation 169,629(1) Class A, 100%
10 FL. NO. 25, Sec. 1 Convertible
Tung Hua S. Road Preferred Stock
Taipei, Taiwan,
Republic of China
</TABLE>
(1) Based on a Schedule 13(d) filed with the SEC on April 20, 1994,
Silitek disclaims beneficial ownership of these 169,629 shares of
Preferred Stock which are held in the name of LPSC, a controlled
subsidiary of Silitek. The address of LPSC is 28-1 Wu-Shin Street, Ta
Wu Lung Industrial Zone, Keelung, Taiwan, Republic of China.
PROPOSAL ONE - ELECTION OF DIRECTORS
BOARD OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The Company's Bylaws provide that the number of directors
shall be determined from time to time by the Board of Directors but may not be
less than five nor more than seventeen. The Board of Directors is currently
composed of five members. The Bylaws further provide for the election of each
director at each annual meeting of Stockholders.
By Written Consent of the Directors and pursuant to the
provisions of Article II, Section 1, of the Bylaws of Diodes Incorporated
entitled Qualifications and Number; Vacancies, the Board of Directors has
authorized the addition of two (2) Board directors and has reset the number of
members of the Board of Directors to seven.
All nominees have indicated their willingness to serve and
unless otherwise instructed, Proxies will be voted in such a way as to affect,
if possible, the election of all nominees. In the event that any of the
nominees should be unable to serve as a director, it is intended that the
Proxies will be voted for the election of such substitute nominees, if any, as
shall be designated by the Board of Directors. Management has no reason to
believe that any nominee will be unavailable.
None of the directors, nominees for director or executive
officers were selected pursuant to any arrangement or understanding, other than
with the directors and executive officers of the Company acting within their
capacity as such. There are no family relationships among directors or
executive officers of the Company as of the date hereof.
5
<PAGE> 9
The following table sets forth certain biographical
information of the nominees for director and the executive officers of the
Company:
<TABLE>
<CAPTION>
DIRECTOR
OFFICERS AND DIRECTORS AGE POSITION WITH THE COMPANY SINCE (1)
---------------------- --- ------------------------- ---------
<S> <C> <C> <C>
Raymond Soong (2) . . . . . . . . 53 Chairman of the Board 1993
Shing Mao (3) . . . . . . . . . . 59 Director 1990
Michael A. Rosenberg (4) . . . . 66 Director 1989
Michael R. Giordano (5) . . . . . 47 Director 1990
David Lin (6) . . . . . . . . . . 48 President and Chief Executive Officer, Director 1991
M.K. Lu (7) . . . . . . . . . . 46 Director - Nominee N/A
Leonard M. Silverman (8) . . . . 55 Director - Nominee N/A
Pedro Morillas (9) . . . . . . . 49 Executive Vice President N/A
Joseph Liu (10) . . . . . . . . . 53 Vice President-Operations, Chief Financial N/A
Officer and Secretary
</TABLE>
(1) Directors are elected at each Annual Meeting of Shareholders.
(2) Mr. Raymond Soong has been the Chairman of the Board of Silitek since
1990 and has been Chairman of the Board of LPSC since 1992. See
"Security Ownership of Certain Beneficial Owners and Management" and
"Certain Relationships and Related Transactions" for a discussion of
the relationship between Silitek, LPSC and the Company. Mr. Soong is
a graduate of the National Taipei Institute of Technology's Electronic
Engineering Department. After serving as a senior engineer for
General Instruments and chief engineer for Texas Instruments, Mr.
Soong, together with several of his coworkers, found Taiwan Liton
Electronic Co. Ltd., a Taiwan corporation ("Taiwan Liton"), in 1973.
Taiwan Liton, which manufactures electronic components and subsystems,
is an affiliate of Silitek through common control, and its stock is
listed on the Taipei Stock Exchange. Mr. Soong is also Chairman of the
Board of Taiwan Liton.
(3) From 1988 to present, Dr. Shing Mao has been Chairman of the Board of
Lite-On, Inc., a California corporation located in Milpitas,
California, ("Lite-On Milpitas"), and wholly owned subsidiary of
Taiwan Liton. Dr. Mao has also been a director of Dyna Investment
Co., Ltd. of Taiwan, a venture capital company, and a director of
LPSC, both since 1989. See "Security Ownership of Certain Beneficial
Owners and Management" and "Certain Relationships and Related
Transactions" for a discussion of the relationship between LPSC and
the Company.
(4) From 1992 to present, Mr. Michael A. Rosenberg serves as an
independent consultant to Vishay Company, a Fortune 500 Company.
Vishay is a major international passive component manufacturer with 50
operating plants located in 11 countries. Until 1991, Mr. Rosenberg
was President, Principal Operating Officer a director of SFE
Technologies. Prior to that, he served since 1970 as Vice President
Technology. SFE Technologies, with principal offices in San Fernando,
California, was a manufacturer of electronic components.
(5) Mr. Michael R. Giordano recently joined the investment banking firm of
PaineWebber Incorporated as a Senior Vice President-Investments, when
PaineWebber acquired his previous firm, Kidder Peabody and Company,
Inc. Mr. Giordano advises corporations, foundations, trusts, and
municipal governments in investments and finance. Mr. Giordano was
with Kidder Peabody since 1979. Formerly a captain and pilot in the
USAF, Mr. Giordano received his Bachelors of Science degree in
Aerospace Engineering from California State Polytechnic University and
his Masters degree in Business Administration (Management and Finance)
from the University of Utah. He also did post graduate work in
International Investments at Babson College.
(footnotes continued on following page)
6
<PAGE> 10
(footnotes continued from previous page)
(6) Mr. David Lin has served as President and Chief Executive Officer of
the Company since 1993. Mr. Lin is also President of Silitek and had
served as Executive Vice President of Silitek since 1990 prior to
becoming President. See "Security Ownership of Certain Beneficial
Owners and Management", "Compensation Committee Interlocks and Insider
Participation" and "Certain Relationships and Related Transactions"
for a discussion of the relationship between Silitek, LPSC and the
Company. Mr. Lin was previously President of Texas Instruments Asia,
Limited, in Taiwan from 1982 to 1990. Mr. Lin has been a director of
LPSC since 1991 and a director of Maxi Switch, Inc., since 1990.
(7) From 1991 to present, Mr. M.K. Lu has been President and a director of
LPSC. From 1983 to 1990, Mr. Lu was General Manager/Vice President of
Silitek. See "Security Ownership of Certain Beneficial Owners and
Management" and "Certain Relationships and Related Transactions" for a
discussion of the relationship between Silitek, LPSC and the Company.
Mr. Lu earned his Bachelor of E.E. at Tatung Institute of Technology
and is a graduate of the Institute of Administration at National
Chengchi University. He is also a present member of the Chinese
Management Association and the Chinese Association for Advancement of
Management.
(8) From 1984 to present, Dr. Leonard Silverman has been the Dean of
Engineering at the University of Southern California. Dean Silverman
is internationally known for his pioneering work in the theory and
application of multivariable control systems and signal processing and
has more than 100 publications to his credit. Dr. Silverman has been
honored as a Fellow of the IEEE, as a Distinguished Member of the IEEE
Control Society, and has received a Centennial Medal of the IEEE. He
has also received election to the National Academy of Engineering, one
of the highest honors that can be bestowed on an engineer. Dean
Silverman also serves on the boards of directors for the Colachis
Foundation, the Lord Foundation and the M.C. Gill Foundation as well
as for Advanced Micro Devices. Dr. Silverman earned his A.B., B.S.,
M.S. and Ph.D. degrees in electrical engineering at Columbia
University during the period 1961 through 1966.
(9) Mr. Pedro Morillas joined the Company in 1993. Prior to becoming
Executive Vice President of the Company, Mr. Morillas was associated
with National Semiconductor for over 10 years, most recently as Vice
President, Asia Marketing, in Hong Kong for 4 years.
(10) Mr. Joseph Liu has been the Company's Vice President, Administration
from 1990 to 1994. Mr. Liu has also served as Vice President,
Operations of the Company since 1994 and Chief Financial Officer and
Secretary since 1990. Prior to joining the Company, Mr. Liu held
various management positions with Texas Instruments ("TI"), Dallas,
since 1971, including Planning Manager, Financial Planning Manager,
Treasury Manager, Cost Accounting Manager and General Accounting
Manager with TI Taiwan, Ltd. in Taipei; from 1981-1986 as Controller
with TI Asia in Singapore and Hong Kong; from 1986-1989 as Financial
Planning Manager, TI Latin America Division (for TI Argentina, TI
Brazil, and TI Mexico) in Dallas and from 1989-1990 Chief Coordinator
of Strategic Business Systems for TI Asia Pacific Division in Dallas.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has various standing committees,
including an Audit Committee, and a Compensation and Options Committee. The
Board of Directors does not have a standing Nominating Committee.
The members of the Audit Committee are Dr. Shing Mao, Michael
Giordano and Michael Rosenberg. The Audit Committee met twice during fiscal
year 1994. The Audit Committee makes recommendations to the Board regarding
the engagement of the Company's independent auditors, reviews the plan, scope
and results of the audit, reviews with management the Company's policies and
procedures with respect to internal accounting and financial controls and
reviews changes in accounting policy and the scope of the non-audit services
which may be performed by the Company's independent auditors. The Audit
Committee also monitors policies to prohibit unethical, questionable or illegal
activities by the Company's employees.
The Compensation and Options Committee, presently consisting
of Directors Michael A. Rosenberg and Michael R. Giordano, makes
recommendations to the Board regarding compensation, benefits and incentive
arrangements for officers and other key managerial employees of the Company
including awards under the Company's Incentive Bonus
7
<PAGE> 11
Plan. The Compensation and Options Committee also administers the Company's
1993 Incentive Stock Option Plan ("1993 ISO Plan"), the Company's 1993
Non-Qualified Stock Option Plan ("1993 NQO Plan"), and the Company's 1984
Non-Qualified Stock Option Plan ("1984 NQO Plan").
The 1993 ISO Plan provides for the issuance of up to 1,000,000
shares of the Company's authorized but unissued Common Stock. Options granted
under the 1993 ISO Plan are not transferable, except by will or the laws of
descent or distribution. An unexercised option is normally exercisable for 90
days after termination of employment, other than by death or retirement. In
the event of death, unmatured options are accelerated to maturity. An option
granted under the 1993 ISO Plan may not be priced at less than 100% of fair
market value on the date of grant and expires 10 years from the date of grant.
The 1993 NQO Plan became effective retroactively to July 6,
1993, upon approval by the shareholders at the Company's 1994 annual meeting.
The 1993 NQO Plan provides for the issuance of up to 1,000,000 shares of the
Company's authorized but unissued Common Stock. Options may be exercised by
the optionee during his or her lifetime or after his or her death by those who
have inherited by will or intestacy. An unexercised option is normally
exercisable for 90 days after termination of employment, other than by death or
retirement. In the event of death, unmatured options are accelerated to
maturity. The Stock Option Committee, which administers the 1993 NQO Plan, has
full discretion to determine whether or not options granted under the 1993 NQO
Plan shall have a right to relinquish up to one-half of an unexercised position
of an option for an amount of cash, if concurrently, the holder of the option
exercises a portion of the option and purchases a number of shares of stock at
least equal to the number of shares which could have been purchased under the
portion of the option relinquished ("SAR"). However, the Board has expressly
stated that it has not and does not intend to grant such SAR. The shares to be
issued upon exercise of options under the 1993 NQO Plan require a three-year
vesting period. The option price is 100% of the fair market value of such
shares on the date the option is granted. Options expire ten years from the
grant of the option.
The 1984 NQO Plan provides for the issuance of up to 300,000
shares of the Company's authorized but unissued Common Stock. Options granted
under the 1984 NQO Plan are not transferable, except by will or the laws of
descent or distribution. An unexercised option is normally exercisable for 90
days after termination of employment, other than by death or retirement. In
the event of death, unmatured options are accelerated to maturity. An option
granted under the 1984 NQO Plan may not be priced at less than 100% of fair
market value on the date of grant and expires 10 years from the date of grant.
The Board of Directors met three times during fiscal year
1994. The Compensation and Options Committee met twice during fiscal year 1994.
All of the persons who were directors of the Company during fiscal year 1994
attended at least 75% of (1) the total number of Board meetings and (2) the
total number of meetings held by all committees on which they served during
fiscal year 1994.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not paid fees
for services provided as a director. Non-employee directors each receive $750
for each board meeting attended during the year ended December 31, 1994. No
additional amounts are paid to non-employee directors for committee
participation or special assignments. Both employee and non-employee directors
are eligible to receive grants of stock options.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, executive officers and any persons holding ten percent
or more of the Common Stock are required to report their ownership of Company
stock and any changes in that ownership to the Securities and Exchange
Commission (the "SEC") and to furnish the Company with copies of such reports.
Specific due dates for these reports have been established and the Company is
required to report any failure to file on a timely basis by such persons.
Based solely upon a review of copies of reports filed with the SEC during the
fiscal year ended December 31, 1994, all reporting persons filed reports on a
timely basis, with the
8
<PAGE> 12
exception of Silitek, who filed one late Form 4 report relating to three
transactions which were all reportable on Form 4 reports.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain summary information
concerning compensation paid or accrued by the Company with respect to the
Company's Chief Executive Officer (who has served in such capacity at any time
during the last fiscal year) and each of the two other executive officers of
the Company (determined as of the end of the last fiscal year) (the "Named
Executives") for each of the fiscal years ended December 31, 1994, 1993 and
1992:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------------
Annual Compensation Awards Payouts
------------------------------------------ -------------------------- ---------
Securities
Name and Other Restricted Underlying All
Principal Annual Stock Options/ LTIP Other
Position Year Salary($) Bonus($) Compensation($) Award($) SARs(#) Payouts($) Compensation($)
- ---------- ---- --------- -------- --------------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DAVID LIN 1994 -- (1) -- -- -- -- -- --
President and 1993 -- -- -- -- 70,000(2) -- --
Chief Executive 1992 -- -- -- -- -- -- --
Officer
PEDRO MORILLAS 1994 125,169 71,504 4,728(4) -- -- -- --
Executive 1993 96,062(3) 14,836 13,051(4) -- 50,000(5) -- --
Vice President 1992 -- -- -- -- -- -- --
JOSEPH LIU 1994 115,560 45,300 3,528(6) -- 40,000(7) -- --
Vice President- 1993 115,776 13,094 -- -- 20,000(8) -- --
Operations, 1992 120,584 -- -- -- -- -- --
Chief Financial
Officer and
Secretary
</TABLE>
(1) Mr. Lin receives no direct cash compensation from the Company, other
than issuance of the Company's stock options. However, Mr. Lin
receives cash compensation directly from Silitek for his services as
President of Silitek, which, through its subsidiary LPSC, supplies a
significant volume of the semiconductors products distributed by the
Company. As disclosed elsewhere in this Proxy Statement, Silitek is
also the beneficial owner of 2,060,464 shares of Company Common Stock
and 169,629 shares of voting, convertible Preferred Stock.
(2) These options were granted pursuant to the Company's 1993 NQO Plan at
an exercise price of $1.875.
(3) Such compensation was paid from the date of commencement of Mr.
Morillas' employment on March 16, 1993 through December 31, 1993.
(footnotes continued on following page)
9
<PAGE> 13
(footnotes continued from previous page)
(4) Mr. Morillas receives the benefit of a Company-owned automobile and a
life insurance premium; the aggregate value is less than 10% of his
total annual salary. Effective September 1, 1994, the Company
implemented a Deferred Profit Sharing Plan ("401(k) Plan") whereby
employees shall be permitted to make elective deferrals in any amount
from 2% to 15% of their compensation. The Company contributes an
additional and discretionary 50% of the employee's contribution, not
to exceed 3% of the employee's compensation. Under the Company's
401(k) Plan, the employee then directs funds into selected
investments. Mr. Morillas participates in the 401(k) Plan and the
Company's discretionary contribution is 3% of his compensation from
September 1, 1994. In addition, Mr. Morillas receives the benefit of
the Company's group health insurance plan, which is partially funded
by the Company and is not included in this total; the value of such
benefit is less than 10% of his salary. Mr. Morillas also received a
one time moving expense of $12,400 in connection with his and his
family's move to the Los Angeles area, in the 1993 amount.
(5) Mr. Morillas' options were issued pursuant to the Company's 1993 ISO
Plan at an exercise price of $1.875 and are exercisable annually in
three equal amounts over a three year vesting period.
(6) Mr. Liu receives the benefit of a Company-owned automobile and a life
insurance premium; the aggregate value is less than 10% of his total
annual salary. Mr. Liu participates in the Company's 401(k) Plan and
the Company's contribution is 3% of his compensation from September 1,
1994. In addition, Mr. Liu receives the benefit of the Company's
group health insurance plan, which is partially funded by the Company,
the value of which is less than 10% of his salary and is not included
in this total.
(7) Mr. Liu's options granted in 1994 were issued pursuant to the
Company's 1993 ISO Plan at an exercise price of $7.875 and become
exercisable with respect to 50% of the options on June 17, 1995 and
the remaining 50% of the options on June 17, 1996.
(8) The options granted to Mr. Liu in 1993 were issued pursuant to the
Company's 1993 ISO Plan at an exercise price of $1.875. All 20,000
stock options were immediately exercisable upon their grant on July 6,
1993.
10
<PAGE> 14
STOCK OPTIONS
The following table contains information concerning the grant
of stock options during fiscal year ended December 31, 1994 to the Named
Executives:
OPTION/SAR GRANTS IN FISCAL YEAR 1994
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term (1)
- ----------------------------------------------------------------------------------------- ---------------------
Number of Percent
Securities of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees Base Price Expiration
Name (#) in FY 1994 ($/Sh) Date 5% ($) 10% ($)
- --------------- ------------ ------------ ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
DAVID LIN -- -- -- -- -- --
PEDRO MORILLAS -- -- -- -- -- --
JOSEPH LIU 40,000(2) 61.5 7.875 6/17/2004 198,102 502,029
</TABLE>
(1) The Potential Realizable Value is the product of (a) the difference
between (i) the product of the closing sale price per share at the
date of grant and the sum of (A) 1 plus (B) the assumed rate of
appreciation of the Common Stock compounded annually over the term of
the option and (ii) the per share exercise price of the option and (b)
the number of shares of Common Stock underlying the option at December
31, 1994. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises
are dependent upon a variety of factors, including market conditions
and the price performance of the Common Stock. There can be no
assurance that the rate of appreciation presented in this table can be
achieved.
(2) Mr. Liu's options were granted pursuant to the Company's 1993 ISO Plan
and become exercisable with respect to 50% of the options on June 17,
1995 and the remaining 50% of the options on June 17, 1996.
OPTION EXERCISES AND HOLDINGS
The following table contains information with respect to the
Named Executives concerning the exercise of options during the fiscal year
ended December 31, 1994 and unexercised options held by the Named Executives as
of December 31, 1994:
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares
Acquired Value Value of Unexercised
on Exercise Realized Number of Unexercised "In-the-Money" Options/SAR at
Name (#) ($) Options/SARs at 12/31/94(#) 12/31/94($)(1)
- -------------- ----------- -------- --------------------------- --------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
DAVID LIN -- -- 23,333 46,667 72,915 145,834
PEDRO MORILLAS 16,667 80,245 -- 33,333 -- 104,165
JOSEPH LIU 10,000 72,393 35,000 40,000 115,000 --
</TABLE>
(1) Value of unexercised "in-the-money" options is the difference between
the market price of the Common Stock on December 31, 1994 ($5.00 per
share) and the exercise price of the option, multiplied by the number
of shares subject to the option.
11
<PAGE> 15
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Effective March 16, 1993, the Company entered into an
employment agreement with Pedro Morillas, the Company's Executive Vice
President, for an indefinite term period, subject to termination upon not less
than three months' written notice from either the Company or Mr. Morillas.
Under such employment agreement, Mr. Morillas is entitled to, among other
things, (i) receive an annual base salary and performance bonus subject to the
determination and evaluation of the Company's Compensation Committee on a
yearly basis, (ii) participate in all plans sponsored by the Company for
employees in general, (iii) usage of a Company car, and (iv) receive an option
to purchase from the Company up to 50,000 shares of the Company's Common Stock
at $1.875 per share (exercisable in three equal installments commencing June
10, 1993, and expiring on the tenth anniversary of the date of grant).
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS TO STOCKHOLDERS
The report of the Compensation and Options Committee of the
Board of Directors to Stockholders shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Compensation and Options Committee (the "Committee")
consists of two directors, Michael A. Rosenberg and Michael R. Giordano, who
are not employees or former employees of, or consultants to, the Company. The
Committee approves salary practices for executive personnel, reviews the
performance of the Company and the executive officers, sets performance
objectives, establishes the compensation of executive officers, and authorizes
the grant of options under the Company's various stock option plans. In May,
1994, the Committee set salary levels for the executive officers of the
Company.
The Company's general approach to compensating executive
officers is to pay cash salaries which are competitive with salaries paid to
executives of other companies in the Company's industry, which are of similar
size and engaged in a similar line of business and to employ a subjective
assessment of the individual's experience and past and potential contribution
to the Company.
The Company's policy in compensating executive officers is to
establish methods and levels of compensation that will provide strong
incentives to promote the profitability and growth of the Company and reward
superior performance. Compensation of executive officers includes base salary,
performance-based incentive bonuses and stock-based programs. Salaries are
established by the Committee based on the Committee's subjective assessment of
the executive's scope of responsibility, level of experience, individual
performance, and contribution to the business.
The Company believes that the emphasis on performance-based
and stock-based compensation serves to align the interests of the executive
officers with the interests of the Company's stockholders. The Company also
seeks to establish overall compensation levels that are sufficiently
competitive to attract, retain, and motivate highly competent management
personnel. Mr. Morillas' base salary is paid in accordance with the terms and
conditions of a compensation agreement based upon the aforementioned subjective
criteria of the Committee See "Employment Contracts and Termination of
Employment and Change in Control Arrangements." Mr. Liu's base salary is also
paid in accordance with subjective criteria set by the Committee.
The Company's performance, for purposes of compensation
decisions, is measured under the annual bonus plan against goals established
prior to the start of the fiscal year by the Committee, and is reviewed and
approved by the Committee. The Company's annual bonus plan is based on
specific financial performance results. Bonuses, set at a fixed amount and
paid as a percentage of the total, are based upon reaching a percentage between
80 and 120% of the goal. Bonus compensation paid to Mr. Morillas is based upon
goals set by the Committee for net sales and profit before tax. Mr. Liu's
bonus is based on targets set by the Committee for net sales, and profit before
tax, as well as, return on assets.
12
<PAGE> 16
COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
No cash compensation is paid by the Company to Mr. David Lin,
the Company's President and Chief Executive Officer. Because Mr. Lin also
serves as President of Silitek Corporation, he is compensated directly from
Silitek. Mr. Lin, is however, eligible to participate in, and receive stock
option grants through, the Company's 1993 Non-Qualified Stock Option Plan.
Shares that have been granted to Mr. Lin were based upon the Committee's
subjective assessment of the performance of Mr. Lin and the Company.
STOCK OPTIONS
The Committee strongly believes that the interests of
senior management must be closely aligned with those of the stockholders.
Stock options are granted to officers, other executives and selected employees
whose contributions and skills are important to the long-term success of the
Company. Stock options granted to executive officers are granted at the fair
market value as of the date of grant with a ten year term. If employment is
terminated, the term of the grant is 90 days from the termination date. To
encourage retention, the ability to exercise options granted under the plans is
subject to vesting restrictions. The Committee's policy is to award an initial
grant at the date of employment, which vests over three years, and is in
recognition of the executive officer's potential contribution to the Company.
The three year vesting period may be increased or decreased at the Committee's
discretion. After three years, it is at the Committee's discretion to award
additional grants based upon future contribution. Decisions made by the
Committee regarding the timing and size of other option grants take into
consideration Company and individual performance, competitive market practices,
and the size and term of option grants made in prior years. The Committee does
not consider current option holdings when granting additional options.
The Company's Stock Option Plans have been amended
and approved by the shareholders so stock options that have been awarded can
qualify for exclusion under Section 162(m) of the Internal Revenue Code of 1986
as performance-based compensation.
Dated April 15, 1995,
MICHAEL A. ROSENBERG
MICHAEL R. GIORDANO
Compensation Committee
of the Board of Directors
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Compensation Committee
during the 1994 fiscal year has ever been an officer or employee of the Company
or any of its subsidiaries. However, David Lin, the President, Chief Executive
Officer and Director of the Company, during fiscal year 1994, was President and
Director of Silitek. Silitek's entire Board of Directors participated in
compensation decisions in the absence of a Compensation Committee during fiscal
year 1994.
Silitek controls LPSC, its subsidiary. LPSC is the record
owner of 44.5% of the Company's issued and outstanding Common Stock, excluding
Treasury Stock, and 100% of the Company's issued and outstanding Preferred
Stock, which is convertible to Common Stock on a one share for one share basis,
and has the same voting rights as holders of Common Stock, at December 31,
1994, and as of May 12, 1995, continues to be the record owner of 46.5% of all
of the Company's issued and outstanding securities, excluding Treasury Stock.
Thus, since LPSC is a controlled subsidiary of Silitek, Silitek is the
beneficial owner of 46.5% of the Company's outstanding voting securities.
However, although Silitek could be considered the ultimate beneficial owner of
all of the Company's securities held of record by LPSC, Silitek has disclaimed
beneficial ownership of the 2,060,464 shares of Common Stock and 169,269 shares
of the convertible Preferred Stock held by LPSC. See "Security Ownership of
Certain Beneficial Owners and Management."
During the years ended December 31, 1994 and 1993,
approximately 18% and 24%, respectively, of the purchases of products for
resale by the Company, amounting to approximately $5,048,000 and $4,640,000,
respectively, were from LPSC. These products, which were also available
generally from other sources, were purchased in transactions
13
<PAGE> 17
negotiated at prices competitive with prices charged by other vendors of
similar products in similar quantities. There are no special or exclusive
trading agreements or understandings between the Company and LPSC.
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly
percentage change in the cumulative total stockholder return of the Company's
Common Stock against the cumulative total return of the American Stock Exchange
Market Index ("AMEX Market Index") and a Company-constructed electronics
manufacturing and distribution peer group for the five fiscal years ending
December 31, 1994.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG DIODES INCORPORATED, AMEX MARKET INDEX AND PEER GROUP INDEX (1)
[Graph]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Diodes Incorporated $100 $60.00 $ 53.33 $ 73.33 $286.67 $266.67
AMEX Market Index 100 84.80 104.45 105.88 125.79 111.12
Peer Group Index (Weighted Average) 100 49.56 85.74 160.56 255.37 283.39
</TABLE>
(1) Assumes $100 invested on December 31, 1989 in the Common Stock of
Diodes Incorporated, the stock of the companies in the AMEX Market
Index, and in the stocks of the peer group companies, and that all
dividends received within a quarter, if any, were reinvested in that
quarter. The peer group companies consist of Microsemi Corporation,
Nu-Horizons Electronics Corporation, Siliconix, Inc., Semtech
Corporation, Sterling Electronics Corporation, Unitrode Corporation,
and Western Microtechnology, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
LPSC is the record owner of 44.5% of the Company's issued and
outstanding Common Stock, excluding Treasury Stock, and 100% of the Company's
issued and outstanding Preferred Stock, which is convertible to Common Stock on
a one share for one share basis, and has the same voting rights as holders of
Common Stock, at December 31,
14
<PAGE> 18
1994, and as of May 12, 1995, continues to be the record owner of 46.5% of all
of the Company's issued and outstanding securities, excluding Treasury Stock.
Thus, since LPSC is a controlled subsidiary of Silitek, Silitek is the
beneficial owner of 46.5% of the Company's outstanding voting securities.
However, although Silitek could be considered the ultimate beneficial owner of
all of the Company's securities held of record by LPSC, Silitek has disclaimed
beneficial ownership of the 2,060,464 shares of Common Stock and 169,269 shares
of the convertible Preferred Stock held by LPSC. See "Security Ownership of
Certain Beneficial Owners and Management."
During the years ended December 31, 1994 and 1993,
approximately 18% and 24%, respectively, of the purchases of products for
resale by the Company, amounting to approximately $5,048,000 and $4,640,000,
respectively, were from LPSC. These products, which were also available
generally from other sources, were purchased in transactions negotiated at
prices competitive with prices charged by other vendors of similar products in
similar quantities. There are no special or exclusive trading agreements or
understandings between the Company and LPSC.
Mr. David Lin, who has been a director of the Company since
1991 and effective March 16, 1993 became President and Chief Executive Officer
of the Company, is also the President and a director of Silitek and his salary
is fully paid by Silitek. See "Executive Compensation."
Mr. Raymond Soong, who became a director and Chairman of the
Board of the Company effective March 16, 1993, is also the Chairman of the
Board of Silitek, LPSC, and Taiwan Liton.
Silitek is affiliated through common ownership and control
with Taiwan Liton, and both companies are members of the Lite-On Group of
companies in Taiwan. Both Silitek and Taiwan Liton are public corporations in
Taiwan with stock registered on the Taipei Stock Exchange. Taiwan Liton owns
100% of the voting shares of Lite-On Milpitas. Dr. Shing Mao, who is a
director of the Company, is Chairman of the Board of Lite-On Milpitas. Dr.
Shing Mao is also a director of LPSC.
During 1994, Mr. Michael R. Giordano, a member of the
Company's Board of Directors and Senior Vice President-Investments at the
investment banking firm of PaineWebber, Inc., assisted members of the Board of
Directors and Executive Officers of the Company in stock option exercises and
subsequent stock sales of the Company's Common Stock. Mr. Giordano also
assisted LPSC in stock transactions. Compensation received by Mr. Giordano for
services rendered to the Company and LPSC was less than $1,000.
Mr. M.K. Lu, who is a first-time director nominee, has been
President and a director of LPSC from 1991 to present. From 1983 to 1990, Mr.
Lu was General Manager/Vice President of Silitek.
PROPOSALS OF STOCKHOLDERS
Under certain circumstances, Stockholders are entitled to
present proposals at stockholder meetings. Any such proposal to be included in
the Proxy Statement for the Company's 1996 Annual Meeting of Stockholders must
be submitted by a Stockholder prior to January 15, 1996, in a form that
complies with applicable regulations.
ANNUAL REPORT AND FORM 10-K
The Company's Annual Report of the fiscal year ended December
31, 1994 accompanies this Proxy Statement. The Annual Report contains
consolidated financial statements of the Company and its subsidiaries and the
report thereon of Moss Adams, the Company's independent auditors for the fiscal
years ended December 31, 1994, and 1993 and Grant Thornton, independent
auditors, for the fiscal year ended December 31, 1992.
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS REQUIRED TO BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE EXCHANGE ACT, FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1994, BY WRITING TO THE COMPANY AT 3050 EAST
HILLCREST DRIVE, WESTLAKE VILLAGE, CALIFORNIA 91362, ATTN: JOSEPH LIU.
15
<PAGE> 19
OTHER MATTERS
Management knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting.
If, however, other matters are properly brought before the Meeting, it is the
intention of the Proxyholders to vote the shares represented thereby on such
matters in accordance with the recommendation of the Board of Directors and
authority to do so is included in the Proxy.
Dated at Westlake Village, California, this 19th day of May,
1995.
By Order of the Board of Directors,
/s/ JOSEPH LIU
Joseph Liu, Secretary
16
<PAGE> 20
REVOCABLE PROXY DIODES INCORPORATED REVOCABLE PROXY
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 30, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Diodes Incorporated (the "Company") hereby
nominates, constitutes and appoints David Lin and Joseph Liu, and each of them,
the attorney, agent and proxy of the undersigned, with full power of
substitution, to vote all stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company (the "Meeting") to
be held at The Radisson Hotel, 30100 Agoura Road, Agoura Hills, California
91301, on June 30, 1995 at 10:00 a.m., and any adjournments thereof, as fully
and with the same force and effect as the undersigned might or could do if
personally thereat, as follows:
1. ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
<S> <C>
FOR all Company nominees listed below / / WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below / /
Discretionary Authority to cumulate votes is granted
Nominees: Michael R. Giordano; David Lin; Shing Mao; Michael A. Rosenberg; Raymond Soong; M.K. Lu and Leonard M. Silverman
</TABLE>
(Instructions: To withhold authority to vote for any one or more nominees, write
that nominee's or nominees' name(s) in the space provided below)
- --------------------------------------------------------------------------------
Please Sign And Date On Reverse Side
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED ABOVE. ALL PROPOSALS TO BE ACTED UPON ARE PROPOSALS OF THE
COMPANY. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED BY THE PROXYHOLDERS IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY
OF THE BOARD OF DIRECTORS.
The undersigned hereby ratifies and confirms all that said attorneys and
proxyholders, or either of them, or their substitutes, shall lawfully do or
cause to be done by virtue hereof, and hereby revokes any and all proxies
heretofore given by the undersigned to vote at the Meeting. The undersigned
hereby acknowledges receipt of the Notice of Annual Meeting and the Proxy
Statement accompanying said notice.
Date:____________________
_________________________
(Number of Shares)
_________________________
(Name of Stockholder,
Printed)
_________________________
(Signature of
Stockholder)
_________________________
(Name of Stockholder,
Printed)
_________________________
(Signature of
Stockholder)
(Please date this Proxy
and sign your name as it
appears on your stock
certificate(s). Executors,
administrators, trustees,
etc., should give their
full titles. All joint
owners should sign.)
I (We) do / / do not / /
expect to attend the
Meeting.
This Proxy will be voted "FOR" the election of all nominees unless authority
to do so is withheld for all nominees or for any individual nominees. PLEASE
SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE PREPAID
ENVELOPE PROVIDED.
