Note 3 – Restructuring and Related Activities

The Company places a strong emphasis on controlling its costs and combats general price inflation by continuously improving its efficiency and operating performance. When the ongoing cost containment activities are not adequate, the Company takes actions to maintain its cost competitiveness.

The Company incurred significant restructuring costs in its past to reduce its cost structure. Historically, the Company's primary cost reduction technique was through the transfer of production from high-labor-cost countries to lower-labor-cost countries. Since 2013, the Company's cost reduction programs have primarily focused on reducing fixed costs, including selling, general, and administrative expenses.

In 2013, the Company announced various cost reduction programs. These programs were substantially implemented by the end of the first fiscal quarter of 2016, with some additional costs incurred in the second fiscal quarter of 2016. Many of the severance costs were recognized ratably over the required stay periods.

In 2015, the Company announced additional global cost reduction programs. These programs include a facility closure in the Netherlands. The cash costs of these programs, primarily severance, are expected to aggregate to approximately $30,000. Complete implementation of these programs is expected to occur before the end of 2017.

The following table summarizes restructuring and related expenses which were recognized and reported on a separate line in the accompanying consolidated statements of operations:

	Fiscal quarters ended				Six fiscal months ended
	July 2, 2016		July 4, 2015		July 2, 2016		July 4, 2015
MOSFETs Enhanced Competitiveness Program	$	1,110	$	939	$	5,025	$	2,292
Voluntary Separation / Retirement Program		-		20		-		77
Modules Production Transfer Program		-		-		-		-
Global Cost Reduction Programs		3,357		4,701		5,917		4,701
Total	$	4,467	$	5,660	$	10,942	$	7,070

MOSFETs Enhanced Competitiveness Program

Over a period of approximately 2 years and in a series of discrete steps, the manufacture of wafers for a substantial share of products was transferred into a more cost-efficient fab. As a consequence, certain other manufacturing currently occurring in-house was transferred to third-party foundries.

The transfer of production was substantially completed by the end of the first fiscal quarter of 2016. Employees generally were required to remain with the Company during the production transfer period. Accordingly, the Company accrued these severance costs ratably over the respective employees' remaining service periods. The Company has incurred and may continue to incur other exit costs associated with the production transfer, including certain contract termination costs. The Company continues to evaluate the performance of its MOSFETs segment and potential cost reduction opportunities.

The following table summarizes the activity to date related to this program:

Expense recorded in 2013	$	2,328
Cash paid		(267	)
Balance at December 31, 2013	$	2,061
Expense recorded in 2014		6,025
Cash paid		(856	)
Balance at December 31, 2014	$	7,230
Expense recorded in 2015		5,367
Cash paid		(426	)
Foreign currency translation		1
Balance at December 31, 2015	$	12,172
Expense recorded in 2016		5,025
Cash paid		(10,327	)
Foreign currency translation		3
Balance at July 2, 2016	$	6,873

Severance benefits are generally paid in a lump sum at cessation of employment. Other exit costs of $4,352 are included in the expenses incurred in 2016 in the table above. The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated condensed balance sheets.

Voluntary Separation / Retirement Program

The voluntary separation / early retirement program was offered to employees worldwide who were eligible because they met job classification, age, and years-of-service criteria as of October 31, 2013. The program benefits varied by country and job classification, but generally included a cash loyalty bonus based on years of service. All employees eligible for the program have left the Company.

These employees generally were not aligned with any particular segment. The effective separation / retirement date for most employees who accepted the offer was June 30, 2014 or earlier, with a few exceptions to allow for a transition period.

The following table summarizes the activity to date related to this program:

Expense recorded in 2013	$	486
Cash paid		(98	)
Foreign currency translation		3
Balance at December 31, 2013	$	391
Expense recorded in 2014		12,792
Cash paid		(8,054	)
Foreign currency translation		(455	)
Balance at December 31, 2014	$	4,674
Expense recorded in 2015		95
Cash paid		(3,166	)
Foreign currency translation		(258	)
Balance at December 31, 2015	$	1,345
Cash paid		(621	)
Foreign currency translation		20
Balance at July 2, 2016	$	744

The payment terms vary by country, but generally are paid in a lump sum at cessation of employment. Certain participants are being paid in installments. The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated condensed balance sheets.

Modules Production Transfer

In an effort to reduce costs and streamline production of its module products within its Diodes segment, the Company committed to two smaller cost reduction programs related to the transfer of production of certain of its products.

The following table summarizes the activity to date related to this program:

Expense recorded in 2014	$	2,080
Cash paid		(464	)
Foreign currency translation		(121	)
Balance at December 31, 2014	$	1,495
Cash paid		(718	)
Foreign currency translation		(120	)
Balance at December 31, 2015	$	657
Cash paid		(10	)
Foreign currency translation		13
Balance at July 2, 2016	$	660

Severance benefits are generally paid in a lump sum at cessation of employment. The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated condensed balance sheets.

Global Cost Reduction Programs

The global cost reduction programs announced in 2015 include a plan to reduce selling, general, and administrative costs company-wide, and targeted streamlining and consolidation of production for certain product lines within its Capacitors and Resistors & Inductors segments.

The following table summarizes the activity to date related to this program:

Expense recorded in 2015	$	13,753
Cash paid		(986	)
Foreign currency translation		(150	)
Balance at December 31, 2015	$	12,617
Expense recorded in 2016		5,917
Cash paid		(7,972	)
Foreign currency translation		(160	)
Balance at July 2, 2016	$	10,402

The following table summarizes the expense recognized in 2016 by segment related to this program:

Diodes	$	578
Optoelectronic Components		953
Resistors & Inductors		2,522
Capacitors		423
Unallocated Selling, General, and Administrative Expenses		1,441
Total	$	5,917

Severance benefits are generally paid in a lump sum at cessation of employment. The current portion of the liability is $7,927 and is included in other accrued expenses in the accompanying consolidated condensed balance sheets. The non-current portion of the liability is included in other liabilities in the accompanying consolidated balance sheets.