NOTE 13 - SHARE-BASED COMPENSATION

The table below sets forth the line items where share-based compensation expense was recorded for the twelve months ended December 31, 2017, 2016 and 2015:

	2017		2016		2015
Cost of goods sold	$	645	$	775	$	716
Selling, general and administrative expense		15,130		10,567		16,228
Research and development expense		2,834		2,687		2,026
Total share-based compensation expense	$	18,609	$	14,029	$	18,970

The table below sets forth share-based compensation expense by type for the twelve months ended December 31, 2017, 2016 and 2015:

	2017		2016		2015
Stock options	$	934	$	1,511	$	2,516
Share grants		17,675		12,518		16,454
Total share-based compensation expense	$	18,609	$	14,029	$	18,970

In 2016, we recorded a $2.7 million reversal decrease of previously recorded expense related to performance grants. In 2015, we recorded $4.0 million in restricted stock expense related to Diodes restricted stock grants issued as replacement for unvested Pericom employee awards outstanding at the date of the acquisition.

In May 2013, our stockholders approved our 2013 Equity Incentive Plan (“2013 Plan”). Since the approval of the 2013 Plan, all stock options are granted under the 2013 Plan, and we will not grant any further stock options under our 2001 Plan. Stock options under the 2013 Plan generally vest in equal annual installments over a four-year period and expire eight years after the grant date. The number of shares originally authorized to be awarded under the 2013 Plan was 6 million shares. In May 2017, our stockholders approved an amendment to the 2013 Plan, authorizing and additional 6 million shares to be awarded, bringing the total shares authorized to be awarded under the 2013 Plan to 12 million shares.

Share-based compensation expense for stock options granted in previous years was calculated on the date of grant using the Black-Scholes-Merton option-pricing model. No stock options were granted in any of the periods presented.

Total cash received from option exercises was approximately $13.6 million, $0.1 million and $10.2 million during 2017, 2016 and 2015, respectively.

At December 31, 2017, unrecognized compensation expense related to unvested options, net of estimated forfeitures, was approximately $0.3 million. The weighted average period over which share-based compensation expense related to these options will be recognized is less than 1 year.

The table below sets forth a summary of activity in our stock option plans:

Stock Options	Shares			Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2014		2,736			21.26
Granted		-			-
Exercised		(653	)		15.63
Forfeited or expired		(20	)		22.91
Outstanding at December 31, 2015		2,063			23.03
Granted		-			-
Exercised		(7	)		18.48
Forfeited or expired		(223	)		22.75
Outstanding at December 31, 2016		1,833			23.08
Granted		-			-
Exercised		(581	)		23.42
Forfeited or expired		(24	)		26.87
Outstanding at December 31, 2017		1,228			22.85		3.1	$	7,298
Exercisable at December 31, 2017		1,186			22.67		3.1	$	7,266

The table below sets forth information about stock options outstanding at December 31, 2017:

Plan	Range of exercise prices		Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price
2001 Plan	$	15.05-29.21		917		2.9	$	21.90
2013 Plan	$	23.35-27.92		311		3.9	$	25.29

Share Grants—Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. Since the approval of the 2013 Plan, all new grants are granted under the 2013 Plan, and we will not grant any further grants under our 2001 Plan.

The table below sets forth a summary of our non-vested share grants in 2017, 2016 and 2015:

Restricted Stock Grants	Shares			Weighted Average Grant Date Fair Value ($)		Aggregate Intrinsic Value
Nonvested at December 31, 2014		1,535			23.32
Granted		1,557			22.46
Vested		(370	)		25.02
Forfeited		(43	)		26.08
Nonvested at December 31, 2015		2,679			23.51
Granted		880			18.63
Vested		(877	)		18.92
Forfeited		(62	)		20.80
Nonvested at December 31, 2016		2,620			21.31
Granted		746			25.23
Vested		(645	)		21.89
Forfeited		(441	)		22.31
Nonvested at December 31, 2017		2,280			22.24	$	65,357

During 2017 the Company modified a performance-based award previously granted to our Chief Executive Officer. The effect was to replace a performance-based grant covering 700,000 shares of the Company’s common stock with a performance-based grant covering 62,905 shares of the Company’s common stock and a restricted stock grant covering 62,905 of the Company’s common stock. If certain performance criteria are met for the performance-based grant, Dr. Lu will receive 200% of that award or 125,810 shares. The incremental expense if Dr. Lu received 200% of the performance-based grant award is approximately $3.3 million. The incremental expense of the restricted stock grant is approximately $1.7 million.

Included in the restricted stock grant for 2015 were 724,000 shares granted to Pericom employees. During 2016, the Company paid $2.5 million in taxes related to the net share settlement on shares of stock that vested for Pericom employees. .

The total unrecognized share-based compensation expense as of December 31, 2017 was approximately $32.4 million, relating to restricted stock awards, which was expected to be recognized over a weighted average period of approximately 2.4 years.

Our Chief Executive Officer has a grant of 600,000 performance-based stock units that vest upon the Company reaching $1.0 billion in revenue. Based on the Company reaching approximately $1.1 billion in revenue in 2017, our Chief Executive Officer’s grant of 600,000 performance-based stock units will be released to the Chief Executive Officer, upon filing of the Company’s Annual Report on Form 10-K, in February 2018. The expense related to the 600,000 performance-based units was all recognized in previous periods.