DEFERRED COMPENSATION PLAN

2.1

Account . Account means a bookkeeping account maintained by the Plan Administrator to record the Company’s payment obligation to a Participant as determined under the terms of the Plan. The Plan Administrator may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms pursuant to the terms of a Participant’s Deferral Election. Reference to an Account means any such Account established by the Plan Administrator, as the context requires. Accounts are intended to constitute unfunded obligations of the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.2

Account Balance . Account Balance means, with respect to any Account, the total amount of the Company’s payment obligation from such Account as of the most recent Valuation Date.

2.3

Affiliate . Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

2.4

Beneficiary . Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if:

2.5

Business Day . A Business Day is each day on which the New York Stock Exchange is open for business.

2.6

Change in Control . Change in Control occurs on the date on which there is (i) a change in the ownership of the Company, (ii) a change in the effective control of the Company or (iii) a change in the ownership of a substantial portion of the Company’s assets. For purposes of this Section, a change in ownership of the Company occurs on the date on which any one person or more than one person acting as a group acquires ownership of stock of the Company that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. A change in the effective control of the Company occurs on the date on which either (i) a person or more than one person acting as a group acquires ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company or (ii) a majority of members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date of the appointment or election. A change in the ownership of a substantial portion of assets occurs on the date on which any one person or more than one person acting as a group acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

2.7

Claimant . Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.

2.8

Code . Code means the Internal Revenue Code of 1986, as amended from time to time.  

2.9

Code Section 409A . Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder. Reference to proposed Treasury Department regulations shall be construed as reference to the corresponding provisions of the final Treasury Department regulations when said regulations are published.

2.10

Committee . Committee means the individuals selected by the Compensation Committee of the Board of Directors of the Company or the Chief Executive Officer of the Company to administer the Plan.

2.11

Company . Company means Diodes Incorporated.

2.12

Company Contribution . Company Contribution means a credit by the Company to a Participant’s Account(s) in accordance with the provisions of Article VI of the Plan. Company Contributions are credited at the sole discretion of the Company and the fact that a Company Contribution is credited in one year shall not obligate the Company to continue to make such Company Contribution in subsequent years.

2.13

Company Stock . Company Stock means phantom shares of common stock issued by Company.

2.14

Compensation . Compensation means a Participant’s base salary, bonus, commission, and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan. Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A.

2.15

Death Benefit . Death Benefit means payment to a Participant’s Beneficiary(ies) of all remaining unpaid Account Balances as provided in Section 8.4 of the Plan.

2.16

Deferral . Deferral means the credits to a Participant’s Accounts attributable to deferrals of Compensation described in Prop. Treas. Reg. Section 1.409A-1(b)(1) and Earnings on such amounts as provided in Prop. Treas. Reg. Section 1.409A-1(b)(2), except where the context of the Plan clearly indicates otherwise.

2.17

Deferral Election . Deferral Election means an agreement between a Participant and the Company specifying any or all of the following: (i) the amount of each component of Compensation subject to the Deferral Election; (ii) the investment allocation described in Section 7.2; and (iii) the Payment Schedule. The Plan Administrator may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Plan Administrator in the Deferral Election agreement, Participants may defer up to 80% of their base salary and up to 100% of other types of Compensation for a Plan Year.

2.18

Disability . Disability means that a Participant (i) is unable to engage in any substantial gainful activity by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, or (ii) is, by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. The determination of the existence of a Disability shall be made by the Plan Administrator in accordance with Code Section 409A.

2.19

Disability Benefit . Disability Benefit means a payment by the Company to a Participant of all remaining unpaid Account Balances in a single lump sum in the event of such Participant’s Disability.

2.20

Earnings . Earnings means an adjustment to the value of an Account in accordance with Article VII.

2.21

Effective Date . Effective Date means January 1, 2007.

2.22

Eligible Employee . Eligible Employee means a member of a “select group of management or highly compensated employees” of the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as determined by the Committee from time to time in its sole discretion.

2.23

Employee . Employee means an employee of the Company.

2.24

ERISA . ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.25

Fiscal Year Compensation . Fiscal Year Compensation means Compensation earned during one or more consecutive fiscal years of the Company, all of which is paid after the last day of such fiscal year or years.

2.26

Participant . Participant means an Eligible Employee who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee of the Company. A Participant’s continued participation in the Plan shall be governed by Section 3.2 and Section 3.3 of the Plan.

2.27

Payment Schedule . Payment Schedule means the date as of which payment under the Plan will commence and the form in which such payment will be made.

(a)

Retirement Benefit .   Except in the case of a Specified Employee, payment of a Participant’s Retirement Benefit will be made (or will commence) on the first business day of the month following the month in which a Participant Retires. Payment will be made in a single lump sum unless the Participant specifies an alternative form of payment in his first Deferral Election (filed prior to earning any Company Contribution or obtaining a legally binding right to Company Contributions to his or her Retirement/Termination Account). A Participant may also specify an alternative form of payment under Section 5.1. Alternative forms of payment include (i) a lump sum payment between 0% and 100% of the Account Balance and (ii) any remaining Account Balance payable in a series of substantially equal annual installments from two to fifteen years. For purposes of Article V, (i) each lump sum payment and (ii) each series of substantially equal installment payments elected by the Participant will be treated as a single form of payment. If a lump sum equal to less than 100% of the Retirement/Termination Account is paid, the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum.

(b)

Termination Benefit . Except in the case of a Specified Employee, payment of a Participant’s Termination Benefit will be made on the first business day of the month following the month in which a Participant incurs a Separation from Service that entitles such Participant to a Termination Benefit. Payment will be made in a single lump sum.

(c)

Specified Date Payments .   Payment from a Participant’s Specified Date Account will be made (or will commence) as of the first day of the month or year specified under the elections described in Section 4.4, as modified under Section 5.1. Unless a Participant specifies an alternative form of payment under Sections 4.4 and 5.1, payment will be made in a single lump sum. Alternative forms of payment include a series of substantially equal annual installments payable over two to five years. For purposes of Article V, a series of installment payments will be treated as a single form of payment. The time and form of payment upon an earlier Separation from Service, death, Disability is specified in Section 4.4(b).

(d)

Death Benefit. Payment to a Participant’s Beneficiary(ies) in the event of death shall be paid in a single lump sum. Payment will be made as of the first day of the first month following the Participant’s death.

(e)

Disability Benefit. Payment due to Disability will be made in a single lump sum as of the first day of the first month following the Participant’s Disability.

2.28

Performance-Based Compensation . Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months in which the Participant performs services for the Company. Organizational or individual performance criteria are considered pre-established if established in writing by not later than ninety (90) days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-Based Compensation may include payments based on performance criteria that are not approved by the Board of Directors or by the stockholders of the Company. Performance-Based Compensation does not include any amount or portion of any amount that will be paid either regardless of performance, or based upon a level of performance that is substantially certain to be met at the time the criteria is established. Performance criteria may be subjective but must relate to the performance of the Participant, a group of Employees that includes the Participant or a business unit (which may include the Company) for which the Participant provides services. The determination that any subjective performance criteria have been met shall not be made by the Participant or by a family member of the Participant, or by a person under the supervision of the Participant or a Participant’s family members where any amount of the compensation of such person is controlled in whole or in part by the Participant or such family member. Compensation based on Company Stock may constitute Performance-Based Compensation if it is based solely on an increase in the value of such stock after the date of grant or award. The determination of whether Compensation qualifies as “Performance-Based Compensation” will be made in accordance with Prop. Treas. Reg. Section 1.409A-1(e) and subsequent guidance.

2.29

Plan . Plan means the “Diodes Incorporated Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter.

2.30

Plan Administrator . Plan Administrator means the Committee, or such individuals appointed by the Committee, acting pursuant to the powers and authority granted under Section 9.1 of the Plan.

2.31

Plan Year . Plan Year means January 1 through December 31.

2.32

Retire/Retirement . Retire and Retirement means a voluntary Separation from Service on or after the earlier of: (i) attaining age 60 with at least 20 Years of Service, or (ii) attaining age 65.

2.33

Retirement Benefit . Retirement Benefit shall mean a payment from a Participant’s Retirement/Termination Account to such Participant due to such Participant’s Retirement. Payment of a Retirement Benefit will be made as provided in Section 8.1(a) of the Plan.

2.34

Retirement/Termination Account . Retirement/Termination Account means an Account established by the Plan Administrator to record the amount payable to a Participant due to his or her Separation from Service.

2.35

Separation from Service . An Employee incurs a Separation from Service upon termination of employment with the Company. The occurrence of a Separation from Service is determined by the Plan Administrator under the facts and circumstances and in accordance with Code Section 409A.

2.36

Specified Date Account . A Specified Date Account means an Account established pursuant to Section 4.4 that will be paid (or that will commence to be paid) at a future date as specified in the Participant’s Deferral Election. Unless otherwise determined by the Plan Administrator, a Participant may maintain no more than five Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an “In-Service Account”.

2.37

Specified Employee . Specified Employee means a “key employee” (as defined in Code Section 416(i) without regard to Code Section 416(i)(5)) of the Company or an Affiliate any stock of which is actively traded on an established securities market or otherwise, or as defined in Prop. Treas. Regulation 1.409A-1(i).

2.38

Substantial Risk of Forfeiture . Substantial Risk of Forfeiture shall have the meaning specified in Prop. Treas. Reg. Section 1.409A-1(d).

2.39

Termination Benefit . Termination Benefit means a payment from a Participant’s Retirement/Termination Account due to such Participant’s Separation from Service other than Retirement or death. Payment of a Termination Benefit will be paid as provided in Section 8.1(b).

2.40

Unforeseeable Emergency . An Unforeseeable Emergency is a severe financial hardship of the Participant or Beneficiary resulting from an illness or accident of the Participant or Beneficiary, the Participant’s or Beneficiary’s spouse, or the Participant’s or Beneficiary’s dependent (as defined in Code section 152(a)); loss of the Participant’s or Beneficiary’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Beneficiary. For example, the imminent foreclosure of or eviction from the Participant’s or Beneficiary’s primary residence may constitute an Unforeseeable Emergency. In addition, the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication, may constitute an Unforeseeable Emergency. Finally, the need to pay for the funeral expenses of a spouse or a dependent (as defined in Code section 152(a)) may also constitute an Unforeseeable Emergency. Except as otherwise provided in this section, the purchase of a home and the payment of college tuition are not Unforeseeable Emergencies. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting a distribution under section 8.5 of the Plan is to be determined by the Plan Administrator based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan.

2.41

Valuation Date . Valuation Date shall mean each Business Day.

2.42

Year of Service . A Year of Service shall mean each 12-month period of continuous service with the Company.

3.1

Eligibility and Participation . An Eligible Employee becomes eligible to file a Deferral Election upon receipt of notification of eligibility from the Plan Administrator. Such Eligible Employee becomes a Participant upon the earlier to occur of (i) a credit of Company Contributions under Article VI or (ii) filing his or her initial Deferral Election in accordance with Article IV.

3.2

Duration . A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant is an Eligible Employee. A Participant who is no longer an Eligible Employee but continues to be employed by the Company may not defer Compensation under the Plan but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero and during such time may continue to make allocation elections as provided in Section 7.2. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid.

3.3

Revocation of Future Participation . Notwithstanding the provisions of Section 3.2, the Committee may, in its discretion, revoke a Participant’s eligibility to make future Deferrals under this Plan. Such revocation will not affect in any manner a Participant’s Account Balance or other terms of this Plan.

4.1

Deferral Elections, Generally.  

(a)

An Eligible Employee shall submit a Deferral Election during the enrollment periods established by the Plan Administrator and in the manner specified by the Plan Administrator, but in any event, in accordance with Section 4.2. A Deferral Election that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation.

(b)

Each Deferral Election will specify the amount of Deferrals and the allocation of Deferrals to the Participant’s Accounts. A Participant may specify in his or her initial Deferral Election the Payment Schedule for the Retirement/Termination Account. A Participant may specify in the Deferral Election that establishes a Specified Date Account the Payment Schedule for such Account in the manner set forth in Section 4.4. If the time and form is not specified in a Deferral Election, the time and form of payment shall be the time and form specified in Section 2.27.

4.2

Timing Requirements for Deferral Elections.

(a)

First Year of Eligibility . Upon notification of his or her eligible status under Section 3.1, and subject to this paragraph (a), an Eligible Employee has up to 30 days to submit a Deferral Election with respect to Compensation earned during such year. The Deferral Election described in this paragraph becomes irrevocable on the first day following such 30 ^th day. An Eligible Employee may file a Deferral Election under this Section 4.2(a) only if he or she does not participate in any other “account balance plan” as defined in Prop. Treas. Reg. Section 1.409A-1(c)(i)(A) maintained by the Company or an Affiliate, other than as permitted in Prop. Treas. Reg. Section 1.409A-1(c)(ii).

(b)

Prior Year Deferrals . Participants may defer Compensation by filing a Deferral Election no later than December 31 of the year prior to the year in which such Compensation is earned. A Deferral Election described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.

(c)

Performance-Based Compensation . A Deferral Election may be filed with respect to Performance-Based Compensation, provided that:

(i)

the Participant performs services continuously from a date no later than the date upon which the performance criteria for such Performance-Based Compensation are established through a date no earlier than the date upon which the Participant submits a Deferral Election;

(ii)

the Deferral Election is submitted no later than the date that is six months before the end of the performance period during which such Performance-Based Compensation is earned; and

(iii)

in no event may an election to defer Performance-Based Compensation be made after such Performance-Based Compensation has become both substantially certain to be paid and readily ascertainable.

(d)

Commissions . For purposes of determining Compensation that may be deferred under Sections 4.2(a) or (b), commissions are considered to be earned in the year a customer remits payment to the Company or an Affiliate.

(e)

Deferral Election with Respect to Fiscal Year Compensation . A Participant may defer Fiscal Year Compensation by filing a Deferral Election prior to the first day of the fiscal year or years in which such Fiscal Year Compensation is earned. The Deferral Election described in this paragraph becomes irrevocable on the first day of the fiscal year or years to which it applies.

(f)

Short-Term Deferrals . Compensation that meets the definition of a “short-term deferral” described in Prop. Treas. Reg. Section 1.409A-1(b)(4) may be deferred under a Deferral Election filed not later than twelve months prior to the date on which the Substantial Risk of Forfeiture lapses. The Payment Schedule for such Deferral must specify a commencement date no earlier than five years after the forfeiture restriction lapses.

(g)

Deferral Election With Respect to Certain Forfeitable Rights . With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least twelve months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30 ^th day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least twelve months in advance of the earliest date at which the forfeiture condition could lapse. The Deferral Election described in this paragraph becomes irrevocable after such 30 ^th day.

4.3

“Evergreen” Deferral Elections . The Plan Administrator, in its discretion, may provide in the Deferral Election that such Deferral Election will continue in effect for each subsequent year or performance period. Such “evergreen” Deferral Elections will become effective with respect to an item of Compensation on the date such election becomes irrevocable under Section 4.2. An evergreen Deferral Election may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under Section 4.2. A Participant whose Deferral Election is suspended due to an Unforeseeable Emergency will be required to file a new Deferral Election under this Article IV in order to continue making Deferrals under the Plan.

4.4

Specified Date Elections . A Participant’s Deferral Election may establish a Specified Date Account by specifying the Payment Schedule for Deferrals and Earnings credited to such Account. 

(a)

Allocation of Deferrals. A Deferral Election may allocate Deferrals to one or more Specified Date Accounts. The Plan Administrator may, in its discretion, establish a minimum deferral period (for example, the third Plan Year following the year Compensation subject to the Deferral Election is earned).

(b)

Effect of Earlier Separation from Service, Death, Disability.  In the event of a Separation from Service, death, or Disability, the unpaid balance of a Specified Date Account will be paid in accordance with the Payment Schedule for the earlier event. Notwithstanding the foregoing, the Plan Administrator may allow a Participant to elect not to receive payment upon Separation from Service, but to receive the Specified Date Accounts as of the specified date. Such election must be made (i) on the Deferral Election form that establishes a Specified Date Account or (ii) in a subsequent election under Article V. Such election, once made, is irrevocable as to such Account.

4.5

Deductions from Pay. The Plan Administrator has the authority to determine the payroll practices under which any component of Compensation subject to a Deferral Election will be deducted from a Participant’s Compensation.

5.1

Participant’s Right to Modify . Subject to Section 5.2, a Participant may modify the Payment Schedule with respect to an Account, provided such modification complies with the requirements of Sections 5.1(a) and (b).

(a)

Time of Election. The date on which a modification election is submitted to the Plan Administrator must be at least twelve months prior to the date on which payment commences under the Payment Schedule in effect prior to modification, and the date payments commence under the modified Payment Schedule must occur no earlier than five years after the date payment would have commenced under the Payment Schedule in effect prior to the effective date of the modification election. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.

(b)

Effective Date .   A modification election described in Section 5.1(a) is irrevocable upon receipt by the Plan Administrator and becomes effective on the date that is twelve months after the date the modification is filed with the Plan Administrator

(c)

Effect on Accounts. An election to modify a Payment Schedule is specific to the Specified Date or Retirement/Termination Account to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.

(d)

Effect of Modification Election Upon Death or Disability.   A modification to the form of payment from any Account that would also change the form of payment upon the Participant’s death or Disability will be effective at the time specified in Section 5.1(b) above. Payment will be made in accordance with Section 2.27, without regard to the five-year requirement specified in Section 5.1(a).

5.2

Modifications Authorized Under Notice 2005-1, Proposed Regulations, and Notice 2006-79 . Notwithstanding any provision of this Plan to the contrary, during calendar year 2007, a Participant may modify any Payment Schedule of any Account without regard to the requirements of Section 5.1(a) and (b); provided, however, that any modification election purporting to modify an Account with a Payment Schedule commencing during 2007 or which would cause the commencement date of the Payment Schedule for an Account to be